Can We Ever Improve the Airport Experience?raeswashington.org/raeswashington/bennett.pdf · 1...
Transcript of Can We Ever Improve the Airport Experience?raeswashington.org/raeswashington/bennett.pdf · 1...
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RONALD REAGANWASHINGTON NATIONAL DULLES TOLL ROAD DULLES METRORAIL
WASHINGTON DULLES INTERNATIONAL
Can We Ever Improve the Airport Experience?
James E. BennettPresident and Chief Executive Officer
Metropolitan Washington Airports Authority
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The Who•
Airport•
Transportation Security Administration
•
Customs and Border Patrol
•
Federal Aviation Administration
•
Airlines•
Concessions
The What•
Global Economic Uncertainty
•
Old Airport Facilities•
Lack of Runways•
Complex and Changing Facilities
Who / What Influences the Airport Experience?
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The Global Economic Climate
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Real GDP 1940 -
2010
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Tracking the Global Recession: Economic Indicators-United States
2010 Federal Reserve Bank of St. Louis: research.stlouisfed.org
Data lasted 2010-02-19
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45
55
65
75
85
95
105
115
82 84 86 88 90 92 94 96 98 00 02 04 06 08 10*
Inde
x
U.S. Consumer Sentiment1981 –
2010
Source: University of Michigan, Delta Associates; February 2010.*Through January 2010.
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Airport Infrastructure needs:How it is Done
How Much and When?
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Aviation infrastructure development supported by enplanement growth
Increased activity generated revenue to pay the related debt
Since 2001, aviation growth been limited
Financing Aviation Infrastructure 1950-2001
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‐100000
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004
2009
U.S enplanements1954 to 2009
U.S Enplanements1954 to 2009
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Which Comes First?Growth or Infrastructure
To improve the airport experience and provide for economic growth, infrastructure is needed
To pay for infrastructure, growth is needed
Resulting in new and old ways to Finance the Infrastructure:•
Stimulus –
government stepping in for shovel ready projects•
PFC increase –
legislative effort•
Public Private Partnerships
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RONALD REAGANWASHINGTON NATIONAL DULLES TOLL ROAD DULLES METRORAIL
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2009 2010 2011 2012 2013 Total %
Large 11,099 11,951 11,052 10,193 10,977 55,273 58.6%
Medium 3,523 2,869 2,859 1,821 2,201 13,273 14.1%
Small 1,384 1,509 1,233 918 754 5,800 6.1%
Non-hub* 1,036 1,051 1,067 1,083 1,099 5,335 5.6%
Commercial Service* 201 204 207 210 213 1,035 1.1%
Reliever* 706 716 727 738 749 3,636 3.9%
GA* 1,932 1,961 1,990 2,020 2,050 9,953 10.6%
Total 19,880 20,262 19,136 16,983 18,045 94,305 100%
ACI-NA Airport Capital Needs(Millions of Current Year Dollars)
Note: Assumes a 1.5% annual increase in construction cost escalation.*FAA NPIAS data.
Source ACI-NA Capital Needs Study
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EXPENDITURES
DESCRIPTION 2009 2010 2011 2012-2016 Unscheduled
Ronald Reagan Washington National Airport $52,363,000 $53,963,000 $78,175,000 $75,456,000 $119,575,000
Washington Dulles International Airport $282,816,000 $205,679,000 $138,345,000 $490,230,000 $2,635,343,000
Total $335,179,000 $259,642,000 $216,520,000 $565,686,000 $2,754,918,000
SUMMARY BY FUNDING SOURCES/REQUIREMENTS
Capital Construction Program2010 Budget
Metropolitan Washington Airports Authority
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Real Investment
2010 Federal Reserve Bank of St. Louis: research.stlouisfed.org
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251,541,000 713,227,000 237,100,000 524,400,000 212,800,000 349,900,000 204,800,000 329,400,000 192,655,000 371,233,000 195,200,000 439,400,000 180,000,000 356,800,000 165,000,000 201,000,000 157,700,000 170,000,000 148,400,000 235,600,000 127,800,000 169,000,000 121,800,000 394,000,000 118,000,000 225,000,000 113,222,000 161,000,000
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
Metropolitan Washington Airports Authority
Comparison of Growth in Annual Spend
Annual Operating Budget Annual Capital Budget
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Overall Passenger Satisfaction Rating of National Airport
24.0%
56.1%54.1%
60.5%
52.1% 51.3%
60.7%
56.1%54.6%
52.7%
48.5% 49.7% 49.8%47.1%
0%
20%
40%
60%
80%
100%
PD1-31997
PD4-61997
CY1998
CY 1999 CY 2000 PD1-32001
PD3-62002
CY 2003 CY 2004 CY 2005 CY 2006 CY 2007 CY 2008 PD1-32009
Excellent (A+, A, A-)
Overall Rating of National Airport
New National Airport opening
Events of 9/11
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Traditional Methods of Airport Infrastructure Financing
Bonds: Leverage defers payment to users of facilities
Passenger charges: Current users of facilities pay “toll” for pay-go or leverage payments
Grants: Government participates in infrastructure development by providing a form of equity capital
Revenue: Airport operator contributes equity to lower cost or accomplish other goals
62%
25%
13%
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How will Airport Operators Accomplish Needed Infrastructure Development in the Current
Economic Climate?
