BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C U.S.-Cuba Frequency Allocation Proceeding Docket DOT-OST

Transcription

1 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C U.S.-Cuba Frequency Allocation Proceeding Docket DOT-OST ANSWER OF THE CITY OF HOUSTON Communications with respect to this document should be sent to: Mario C. Diaz Director Ian Wadsworth Chief Commercial Officer Department of Aviation CITY OF HOUSTON John F. Kennedy Blvd. Houston, TX (281) (281) (fax) Rachel B. Trinder Jol A. Silversmith ZUCKERT, SCOUTT & RASENBERGER, L.L.P. 888 Seventeenth Street, N.W. Washington, D.C (202) (202) (fax) For the City of Houston Dated: March 14, 2016

2 Answer of the City of Houston March 14, 2016 Page i Table of Contents Introduction... 2 I. THE DEPARTMENT S DECISIONAL CRITERIA WILL BE BEST SERVED BY INCLUDING AN AWARD TO UNITED FOR HOUSTON-HAVANA SERVICE, WHICH WILL ENSURE NEW INTERGATEWAY AND INTERCARRIER COMPETITION IN THE U.S.-HAVANA MARKET AND THAT OVERALL THE GREATEST PUBLIC BENEFITS ARE DERIVED FROM THE LIMITED OPPORTUNITIES AVAILABLE IN THIS PROCEEDING... 3 A. United Will Open A New Scheduled Air Service Gateway To Cuba From A Vital International City In The South-Central Region Of The U.S. That Has Been Seriously Disadvantaged Since The Embargo Was Imposed More Than Fifty Years Ago... 3 B. Houston Is A Powerhouse Economy Of The South-Central United States, With All The Elements Necessary For The Successful Reestablishment of Nonstop Havana Service... 4 C. The Houston Region Is Especially Strong In Key Fields That Are Essential To The Re-establishment of Scheduled Services to Cuba... 7 D. Houston s Strengths And Vitality Are Supported By The Strong And Vibrant Economy Of The State Of Texas, Its Long Term Interest In Cuba, And Its Expertise In Industries In Which Exports To Cuba Are Permitted... 9 E. Despite The Absence of Air Service There Is Already Significant Demand for Houston-Cuba and Texas-Cuba Scheduled Air Services II. III. HOUSTON HAS A LONG AND WELL-ESTABLISHED TRACK RECORD OF DEVELOPING NEW INTERNATIONAL AIR SERVICES. IN PARTICULAR ITS PAST SUCCESS IN SUPPORTING THE ESTABLISHMENT OF SERVICES TO LATIN AMERICA IS AN EXCELLENT PREDICTOR OF SUCCESS IN THE CUBA MARKET THE SELECTION OF UNITED S HOUSTON-CUBA SERVICE PROPOSAL SHOULD BE PRIORITIZED BECAUSE INCLUDING IT WILL ENSURE THE GREATEST OVERALL BENEFITS FOR THE PUBLIC A. An Award To United For Houston Will Best Satisfy One of DOT s Most Critical Decisional Criteria In Limited Entry Proceedings, Namely Ensuring Intergateway Competition And A Competitive Market Structure... 16

3 Answer of the City of Houston March 14, 2016 Page ii B. An Award To United For Houston Also Will Best Satisfy Another Key Department Decisional Factor In Limited Entry Proceedings, Namely Ensuring Intercarrier Competition And A Competitive Market Structure C. United s Proposal Will Provide The Additional Public Benefit Of An Impressive Network Of Hub Connections, Enabling Access To Cuba From Not Just Houston But Also A Diverse Set Of Behind-Gateway Points More Than Those Proposed From The Western U.S. By Many Carriers D. United Will Be Able to Draw On The Significant Untapped Demand That Exists Between The U.S. And Cuba E. United Has An Outstanding Track Record Of Developing Caribbean Services From Houston, Including When Starting With Saturday-Only Services F. An Award To Houston Should Be Prioritized Over American s Proposal For Dallas/Fort Worth, Which Is American s Tenth Priority And Not Realistic; In Any Event IAH Is A Far Superior Connecting Point For Caribbean Service Than Is DFW IV. THE HOUSTON AIRPORT SYSTEM S WORLD CLASS INTERNATIONAL AIR SERVICE FACILITIES WILL PROVIDE OUTSTANDING SUPPORT FOR THE NEW HAVANA SERVICE Conclusion... 35

4 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C U.S.-Cuba Frequency Allocation Proceeding Docket DOT-OST ANSWER OF THE CITY OF HOUSTON The City of Houston ( Houston or the City ), through its Department of Aviation, (the Houston Airport System or HAS ), respectfully submits this answer in support of the application for one weekly (Saturday) U.S.-Havana frequency and related exemption authority filed by United Airlines 1 that would enable the operation of new scheduled nonstop air services between Houston s George Bush Intercontinental Airport ( Bush Intercontinental or IAH ) and Havana s José Martí International Airport ( HAV ). United s request is highly meritorious and Houston strongly urges that it be granted as soon as possible. Additionally, Houston asks that once United s application has been granted, DOT give favorable consideration to those other frequency requests that would facilitate one-stop connecting services between Houston and Cuba. 1 For carriers, common names are used throughout.

5 Answer of the City of Houston March 14, 2016 Page 2 Introduction No entity is more aware than is the Department of Transportation ( DOT or the Department ) of the unique nature of this proceeding, which is the culmination of years of effort by the U.S. Government, U.S. airports (including the Houston Airport System), U.S. airlines, and other parties focused on enabling the restoration of scheduled air services between the U.S. and Cuba after a 55-year hiatus. Houston enjoyed scheduled nonstop Havana air services prior to imposition of the embargo and has strongly supported these efforts to normalize the U.S.-Cuba aviation relationship, as exemplified by the City s support of the recent U.S.-Cuba aviation negotiations and by HAS s work with the U.S.-Cuba Bilateral Commission. Houston greatly appreciates the hard work of all the U.S. Government officials that has made this proceeding possible. Because of the proceeding s unique nature and the fact that the decisions to be made by DOT are likely to set the terms for scheduled U.S.-Cuba air services for some time to come, it is all the more critical that the public benefits that will flow from the frequency allocations are shared equitably among carriers and airports nationwide, so as to ensure maximum intercarrier and intergateway competition and the maximization of public benefits. As discussed herein, the Department s stated objectives and its extensive precedent in limited opportunity international route proceedings amply support this approach. Indeed and notwithstanding the significant number of frequency requests made overall Houston submits that application of DOT s stated objectives and long standing precedent to this case can lead only to the conclusion that United s request for just one weekly frequency to serve Houston must be among those granted.

6 Answer of the City of Houston March 14, 2016 Page 3 I. THE DEPARTMENT S DECISIONAL CRITERIA WILL BE BEST SERVED BY INCLUDING AN AWARD TO UNITED FOR HOUSTON-HAVANA SERVICE, WHICH WILL ENSURE NEW INTERGATEWAY AND INTERCARRIER COMPETITION IN THE U.S.-HAVANA MARKET AND THAT OVERALL THE GREATEST PUBLIC BENEFITS ARE DERIVED FROM THE LIMITED OPPORTUNITIES AVAILABLE IN THIS PROCEEDING. A. United Will Open A New Scheduled Air Service Gateway To Cuba From A Vital International City In The South-Central Region Of The U.S. That Has Been Seriously Disadvantaged Since The Embargo Was Imposed More Than Fifty Years Ago. Houston was a named point in the 1950s-era U.S.-Cuba bilateral air services agreement, and is one of the few cities in the United States that enjoyed pre-embargo scheduled nonstop service to Havana (with services by Braniff International Airways between 1948 and 1961). Today, as the premier international city in the region, and after many years of supporting the re-opening of scheduled air services, Houston s businesses, residents and airports are poised to begin a new era in Cuba service. United s proposal recognizes this in seeking to re-establish the pre-embargo Houston- Havana gateway with a proposal that builds on Houston s and United s combined strengths while recognizing the special realities applicable to the start-up of scheduled services after a half-century hiatus and under applicable travel limitations. Unlike a number of carriers in this case, United has submitted a highly focused application that reflects the reality of the current U.S.-Cuba relationship. That relationship enables far more travel than was the case prior to the Administration s 2015 liberalization of certain licensing restrictions, but still prohibits tourism, and contains multiple limitations. While some applicants remarkably have requested for themselves more than 60% of the Havana frequencies that are available for all carriers, United s approach reflects the frequency limits and significant travel limitations that

7 Answer of the City of Houston March 14, 2016 Page 4 remain, seeking as it does only 7% of the total Havana frequencies and a diversified geographical distribution of opportunities. This compares favorably with a small group of carriers that seek to obtain virtually all of the Havana frequencies for themselves. No one disputes that certain East Coast destinations, including in Florida and the Newark/New York area, have an established demand for Cuba service, as evidenced by existing charter service. However, as United recognizes, the United States does not consist of the East Coast alone, and after so many decades without Cuba services, Houston is in need of re-establishment of nonstop services to Havana. Most importantly, fulfilling this need also will result in the fulfillment of the Department s objectives, will be consistent with well-established decisional criteria in limited entry proceedings, and will best serve the public interest. B. Houston Is A Powerhouse Economy Of The South-Central United States, With All The Elements Necessary For The Successful Re-establishment of Nonstop Havana Service. As DOT knows, Houston is not only the fourth-largest city in the country, but also an economic powerhouse that is a key driver of the national economy and that of the entire south-central U.S. See Exhibit HOU The City lies at the heart of a ninecounty metropolitan statistical area ( MSA ) whose population exceeds 6.5 million and is the fifth-most populous MSA in the nation, having added nearly 570,000 residents since 2010 and being larger than some states. See Exhibits HOU-102 and HOU-103. The Houston MSA s gross area product exceeded $533 billion in Based on that total, if Houston were a country, its economy would be larger than that of 2 For all data cited, Houston has used the latest available. For example, some data for the Houston region has been released for 2015, but in some cases only full-year 2014 data is currently available.

8 Answer of the City of Houston March 14, 2016 Page 5 Norway or Venezuela; indeed, only 24 foreign nations gross product exceeds Houston s. 3 Through 2040, the region s gross area product is expected to grow at an average annual rate of 3.37%, more than doubling by the end of the period. See Exhibit HOU-104. Houston is perhaps best known as the world s energy capital. More than 3,700 energy companies are based in the greater Houston area, including more than 500 petroleum exploration and production companies. Ten of the 25 top publicly-traded petroleum exploration and production companies, the secretariat of the World Energy Cities Partnership (which facilitates information exchange and networking between energy cities), and more than one-quarter of all U.S. petroleum extraction jobs are based in Houston. See Exhibit HOU But while energy production and support remain key to the City s economy, the reality of Houston today is far broader in scope than just its energy-focused image. It is a diverse, award-winning global international business community that includes a breadth and depth rare in the world, offering as it does world-class facilities for medical research and treatment (including the world s largest medical complex), aerospace manufacturing, financial investment, facilities for large-scale international conferences, a vibrant international port, a vast global network of international air services, and 3 Source: Greater Houston Partnership, Houston Facts (2015). 4 Energy includes all types of resources, and Texas leads the nation in wind power generation, led by 30 wind-focused companies based in Houston. See Exhibit HOU-106. Energy is a market sector likely to be of future interest to Cuba, given the expectation that the latter has significant off-shore petroleum reserves and related energy infrastructure needs. For example, the Center for International Energy and Environmental Policy at the University of Texas in Austin estimated in June 2015, in a submission to the U.S. International Trade Commission, that the future value of U.S.-Cuba trade and investments in the energy sector alone post-embargo should be $10-12 billion over a ten-year period.

9 Answer of the City of Houston March 14, 2016 Page 6 exceptional cargo transportation processing, and distribution facilities, among many other strengths. See, e.g., Exhibits HOU-107 and HOU For example, the Houston Medical Center includes 190 life science companies and nearly 200 hospitals, see Exhibits HOU-109 and HOU-110, and represents a prime opportunity for cooperation with Cuba, which itself has emphasized medical research and developed its own unique expertise, such as in the development of medications and vaccines. 6 Houston also is home to a large number of companies engaged in the world s top industries, with ties throughout the nation and the world. Notably, Houston is home to 26 Fortune 500 companies, see Exhibit HOU-111; 26 Forbes Global 2000 companies, see Exhibit HOU-112; 91 foreign consulates (the nation s third-ranking concentration, after New York and Los Angeles), see Exhibit HOU-113; more than 5,700 manufacturers engaged in foreign commerce; and more than 430 companies with foreign offices (in a total of 200 countries and involving more than 250 types of products and services). See Exhibit HOU-114. The Houston-based customs district processed more than $196 billion in international trade in 2015 the seventh-busiest district in the nation. See Exhibit HOU As noted elsewhere in this answer, the strength of Houston and Texas in the production and export of agricultural products is likely to be a major contributor to the success of Houston s new Cuba gateway. The Houston MSA s annual economic activity related to agriculture is valued at $437 million (Source: Greater Houston Partnership, Houston Facts (2015)), and for export purposes, Houston is a gateway for regions extending well-beyond the MSA s borders. Note that details regarding agriculture are not included in Exhibits HOU-107 and HOU-108 but are referenced in sections I.D. and I.E., infra; see also Exhibit HOU-116 (regarding the recent Texas Department of Agriculture trade mission and the potential for future exports to Cuba). 6 Source: BG Consultants, Inc.

10 Answer of the City of Houston March 14, 2016 Page 7 C. The Houston Region Is Especially Strong In Key Fields That Are Essential To The Re-establishment of Scheduled Services to Cuba. The Greater Houston area has a deep and broad expertise in the fields of commerce for which exports to Cuba currently are authorized including agricultural commodities, medicine and medical devices, building materials and tools for private sector construction, and consumer communication devices and other telecommunications equipment. Houston also anticipates that its expertise in other specialties, such as the energy sector, will be of significant value as the U.S.-Cuba trans-gulf market continues to liberalize (e.g., the export of Houston services to assist in offshore exploration). These economic strengths will provide key support for United s proposed Houston-Havana air services. Houston s international strengths are reflected in its employment data, which show that international jobs account for a dominant portion of the million jobs in the region. 7 Furthermore, the region s unemployment rate is below the national average, and employment analyses for the metropolitan area record a 23,200 net gain in jobs for 2015, see Exhibit HOU-117. Houston has added more jobs (738,000+) than any other MSA since 2000, 8 and employment growth of 1.62% over a 25-year future period is anticipated (leading to a total of 4.6 million in 2040). See Exhibit HOU-118. The Greater Houston area s highly educated and skilled workforce represents a multitude of cultures, further reflecting the region s strong international focus (including 7 Source: Greater Houston Partnership, Houston Facts (2015). 8 Source: U.S. Bureau of Labor Statistics.

11 Answer of the City of Houston March 14, 2016 Page 8 the fourth-largest Hispanic population among MSAs more than 2.2 million individuals 9 which is expected to grow at an annual rate of 2.2% and more than double in size by 2050). 10 Houston s residents collectively speak more than 100 different languages, 11 and Houston s foreign-born citizens account for 23.1% of the Houston MSA population more than 1.5 million individuals. See Exhibit HOU Furthermore, Houston is home to over 500 art and cultural institutions and numerous educational institutions (enrolling a total of more than 400,000 students). As the Department knows, visits to Cuba in the arts and education fields are among OFAC s permitted categories of travel. See Exhibits HOU-120 and HOU-121. United will be able to draw on all these factors in support of both the short and long term success of its new Havana service. 13 This vibrant and robust community is supported by the extensive domestic and international air services provided through the Houston Airport System. 14 Houston has recorded impressive traffic gains in recent years, including in just the past year a 3.7% 9 Source: U.S. Census Bureau, American Factfinder (2014). 10 Source: Texas State Data Center; American Community Survey; California Department of Finance. 11 Source: Greater Houston Partnership, Houston Facts (2015). 12 Also of note is that the per capita personal income of Houston residents is 16% above the national average, with total personal income in 2014 of $327.8 billion. Source: Greater Houston Partnership, Houston Facts (2015). The cost of living in Houston is the sixth lowest among the top 20 MSAs better than in Miami, among many other cities. See Exhibit HOU Houston s strength, diversity, and the economic opportunities it offers have led to many awards. Recent key accolades include America s Fastest Growing City (Forbes), No. 1 Destination City (U-Haul International); Top 10 Global Destination for Food and Culture (New York Times); Top City for New Graduates (msnnow); and among the Best Cities for Young Entrepreneurs (CreditDonkey). Source: Websites of listed entities. Houston also regularly hosts major events, including fields likely to be of interest to Cuba and to companies that can now or may in the future engage in trade with Cuba, such as the 2016 World Petrochemical Congress, the 2016 Medical World Americas Conference and Expo, and annual events such as CERA Week and the Offshore Technology Conference. See Exhibit HOU HAS is comprised of three airports (IAH, William P. Hobby Airport ( HOU ), and Ellington Airport ( EFD )). See Exhibit HOU-124.

12 Answer of the City of Houston March 14, 2016 Page 9 increase in overall passengers and an impressive 9.5% increase in international passengers 15 far outpacing the overall and international departure growth rates of a number of other gateways proposed in this proceeding, such as Atlanta (1.9% and 6.2%), Charlotte (1.9% and 2.0%), and Miami (0.9% and -1.2%). 16 Houston enjoys nonstop service to more than 70 foreign destinations, with locations on all six inhabited continents. Indeed, IAH is one of only five airports globally and the only airport in the Americas that provides this level of diversity in its service network. See Exhibit HOU The Houston airports support over 234,000 jobs and contribute more than $27.5 billion in direct and indirect economic benefits to the community. See Exhibit HOU D. Houston s Strengths And Vitality Are Supported By The Strong And Vibrant Economy Of The State Of Texas, Its Long Term Interest In Cuba, And Its Expertise In Industries In Which Exports To Cuba Are Permitted. Houston is the most populous and the premier international city in Texas, see Exhibit HOU-101, and also is an integral part of one of the nation s most energetic and prosperous states. Notably, Texas ranks number two among the states in the number of Fortune 500 company headquarters locations (54 headquarters, just behind New York s total of 55). See Exhibit HOU It is the nation s #1 exporting state (for 14 years running, 15 Source: HAS December 2015 Statistical Report. 16 Source: ACI, 2014 North American Airport Traffic Summary; DOT, 2014 U.S. International Air Passenger and Freight Statistics Report. 17 Houston Mayor Sylvester Turner has expressed the City s support for United s application in a letter that is included with the application. See United Application, Attachment Additional source: Forbes website.

