Post on 14-Feb-2020
John P. Heimlich Sharon L. Pinkerton VP & Chief Economist SVP-Legislative & Regulatory Policy
A4A Media Briefing November 14, 2018
Contents
airlines.org 2
» Year-to-Date Operations and Financial Results
» Thanksgiving-Period Air Travel Forecast
» Trends in U.S. Airline and Airport Investment / Capital Improvement
» Update on Taxes and Airport Financial Resources
YTD 2018 OPERATIONS AND FINANCIAL RESULTS
airlines.org 3
Sources: BTS and DOT Air Travel Consumer Report (http://www.dot.gov/airconsumer/air-travel-consumer-reports)
airlines.org 4
On-Time Performance Inched Up in First 8 Months Despite Slightly Lower Completion 2018 Featuring the Lowest-Ever Recorded Rate of Involuntary Denied Boardings
98.2 98.7
98.5 98.1
2015
2016
2017
2018
Flight Completion Factor (%) – YTD Aug
3.24 2.70
2.46 2.89
2015
2016
2017
2018
Mishandled Bag Reports per 1,000 Psgrs. On-Time Arrival Rate (%) – YTD Aug
78.1 80.5
78.2 78.5
2015
2016
2017
2018
0.76 0.62
0.34 0.12
2015
2016
2017
2018
Involuntary Denied Boardings per 10K Psgrs.
1H
Jan-Aug
The First Nine Months of 2018 Posed Some Significant Operating Challenges
airlines.org 5
Source: A4A research, FAA Air Traffic Organization and masFlight (subsidiary of Global Eagle)
Airport Construction: ATL/CHI/DCA/DFW/HNL/HOU/LAX/MCO/MIA/NYC/PHL/PHX/SAN/TPA
Air Traffic Control: Understaffing at many major facilities; critically low staffing at New York TRACON*
Power Outages/Airport Equipment: Jan 1 CBP nationwide outage; Jan 7 (JFK T4 water main break) Aug 16 – DCA loses power for more than 1 hour, affecting about two dozen flights Sep 16 – Portions of PHX T4 had a multi-hour closure, prompted by a suspicious abandoned rental car, which snarled air traffic and led to the cancellation of ~30 flights (mostly WN) and delayed hundreds more.
Major Weather • Jan 3-5 (“bomb cyclone”), 7-8, 12, 16-18, 21-22 • Feb 4-5, 7, 9, 11, 15, 20 • Mar 2 (Winter Storm Riley) 7 (Quinn) 13 (Skylar) 20-22 (Toby) • Apr 4 (Mid-Atlantic/Northeast), 14-16 (MSP/ORD/CLT/NE), 25 (NE) • May 3 (CHI/DAL t-storms), 14-16 (CHI/mid-Atlantic/NE t-storms), 31 (SE/mid-Atlantic t-storms) • Jun 18-20 (rainstorms and low visibility in Chicago/mid-Atlantic), 26 (CHI t-storms) • Jul 1 (CHI storms), 15 (NYC/PHL storms), 17 (NE/mid-Atlantic), 22 (MCO), 23 (DEN), 27 (NE/mid-Atlantic) • Aug 2-3, 7-8 (t-storms in mid-Atlantic/NE/CHI), 11 (NYC/PHL), 13-14 (mid-Atlantic/NE/DAL), 17 (NE) • Sep 3 – “Flooding Causes Massive Delays at O’Hare, Closes Surrounding Roads”; ~500 flights canceled
and ~1,100 delayed; crews worked to clean up leaks inside the terminal • Sep 11-17 – Hurricane Florence (Carolinas) ~3,000 cancellations
* Staffing is routinely cited as the basis for many traffic management initiatives (ground delay programs, ground stops, airspace flow programs, miles-in-trail) across the NAS
1.90
1.52 1.35
1.02
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2015 2016 2017 2018
Sources: DOT Air Travel Consumer Report (http://www.dot.gov/airconsumer/air-travel-consumer-reports)
airlines.org 6
The Rate of Customer Complaints to DOT Continues to Fall in 2018 Customer Complaints re: U.S. Airlines per 100,000 Passengers
Jan-
Aug
YTD 3Q18 Expenses Rose Faster Than Revenues, Reducing Profitability Yet Again Carriers Under Cost Pressure in Every Major Category, Driving Margins Lower in 2018
airlines.org 7
