Thomas McKenna
Assistant Director of Aviation - Marketing
FAA Economic Forecast
• 2.0 percent increase in domestic enplanements for 2003
• 3.5 percent increase in domestic enplanements in long run (2004-2014)
• Traffic returns to Pre-911 totals by 2006
• Low fare carriers increase market share == falling fares
• 5.0 percent increase in air cargo for 2003 and beyond
Industry Overview - Airlines
• Bankruptcy – Chapter 7 or 11
• Vanguard
• US Airways
• United
• “Who’s Next??”
•
•
•
•
American
Delta
Midwest
Northwest
• Capacity Cuts
•
•
•
•
Layoffs/Unions
Reduction of flights/destinations
Regional Jets/Low-cost carriers
Alliances/Partnerships/Merges
Regional Jets
• 91 Regional Jet Airlines
• 1/3 of U.S. commercial airline fleet
• Fastest growing segment in commercial aviation
• 1 out 8 domestic airline passengers flies on a regional airline
• 82.8 million passengers boarded in 2001; double 1991 totals
Source: Regional Airline Association; April 2002
Industry Overview - Airports
• AIR-3 Reauthorization
•
•
•
•
Establish a new federal – airport partnership
Protect capacity investments
Increase airport financial flexibility
PFC streamlining
• Essential Air Service
• Small Airports – affordable access to Air Service
• Security Mandates
• Expand federal reimbursement
Economic Impact of KCI
• $3.2 billion to the Kansas City Economy
• 67,400 total employment
• $1.5 million in total payroll expenses
• Headquarter Relocation Program
• Geographic Location
• Life Style
• Air Service
SEA
SEA
SEA
PDX
PDX
PDX
M
M
MSP
SP
SP
M
M
MHT
HT
HT
BOS
BOS
BOS
PVD
PVD
PVD
YYZ
YYZ
YYZ
M
M
MKE
KE
KE
OM
OM
OMA
A
A
SLC
SLC
SLC
SM
SM
SMF
F
F
OAK
OAK
OAK
SFO
SFO
SFO
DSM
DSM
DSM
Kansas
Kansas City
City
DEN
DEN
DEN
SJC
SJC
SJC
LAS
LAS
LAS
ABQ
ABQ
ABQ
SAN
SAN
SAN
BWI
BWI
BWI
DCA
DCA
DCA
CVG
CVG
CVG
STL
STL
STL
FOE
FOE
FOE
SGF
SGF
SGF
RDU
RDU
RDU
BNA
BNA
BNA
TUL
TUL
TUL
LAX
LAX
LAX
OKC
OKC
OKC
PHL
PHL
PHL
PIT
PIT
PIT
IND
IND
IND
M
M
MHK
HK
HK
GBD
GBD
GBD
DDC
DDC
DDC
EWR
EWR
EWR
LGA
LGA
LGA
DTW
DTW
DTW
CLE
CLE
CLE
ORD
ORD
ORD
M
DW
M
MDW
DW
LIT
LIT
LIT
CLT
CLT
CLT
M
M
MEM
EM
EM
ATL
ATL
ATL
PHX
PHX
PHX
DFW
DFW
DFW
Nonstop Destinations
Daily Nonstop Departures
Daily Nonstop Seats
55
SAT
SAT
SAT
AUS
AUS
AUS
M
M
MSY
SY
SY
IAH
IAH
IAH
212
23,811
Source: Official Airline Guide, schedules for the week of March 10 – 16, 2003, February 2003, Max edition and announced new service.
M
CO
M
MCO
CO
TPA
TPA
TPA
RSW
RSW
RSW
IOWA
NEBRASKA
Sioux City
Dubuque
Waterloo
Cedar Rapids
Des Moines
Davenport
Iowa City
Omaha
Lincoln
KCI
KANSAS
Columbia
St. Louis
Wichita
Springfield
Joplin
MISSOURI
Enid
Tulsa
Oklahoma City
Fayetteville
Ft. Smith
Memphis
Little Rock
Lawton
OKLAHOMA
Pine Bluff
DMA Populations =
2,780.0
Texarkana
ARKANSAS
DMA’s of Kansas City, St. Joseph and Topeka
DMA = Designated Market Area.
Source: Sales & Marketing Management, Survey of Buying Power, September 2002
Income (EBI in billions) =
$49.9
Approximate Population of San Diego
KANSAS CITY IS NOT DOMINATED BY A HUB CARRIER
Year Ended March 2002, Enplanements
America West
3%
Continental
5%
Frontier
2%
Midwest Express
5%
Southwest
35%
US Airways
7%
Northwest
8%
United
9%
Delta
11%
Note: Includes only U.S. carriers reporting T-100 data.
