Transcript Wilkes-Barre/Scranton

A Brief Overview of LAX’s Position in
WORLD AIRPORT PASSENGER
TRAFFIC RANKINGS
A Management Presentation for the:
Los Angeles Board of
Airport Commissioners
Monday, August 3, 2009
LAX Has Fallen in the ACI World Airport Passenger Traffic Rankings from #3
in 2000 to #6 in 2008, as Traffic Has Not Fully Rebounded From 2001
Total Airport Passengers
2000-2008
CY 08
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
CY 00
Rank Airport
1
2
4
6
8
3
5
42
7
11
20
22
21
10
12
17
15
26
28
80
9
24
18
16
32
2000
Atlanta
Chicago O'Hare
London Heathrow
Tokyo Haneda
Paris De Gaulle
Los Angeles
Dallas/Fort Worth
Beijing/Peking
Frankfurt
Denver
Madrid
Hong Kong
New York J F Kennedy
Amsterdam
Las Vegas
Houston Intercontinental
Phoenix
Bangkok
Singapore
Dubai
San Francisco
Orlando
New York Newark
Detroit
Rome
80,162,407
72,144,244
64,606,826
56,402,206
48,246,137
66,424,767
60,687,122
21,691,077
49,360,630
38,751,687
32,893,190
32,752,359
32,856,220
39,606,925
36,865,866
35,251,372
36,040,469
29,616,432
28,618,200
12,320,660
41,040,995
30,823,509
34,188,468
35,535,080
26,288,135
2005
85,907,423
76,510,003
67,915,403
63,303,843
53,798,308
61,489,398
59,176,265
41,004,008
52,219,412
43,387,513
41,940,059
40,269,847
41,885,104
44,163,098
43,989,982
39,684,640
41,213,754
38,985,043
32,430,856
24,782,288
32,802,363
34,128,048
33,999,990
36,389,294
28,619,845
2006
84,846,639
77,028,134
67,530,197
65,810,672
56,849,567
61,041,066
60,226,138
48,654,770
52,810,683
47,325,016
45,501,168
43,857,908
43,762,282
46,065,719
46,193,329
42,550,432
41,436,737
42,799,532
35,033,083
28,788,726
33,574,807
34,640,451
36,724,167
35,972,673
30,102,097
2007
89,379,287
76,177,855
68,068,304
66,823,414
59,922,177
61,896,075
59,786,476
53,583,664
54,161,856
49,863,352
52,122,702
47,042,419
47,716,941
47,794,994
46,961,011
42,998,040
42,184,515
41,210,081
36,701,556
34,348,110
35,792,707
36,480,416
36,367,240
35,983,478
32,855,542
2008
90,039,280
69,353,876
67,056,379
66,754,829
60,874,681
59,497,539
57,093,187
55,937,289
53,467,450
51,245,334
50,824,435
47,857,746
47,807,816
47,430,019
43,208,724
41,709,389
39,891,193
38,603,490
37,694,824
37,441,440
37,234,592
35,660,742
35,360,848
35,135,828
35,132,224
Percent Change
07-08
00-08
0.7%
-9.0%
-1.5%
-0.1%
1.6%
-3.9%
-4.5%
4.4%
-1.3%
2.8%
-2.5%
1.7%
0.2%
-0.8%
-8.0%
-3.0%
-5.4%
-6.3%
2.7%
9.0%
4.0%
-2.2%
-2.8%
-2.4%
6.9%
12.3%
-3.9%
3.8%
18.4%
26.2%
-10.4%
-5.9%
157.9%
8.3%
32.2%
54.5%
46.1%
45.5%
19.8%
17.2%
18.3%
10.7%
30.3%
31.7%
203.9%
-9.3%
15.7%
3.4%
-1.1%
33.6%
Note: Traffic Includes Connecting Passengers
Source: Airports Council International (ACI)
1
Several Factors Have Contributed to LAX’s Decline in Traffic Levels and
Descent in the ACI World Rankings
After the Events of 9/11/2001, Airlines Operating Hub and Spoke
Networks Re-Trenched at the Major Hub Airports
–
As a result of this strategy, total passenger traffic at nearly every major airline
connecting hub has increased… despite significant reductions in seat capacity
LAX is no Longer a Major Connecting Hub for any Single Airline
–
United, the last airline to operate a hub at LAX, has cut 45.8% of its seat capacity
(more than 225,000 seats per week) since 2000
–
American (-26.6%), Delta (-32.8%) and Northwest (-25%) have, combined, cut an
additional 159,000 weekly seats at LAX during the same period
–
Low-cost carriers such as JetBlue and Virgin America have entered the LAX market
relatively recently… it will take time for these airlines to replace lost seat capacity
Regionalization Has Worked During the Current Decade
–