Change (%) in Operating Revenues and Expenses First Nine Months 2018 vs. First Nine Months 2017
6.5
15.8 12.4
7.0 5.9
33.9
2.7 6.5
3.2 8.6
12.0 15.6 15.5
12.1 8.2
Pax
Rev
(1)
Car
go R
ev
Oth
er R
ev (2
)
Tota
l OpR
ev
Labo
r
Fuel
Mai
nten
ance
Airp
orts
Airc
raft
Oth
er (3
)
Tota
l OpE
xp
2015
2016
2017
2018
Source: A4A analysis of reports by Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit and United
1. Traffic (revenue passenger miles) up 4.8 percent; yield (revenue per passenger-mile flown) up 1.6 percent; U.S. CPI up 2.5 percent 2. Sale of frequent flyer award miles to airline business partners, transportation of pets, in-sourced aircraft and engine repair, flight simulator rentals, inflight sales, etc. 3. Professional fees, food/beverage, insurance, commissions, GDS fees, communications, advertising, utilities, office supplies, crew hotels, nonfuel payments to regionals
Pre-Tax Profit Margin (%) YTD 3Q Four-Year Trend
$10.
8B
$14.
9B
$2.2
0 vs
. $1.
70
$18.
3B
$18.
7B
In YTD 3Q18, U.S. Passenger Airline* Profitability Less Than a Third of Starbucks Pre-Tax Profit Margin (% of Operating Revenues)
airlines.org
38.2 33.0
28.3 26.3 25.5
18.3 18.0 16.0 12.1 10.4
8.2 6.2 3.7
McD
onal
d´s
Rai
lroad
s (2
)
Appl
e
Star
buck
s
Dis
ney
Com
cast
Hon
eyw
ell
Cat
erpi
llar
Mar
riott
Boei
ng
Airli
nes
(1)
Chi
potle
Ford
8
1 Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit and United 2 CSX, Norfolk Southern and Union Pacific Source: Company SEC filings
Airlines Recovered $0.68 in Revenue for Every $1.00 Increase in Operating Costs Fuel Alone Accounted for 57 Percent of the Year-Over-Year Increase in Costs
airlines.org 9
~ $70M/D
ay
Passenger Cargo
Other
Fuel
Labor Maintenance Airports Aircraft Other
$8,668
$12,767
($4,099)
Op Revenues Op Expenses Op Profits
Source: A4A analysis of reports by Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit and United
Change ($ Millions) in Revenues and Expenses – First Nine Months 2018 vs. First Nine Months 2017
1 ~75% traffic-driven 2 ~90% price-driven
1 2
Crude-Oil Prices Rising Swiftly, to Highest Level Since Late 2014 October 2018 Benchmark Price Averaged 41 Percent More Than October 2017
Spot Price* of Brent Crude Oil ($ per Barrel)
airlines.org 10
$0
$20
$40
$60
$80
$100
$120
Jan-
14M
ar-1
4M
ay-1
4Ju
l-14
Sep
-14
Nov
-14
Jan-
15M
ar-1
5M
ay-1
5Ju
l-15
Sep
-15
Nov
-15
Jan-
16M
ar-1
6M
ay-1
6Ju
l-16
Sep
-16
Nov
-16
Jan-
17M
ar-1
7M
ay-1
7Ju
l-17
Sep
-17
Nov
-17
Jan-
18M
ar-1
8M
ay-1
8Ju
l-18
Sep
-18
Nov
-18
Jan-
19M
ar-1
9M
ay-1
9Ju
l-19
Sep
-19
Nov
-19
Jan-
20
Source: A4A and Energy Information Administration (http://www.eia.gov/dnav/pet/pet_pri_spt_s1_d.htm)
Inflation-Adjusted Fares Continue to Fall in 2018, Averaging Less Than in 2010 Real Price* of Domestic Air Travel Down 5.3% YOY (-5.2% Fares, -7.2% Fees)
airlines.org 11
Source: A4A analysis of DOT Data Bank 1B (all cabins and fare basis codes) and DOT Form 41 via Airline Data Inc. (airlinedata.com)
362 382 387 391 398
384
359 347 356
338
25
24 24 24
24
24
24
23 24
22
387
406 412 415
423
408
382
370 380
360
$320
$340
$360
$380
$400
$420
$440
2010 2011 2012 2013 2014 2015 2016 2017 1H17 1H18
Fare Ancillary Fees (Bags + Reservation Changes)
Rou
nd-T
rip T
icke
t Pric
e ($
1H 2
018)
*
* Excl. taxes; CPI up 2.5% YOY
In Fact, 2Q 2018 Inflation-Adjusted Fares Were Lowest 2Q Ever Recorded by DOT In Real Terms, Domestic Fares Fell ~11% From 2Q 2010 and ~30% From 2Q 2000
