A4A Media Briefing November 14, 2018 John P. Heimlich VP & Chief Economist Sharon L. Pinkerton SVP-Legislative & Regulatory Policy
Contents» Year-to-Date Operations and Financial Results» Thanksgiving-Period Air Travel Forecast» Trends in U.S. Airline and Airport Investment / Capital Improvement» Update on Taxes and Airport Financial Resources 2
YTD 2018 OPERATIONS AND FINANCIAL RESULTS 3
On-Time Performance Inched Up in First 8 Months Despite Slightly Lower Completion 2018 Featuring the Lowest-Ever Recorded Rate of Involuntary Denied Boardings Involuntary Denied Boardings per 10K Psgrs. Flight Completion Factor (%) YTD Aug 2018 2017 2016 2015 1H 0.12 0.34 0.62 0.76 2018 2017 2016 2015 98.1 98.2 98.5 98.7 On-Time Arrival Rate (%) YTD Aug Mishandled Bag Reports per 1,000 Psgrs. 2018 2017 2016 2015 78.2 78.1 78.5 80.5 2018 2017 2016 2015 Jan-Aug 2.89 2.46 2.70 3.24 Sources: BTS and DOT Air Travel Consumer Report (http://www.dot.gov/airconsumer/air-travel-consumer-reports) 4
The First Nine Months of 2018 Posed Some Significant Operating Challenges Power Outages/Airport Equipment: Jan 1 CBP nationwide outage; Jan 7 (JFK T4 water main break) Aug 16 DCA loses power for more than 1 hour, affecting about two dozen flights Sep 16 Portions of PHX T4 had a multi-hour closure, prompted by a suspicious abandoned rental car, which snarled air traffic and led to the cancellation of ~30 flights (mostly WN) and delayed hundreds more. Airport Construction: ATL/CHI/DCA/DFW/HNL/HOU/LAX/MCO/MIA/NYC/PHL/PHX/SAN/TPA Major Weather Jan 3-5 ( bomb cyclone ), 7-8, 12, 16-18, 21-22 Feb 4-5, 7, 9, 11, 15, 20 Mar 2 (Winter Storm Riley) 7 (Quinn) 13 (Skylar) 20-22 (Toby) Apr 4 (Mid-Atlantic/Northeast), 14-16 (MSP/ORD/CLT/NE), 25 (NE) May 3 (CHI/DAL t-storms), 14-16 (CHI/mid-Atlantic/NE t-storms), 31 (SE/mid-Atlantic t-storms) Jun 18-20 (rainstorms and low visibility in Chicago/mid-Atlantic), 26 (CHI t-storms) Jul 1 (CHI storms), 15 (NYC/PHL storms), 17 (NE/mid-Atlantic), 22 (MCO), 23 (DEN), 27 (NE/mid-Atlantic) Aug 2-3, 7-8 (t-storms in mid-atlantic/ne/chi), 11 (NYC/PHL), 13-14 (mid-atlantic/ne/dal), 17 (NE) Sep 3 Flooding Causes Massive Delays at O Hare, Closes Surrounding Roads ; ~500 flights canceled and ~1,100 delayed; crews worked to clean up leaks inside the terminal Sep 11-17 Hurricane Florence (Carolinas) ~3,000 cancellations Air Traffic Control: Understaffing at many major facilities; critically low staffing at New York TRACON* * Staffing is routinely cited as the basis for many traffic management initiatives (ground delay programs, ground stops, airspace flow programs, miles-in-trail) across the NAS Source: A4A research, FAA Air Traffic Organization and masflight (subsidiary of Global Eagle) 5
The Rate of Customer Complaints to DOT Continues to Fall in 2018 Customer Complaints re: U.S. Airlines per 100,000 Passengers 2.00 1.75 1.90 1.50 1.25 1.52 1.35 1.00 0.75 0.50 0.25 0.00 1.02 2015 2016 2017 2018 Jan-Aug Sources: DOT Air Travel Consumer Report (http://www.dot.gov/airconsumer/air-travel-consumer-reports) 6
YTD 3Q18 Expenses Rose Faster Than Revenues, Reducing Profitability Yet Again Carriers Under Cost Pressure in Every Major Category, Driving Margins Lower in 2018 Change (%) in Operating Revenues and Expenses First Nine Months 2018 vs. First Nine Months 2017 Pre-Tax Profit Margin (%) YTD 3Q Four-Year Trend 33.9 6.5 15.8 12.4 7.0 5.9 $2.20 vs. $1.70 2.7 6.5 3.2 8.6 12.0 15.6 15.5 12.1 8.2 Pax Rev (1) Cargo Rev Other Rev (2) Total OpRev Labor Fuel Maintenance Airports Aircraft Other (3) Total OpExp $18.7B 2015 $18.3B 2016 $14.9B 2017 $10.8B 2018 1. Traffic (revenue passenger miles) up 4.8 percent; yield (revenue per passenger-mile flown) up 1.6 percent; U.S. CPI up 2.5 percent 2. Sale of frequent flyer award miles to airline business partners, transportation of pets, in-sourced aircraft and engine repair, flight simulator rentals, inflight sales, etc. 3. Professional fees, food/beverage, insurance, commissions, GDS fees, communications, advertising, utilities, office supplies, crew hotels, nonfuel payments to regionals Source: A4A analysis of reports by Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit and United 7