13 Answer of the City of Houston March 14, 2016 Page 10 with exports worth $251 billion in 2015), 19 and the #3 state for overseas travel by its residents (after New York and California but ahead of Florida). 20 The gross product of Texas exceeds $1.6 trillion and would rank it 12th worldwide if Texas were a country, larger than Australia, Mexico, Spain, or South Korea. 21 The state s trade with Latin America in 2015 (imports and exports) totaled more than $235 billion, including more than $5.7 billion in air cargo. 22 Texas consistently receives the highest marks on multiple fronts, for both commerce and lifestyle. 23 Of significant importance in this proceeding, Texas s strengths and interests dovetail perfectly with Houston s and United s desire to re-establish scheduled service to Havana from Houston. Even in the absence of air service, and with exports stymied by federal restrictions, the state s exports to Cuba over the past decade have been valued at more than $477 million. 24 In December 2015 Texas Governor Greg Abbott led a trade mission to Cuba (which included representatives of the state s TexasOne economic development agency as well as the Houston Airport System), and a further mission led by Deputy Agriculture Commissioner Jason Fearneyhough, accompanied 19 Source: Office of Governor Greg Abbott, Texas Remains Top Exporting State In Nation For 14th Consecutive Year (February 9, 2016). 20 Source: National Travel and Tourism Office, Profile of U.S. Resident Travelers Visiting Overseas Destinations: 2014 Outbound. 21 Source: Texas Economic Development Corporation. 22 Source: WiserTrade. 23 This includes in the past year: America s Top State for Infrastructure (CNBC), the Best State for Business (Chief Executive Magazine) for the eleventh year in a row, the no.1 ranked-state for Small Business Friendliness (Thumbtack), the Best State to Make a Living (MoneyRates.com), the Gold Shovel for economic development (Area Development), and the Best Business Climate (Business Facilities). Source: Websites of listed entities. 24 Source: WiserTrade, Port HS database.

14 Answer of the City of Houston March 14, 2016 Page 11 by industry and community representatives, was completed last month. 25 Entities ranging from the Texas Farm Bureau to the Texas-Cuba Trade Alliance have publicly supported efforts to make Cuban markets available to U.S. trade. 26 Furthermore, Texas is a leader in market sectors that are likely to be of high interest to Cuba today and in the future; for example, in 2014, the state exported agricultural products worth $4.8 billion, medical equipment worth $2.9 billion, and petroleum-related products worth $59 billion. 27 E. Despite The Absence of Air Service There Is Already Significant Demand for Houston-Cuba and Texas-Cuba Scheduled Air Services. Until recently, the restrictions on travel by U.S. citizens to Cuba meant that traffic in the market was driven primarily by family visits. While United s new service will draw in part on the needs of the Houston business community for support, the family sector will continue to be a source of significant demand for Cuba travel, and in this regard Houston has significant strength, with its Cuban population ranking high among Metropolitan Statistical Areas ( MSAs ) (#8). See United Application, at 9, and Exhibit UA-114. This strength is augmented when behind-houston population is taken into account, with Texas ranking fifth among the states for the number of its Cuban- 25 Source: Office of Governor Greg Abbott, Governor Abbott To Lead Business Development Mission To Cuba (November 24, 2015); Texas Department of Agriculture, Expansion of Trade Relations, Developing New Markets For Texas Agricultural Products Focus of Official Trade Mission to Cuba (February 23, 2016). 26 Source: Websites of listed entities. 27 Source: Texas Economic Development Corporation. The Center for North American Studies at Texas A&M University has estimated that if fully realized, Texas agricultural exports to Cuba alone would reach $18.8 million annually, would produce $24.1 million from supporting industries, and would result in a total economic impact of $42.9 million throughout the Texas economy. Source: Potential for Texas Agricultural Exports to Cuba (November 2015).

15 Answer of the City of Houston March 14, 2016 Page 12 American residents, 28 enabling United to draw upon Cuban-American communities in the state and beyond with a population of almost 200,000, passengers who today have few options other than circuitous flights over Florida. See United Application, at 9. Furthermore, the record shows considerable recent Cuba travel by Houston- and Texas-based entities in response to the 2015 liberalization of U.S. licensing limitations, which now permit travel for purposes such as educational activities; public performances; religious activities; humanitarian projects; professional research, and for business transactions related to the expanded categories of permissible exports (as discussed further below). In addition to those cited previously, recent Cuba trips include travel to Havana by the Greater Houston Partnership, the World Affairs Council of Greater Houston, the University of Houston Alumni Association, and the Texas Lyceum. 29 Given that in 2015 U.S. travel to Cuba increased by a remarkable 50%, 30 it is reasonable to expect not only that this traffic will grow significantly over time both as connections are built under the terms of the current limitations, and more so as additional travel restrictions may be removed but also that Houston will receive its share of the growth. As American has pointed out, youthful Cuban-American populations have an expansive attitude towards travel and liberalization. See Exhibits AA-803 AA-804. Indeed, Houston s community as a whole is young, with a median 28 Source: U.S. Census Bureau. 29 Source: Websites of listed entities. 30 Source: BG Consultants, Inc.

16 Answer of the City of Houston March 14, 2016 Page 13 age of 33.5, 31 and thus based on American s own studies is likely to be interested in travel to, liberalization with, and investment in Cuba. II. HOUSTON HAS A LONG AND WELL-ESTABLISHED TRACK RECORD OF DEVELOPING NEW INTERNATIONAL AIR SERVICES. IN PARTICULAR ITS PAST SUCCESS IN SUPPORTING THE ESTABLISHMENT OF SERVICES TO LATIN AMERICA IS AN EXCELLENT PREDICTOR OF SUCCESS IN THE CUBA MARKET. At the dawn of deregulation in the 1970s, Houston had international air service to just ten international destinations, namely three in Europe and seven in Mexico. Today Houston is one of the world s major international air service gateways, offering an extraordinary array of global services (including, as noted above, nonstop service to more than 70 foreign destinations). This success reflects the long term commitment by the City to working closely with its carriers and with local and regional entities to ensure that the community has available an impressive global web of nonstop services, as well as extensive connections for local and behind-gateway passengers. In parallel with this growth the City, its business leaders and its highly diverse residential population have over this same time period vastly expanded the size, depth, diversity, and complexity of the regional economy, with its population having grown by 185% and its employment by 193%. 32 The success that has resulted from this highly proactive approach by the City and its carriers is perhaps reflected best in the impressive array of Latin America services that Houston enjoys today. The City s ideal geographical location equidistant 31 Source: Greater Houston Partnership, Houston Facts (2015). 32 Source: Greater Houston Partnership, Houston Facts (1975 and 2015).

17 Answer of the City of Houston March 14, 2016 Page 14 from the east and west coasts, within a few hours by air of all major U.S. metropolitan regions (more than 141 million Americans live within a 1,000 mile radius alone), see Exhibit HOU-201, and with direct access to the Gulf of Mexico has made Houston the gateway of choice for trade with Latin America. Today Houston is the fourth-largest customs district for overall trade with Latin America, with combined exports and imports in 2015 of more than $66 billion, larger than any other gateway in this proceeding other than Miami. See Exhibit HOU-202. Air cargo is particularly strong, with the 2015 bidirectional trade between Houston and Latin America totaling over 14.4 million kilograms at a value of over $824 million. 33 So important is this trade that more than twenty Latin American countries have chosen Houston as a location for their consulates. See Exhibit HOU-113. This success is reflected in the strong network of Latin America air services that Houston enjoys today. Measured by seats, IAH is the third largest U.S. gateway to Latin America, with scheduled service by United to 54 destinations in See Exhibits HOU-203 and HOU-204. Houston s Latin American passenger traffic has grown at a rate of 21% since 2011 and 15% in the past year alone, see Exhibit HOU These same factors provide the basis for the development of Houston as a major gateway for scheduled U.S.-Cuba air services. Houston s optimal location and its other significant strengths supporting the development of Latin America services also make it 33 Source: WiserTrade. 34 United s hub at IAH also is the largest U.S. gateway to Mexico. See HOU-203.

18 Answer of the City of Houston March 14, 2016 Page 15 an ideal trade connector with Cuba, bringing benefits to the greater Houston area and nationally. See Exhibit HOU-201. The strong potential for Houston s gateway to Cuba is demonstrated by data extrapolations based on the region s existing trade relationships with other Latin American countries. If Cuba experienced trade with Houston commensurate with its size and population, Houston anticipates that the figure for the annual Houston-Cuba trade would rapidly again exceed $100 million per year. As an example: in 2015 Houston sent exports with a value of more than $147 million to and received imports with a value of more than $10 million from Bolivia, a similarly-populated Latin American market. 35 Likewise, in 2015 Houston sent exports with a value of more than $808 million and received imports with a value of more than $108 million to/from the Dominican Republic a Latin American country similar to Cuba in terms of GDP data. 36 Even if the Houston-Cuba trade amounted to only a fraction of these figures in the short term, the gains nevertheless would be significant, and can be expected in the long-term to reach their full potential. Even American which seeks more than 60% of the total number of frequencies available in the entire proceeding acknowledges that scheduled service in conjunction with the relaxation of travel and trade restrictions will spur demand for Cuba travel elsewhere in the U.S. See American Application, at Source: U.S. Census Bureau, USA TRADE database. 36 Source: U.S. Census Bureau, USA TRADE database.

19 Answer of the City of Houston March 14, 2016 Page 16 III. THE SELECTION OF UNITED S HOUSTON-CUBA SERVICE PROPOSAL SHOULD BE PRIORITIZED BECAUSE INCLUDING IT WILL ENSURE THE GREATEST OVERALL BENEFITS FOR THE PUBLIC. A. An Award To United For Houston Will Best Satisfy One of DOT s Most Critical Decisional Criteria In Limited Entry Proceedings, Namely Ensuring Intergateway Competition And A Competitive Market Structure. In one of its most significant recent rulings in a limited entry competitive proceeding, DOT determined that an award to a new gateway currently lacking service would produce the highest public benefits. See, e.g., U.S.-Haneda Combination Services Allocation Proceeding, Order , at 6 (March 27, 2015) (prioritizing the first nonstop service on a significant route that then lacked any such service). Applying that important precedent in this case would result in an award to United for Houston service. It would ensure new service from an entirely unserved gateway and help correct the existing geographic imbalance that is so heavily weighted towards Florida. The Department s decision in the U.S.-Brazil Combination Service Proceeding, Order , at 7 (March 20, 2009) also is particularly on point. As DOT stated: [w]hile we recognize that some of the largest markets are on the east coast, this geographic disparity nevertheless presents a significant service imbalance that can be at least partially remedied by the selection of a Houston-based service proposal. Houston strongly urges the Department to make new gateway entry a priority in its decision in this case. While the overall number of Havana frequencies available 20 per day, or 140 per week is small, that number is high enough to ensure that scheduled services can be enabled from a variety of U.S. gateways nationwide. Of the

20 Answer of the City of Houston March 14, 2016 Page 17 total 397 Havana frequencies requested, 355, or almost 90%, propose service from the East Coast, and only just over 10% of the frequencies are sought for nonstop service from gateways in the central/western United States. 37 For Florida alone, a total of ten carriers have requested to collectively operate 42 daily flights (a weekly total of 294) more than twice the 20 daily/140 weekly available. While clearly some East Coast gateways merit a frequency award, there is extensive DOT precedent supporting indeed demanding an equitable allocation to other gateways in order to maximize intergateway competition. In addition to the DOT precedents cited above, see, e.g., U.S.-Brazil Combination Frequency Proceeding, Order , at 7 (June 20, 2013) (concluding that opening a new western gateway would partially offset the disparity of access to Sao Paulo from Western U.S. points, and we tentatively find that the traveling public will benefit from the addition of new daily U.S. carrier nonstop service to Sao Paulo from a major international gateway ); U.S.-Lima Combination Service Proceeding, Order , at 5-6 (April 29, 1996) ( Continental s proposal will provide significantly greater overall public benefits in the form of intergateway competition with Miami, the traditionally dominant U.S. gateway, and in the form of enhanced intercarrier competition with American, the dominant U.S. carrier ). Even American has acknowledged that 32% of Cuban-Americans live somewhere other than Florida (see Exhibit AA-602) and that even in 2014, before the 37 Specifically, Alaska (14), American (9), Dynamic (8), Frontier (7), Sun Country (2), and United (2).

21 Answer of the City of Houston March 14, 2016 Page 18 recent changes in the law, 20% of travelers to Cuba were not of Cuban ancestry (see American Application, at 10). JetBlue suggests that cities such as Houston should not receive an award because travel to Cuba will remain fundamentally restricted (see JetBlue Application, at 9), while American has suggested that other markets should await a second phase of frequency allocations (see American Application, at 8). 38 These positions are shortsighted and completely inconsistent with DOT s stated objectives and long-standing precedent in limited entry cases (and in JetBlue s case inconsistent with elements of its own proposal e.g., to serve Boston, a city with many merits but none as strong as those of Houston). Neither approach would serve the public interest, and each merely emphasizes the rather astounding proposals that those carriers have submitted, which together seek 170 Havana frequencies, namely 121% of the total available. 39 These arguments must be rejected as being entirely contrary to the public interest. Indeed, even if the only consideration were the replacement of existing charter flights by scheduled service (which of course it is not), the heavy focus on certain destinations may overstate the likely traffic. For example, in recent months there has been an average of just over 8 flights a day from MIA to HAV (see Exhibit HOU-301) As the Department knows, it is unlikely that additional frequencies for U.S. carrier service to Havana will be made available in the short term, and there is no second phase of allocations. Houston hopes that when possible the U.S. Government will press for additional frequencies so that in the long term cities such as Houston can enjoy competitive nonstop Havana service. However, the hope of more Havana frequencies is, at this time, just that, and cannot serve as the basis for the decision in this case. 39 In contrast, other carriers such as Silver nevertheless anticipate that a significant percentage of travelers to Cuba will not be Cubans or Cuban-Americans. See Silver Application, at 6. See also FedEx Application, FX-T-1 at 7, et seq. (noting expanding opportunities for trade with Cuba). 40 A review of the public charter flights operated in January and February 2016, based on DOT prospectus filings, finds that 99% of them originated east of the Mississippi, 97% of them originated in (continued )

22 Answer of the City of Houston March 14, 2016 Page 19 Yet in this proceeding six carriers have requested to collectively operate an average of more than 16 scheduled flights per day in that market, which if granted would consume 80% of the available rights for the U.S. as a whole. Similarly, American has calculated that for all of 2015, there were on average 7.3 MIA-HAV public charter flights per day and that the charter flight count is growing which American cites for the proposition that 80% of the total available Havana frequencies should be allocated to Miami. It goes on to argue that its proposal for an astounding ten daily MIA frequencies is modest and reasonable. See American Application, at With respect, there is nothing modest or reasonable about an approach that would, if granted, preclude other gateways and carriers from an opportunity for new scheduled service and also prevent the creation of a competitive environment for U.S.-Cuba services. It is also worth noting that because Cuba charter flights are not combined on a PNR with any connecting flight, the current concentration of O&D charter traffic in Florida should not be interpreted to mean that all of the passengers of charters are local in origin; in all likelihood a significant percentage of them separately arranged connections from their true points of origin elsewhere and would prefer nonstop services starting from those communities. The purpose of this proceeding is to allocate new scheduled opportunities that exist only because of dedicated efforts by the U.S. Government to move towards a liberalized relationship with Cuba that will open up avenues for trade and travel not Florida, and 88% of them originated in Miami. See Exhibit HOU-301. DOT T100 data further indicates that the imbalance was similar but even more extreme in See Exhibit HOU-302.

23 Answer of the City of Houston March 14, 2016 Page 20 allowed in more than half a century. Yet American stakes its highly unreasonable claim around the proposition that DOT should ensure the continuation of existing traffic patterns (see American Application, at 17) the very same traffic patterns that have been so severely limited by the absence of scheduled service and the presence of significant travel restrictions. Such a result would be contrary to the entire purpose and spirit of this proceeding. In accordance with DOT precedent, this proceeding should look to the future, not the past. See, e.g., United States-London Case, 87 C.A.B. 321, 426; Order , at 92 (October 31, 1980) ( [t]he Board is selecting gateways for the future not for the past ) (emphasis added). See also Japan Charter Authorization Proceeding, Order , at 3 (June 8, 1989) (factors to be considered in allocating limited rights include our need to be responsive to the present and future needs of the domestic and foreign commerce of the United States ) (emphasis added); 49 U.S.C (a)(7)(A) (DOT s mandates include developing and maintaining a sound regulatory system that is responsive to the present and future needs of the commerce of the United States ) (emphasis added). While it is true that historically one of the greatest sources of demand for Cuba travel has been family visitation (and no one disputes that Florida and other East Coast areas have a significant Cuban-American population), the reality is that the regulatory and market situations are changing rapidly, and that other regions such as the Greater Houston area have both a need and a demand (as well as one of the top ten largest Cuban-American populations in the nation). As the Department itself noted in its instituting order, it will also consider the effects of the applicants service proposals on

24 Answer of the City of Houston March 14, 2016 Page 21 the overall competitive environment, including effects on market structure and competition in the U.S.-Cuba market. Order , at 2 (February 16, 2016). Only a decision that includes an award to United for Houston service can ensure a competitive market structure. B. An Award To United For Houston Also Will Best Satisfy Another Key Department Decisional Factor In Limited Entry Proceedings, Namely Ensuring Intercarrier Competition And A Competitive Market Structure. An award to United for Houston services also would fulfill DOT s well-established preference for the enhancement of intercarrier competition in limited entry international markets. As DOT repeatedly has emphasized, entry by U.S. carriers that do not already serve a market should be prioritized over awards favoring incumbents. See, e.g., U.S.- Colombia Combination Frequency Allocation Proceeding, Order , at 11 (March 5, 2008) ( [w]hen rights for U.S. carriers become newly available in such restrictive environments one of our primary goals has been to enhance competition by creating opportunities for new entrant carriers to gain market access ). In this proceeding there are 13 carriers seeking a very limited number of frequencies in the Havana market. Some of those carriers have submitted extraordinarily rich requests that if granted would effectively preclude any competition. Indeed two carriers collectively seek for themselves more than the total number available to all, namely American with a request for 86 weekly and JetBlue for 84 weekly frequencies, or a total of 170, in a market for which only 140 weekly are available. By contrast, United seeks only a very reasonable 7% of the Havana total. Even recognizing the demand in certain East Coast markets, there is simply no basis for

25 Answer of the City of Houston March 14, 2016 Page 22 awarding all or even most of the Havana frequencies to the existing dominant carriers or to a very small number of carriers. The public interest can be served only by allocating frequencies among all qualified applicants. Indeed, at least one carrier American appears to be attempting to resuscitate the long ago discarded and discredited chosen instrument theory of frequency allocation 41 by touting its current dominance of the market as a basis for further increasing that dominance. See Exhibit AA-401, et seq. Houston recognizes that in this proceeding the term incumbent means something slightly different than in other cases, given that all carriers are applying for scheduled authority for the first time. Nonetheless, the fact remains that some applicants in this proceeding already operate extensive services in the Cuba market, albeit with charters. Currently American operates more than 1,000 per year, and for 2015 reported that it carried 222,228 passengers. See Exhibit AA-401. Eastern Air Lines in 2015 operated an average of 90 per month, see Eastern Application, at 2, and although it has not provided a passenger count, based on aircraft type it appears to have offered more than 158,000 seats to Cuba in As historically has been the case in other route cases involving limited entry markets, it is in the public interest to allocate the few available frequencies to multiple carriers so that no carrier is dominant and that other carriers have sufficient frequencies 41 It is worthy of note that in attempting to spin its incumbency as an advantage because it is well-versed in doing business in Cuba, American acknowledges that United has the second-most experience among scheduled U.S. carriers in doing business in Cuba, even though United is not presently operating charter services. See Exhibit AA Based on prospectus filings for January and February 2016, American operated 174 flights, and based on aircraft type offered more than 25,000 seats departing the U.S. to Cuba over that two-month period. See Exhibit HOU-303. Meanwhile JetBlue operated 49 Cuba charters during the same period. See id.

