Inter-Office Memo Reno-Tahoe Airport Authority Date: June 5, 2008 To: Statistics Recipients From: Tom Medland, Director Air Service Business Development Subject: RENO-TAHOE INTERNATIONAL AIRPORT PASSENGER STATISTICS AIRLINE INDUSTRY SUMMARY UPDATE Today s aviation industry is faced with unprecedented and extremely challenging issues including the continuous rise in the cost of fuel, a weakening domestic economy and softening travel demand. The cost of jet fuel, according to the June 1, 2008 report by the International Air Transport Association (IATA), was $3.78/gallon in North America, 84% higher than the previous year. As airline costs continue to increase, and the amount of individuals traveling decreases, carriers are forced to reduce capacity through a reduction in the number of flights or available seats. Virtually all domestic carriers have implemented, or have announced plans to implement, capacity reductions across their entire domestic network, affecting nearly every airport in the country. The following charts illustrate the reduction in flights and seats experienced by practically every airport on the West Coast. RNO is impacted and falls in the middle of the pack. WEST COAST AIRPORTS DEPARTURE COMPARISONS RNO is scheduled to lose approximately 6% of its daily departures due to capacity and seasonality reductions, which is comparable with other airports in the west coast such as Phoenix, Sacramento, Salt Lake, San Diego, Boise, Los Angeles, and Tucson. *RNO s decline of 6% is slightly greater than the national average of 3%. 10 6.5 5 1 Change in Departures (%) 0-5 -10 OAK SNA -12.2 LAS -10.1 SJC -7.4 PHX SMF SLC SAN BOI LAX RNO TUS -6.9-6.5-6.5-6.4-6.2-6.2-6.1-5.9 Nat'l Avg -3 PDX -0.7 SEA SFO -15-20 -21.2-25 Source: * Schedule Plan September 2008 vs. September 2007 Actual
WEST COAST AIRPORTS SEAT COMPARISONS Due to airline capacity reductions and increased use of Regional Jet aircraft there will be a 10.6% decrease in the number of available seats flown out of RNO as described in the September 2008 versus the September 2007 schedule plan. This compares with the national average decline of 4.5%. 10 5.4 5 2.7 Change in Seats (%) 0-5 -10 OAK SNA RNO LAS -10.6-10.3 PHX SJC -6.7-6.6 TUS SAN -6.1-5.8 SMF BOI -5.4-5.2 Nat'l Avg -4.5 SLC -3.7 LAX -3.2 PDX -2.5 SEA SFO -15-13.2-20 -22-25 Source: September 2008 Available Seats vs. September 2007 Actual AIRLINE YIELD COMPARISON For year-end 2007, the yield at RNO was 12.8 cents per mile. This was the highest yield reported by any unconstrained airport in the West. Only Orange County, a capacity controlled airport, had a higher yield at 13.2 cents. RNO s neighbor to the south, Las Vegas, had the second lowest yield at 10.5 cents, second only to Long Beach at 9.6 cents. 14.0 13.0 12.0 11.0 13.2 12.8 12.5 12.2 11.7 11.6 11.6 11.4 11.4 11.2 10.9 10.5 10.0 9.6 9.0 8.0 7.0 SNA RNO SJC SMF PDX SFO PHX OAK SEA SAN LAX LAS LGB Source: Year End 2007 SOUTHWEST AIRLINES RNO S LARGEST AIRLINE Southwest Airlines is RNO s largest air carrier by market share, with 49.6% of the market for the month of April. Southwest accounted for approximately 2.5 million of RNO s five million total passengers year-end 2007, and was the only major airline to post a profit, $34