Source: U.S. DOT, T-100 data, via Data Base Products.
American
15%
PROFILE OF THE KANSAS CITY DOMESTIC MARKET
(Year Ended March 2002)
Domestic O&D passengers
Average yield
Average passenger haul
Sources: U.S. DOT Origination-Destination Passenger Survey, year ended March 2002, via Data Base Products,
8,885,500
13.0¢
930 miles
Seats/Passengers
20,000,000
Load factor has improved by 6 points
to 64% over the last ten years
Seats
18,000,000
16,000,000
14,000,000
Passengers
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
Year Ended
0
92Q1 92Q3 93Q1 93Q3 94Q1 94Q3 95Q1 95Q3 96Q1 96Q3 97Q1 97Q3 98Q1 98Q3 99Q1 99Q3 00Q1 00Q3 01Q1 01Q3 02Q1
Source: U.S. DOT, T-100 Data, via Data Base Products.
Canada/Greenland
Over 430,000 international
passengers in YE June 2001
Asia
Nearly 50,000
KCI
Mexico
Source: U.S. DOT Origination-Destination Passenger Survey via Data Base Products, YE June 2001.
Over 150,000
Caribbean/
Central America/
South America
Europe
KCI PROJECTS
• Terminal Improvement Project
• Consolidated Rental Car Facility
• Economy Lot
TERMINAL IMPROVEMENT PROJECT
• KCI’s $258 million Terminal Improvement Project will:
– Better distribute passenger traffic among the three
terminals
– Widen walkways in all terminals
– Improve information displays for flights and baggage
• The short curb-to-gate distance of 75 feet will not change
• KCI’s $258 million Terminal Improvement Project will:
– Provide unique baggage claims areas for all airlines
– Add many PC outlets and establish a new business
center
– 50% more concession space
• Expected completion: 2004
Economy Lot
KCI’s $62 million Economy Lot will provide:
– Dedicated terminal lots & shuttles
– Real time parking& airport information (Kiosks)
– 15,000 new low cost parking spaces
– Additional security cameras for patrons’ safety
– Faster travel time from new lots to terminal
New Employee Lot
C
B
• Expected completion: 2003
A
Consolidated Rental Car Facility
Benefits to the airport user:
– Customer convenience
– Closer to the terminals
– Flight information display
– Additional on-airport rental choices
• Expected cost: $86 million
• Expected completion: 2005
Air Cargo
Air Cargo means business at KCI !
• All Cargo Carriers
(20 flights per day)
– Airborne, BAX Global, DHL Worldwide, Emery Worldwide, FedEx, Kitty
Hawk, UPS, and United States Post Office
• Largest cargo airport in six-states
– (NE,IA,MO,KS,OK,AR)
• Air cargo buildings on airport - 6
 89% of all air freight is processed by the eight all-cargo carriers
FTZ Attributes at KCI
• Zone No. 15 - Site 3
• One of Largest FTZ airports in the US
•
Benefits including: Deferral payment of duties until goods
are entered in the commerce of the United States
• Works with Greater Kansas City Foreign Trade Zone, Inc
to attract companies that need airport location and FTZ
benefits.
Types / Modes of Distribution
• Pipeline
• Water
• Rail
• Truck
• Air
Cost of Modes
• Pipeline
0.02 per ton mile
• Water
0.02 per ton mile
• Rail
0.03 per ton mile
• Truck
0.40 per ton mile
• Air
0.90 per ton mile
What percentage of World Commerce goes by Air?
• About 2% of World Trade by Volume
• About 40% of World Trade by Value
– About 2.5 trillion dollars of goods are uplifted by aircraft each year
What types of commodities move by Air?
Limits of Air Cargo
• History
• Belly Cargo
• Weight
• Size
– 747 today = 100 tons (total Aircraft load)
(118 inches high, 96 inches wide, 240 inches long)
Intermodal Air Cargo
• Air - Truck
• Sea - Air
• Air - Rail
Air Cargo Information Flow
Freight Fowarder
Custom Hose Broker
Air Carrier
Banks
Customs Service
Dept. of Agriculture
Shipper
Consignee
ACS (Automated Customs System)
Not Just Jets
Remote location (Helicopter)
Airships (lighter than Air)
Rockets (Satelitte Delivery)
DISCUSSION