Fundamentals of Airline Schedule Data Leveraging a Schedule for Air Service Success

Agenda Page 2 Why Your Schedule is Important Schedule s Impact on Margin Crew Challenges Aircraft Availability Challenges Basic Airline Scheduling Concepts Glossary of Terms Business vs. Leisure Schedule How a Bank Works Data Sources Optimizing Your Current Schedule The Value of Connection Analysis by Market Case Study: Crescent City, California Finding a Plane Case Study: Windsor, Ontario Building Your Business Case Case Study: Burbank, California

Why Your Schedule is Important

Why Your Schedule Is Important Resources Are Scarce Pilot Shortage Aircraft Retirements Hubs that Are Close to Being Maxed Out Page 4

Why Your Schedule Is Important Resources Are Scarce Pilot Shortage Aircraft Retirements Hubs that Are Close to Being Maxed Out Performance of the Resource is EVERYTHING Top Line Performers Are Safe Upgauges Go To Best Performers Worst Performers Eliminated Schedule is Key to Performance Network Carriers: Need Easy Connects to Top Markets LCCs: Need Good Day-of-Week and Time-of-Day Page 6

Margins Are Tight Even With Low Fuel Prices Average Seats Filled on a 50-Seat Regional Jet in the US First Quarter 2015 Breakeven: 36 Seats Profit: 6 Seats With Fuel Below $2 a Gallon, Airlines Still Needed: 71% of Seats Filled to Break Even, or 36 Seats on a 50 Seat RJ 11% of Seats Represented Profit, or 6 Seats on a 50 Seat RJ 82% Average Load Factor for a 13% Overall Margin Page 7 Source: Sixel Consulting Group Analysis of Airline Financial Reports,1Q15

New Pilot Rules Impacted All Carriers Pilots Required Before and After FAA Rule Change Before and After January 2014 Network 41,100 44,300 Regional 17,000 18,300 Low Cost Others 5,900 6,400 2,300 2,500 5,200 Pilots Needed Overnight Pilot Food Chain Hurt the Smaller Airlines 0 10,000 20,000 30,000 40,000 50,000 Page 8 Source: Regional Airline Association (RAA)

18,000 Pilots Face Retirement by 2022 Cumulative Number of US Mainline Airline Pilots Reaching Retirement Age Calendar Year 2013 Calendar Year 2022 18,000 16,000 14,000 Regionals Currently Employ 17,000 Pilots LCCs Likely to Be Affected Too 12,000 10,000 8,000 6,000 4,000 2,000 0 17,751 15,155 12,594 10,388 8,377 6,644 5,029 3,580 2,264 1,032 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Page 9 Source: Regional Airline Association (RAA)

Fewer Students Want to Be Pilots 10,000 9,000 8,000 Air Transport Pilot (ATP) Certificates Issued in the US Calendar Year 1979 Calendar Year 2014 Pilots Graduating with ATP Have Declined 56% Since 1979 Perception of Low Earning Potential Median Pilot Income: $114,000/Yr Median in US: $35,000/Yr 7,000 6,000 5,000 4,000 Page 10 Source: University of North Dakota/Regional Airline Association

Airlines Are Cutting Costs by Upgauging Average Domestic US Aircraft Size 2010 2015 108 106 104 102 100 98 107 96 102 94 92 95 97 98 99 90 2010 2011 2012 2013 2014 2015 Page 11 Source: Boeing Company

Airlines Are Cutting Costs by Upgauging Average Domestic US Aircraft Size 2010 2015 Change in Scheduled Departures 2010 2015 108 30.0% 106 20.0% 104 10.0% 26.9% 102 100 0.0% 5.5% 98 107-10.0% 96 94 92 95 97 98 99 102-20.0% -30.0% -33.9% 90 2010 2011 2012 2013 2014 2015-40.0% < 51 Seats 51-100 Seats > 100 Seats Page 12 Source: Boeing Company

Basic Airline Scheduling Concepts

Glossary of Terms Block Hour/Block Time Starts When Aircraft Brakes Released Ends When Brakes Are Reset Gate to Gate Page 14