million, during the first quarter of 2008. During the past few months, and expecting to continue into the second half of 2008, Southwest has been right-sizing various Reno markets. In October 2007, Southwest reduced the Reno Oakland schedule by one daily departure and also reduced the Reno San Jose schedule by two daily departures, leaving a total of four daily departures to each market. The most recent right-sizing by Southwest occurred in May when Southwest discontinued one daily Reno Portland flight and one daily Reno Las Vegas, leaving four daily departures in the Portland market and twelve daily departures in the Las Vegas market. WN Frequency Reductions 2 SJC 1 OAK 1 PDX 1 LAS IN THE NEWS - AMERICAN AIRLINES: American Airlines has made local and national news by announcing a $15 fee to check a passengers first bag, a 10% to 11% cut in domestic air service throughout American s system, the grounding of 75 aircraft mostly MD-80s, as well as layoffs planned through 2008 in order to adjust to unprecedented fuel costs in the aviation industry. American s first round of cuts did not target any RNO markets but there is concern as American Airlines operates two of its three daily departures (RNO DFW) in MD-80 aircraft. On a positive note, the yield for the RNO-DFW route is at 14.3 cents, which falls right on the average yield that American Airlines is generating from all markets to DFW. RNO-DFW traffic is averaging load factors in the high 70 s to low 80 s percentile. As traffic is at or slightly above system load factor, and yield is even with their system average, it is reasonable to expect American Airlines to continue to serve RNO DFW.
SUMMARY MONTHLY PASSENGER AND CARGO STATISTICS Total passengers at RNO for the month of April 2008 declined 12.7% as compared to April 2007. The decrease in April traffic is attributed to several factors; Easter vacation/spring break falling in March versus April, increased air fares resulting from skyrocketing fuel costs and a seriously softening economy. Year-to-date, 1.6 million total passengers have flown in and out of RNO, which is a 5.78% decline versus the same period in 2007. This decline in total passengers is further reflected in an average 72.5% airline load factor for the month at RNO which is four points lower than April 2007. Airlines serving RNO were unable to fill existing capacity at the same level as last year due to a weak demand for the Reno-Tahoe region and the overall weakening economy impacting the visitor market. Total cargo was reported at 9,915,236 pounds, or 4,496.7 metric tons, during the month of April. This represents a 2.7% increase over April 2007, despite a slowing economy, high fuel costs, and a regional business shift to ground transportation. Year-to-date air cargo is off 2.26% compared to the first four months of 2007. TOTAL PASSENGERS During the month of April, 354,768 passengers flew through RNO, 12.67% fewer than the same period last year and the lowest monthly number of total passengers recorded in RNO since April 2003. The decrease in April traffic is attributed to several factors which include an early Easter vacation/spring break travel period falling in March rather than April, a soft ski season with lower-than-average snowfall resulting in most ski resorts closing by the end of April, no bowlers in 2008, a continuing soft economy and an economic downturn due to the record high prices of fuel. Year-to-date RNO traffic dipped 5.78% to 1,579,694 total passengers, 96,877 fewer passengers compared to 2007. TOTAL