In YTD 3Q18, U.S. Passenger Airline* Profitability Less Than a Third of Starbucks Pre-Tax Profit Margin (% of Operating Revenues) 38.2 25.5 26.3 28.3 33.0 3.7 6.2 8.2 10.4 12.1 16.0 18.0 18.3 Ford Chipotle Airlines (1) Boeing Marriott Caterpillar Honeywell Comcast Disney Starbucks Apple Railroads (2) McDonald s 1 Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit and United 2 CSX, Norfolk Southern and Union Pacific Source: Company SEC filings 8
Airlines Recovered $0.68 in Revenue for Every $1.00 Increase in Operating Costs Fuel Alone Accounted for 57 Percent of the Year-Over-Year Increase in Costs Change ($ Millions) in Revenues and Expenses First Nine Months 2018 vs. First Nine Months 2017 $8,668 Other Passenger 1 Cargo $12,767 Other Labor Fuel 1 ~75% traffic-driven 2 ~90% price-driven 2 Aircraft Airports Maintenance ~ $70M/Day ($4,099) Op Revenues Op Expenses Op Profits Source: A4A analysis of reports by Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit and United 9
Crude-Oil Prices Rising Swiftly, to Highest Level Since Late 2014 October 2018 Benchmark Price Averaged 41 Percent More Than October 2017 $120 Spot Price* of Brent Crude Oil ($ per Barrel) $100 $80 $60 $40 $20 $0 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Source: A4A and Energy Information Administration (http://www.eia.gov/dnav/pet/pet_pri_spt_s1_d.htm) 10
Inflation-Adjusted Fares Continue to Fall in 2018, Averaging Less Than in 2010 Real Price* of Domestic Air Travel Down 5.3% YOY (-5.2% Fares, -7.2% Fees) Round-Trip Ticket Price ($1H 2018)* $440 $420 $400 $380 $360 $340 $320 423 406 412 415 24 408 387 24 24 24 24 382 380 25 370 24 24 360 382 387 391 398 23 384 22 362 359 356 347 338 2010 2011 2012 2013 2014 2015 2016 2017 1H17 1H18 Fare Ancillary Fees (Bags + Reservation Changes) Source: A4A analysis of DOT Data Bank 1B (all cabins and fare basis codes) and DOT Form 41 via Airline Data Inc. (airlinedata.com) * Excl. taxes; CPI up 2.5% YOY 11
In Fact, 2Q 2018 Inflation-Adjusted Fares Were Lowest 2Q Ever Recorded by DOT In Real Terms, Domestic Fares Fell ~11% From 2Q 2010 and ~30% From 2Q 2000 $500 Average Second-Quarter Domestic Round-Trip Airfare Including Taxes (in 2018 Dollars)* $475 $450 $425 $400 $375 Down 11.1% $350 $325 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Transportation Statistics * Fare and taxes only, adjusted for inflation 12
In 2015-2018, Domestic Airline Capacity Grew at Twice the Rate of the U.S. Economy 6 5 4 3 2 1 0 5.1 5.3 4.9 4.0 2.9 2.6 2.5 2.5 2.2 2.2 1.8 1.6 2.3 1.6 1.6 1.6 1.1 0.2 2010 2011 2012 2013 2014 2015 2016 2017 2018 Domestic Airline Capacity (ASMs) Real US GDP Source: Bureau of Economic Analysis and published airline schedules via Diio Mi 13
Among 11 U.S. Airline Brands, Smaller Carriers Have Been Growing the Fastest Different Types of Carriers Market Their Prices and Services Differently 400 350 Spirit % Change in Capacity* Since 2007 300 250 200 150 100 50 0 Allegiant Alaska JetBlue Sun Ctry AA/DL/UA Hawaiian Frontier (50) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Southwest Source: Innovata (via Diio Mi) schedules as of Oct. 5, 2018, for selected marketing airlines including predecessors * Systemwide scheduled available seat miles 14