From 2000 until the 2007 cyclical peak, LAX lost nearly 5 million annual passenger
trips, while the other 4 airports in the region grew by nearly 6 million annual
passenger trips
2
LAX has Faced Steeper Capacity Declines Than Other Top U.S. Gateways
Since the 2007 Cyclical Peak… Especially by U.S. Legacy Airlines
Weekly Seats Change
August 2007 vs. August 2009
10%
All Airlines
Legacy Airlines
5%
0%
-5%
-10%
-15%
JFK
LAX
MIA
ORD
EWR
ATL
SFO
IAH
IAD
DFW
Note: Majors Include American, Continental, Delta, Northwest, United and US Airways
Source: OAG Schedules
3
U.S. Legacy Airlines Have Cut Seat Capacity at LAX Because High Levels of
Competition Prevent Market Dominance (and Resultant Revenue Premium)
Weekly Seats at LAX, by Global Alliance
August 2009
oneworld
19.0%
SkyTeam
19.0%
Star
27.4%
Other
34.6%
Source: OAG Schedules
4
Despite Airlines’ Seat Capacity Cuts During this Decade, LAX Continues to
Rank #3 in the U.S., in Terms of Scheduled Seat Capacity
Weekly Seats from U.S. Airports
August 2002, August 2005, August 2009
Dom
1
2
4
3
5
25
12
14
6
9
2002 Rank
Intl
Total
7
4
3
11
22
1
8
6
21
29
1
2
3
4
5
10
11
9
6
14
Dom
1
2
4
3
5
22
11
16
6
7
2005 Rank
Intl
Total
7
4
2
10
24
1
8
6
22
25
1
2
3
4
5
7
9
14
6
8
Dom
1
2
5
3
4
16
10
12
6
7
2009 Rank
Intl
Total
6
5
3
10
21
1
7
8
24
23
1
2
3
4
5
6
7
8
9
10
Market
August 2009 Weekly Seats
Dom
Intl
Total
Atlanta
Chicago O'Hare
Los Angeles
Dallas/Fort Worth
Denver
New York J F Kennedy
Houston Intercontinental
San Francisco
Phoenix
Las Vegas
955,262
695,771
543,422
628,072
624,608
328,331
387,582
382,490
458,411
436,503
119,484 1,074,746
145,673
841,444
200,611
744,033
61,311
689,383
25,727
650,335
317,889
646,220
107,995
495,577
105,588
488,078
18,418
476,829
20,621
457,124
Source: Official Airline Guide (OAG) Schedules, for the month(s) noted.
5
While Annual Passenger Traffic Totals at LAX Matter, They’re not the Most
Accurate Measure of the Relative Health of our Local Air Service Market
Total Passenger Numbers Include Connecting and Origin-Destination
(O-D) Passenger Traffic
–
Both O-D and connecting passengers are vital to the financial health of any airport
–
However, connecting passenger traffic is largely the result of airlines’ network and
route system decisions. Such decisions are typically influenced by factors outside
of any airport’s control
–
Many of the airports listed in the Top 25 of the ACI World rankings are major
connecting hubs, 33-50+% of the passenger traffic is connecting. At LAX,
connecting passengers comprise just 27% of the total
O-D Passenger Traffic Represents Demand for Air Travel to/from a
Particular Market, and is Therefore a Better Measure of Market Vitality
–
O-D passengers are those who “begin and/or end a trip” at a particular airport
–
During CY 2008, approximately 43.5 million O-D passengers passed through LAX
(73% of the airport’s total traffic)
6
LAX Finished CY 2008 Ranked 3rd in the World (and #1 in The Americas), in
Terms of O-D Passenger Traffic
Top 10 World Airports, by Estimated Number of O-D Passenger Bookings
CY 2008
World Rank
CY 2008
O-D Passenger
Bookings
ACI Total
Passengers
Percent
Connecting
Percent
O-D
1
8
Beijing
44,094,106
21%
79%
2
3
London Heathrow
43,743,135
33%
67%
3
6
Los Angeles
43,497,438
27%
73%
4
4
Tokyo Haneda
39,758,352
40%
60%
5
13
New York City Kennedy
38,964,745
18%
82%
6
5
Paris DeGaulle
36,776,830
40%
60%
7
2
Chicago O'Hare
33,297,071
52%
48%
8
15
Las Vegas
32,556,539
25%
75%
9
12
Hong Kong
31,700,145
34%
66%
10
22
Orlando
31,086,856
13%
87%
Airport
Estimated O-D
Passengers
Note: MIDT Booking Data Adjusted for Underreporting
Source: MIDT Bookings, Sabre Airline Solutions, for the year(s) noted.