airlines.org 12
Source: Bureau of Transportation Statistics
$325
$350
$375
$400
$425
$450
$475
$500
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Average Second-Quarter Domestic Round-Trip Airfare Including Taxes (in 2018 Dollars)*
* Fare and taxes only, adjusted for inflation
Down 11.1%
In 2015-2018, Domestic Airline Capacity Grew at Twice the Rate of the U.S. Economy
airlines.org
Source: Bureau of Economic Analysis and published airline schedules via Diio Mi
1.6 1.1
0.2
1.6
2.3
5.1 4.9
4.0
5.3
2.6
1.6
2.2 1.8
2.5 2.9
1.6
2.2 2.5
0
1
2
3
4
5
6
2010 2011 2012 2013 2014 2015 2016 2017 2018
Domestic Airline Capacity (ASMs) Real US GDP
13
airlines.org 14
Among 11 U.S. Airline Brands, Smaller Carriers Have Been Growing the Fastest Different Types of Carriers Market Their Prices and Services Differently
(50)
0
50
100
150
200
250
300
350
400
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
% C
hang
e in
Cap
acity
* S
ince
200
7
Spirit
Sun Ctry
Hawaiian Alaska
JetBlue
Southwest AA/DL/UA
Source: Innovata (via Diio Mi) schedules as of Oct. 5, 2018, for selected marketing airlines including predecessors
Allegiant
Frontier
* Systemwide scheduled available seat miles
Airlines Utilize a Wide Array of Tools to Improve Profitability Amid Rising Fuel Prices
airlines.org 15
Increase fuel efficiency (reduce consumption per unit of flying) o Continue to replace older (often smaller) aircraft with typically larger, next-generation or re-engined aircraft o Deploy state-of-the-art flight planning/navigation software to optimize airborne movement of aircraft
o Utilize taxi-management technologies – and single-engine taxi – to minimize ground-based fuel burn o Consistently employ ground power while parked at gate instead of aircraft auxiliary power unit (APU) o Reduce onboard weight (e.g., lighter materials/structures, inflight entertainment systems, excess fuel)
Airlines Utilize a Wide Array of Tools to Improve Profitability (Cont’d)
airlines.org 16
Reduce or contain non-fuel costs o Deploy customer-preferred technologies
(e.g., airport kiosks for self-tagging of luggage, airline apps for passenger modification of itinerary in lieu of agents)
o Drive more bookings to lower-cost direct distribution channels (e.g., website, app)
o Trim management/nonunion headcount via attrition, buy-outs; freeze open positions
o Use virtual medicine (e.g., Doctor on Demand) for health care – cost-efficient and highly popular with workforce
o Achieve single pilot/FA contracts – reduce delays/cancels, enable efficient use of aircraft/crews, avoids over-hiring
o Employ new software/methods to improve hotel procurement and manage employee travel bookings
o Insource engine/ground-handling/other work to be performed better/more efficiently (where practicable)
o Negotiate preferred-pricing maintenance contracts enabled by improved scale/credit, recover warranties on aircraft parts, leverage data streams from new aircraft/engines to increase reliability and lower repair/inspection costs
Airlines Utilize a Wide Array of Tools to Improve Profitability (Cont’d)
airlines.org 17
Generate more revenue
o Carry more passenger traffic or better mix of traffic (corporate/premium), optimize fare/fee structure