Airlines Utilize a Wide Array of Tools to Improve Profitability Amid Rising Fuel Prices Increase fuel efficiency (reduce consumption per unit of flying) o Continue to replace older (often smaller) aircraft with typically larger, next-generation or re-engined aircraft o Deploy state-of-the-art flight planning/navigation software to optimize airborne movement of aircraft o Utilize taxi-management technologies and single-engine taxi to minimize ground-based fuel burn o Consistently employ ground power while parked at gate instead of aircraft auxiliary power unit (APU) o Reduce onboard weight (e.g., lighter materials/structures, inflight entertainment systems, excess fuel) 15
Airlines Utilize a Wide Array of Tools to Improve Profitability (Cont d) Reduce or contain non-fuel costs o Deploy customer-preferred technologies (e.g., airport kiosks for self-tagging of luggage, airline apps for passenger modification of itinerary in lieu of agents) o Use virtual medicine (e.g., Doctor on Demand) for health care cost-efficient and highly popular with workforce o Achieve single pilot/fa contracts reduce delays/cancels, enable efficient use of aircraft/crews, avoids over-hiring o Employ new software/methods to improve hotel procurement and manage employee travel bookings o Drive more bookings to lower-cost direct distribution channels (e.g., website, app) o Trim management/nonunion headcount via attrition, buy-outs; freeze open positions o Insource engine/ground-handling/other work to be performed better/more efficiently (where practicable) o Negotiate preferred-pricing maintenance contracts enabled by improved scale/credit, recover warranties on aircraft parts, leverage data streams from new aircraft/engines to increase reliability and lower repair/inspection costs 16
Airlines Utilize a Wide Array of Tools to Improve Profitability (Cont d) Generate more revenue o Carry more passenger traffic or better mix of traffic (corporate/premium), optimize fare/fee structure o Boost availability/desirability of ancillary products (fleet-wide/faster WiFi, live TV int l, refurbished clubs) o Increase credit card sales attracting new accounts due to larger networks and customer-preferred timings o Intensify cargo sales efforts and leverage increased belly capacity (and temp controls) offered by new aircraft 17
Airlines Utilize a Wide Array of Tools to Improve Profitability (Cont d) Hybrid revenue/cost improvements o Re-optimize route networks trim unprofitable capacity, defer deliveries, add routes enabled by new aircraft o Increase utilization of aircraft, ground equipment and gates at hubs and take advantage of new gates coming online at key locations in 2018-2020 o Reduce fleet/subfleet types to lower hiring, training and maintenance costs while increasing both aircraft substitutability and product consistency (for travelers) 18
THANKSGIVING PERIOD AIR TRAVEL FORECAST: PROJECTING ALL-TIME HIGH 19
U.S. Airline Traffic Flown and Capacity Operated Have Continued to Grow in 2018 Passenger Traffic Up 5.6% Year Over Year, Seating Capacity Up 4.4% January-September (prelim) 1000 900 800 700 600 500 400 300 200 100 847.0 872.0 812.2 681.3 707.0 728.4 598.5 620.0 636.8 910.3 769.2 672.4 0 2015 2016 2017 2018 Passengers (Mils) RPMs (Bils) ASMs (Bils) Source: U.S. Bureau of Transportation Statistics T1, systemwide scheduled service on U.S. airlines revenue passenger miles (RPMs) and available seat miles (ASMs) 20
