Committee for Dulles June 9, 2016 Jack Potter, MWAA President & CEO
Dulles International is the Premier International Gateway to the Capital Region Dom Intl Total Mainline Airlines 10 29 37* Destinations 77 48 125 Average Daily Departures 263 72 335 * Total will not add up as some mainline airlines service domestic and international destinations Source: Diio, Scheduled June 2016 Activity as of May 4, 2016 2
International Travel is Key to the Regional Economy and Competitive Position On average, international visitors spend $3,300 per visit to this region This activity supported over 173,000 jobs and $4.4 billion in wages Local multi-national businesses depend on strong international service The region is home to the headquarters of 15 Fortune 500 companies 3
Airports System Serves a Large and Economically Robust Region SIZE: 6.1 million Residents (6 th largest market in the U.S.) AFFLUENCE: $63,050 Per Capita Income (8 th highest in the U.S.) ECONOMY: $472 Billion Regional GDP (6 th highest among MSAs in the U.S.) DESTINATION: $6.8 Billion Visitor Spending (8 th most visited region among international travelers) The population of the Airports Service Region has grown to over 6.1 million, a 13.5% increase since 2007, which was the 4 th highest population growth in the nation for the period Highly educated work force drives strong per capita income levels 36.8% higher than national average While the Airports Service Region population accounts for 1.9% of total U.S. population, it generates 2.7% of total U.S. GDP Washington, D.C. attracted 18.3 million domestic and 1.9 million international visitors in 2014 Source: U.S. Department of Commerce, Bureau of Economic Analysis; Report of the Airport Consultant (2016) 4
Long-term Growth for the Airports is Supported by Population Forecasts Population Growth (Annual % Change) Projected Population Growth within Service Region 2010-2040 2.0% 1.6% 1.2% 0.8% 0.4% 52.1% 22.3% 42.7% 0.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 United States The Airports Service Region s population growth averaged 1.6% annually between 2007 and 2015, exceeding the national average of 0.8% The Region s inner suburbs (Fairfax, Montgomery and Prince George s Counties) are forecast to have the greatest total population by 2040 The Region s outer suburbs (Charles, Frederick, Loudoun, Stafford, Calvert and Prince William Counties) and surrounding jurisdictions are forecast to experience the fastest rates of growth Source: Report of the Airport Consultant (2016) Airports Service Region 52.6% Not Modeled 4% Other Jurisdictions Outer 5% Ring - VA* 6% Outer Suburbs 10% 62.5% IAD Central Jurisdictions 41% DCA Inner Suburbs 34% Central Jurisdictions Inner Suburbs Outer Suburbs Outer Ring - VA* Other Jurisdictions Not Modeled Source: 2040 Growth - Metropolitan Washington Council of Governments * Fredericksburg-Area Jurisdictions 5
Dulles Has Lost Market Share to DCA and BWI 24 23 Total Annual Passengers (In Millions) 5 Year Activity Trend: 9% Growth at BWI 27% Growth at DCA 22 21 20 8% Decline at IAD 19 18 17 2010 2011 2012 2013 2014 2015 IAD DCA BWI Source: Air Traffic Statistics The regional leader 5 years ago, Dulles now serves fewer passengers than DCA and BWI 6
Declining Passenger Activity, Coupled With $5 B Capital Investment, Raised Dulles s Cost Per Enplanement to One of The Highest in the Nation $35 $30 IAD 2014 ROAC $25 $20 $15 DCA $10 BWI $5 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 CPE = Total Airport Charges to Airlines # of Enplaned Passengers CLT MWAA Sources: 2016 Budget, Office of Finance; BWI Source: 2017 MDOT MAA Budget; CLT Source: 2014 Annual Report; 2014 ROAC: 2014 Report of the Airport Consultant 7
MWAA Implemented a Multi-Layered Plan to Address Dulles s Challenge Grow Passengers Grow Non-Airline Revenue Cost Control Political Protection External Economic Support Healthy Dulles Airport 8
Continuously Improving the Passenger Experience 9 9
Many Continuing Actions Have Helped IAD s CPE Turn the Corner $35 $30 $25 $20 32% 2014 ROAC IAD $15 $10 DCA BWI $5 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 CPE = Total Airport Charges to Airlines # of Enplaned Passengers CLT MWAA Sources: 2016 Budget and Reports of the Airport Consultant, Office of Finance; BWI Source: 2017 MDOT MAA Budget; CLT Source: 2014 Annual Report 10
