Air Service at GMIA. ASQ Milwaukee. January 21, 2013

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1 Air Service at GMIA ASQ Milwaukee January 21, 2013

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6 Airlines that have served MKE

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15 GMIA Airlines 2002 to 2013

16 GMIA Total Passengers - Enplaned & Deplaned 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,

17 GMIA Total Passengers to ,000,000 9,000,000 8,000,000 Enplaned/Deplaned 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,

18 GMIA Transfer and O&D Passengers to 2011

19 GMIA Total O&D Passengers 10,000,000 9,000,000 8,000,000 (Enplaned/Deplaned) 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,

20 GMIA Total Passengers 10,000,000 9,000,000 8,000,000 (Enplaned/Deplaned) 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,

21 Airline Market Share At GMIA - By Seats December 2011 Seat Share December 2012 Seat Share US Airways 3% United 4% Southwest 12% American 3% Continental 3% Air Canada 1% AirTran 35% US Airways 5% Frontier 5% United 8% American 4% Air Canada 1% Southwest/ AirTran 52% Delta 17% Frontier 22% Delta 25% Source: Innovata Schedules for December.

22 Nationwide Trends in Aviation

23 Rising Fuel Prices Airlines spent $31 billion on fuel in 2011, compared to $10 billion in 2000 Fuel is largest single component of airline costs, exceeding payroll and fringe benefits

24 Historic Jet Fuel Prices - October 1990 to October 2012 Cost Per Gallon Source: U.S. Energy Information Administration

25 Cost per Available Seat-Mile (cents) Cost per Available Seat-Mile - CASM with and without fuel

26 Average U.S. Domestic Fares to 2012 (1Q) non-adjusted Source: Bureau of Transportation Statistics

27 Adjusted Airfares Have Decreased Compared to 1979 Source: Airlines For America

28 Summary of Airline Fees - April 2012 Airline Carry-on Luggage 1 st Checked Bag 2 nd Checked Bag Ticket Change Fee Seat Selection Fee AirTran Alaska Allegiant American Delta Frontier JetBlue Southwest Spirit United US Airways

29 Billions of Dollars Accumulated Net Losses & Gains - Legacy and low-cost airlines,

30 U.S. Domestic Market Share Chart 30 JetBlue 1% Hawaiian AirTran ATA 1% 2% 2% Alaska 3% America West 4% Continental 7% Northwest 9% December 2002 Seat Share Frontier 1% Aloha 1% Spirit 1% Midwest 1% Delta 18% American 15% Frontier 2% Alaska JetBlue 4% 4% US Airways 12% December 2012 Seat Share Spirit 1% Hawaiian 1% Virgin America 1% Allegiant 1% Other 1% Southwest 22% US Airways 10% United 12% Southwest 14% American 13% United 17% Delta 21% Source: Innovata Schedules for December.

31 Airline Industry Consolidation -Percent of domestic passenger capacity

32 Airlines Cut Shorter Flights Between June 2007 and June 2012, airlines reduced the number of domestic scheduled passenger flights by 13.9% Flights less than 250 miles decreased by 24% Flights between 250 and 499 miles decreased by 16% These reductions accounted for 3,000 fewer flights per day Financial pressures have forced 51 passenger and cargo airlines to file for bankruptcy since 2000.

33 Overall reduction in flights Year-over-year changes in departures, by U.S. carrier Airline 2012 Departures 2013 Departures Percent Change American 310, , % Delta 466, , % United 490, , % US Airways 288, , % Alaska 70,337 72, % JetBlue 63,706 67, % Spirit 18,063 20, % Virgin America 12,831 12, % Southwest/AirTran 335, , % Frontier 32,613 21, % Totals 2,089,877 2,029, % Source: Innovata/Aviation DataMiner

34 Billions of passengers Passenger Traffic and Capacity - Domestic, 2000 to 2011

35 Average Fares by Flight Length - New fees also increase revenue $226 $237 $191 $177 $164 $116

36 Change in the Nation s Hub Network

37 U.S. Domestic Market Share December 2012 Seat Share Frontier 2% Other 13% Southwest 22% US Airways 12% American 13% Delta 21% United 17% Source: Innovata Schedules for December.