U.S. Economy, Jobs Growing; Household Net Worth Continues to Set New Records U.S. Real GDP Growth (% CAGR) U.S. Employment Growth (000) 2.9 1.6 2.2 2.9 2.8 250 226 195 182 213 2015 2016 2017 2018F 2019F Consumer Sentiment (UMich Index 1Q66=100) 2014 2015 2016 2017 2018 U.S. Household Net Worth ($ Trillion, NSA) 91.6 92.4 90.3 93.1 97.2 96.4 95.1 98.4 98.9 98.3 98.1 86.3 89.6 95.2 103.4 104.7 106.9 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 2014 2015 2016 2017 1Q18 2Q18 Sources: U.S. GDP (Bureau of Economic Analysis actuals and IHS Markit forecast); U.S. nonfarm payroll employment growth (month-over-month, seasonally adjusted) from BLS; consumer sentiment (University of Michigan, Index 1Q 1966=100); U.S. household net worth in current dollars, not seasonally adjusted (Federal Reserve) 21
A4A Projects U.S. Airlines to Carry 30.6M Thanksgiving* Passengers in 2018, Up 5.7% *12-Day Forecast Period = Fri., Nov. 16 Through Tues., Nov. 27 U.S. Airline Onboard Passengers (Millions) 12-Day Thanksgiving Period, 2008E-2018F 23.2 23.2 24.3 24.4 24.8 24.6 25.2 26.6 27.8 29.0 30.6 2018 Volume Projections 2.55M passengers per day, up ~137,000 2.94M seats per day, up ~158,000 Daily volumes to range from 1.73M to 3.06M 2017 Thanksgiving Highlights T-giving Day was 4 th lightest day of year Sunday return was 2 nd busiest day of year Wednesday before was 18 th busiest day of year 2008E 2009E 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018F Source: A4A analysis of TSA and BTS T100 segment data; volumes from past years are estimates from comparable 12-day period Note: E=estimate; F=forecast 22
Daily Thanksgiving Passenger Volumes to Vary by as Much as 1.33M (77%) T-giving Day to Fall 32% Below 12-Day Average, Sunday Return 20% Above Average U.S. Airline Projected Onboard Passengers (Millions) Systemwide Service 2.85 2.36 2.55 2.53 2.76 2.93 12-Day Avg. = 2.55 2.69 3.06 2.80 2.35 1.73 2.01 #3 #9 #7 #8 #5 #2 #12 #11 #6 #1 #4 #10 Fri., 11/16 Sat., 11/17 Sun., 11/18 Mon., 11/19 Tue., 11/20 Wed., 11/21 Thu., 11/22 Fri., 11/23 Sat., 11/24 Sun., 11/25 Mon., 11/26 Tue., 11/27 Source: A4A analysis of TSA and BTS T100 segment data 23
Customers Will See All-Time High of 3.07M Daily Seats Departing U.S. Airports Daily Seats (000) Departing U.S. Airports: Up 4.2% YOY in 2018 and 1.6% in 1H 2019 3,500 3,000 2,500 2,000 2,584 2,620 310 330 2,717 351 2,274 2,289 2,366 2,823 368 2,454 2,932 390 2,542 3,056 3,019 3,068 405 401 413 2,651 2,618 2,655 1,500 1,000 500 0 2013 2014 2015 2016 2017 2018 1H18 1H19 Domestic International Source: Innovata (via Diio Mi) published schedules as of Nov. 3, 2018, for all airlines providing scheduled passenger service from U.S. airports to all destinations 24
Almost Every Major* U.S. Airport Has Seen Supply of Seats Rise Over Past 5 Years % Change in Scheduled-Service Seats Available: 2018 vs. 2013 80 70 70 60 50 40 30 20 10 0 (10) 57 56 51 45 44 43 35 35 35 33 32 32 32 31 30 30 29 26 25 24 24 24 24 22 22 22 21 20 20 19 18 18 17 16 16 15 15 14 14 12 11 10 9 9 9 9 9 8 7 7 5 5 5 3 2 1 1 (2) (3) (4) DAL AUS SJC FLL SEA CVG BNA MCO RDU MSY PDX BOS SMF SAN OAK SFO IND LAX EWR RSW OMA SLC CMH BUR BDL TPA OGG JFK ORD PBI DEN JAX ONT PIT HOU LAS BWI SAT MCI STL ANC ATL SNA IAH DFW DTW MSP DCA MIA PHX CLT IAD LGA HNL PHL MDW MKE CLE BUF ABQ SJU Source: Innovata (via Diio Mi) published schedules as of Oct. 26, 2018, for all airlines providing scheduled service * FAA large and medium hub airports 25
U.S. AIRLINES & AIRPORTS INVESTING HEAVILY FOR THE FUTURE 26
Substantial U.S. Airline Capital Investment* Has Continued in 2018 Despite Waning Profits Bringing Total for This Business Cycle to $115 Billion U.S. Passenger Airline Capital Expenditures* ($ Billions per Year) 17.0 17.5 19.9 12.5 13.9 13.0 9.8 5.2 6.6 2010 2011 Jan-Sep 2012 2013 2014 2015 2016 2017 2018 * Includes payments made for aircraft and other flight equipment, ground and other property and equipment, airport and other facility construction and information technology Source: SEC filings of Alaska, Allegiant, American, Delta, Hawaiian, JetBlue, Southwest, Spirit, United and merged/acquired predecessors 27