o Boost availability/desirability of ancillary products (fleet-wide/faster WiFi, live TV int’l, refurbished clubs)
o Increase credit card sales – attracting new accounts due to larger networks and customer-preferred timings
o Intensify cargo sales efforts and leverage increased belly capacity (and temp controls) offered by new aircraft
Airlines Utilize a Wide Array of Tools to Improve Profitability (Cont’d)
airlines.org 18
o Re-optimize route networks – trim unprofitable capacity, defer deliveries, add routes enabled by new aircraft
o Increase utilization of aircraft, ground equipment and gates at hubs and take advantage of new gates coming online at key locations in 2018-2020
o Reduce fleet/subfleet types to lower hiring, training and maintenance costs while increasing both aircraft substitutability and product consistency (for travelers)
Hybrid revenue/cost improvements
THANKSGIVING PERIOD AIR TRAVEL FORECAST: PROJECTING ALL-TIME HIGH
airlines.org 19
U.S. Airline Traffic Flown and Capacity Operated Have Continued to Grow in 2018 Passenger Traffic Up 5.6% Year Over Year, Seating Capacity Up 4.4%
airlines.org 20
598.5 620.0 636.8 672.4
681.3 707.0 728.4 769.2
812.2 847.0 872.0 910.3
0
100
200
300
400
500
600
700
800
900
1000
2015 2016 2017 2018
Janu
ary-
Sept
embe
r (pr
elim
)
Passengers (Mils) RPMs (Bils) ASMs (Bils)
Source: U.S. Bureau of Transportation Statistics T1, systemwide scheduled service on U.S. airlines – revenue passenger miles (RPMs) and available seat miles (ASMs)
U.S. Economy, Jobs Growing; Household Net Worth Continues to Set New Records
airlines.org
2.9
1.6 2.2
2.9 2.8
2015 2016 2017 2018F 2019F
U.S. Real GDP Growth (% CAGR)
21
U.S. Employment Growth (000)
250
226
195
182
213
2014 2015 2016 2017 2018
Sources: U.S. GDP (Bureau of Economic Analysis actuals and IHS Markit forecast); U.S. nonfarm payroll employment growth (month-over-month, seasonally adjusted) from BLS; consumer sentiment (University of Michigan, Index 1Q 1966=100); U.S. household net worth in current dollars, not seasonally adjusted (Federal Reserve)
Consumer Sentiment (UMich Index 1Q66=100) U.S. Household Net Worth ($ Trillion, NSA)
86.3
89.6
95.2
103.
4
104.
7
106.
9
2014 2015 2016 2017 1Q18 2Q18
91.6
92.4
90.3
93.1
97.2
96.4
95.1
98.4
98.9
98.3
98.1
1Q16 3Q16 1Q17 3Q17 1Q18 3Q18
A4A Projects U.S. Airlines to Carry 30.6M Thanksgiving* Passengers in 2018, Up 5.7% *12-Day Forecast Period = Fri., Nov. 16 Through Tues., Nov. 27
airlines.org 22
23.2
23
.2
24.3
24
.4
24.8
24
.6
25.2
26
.6
27.8
29
.0
30.6
2008
E
2009
E
2010
E
2011
E
2012
E
2013
E
2014
E
2015
E
2016
E
2017
E
2018
F
Source: A4A analysis of TSA and BTS T100 segment data; volumes from past years are estimates from comparable 12-day period
U.S. Airline Onboard Passengers (Millions) 12-Day Thanksgiving Period, 2008E-2018F
2018 Volume Projections 2.55M passengers per day, up ~137,000 2.94M seats per day, up ~158,000 Daily volumes to range from 1.73M to 3.06M 2017 Thanksgiving Highlights T-giving Day was 4th lightest day of year Sunday return was 2nd busiest day of year Wednesday before was 18th busiest day of year
Note: E=estimate; F=forecast
Daily Thanksgiving Passenger Volumes to Vary by as Much as 1.33M (77%) T-giving Day to Fall 32% Below 12-Day Average, Sunday Return 20% Above Average
2.85
2.36 2.55 2.53
2.76 2.93
1.73 2.01
2.69 3.06
2.80
2.35
Fri.,
11/
16
Sat
., 11
/17
Sun
., 11
/18
Mon
., 11
/19
Tue.