CARGO A total of 9,915,236 pounds, or 4,496.7 metric tons, handled during the month of April represents a 2.71% increase above the same month in 2007 and the greatest amount of air cargo ever handled at RTIA in the month of April. FedEx maintains the largest market share with 52.5% of the total cargo volume while UPS followed with 33.6%. Southwest Airlines reported the largest monthly year-over-year increase with 14.6% growth while FedEx and DHL both posted positive gains with 11.2% and 7.8% respectively. FedEx reported a high volume of military shipments departing out of Reno as the reason for the substantial increase in April. Year-to-date 2008 air cargo is down 2.26% for a total of 40,453,829 pounds. AIRLINE LOAD FACTORS RNO airlines reported a 72.5% average load factor for the month of April compared to a 76.5% load factor in 2007. This is the lowest April airline load factor reported since 2005 (68%), the most recent non-bowling year. The New York Times (NYT May 13, 2008) has
reported that for the first time in well over a year, domestic airlines are reporting declining load factors throughout the nation. In RNO, airline load factors were not only impacted by an early Easter and spring break during the month but the absence of approximately 20,000 bowlers, a soft end to the ski season and noticeably higher air fares which contributed to the four point decline in load factor. US Airways reported a significantly low 61.5% RNO load factor which is attributable to a weak demand and US Airway s decision to maintain higher pricing during the off-peak months of April and May. It should be noted that only one airline serving RNO exceeded their system wide average load factor during the month of April compared to four airlines in April 2007. The high cost of fuel and softening economy is anticipated to continue to impact passenger decisions to travel. Airline Reno LF System LF Difference Allegiant 84.4% 87.5% -3.1 Delta 81.4% 81.4% 0.0 Alaska / Horizon 78.7% 76.9% 1.8 Continental 78.4% 79.4% -1.0 Delta Connection* 78.3% 80.1% -1.8 American 76.4% 80.1% -3.7 United 70.2% 80.5% -10.3 Southwest 63.2% 72.6% -9.4 US Airways 61.5% 83.2% -21.7 ExpressJet 52.7% 63.0% -10.3 *Delta Connection Inc. carrier includes SkyWest and ExpressJet AIRLINE MARKET SHARE Southwest Airlines reported the largest market share increase for the month of April gaining 2.2% for a market share of 49.7%. This is a direct result of regaining the business to and from Orange County following the Aloha Airlines bankruptcy and it appears that Southwest captured additional Bay Area business following United Airlines reduction of one daily nonstop to San Francisco. United Airlines and Alaska Airlines follow in sequence reporting 12.5% and 9.9% market share respectively. Airline APR. 2008 APR. 2007 Change Alaska 9.96% 8.58% 1.38 *Allegiant 0.53% n/a n/a *Aloha n/a 0.93% n/a American 7.84% 8.15% -0.31 Continental 2.29% 3.47% -1.18 Delta/Delta Connection 6.19% 5.54% 0.65 *Express Jet 2.19% n/a n/a Southwest 49.66% 47.46% 2.20 United 12.46% 14.11% -1.65 US Airways 7.27% 7.94% -0.67 Non-Scheduled 1.59% 1.42% 0.17 *Annual comparison not available