38 Historic Hub Cities - 38 Hub Cities Seattle Minneapolis Portland San Francisco Reno Salt Lake City Denver Colorado Springs Kansas City Milwaukee Chicago Dayton Cincinnati St. Louis Detroit Cleveland Pittsburgh Columbus Baltimore Boston New York City Newark Philadelphia Washington, D.C. San Jose Los Angeles Las Vegas Phoenix Dallas Memphis Nashville Atlanta Raleigh Charlotte Houston Orlando Fort Lauderdale Miami

39 Historic Hub Cities - 15 Cities Lost Hub Status Portland Milwaukee Dayton Pittsburgh Reno Colorado Springs Kansas City St. Louis Columbus San Jose Las Vegas Nashville Raleigh Los Angeles Fort Lauderdale

40 Current Hub Cities - 22 Hub Cities Seattle Minneapolis Detroit San Francisco Salt Lake City Denver Chicago Cincinnati Cleveland Newark New York City Philadelphia Washington, D.C. Baltimore Phoenix Memphis Dallas Atlanta Charlotte Houston Orlando Miami

41 Flight Cutbacks at Hub Airports - June 2007-June 2012 Hub Airport Hub Airline Scheduled Passenger Flights June 2007 Scheduled Passenger Flights June 2012 Percent Change Cincinnati Delta 12,781 4,710-63% Cleveland Continental 9,070 6,684-26% Memphis Northwest 8,227 5,308-36% Pittsburgh US Airways 7,462 4,470-40% St. Louis American 9,503 7,127-25% Total 5 hubs 47,043 28,299-40%

42 Current Cities With 2 Hubbing Airlines - 5 Cities Chicago Denver Phoenix Dallas Atlanta

43 Timeline: Air Service at GMIA

44 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 Midwest/Frontier Timeline to Frontier De-Hubs November Midwest Southwest AirTran 2009 TPG/Northwest August June Merged Attempts 2009 Purchases Into 2003 Milwaukee Frontier Enters Republic Midwest Southwest Frontier Purchase AirTran Airways Takeover Brand Enters Frontier Midwest Airlines Airlines - 29% Midwest - 36% (2011) Acquires Midwest Convergence Midwest Midwest Airlines Airlines Airlines % 34% 35% Frontier Airlines - 7% From (June for $31 - Bankruptcy 2012) 53% Million Northwest Airlines Northwest - 35% Total Airlines Passengers: Midwest - 25% Airlines 6,142,124-35% Midwest Express Total Passengers: 7,299,294 Midwest - Midwest 14% Total Total Express Airlines Passengers: - 25% Serves 9,522,456 9,848,377 7,935, ,712,535 Cities Frontier Frontier/Midwest Airlines Total Airlines Passengers: Airlines Serves Serves 36 Serves Cities 7,935, Cities (2011) Cities Total Passengers: Total 4,308,295 Frontier Passengers: Midwest Airlines 4,521,872 Airlines Serves 4 Serves Cities 32 (2012) Cities Midwest Express Midwest Serves Express 20 Cities Serves 31 Cities 2002 AirTran Enters Midwest Airlines - 37% Total Passengers: 5,589,127 Midwest Airlines Serves 44 Cities Total GMIA Midwest AirTran

45 GMIA Air Service Today

46 The airlines are flying into GMIA to serve the aviation transportation demand of Southeastern Wisconsin. The airlines compete for passengers and cargo. Ticket prices are set by the airlines and the market. Where airlines fly is a decision made by the airlines.

47 Average Air Fares to 2012 (2Q) $400 $380 $360 $340 $320 $300 $280 $260 NAT MKE MDW ORD $240 $220 $

48 GMIA s Top 30 Markets 1 Orlando (MCO) AT, DL, FR, SW 2 Las Vegas (LAS) SW 3 New York (LGA) AT, DL, SW 4 Phoenix (PHX) SW, US 5 Denver (DEN) FR, SW, UA 6 Washington (DCA) AT 7 Atlanta (ATL) AT, DL 8 Minneapolis/St. Paul (MSP) DL, SW 9 Boston (BOS) SW 10 Los Angeles (LAX) SW 11 Dallas/Ft. Worth (DFW) AA 12 Tampa (TPA) AT, SW 13 Ft. Myers (RSW) AT 14 San Francisco (SFO) SW 15 Baltimore (BWI) SW 16 Kansas City (MCI) SW 17 Ft. Lauderdale (FLL) SW 18 Philadelphia (PHL) US 19 Seattle (SEA) SW 20 San Diego (SAN) - 21 Newark (EWR) UA 22 St. Louis (STL) SW 23 Charlotte (CLT) US 24 Pittsburgh (PIT) - 25 Omaha (OMA) - 26 New Orleans (MSY) SW 27 Houston (IAH) UA 28 San Antonio (SAT) - 29 Raleigh-Durham (RDU) - 30 Columbus (CMH) -