26 Answer of the City of Houston March 14, 2016 Page 23 to be able to compete. See, e.g., U.S.-Brazil Combination Frequency Proceeding, Order , at 7-8 (March 20, 2009) ( [w]hen rights for U.S. carriers become available in restrictive markets, one of our primary goals has been to enhance competition by creating opportunities for new entrant carriers to gain market access ); U.S.-Peru Combination Service Proceeding, Order , at 8 (October 17, 1995) ( an award to American would increase concentration in an already concentrated market, and make future new entry that much more difficult ). As the Department itself noted in its instituting order, a primary criterion to be considered in this proceeding is the effects of the applicants service proposals on the overall competitive environment, including effects on market structure and competition in the U.S.-Cuba market. See Order , at 2 (February 16, 2016). Furthermore, unlike United, which has requested frequencies for Havana only, multiple other applicants are assured of receiving Cuba frequencies because the regional markets for which they also seek authority are undersubscribed. This includes American (Cienfuegos, Camaguey, Holguín, Santa Clara, and Varadero), JetBlue (Camaguey, Holguín, and Santa Clara), and Frontier (Camaguey, Santiago, Santa Clara, and Varadero). This further supports selecting United in order to ensure competitive balance among carriers in the overall U.S-Cuba market. Another significant public benefit of maximizing intercarrier competition is that it will help lessen the likelihood of failure by carriers that may have been overly ambitious in their proposals. While Houston believes that the Cuba market has significant untapped potential and demand for scheduled services, it also recognizes the limitations imposed by the current U.S. embargo-related travel restrictions. As DOT knows, overly-

27 Answer of the City of Houston March 14, 2016 Page 24 ambitious proposals can end badly. For example, in the U.S.-China All-Cargo Case, Order (December 7, 1992), DOT selected Evergreen over FedEx because the former submitted an ambitious all-in proposal for the first U.S. all-cargo service in the U.S.-China market. That business model proved overly ambitious, and after less than two years of operation Evergreen ended its scheduled services and transferred its authority to FedEx. See Order , Appendix A, at 1 (July 14, 2003). In this case United has submitted a highly targeted and reasoned proposal (see United Application, at 5) that reflects the reality of the current U.S.-Cuba relationship. But some carriers have not, and may be promising far more than they can deliver, even given rapidly changing circumstances. See also Silver Application, at 12 (cautioning against applications unlikely to support the proposed pattern of service). This warrants caution by DOT and further supports an equitable allocation among carriers. C. United s Proposal Will Provide The Additional Public Benefit Of An Impressive Network Of Hub Connections, Enabling Access To Cuba From Not Just Houston But Also A Diverse Set Of Behind-Gateway Points More Than Those Proposed From The Western U.S. By Many Carriers. Houston s geographic position and the strength of United s hub at IAH will enable a wide range of low-circuity connections from Houston to communities across the western U.S. and Cuba. See Exhibit HOU-306. United s IAH hub offers more than 520 daily flights including more than 100 international flights to 63 international destinations, 52 of them in Latin America and the Caribbean. See United Application, at 9. Thus United s Houston-Havana air services will draw on and benefit not only

28 Answer of the City of Houston March 14, 2016 Page 25 passengers from the greater Houston area but also those from communities across the U.S. 43 DOT long has recognized and recently reiterated that behind-gateway benefits (a/k/a route integration ) also comprise an important decisional factor in route cases; such connections extend the benefits of a service in a limited-entry international market beyond the gateway, to communities across the U.S. See, e.g., U.S.-Haneda Combination Services Allocation Proceeding, Order , at 6 (March 27, 2015) (noting that the proposed service would further serve the public interest by providing a number of western cities with their first one-stop connecting opportunity and that other cities would gain the option of service over a less circuitous gateway ); U.S.- Brazil Combination Service Proceeding, Order , at 7 (March 20, 2009) (in addition to Houston itself, selection of Houston-based service proposal would provide benefits to the western and central region as a whole ). The same factors are applicable in this case. The United network behind Houston one of the carrier s largest hubs (see Exhibit HOU-304) and a launching point for extensive Latin American services (see Exhibit HOU-305) will accomplish that important DOT goal of maximizing behind-gateway benefits, by supporting United s IAH- HAV flights with convenient and wide-ranging connecting options. As United has observed, for travel to Cuba, IAH s overall circuity is superior to all other southern hubs; and 20 cities across the U.S. will have efficient year-round round-trip connections to 43 Houston also will offer advantages over certain East Coast gateways that have been proposed in this proceeding. For example, as noted above, Houston s overall and international traffic have been growing faster than that at either ATL or CLT (both of which are included as potential competitors against American s mega-hub in MIA), and Delta in this proceeding has requested more frequencies from MIA than from its own hometown of Atlanta.

29 Answer of the City of Houston March 14, 2016 Page 26 Havana via Houston. This amply fulfills DOT s standards and should place United s Houston proposal very high on DOT s selection list, because the public benefits that will flow from this element alone are so significant and so superior to many other proposals. See United Application, at 10; see also Exhibit HOU Although a few other carriers have proposed service from markets in the western United States to Havana, none can compete with United in the array of public service benefits that will flow from behind-gateway connections. In the case of Los Angeles, Alaska admits that it would serve only four points and American that it would serve only nine. 45 Likewise, Frontier acknowledges that at Denver it would offer behind-gateway connections to only 14 points and although Sun Country does not disclose in its application a figure for connections at Minneapolis, it can be no more than 10 points. See Exhibit HOU-309. D. United Will Be Able to Draw On The Significant Untapped Demand That Exists Between The U.S. And Cuba. As DOT is aware, because of the overall lack of scheduled services, the changing regulatory environment and the recent rapid market evolution of traffic in the U.S.-Cuba market, developing precise traffic projections is a challenging task for gateways that currently have no service at all. However, examples from certain other markets provide considerable insight, especially when they can be drawn from other countries with a commensurate size, population, and potential. This general concept 44 Additionally, to the extent that other carriers would establish behind-gateway networks that would enable one-stop services to Houston via other cities, those proposals also have value and should be given favorable consideration (such as via Southwest Airlines at FLL, see Southwest Application at 7-8) but only after United s nonstop IAH-HAV proposal has been granted. 45 Furthermore, American s Los Angeles proposal would simply convert charter services to scheduled services, further entrenching American s market position. See AA-T-3, at 6.

30 Answer of the City of Houston March 14, 2016 Page 27 has been invoked by various applicants in this case, including United (see Exhibits UA- 100 UA-106), Southwest (see Southwest Application, Appendix 1) and Spirit (see Exhibit NK-CU-6). For example, in 2014 more than 465,000 passengers (over 1,200 per day) traveled between Houston and Costa Rica 46 a country with less than half the population of Cuba. Houston first offered service to San Jose (SJO) in 1990 and to Liberia (LIR) in 2004; both markets have grown significantly and today are served multiple times per day (including by United from IAH and by Southwest from HOU). 47 Another useful example is Houston-Grand Cayman a market similar to Houston-Havana in terms of distance (and also like Houston-Havana at least initially one that is not business-intensive and would be served less than daily). 48 In 2014, the IAH-GCM traffic exceeded 72,000 passengers. 49 In addition, utilizing data based on traffic in the similarly-situated Houston-Dominican Republic and Houston-Jamaica markets, Houston has highlighted a very reasonable scenario in which United s proposed Houston-Havana service can be expected to achieve a load factor at or greater than 80%, or 123 passengers per flight. See Exhibit HOU-307. The volume of traffic to Cuba from other countries also serves as evidence of the lost opportunities for U.S.-Cuba travel overall and suggests that demand is likely to be widespread across U.S. cities. For example, Canada with a population equivalent to just 11% of the U.S. nevertheless reported traffic of more than 1 million passengers 46 Source: DOT, U.S.-International Passenger Raw Data for Calendar Year Source: OAG. 48 Source: OAG. 49 Source: DOT, U.S.-International Passenger Raw Data for Calendar Year 2014.

31 Answer of the City of Houston March 14, 2016 Page 28 to/from Cuba in In February 2016 Canadian and Cuban carriers scheduled 245 weekly flights between Cuba and Canada, linking 19 Canadian cities with 10 Cuban cities 50 a far more diverse and deep regime than the current Miami-centric charter services between the U.S. and Cuba, despite the much smaller Canadian population. This provides further evidence that once unshackled, multiple communities across the U.S., including Houston, will be successful in supporting long term air access to Cuba. In short, while overall U.S.-Cuba traffic and trade has been stymied in the past by lack of scheduled service and the U.S. embargo, there is every reason to believe that given the 2015 regulatory changes and the institution of new scheduled service, United will be able to draw on untapped sources of traffic to sustain and develop its new Houston service. This conclusion is further supported by data showing that existing U.S. export trade has thus far been forced to travel largely over the southeastern U.S. gateways, thereby diverting traffic from other gateways. 51 E. United Has An Outstanding Track Record Of Developing Caribbean Services From Houston, Including When Starting With Saturday-Only Services. Houston and United have a long track record of successful and close cooperation in developing new markets, combining the strength of local needs with demand from behind-gateway communities; Caribbean services provide an outstanding example of this. Since December 2014, United has started service from Houston to three new 50 Source: Airline schedule and ARC and IATA Booking Information, via Diio FMg. 51 According to the USA TRADE database, in 2008, 26.6% of U.S. exports to Cuba moved through ports in Florida, Georgia, and Alabama; in 2015, 57.3% of U.S. exports did so.

32 Answer of the City of Houston March 14, 2016 Page 29 destinations in the Caribbean, namely Providenciales, St. Thomas, and Punta Cana. See Exhibit UA-106. Furthermore, as United notes, Saturday-only service is a proven travel pattern for Caribbean services. See United Application, at 3. United currently operates Saturdayonly services in numerous markets. In four of those, Saturday-only services that were started in February 2015 since have been upgraded to more frequent service, including in the IAH-MBJ market, and United is continuing to increase its overall weekend-only Caribbean services from IAH. See Exhibit HOU-308. Even American has acknowledged that weekly flights are appropriate when they reflect market demand, such as for its own proposals to operate LAX-HAV and ORD-HAV services. See AA-T- 3, at 6. The instituting order in this case emphasizes that the Department will consider which applicants will be most likely to offer and maintain the best service for the traveling and shipping public. See Order , at 2 (February 16, 2016). United s Houston proposal amply satisfies these criteria. F. An Award To Houston Should Be Prioritized Over American s Proposal For Dallas/Fort Worth, Which Is American s Tenth Priority And Not Realistic; In Any Event IAH Is A Far Superior Connecting Point For Caribbean Service Than Is DFW. Although it is buried deep in the carrier s exhibits, American acknowledges that service to Dallas/Ft. Worth is its tenth priority, and that it would serve DFW only if it first received almost half the total frequencies available to Havana in this proceeding. See Exhibit AA-1002 (emphasis added). To clarify: even if American were awarded all the frequencies it seeks i.e., more than 60% of the total

33 Answer of the City of Houston March 14, 2016 Page 30 available it would start service to DFW only after obtaining sufficient frequencies to provide eight daily roundtrips to Havana from Miami and one daily roundtrip from Charlotte to Havana. See Exhibit AA-201. Given that only 20 daily roundtrips are available from the entire United States, it is thus unrealistic to view American s DFW proposal as having any chance of actually being implemented. Indeed it would be impossible for DOT to grant American s very low priority application for DFW frequencies if it wishes to fulfill the Department s stated goals in this proceeding. To do so would enable such extraordinary dominance by American of the overall U.S-Cuba market that it would violate significant DOT precedent and eliminate the possibility of true intercarrier and intergateway competition. By contrast, United has been conservative and judicious in its request for Texas frequencies, and has made Houston its second priority, seeking only one frequency for Saturday services one that will bring extensive public benefits, including more behindgateway connections than many of the other proposals to serve the western U.S. See United Application, at 4; Exhibit HOU-309. Indeed, American has argued that if it is allowed to operate multiple daily Miami- Cuba services, it will emphasize behind-gateway connectivity via MIA, rather than via DFW. See American Application, at 18. Thus American s inclusion of a very low priority application for DFW is not only meaningless as a practical matter because there is almost no chance that the services will start, but if granted would serve only to extend American s dominance in the U.S.-Cuba market to other regions of the country, without adding any significant benefits to the local and regional markets.

34 Answer of the City of Houston March 14, 2016 Page 31 DOT previously has rejected similar American proposals on this very basis. See, e.g., U.S.-Lima Combination Service Proceeding, Order , at 8 (April 29, 1996) ( nearly 60 percent of American s proposed Dallas/Fort Worth traffic comes from cities that American already serves on its Miami-Peru nonstop service. American s [DFW] proposal would thus offer far less intergateway competition than would Continental s [IAH] proposal ); U.S.-Colombia Combination Frequency Allocation Proceeding, Order , at 10 (March 5, 2008) (reallocating American frequencies on the basis that benefits of services at Miami are outweighed by the benefits of new competition in the market and expanded service options in the overall U.S.-Colombia market ). Furthermore, IAH is already a much better connecting point for services to the Caribbean than is DFW. Measured in passengers per day making one-stop connections, IAH handles more than twice as many passengers as does DFW. See HOU-310. Houston is already a leading gateway for channeling connecting passengers from western points to the Caribbean (see HOU-311), and those connections work in coordination with Houston s strong local demand: the local Houston market for passengers to the Caribbean has grown by 96% in the past ten years, see HOU Houston s services to the Dominican Republic and Jamaica both relatively proximate to Cuba also show the potential of the local market, generating 141 travelers per day. See Exhibit HOU-313. Thus, unlike with DFW, IAH service would both build upon and increase competition to the region and to Cuba, from a local market in need of service and from multiple additional origination points, rather than further entrenching the long-time

35 Answer of the City of Houston March 14, 2016 Page 32 dominant carrier. This further supports selection of United s Houston proposal by the Department, and certainly far higher prioritization than American s Dallas proposal. IV. THE HOUSTON AIRPORT SYSTEM S WORLD CLASS INTERNATIONAL AIR SERVICE FACILITIES WILL PROVIDE OUTSTANDING SUPPORT FOR THE NEW HAVANA SERVICE. United will operate its Havana services from Bush Intercontinental, one of its largest hubs and Houston s primary gateway to the world since In recent years Houston has invested significantly in its facilities, transforming IAH into a superb international gateway that is always at the cutting edge of providing new technology. Houston also has made it a priority to work closely with U.S. Government officials to implement pilot programs designed to further enhance international arrivals, improve the customer experience, and obtain maximum efficiencies to ensure speedy processing and on-time connections. For example, as one of the first two Model Ports designated by the State Department and the Department of Homeland Security in 2007, for nearly a decade IAH has been at the forefront of efforts with the U.S. Government to maximize the efficiency and security of international passenger arrivals processing. 53 IAH was one of the first airports nationwide to install an on-site enrollment center for Global Entry which allows frequent international travelers to bypass passport control lines and clear customs by using an automated self-service kiosk, and since 2013 also has offered the convenience 52 Last year, IAH was the nation s fourth-largest international passenger gateway measured by destinations, with more than 10.6 million passengers. Source: HAS website and December 2015 Statistical Report. 53 Source: HAS website.

36 Answer of the City of Houston March 14, 2016 Page 33 of a satellite downtown Global Entry enrollment center. 54 According to the most recent data available, IAH ranks third among all U.S. airports for passenger entries via Global Entry kiosks. 55 This spring IAH will continue to be a testing location for CBP biometric exit screening. 56 Additionally, to further enhance the arrivals experience, on its own initiative HAS has paid for the installation of 57 Automatic Passport Control kiosks, and dedicates Special Service Representatives to provide assistive services in 18 languages. See Exhibit HOU-401. HAS also is a leader in qualifying for and implementing new approaches for maximizing efficiency and reducing wait times for arriving passengers in the FIS. IAH was one of the first airports to participate in CBP s Section 560 Reimbursable Services public-private partnership program, through which the City has committed to funding extensive amounts of CBP officer overtime to enable faster processing of international arrivals and the accommodation of additional international flights. Just this month CBP announced that among its five initial partnerships the international arrivals wait times decreased the most at IAH, showing a 14.6% decrease 3.5% more than at any other participant gateway. 57 HAS s commitment to constantly enhancing its international facilities to address ever-increasing demand (evident most recently from the 9.5% increase in international passengers in 2015) also is demonstrated by other major infrastructure improvements 54 Source: HAS website. 55 Source: GAO, Trusted Travelers: Programs Provide Benefits, But Enrollment Processes Could Be Strengthened (May 2014). 56 Source: U.S. Customs and Border Protection. 57 Source: U.S. Customs and Border Protection, CBP Releases Fiscal Year 2015 Trade and Travel Numbers (March 4, 2016).

37 Answer of the City of Houston March 14, 2016 Page 34 recently completed or underway. At Bush Intercontinental, with significant support from United, a major renovation of Terminal C is in progress that will, among other benefits, increase the airport s international capacity through expanded FIS facilities devoted to United flights and further streamline beyond-houston connections. See Exhibit HOU At Hobby, and with significant financial investment by Southwest, a new FIS facility was opened in 2015, enabling the resumption of international services at HOU, and enhancement of the range and competitiveness of Houston s overall international air service options. See Exhibit HOU The Houston airports also are perfectly positioned to support additional cargo trade that may be developed. IAH is already a first class, global hub for cargo operations, which includes a state-of-the-art Fresh Air Cargo facility that provides competition with traditional U.S. gateways for perishable and other imports from Latin America, such as New York, Los Angeles, and Miami In this proceeding Southwest has proposed Havana services from three cities that would provide behind-gateway connections to HOU, namely Fort Lauderdale, Orlando, and Tampa. Houston is hopeful that if the current U.S. restrictions on U.S. travel to Cuba are further liberalized or removed, Southwest or another carrier may consider new service from Hobby to one of the non-havana destinations, all of which will have remaining available frequencies following this proceeding even if all applications for those destinations are awarded. Meanwhile EFD recently received an FAA license that enables it to become the tenth spaceport in the U.S. (Source: HAS website), further confirming Houston s (and Texas ) leading role in aerospace and providing a venue for 21st century aeronautical progress. See Exhibit HOU Houston s airports also have a growing presence in cargo processing and distribution. In 2015, IAH processed more than 429,500 metric tons of air freight, including more than 220,000 metric tons in international commerce, see Exhibit HOU-405, and ranked as the 14th-largest overall cargo hub in the U.S. by tonnage. Source: ACI 2014 North American Airport Traffic Summary. Houston also is regularly served by all-cargo aircraft by 12 U.S. and foreign carriers, operating to/from destinations worldwide. Source: HAS website. IAH s cargo traffic has expanded steadily for decades, advanced by the opening of its CargoCenter in 2003, which provides a consolidation hub for the south-central United States and is able to accommodate the world s largest aircraft and the demands of any importer/exporter. In addition to 650,000 square feet of warehouse space, ramp capacity for twenty widebody freighters, and a devoted perishables facility, the CargoCenter offers one-stop-shopping for federal inspection processing, an APHIS inspection station, and the state-of-the-art Fresh Air Cargo facility. See Exhibit HOU-406. (Although not the market sector for which Cuba is best known, it is a major exporter of seafood. Source: BG Consultants, Inc.)

