Memphis International Airport Enplanements by Fiscal Year (000 s)

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1 Enplanements (000's) Memphis International Airport Enplanements by Fiscal Year (000 s) International Domestic

2 Enplanements ('000) Memphis International Airport Enplanements - O&D vs. Connecting 4,000 3,500 3,000 2,500 2,000 O&D Connecting 1,500 1,

3 Landed Weight lbs (000's) Memphis International Airport Landed Weight by Fiscal Year (000 s) 30,000 25,000 20,000 15,000 Cargo Regional Mainline 10,000 5,

4 Operations Memphis International Airport Operations by Fiscal Year 400, , , , ,000 Cargo Regional Mainline 150, ,000 50,

5 Terminal Space by Square foot 500,000 Memphis International Airport Terminal Space by Fiscal Year 450, , , , ,000 Terminal Sq ft 200, , ,000 50,

6 The Authority has been working with airlines and consultants over the past 10+ years on developing additional air service at MEM Due to service reductions over the last 3-4 years community and local political pressure to do more April 2012 first draft of the MEM Air Service Development Program - created to take the Sting out of start-up costs not buying service. June 2012 obtained Board Approval for the MEM Air Service Development Program ( Program ) July 1, 2012 The Program became available

7 Highlights of the MEM Program Total Financial Incentives Amount - $1 million Available to all certified commercial service passenger airlines either signatory or non-signatory Must provide new round trip scheduled service between MEM and top 50 MEM O&D markets No less than 5 days per week domestic No less than 4 days per week international Must be new service not provided by air carrier at MEM in the last 12 months Must continue new service for not less than 12 months If requirements not met pay all fees that would have been incurred

8 Highlights of the MEM Program Mainline Domestic Jet Service (100 seats or more) Landing fee credits up to $50K per new City maximum $250K per airline Terminal rent credit up to $25K per new City maximum $100K per airline Advertising allowance - $50K per new City maximum $150K per airline Maximum incentive per airline per year - $500K

9 Highlights of the MEM Program Regional Domestic Jet Service (99 seats or less) Landing fee credits up to $20K per new City maximum $100K per airline Terminal rent credit up to $10K per new City maximum $40K per airline Advertising allowance - $25K per new City maximum $75K per airline Maximum incentive per airline per year - $215K

10 Highlights of the MEM Program International Service Landing fee credits up to $25K per new City maximum $100K per airline Terminal rent credit up to $25K per new City maximum $75K per airline Advertising allowance - $50K per new City maximum $100K per airline FIS fee waiver (6 months) $25K per new City maximum $75K Maximum incentive per airline per year - $350K

11 Highlights of the MEM Program FAA Issues with Program FAA position was that the Program was structured to be a tiered program based on the categories (size) of Mainline vs. Regional Service FAA basis FAA Air Incentive Program Guidebook incentives can not be based on type or size of aircraft also can not be limited to aircraft with certain number of seats The program must make the incentives available to all similarly situated air carriers.. Explain how the MEM Program not unjustly discriminatory

12 MEM Comments to FAA Every airport s air service situation and objectives are different with a down-sized hub and a need for competitive air service an incentive program must offer incentives suited for our situation. The differentiations in the Program based on size of aircraft and domestic and international services have been made to scale the level of each incentive. Our Program does not exclude any airline on any basis it simply adjusts maximum caps based on a scale. In our view an airline operating a 50 seat airplane is not similarly situated to one operating a 200 seat airplane; therefore, it is reasonable to make these types of differentiation for the scaling of incentive levels.

13 Highlights of the MEM Program To date no air carrier has taken advantage of the Program Southwest begins new service August 11, 2013 with flights to Chicago, Orlando and Baltimore - I m sure they will take the money!

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