Glossary of Terms Block Hour/Block Time Starts When Aircraft Brakes Released Ends When Brakes Are Reset Gate to Gate MCT: Minimum Connection Time The Minimum Allowable Elapsed Time Between Connecting Flights Varies by Hub and Itinerary Day-of-Week Days on Which a Flight Operates Most Important for Less-than-Daily Leisure Carriers Increasingly Important at Network Carriers 1 = Monday, 7 = Sunday Page 16

Glossary of Terms Business Schedule Out and Back Same Day Arrive in Time for Day of Work Leave After a Full Day of Work Page 17

Glossary of Terms Business Schedule Out and Back Same Day Arrive in Time for Day of Work Leave After a Full Day of Work Leisure Schedule Arrive at Destination Around Midday Corresponds with Hotel Check-Out/Check-In In Day-of-Week Provides for Long Weekend and Full Week Stay Options Page 18

Illustration of a Business vs. Leisure Schedule North Bend Medford DEN Page 20

Illustration of a Business vs. Leisure Schedule Business Schedule Medford - Denver North Bend Medford Flight # Departs Arrives Equipment Operates UA6285 5:30a 9:08a CRJ 123456x UA6507 3:23p 7:06p CR7 1234567 Denver - Medford Flight # Departs Arrives Equipment Operates DEN UA5643 11:26a 1:16p CR7 1234567 UA6222 10:05p 11:59p CRJ 12345X7 Leisure Schedule North Bend - Denver Flight # Departs Arrives Equipment Operates UA6601 1:55p 5:40p CR7 XXX4XX7 Denver - North Bend Flight # Departs Arrives Equipment Operates UA6601 11:20a 1:15p CR7 XXX4XX7 Page 22

Put It in the Bank Most Hubs Are Banked Airlines Schedule a Bank of Flights in, Followed by Corresponding Bank of Flights Out Many Banks Are Directional Flights Come in From East Then Depart to West Especially True in International Gateways Delta/New York Kennedy United/San Francisco Page 23

Put It in the Bank 7am 7:45am DEN Denver Hub Page 24 Source: OAG Filed Schedule, United Airlines, January 4, 2016

Put It in the Bank 7am 7:45am DEN Denver Hub Page 25 Source: OAG Filed Schedule, United Airlines, January 4, 2016

Put It in the Bank 8am 8:45am DEN Denver Hub Page 26 Source: OAG Filed Schedule, United Airlines, January 4, 2016

Put It in the Bank 8am 8:45am DEN Denver Hub Page 27 Source: OAG Filed Schedule, United Airlines, January 4, 2016

Where to Get Your Data For Free Airline Websites Page 28

Where to Get Your Data For Free Airline Websites Not User Friendly for ASD Purposes No Full Hub Picture Difficult to Assess Connectivity Difficult to Picture Network Page 29

Where to Get Your Data The Easy Way Data Providers Easy to Use Formats Page 30

Optimizing Your Current Schedule

Key Points About Schedule Optimization Not About How Many Connections The Number of Connecting Cities Isn t Top Priority You Need to Make Sure You Connect to: Top 20 Passenger Markets Top 20 Revenue Markets Top International Markets Takes a More In-Depth Analysis Connection Time Important in Top Markets Top Markets Are Top Markets for a Reason Many Have Heavy Business Demand Business Travelers Don t Want to Wait Leisure Travelers Put Up With Less Than Ideal Schedules Connection Time Not as Important in Leisure Markets Page 33

Schedule Challenge in Crescent City Crescent City - Portland As of December 2015 Flight # Departs Arrives Equipment Operates KS160 7:30a 8:50a SF3 1234567 KS162 2:55p 4:15p SF3 1234567 Portland - Crescent City As of December 2015 Flight # Departs Arrives Equipment Operates KS161 1:05p 2:25p SF3 1234567 KS165 5:00p 6:20p SF3 1234567 Connections Critical with Just Two Flights per Day Current Schedule Misses 25 Important Cities Needed to Illustrate to Airline What It Is Missing Page 34 Source: OAG, December 2015