, 11/
20
Wed
., 11
/21
Thu.
, 11/
22
Fri.,
11/
23
Sat
., 11
/24
Sun
., 11
/25
Mon
., 11
/26
Tue.
, 11/
27
airlines.org 23
#6 #5 #4 #8 #9 #7 #3 #12 #2 #11 #10 #1
U.S. Airline Projected Onboard Passengers (Millions) – Systemwide Service
Source: A4A analysis of TSA and BTS T100 segment data
12-Day Avg. = 2.55
2,274 2,289 2,366 2,454 2,542 2,651 2,618 2,655 310 330 351 368 390 405 401 413 2,584 2,620 2,717 2,823 2,932 3,056 3,019 3,068
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2013 2014 2015 2016 2017 2018 1H18 1H19
Domestic International
Customers Will See All-Time High of 3.07M Daily Seats Departing U.S. Airports Daily Seats (000) Departing U.S. Airports: Up 4.2% YOY in 2018 and 1.6% in 1H 2019
airlines.org 24
Source: Innovata (via Diio Mi) published schedules as of Nov. 3, 2018, for all airlines providing scheduled passenger service from U.S. airports to all destinations
Almost Every Major* U.S. Airport Has Seen Supply of Seats Rise Over Past 5 Years % Change in Scheduled-Service Seats Available: 2018 vs. 2013
airlines.org
70
57
56
51
45
44
43
35
35
35
33
32
32
32
31
30
30
29
26
25
24
24
24
24
22
22
22
21
20
20
19
18
18
17
16
16
15
15
14
14
12
11
10
9
9
9
9
9
8
7
7
5
5
5
3
2
1
1
(2)
(3)
(4)
(10)
0
10
20
30
40
50
60
70
80
DA
LA
US
SJC FL
LS
EAC
VG
BN
AM
CO
RD
UM
SY
PD
XB
OS
SM
FS
ANO
AKS
FO IND
LAX
EW
RR
SW
OM
AS
LCC
MH
BU
RB
DL
TPA
OG
GJF
KO
RD
PBI
DE
NJA
XO
NT
PIT
HO
ULA
SB
WI
SAT MC
IS
TLA
NC
ATL
SN
AIA
HD
FWD
TW MS
PD
CA
MIA
PH
XC
LT IAD
LGA
HN
LP
HL
MD
WM
KE
CLE
BU
FA
BQ SJU
25
Source: Innovata (via Diio Mi) published schedules as of Oct. 26, 2018, for all airlines providing scheduled service * FAA large and medium hub airports
U.S. AIRLINES & AIRPORTS – INVESTING HEAVILY FOR THE FUTURE
airlines.org 26
Substantial U.S. Airline Capital Investment* Has Continued in 2018 Despite Waning Profits – Bringing Total for This Business Cycle to $115 Billion
airlines.org 27
5.2 6.6
9.8
12.5 13.9
17.0 17.5 19.9
13.0
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: SEC filings of Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit, United and merged/acquired predecessors
U.S. Passenger Airline Capital Expenditures* ($ Billions per Year)
* Includes payments made for aircraft and other flight equipment, ground and other property and equipment, airport and other facility construction and information technology
Jan-
Sep
Airline-Airport Collaboration Has Paved Way for Widespread Infrastructure Investment Capital Projects Have Grown 86% Since 2015 at the 30 Largest U.S. Airports
airlines.org 28
» $130B of capital projects completed, underway or approved at the 30 largest U.S. airports since 2008, including, for example:
o Multiple new runways at Chicago O’Hare and new runways at Fort Lauderdale, Washington Dulles, Seattle and Charlotte
o New/expanded/modernized facilities at NYC, Miami, Las Vegas, Orlando, Honolulu, Houston, Denver, Seattle, Salt Lake City and San Francisco plus international facilities at Atlanta, Boston and L.A.