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Unit TerminalsAirports lease land to airlines for terminal development
JFKLGA
NewarkBoston
ChicagoHouston
Airlines construct and maintain facilities under long term lease
Airports lose control over facilities and have competing terminals on airport
Use of grants and PFC limitedAirline bankruptcy further complicates arrangements
Airline have limited ability to finance terminals
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Privatized Airports
Argentina, Australia, Austria, Bahamas, Bolivia, Cambodia, Canada, Chile, China, Colombia, Denmark, Dominican Republic, Germany, Hungary, Italy, Japan, Malaysia, Mexico, New Zealand, Singapore, South Africa and Switzerland.
Current activity in privatized airport investments
Private Equity to Leverage required: 50/50 formerly 20/80−Both Available Equity and Leverage in limited supply
Chicago Midway− Investors pulled out of privatization paying a $126 million penalty to the City. −Chicago to repackage the plan
Gatwick−BAA sold Gatwick to Ferrovial−Ferrovial sold
Gatwick for £1.5BN to GIP, 25% less than plan, a £142m charge −GIP promised to upgrade services at Gatwick with IPOs
Previous IPOs
Vienna
Schiphol Concession Agreement
Third party contract with airport to build terminal−Terminal 4 at JFK
Airport Management can be in multiple forms
Private Methods of Financing Airports
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Hochtief
Airport
TAV Airports Holding Company
Skonto
Buve
Aecon
Concessions
Africa Israel Investments
Morgan Stanley Infrastructure Partners
Global Infrastructure Partners (GIP),(GE and Credit Suisse)−
GIP owns London City Airport
Citigroup Infrastructure Investors,
Vancouver Airport Services
Babcock and Brown
Borealis Infrastructure;
Venice Airport
Macquarie Capital Group
Current Private Interest in Airport Development
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US Airports have limited results with privatization.• Indianapolis
− BAA returned the airport to government management• Stewart Airport
−
In 2007 PANYNJ acquired remaining 93 years of concession
from National Express Group
Airports in the US enjoy low cost infrastructure financing− Tax exempt bonds provide low cost financing − Grants, PFCs provide equity contributions
Airport communities have a strong interest in airport management− Airports viewed as economic engines to community − Airlines have strong presence in airport communities
Private Airport Development in the U.S has been limited
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To Move Forward a Combination of Old And New Methods of Infrastructure Development is RequiredPrivate concession opportunities
Airport provide the airfield, utility, transportation connections
Concession develops terminal gates and contract with directly with airline
Negotiate variance on the theme to make it work.
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Conclusion
There is no single best method to improve the Airport Experience
The model of infrastructure Development based on continuing growth and healthy airlines is changing
Airports need to be creative in finding new solutions to age old issues of facility investment
WASHINGTON DULLES INTERNATIONAL AIRPORT
Main Terminal station B Gate station
A Gate Station C Gate Station
Security Checkpoints AeroTrain
WASHINGTON DULLES INTERNATIONAL AIRPORT
Concourse B expansion 4th Runway
International Arrivals Building Expansion
Dulles Corridor Metrorail Project
Dulles Toll Road New Airport Traffic Control Tower
Ronald Reagan Washington National Airport Dulles Corridor Metrorail Project
Washington Dulles International AirportDulles Toll Road