Missed Connection Overview First Step: Analysis of Cities with Misconnections Pulled Hub Schedule Used MCT and Maximum Connect Time for PDX Missed Outbound Missed Inbound Missed Both Ways Connect One Way BIL ANC BIL ANC BLI AUS BLI AUS BOS BIL BOS BZN FAT BLI HNL DCA HNL BOS KOA DFW KOA BZN MSO FAT MSO DCA PSC LAS PSC DFW STL OGG PSP HNL STS ORD RNO KOA PVR TUS LAS RNO YVR MSO SAN OGG SBA ORD SLC PSC TUS PVR YVR SAN SBA SLC STL STS Page 35 Source: OAG, December 2015

Lost Connecting Passengers and Revenue Second Step: Analysis of Lost Passengers and Revenue Missing an Average of 14.3 PDEW Missing an Average of $3,430 in Revenue/Day Impact of Connections Missed One Direction Market Passengers Revenue Fare Anchorage 30 $4,265 $142 Austin 180 $45,153 $251 Bozeman 10 $2,600 $260 Washington, DC 640 $210,242 $329 Dallas/Ft. Worth 320 $72,678 $227 Fresno 220 $29,674 $233 Las Vegas 690 $139,866 $203 Maui 40 $16,180 $405 Chicago 400 $104,968 $262 Puerto Vallarta 50 $7,214 $144 Reno 120 $35,912 $299 San Diego 1,150 $227,608 $198 Santa Barbara 170 $28,144 $166 Salt Lake City 280 $65,526 $234 Tucson 60 $17,690 $295 Vancouver, BC 150 $36,750 $245 Totals 4,510 $1,044,470 $232 Impact of Connections Missed Both Directions Market Passengers Revenue Fare Billings 20 $5,040 $252 Bellingham 10 $2,300 $230 Boston 230 $64,835 $282 Honolulu 200 $69,574 $348 Kona 50 $15,340 $307 Missoula 10 $1,925 $193 Pasco 10 $2,155 $216 St. Louis 190 $46,468 $245 Santa Rosa 0 $0 $0 Totals 720 $207,637 $288 Total Impact of Connections Missed Market Passengers Revenue Fare Annual 5,230 $1,252,107 $239 Daily Average 14.3 $3,430 $239 Page 36 Source: US DOT Database DB1B, YE2Q14

Proposed New Crescent City Schedule Third Step: Develop a New Schedule Retain as Many High Value Connects as Possible Shorten Connect Times Where Possible Page 37 Source: Sixel Consulting Group

Proposed New Crescent City Schedule Third Step: Develop a New Schedule Retain as Many High Value Connects as Possible Shorten Connect Times Where Possible Crescent City - Portland Proposed Schedule Flight # Departs Arrives Equipment Operates KS160 6:00a 7:20a SF3 1234567 KS162 2:55p 4:15p SF3 1234567 Portland - Crescent City Proposed Schedule Flight # Departs Arrives Equipment Operates KS161 1:10p 2:30p SF3 1234567 KS165 9:30pm 10:50pm SF3 1234567 Just Three Changes Needed Move Morning CEC-PDX 90 Minutes Earlier Move Midday PDX-CEC Five Minutes Later Move Last PDX-CEC to 9:30pm Page 38 Source: Sixel Consulting Group

Illustrate Net Benefit to Carrier Markets Retained with New Schedule Market Passengers Revenue Fare Austin 180 $45,153 $251 Boston 230 $64,835 $282 Chicago 400 $104,968 $262 Dallas/Ft. Worth 320 $72,678 $227 Honolulu 200 $69,574 $348 Kona 50 $15,340 $307 Las Vegas 690 $139,866 $203 Maui 40 $16,180 $405 Missoula 10 $1,925 $193 Puerto Vallarta 50 $7,214 $144 Reno 120 $35,912 $299 San Diego 1,150 $227,608 $198 Santa Rosa 0 $0 $0 St. Louis 190 $46,468 $245 Washington, DC 640 $210,242 $329 Totals 4,270 $1,057,963 $248 Daily Average 11.7 $2,898.53 $248 Fourth Step: Net Benefit Retain 11.7 PDEW Retain $2,900 Daily Rev. Offsets Cost of Crew Page 39 Source: US DOT Database DB1B, YE2Q14