DOMESTIC AND INTERNATIONAL CHARTER PASSENGERS During the month of April, 5,757 charter passengers flew in and out of RNO, 1.8% less than one year earlier. The charter passenger decrease is representative of the softening of demand to Reno as reported by the Harrah s charter division. Year-to-date charter passenger traffic reflects a 5.7% increase. SCHEDULED DEPARTURES AND SEATS During the month of April, RNO reported 2,396 departures, 2.9% less than one year earlier. Monthly available seats totaling 280,200 represents an 8.5% decrease year over year. The reduction in seats is partially attributable to the percentage increase of regional jet (RJ) aircraft at RNO from 20% in 2007 to 31% in 2008. TOTAL OPERATIONS Total airport operations consisting of air carrier arrivals and departures, air taxi flights, general aviation landings and take-offs, and military aircraft operations decreased by 8.1% in the month of April compared to one year earlier. Significant reductions in air taxi and general aviation operations, impacted by high fuel costs, contributed to the decrease in total airport operations for the month. KTB
TOTAL PASSENGERS Jan Feb 490,000 Mar Apr May June 470,000 July Aug Sept 450,000 Oct Nov Dec PASSENGERS 430,000 410,000 390,000 370,000 350,000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2006 2007 2008 PASSENGERS¹ PASSENGERS¹ Month 2006 2007 Percent Change 2008 Percent Change January 409,643 395,878-3.36% 385,612-2.59% February 401,220 393,086-2.03% 403,819 2.73% March 465,381 481,370 3.44% 435,495-9.53% 1st Q Total 1,276,244 1,270,334-0.46% 1,224,926-3.57% April 410,562 406,237-1.05% 354,768-12.67% May 409,498 421,078 2.83% June 445,018 458,338 2.99% 2nd Q Total 1,265,078 1,285,653 1.63% July 466,271 465,487-0.17% August 452,866 473,858 4.64% September 399,922 398,219-0.43% 3rd Q Total 1,319,059 1,337,564 1.40% October 383,099 397,367 3.72% November 361,711 375,463 3.80% December 395,472 377,583-4.52% 4th Q Total 1,140,282 1,150,413 0.89% TOTALS 5,000,663 5,043,964 0.87% 1,579,694-5.78% ¹Per Landing Reports % change YTD
TOTAL CARGO Jan Feb Mar Apr May June July Aug Sept Oct Dec CARGO POUNDS (in millions) 15.00 14.00 13.00 12.00 11.00 10.00 9.00 8.00 7.00 6.00 2006 2007 2008 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC CARGO (IN POUNDS) PERCENT Month 2006 2007 2008 METRIC TONS CHANGE January 9,545,594 10,293,920 11,231,880 5,093.8 9.11% February 8,515,885 10,313,441 9,786,730 4,438.4-5.11% March 10,126,307 11,129,070 9,519,983 4,317.5-14.46% 1st Quarter 28,187,786 31,736,431 30,538,593 13,850-3.77% April 8,665,756 9,653,603 9,915,236 4,496.7 2.71% May 9,363,233 10,718,860 June 9,772,322 10,483,160 2nd Quarter 27,801,311 30,855,623 July 9,580,355 10,377,947 August 11,153,394 11,736,465 September 10,256,974 10,311,212 3rd Quarter 30,990,723 32,425,624 October 10,408,180 10,813,406 November 10,859,489 10,646,261 December 14,242,702 12,772,059 4th Quarter 35,510,371 34,231,726 TOTALS 122,490,191 129,249,404 40,453,829 18,346.4-2.26% % change YTD
MONTHLY ENPLANED PASSENGERS PASSENGERS¹ Jan Month 2006 2007 2008 DIFFERENCE Feb January 206,675 198,737 195,981-1.39% Mar February 197,016 193,576 200,851 3.76% Apr March 229,093 237,470 221,875-6.57% May April 205,569 204,156 179,845-11.91% June May 201,560 206,369 July June 218,312 226,577 Aug July 230,715 229,238 Sept August 222,404 232,031 Oct September 201,599 199,578 Nov October 191,580 198,499 Dec November 177,581 184,384 December 191,404 181,472 TOTALS 2,473,508 2,492,087 798,552-16.10% ¹Per Landing Reports Monthly Enplaned Passengers 250,000 240,000 230,000 220,000 PASSENGERS 210,000 200,000 190,000 180,000 170,000 160,000 150,000 January February March April May June July August September October November December 2006 2007 2008