49 GMIA s Top 30 Markets Passengers 1 Orlando 417,506 2 Las Vegas 412,821 3 New York 358,255 4 Phoenix 350,820 5 Denver 280,842 6 Washington 275,780 7 Atlanta 254,649 8 Minneapolis/St. Paul 246,885 9 Boston 224, Los Angeles 216, Dallas/Ft. Worth 195, Tampa 193, Ft. Myers 173, San Francisco 165, Baltimore 151, Kansas City 147, Ft. Lauderdale 144, Philadelphia 124, Seattle 123, San Diego 105, Newark 97, St. Louis 82, Charlotte 76, Pittsburgh 70, Omaha 68, New Orleans 66, Houston 60, San Antonio 58, Raleigh-Durham 58, Columbus 56,108 *Destinations in red denote no non-stop service from MKE

50 GMIA Passengers Flying Non-stop 68% of our passengers fly Non-stop 6% of our passengers reach our Top 30 Markets via connections 26% of our passengers fly to other markets

51 Air Canada NonStop Cities Served

52 American Airlines NonStop Cities Served

53 US Airways NonStop Cities Served

54 Frontier NonStop Cities Served

55 United NonStop Cities Served

56 Delta Airlines NonStop Cities Served

57 Southwest/AirTran NonStop Cities Served

58 GMIA Cities No Longer Served Non-Stop Akron Appleton Columbus Dayton Des Moines Flint Grand Rapids Green Bay Hartford Indianapolis Madison Manistee Marquette Nashville Omaha Pittsburgh Raleigh-Durham Rhinelander San Antonio San Diego Louisville

59 GMIA in Comparison

60 Wisconsin s Air Service

61 Central Wisconsin Non-Stop Cities - 3 Non-stop Cities Minneapolis Central Wisconsin Airport Detroit Chicago

62 La Crosse Non-Stop Cities - 3 Non-stop Cities Minneapolis La Crosse Chicago Detroit

63 Green Bay Non-Stop Cities - 5 Non-stop Cities Minneapolis Green Bay Detroit Chicago Orlando Ft. Myers

64 Appleton Non-Stop Cities - 7 Non-stop Cities Minneapolis Appleton Detroit Chicago Las Vegas Phoenix Atlanta Orlando

65 Madison Non-Stop Cities - 12 Non-stop Cities Minneapolis Madison Detroit Denver Chicago Cincinnati Cleveland New York City Newark Washington, D.C. Dallas Atlanta Orlando

66 Milwaukee Non-Stop Cities - 31 Non-stop Cities Seattle Minneapolis Milwaukee Detroit Toronto San Francisco Las Vegas Denver Kansas City Chicago St. Louis Memphis Cleveland Cincinnati Charlotte Boston New York City Newark Philadelphia Baltimore Washington D.C. Los Angeles Phoenix Dallas Atlanta New Orleans Houston Tampa Ft. Myers Orlando Ft. Lauderdale Cancun

67 Other U.S. Medium-Hubs

68 Change in Passenger Counts At Midwestern Hub Airports 2007 Minneapolis ,157,322-2,038,823 33,118, Detroit ,983,478-3,577,319 32,406, Milwaukee ,712, ,809,921 9,522, Chicago O Hare ,177,855-9,518,146 66,659, Cleveland ,459,390-2,256,506 9,202, Cincinnati ,736,220-8,701,957 7,034, Memphis ,290,477-2,220,390 9,070,087

69 Comparable U.S. Cities City Population Passengers Conventions (in Room Nights) Kansas City, MO 2,052,676 10,400, ,291 Columbus, OH 1,858,464 6,378, ,651 Austin, TX 1,783,519 9,080, ,712 Indianapolis, IN 1,778,568 7,478, ,657 Nashville, TN 1,617,142 9,602, ,395* Milwaukee, WI 1,562,216 9,522, ,000 Louisville, KY 1,294,849 3,398, ,607 Oklahoma City, OK 1,278,053 3,561, ,720 * Nashville reported in Total Convention Attendance.