Optimal Schedule Not Always Possible Lack of Aircraft Limited Number of RON Aircraft Reduced Overall Fleet Size Page 40

Optimal Schedule Not Always Possible Lack of Aircraft Limited Number of RON Aircraft Reduced Overall Fleet Size Crew Constraints FAR 117 Requires Ten Hours Overnight Crew Rest Last Flight In and First Flight Out Have Shifted Gate Constraints Many Hubs Have No Common Use Gates for Overflow Maintenance Requirements Example: Champaign, Illinois Three Embraer ERJ RONs Per Night Unbalanced Schedule Three (of Five) Departures to ORD Before 8:45am Plus One (of One) to DFW at 7:20am Three (of Five) Arrivals from ORD After 7pm Plus One (of One) from DFW at 8:30pm Page 43

Finding a Plane

We Don t Have Any Aircraft Time Windsor Toronto Recruitment Love the Market BUT Can t Find an Aircraft. YTZ YQG Page 45

Fleet Schedule Analysis and Plotting Used Busiest Daily Schedule for Quarter Pulled Entire Schedule for Fleet Type Searched for Gaps Tail Number RON RON C-FLQY YOW YOW YTZ YTZ YOWYOW YTZ YTZ YUL YUL YTZ YTZ MDW MDW YTZ YTZ BOS BOS C-GLQB YUL YUL YTZ YTZ EWR EWR YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ MDW MDW C-GLQC YQB YQB YTZ YTZ YOW YOW YTZ YTZ EWR EWR YTZ YTZ EWR EWR YTZ YTZ EWR EWR C-GLQD YTZ YTZ YOWYOW YTZ YTZ MDW MDW YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ YUL YUL C-GLQE YTZ YTZ YUL YUL YTZ YTZ YOW YOW YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ EWR EWR C-GLQF MDW MDW YTZ YTZ YUL YUL YTZ YTZ YOW YOW YTZ YTZ YOWYOW YHZ YHZ YYT YYT C-GLQG EWR EWR YTZ YTZ EWR EWR YTZ YTZ EWR EWR YTZ YTZ EWR EWR YTZ YTZ C-GLQH YTZ YTZ EWR EWR YTZ YTZ EWR EWR YTZ YTZ BOS BOS YTZ YTZ YQB YQB C-GLQJ YTZ YTZ BOS BOS YTZ YTZ BOS BOS YTZ YTZ YOW YOW YTZ YTZ YQT YQT C-GLQK YQT YQT YTZ YTZ YQT YQT YTZ YTZ YQT YQT YTZ YTZ YOW YOW YTZ YTZ YOW YOW C-GLQL YTZ YTZ MDW MDW YTZ YTZ YOWYOW YHZ YHZ YYT YYT YHZ YHZ YOW YOW C-GLQM YOW YOW YTZ YTZ YQB YQB YTZ YTZ YSB YSB YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ C-GLQN BOS BOS YTZ YTZ MDW MDW YTZ YTZ BOS BOS YTZ YTZ C-GLQO YTZ YTZ YOWYOW YTZ YTZ YOW YOW YTZ YTZ YOW YOW C-GLQP YUL YUL YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ YQB YQB YTZ YTZ C-GLQQ YOW YOW YHZ YHZ YYT YYT YHZ YHZ YOWYOW YTZ YTZ YOW YOW YHZ YHZ C-GLQR YHZ YHZ YOW YOW YHZ YHZ YYT YYT YHZ YHZ YOW YOW YTZ YTZ YUL YUL C-GLQS YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ YOW YOW YTZ YTZ MDW MDW YTZ YTZ C-GLQV EWR EWR YTZ YTZ EWR EWR YTZ YTZ YUL YUL YHZ YHZ YUL YUL YTZ YTZ C-GLQX YYT YYT YHZ YHZ YOW YOW YTZ YTZ YOW YOW YTZ YTZ YOWYOW YQM YQM YOW YOW YTZ YTZ Page 46