7
As of YE2Q 2009, Continues to Rank Among the World Top 5 in Terms of
Both O-D Passenger Bookings (#3) and O-D Passenger Revenue (#5)
Top 10 World Airports, O-D Passenger Bookings and Revenue
YE 2Q 2009, Indexed Against LAX Totals (LAX = 100)
160
151
Passenger Bookings
Revenue
140
120
116
99
101
107
100 100
102
100
100
91
84
74
80
55
53
60
74
49
40
20
0
Beijing
London
Heathrow
Los
Angeles
Tokyo
Haneda
New York
City JFK
Paris
DeGaulle
Chicago
O'Hare
Atlanta
8
LAX has Ranked Among the World’s Top 3 O-D Passenger Airports During
the Most Recent 7 Years (and #1 in the Americas Each Year)
LAX World Ranking, O-D Passenger Bookings
YE 2Q 2003 – YE 2Q 2009
YE 2Q
LAX World Rank, O-D
Passenger Bookings
2003
3
2004
3
2005
3
2006
2
2007
1
2008
1
2009
3
Note: MIDT Booking Data Adjusted for Underreporting
Source: MIDT Bookings, Sabre Airline Solutions, for the year(s) noted.
9
The Unmatched Concentration of Foreign Flag Airlines at LAX Indicates the
Comparative Strength of the Southern California O-D Passenger Market…
Top 10 U.S. Airports for International Capacity Distribution By Carrier Flag Country
August 2009
Foreign Carriers
82%
82%
Los Angeles
San Francisco
18%
64%
New York JFK
36%
59%
Washington IAD
40%
53%
Chicago O'Hare
47%
46%
Miami
54%
38%
New York EWR
63%
31%
Houston IAH
69%
20%
Dallas/Fort Worth
Atlanta
U.S. Carriers
80%
15%
85%
10%
0%
10%
Source: OAG Schedules
90%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10
… as Does the Fact that LAX has Gained More New Foreign Flag Service
Than Any Other U.S. Airport Since 2007
Edmonton-LAX
November 2008
London-LAX
March 2008
Osaka-LAX
March 2008
Oaxaca-LAX
December 2008
Dubai-LAX
October 2008
Monterrey-LAX
March 2007
Rome-LAX
June 2008
San Jose Del Cabo-LAX
August 2008
Puerto Vallarta-LAX
December 2007
Rarotonga-LAX
April 2007
Brisbane-LAX
April 2009
São Paulo-LAX
June 2008
Melbourne-LAX
September 2009
Santiago-LAX
June 2007
São Paulo-LAX
May 2009
Melbourne-LAX
December 2008
Notes: Includes New Nonstop Services That Began Since January 2007
United Melbourne Service is Seasonal During the Winter
Source: OAG Schedules
Sydney-LAX
February 2009
Sydney-LAX
July 2009
11
Conclusion: What Can LAWA do to Return LAX to it Previous Position in the
World Passenger Traffic Rankings?
Recognize Industry Trends and be Realistic
–
Many of the fastest-rising airports, in terms of both total and O-D passenger
rankings, are in countries (e.g., China, India, the Middle East, etc.) with positive
demographic growth and decades of pent-up demand for air travel
Continue to Attract as Much New Nonstop Air Service as Possible
–
Strategic new domestic routes (to replace lost legacy airline service and to provide
feed for international services)
–
International destinations without nonstop (or attractive one-stop) service
–
Competitive service on existing international routes (as demand indicates)
Monitor Industry Consolidation, and Seek Opportunities to Re-establish
Legacy Airline Hub/Gateway Operations
–
Example: Increased focus at LAX by Delta/SkyTeam, post Delta-Northwest merger
–
Hub/gateway operations will increase connecting passenger traffic, as well as O-D
12