70 Kansas City Non-Stop Cities - 40 Non-stop Cities Seattle Portland Minneapolis Milwaukee Detroit Toronto Boston San Francisco Oakland Salt Lake City Denver Salina Chicago Indianapolis Kansas City St. Louis Cleveland Cincinnati New York City Newark Philadelphia Baltimore Washington, D.C. Los Angeles San Diego Las Vegas Phoenix Albuquerque Harrison Nashville Oklahoma City Memphis Charlotte Atlanta Dallas Houston New Orleans Tampa Orlando Ft. Lauderdale Cancun

71 Columbus Non-Stop Cities - 32 Non-stop Cities Minneapolis Detroit Toronto Boston Denver St. Louis Chicago Columbus Cleveland Raleigh-Durham New York City Newark Philadelphia Baltimore Washington, D.C. Los Angeles Las Vegas Phoenix Dallas Memphis Nashville Atlanta Charlotte Houston Tampa Ft. Myers Orlando Ft. Lauderdale Miami Cancun

72 Austin Non-Stop Cities - 33 Non-stop Cities Seattle Minneapolis Portland Detroit San Francisco Oakland San Jose Los Angeles Long Beach San Diego Salt Lake City Las Vegas Phoenix Denver Lubbock Dallas El Paso Houston Austin Harlingen Boston Chicago New York City Newark Philadelphia Baltimore Washington, D.C. Nashville Memphis Charlotte Atlanta Orlando Tampa Ft. Lauderdale Cancun

73 Indianapolis Non-Stop Cities - 32 Non-stop Cities Minneapolis Toronto Detroit Boston Los Angeles Salt Lake City Las Vegas Phoenix Denver Chicago Cleveland Indianapolis Kansas City Raleigh-Durham Charlotte Memphis Atlanta Dallas New York City Newark Philadelphia Baltimore Washington, D.C. Houston Tampa Ft. Myers Orlando Ft. Lauderdale Miami Cancun

74 Nashville Non-Stop Cities - 42 Non-stop Cities Minneapolis Toronto Detroit Boston Los Angeles San Diego Salt Lake City Las Vegas Phoenix Chicago Cleveland New York City Newark Denver Columbus Philadelphia Kansas City Cincinnati Baltimore St. Louis Washington D.C. Jackson Norfolk Memphis Nashville Greenville Raleigh-Durham Charlotte Austin Atlanta Birmingham Dallas Charleston Houston Jacksonville Panama City San Antonio New Orleans Orlando Tampa Ft. Lauderdale Miami Cancun

75 Louisville Non-Stop Cities - 21 Non-stop Cities Minneapolis Detroit Las Vegas Phoenix Denver Dallas Chicago Cleveland St. Louis Louisville Charlotte Memphis Atlanta New York City Newark Philadelphia Baltimore Washington D.C. Houston Tampa Orlando Miami

76 Oklahoma City Non-Stop Cities - 18 Non-stop Cities Minneapolis Detroit Chicago San Francisco Salt Lake City Denver Kansas City St. Louis Newark Baltimore Washington, D.C. Los Angeles Las Vegas Phoenix Oklahoma City Dallas Memphis Atlanta Houston

77 Milwaukee Non-Stop Cities (Current) - 31 Non-stop Cities Seattle Minneapolis Milwaukee Detroit Toronto San Francisco Las Vegas Denver Chicago Kansas City St. Louis Memphis Cleveland Cincinnati Charlotte Boston New York City Newark Philadelphia Baltimore Washington D.C. Los Angeles Phoenix Dallas Atlanta New Orleans Houston Tampa Ft. Myers Orlando Ft. Lauderdale Cancun

78 Comparable U.S. Cities City Non-Stops Population Kansas City 40 2,052,676 Columbus 32 1,858,464 Austin 33 1,783,519 Indianapolis 32 1,778,568 Nashville 42 1,617,142 Milwaukee 31 1,562,216 Louisville 21 1,294,849 Oklahoma City 18 1,278,053

79 MKE As Chicago s Third Airport

80 Growth in Illinois Travelers Using GMIA GMIA continues to market aggressively to northern Illinois residents, who are frequent travelers.