» Development is also robust at smaller airports, including:
o Runway projects at Columbus, Des Moines, Erie, Nashville, Providence, Sioux Falls; terminal projects at New Orleans, Eugene, Grand Rapids, Greenville-Spartanburg, Oakland, Dallas Love Field, San Luis Obispo, Portland (ME), Pasco, Reno-Tahoe, Wichita
» Investment is also occurring in cargo facilities and related infrastructure at Louisville, Newark, Lafayette (Louisiana), Indianapolis, Rockford, Memphis and elsewhere
$70
$100
$130
2015 2017 2018Approved Completed/Underway
Investment at Largest Airports ($ Billions)
J.D. Power: North America Airport Satisfaction* Climbs to Record High
airlines.org
689
675
690
725
731
749
761
600
650
700
750
800
2007 2008 2010 2015 2016 2017 2018
Source: J.D. Power 2018 North America Airport Satisfaction StudySM
“North America airports have managed to shrug off the potentially disruptive effects of record passenger volumes and massive construction projects to achieve a record high in overall passenger satisfaction.” (Sept. 19, 2018)
Note: Scale = 0-1000; study not conducted in 2009/2011-2014
29
Six factors: Terminal Facilities* (24%) Airport Accessibility (19%)
Security Check (16%) Baggage Claim (15%)
Check-In / Baggage Check (14%) Food / Beverage / Retail (13%)
* The study is based on responses from 40,183 North America travelers who traveled through at least one domestic airport and covers both departure and arrival experiences (including connecting airports) during the past three months. Travelers evaluated either a departing or arriving airport from their round-trip experience. The study was fielded from September 2017 through September 2018.
* Concourses, lounges, signage, restrooms, gate areas
RECORD TAX COLLECTIONS & ABUNDANT AIRPORT FINANCIAL RESOURCES
airlines.org 30
U.S. Commercial Aviation Taxes/Fees* Topped $25 Billion (~$70M per Day) in 2018 Fiscal Year 2018 Collections* ($Millions) from Airlines and their Customers
Sources: Animal and Plant Health Inspection Service (APHIS), Customs and Border Protection (CBP), Federal Aviation Administration (FAA), Treasury Dept. and A4A * U.S. federally levied/approved, including collections from non-U.S. carriers; APHIS figure is A4A estimate pending FOIA; PFC figure is FAA estimate for calendar year 2018
4,099 897 686 695
3,427
10,485
4,093 540 420 98 25,439
airlines.org 31
~ $70M/D
ay
DHS U.S. Airports FAA (Airport & Airway Trust Fund) EPA (Leaking Underground Storage Tank Trust Fund)
U.S. Airports Have Ample/Multiple Resources from Which to Fund Improvements
airlines.org 32
9.2
9.1
8.7 9.2 10
.4
10.5
11
.5
12.0
10
.7
10.6
11
.6
12.6
12
.9
13.5
14
.3
14.4
15
.1
15.8
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
General AviationCommercial Aviation
Airport & Airway Trust Fund Revenues ($ Bils) Airport & Airway Trust Fund Unobligated Balance ($ Bils)
7.3
4.8
3.9
2.4
1.9
1.8
1.5
1.4
0.3 0.7 1.
4 2.8
4.9 5.
8 5.
6 5.9
5.8
5.9 7.