Airline-Airport Collaboration Has Paved Way for Widespread Infrastructure Investment Capital Projects Have Grown 86% Since 2015 at the 30 Largest U.S. Airports» $130B of capital projects completed, underway or approved at the 30 largest U.S. airports since 2008, including, for example: o Multiple new runways at Chicago O Hare and new runways at Fort Lauderdale, Washington Dulles, Seattle and Charlotte o New/expanded/modernized facilities at NYC, Miami, Las Vegas, Orlando, Honolulu, Houston, Denver, Seattle, Salt Lake City and San Francisco plus international facilities at Atlanta, Boston and L.A.» Development is also robust at smaller airports, including: Investment at Largest Airports ($ Billions) $70 $100 $130 o Runway projects at Columbus, Des Moines, Erie, Nashville, Providence, Sioux Falls; terminal projects at New Orleans, Eugene, Grand Rapids, Greenville-Spartanburg, Oakland, Dallas Love Field, San Luis Obispo, Portland (ME), Pasco, Reno-Tahoe, Wichita» Investment is also occurring in cargo facilities and related infrastructure at Louisville, Newark, Lafayette (Louisiana), Indianapolis, Rockford, Memphis and elsewhere 2015 2017 2018 Approved Completed/Underway 28
J.D. Power: North America Airport Satisfaction* Climbs to Record High North America airports have managed to shrug off the potentially disruptive effects of record passenger volumes and massive construction projects to achieve a record high in overall passenger satisfaction. (Sept. 19, 2018) 800 750 700 650 Note: Scale = 0-1000; study not conducted in 2009/2011-2014 689 675 690 725 731 749 761 Six factors: Terminal Facilities* (24%) Airport Accessibility (19%) Security Check (16%) Baggage Claim (15%) Check-In / Baggage Check (14%) Food / Beverage / Retail (13%) * Concourses, lounges, signage, restrooms, gate areas 600 2007 2008 2010 2015 2016 2017 2018 * The study is based on responses from 40,183 North America travelers who traveled through at least one domestic airport and covers both departure and arrival experiences (including connecting airports) during the past three months. Travelers evaluated either a departing or arriving airport from their round-trip experience. The study was fielded from September 2017 through September 2018. Source: J.D. Power 2018 North America Airport Satisfaction Study SM 29
RECORD TAX COLLECTIONS & ABUNDANT AIRPORT FINANCIAL RESOURCES 30
U.S. Commercial Aviation Taxes/Fees* Topped $25 Billion (~$70M per Day) in 2018 Fiscal Year 2018 Collections* ($Millions) from Airlines and their Customers 4,093 540 420 98 10,485 25,439 4,099 897 686 695 3,427 ~ $70M/Day DHS U.S. Airports FAA (Airport & Airway Trust Fund) EPA (Leaking Underground Storage Tank Trust Fund) * U.S. federally levied/approved, including collections from non-u.s. carriers; APHIS figure is A4A estimate pending FOIA; PFC figure is FAA estimate for calendar year 2018 Sources: Animal and Plant Health Inspection Service (APHIS), Customs and Border Protection (CBP), Federal Aviation Administration (FAA), Treasury Dept. and A4A 31