38 Answer of the City of Houston March 14, 2016 Page 35 These offerings are enhanced by HAS s wide array of intermodal connections, including those with the Port of Houston. The nation s largest port in import and export tonnage and second largest in total tonnage, the Port of Houston is a 25-mile long complex of diversified public and private facilities located close to the Gulf of Mexico that dwarfs all of its rivals in terms of foreign trade. More than 163 million tons of cargo moved through the Port in 2015, and businesses in the Houston Ship Channel support more than 1.17 million jobs throughout Texas, generating almost $265 billion in economic impact. Two major railroads, major highways and 150 trucking companies link the Port, the airports, and destinations nationwide. See Exhibit HOU-407. The City anticipates that the Port and the City s overall transportation assets will play a key role in developing and supporting Cuba trade going forward, in coordination with the air services now proposed. Conclusion Houston s many advantages for both passengers and trade, embodied in both the overall community and its airport facilities make it a natural gateway for scheduled Cuba services and highlight why the Houston-Havana market should be among those selected for a frequency award. The potential for United s route is enormous. Most importantly, based on the Department s objectives for this proceeding and its extensive precedent in limited entry route cases, an award to United for Houston nonstop services is warranted because by including it the Department will ensure intergateway and intercarrier competition and a structural balance in the U.S.-Cuba market, thereby maximizing the benefits to the public. Accordingly, Houston asks that the Department grant United s well-reasoned and narrowly-tailored request for a single Saturday

39 Answer of the City of Houston March 14, 2016 Page 36 frequency to serve Houston. Additionally, Houston asks that once United s application has been granted, DOT give favorable consideration to those other frequency requests that would facilitate one-stop connecting services between Houston and Cuba. Respectfully submitted, Rachel B. Trinder Jol A. Silversmith ZUCKERT, SCOUTT & RASENBERGER, L.L.P. 888 Seventeenth Street, N.W. Washington, D.C (202) (202) (fax) rbtrinder@zsrlaw.com jasilversmith@zsrlaw.com For the City of Houston Dated: March 14, 2016

40 CERTIFICATE OF SERVICE I certify that on this 14th day of March 2016, a copy of the foregoing was served on the parties named below in accordance with the Department s Rules of Practice. Jol A. Silversmith dheffernan@cozen.com (Counsel for Alaska Airlines) howard.kass@aa.com, robert.wirick@aa.com and john.b.williams@aa.com (American Airlines) charles.hunnicutt@thompsonhine.com, brent.connor@thompsonhine.com, paul.denis@dechert.com, steven.bradbury@dechert.com, and william.sohn@dechert.com (Counsel for American Airlines) chris.walker@delta.com and alex.krulic@delta.com (Delta Air Lines) jmaddux@ggh-airlaw.com (Counsel for Dynamic International) john@mietuslaw.com (Counsel for Eastern Air Lines) nssparks@fedex.com (Federal Express) howard.diamond@flyfrontier.com (Frontier Airlines) foont@foontlaw.com (Counsel for Frontier) esahr@eckertseamans.com, dderco@eckertseamans.com, and rdavidson@eckertseamans.com (Counsel for JetBlue Airways) robert.land@jetblue.com (JetBlue Airways) dflint@lawa.org and smengistu@lawa.org Los Angeles World Airports sami.teittinen@silverairways.com and bryan.winters@silverairways.com (Silver Airways) bob.kneisley@wnco.com and leslie.abbott@wnco.com (Southwest Airlines) dkirstein@yklaw.com and jyoung@yklaw.com (Counsel for Spirit Airlines) thomas.ting@suncountry.com (Sun Country) james.conneely@united.com, dan.weiss@united.com, thomas.bolling@united.com, abby.bried@united.com, and steve.morrissey@united.com (United Airlines) mwarren@crowell.com, sseiden@crowell.com, and gmurphy@crowell.com (Counsel for United Airlines) keith@washingtonairports.com Washington Airports Task Force susan.kurland@dot.gov, brian.hedberg@dot.gov, brett.kruger@dot.gov, todd.homan@dot.gov, peter.irvine@dot.gov, laura.remo@dot.gov, and robert.finamore@dot.gov (DOT) john.s.duncan@faa.gov (FAA) ronald.williams@ustranscom.mil (USTRANSCOM) englets@state.gov, cristinasa@state.gov, and dunhamjd@state.gov (State Department) info@airlineinfo.com

41 HOUSTON AIRPORTS EXHIBITS DOCKET DOT-OST

42 HOUSTON AIRPORTS TABLE OF EXHIBITS DOCKET DOT-OST SECTION I HOU-101 HOU-102 HOU-103 HOU-104 HOU-105 HOU-106 HOU-107 HOU-108 HOU-109 HOU-110 HOU-111 HOU-112 HOU-113 HOU-114 HOU-115 HOU-116 HOU-117 International Overview: Houston Is The Premier International City Of Texas And The South-Central U.S. Population Growth: Houston Has Added Nearly 570,000 Residents Since The April 2010 Census Houston MSA Profile: The Greater Houston Area Is One Of The Largest And Most Populous U.S. Metropolitan Areas GAP Forecast: Houston s Houston's Gross Area Product (GAP) Is Projected To Exceed $1 Trillion Energy Industry: Houston Is The U.S. US. Energy Headquarters Wind Energy: Houston Is Number 111n In Wind Power Purchases Diverse Employment: Houston Has A Large And Diverse Base Of Employment Diverse Employment: Houston Has A Large And Diverse Base Of Employment Biotechnology And Life Science: Houston And Texas Are National Leaders In The Biotechnology And Life Science Sector Medical Complex: Houston Is Home To The Largest Medical Complex In The World Fortune 500 Companies In Houston: Houston Has One Of The Largest Concentrations Of Fortune 500 Headquarters In The U.S. Forbes Global 2000 In Houston; Houston Has One Of The Largest Concentrations Of Forbes Global 2000 Headquarters In The U.S. Consulate Representation: Houston s Houston's Leading Role In International Trade Is Reflected In The Large Number Of Consulates Based In The City, Including From Latin America Foreign Trade Ties: Houston Has 5,700 Companies With Foreign Trade Ties Foreign Trade Data: Houston Handled Nearly $200 Billion In Foreign Trade In 2015 Texas Agriculture Trade Mission: Texas Is Poised To Benefit From Any Future Cuba Trade Opportunities Employment Growth: In 2015 Houston Created 23,200 Jobs And Unemployment Decreased 2

43 HOUSTON AIRPORTS TABLE OF EXHIBITS (CONT.) DOCKET DOT-OST HOU-118 HOU-119 HOU-120 HOU-121 HOU-122 HOU-123 HOU-124 HOU-125 HOU-126 HOU-127 Population/Employment Forecast: Houston s Houston's Population And Employment Are Expected To Grow At Nation-Leading Rates For Decades To Come Foreign-Born Population: More Than 20% Of Houston s Houston's Population Is Foreign-Born Museums And Culture: More Than 500 Institutions In Houston Are Devoted To The Arts, Science And History Universities And Colleges: More Than 400,000 Students Are Enrolled In Higher Education In The Greater Houston Area Living Costs: Houston Offers A Low Cost Of Living And High Quality Of Life Events And Conferences: Houston Hosts Major Events And Conferences Of Likely Interest To Cuba Travel/Trade Houston Airport System Profile: The Houston Airport System Is Comprised Of Three Airports And Handled 55 Million Passengers In 2015, Including More Than 10.6 Million International Passengers International Air Service: Houston Is The Only Gateway In North America With Nonstop Service To All 6 Inhabited Continents Economic Impact: The Houston Airport System Contributes More Than $27 Billion To The Local Economy; Further, The Economic Impact Of New International Air Service Implemented Since 2011 Is Estimated To Be An Additional $1.3 Billion Fortune 500 Companies In Texas: Texas Has One Of The Largest Concentrations Of Fortune 500 Headquarters In The U.S. SECTION II HOU-201 HOU-202 HOU-203 HOU-204 Houston s Houston's Geographic Advantage: Houston Provides An Ideal Central Location For Business Operations Latin America Trade: Houston Is A Highly Competitive Gateway For Overall Trade With Latin America United s United's Hub At IAH Ranks Highly Among U.S. - Latin American Gateways: The UA-IAH Hub Ranks #3 Among U.S. Gateways In Terms Of Total Seats To Latin America For The Year Ending September 2016 Latin America Service: Houston Has Service To 54 Latin American Destinations 3

44 HOUSTON AIRPORTS TABLE OF EXHIBITS (CONT.) DOCKET DOT-OST HOU-205 Houston Is A Large And Growing Gateway To Latin America: Traffic Between Houston And Latin America Has Grown By 15% In The Past Year And By 21% Since 2011 SECTION III HOU-301 HOU-302 HOU-303 HOU-304 HOU-305 HOU-306 HOU-307 HOU-308 HOU-309 Recently Scheduled U.S.-Cuba Charter Operations Highlight A Large Service Gap West Of Florida: The Vast Majority Of Current U.S.-Cuba US. Charter Services Operate From Florida Florida Is Already Heavily Served By Charters To Cuba: For The Most Recent DOT T100 Annual Reporting Period, 99% Of U.S.-Cuba Charter Activity Was Reported As Serving Florida American Is The Largest Operator Of Air Services Between The U.S. And Cuba: Recently Scheduled U.S.-Cuba Charter Operations Highlight American's American s Already Dominant Market Position United Operates One Of Its Largest Domestic Route Networks From Houston: In 2016, United Will Serve 116 Domestic Destinations From IAH Representing An Average Of 405 Daily Domestic Departures United Operates Its Largest Latin American Route Network From Houston: In 2016, United Will Serve 54 Latin American Destinations From IAH Representing An Average Of 85 Daily Latin American Departures United s United's IAH-HAV HAV Application Will Generate One-Stop Connections To Havana From Twenty U.S. Destinations: UA s IAH-HAV Nonstop Service Will Drive Convenient One-Stop Service To Markets Throughout The Midwest And West Houston Anticipates That The Proposed IAH-HAV HAV Service Will Operate With A High Load Factor: There Is Strong Traffic Potential For A One-time Weekly UA IAH-HAV HA V Departure United Has A Long Track Record Of Successfully Operating And Upgrading Service To The Caribbean: United Continues To Increase Weekend-Only Caribbean Service At Houston United s United's IAH-HAV HAV Service Will Generate Superior Beyond Connectivity Compared To Other Western Proposals: United s Total Of 20 Connecting Markets Beyond IAH-HAV HA V Exceeds Several Other Proposed Western Gateways 4

45 HOUSTON AIRPORTS TABLE OF EXHIBITS (CONT.) DOCKET DOT-OST HOU-310 HOU-311 HOU-312 HOU-313 IAH Accommodates More Than Twice As Much U.S/Canada Connecting Traffic To The Caribbean As Does DFW: Over 300 Daily Passengers One-Stop Connected Through IAH To The Caribbean in 2015 More Than Twice The Total One-Stops Connecting Through DFW Houston Consolidates Traffic To The Caribbean From Across The Western U.S.: Of The Over 300 IAH One-Stop U.S./Canada Connections To The Caribbean, The Top Originating Markets Come Primarily From The Western And Midwestern United States Houston Generates Significant Local Demand For Travel To The Caribbean: For The Calendar Year 2015, Houston Generated 440 PDEW To The Caribbean Houston Generates Significant Local Demand For Travel To Markets Similar To Cuba: Of Those 440 PDEW To The Caribbean, 141 Traveled To The Dominican Republic And Jamaica Both In Relative Proximity To Cuba SECTION IV HOU-401 HOU-402 HOU-403 HOU-404 HOU-405 HOU-406 HOU-407 HAS International Services: Houston Has Made Major Investments In Facilitating International Arrivals Facility Infrastructure Projects New, Expanded International Terminal Redevelopment Program And Terminal C: The Houston Airport System And Our Partners Have Several Infrastructure Projects Underway To Ensure Its Position As A Global Gateway For Decades To Come Hobby (HOU) International FIS: HOU Opened A New International Terminal For Commercial Operations On October 15, 2015 Texas Texas' Aerospace Industry: Houston And Texas Play A Leading Role In The U.S. Aerospace Industry Cargo Center Profile: The IAH Air Cargo Center Offers The Services Needed To Develop Trade Opportunities With Cuba Cargo Services: The Houston Airport System Provides A 120-Acre Air Cargo Center With Services Tailored To International Shippers Port Of Houston: The Port Of Houston Is A Major Gateway For International Trade 5

46 HOU-101 INTERNATIONAL OVERVIEW HOUSTON IS THE PREMIER INTERNATIONAL CITY OF TEXAS AND THE SOUTH-CENTRAL U.S. International Overview Houston's status as an international center is reflected in the breadth and depth of the city's international representation Houston is the fourth most populous city and fifth most populous metro area in the nation. More than 1.5 million Houstonians-about one in four-are foreign-born. The MSA ranks fourth nationally in number of Hispanics and seventh in number of Asians. Ninety-one countries have official govemment representation in Houston ranking Houston as one of the top three cities in the nation in the number of consular offices. Houston has 17 sister-city relationships promoting business opportunities across five continents: Africa (1), Asia (6), Australia (1), Europe (7), and the Americas (2). Fourteen foreign govemments maintain trade and commercial offices, and the metro area has 32 active international chambers of commerce or trade associations. Texas is the nation's largest exporter, ahead of second place Califomia and significantly ahead of Washington, New York, and Illinois. Among U.S. seaports, the Port of Houston has ranked first in foreign tonnage for 19 consecutive years as of '15, and first in import tonnage for 24 consecutive years. In 2015, the Houston/Galveston customs district ranked as the seventh largest district by dollar value with $196.4 billion in total trade, behind Los Angeles, New York City, Laredo, Detroit, Chicago, and New Orleans. I I 'l PARTNERSHIP Trade with China increased 11.6 percent from '14 to '15, moving China from second in '14 to first in '15. Of Houston's top 20 trading partners, the UAE had the strongest growth in trade with Houston increasing more than 23.8 percent in '15. China was the Houston/Galveston customs district's largest trading partner at $18.5 billion, followed by Mexico ($17.7 billion), Brazil ($10.5 billion), Germany ($10.0 billion), Netherlands ($8.4 billion), Venezuela ($7.9 billion), Colombia ($7.2 billion), South Korea ($6.5 billion), Saudi Arabia ($6.2 billion), and the United Kingdom ($5.5 billion). Thirty-nine countries logged more than $1 billion in trade through the customs district in '15. Houston's 10 largest trade partners accounted for 50.1 percent of all trade. Approximately 100 steamship lines provide service between Houston and over 1,000 ports around the world. More than 8,000 ships call on the Port of Houston annually. Among Gulf of Mexico ports, the Port of Houston is the leader in container cargo, handling 67 percent of Gulf coast container traffic. The Port of Houston is the largest Texas port, handling 95 percent of Texas container traffic. Two major railroads and approximately 100 trucking lines connect the Port to the balance of the continental United States, Canada and Mexico. The Houston Airport System handled approximately 55.1 million air passengers in 2015, a record for HAS. Domestic traffic rose 2.3 percent to 44.4 million passengers; intemational traffic rose 9.5 percent, to 10.7 million passengers. Scheduled and charter passenger and cargo carriers fly directly to approximately 124 domestic and 74 intemational destinations in 41 countries from Houston. Greater Houston Partnership Research Updated March 8,

47 HOU-101 INTERNATIONAL OVERVIEW (CONT.) HOUSTON IS THE PREMIER INTERNATIONAL CITY OF TEXAS AND THE SOUTH-CENTRAL U.S. GRt.ATE HOUS c.' PARTNERSHIP In September 2013, HOU broke ground on a new international terminal, a $156 million project Once completed, the five-gate facility will accommodate regional international flights for Southwest Airlines, with service reaclhing destinations in the Caribbean, Mexico and the northern cities of South America. The Houston Airport System has recently added state-of-the-art temperature-and-timesensitive facilities at George Bush Intercontinental Airport (IAH) to support cool-chain providers in the U.S. and abroad. Houston is the base of operations for the international oil and gas exploration and production industry and for many of the nation's larqest international engineering and construction firms. Ten of the 25 largest publicly traded oil and gas exploration arid production firms are headquartered in Houston; nine more among the top 25 have subsidiaries, major divisions or other significant operations here. Houston, a major corporate center, ranks third among areas in Fortune 500 headquarters with 26 firms on the 2015 Fortune 500 list, eight on the 2015 Fortune Global 500 list and 26 on the 2015 Forbes Global 2000 list Many other firms ranked on these lists maintain US. offices in Houston. A center for international finance, Houston leads the Southwest with 19 foreign banks from 9 nations. GHP's database lists more than 5,700 Houston area firms, foreign government offices and nonprofit organizations involved in international business. In the Houston area more than 430 companies report having offices abroad in 144 countries and more than 800 fiirms in Houston report foreign ownership. Greater Houston Partnership Research Updated March 8, 2()16 7