Millions Enplanements Have Stabilized at Dulles Total enplanements increased 0.3% compared to 2014: domestic and international enplanements increased 0.4% and 0.2%, respectively Dulles International Enplanements (1) 11.55 11.74 11.52 11.17 10.86 10.68 10.71 12 10 8 6 4 2-2015 2014 2013 2012 2011 2010 2009 Domestic 1 - Excludes general aviation and military enplanements. 2 - Total commercial passenger share. International 11
Continued Focus on Opportunities to Increase Non-Airline Revenue Concessions New Offerings Dulles Real Estate 118 new concessions at the Airports since 2014 through 2016 YTD and more to come Chef-driven restaurants, local and international brands Digital transformation through new advertising contract with Clear Channel 6 new Duty Free locations in 2016 New parking products and rate increases resulted in high facilities utilization and significant revenue increase New contracts with Transportation Network Companies Website, WiFi, Fiber Rightof-Way New gas station and convenience store FBO lease Potential hotel Western lands development 12
Millions Millions Concessions Revenue Trends are Positive Concession revenues at DCA increased by $19.6 million (18.8%) in 2015 while enplanements grew 9.9% Concession revenues at IAD increased by $13.0 million (8.7%) in 2015 while enplanements grew 0.3% Concession Revenue - DCA Concession Revenue - IAD $180 $160 $140 $120 $100 $80 $60 $40 $20 $- $123 $97 $87 $92 $93 $98 $104 2009 2010 2011 2012 2013 2014 2015 $180 $160 $140 $120 $100 $80 $60 $40 $20 $- $163 $150 $130 $134 $135 $134 $139 2009 2010 2011 2012 2013 2014 2015 Parking Rental cars Terminal and Other Concession Revenue per Enplanement - DCA Concession Parking Revenue Rental cars per Terminal Enplanement and Other - IAD $16 $14 $12 $10 $9.97 $10.76 $9.85 $9.54 $9.57 $9.91 $10.72 $16 $14 $12 $10 $11.19 $11.31 $11.67 $11.93 $12.67 $13.91 $15.08 $8 $8 $6 $6 $4 $4 $2 $2 $- 2009 2010 2011 2012 2013 2014 2015 $- 2009 2010 2011 2012 2013 2014 2015 Parking Rental cars Terminal and Other Source: Comprehensive Annual Financial Report (2015) Parking Rental cars Terminal and Other 13
Aggressive Pursuit of Financial Strategies New Contracts Debt Refinancing Prudent Management Parking & Shuttle Bus Audit Services Health Care $2B $1B $- 2010 2011 2012 2013 2014 2015 $2.4 billion refinanced since 2010 Net present value savings total over $200 million $400M $300M $200M $100M $- 2014 2015 2016 Held operating budget flat Kept actual expenses below budgeted amounts 14
Implement Local & Federal Efforts to Stay the Course Local Adjacent Development Federal Slot and Perimeter Rules Loudoun County Best Practices Study Airport Overlay District to guide development Preventing expansion of DCA perimeter and additional beyondperimeter flights Bi-partisan support to ensure balance between Reagan and Dulles 15
External Support Bolsters Dulles s Competitive Position Use & Lease Agreement State & Local Support Federal Support Net Remaining Revenue at Reagan is shared with Dulles Passenger Facility Charges Support Metrorail Construction Virginia s $50 million investment in Dulles Virginia, Fairfax, and Loudoun contributions to Metrorail construction Grants and TIFIA assistance to support Metrorail construction DC and Virginia airline incentives for key international markets 16
Dulles is Poised for Growth and Ready for the Next 50 Years Loudoun Gateway Rail Station Western Lands Dulles Rail Station 5th Runway Legend: Future runway/taxiway improvements South Concourses South Terminal Future Infrastructure Development 17
No Changes to Estimated Dulles Toll Road Costs 18
The Airports Authority is a Good Partner Easements (in yellow) for VDOT Route 28 construction on Dulles property Constructing sound walls along Dulles Toll Road 19 19
The Airports Authority is a Good Partner (continued) Easement to Virginia Dominion Power to expand its substation on IAD property Easements for Route 606 Loudoun County Parkway/Old Ox Road, Reconstruction. Easements around Dulles total more than 107 acres in last 10 years. 20
Dulles Plan Grow Passengers Grow Non-Airline Revenue Cost Control Political Protection External Economic Support Healthy Dulles Airport 21
Going Forward Dulles Plan Grow Passengers Grow Non-Airline Revenue Cost Control Political Protection External Economic Support Healthy Dulles Airport Key Challenges Use & Lease Agreement Virginia $25M 2017, 2018 Lower CPE = Passengers Manage Debt Service Get Value from Land Rail to Dulles and Beyond Bright Future 22