U.S. Airports Have Ample/Multiple Resources from Which to Fund Improvements Airport & Airway Trust Fund Revenues ($ Bils) Airport & Airway Trust Fund Unobligated Balance ($ Bils) General Aviation Commercial Aviation 9.2 9.1 8.7 9.2 10.4 10.5 11.5 12.0 10.7 10.6 11.6 12.6 12.9 13.5 14.3 14.4 15.1 15.8 7.3 4.8 3.9 2.4 1.9 1.8 1.5 1.4 0.3 0.7 1.4 2.8 4.9 5.8 5.6 5.9 5.8 5.9 7.5 8.7 all-time high 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 U.S. Airport Revenues ($ Bils) U.S. Airport Unrestricted Cash & Investments ($ Bils) 21.0 20.9 20.6 20.2 21.8 23.5 25.5 26.5 22.7 23.4 24.1 24.3 25.6 26.7 26.8 28.9 29.9 3.16 3.29 2.84 2.64 3.48 3.38 3.65 3.68 3.07 3.67 3.52 3.52 2.81 2.88 3.04 3.35 3.35 2.53 3.35 3.35 3.35 1.59 1.86 2.06 2.16 2.52 2.73 2.71 2.80 2.05 3.52 3.52 3.52 3.35 15.9 15.6 14.9 14.5 16.5 17.3 19.1 20.4 16.7 17.2 17.8 18.1 19.4 20.4 20.4 22.3 23.3 not available 9.8 9.7 10.5 11.3 12.5 12.7 14.0 14.4 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 Airlines/Concessions/Rents/Other AIP* PFC 2010 2011 2012 2013 2014 2015 2016 2017 Source: A4A, FAA, CBO, U.S. Treasury; PFC collections exclude any compensation received for collecting/handling/remitting * Airport Improvement Program 32
Fitch Ratings: Skies Remain Friendly for U.S. Airports strong overall performance for U.S. airports should continue undeterred for the foreseeable future according to Fitch Ratings in its latest annual peer review for the sector Fitch-rated airports are still largely entrenched in A territory. Airports in general are showing a lot of resilience as the industry continues to evolve and event-driven challenges from the broader economy take shape, said Senior Director Seth Lehman. Over 90% of the airports Fitch rates currently have a Stable Rating Outlook, which signifies continued stability deep into next year. GDP growth and general airline health remain the most important revenue gauges for airports, though rising rates could make borrowing debt more expensive for airports with a substantial pipeline of investments on the horizon. -- Fitch Ratings: Skies Remain Friendly for U.S. Airports (Oct. 29, 2018) Sources: https://www.fitchratings.com/site/pr/10049679 and Peer Review of U.S. Airports (Attribute Assessments, Metrics and Ratings), Oct. 29, 2018 33
U.S. Airport Revenues Have Grown Faster Than Flights, Passengers and Inflation From 2000 to 2017, Airport Revenues Rose 87%, Double the Pace of U.S. Inflation 200 180 Index: 2000 = 100 U.S. Airport Revenues 160 140 120 U.S. CPI (Inflation) Passengers 100 80 Aircraft Departures 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 Source: FAA Form 5100-127 and DOT T100 + 298c reflecting all scheduled and nonscheduled passenger and cargo airline flights departing U.S. airports 34
In Contrast to Highway Trust Fund Fuel Tax Revenues, Airport PFCs and Aviation Trust Fund Revenues Have Sharply Outpaced U.S. Inflation 2017 PFC Collections Reached $3.3 Billion the Highest Level in Program History Percent Change, 2000-2017 PFC Collections ($ Billions) Highway Trust Fund Tax Receipts 17.7% 2000 2010 1.6 2.7 U.S. Inflation (CPI) 42.3% 2017 3.3 Airport & Airway Trust Fund Revenues 54.0% U.S. Airport PFC Revenues 111.0% 0% 20% 40% 60% 80% 100% 120% Source: FAA Passenger Facility Charge (PFC) reports, Federal Highway Administration, Bureau of Labor Statistics (for the Consumer Price Index [CPI]) 35
Flyer Satisfaction Rises Markedly With Enrollment in Trusted Traveler Programs Airline/Government Collaboration Boosting Enrollment in Global Entry and TSA Pre % of 2017 Flyers Somewhat Satisfied or Very Satisfied With Overall Air Travel Experience Trusted Traveler (Global Entry or TSA Pre ) Very, 49% Somewhat, 36% 86% Unenrolled Very, 30% Somewhat, 49% 79% Millions of Persons Enrolled in DHS Trusted Traveler Programs (Dec. 31) 2018* 2017 2016 2015 2014 2.0 0.8 1.9 4.2 6.5 5.8 2.6 2.7 4.6 3.7 5.3 4.9 7.9 10.7 11.8 TSA Pre Global Entry Sources: Ipsos survey of American adults (January 2018), TSA and CBP * As of May 16 36
www.