48 HOU-102 POPULATION GROWTH HOUSTON HAS ADDED NEARLY 570,000 RESIDENTS SINCE THE APRIL 2010 CENSUS PARTNERSHIP Population Update The Houston metro area led the nation in population growth last year, adding nearly 157,000 residents.' Since the April'10 census, Houston has added nearly 570,000 residents, the largest gain of any U.S. metro overthat perlod,? The U.S. Bureau of the Census estimated Houston's population at 6.5 million in mid-'14. Based on recent trends, Houston's population will likely exceed 6.6 million by mid-'15. A number of factors have spurred Houston's recent population growth: A booming economy: The region's gross domestic product-the value of all goods and services produced in the region-has grown by more than $114.8 billion since '10. Corporote moves: More than 1,500 companies have announced significant relocations or expansions here over the past five years. Robust job growth: From April '10 through July '14 (the period covered by the population estimates), Houston added 375,000 jobs. A better imoge: In recent years, Forbes has ranked Houston as the "coolest city in America," the New York Times listed the metro as a top 10 "'place to go" for travelers, and Credit Donkey rated Houston as the "Best City in America for Young Couples." In situ growth: Nearly 400,000 babies were born in Houston between April '10 and July '14. Subtract the approximately 150,000 deaths overthe same period and "natural increase" added 250,000 residents to Houston's population. CURRENT POPULATION ESTIMATES - 20 LARGEST U.S. METRO AREAS Rank Metro As of 7/1/14 A Since 4/1/10 Rank Metro As of 7/1/14 A Since 4/1/10 New York 20,092, , San Francisco 4,594, ,500 2 Los Angeles 13,262, , PhoeniX 4,489, ,982 3 Chicago 9,554,598 93, Riverside 4,441, ,918 4 Dallas-Ft Worth 6,954; , Detroit 4,296, Houston 6,490, , Seattle 3,671, ,663 6 Philadelphia 6,051,170 85, Mtnneapolis 3,495, ,319 7 Washington 6,033, , San Diego 3,263, ,123 8 Miami 5,929, , Tampa 2,915, ,068 9 Atlanta 5,614, , SI. LOUIS 2,806,207 18, Boston 4,732, , Baltimore 2,785,874 75,277 Source: U.S. Bureau of the Census I Change from 711/13 to 711/14.! Metro Houston includes Austin, Brazoria. hambers, -ort Bend. Galveston. funis. Liberty. Montgomery and Walker ounties. Greater Houston PartnershipResearch Updated

49 HOU-102 POPULATION GROWTH (CONT.) HOUSTON HAS ADDED NEARLY 570,000 RESIDENTS SINCE THE APRIL 2010 CENSUS t fl.,j 'J PARTNERSHIP While Houston's growth is impressive, it's not out of character. With few exceptions, the region's population has grown steadily throughout its history. From 1850 to 1990, Houston's population nearly doubled every 20 years. Only recently, when the region's population became exceedingly large, did that rule of thumb no longer hold true. Since'00, Houston has added 1.8 million residents, an average of 1.28 million per decade. This suggests a new rule of thumb: Houston grows by about 10,000 residents per month, faster in boom times and somewhat slower in lean times. As Houston's population has grown, the region has climbed in the rankings. In '70, a few months after man set foot on the moon, Houston was the nation's 14th most populous metro. Today, the energy capital of the world is the nation's fifth. Over that period, three metros-cleveland, Detroit and San Francisco-have slipped from the top 10 and three metros-atlanta, Miami and Houstontook their places. HOUSTON'S METRO RANK THROUGH THE YEARS Year U.S. Rank '14 '10 '00 '90 '80 5th 6th 8th 10th 9th '70 14th Source: u.s. Bureau of the Census METRO HOUSTON POPULATION ,490, ,920, ,693, ,750, ,135, ,195, ,594, ,083, , , , , , , , , , ,984 Source: Houston Facts Additional Insights Since April '10, more people have moved from Detroit, Memphis, Milwaukee and St. Louisthan moved in. If not for the natural increase (i.e., more births than deaths), those metros would have lost population. Net international migration (i.e., people moving into a metro from overseas minus those leaving that metro for a destination overseas) has offset the stream of residents flowing out of Boston, Los Angeles, New York and Philadelphia to domestic destinations. If not for babies and immigrants, these metros would have lost population. Seventy U.S. metros, Cleveland and Pittsburgh among them, could not offset out-migration with births or immigrants, and their populations continue to shrink. Houston enjoys a healthy balance of births and international and domestic migration, and Houston's population continues to grow. Greater Houston Partnership Research Updated

50 HOU-102 POPULATION GROWTH (CONT.) HOUSTON HAS ADDED NEARLY 570,000 RESIDENTS SINCE THE APRIL 2010 CENSUS It H f J PARTNERSHIP Local Overview - Every county in the Houston metro area experienced population growth since April '10. Approximately half of the newcomers to the region settled in Harris County and onefourth in Fort Bend. Three-fourths of all births occurred in Harris County. The slow shift of the population tothe suburbs continues, with Harris County accounting for 69.1 percent ofthe region's population in '10, slipping to 68.4 percent in '14. COMPONENTS OF POPULATION CHANGE - 4/1/10 to 7/1/14 - HOUSTON METRO AREA Natural Increase Nat Migration County Total Total Total In!ernatlo Births Deaths Change Natural Migration nal Domestic Austin ,477 1, Brazoria Chambers 3, , , ,987 Fort Bend 100,448 23,657 34,534 10,877 75,041 16,646 58,395 Galveston 22,894 6,719 16,703 9,984 15,882 2,873 13,009 Harris , ,753 99, , ,542 63,037 Liberty 2,474 1,380 4,412 3,032 1, Montgomery 63,183 14,317 27,488 13,171 47,351 6,384 40,967 Waller 3,583 1,278 2,439 1,161 2, ,044 Totals , Source. U.S. Bureau of the Census Among the nine metro counties, Fort Bend grew the fastest in '14 (4.7 percent) and Harris added the most residents (88,618). Net migration added 98,133 to the region's population. The net natural increase added 57,776 to the population. The numbers do not sum to the total increase due to rounding errors and residual effects. Sincethe '10 census, Texas' population hasgrown by 1.8 million residents-893,134 via the natural increase and 905,754 via net migration, of which 37.9 percent was international and 62.1 percent domestic. The bureau doesn't report what share of international migration resulted from the movement of undocumented workers into or out of a region, but they are included in the total international migration estimates. The Texas State Data Center forecasts Houston will add 490,000 to 790,000 residents over the next five years. The larger number assumes residents move to the region at the same rate they did between '00 and '10. The smaller assumes net migration slips to half that rate. If the region simply reverts to the long-term average, the region's population will add more than 600,000 residents over the next five years. Both the Texas State Data Center and the long-term average suggest Houston's population will exceed 7.0 million residents by the end ofthe decade. Greater Houston Partnership Research Updated 41t71t5 10

51 HOU-103 HOUSTON MSA PROFILE THE GREATER HOUSTON AREA IS ONE OF THE LARGEST AND MOST POPULOUS U.S. METROPOLITAN AREAS ~ PARTNERSHIP Houston Metropolitan Statistical Area Profile The Houston MSA is the fifth most populous in the U.S. and a top destination Founded in 1836, the City of Houston had a population of nearly 22 million as of July 1, 2013, making it the fourth most populous U.S. city. Only New York, Los Angeles and Chicago have more residents. Houston has been Texas' most populous city since The Houston-The Woodlands-Sugar Land Metropolitan Statistical Area (Houston MSA) consists of 9 counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller. The metro area's 2013 population of 6.3 million ranks fifth among U.S. metropolitan statistical areas. The Houston MSA covers 9,444 square miles, an area larger than New Hampshire. The Houston MSA's nominal gross area product in 2013 was $532.9 billion, according to The Perryman Group. If Houston were a country. its economy would be larger than that of Norway or Venezuela, according to the World Bank. Only 22 foreign nations' gross domestic products exceed Houston's. The Houston MSA recorded 2.9 million payroll jobs in September 2014, more than the job counts of 36 U.S. states, including Minnesota, Tennessee and Missouri. Houston took the no. 1 spot in U-Haul International's The 2013 Top 50 U.S. Destination Cities, for the fifth year in a row. The report was compiled from more than 1.7 million oneway U-Haul truck transactions occurring during a recent 12 month period. Partnership Research Updated

52 HOU-104 GAP FORECAST HOUSTON S GROSS AREA PRODUCT (GAP) IS PROJECTED TO EXCEED $1 TRILLION Gross Area Product Forecast The Perryman Group forecasts sustained growth for the Houston metro over the next quarter century, Real Gross Area Product Forecast Houston-The Woodlands-Sugar Land MSA $ Billions'" I '1-( PARTNERSHIP I r.$1,154,1 '05 '10 '15 ' '30 '35 '40 Seurce:The Perryman Group, Summer 2015 '09 constant dollars Re~1 (i,e., net of intlatlon) Gross Area Product (GAP) in the Houston region is expected to grow at an average annual rate of 3.37 percent from '15 to '40 in The Perryman Group's forecast. The Houston MSA's real gross area product is projected to more than double between '15 and '40. Compound annual growth rates of real gross ~rea product from '15 to '40 are highest in services (3.9 percent): manufacturing (3.8 percent): mining (3.3 percent): and finance, insurance, and real estate (3.1 percent). GreaterHouslon Paf1:nersl1ip Research Updated August

53 HOU-105 ENERGY INDUSTRY ENERGY INDUSTRY HOUSTON IS THE U.S. ENERGY HEADQUARTERS Energy Industry Overview l PARTNERSHIP Houston is the U.S. energy headquarters and a world center for virtually every segment of the oil and gas industry including exploration, production, transmission, marketing, supply and technology. Houston's high concentration of energy expertise and experience has meant a large number of relocations to the Houston region since Shell Oil left New York for Houston in Energy firms relocating to Houston in recent years include; -:' Honghua America, LLC relocates its operations from Chengdu, China (2015); o AKO Engineering relocates their U.S. headquarters from Phoenix, Arizona (2014); a Occidental Petroleum Corp, relocated their headquarters from Los Angeles, California (2013); o Nexen Petroleum U.S.A. moved its headquarters from Plano, Texas (2012); Co Direct Energy moved their corporate headquarters from Toronto. Canada (2012); o Calpine's headquarters were relocated from San Jose, California (2009); o GE Oil & Gas, based Tn Florence. Italy, selected Houston as their headquarters for the Americas (2008);... SP America Inc. centralized its U.S. headquarters in Houston by moving personnel and positions from their Chicago office (2007); o Heartland Oil and Gas Corporation relocated its corporate headquarters from Denver (2007); o Schlumberger relocated their U.S. corporate headquarters from New York (2006); o CITGO Petroleum Corporation relocated lis corporate headquarters from Tulsa (2004) More than 3,700 energy-related estabflshments are located within the Houston Metropolitan Statistical Area, including more than 500 exploration and production firms, more than 150 pipeline transportation establishments and hundreds of manufacturers and wholesalers of energy-sector products. Houston is home to 40 of the nation's 134 publicly traded oil and gas exploration and production firms, including 10 of the top 25; nine more among the top 25 have subsidiaries, major divisions or other significant operations in the Houston area. The nine refineries in the Houston region process more than 2.3 million barrels of crude oil per calenda r day - approximately 50 percent of the state's tota I production and 13.2 percent of the tolal U.S. capacity, The logistics for moving much of the nation's petroleum and natural gas across the country are controlled from Houston. Fifteen of the nation's 20 largest US interstate oil pipeline companies have a presence in the Houston region that Includes corporate or divisional headquarters or ownership interests. These 15 control 66,746 miles, or 44 percent of all U.S. oil pipeline capacity. Thirteen of the nation's top 20 natural gas transmission companies have corporate or divisional headquarters In Houston, controlling miles of U.S. pipeline, which is 52 percent of the total U.S. natural gas pipeline capacity. In May 2015, according to Ihe U.S. Bureau of Labor Statistics, the Houston MSA held: o 28.3 percent of the nation's jobs in oil and gas extraction (54,700 of 193,000); and o 17.1 percent of jobs in support activities for mining (52,900 of 308,4(0). Houston is the Permanent Secretariat of the World Energy Cities Partnership (WECP), a collaboration among 19 energy cities worldwide prov"rding a platform for information exchange, networking and public relations. Greater H6IJslon Partnership Research Updated

54 HOU-106 WIND ENERGY HOUSTON IS NUMBER 1 IN WIND POWER PURCHASES Houston Wind Energy Houston is no 1 in wind power purchases, and a global center for wind energy. HOUSTON WIND ENERGY COMPANIES Company Description ABB Inc, Manufacturing: Heavy construction Advanced Combustion Technology Manufacturingi Turbines Aistom Power Affordable Wind Energy A'kart Energy Manufacturing; Turbines Design, build and operate wind turbines Alternative Power solutions Provides wind power Ameresco Solar Inc. Aztec Bolting BPWind Energy North America Inc. Centerfield, Inc, Compress and Turbine Services, LLC China United New Energies (USA) LlC DKRW Energy LlC Dresser Rand leading Edge, llc Provides and installs wind systems of all sizes Offers small wind generators Wind turbine tools and bolting services Various Wind projects Manufactu ring; Turbines Manufactu ring; Turbines Green energy: solar, wind, natu ral gas Manufactu ring; Motor and generator Manufactu ring; Turbines EDPRenewables (formerly Horizon Wind Energy) Develops, Owns and operates Wind Farms Galveston-Offshore Wind llc Offshore Wihd projects GEAero Energy Manufacturing; Aeroderivative turbines PARTNERSHIP GEPackaged Power Inc. Manufactu ring; Turbines/Generator Sets Gestarnp Wind Energy North America, Inc. Manufacturing; Motor and generator Integrated Electrical Services Inc. Provides wind to commercial, industrial, residential Nature's Electric Inc. Energy; Wind power generation NRG Energy / Reliant Energy - Wind Energy; Wind power generation Proinlosa Energy Corp Manufacturing; Internal tower components RBCBearings Manufacturing; Wind turbine ring bearings Shell Energy Environmental5plutions Energy; Wind power generation Siemens Industrial Turbomachinery Inc. Manufacturing; Turbine replacement parts Siemens Power Generation Inc. Manufactu ring; Turbines/Generator sets Siemens Westinghouse Power Corp. Manufacturers of wind energy systems Silver Star I Power Partners LLC Alternativeiuels and wind energy TWR Lighting Inc, Manufacturer and marketer of wind farms Source:GreaterHoustonPartnership BusinessDatabase Houston ranks no. 1 out of all Local Government Green Power Purchasers in the nation, -according to the U.S. Environmental Protection Agency. In 2015 Houston purchased 623 million kwh of green wind power, accounting for 50% percent of the City's total power consumption; this up 13 percent from 2011 levels where Houston was also no. 1 nationally. The Wind Alliance, headquartered in Houston, Texas, is a national collaboration of over 50 entities in industry, academia and the public sector, Members of The Wind Alliance work together to improve the areas of workforce, technology and infrastnucture. Texas has enacted legislation creating "Energy Districts" in order to loan residential and commercial property owners money for renewable energy: Partnership Researoh Updated 06/

55 HOU-107 DIVERSE EMPLOYMENT HOUSTON HAS A LARGE AND DIVERSE BASE OF EMPLOYMENT c.j. t - '1 PARTNERSHIP Employment by Industry HOlJston has more j oils than 35 U_S. states. Industry Share of Houston MSA EHlpl.oyment Minina,,1><1I.ot!smg IEm..gy) 4~ Iloisll'" _ 10""'; Ho.pitl>lity - ~J FI~.~I nd llvsiinez ~ 16~ - / R."I Est~te moor,.l mull..""iois 2'10': \ \ rfitlill'l!c~iljld mljrllm:~ ~~ SDurce:TexasWcrtf~ Commission,OctDber 2015 Nonfarm payroll employment in ~he Houston metro area fell ched a record 3,Dlm,6Q[] in October '15, 3J 1.1 percent increase from the 2,967,500 in October '14. Service industries aecountfor 2-4 minion Houston -area jobs or eig:ht out of ten 'i'i/o'j1::ers in Ihe region. The largest service industries are trade, IransporUltioo, and u~il:mies(202 percent of jobs), professional lind business services (15.8 percent}, and educational and health services (12.5 percent). The goods-produl:ling sector employs more than half a million Houstoniana and accounts for nearly one in five ohhe re9rcn'sjobs.manu'facrurirtg is Ifle largest goods-producing 'indusby with 8.D percent. of tq~l jobs,ro1lowed by conatruetion (7.2. percent] mki energy (3.7 percent). TwcHllirds of Hoostol1's manum eluiillg jobs irnroive lile produ clionot durable 'gootls, items with a useful life of three years ot more. In Houston,this includes items such as oil field e1:iuipment, still cluml steel, and computers. 15

56 HOU-108 DIVERSE EMPLOYMENT HOUSTON HAS A LARGE AND DIVERSE BASE OF EMPLOYMENT I _ f \ PARTNERSHIP Houston MSA Employment by Industry Indul>try Percent of Total Total Nlonfa:rm 3,OOOjiCIfO 100_0 Tota I P,ri...-ate a6_9 Goods E'lroducing 1:8.9 Sen/ice Prn'iliding all l09,1l00 Oil and Gas Extractton i.s Support Act~vitresro.- Mjni ng 53,700 i.s Construction 214,600 Mamriaotming :l41,:500 :8.0 Durable Gc{)ds Non-Ou.-a'ble i30mis SO,aOO n-.ade, TranSlponation, and Utilities 505,700 Whole.s'"le Trade 167,900 Retail Trade. 306, Transpertation, Wan=hoosing, and Utilities 131,200 4L4 Intonnation 34P:W 1.1 finandal Activittes -lui Fina nee.and Insuranoe Rea I Estate and Re'ntar nd Leasing 52)!OO 1.7 ProfessiDnal and Business SerVices 472)lCIfO Profess ional Sdentifi'l::, a nd Technical SeIVi"ces 73 Manag}!ment of Co rnpa nies and EntelipTisoes 1.1 Admin and SWlI!IPon and Waste 'M mt 2'20, Educational and Hea Ito Servi 0!5 374;,lOO Educationa I Se.rvkes: 1.9 Health Care and Social Assistan;c:e 318,000 LeiSlUn;!"nd Hospitality 306, Arts, Entelftai nment, and Re~reation 30jil)O 1_0 Accomrnodetlon and Food Servrces 275,700 9_2 Other Servi'CeS 3_5 GovemmeJ1t 391,700 13_1 SClUce:"I1I!lc.a5won\fcJ,ce COIIlIllission october 2(U5" not seas(ma(l~"di\jste.a Upa'ated ~er

57 HOU-109 BIOTECHNOLOGY AND LIFE SCIENCE HOUSTON AND TEXAS ARE NATIONAL LEADERS IN THE BIOTECHNOLOGY AND LIFE SCIENCE SECTOR 17

58 HOU-110 MEDICAL COMPLEX HOUSTON IS HOME TO THE LARGEST MEDICAL COMPLEX IN THE WORLD 18

59 HOU-110 MEDICAL COMPLEX (CONT.) (CONY.) HOUSTON IS HOME TO THE LARGEST MEDICAL COMPLEX IN THE WORLD /, I i_ HOUSTON REGION Home to the World-Renowned The HOlJstonregion ISthe heart of the biotechnology, nanotecllllology Texas Medical (en er and life science Industnes. 19