5 8.7
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Source: A4A, FAA, CBO, U.S. Treasury; PFC collections exclude any compensation received for collecting/handling/remitting
U.S. Airport Revenues ($ Bils)
15.9 15.6 14.9 14.5 16.5 17.3 19.1 20.4 16.7 17.2 17.8 18.1 19.4 20.4 20.4 22.3 23.3
3.48 3.38 3.65 3.68 3.07 3.67
3.52 3.52 3.52 3.52 3.52 3.35 3.35 3.35 3.35
3.35 3.35
1.59 1.86 2.06 2.05 2.16 2.53 2.84 2.64
2.52 2.73 2.71 2.80 2.81 2.88 3.04 3.16 3.29
21.0
20
.9
20.6
20
.2
21.8
23
.5
25.5
26
.5
22.7
23
.4
24.1
24
.3
25.6
26
.7
26.8
28
.9
29.9
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18Airlines/Concessions/Rents/Other AIP* PFC
U.S. Airport Unrestricted Cash & Investments ($ Bils)
9.8
9.7
10.5
11.3
12.5
12.7
14.0
14.4
2010 2011 2012 2013 2014 2015 2016 2017
* Airport Improvement Program
not a
vaila
ble
all-t
ime
high
Sources: https://www.fitchratings.com/site/pr/10049679 and Peer Review of U.S. Airports (Attribute Assessments, Metrics and Ratings), Oct. 29, 2018
33 airlines.org
“…strong overall performance for U.S. airports should continue undeterred for the foreseeable future according to Fitch Ratings in its latest annual peer review for the sector… Fitch-rated airports are still largely entrenched in ‘A’ territory. ‘Airports in general are showing a lot of resilience as the industry continues to evolve and event-driven challenges from the broader economy take shape,’ said Senior Director Seth Lehman. ‘Over 90% of the airports Fitch rates currently have a Stable Rating Outlook, which signifies continued stability deep into next year.’ GDP growth and general airline health remain the most important revenue gauges for airports, though rising rates could make borrowing debt more expensive for airports with a substantial pipeline of investments on the horizon.”
-- Fitch Ratings: “Skies Remain Friendly for U.S. Airports” (Oct. 29, 2018)
Fitch Ratings: Skies Remain Friendly for U.S. Airports
U.S. Airport Revenues Have Grown Faster Than Flights, Passengers and Inflation From 2000 to 2017, Airport Revenues Rose 87%, Double the Pace of U.S. Inflation
airlines.org 34
Source: FAA Form 5100-127 and DOT T100 + 298c reflecting all scheduled and nonscheduled passenger and cargo airline flights departing U.S. airports
80
100
120
140
160
180
200
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
Index: 2000 = 100
U.S. CPI (Inflation)
Aircraft Departures
Passengers
U.S. Airport Revenues
In Contrast to Highway Trust Fund Fuel Tax Revenues, Airport PFCs and Aviation Trust Fund Revenues Have Sharply Outpaced U.S. Inflation 2017 PFC Collections Reached $3.3 Billion – the Highest Level in Program History
airlines.org 35
Source: FAA Passenger Facility Charge (PFC) reports, Federal Highway Administration, Bureau of Labor Statistics (for the Consumer Price Index [CPI])
111.0%
54.0%
42.3%
17.7%
0% 20% 40% 60% 80% 100% 120%
U.S. Airport PFC Revenues
Airport & Airway Trust Fund Revenues
U.S. Inflation (CPI)
Highway Trust Fund Tax Receipts
Percent Change, 2000-2017
1.6 2.7
3.3
200020102017
PFC Collections ($ Billions)
Flyer Satisfaction Rises Markedly With Enrollment in “Trusted Traveler” Programs Airline/Government Collaboration Boosting Enrollment in Global Entry and TSA Pre✓
airlines.org
Very, 49%
Very, 30%
Somewhat, 36%
Somewhat, 49%
Trusted Traveler
Unenrolled
% of 2017 Flyers “Somewhat Satisfied” or “Very Satisfied” With Overall Air Travel Experience
Sources: Ipsos survey of American adults (January 2018), TSA and CBP
36
Millions of Persons Enrolled in DHS Trusted Traveler Programs (Dec. 31)
0.8 2.0
4.2 5.8
6.5
1.9 2.6
3.7 4.9
5.3
2.7
4.6
7.9
10.7 11.8
2014
2015
2016
2017
2018*
TSA Pre✓ Global Entry
86%
79%
(Global Entry or TSA Pre✓)
* As of May 16
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