Fleet Schedule Analysis and Plotting Found Available Aircraft Time for Two Daily Flights Pulled One Aircraft Off a YTZ RON Plenty of Time for Midday Turn Tail Number RON C-FLQY YOW YOW YTZ YTZ YOWYOW YTZ YTZ YUL YUL YTZ YTZ MDW MDW YTZ YTZ BOS C-GLQB YUL YUL YTZ YTZ EWR EWR YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ MDW C-GLQC YQB YQB YTZ YTZ YOW YOW YTZ YTZ EWR EWR YTZ YTZ EWR EWR YTZ YTZ EWR C-GLQD YTZ YTZ YOWYOW YTZ YTZ MDW MDW YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ YUL C-GLQE YTZ YTZ YUL YUL YTZ YTZ YOW YOW YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ EWR C-GLQF MDW MDW YTZ YTZ YUL YUL YTZ YTZ YOW YOW YTZ YTZ YOWYOW YHZ YHZ YYT C-GLQG EWR EWR YTZ YTZ EWR EWR YTZ YTZ EWR EWR YTZ YTZ EWR EWR YTZ C-GLQH YTZ YTZ EWR EWR YTZ YTZ EWR EWR YTZ YTZ BOS BOS YTZ YTZ YQB C-GLQJ YTZ YTZ BOS BOS YTZ YTZ BOS BOS YTZ YTZ YOW YOW YTZ YTZ YQT C-GLQK YQT YQT YTZ YTZ YQT YQT YTZ YTZ YQT YQT YTZ YTZ YOW YOW YTZ YTZ YOW C-GLQL YTZ YTZ MDW MDW YTZ YTZ YOWYOW YHZ YHZ YYT YYT YHZ YHZ YOW C-GLQM YOW YOW YTZ YTZ YQB YQB YTZ YTZ YSB YSB YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ C-GLQN BOS BOS YTZ YTZ MDW MDW YTZ YTZ BOS BOS YTZ C-GLQO YTZ YTZ YOWYOW YTZ YTZ YQG YQG YTZ YTZ YOW YOW YTZ YTZ YOW C-GLQP YUL YUL YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ YQB YQB YTZ YTZ YQG C-GLQQ YOW YOW YHZ YHZ YYT YYT YHZ YHZ YOWYOW YTZ YTZ YOW YOW YHZ C-GLQR YHZ YHZ YOW YOW YHZ YHZ YYT YYT YHZ YHZ YOW YOW YTZ YTZ YUL C-GLQS YQG YQG YTZ YTZ YUL YUL YTZ YTZ YUL YUL YTZ YTZ YOW YOW YTZ YTZ MDW MDW YTZ C-GLQV EWR EWR YTZ YTZ EWR EWR YTZ YTZ YUL YUL YHZ YHZ YUL YUL YTZ C-GLQX YYT YYT YHZ YHZ YOW YOW YTZ YTZ YOW YOW YTZ YTZ YOWYOW YQM YQM YOW YOW YTZ Page 47

Proposing Schedule and Landing Service Proposed a Specific Schedule to the Airline Ideal Schedule for Connectivity Worked Within Airline s Published Schedule Airline Announced Service Two Months Later Today Service Operates Four Times per Day Page 48

Building Your Business Case

Page 50 Schedule Was Key in Burbank s DAL Proposal

Schedule Was Key in Burbank s DAL Proposal Market Needed Connectivity BUR Has a Curfew Proposed This Schedule: Departs Arrives Equipment Operates 7:00a 11:55a 73G 1234567 Departs Arrives Equipment Operates 7:15p 8:20p 73G 1234567 Page 51