60 HOU-111 FORTUNE 500 COMPANIES IN HOUSTON HOUSTON HAS ONE OF THE LARGEST CONCENTRATIONS OF FORTUNE 500 HEADQUARTERS IN THE U.S. Corporate Headquarters Houston ranks third among areas in Fortune 500 headquarters. 26 Fortune 500 companies base their operations in the Metro Area PARTNERSHIP FORTUNE 500 COMPANIES HEADQUARTERED IN HOUSTON METRO Company (Rank) Revenues Revenues Company (Rank) (S billions) (S billions) Phillips 66 (7) Apache (218) ConocoPhillips (51) Marathon Oil (227) Enterprise Products Partners (59) Cameron International (275) Sysco (61) Group 1 Automotive (291) Plains GP Holdings (67) CenterPoint Energy (313) Halliburton (96) Targa Resources (329) Occidental Petroleum (115) Calpine (353) Baker Hughes (119) FMC Technologies (357) National Oilwell Varco (127) Quanta Services (361) Anadarko Petroleum (162) Buckeye Partners, LP (406) EOG Resources (167) 1B.035 KBR (424) Kinder Morgan (193) MRC Global (448) Waste Management (217) Spectra Energy (449) Source: Fortune, June 2015 Twenty-six companies on the 2015 Fortune 500 list are headquartered in the Houston metro area based on the rankings released by Fortune magazine. Houston ranks third among metro areas in Fortune 500 headquarters, behind the metro areas of New York (68) and Chicago (32), and ahead of Dallas/Fort Worth (21), Atlanta (18), Los Angeles (17) and San Francisco (17). Many other Fortune 500 companies maintain U.S. administrative headquarters in Houston. Occidental Petroleum is new to the 2015 list in Houston having moved from Los Angeles landing at #115 with $25.9 billion in revenues. The biggest movers are Buckeye Partners, LP moving up from #485 ($5.1 billion) in 2014 to #406 ($6.6 billion) in 2015, Targa Resources moving up from #395 ($6.6 billion) in 2014 to #329 ($8.6 billion) in 2015, and Calpine moving up from #414 ($6.3) in 2014 to #353 ($8.0 billion) in Greater Houston Partnership Research Updated June 8,

61 HOU-112 FORBES GLOBAL 2000 IN HOUSTON HOUSTON HAS ONE OF THE LARGEST CONCENTRATIONS OF FORBES GLOBAL 2000 HEADQUARTERS IN THE U.S. World's Largest Companies 26 companies ranked on the 2015 Forbes Global 2000 list have their world headquarters in the Houston region. PARTNERSH P Company 2015 FORBES GLOBAL 2000 COMPANIES HEADQUARTERED IN HOUSTON REGION Rank Assets ($Billions) Company Rank Assets j$biliions) ConocoPhillips S pectra Energy Schlumberger Apache PhillipS Noble Energy Halliburton Center Point En",rgy ,7 Kinder Morgan Calpine ,4 EOG Resources Cameron International National OilweH Varco Crown Castle Inlernational Baker Hughes Southwest.ern Energy Occidental Petroleum FMC Technologies Marathon Oil Westlake Chemical Sysco Cheniere. 'Energy Waste Management Newfield EKplorntion Anadarko Petroleum EP Energy Source.:Forbes, June17,2015 Houston is home to the headquarters of 26 Forbes Global 2000 companies with total assets of $887.3 billion, Forbesscreens forthe biggest companies in four metrics: sales, profits, assets and market value. Their market value calculation is as of May 2015 closing prices, including all common shares outstanding. Each company receives a separate score for each metric based on where it ranks on the metric's 2000 lis!. If a company ranks below any metric's 2000 list cut-off, it receives a zero score for that metric. The scores are summed for all four metrics (equally weighted) and compile a composite score fur each company based on their rankings for sales, profits, assets and market value. The companies are then sorted In descending order by the highest composite score and given their Forbes Global 2000 rank. The highest composite score gets the hfghest rank. Greater- Houston Partnership Researoh Updated June

62 HOU-113 CONSULATE REPRESENTATION HOUSTON S LEADING ROLE IN INTERNATIONAL TRADE IS REFLECTED IN THE LARGE NUMBER OF CONSULATES BASED IN THE CITY, INCLUDING FROM LATIN AMERICA Houston Foreign Consulate Representation " I PARTNERSHIP Foreign governments have established 91 consular offices in metropolitan Houston, ranking Houston third behind New York and Los Angeles. COnsulate General of tr>erepublic of AIba.f1ia Consulate General of the Republic of Angola Consulate General of the ArgerJtine Republic COnsulate of Australia Consulate General of the Republic of Austria Consulate of the Bahamas Consulate of Barbados COnsUlate of the Kihgdom of Bel.glum Consulate General Of Belize Consulate General of Bolivia Co(1sulate of the RepUblic 0' Botswana Consulate General of the Federative Republicof Brazil Consulate of the Republic of Cameroon COnsulate of Canada coosuete General of the Republlc of Chile COnsulate General of the People's Republic of China COnsulate General of the RepUblic of Colombia COnsUlate General of the Republic of Costa Rica Consulate General of the Republic of Cote D'lvoire Consulate of the Republic of Croati" Consulate General of the Republic of Cyprus COnsulateolthe Kingdom of Denmark Consulate General of the Republic of Ecuador Consulate General of the Arab Republic of Egypt COnsulate General of the Republic of EI Salvado~ Consulate General of the Republic of Equato"al Guinea Consulate of the Republic 01 Estonia Consulate of Ethiopia Consulateofthe Republic of Finland Consulate General of the French Republic COnsulate General of the Federal Republic of Germany COnsulate of the RepubliC of Ghana COnsulate of the Hellenic Republic Consulate General of the Republic of Guatemala COnsulate of the Co-Operative Republic of Guyana Co[1sulate of the RepUblic of Hai~ Consulate General of the Republic of Honduras Consulate General of the RepUtllic of Hungary Consulate of Iceland Consular" General of the Republic of India Consulate General of the RepubliG of Indonesia Consulate or Irefand CoJ1s~lateGeneral of the State of lsrae] Consulate General of the Italian Republfc. COnsulate of Jamaica COnsulate General of Japan COnsulate General of the Hashemite Kingdom of Jordan Consulate of the Repubhc of Kazakhstan Consulate General of the RepubliC of Korea Consulate of the Republic of Latvia Consulate of the Republic of Lebanon Consulate of the Republic of lithuania Consulate of MalaYSia Consulate General of the Republic of Malta Consulate General of Me)Mo Consulate General 01 Mongolia consutate otrne Republic of Namibi~ COnsulate Gene.ral of tile Kingdom of the Netherlands Consulate 01 New Zealand COnsulate General of the RepUblic of Nicaragua COnsulate General of the Kingdom of Norway Consulate General of Pak15ian Consulate General of the Republic of Panama Consulate General of the Independent State of Papua New Guinea Consulate 01 the Republic of Paraguay Consulate General of the Republic of Peru COnsulate of the Republic Of Poland COnsutate of the Portuguese Republic COnsulate General of the State of Qatar COnsulate of Romania Consulate General of the Russian Federation Consul General of the Republic of Rwanda COnsulate General of the Kingdom of Saudf Arabia COnsulate General OfSierra Leone COnSUlateGeneral of the Republic of Singapore Consuiate of the RepUblic of Slovenia COnsulate Ge"eral of the KIl'lgdom of spain Consu'ate General of Sri Lanka Consulate General of the Kingdom of Sweden Consulate General of tbe Swiss Confederation Consulate General of the SVrianArab Republic COnsutate General of the Kingdom of Thailand COnsulate of the Republic OfTrinidad and Toba.go Consulate of TuniSia Consulate General of the Republic of Turkey Consulate of Ukraine Consulate General of the United Arab Emirates COnSUlateGeneral of the United Ki[1gdQmof Greal Britain and Northern Ireland COnsulate General of the Republic of uruguay corsuiate General of the Bolilrarian Republic Of Venezueta Consulate General of the Socialist Republic. of vietnarn Source: The Houston Office of Protocol and International Affairs, August ;1015 Greater Houston PartnershIp Reseerd: A "",us! 26,

63 HOU-114 FOREIGN TRADE TIES HOUSTON HAS 5,700 COMPANIES WITH FOREIGN TRADE TIES Houston Companies with For,eign Trade Ties GREATER Houston's foreign commercial ties exceed 5,700 firms and organizations trading more than 250 types of products and services in more than 200 countries. f-iou5ton PARTNERSHIP Types of Companies in Houston with Foreign Trade Ties Busin,ess services Energv 6% IlI'lformoa,tion 3% Manufacturing 23% 22% other 10% Source: Greater Houston Partnership Database; Uni'lHOl1d Bustness GHP's database and Uniworld Business lists more than 5,700 Houston area firms, foreign govemment offices and nonprofit organizations involved in international business. In the Houston area 430 companies report having offices abroad in more than 200 countries; more than 800 finns in Houston report foreign ownership and more than 100 countries have business offices and/or government representation in Houston. Servioes are the most frequently reported business type, accounting tor 30 percent of all reporting companies. These services mclude engineering, accounting, law, banking, health care, rnappinq and telecommunications Manutactunnq accounts for approximately 23 peroent of all reporting companies, with oil and gas field madhinery and equipment being the most frequently cited product group. Other business sectors, including trade, transportation/warehousinq, finance/insurance/real estate, mining, government, health and education, accounted for the remainder of reported surveyed companies. Greater Houston Pannership Research Updated March e,

64 HOU-115 FOREIGN TRADE DATA HOUSTON HANDLED NEARLY $200 BILLION IN FOREIGN TRADE IN 2015 Foreign Trade Houston handled nearly $200 billion in foreign trade in '15, making Houston the seventh busiest U.S. customs district. Houston-Galveston 300, Imports Exports _ ~.. c,g , ~ oj ~ 100 > II ] ~ 50 Customs District Trade I r PARTNERSHIP o '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 Source: Wiser Trade The Houston-Galveston Customs District includes the ports of Houston, Galveston, Freeport, Texas City, Corpus Christi, Port lavaca, Bush Intercontinental Airport and Sugar Land Regional Airport. The Houston-Galveston Customs District handled $196.4 billion trade in '15, ranking it as the seventh busiest district behind New Orleans ($199.7 billion) and ahead of Seattle ($154.8 billion). Thirty-nine countries logged more than $1 billion in trade through the customs district in '15. The 10 largest, which accounted for 50.1 percent of all trade, included China ($18.5 billion), Mexico ($17.7 billion), Brazil ($10.5 billion), Germany ($10.0 billion), the Netherlands ($8.4 billion), Venezuela ($7.9 billion), Colombia ($7.2 billion), South Korea ($6.5 billion), Saudi Arabia ($6.2 billion), and the United Kingdom ($5.5 billion). Imports totaled $86.2 billion in '15. The top five imports were oil and oil products ($26.9 billion), industrial machinery ($11.9 billion), articles of iron and steel ($7.5 billion), vehicles and parts ($5.0 billion), and electrical machinery ($4.3 billion). Exports totaled $110.3 billion in '15. Leading exports included refined oil products ($39.7 billion), industrial machinery ($17.0 billion), organic chemicals ($13.0 billion), plastics ($7.1 billion), and electrical machinery ($5.2 billion). Greater Houston Partnership Research February

65 HOU-116 TEXAS AGRICULTURE TRADE MISSION TEXAS IS POISED TO BENEFIT FROM ANY FUTURE CUBA TRADE OPPORTUNITIES F va R p.1 In, th f. r d mt Ion eui T. U Stat. R~.~eIl13Ih' Truy IGnlllnslteds e'al cut5 or IIKI~\.\ ~ I $ c;ou,,\ r In C<lU'. KI"". ;010"9 with othe, TeUs delegatej. traveled te the country ',a, U'~5 <>Ii PilrI01~ I~" m 551 orgib ud byu... T.. De.,. eft!01alirteu 25

66 HOU-117 EMPLOYMENT GROWTH IN 2015, HOUSTON CREATED 23,200 JOBS AND UNEMPLOYMENT DECREASED DECREASED tl H I)., PARTNERSHIP UPDATE (i\ ~ EMPLOYMENT For the latest data, click here. January 22, 2016 The Houston-The Woodlands-Sugar Land metro area created 23,200 jobs in '15, according to data released today by the Texas Workforce Commission (TWC). The annual job growth was in line with the Partnership's revised forecast for '15 of 20,000 to 30,000 net new jobs. The region added 9,400 jobs in December '15, slightly below the 9,900 jobs added in December '14. Over the past 25 years, Houston has added an average of 10,900 jobs in December. Even during periods of a weak economy, Houston added jobs in December (3,100 in '96,600 in '01, and 1,500 in (08). Since December '14, the goods-producing sector lost 21,600 jobs while the serviceproviding sector added 44,800 jobs. Employment in mining and logging (i.e., upstream energy) declined by 8,500 and manufacturing by 16,000. Construction is the only goodsproducing sector to have added employment during this period, gaining 2,900 jobs. The largest job gains in the service sector occurred in accommodation and food services (+18,600), health care and social assistance (+16,700), and government (+10,200), with half of those job gains occurring in public education. Job Gains/Job Losses Dec '14 to Dec 'IS - Selected Sectors Total Nonfarm Payroll Employment Mining Construction Manufacturing Durable and Logging Non-Durable Goods Goods Trade, Transportation, Wholesale Retail Trade Trade and Utilities Transportation, Warehousing, and Utilities Information Financial Activities Finance and Insurance Real Estate and Rental and Leasing Professional Health and Business Services Care and Social Assistance Arts, Entertainment, and Recreation +23,200-8,500 +2,900-16,000-18,900 +2, ,800 +7,100-2,500 +1,400-5,200-1,600-3, ,700 +1,000 26

67 HOU-117 EMPLOYMENT GROWTH (CONT.) IN 2015, HOUSTON CREATED 23,200 JOBS AND UNEMPLOYMENT DECREASED Accommodation and Food Services Other Services Government Source: Texas Workforce Commission +18,600-1, ,200 The Greater Houston Partnership forecasts Houston to add 21,900 jobs in '16. For details on the forecast, please click here. Houston's December unemployment rate was 4.6 percent, down from 4.9 percent in November and up from 4.0 percent In December '14. Texas' unemployment rate was 4.2 percent in December, down from 4.5 percent in November and up from 4.1 percent in December '14. The U.S. rate was 4.8 percent in December, unchanged from 4.8 percent in November and down from 5.4 percent in December '14. The rates are not seasonally adjusted. Prepared by Greater Houston Partnership Research Department 27

68 HOU-118 POPULATION I/ EMPLOYMENT FORECAST HOUSTON S POPULATION AND EMPLOYMENT ARE EXPECTED TO GROW AT NATION-LEADING RATES FOR DECADES TO COME IPopulation and iemployment Forecast The Perryman Group forecasts Houston's population and employment to grow fasts r Umn the state and tile netion ave r the next 25 years. 12. Population alild Employment Houston-The Woodlands-Suga'l" Land MS.A I I PARTNERSHIP 10 8 ~.; ;;;; :a Ii 4 2: 0 '1.5,20 ~,Z5 150 Population Bmploymsnt '.:15 '40 s.ourc~: "i111.e Perryman GrouP. s mfl1l!!ir From '15 to '401, The Perrvman Group sees population gw\'llh all'eraging 1.69 percent annuliilly in tile Houston region. Over the same period, the T e!l::a~basedeoonomic toreclilsting timl expects I.'mge and salary empfo)'iment to rise at a 1.62 p-ercent annual rate. The Hauston--:.The Woodlands--Sugar Land Metro Area will add 3A m~iion ressdents between '15 and '40. PenYlfllan alsoforecasts ~hat Houston will add an additional 1.54 mi lion jobs and accountfor osle-fourth of Texas job grov.1h during that ~ime frame, The Perryman repo rt states: ~As 3 nmjor center fof the oil industry and related activity, Houston li3s been hit by lower oil prices. Wlille tire emf of the oil sufpe r.ill atrec'f perrorrnt1llce ill tile ne3[ remj, file Houstan area's ecollom y is far more diversified tlian in accede» fxijsl and the d{)wntum ill oil prices is not liketyto derail,eoonomic perfarmanre for 311 extended period of time. Despite weiilkness from tile rower ene;gy prices 300 tile ripp.fe effects tlirough tile economy. ey:jxlllsitjn in otlier se.crors.is expeded to moderote tile overall Ilegative impact 31ld generate growth in tile ye8fs to conle. ~ 28

69 HOU-119 FOREIGN-BORN POPULATION MORE THAN 20% OF HOUSTON S POPULATION IS FOREIGN-BORN Foreign-Born Population Houston is a magnet for international migration. JI II J PARTNERSHIP Percent of Metro Population Foreign-Born 20 Most Populous Metro Areas Miami,FL los Angeles, CA San Francisco, CA 30. A New York, NY 28.8 San Diego. Houston, CA TX Washington, Riverside, DC CA Dallas, TX 17.9 Chlcago,IL 17.6 B05ton, MA 17.6 Seattle, WA Phoenix, fu Atlanta, G.A 13.4 Tampa, FL 13.0 Philadelphia, PA 10.2 Minneapolis, Baltimore, Detroit, MN MD MI St. Louis, MO _4.2 Source: U.S. Census Bureau, 2014 American Community Survev In '14. nearly one in four Houstonians was foreign-born, versus one In eight nationwide, according to the Census Bureau's American Community Survey. In only five of the nation's 20 most populous metropolitan areas-miami, Los Angeles, San Francisco, New York and San Dlego-do foreign-born residents represent a larger share of total population than in Houston. Houston's foreign-born population of 1.5 million is greater than the total populations of 11 states and the District of Columbia. Greater Houston Pattnen>hip Researoh November 5,

70 HOU-120 MUSEUMS AND CULTURE MORE THAN 500 INSTITUTIONS IN HOUSTON ARE DEVOTED TO THE ARTS, SCIENCE AND HISTORY PARTNERSHIP Museums and Cultural Arts More than 500 institutions are devoted to the arts, science and history in the Houston area. Major Houston-Area Arts, Science and History Institutions Key Art Museums and Galleries Selected Performing Arts Organizations Asia Society Actors Theatre of Houston Bavou Bend Allev Theatre Blaffer Gallery (U. of Houston) American Festival for the Arts Contemporary Arts Museum Houston American Guild of Organists Cullen Sculpture Garden Ars Lyrica Houston Houston Center for Contemporary Craft Bach Society Museum of Fine Arts, Houston Bay Area Chorus O'Kane Gallery (U. of Houston-Downtown) Bayou City Chorale Rice Gallery (Rice U.) Bavou City Concert Musicals The Contemoorarv Arts Museum Houston Chooin Society of Houston The Menil Collection Da Camera University Museum of Texas Southem Univ. Ensemble Theatre Key Performina Arts Facilities Festival Ballet of Greater Houston Allev Theatre Gilbert & Sullivan Society of Houston Cynthia Woods Mitchell Pavilion Guitar Houston Galveston's Grand 1894 Opera House Houston Ballet Hobbv Center for the Performina Arts Houston Chamber Orchestra Jesse H. Jones Hall for the Performina Arts Houston Children'S Chorus Miller Outdoor Theatre Houston Early Music Verizon Wireless Theater at Bavou Place Houston Ebonv Ooera Guild Wortham Theater Center Houston Friends of Music Key Science and History Museums Houston Grand Opera Children'S Museum of Houston Houston Masterworks Chorus Harris Country Heritaae Society Houston Svmohonv Chorus Holocaust Museum Houston Houston Symphony Orchestra Houston Museum of Natural Science Indian Music Society of Houston Lone Star Flight Museum Istanpitta Early Music Ensemble Museum of Health & Medical Science Main Street Theater San Jacinto Museum of Historv Mercury Baroaue Ensemble John C. Freeman Weather Museum Opera in the Heights Soace Center Houston Staaes Reoertorv Theater The Woodlands Children'S Museum Theatre Under the Stars Source: Houston Facts 2013 Houston is one of the few U.S. cities (New York City, Chicago, Seattle and San Francisco are others) that offer world-class, year-round resident companies in all of the major performing arts-symphony (Houston Symphony Orchestra), opera (Houston Grand Opera), drama (The Alley Theatre) and ballet (Houston Ballet). Houston is also home to a leading musical theater company, Theater Under the Stars, and to the Society for the Performing Arts, an active presenter of major national and international attractions in theater, music and dance. Partnership Research Updated