81 The Northern Illinois Counties Are High Growth & High Income Chart 24 WASHINGTON OZAUKEE Lake & McHenry Counties WAUKESHA l Over 1 million population MKE l Median household income 47% and 39% above national average RACINE l $34.9 billion aggregate household income Wisconsin KENOSHA l Within 1 hour of MKE Illinois MCHENRY LAKE MKE - ORD Travel Time Midpoint DE KALB KANE COOK DUPAGE ORD MDW KENDALL WILL Source: U.S. Census, 2011 American Community Survey. GRUNDY

82 Growth in Illinois Travelers Using GMIA

83 Train-to-Plane via Airport Amtrak Station Annual Number of MKE Passengers Using Amtrak

84 Chart 84 MKE s Share Of The Chicago 3-Airport Market Has Increased From 11% in 2002 to 16% in YE Q MKE Passenger Share of ORD/MDW/MKE 20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Source: U.S. DOT, Origin-Destination Passenger Survey Year-Ended Moving Total Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q MKE passenger share rose 4 points since YE Q1 2008

85 Air Service Development Initiatives

86 U.S. Domestic Market Share December 2012 Seat Share Frontier 2% Other 13% Southwest 22% US Airways 12% American 13% Delta 21% United 17%

87 Air Service Initiatives GMIA met with, and made presentations to, 23 airlines in 2012.

88 Chart Large Companies Have Headquarters In MKE Service Area -Johnson Controls -Northwestern Mutual -Manpower -Kohl s -American Family Insurance -Oshkosh -Harley-Davidson -Rockwell Automation -Fiserv -Wisconsin Energy -Manitowoc -CUNA Mutual Group -Bemis -Alliant Energy -JohnsonDiversey -Snap-On, Kenosha -Sentry Insurance Group -Joy Global -A.O. Smith -Briggs & Stratton -Regal-Beloit -Modine Manufacturing -MGIC Investment -Walgreen -Abbott Laboratories -Baxter International -Fortune Brands -W.W. Grainger -Tenneco -United Stationers -Hospira -Pactiv -Hewitt Associates -CF Industries Holding -Solo Cup -Packaging Corp. of America -ACCO Brands -Menard -Kohler -Schneider National -Roundy s Supermarkets -Ashley Furniture -ShopKo Stores -SC Johnson & Son -ABC Supply -Schreiber Foods -Jockey International Fortune 500 Company - WI Fortune 1000 Company - WI Fortune 500 Company - IL Fortune 1000 Company - IL Large Private Wisconsin Company Source: Fortune, ABRAZO Marketing.

89 Fortune 500 Headquarters Per Million People

90 Air Service Initiatives GMIA has hosted three groups of airline network planners in Milwaukee over the last few months.

91 North America Market Share US Airways Frontier Air Canada Other Delta GMIA is served by the 6 largest airlines in North America, including the 5 largest U.S. airlines, in addition to Frontier and Air Canada American United Southwest

92 U.S. Domestic Market Share Of Other Airlines December 2012 Seat Share Virgin America 1% Alaska 3% JetBlue 4% Spirit 1% Other 4% Airlines Currently serving MKE 87% Source: Innovata Schedules for December.

93 Alaska Airlines - Hubs and Focus Cities Seattle

94 JetBlue - Hubs and Focus Cities Boston New York City Long Beach (LA Area) Orlando Fort Lauderdale San Juan

95 Virgin America - Hubs and Focus Cities San Francisco Los Angeles

96 Spirit Airlines - Hubs and Focus Cities Detroit Dallas Fort Lauderdale

97 MKE Business Travelers

98 MKE Business Travelers Create Demand Stay involved in the efforts of M7, MMAC, GMC to bring businesses and jobs to the Milwaukee region

99 MKE Business Travelers Fly from MKE Understanding that demand for nonstop service at a profit is what will keep airlines flying from MKE, use your airport.

100 MKE Business Travelers Invite Business Partner with VISIT Milwaukee and host professional conferences.

101 MKE Business Travelers Communicate changes in your nonstop travel needs Airlines ask for info on new business ties between MKE and other cities Delta and Southwest have local sales reps

102

103 Thank You! Questions?

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