MONTHLY DEPLANED PASSENGERS PASSENGERS¹ Month 2006 2007 2008 DIFFERENCE Jan January 201,391 195,544 189,631-3.02% Feb February 201,290 197,089 202,968 2.98% Mar March 233,269 240,490 213,620-11.17% Apr April 201,208 198,794 174,923-12.01% May May 205,261 211,521 June June 223,935 228,762 July July 232,477 233,323 Aug August 227,304 238,540 Sept September 195,756 195,908 Oct October 188,438 195,508 Nov November 179,936 187,392 Dec December 202,985 193,988 TOTALS 2,493,250 2,516,859 781,142-23.22% ¹Per Landing Reports - Scheduled and Charter Monthly Deplaned Passengers PASSENGERS 250,000 240,000 230,000 220,000 210,000 200,000 190,000 180,000 170,000 160,000 150,000 January February March April May June July August September October November December 2006 2007 2008
MONTHLY ENPLANED PASSENGER LOAD FACTOR SUMMARY 100.00% 95.00% 90.00% 85.00% 80.00% 75.00% 70.00% 65.00% 60.00% 55.00% 50.00% 45.00% 40.00% Monthly Load Factor Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2006 82.75% 80.57% 83.71% 81.83% 80.28% 85.37% 85.29% 81.23% 79.74% 74.69% 71.90% 73.30% 2007 73.10% 75.70% 81.80% 76.45% 77.46% 82.96% 80.80% 81.90% 75.80% 77.00% 71.10% 69.30% 2008 68.10% 75.06% 75.20% 72.51% 2006 2007 2008 ENPLANED PASSENGERS* LOAD FACTOR (%) DIFFERENCE Month 2006 2007 2008 2006 2007 2008 (2008 / 2007) January 206,675 198,737 195,981 82.75 73.10 68.10-5.0 February 197,016 193,576 200,851 80.57 75.65 75.06-0.6 March 229,093 237,470 221,875 83.71 81.78 75.20-6.6 April 205,569 204,156 179,845 81.83 76.45 72.51-3.9 May 201,560 206,369 80.28 77.46 June 218,312 226,577 85.37 82.96 July 230,715 229,238 85.29 80.75 August 222,404 232,031 81.23 81.89 September 201,599 199,578 79.74 75.77 October 191,580 198,499 74.69 77.07 November 177,581 184,384 71.86 71.48 December 191,404 181,472 73.32 69.13 *** 2,473,508 2,492,087 798,552 80.05 76.96 72.7-4.0 * Per Landing Reports *** AVERAGE OF AIRLINE LOAD FACTORS
LOAD FACTOR BY AIRLINE Carrier Seats Available Enplaned Passengers 2008 Load Factor (%) 2007 Load Factor (%) Difference Alaska / Horizon 23,550 19,382 78.7% 78.4% 0.3 Allegiant 1,950 1,208 84.4% n/a n/a American* 19,400 17,687 76.4% 86.1% -9.7 Continental 9,964 8,208 78.4% 79.3% -0.9 Delta 13,290 11,636 81.4% 89.2% -7.8 Delta Connection 6,765 5,770 78.3% 94.5% -16.2 ExpressJet 7,700 4,655 52.7% n/a n/a Southwest 160,799 103,114 63.2% 64.7% -1.5 United 37,424 28,587 70.2% 79.1% -8.8 US Airways 21,878 15,839 61.5% 64.9% -3.4 Frontier n/a n/a n/a 75.4% n/a Atlantic Southeast n/a n/a n/a 77.7% n/a ** 302,720 216,086 72.5% 78.9% -6.4 *LOAD FACTORS REPORTED BY AIRLINES ** AVERAGE OF AIRLINE LOAD FACTORS Airline Load Factor 90.0% 80.0% 70.0% Average 72.5% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Alaska / Horizon Allegiant American* Continental Delta Delta Connection ExpressJet Southwest United US Airways
DAILY ENPLANED SEATS AVAILABLE 10,800 10,600 10,400 10,200 10,000 9,800 9,600 9,400 9,200 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2006 10,018 10,192 10,190 9,763 9,763 9,851 9,977 9,981 10,016 9,950 9,724 10,047 2007 10,130 10,099 10,505 10,332 10,430 10,633 10,633 10,633 10,329 10,122 9,901 10,086 2008 10,064 10,256 10,153 9,768 2006 2007 2008