71 HOU-120 MUSEUMS AND CULTURE (CONT.) MORE THAN 500 INSTITUTIONS IN HOUSTON ARE DEVOTED TO THE ARTS, SCIENCE AND HISTORY Arts and Culture Houston is one of few U.S. cities with resident companies performing arts - drama, ballet, opera and orchestra. in all four major I Ii ~ 11 PARTNERSHIP The famed Alley Theatre was founded in 1947 and is one of the few American theater companies that support a company of actors, designers, artisans and craftspeople throughout the year. Recipient of the 1996 Special Tony Award for outstanding achievement by regional theatre, the Alley performs year-round with a resident company of actors in its two-theater complex, the 824 seat Hubbard Stage and the 310 seat Neuhaus Stage, in downtown Houston. On these two stages, the Alley usually presents 11 major productions per season. Productions are built and rehearsed in a 75,000 square foot state-of-the art facility, one of the largest of its kind, adjacent to its two-theatre complex. The company has toured 40 U.S. cities and abroad. The Alley is also home to educational programs for students and teachers, including the Young Performers Studio, From Stage to Page, HYPE (Houston Young Playwrights Exchange) and Playwright 360'. Houston Ballet, founded in 1955 and established as a professional company in 1969, is the nation's fourth largest ballet company, with annual budget of more than $22 million and 53 dancers, many of whom have won medals at major international competitions. Houston Ballet has toured to critical praise in Europe, the United Kingdom, Canada, the Orient (including the People's Republic of China) and cities throughout the United States. Most recently, the company presents some 96 performances (79 in Houston, 17 touring). The internationally renowned Houston Grand Opera performs October through May each year at the Wortham Theater Center downtown. Founded in 1955, the company is known worldwide and enjoys a reputation for commissioning and presenting new works by important contemporary composers, including 47 world and six U.S. premieres since Its tours have included the U.S., Japan, Italy, Egypt, Scotland and France. HGO is the only opera company to have won a Tony Award, two Grammy Awards and two Emmy Awards. Its performances are broadcast nationally and internationally over the WFMT Radio Network New York City's WQXR, the European Broadcasting Union, and the Australian Broadcasting Corporation. In addition to its mainstage season, HGO is home to the Houston Grand Opera Studio, an acclaimed professional development program for young singers, and HGOco, an education and audience development initiative designed to bring company and community together in collaborative performing arts projects. The Houston Symphony, founded in 1913, has an annual budget of more than $24 million and maintains an internationally acclaimed orchestra and chorus. Some 350,000 attend its season of more than 170 classical, pops, educational and family concerts. The symphony's free summer concerts at Miller Outdoor Theatre have been a tradition since The symphony's long tradition of touring in recent years has included Europe, Japan, Singapore and many U.S. cities. Each season, musicians reach more than 22,000 Houstonians in schools, hospitals, retirement homes, shelters and community centers. Theatre Under The Stars offers musical theater productions, both new works and revivals, in a winter subscription season and in popular free summer productions at Hermann Park's Miller Outdoor Theatre. It also operates the Humphreys School of Musical Theatre. Located in midtown Houston is the Ensemble Theatre, established in the only professional theater in the Southwest devoted to the African-American experience - with two stages and a full season of productions. Partnership Research Updated

72 HOU-121 UNIVERSITIES AND COLLEGES MORE THAN 400,000 STUDENTS ARE ENROLLED IN HIGHER EDUCATION IN THE GREATER HOUSTON AREA Houston Area Universities and Colleges l ; '" U 1-" ( PARTNERSHIP More than 403,300 students are enrolled in higher education in the Houston area and more than 71,700 degrees and certificates were awarded for the academic year. SELECTED HOUSTON AREA UNIVERSITIES AND COLLEGES OFFERING A FULL RANGE OF CERTIFICATE AND DEGREE PROGRAMS Universities Baylor College of Medicine Texas Southern University Houston Baptist University University of Houston Lamar University University of Houston - Clear Lake Prairie View A&M University University of Houston - Downtown Rice University University of Phoenix - Houston Campus Sam Houston State University University of St. Thomas South Texas College of Law University oitexas Health Science Center Texas A&M University University oitexas M. D. Anderson Cancer Center Texas A&M University at Galveston University of Texas Medical Branch at Galveston Texas A&M University Health Science Center Community Colleges Alvin Community College Houston Community College System Blinn College Lee College Brazosport College Lone Star College System College of the Mainland San Jacinto College District Galveston College Wharton County Junior College Source: College For All Texans; Texas Higher Education Coordinating Board; IPEDS College Opportunities On-Une- National Center for Education Statistics Additional instruction is available at the Academy of Healthcare Professions, American College of Acupuncture & Oriental Medicine, American InterContinental University, Art Institute of Houston, Center for Advanced Legal Studies, College of Biblical Studies, Commonwealth Institute of Funeral Service, Concordia University, The Culinary Institute, Dallas Theology Seminary, DeVry University, Houston Graduate School of Theology, ICC Technical Institute, In Technical Institute, LeTourneau University, Our Lady of the Lake University, Prairie View A&M School of Nursing, Remington College, SI. Mary's Seminary School of Theology, Texas Chiropractic College, Texas School of Business, Texas Woman's University and Westwood College of Technology. Greater Houston Partnership Research May29,

73 HOU-122 LIVING COSTS HOUSTON OFFERS A LOW COST OF LIVING AND HIGH QUALITY OF LIFE Living Cost Comparison Houston offers a low cost of living while maintaining a high quality of life with the amenities expected in a world-class city. PARTNERSHIP New York (Manhattan), NY San Francisco, CA Washington, DC San Diego, CA Boston, MA Seattle, WA Los Angeles, CA Philadelphia, PA Chlcago,lL Baltimore, MD Miami,FL Cost of living Comparison 20 Most Populous U.S. Metros Minneapolis, Atlanta, Houston, MN GA TX Dallas, TX Phoenix,AZ Detroit, MI st. Louis, MO -7.5 Tampa, FL -8.4 % Below/Above U.S. Average Source: Council for Community and Economic Research (C2ER), Cost of Living Index, 2015 Annual Average (Data based on a survey of 273 urban areas, published January 2016). Note: Riverside, California is among the 20 most populous MSAs, but did not submit COLI data. The C2ER Cost ofliving Index for 2016 Annual Average shows Houston has the sixth lowest cost of living among the nation's 20 most populous metropolitan areas. Houston's overall aftertaxes living costs are 1.8 percent below the average for all 273 urban areas participating in the survey. Houston's housing costs are 58.8 percent below the average for the 20 most populous U.S. metros, and its overall costs are 25.9 percent below the average for this group. If one excludes the three most expensive housing markets-new York, San Francisco, Washington, D.C.- which tend to skew the average, Houston's housing costs are still 41 percent below the major metro average. Greater Houston Partnership Research Updated February

74 HOU-122 LIVING COSTS (CONT.) HOUSTON OFFERS A LOW COST OF LIVING AND HIGH QUALITY OF LIFE Living Cost Comparison Houston offers an attractive cost of living., L 1-01 PARTNERSHIP Cost of Living Comparisons 20 Most Populous U.S. Metros (Average for 273 Urban Areas = 100) Metropolitan St.tinical Area Compo.ite Groceries Housing Utilitie, Trans- H".lth Mi5C. GOOd5 port-ation Car. & Services New York (Manhattan), NY San Francisco, CA , Washington, DC San Diego, CA Boslon, MA Seattle, WA Los Angeles, CA Philadelphia, PA ,8 Chicago,IL , ,1,06.0 Baltimore, MD , Miami, FL Minneapolis, MN Atlanta, GA Houston, rx 98, , Dallas, TX Phoenix,AZ Detroit, MI St. Louis, MO Tampa, FL Riverside, California is among the 20 most populous MSAs, bur did not submit COLIdata. Source: Council for Community and Economic Research (C2ERI. Cost 0/ Living Index, 2015 Annual Average (Data based on a survey of 273 urban areas, published January 2016). Greater Houston Partnership Research Updated FebnlEJry 2,

75 HOU-123 EVENTS AND CONFERENCES HOUSTON HOSTS MAJOR EVENTS AND CONFERENCES OF LIKELY INTEREST TO CUBA TRAVEL/TRADE Annual Events: IHS ENERGY CERAWEEK' 35th Anniversary Energy Transition: Strategies for a New World February 22-26,2016 Houston, Texas CERAWeek Every February - IHS CERAWeek is the premier annual international gathering of energy industry leaders, experts, government officials and policymakers, leaders from the technology, financial, and industrial communities and energy technology innovators. This year marks the 35th anniversary of this influential event, ranked among the top five corporate leader conferences in the world. Midst the turbulence and uncertainty in energy markets this year, IHS CERAWeek 2016 will provide new insights and critically-important dialogue and a very cost efficient way to engage on the most urgent questions with decision-makers from around the world. Offshore Technology Conference I 2-5 May I Houston, Texas, USA I Offshore Technology Conference (OTC) Every May - The Offshore Technology Conference is where energy professionals meet to exchange ideas and opinions to advance scientific and technical knowledge for offshore resources. OTC gives you access to leading-edge technical information, the industry s industry's largest equipment exhibition, and valuable new professional contacts from around the world. Its large international participation provides excellent opportunities for global sharing of technology, expertise, products, and best practices. OTC brings together industry leaders, investors, buyers, and entrepreneurs to develop markets and business partnerships. 35

76 HOU-123 EVENTS AND CONFERENCES (CONT.) HOUSTON HOSTS MAJOR EVENTS AND CONFERENCES OF LIKELY INTEREST TO CUBA TRAVEL/TRADE Annual Events (cont.): Caribbean Heritage Month Festival Every June - The Caribbean Heritage Month Festival occurs the first Saturday of every June. Those in attendance enjoy the great Caribbean heritage celebration, complete with fabulous native music, exuberant cultural dancing and delicious authentic foods. Come out and enjoy various groups representing many nations of the Caribbean. Latin and Spanish Caribbean nations as took part in the festival, some adorned in their native, bright, colorful, cultural heritage customs. x.htm 36

77 HOU-123 EVENTS AND CONFERENCES (CONT.) HOUSTON HOSTS MAJOR EVENTS AND CONFERENCES OF LIKELY INTEREST TO CUBA TRAVEL/TRADE Special Events: IHS CHEMICAL 31 st World Petrochemical Conference 2016 World Petrochemical Conference March 15-18, The World Petrochemical Conference & Workshops is the premier gathering for the petrochemical industry, bringing together more than 1,200 senior chemical industry decision-makers from more than 40 countries for networking, unparalleled insight and critical analysis from IHS, your trusted partner in decisionmaking. MEDICAL WORLD AMERICAS CONFERENCE AND EXPO MAY 18-20, GEORGE R. BROWN CONVENTION CENTER 1HOUSTON, TX Medical World Americas Conference & Expo May 18-20, Medical World Americas (MWA) is a medical conference for all disciplines, held annually at the George R Brown Convention Center in Houston, TX. MWA offers a forum that fosters collaboration among clinical and administrative professionals from the public and private sectors and the world of academia to advance the health of our communities. It is a conference created for doctors, nurses, physician s assistants, a administrators, researchers, academics and manufacturers to have an equal voice in shaping the future of healthcare. The event is produced in collaboration with Texas Medical Center by Messe Düsseldorf North America and Houston First Corporation/Greater Houston Convention and Visitors Bureau. / 37

78 HOU-123 EVENTS AND CONFERENCES (CONT.) HOUSTON HOSTS MAJOR EVENTS AND CONFERENCES OF LIKELY INTEREST TO CUBA TRAVEL/TRADE Special Events (cont.): Copa America Centario, USA 2016 June The Copa America Centario is a once-in-a-lifetime gathering of the world s best soccer players. The group stage of the tournament will take place from June 3rd-14 across 10 U.S. cities including group play and the first semifinal game in Houston. Each group will conduct a round robin format, with each team playing each other once. A win earns a team 3 points, a draw gets 1 point, and a loss is worth 0 points. The top two teams of each group move on to the quarterfinals. 38

79 HOU-124 HOUSTON AIRPORT SYSTEM PROFILE THE HOUSTON AIRPORT SYSTEM IS COMPRISED OF THREE AIRPORTS AND HANDLED 55 MILLION PASSENGERS IN 2015, INCLUDING MORE THAN 10.6 MILLION INTERNATIONAL PASSENGERS m 146 '--"" ~ INTERNATIONAL DOMESTIC 821 DAILY***** 0 DEPARTURES FROM HOUSTON FROM HOUSTON DESTINATIONS MILLION ANNUAL PASSENGERS 39

80 HOU-125 INTERNATIONAL AIR SERVICE HOUSTON IS THE ONLY GATEWAY IN NORTH AMERICA WITH NONSTOP SERVICE TO ALL 6 INHABITED CONTINENTS., " ~.:... '.....', ",... ::::::::: 1, :::::::::::,' ::::.:. :':'::::':':.:~..tn..::.: t:,.:: ~"":':"::""::':"::::.'::'..'....:.::::::~:... The only five cities connecting all six inhabited continents are: Houston, Texas Abu Dhabi, United Arab Emirates Doha, Qatar Dubai, United Arab Emirates Johannesburg, South Africa 40

81 HOU-126 ECONOMIC IMPACT THE HOUSTON AIRPORT SYSTEM CONTRIBUTES MORE THAN $27 BILLION TO THE LOCAL ECONOMY; FURTHER, THE ECONOMIC IMPACT OF NEW INTERNATIONAL AIR SERVICE IMPLEMENTED SINCE 2011 IS ESTIMATED TO BE AN ADDITIONAL $1.3 BILLION Total Economic Impact of Houston Airport System Airports (2011) Impact Employment Earnings ($mil) Output ($mil) Direct 47,456 $3,132.7 $8,666.7 Indirect 47,713 $1,125.0 $3,663.6 Induced 139,113 $4,593.2 $15,227.4 Total 234,281 $8,850.9 $27,557.8 Total Economic Impact from New International Flights since 2011 Impact Employment Earnings ($mil) Output ($mil) Direct 1,712 $ $ Indirect 4,326 $ $ Induced 6,200 $ $ Total 12,237 $ $1, Source: GRA, Incorporated 2011,

82 HOU-127 FORTUNE 500 COMPANIES IN TEXAS TEXAS HAS ONE OF THE LARGEST CONCENTRATIONS OF FORTUNE 500 HEADQUARTERS IN THE U.S. EJf(onMobii FLUOR ~ II ll,,~r~.!,mer. ~, AliianceData I, GameSto Energy Future Holdings ~ Trinitu Industries. Inc. HALUBURTON PL\IN. P Svsco 'K)WL~~. ~ ~ ~ ConocoPhillips UK HUOHIS {j MarathonOil Coo:>Or.uon eogresources WHOLE foods M ' CenterPoint. Energy KBR. C TESORO =O uuel t<31 TARGA LP MRCGlab r oxv QUANTA SERVICES Spect~ Energy 42

83 HOU-201 HOUSTON S HOUSTON'S GEOGRAPHIC ADVANTAGE HOUSTON PROVIDES AN IDEAL CENTRAL LOCATION FOR BUSINESS OPERATIONS Geographic Advantage The Houston region provides a central location for all business operations. I I' r PARTNERSHIP Oenvr- ~ 1,000 Mile Radius Houston region geographic advantages: Population Reach: from central Houston, more than 25 million people live within 300 miles, 40 million live within 500 miles and 141 million live within 1,000 miles. Central Time Zone: one hour behind East Coast, two hours ahead of West Coast, allowing for optimal communications with entire country. Equidistant from East and West Coasts: 1,675 miles to New York, 1,546 miles to Los Angeles; can reach any metro area within hours by air. Convenient to Port of Houston (8 miles from Houston's City Hall), Port of Texas City (37 miles), Port of Galveston (51 miles), and Port Freeport (61 miles), offering worldwide access. Mild Climate: only 18 days per year with temperatures of 32 F or less, allowing for year-round outdoor activities. Partnership Research Updated

84 HOU-202 LATIN AMERICA TRADE HOUSTON IS A HIGHLY COMPETITIVE GATEWAY FOR OVERALL TRADE WITH LATIN AMERICA Top 20 U.S. Customs District trading with Latin America (2015 total $ value) WISERTrade: US District Harmonized Query Rank Code Description ANNUAL 2015 % Share TOTAL ALL DISTRICTS 800,296,721, Laredo, TX 274,623,324,202 34% 2 24 El Paso, TX 91,792,370,090 11% 3 52 Miami, FL 75,027,012,958 9% 4 53 Houston/Galveston, TX 66,081,464,627 8% 5 25 San Diego, CA 60,545,848,979 8% 6 20 New Orleans, LA 39,191,546,885 5% 7 26 Nogales, AZ 31,919,727,535 4% 8 10 New York City, NY 16,849,976,486 2% 9 27 Los Angeles, CA 15,661,708,747 2% Tampa, FL 14,331,509,855 2% Port Arthur, TX 14,000,492,477 2% Low Value Shipments 13,898,063,882 2% Mobile, AL 12,043,586,695 2% Philadelphia, PA 10,072,482,068 1% San Francisco, CA 8,132,482,615 1% Charleston, SC 7,011,413,526 1% Seattle, WA 6,727,599,989 1% Baltimore, MD 6,339,799,127 1% Norfolk, VA 5,612,036,497 1% Savannah, GA 5,457,387,062 1% WISERTrade: US District Harmonized Query Data provided by WISER, at w w.w isertrade.org, from US Census Bureau, Foreign Trade Division 44