Illustrated Potential Passengers 4,500 Available Passengers per Day Each Way (PDEW) New York / Newark 234,760 568,426 1,100.3 Chicago 37,550 369,596 557.7 Washington / Baltimore 39,460 338,076 517.2 Dallas / Ft. Worth 133,420 174,086 421.2 South Florida 14,720 207,505 304.4 Boston 18,990 196,632 295.4 Atlanta 16,420 189,809 282.5 Houston 48,810 138,817 257.0 Orlando / Sanford 20,490 118,993 191.1 Austin 28,670 70,636 136.0 St Louis 17,760 70,450 120.8 Kansas City 16,740 63,245 109.6 New Orleans 10,130 57,672 92.9 Nashville 11,290 54,180 89.7 San Antonio 20,730 39,22782.1 Tampa / St. Petersburg 17,130 42,39281.5 Charlotte 11,170 47,048 79.8 Indianapolis 19,53035,57375.5 Pittsburgh 17,53031,528 67.2 Raleigh/Durham 12,28034,80364.5 Oklahoma City 13,710 17,251 42.4 Jacksonville 3,840 21,462 34.7 Tulsa Birmingham Little Rock 13,100 10,652 32.5 4,450 12,463 23.2 6,880 8,058 20.5 Bob Hope Airport Other Airports Total PDEW Source: Sixel Consulting Group Burbank True Market Study 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 Page 52

Illustrated Potential per Passenger Revenue Strong Average Fare New York / Newark Chicago Washington / Baltimore Dallas / Ft. Worth South Florida Boston Atlanta Houston Orlando / Sanford Austin St Louis Kansas City New Orleans Nashville San Antonio Tampa / St. Petersburg Charlotte Indianapolis Pittsburgh Raleigh/Durham Oklahoma City Jacksonville Tulsa Birmingham Little Rock $260 $187 $223 $173 $207 $226 $191 $202 $199 $165 $182 $162 $197 $199 $183 $196 $245 $206 $218 $195 $201 $200 $198 $203 $202 True Average Fare: $212 $0 $50 $100 $150 $200 $250 Page 53

Illustrated Lack of Market Dominance Southwest Only Captures 21% of Available Passengers Southwest United American Delta Others New York / Newark 3.11% 22.47% 18.55% 11.00% 44.9% Chicago 22.26% 29.29% 34.82% 2.14% 11.5% Washington / Baltimore 17.30% 34.36% 18.79% 4.09% 25.5% Dallas / Ft. Worth 9.15% 3.75% 72.56% 0.86% 13.7% South Florida 6.63% 6.22% 40.94% 14.96% 31.3% Boston 4.74% 19.00% 28.28% 3.02% 45.0% Atlanta 18.03% 2.53% 6.71% 66.52% 6.2% Houston 32.10% 46.89% 8.85% 1.79% 10.4% Orlando / Sanford 15.67% 17.33% 21.15% 25.86% 20.0% Austin 40.94% 6.95% 35.80% 1.02% 15.3% St Louis 38.37% 4.32% 44.84% 3.55% 8.9% Kansas City 56.08% 6.12% 6.92% 6.67% 24.2% New Orleans 33.08% 24.92% 7.91% 32.34% 1.7% Nashville 53.21% 3.65% 33.77% 4.81% 4.6% San Antonio 53.62% 22.00% 10.63% 1.58% 12.2% Tampa / St. Petersburg 28.08% 8.41% 14.24% 35.38% 13.9% Charlotte 3.78% 9.49% 20.41% 15.14% 51.2% Indianapolis 41.01% 7.79% 11.60% 22.68% 16.9% Pittsburgh 31.23% 29.84% 8.51% 4.42% 26.0% Raleigh/Durham 26.61% 13.07% 22.83% 26.05% 11.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Page 54

Southwest Just Announced Service Schedule Was Almost Ideal: Departs Arrives Equipment Operates 7:10a 12:10p 73G 1234567 Departs Arrives Equipment Operates 7:00p 8:05p 73G 1234567 Page 55

Fundamentals of Airline Schedule Data Jack Penning Executive Director, Air Service Strategy and Development Sixel Consulting Group jack@sixelconsulting.com sixelconsulting.com