TOTAL AIR CARRIER MARKET SHARE Carrier Passengers Alaska Air Group 35,328 9.96% Allegiant 1,880 0.53% American 27,829 7.84% Continental 8,127 2.29% Delta 13,142 3.70% Delta Connection* 8,849 2.49% ExpressJet 7,785 2.19% Southwest 176,178 49.66% United 44,193 12.46% US Airways 25,802 7.27% Non-Scheduled 5,655 1.59% Totals 354,768 100.00% *Delta Connection carriers: ExpressJet and SkyWest Percentage of Total Delta, 3.7% Alaska Air Group, 10.0% Allegiant, 0.5% American, 7.8% Continental, 2.3% Delta Connection*, 2.5% ExpressJet, 2.2% Non-Scheduled, 1.6% US Airways, 7.3% Southwest, 49.7% United, 12.5%
TOTAL AIRLINE MARKET SHARE Carrier Passengers Percentage of Total Alaska Air Group 35,328 9.95% Allegiant 1,880 0.53% American 27,829 7.83% Continental 8,127 2.29% Delta 13,142 3.70% ExpressJet - Delta 3,813 1.07% ExpressJet - Branded 7,785 2.19% Mesa Air Group 6,082 1.71% Skywest 5,036 1.42% Southwest 176,178 49.60% United 44,193 12.44% US Airways 20,168 5.68% Non-Scheduled 5,655 1.59% Totals 355,216 100.0% *Delta Connection carriers: ExpressJet and SkyWest ExpressJet - Delta, 1.1% Allegiant, 0.5% Alaska Air Group, 10.0% American, 7.8% Continental, 2.3% Delta, 3.7% ExpressJet - Branded, 2.2% Mesa Air Group, 1.7% Skywest, 1.4% Non-Scheduled, 1.6% US Airways, 5.7% United, 12.4% Southwest, 49.6%
Jan TOTAL PASSENGERS DOMESTIC & INTERNATIONAL DOMESTIC SCHEDULED PASSENGERS Feb Mar Apr 550,000 May June July 500,000 Aug Sept Oct Nov Dec PASSENGERS 450,000 400,000 350,000 300,000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2006 2007 2008 DOMESTIC CHARTER PASSENGERS 7,000 6,000 5,000 PASSENGERS 4,000 3,000 2,000 1,000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2006 2007 2008 2008 DOMESTIC¹ INTERNATIONAL¹ 2008 TOTAL 2008 Charter 2007 Charter DIFFERENCE MONTH Scheduled Charter Scheduled Charter Passengers Passengers Passengers Passengers January 381,103 4,509 0 0 385,612 4,509 3,230 39.6% February 399,602 4,217 0 0 403,819 4,217 4,021 4.9% March 429,293 6,202 0 0 435,495 6,202 6,471-4.2% April 349,113 5,655 0 0 354,768 5,655 5,757-1.8% May June July August September October November December TOTALS 1,559,111 20,583 0 0 1,579,694 20,583 19,479 5.7% ¹Per Landing Reports
2,700 MONTHLY SCHEDULED DEPARTURES 2,600 2,500 2,400 2,300 2,200 2,100 2,000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2006 2,365 2,256 2,429 2,375 2,371 2,351 2,409 2,441 2,310 2,395 2,271 2,395 2007 2,462 2,239 2,534 2,468 2,520 2,544 2,628 2,644 2,449 2,489 2,408 2,533 2008 2,608 2,434 2,598 2,396
350,000 MONTHLY AVAILABLE SEATS 330,000 310,000 290,000 270,000 250,000 230,000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2006 286,884 270,407 290,587 280,789 277,610 289,990 302,163 305,409 288,480 299,489 282,183 297,583 2007 306,097 277,791 314,406 306,129 308,027 307,152 318,384 319,833 295,522 300,765 280,121 292,630 2008 301,118 284,419 307,910 280,220
TOTAL OPERATIONS 15,000 14,000 13,000 Number of Operations 12,000 11,000 10,000 9,000 8,000 7,000 6,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2006 2007 2008 Number of Operations 07 to 08 Percent Month 2006 2007 2008 Change January 11,147 12,628 10,163-19.52% February 10,730 10,322 10,420 0.95% March 10,595 13,933 10,948-21.42% April 10,979 11,424 10,501-8.08% May 12,579 12,734 June 12,956 11,733 July 11,977 12,657 August 13,421 12,057 September 13,430 11,706 October 12,494 10,934 November 10,528 10,624 December 10,891 10,054 TOTALS 141,727 140,806 42,032-12.99% % change YTD