85 HOU-203 UNITED S UNITED'S HUB AT IAH RANKS HIGHLY AMONG U.S. - LATIN AMERICAN GATEWAYS - THE UA-IAH HUB RANKS #3 AMONG U.S. GATEWAYS IN TERMS OF TOTAL SEATS TO LATIN AMERICA FOR THE YEAR ENDING SEPTEMBER 2016 YE September 2016 Latin America scheduled seats by U.S. gateway 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 AA-MIA DL-ATL UA-IAH B6-JFK AA-DFW UA-EWR DL-JFK B6-FLL AA-CLT NK-FLL During this period, UA-IAH ranks: #1 in total scheduled seats to Mexico #1 in total scheduled seats to Central America #3 in total scheduled seats to South America #14 in total scheduled seats to the Caribbean United* at IAH total scheduled seats to Latin America have increased by 21% over the ten years ending this period * Ten year comparison data also reflects operations by Continental Airlines Source: Innovata schedule data via Diio online portal 45

86 HOU-204 LATIN AMERICA SERVICE HOUSTON HAS SERVICE TO 54 LATIN AMERICAN DESTINATIONS OIlh h 0 \* MU t 0 CiuDle", Quito To q' De 'ro S;!oP au.r.o, AIr I> ~li.:o [rill Source: Innovata schedule data via Diio online portal 46

87 HOU-205 HOUSTON IS A LARGE AND GROWING GATEWAY TO LATIN AMERICA TRAFFIC BETWEEN HOUSTON AND LATIN AMERICA HAS GROWN BY 15% IN THE PAST YEAR AND BY 21% SINCE 2011 Houston (IAH+HOU) Round trip passengers p by year Region Mexico 2,978,754 2,863,546 2,734,593 2,932,221 3,259,472 Caribbean (Non US) 224, , , , ,232 Central/South America 2,410,887 2,481,471 2,571,487 2,711,283 3,126,972 Total 5,614,441 5,573,693 5,550,905 5,923,128 6,799,676 Houston (IAH+HOU) Year-over-year round trip t passengers p % change Region Mexico - -4% -5% 7% 11% Caribbean (Non US) - 2% 7% 14% 48% Central/South America - 3% 4% 5% 15% Total - -1% -0% 7% 15% Source: SABRE Market Intelligence tool and Houston Airport System monthly statistics s reportr 47

88 HOU-301 RECENTLY SCHEDULED U.S. CUBA CHARTER OPERATIONS HIGHLIGHT A LARGE SERVICE GAP WEST OF FLORIDA THE VAST MAJORITY OF CURRENT U.S. CUBA CHARTER SERVICES OPERATE FROM FLORIDA.,., ,.... ;, t, \ / ----~-,. Los Angeles New York JFK scu Key HAV CFG i CMW SCU MIA based Jan/Feb 2016 Non-MIA- based Jan/Feb 2016 routes departures routes departures MIA-HAV 503 FLL-HAV 9 MIA-CFG 31 EYW-HAV 8 MIA-CMW 75 TPA-HAV 43 MIA-HOG 78 TPA-HOG 4 MIA-SCU 31 TPA-SNU 8 MIA-SNU 88 MCO-HAV 17 JFK-HAV 16 LAX-HAV Total Source: DOT public charter prospectus filings 48

89 HOU-302 FLORIDA IS ALREADY HEAVILY SERVED BY CHARTERS TO CUBA FOR THE MOST RECENT DOT T100 ANNUAL REPORTING PERIOD, 99% OF U.S. CUBA CHARTER ACTIVITY WAS REPORTED AS SERVING FLORIDA YE August 2015 DOT/T100 Cuba charter departures by U.S. destination Other Florida, 11% Other U.S., 1% MIA, 88% MIA Other Florida Other U.S. Source: DOT T100 data via Diio online portal 49

90 HOU-303 AMERICAN IS THE LARGEST OPERATOR OF AIR SERVICES BETWEEN THE U.S. AND CUBA RECENTLY SCHEDULED U.S. CUBA CHARTER OPERATIONS HIGHLIGHT AMERICAN'S AMERICAN S ALREADY-DOMINANT DOMINANT MARKET POSITION January & February 2016 Cuba charter departures by carrier II American Eastern Aruba Xtra Airlines Air Lines Airlines Airways Swift Air -- Aruba Airways Atlantic West InselAir Aruba JetBlue Airways Envoy Air World Atlantic Air Key West Carrier Jan/Feb 2016 departures American Airlines 174 Eastern Air Lines Aruba Airlines Xtra Airways 134 Swift Air 101 InselAir Aruba 90 JetBlue Airways 49 Envoy Air 48 World Atlantic 11 Air Key West 8 Total 920 Source: DOT public charter prospectus filings 50

91 HOU-304 UNITED OPERATES ONE OF ITS LARGEST DOMESTIC ROUTE NETWORKS FROM HOUSTON IN 2016,, UNITED WILL SERVE 116 DOMESTIC DESTINATIONS FROM IAH REPRESENTING AN AVERAGE OF 405 DAILY DOMESTIC DEPARTURES To Anchorage Seattle Boston sacramento R-,e~n:::o:::::::::::::-_~ San Francisc:":o---- San Jose To Honolulu Bakersfield los. las Vegas Angeles ontano.~~~~~~~~~~iiii~~ g~~n~j~e~~~~. San Diego Phoenix Tucson Charleston ~;P~~~~--::-:~Jacksonville Orlando To San Juan To ST.Thomas, USVI Source: Innovata schedule data via Diio online portal 51

92 HOU-305 UNITED OPERATES ITS LARGEST LATIN AMERICAN ROUTENE~ORKFROM NETWORK HOUSTON IN 2016,, UNITED WILL SERVE 54 LATIN AMERICAN DESTINATIONS FROM IAH REPRESENTING AN AVERAGE OF 85 DAILY LATIN AMERICAN DEPARTURES San Jose Del Cabo San Jose \\ Port of Spain Bogota Quito To Rio De Janeiro Sao Paulo Buenos Aires To Santiago Lima Source: Innovata schedule data via Diio online portal 52

93 HOU-306 UNITED S UNITED'S IAH-HAV HAV APPLICATION WILL GENERATE ONE-STOP - CONNECTIONS TO HAVANA FROM TWENTY U.S. DESTINATIONS UA S IAH-HAV NONSTOP SERVICE WILL DRIVE CONVENIENT ONE-STOP SERVICE TO MARKETS THROUGHOUT THE MIDWEST AND WEST Seattle Chicago ORO San Francisco Los Angeles LasVegas San Diego Phoenix Tucson _~~~~e~ New Orleans Several of these connections including LAX, SAN, SFO, PDX, SEA, LAS, PHX, TUS, and AUS have very low circuity compared to a nonstop itinerary* * Reflects comparison of nonstop/connecting itinerary mileage per GreatCircleMapper.com Source: United Airlines application for service 53

94 HOU-307 HOUSTON ANTICIPATES - THAT THE PROPOSED IAH-HAV SERVICE WILL OPERATE WITH A HIGH LOAD FACTOR THERE IS STRONG TRAFFIC POTENTIAL FORAA ONE-TIME WEEKLY UA IAH-HAV DEPARTURE Annual Houston O&D traffic to Jamaica / Dominican Republic: 141 PDEW Assumed 10% traffic shift to HAV and 75% UA traffic market share Results in 10.5 IAH-HAV local PDEW Assumed UA IAH-HAV - segment traffic composition at 50% local* Results in 10.5 connecting PDEW / ~ 21 total segment PDEW 21 segment PDEW = demand for 148 segment passengers at 1x/weekly** * The scenario above generates 80%+ load factors at local traffic percentages up to 60% ** Given the UA proposed aircraft size of 154 seats, some traffic would likely be spilled Source: SABRE Market Intelligence tool and Houston/InterVISTAS analysis 54

95 HOU-308 UNITED HAS A LONG TRACK RECORD OF SUCCESSFULLY OPERATING AND UPGRADING SERVICE TO THE CARIBBEAN UNITED BRINGS A SUCCESSFUL RECENT HISTORY OF SATURDAY- ONLY CARIBBEAN SERVICE AS EVIDENCED FROM THE LAST TWO FEBRUARYS WHICH OFTEN LEADS TO EXPANDED SERVICE February 2015 UA Saturday-only Caribbean service Route February 2015 February 2015 load February 2016 scheduled scheduled departures factor departures CLE-SJU 4 96% 4 EWR-BON 4 84% 4 EWR-UVF 4 84% 8 (+4) IAD-SXM 4 94% 12 (+8) IAH-BON 4 83% 4 IAH-MBJ 4 66% 12 (+8) ORD-SXM 4 91% 12 (+8) Total 28 85% 56 The success of this trend led to an increase to 60 overall UA scheduled Saturday-only U.S.-Caribbean departures in February 2016 Source: Innovata schedule data via Diio online portal 55

96 HOU-308 UNITED HAS A TRACK RECORD OF SUCCESSFULLY OPERATING AND UPGRADING SERVICE TO THE CARIBBEAN (CONT.) UNITED CONTINUES TO INCREASE WEEKEND-ONLY CARIBBEAN SERVICE AT HOUSTON UA PLS & STT day of service year-over-year y - comparison Route Jun-16 June-15 IAH-PLS Sat, Sun Sat IAH-STT Tues, Wed, Sat, Sun Sat, Sun UA PLS & STT total monthly departures year-over-year comparison Route Jun-16 June-15 YOY % Change IAH-PLS % IAH-STT % The success of this trend and general traffic growth will lead to an increase of 55 UA scheduled U.S.-Caribbean departures at IAH in June 2016 versus the same period last year Source: Innovata schedule data via Diio online portal 56

97 HOU-309 UNITED S UNITED'S IAH-HAV HAV SERVICE WILL GENERATE SUPERIOR BEYOND CONNECTIVITY COMPARED TO OTHER WESTERN PROPOSALS UNITED S TOTAL OF 20 CONNECTING MARKETS BEYOND IAH-HAV HAV EXCEEDS SEVERAL OTHER PROPOSED WESTERN GATEWAYS Potential beyond gateway destinations per various airline applications UA IAH-HAV F9 DEN-HAV SY MSP-HAV* AA LAX-HAV AS LAX-HAV * Sun Country did not detail connecting market totals in its application; ; the figure above represents a maximum based on its overall route network actual connecting markets are likely lower Source: Various carrier applications and Innovata schedule data via Diio online portal 57

98 HOU-310 IAH ACCOMMODATES MORE THAN TWICE AS MUCH U.S./CANADA CONNECTING TRAFFIC TO THE CARIBBEAN AS DOES DFW OVER 300 DAILY PASSENGERS ONE-STOP CONNECTED THROUGH IAH TO THE CARIBBEAN IN 2015 MORE THAN TWICE THE TOTAL ONE- STOPS CONNECTING THROUGH DFW 2015 U.S./Canada one-stop connections to the Caribbean (PDEW)} IAH DFW IAH DFW Note: data reflects only one-stop connections through each specified hub Source: SABRE Market Intelligence tool 58

99 HOU-311 HOUSTON CONSOLIDATES TRAFFIC TO THE CARIBBEAN FROM ACROSS THE WESTERN U.S. OF THE OVER 300 IAH ONE-STOP U.S./CANADA CONNECTIONS TO THE CARIBBEAN, THE TOP ORIGINATING MARKETS COME PRIMARILY FROM THE WESTERN AND MIDWESTERN UNITED STATES 2015 top U.S./Canada-Caribbean markets through IAH (PDEW) III1IIIIIIII LAX DEN SFO ORD AUS LAS DFW SAT OKC MSY SEA PHX EWR DCA LFT PIT PDX SAN In total, the markets highlighted in the graph above generated over 5,000 PDEW to the Caribbean in 2015 Source: SABRE Market Intelligence tool 59

100 HOU-312 HOUSTON GENERATES SIGNIFICANT LOCAL DEMAND FOR TRAVEL TO THE CARIBBEAN FOR THE CALENDAR YEAR 2015, HOUSTON GENERATED 440 PDEW TO THE CARIBBEAN 2015 Houston (IAH+HOU) Caribbean O&D PDEW by month II Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Houston (IAH+HOU) Caribbean O&D PDEW by year s total of 440 PDEW is up 96% over the past ten years Source: SABRE Market Intelligence tool 60

101 HOU-313 HOUSTON GENERATES SIGNIFICANT LOCAL DEMAND FOR TRAVEL TO MARKETS SIMILAR TO CUBA OF THOSE 440 PDEW TO THE CARIBBEAN, 141 TRAVELED TO THE DOMINICAN REPUBLIC AND JAMAICA BOTH IN RELATIVE PROXIMITY TO CUBA 2015 Houston (IAH+HOU) traffic to the Dominican Republic/Jamaica I I I I I Total Caribbean Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Note: Total Caribbean traffic included for comparison Dom Republic/Jamaica For the year 2015, 32% of Houston-Caribbean O&D traffic traveled to either the Dominican Republic or Jamaica Source: SABRE Market Intelligence tool 61

102 HOU-401 HAS INTERNATIONAL SERVICES HOUSTON HAS MADE MAJOR INVESTMENTS IN FACILITATING INTERNATIONAL ARRIVALS The Houston Airport System (HAS) welcomed more than 10.7 million international travelers to the United States in 2015 and is committed to providing those passengers a seamless experience. HAS has invested in 57 Automated Passport Control (APC) kiosks, 46 Global Entry kiosks and employs Special Service Representatives (SSRs that are trained to assist int l arriving passengers). At IAH, SSRs speak over 18 different languages. Such measures support our strong relationship with all of our security focused airport partners with the common goal of a secure and efficient processing. Source: Houston Airport System 62

103 HOU-402 FACILITY INFRASTRUCTURE PROJECTS PRO~ECTS THE HOUSTON AIRPORT SYSTEM AND OUR PARTNERS HAVE SEVERAL INFRASTRUCTURE PROJECTS UNDERWAY TO ENSURE ITS POSITION AS A GLOBAL GATEWAY FOR DECADES TO COME IAH United Airlines, New Terminal C North Project On May 15, 2015, a groundbreaking ceremony launched the construction of a new Terminal C North which will accommodate narrow-, mid-, - and wide-body flight operations from United Airlines. 63

104 HOU-402 FACILITY INFRASTRUCTURE PROJECTS PRO~ECTS (CONT.) THE HOUSTON AIRPORT SYSTEM AND OUR PARTNERS HAVE SEVERAL INFRASTRUCTURE PROJECTS UNDERWAY TO ENSURE ITS POSITION AS A GLOBAL GATEWAY FOR DECADES TO COME IAH Terminal Redevelopment Program (ITRP) Hewl"ennlna:1C'- The dramatic increase in the number of passengers traveling aboard international flights in Houston is the driving force behind an expansion plan known as the IAH Terminal Redevelopment Program. It s a plan that calls for two new terminal facilities and a host of other vital improvements. In addition to the new international gateway facility, the IAH Terminal Redevelopment Program calls for major improvements in a variety of other areas as well, including: Improved north terminal roadway Expanded aircraft parking areas Expanded Federal Inspection Services (FIS) facilities Terminal D baggage handling system New Terminal C West Parking Garage Infrastructure and utilities modernization 64

105 HOU-403 HOBBY (HOU) INTERNATIONAL FIS HOU OPENED A NEW INTERNATIONAL TERMINAL FOR COMMERCIAL OPERATIONS ON OCTOBER 15, 2015 William P. Hobby Airport has enjoyed a number of significant events and momentous occasions over the years, but the opening of a new international concourse building on October 15, 2015 undoubtedly stands as one of the facility's major highlights. The new five-gate concourse not only expanded Hobby s Hobby's operational capacity, but more importantly, it established the infrastructure necessary to accommodate regional international flight service to locations throughout Latin America and the Caribbean. Source: Innovata schedule data via Diio online portal 65

106 HOU-404 TEXAS'AEROSPACEINDUSTRY TEXAS AEROSPACE INDUSTRY HOUSTON AND TEXAS PLAY A LEADING ROLE IN THE U.S. AEROSPACE INDUSTRY 66

107 HOU-405 CARGO CENTER PROFILE THE IAH AIR CARGO CENTER OFFERS THE SERVICES NEEDED TO DEVELOP TRADE OPPORTUNITIES WITH CUBA George Bush Intercontinental Airport (IAH) handled 429,534 Metric Tons of cargo in It specializes in the movement of oil/gas equipment, industrial machinery and project cargo. Two air cargo centers at IAH serve 12 cargo carriers and 29 passenger airlines. Shippers and freight forwarders in the Houston region enjoy connectivity to over 200 destinations around the world (including passenger and cargo flights) IAH Air Cargo Stats (Metric Tons) Region Deplaned Enplaned Total Mexico 1, ,548.8 Europe 59, , ,374.2 Ctrl/South America 16, , ,482.8 Canada Asia/Africa/Australia 23, , ,728.3 Middle East 5, , ,946.7 INTERNATIONAL TOTAL 105, , ,431.7 DOMESTIC TOTAL 103, , ,102.3 GRAND TOTAL 209, , ,534.0 Note: Air Cargo reflects freight and mail handled at IAH Source: Houston Airport System 67

108 HOU-406 CARGO SERVICES THE HOUSTON AIRPORT SYSTEM PROVIDES A 120-ACRE AIR CARGO CENTER WITH SERVICES TAILORED TO INTERNATIONAL SHIPPERS IAH offers a perishables facility on airport the Fresh Air Cargo Center IAH which would allow the import of time and temperature-sensitive goods from Cuba, like fish and citrus The 32,000 sf facility, which includes 12,000 sf of refrigerated space, is currently receiving flowers, produce and pharma for the Texas region or connecting to different markets in Europe, Asia and the Middle East Commodities currently handled at the Fresh Air Cargo Center IAH include California citrus, Mexican avocado, mango and lime, U.S. beef, Chilean salmon and berries, Colombian flowers and pharmaceuticals The 120-acre IAH Air Cargo Center, with more than 650,000 sf of onairport warehouse space for cargo, offers the following services to cargo companies in the Houston region: Parking for 20 wide w body freighters One stop shop Federal Inspection Services Fresh Air Cargo IAH Perishables Center Fumigation facility on-site 0 - Airport's access to U.S. foreign trade zones, allowing duty-free storage, manufacturing and processing of imported goods Hydrant fueling Full service animal/plant inspection facility USDA livestock export facility Source: Houston Airport System 68

109 HOU-407 PORT OF HOUSTON THE PORT OF HOUSTON IS A MAJOR GATEWAY FOR INTERNATIONAL TRADE As one of the world's world s busiest ports, the Port of Houston is a large and vibrant component of the regional economy. A 2015 study by Martin Associates says ship channel-related businesses contribute 1,174,567 jobs throughout Texas, up from more than 1 million jobs cited in a 2012 study. This activity helped generate more than $264.9 billion in statewide economic impact, up from nearly $182.6 billion. Additionally, more than $5 billion in state and local tax revenues are generated by business activities related to the port, up from $4.5 billion. 69