Inter-Office Memo Reno-Tahoe Airport Authority Date: October 2, 2008 To: Statistics Recipients From: Tom Medland, Director Air Service Business Development Subject: RENO-TAHOE INTERNATIONAL AIRPORT PASSENGER STATISTICS AIRLINE INDUSTRY SUMMARY The aviation industry continues to feel the negative influence of high jet fuel costs, a weakened domestic economy and decreased domestic travel demand through the first eight months of 2008. Airlines fuel costs have increased over 48% compared to one year earlier. Airline carriers have furloughed employees in record numbers, increased airfares and reduced flights and capacity which will, conversely, continue to reduce the number of travelers throughout the nation. According to the Official Airline Guide (OAG) consolidated database, a seven percent drop in the number of flights and seat capacity is expected nationwide while the world s airlines will offer nearly 60 million less seats in the fourth quarter of 2008 compared to one year ago. Although the recent drop in the cost of fuel to under $100 per barrel has slowed the number of airline announcements of further capacity reductions for the time being, industry experts continue to speculate that the revenues benefited from the airline changes will be counteracted by a decline in passenger travel. MONTHLY PASSENGER AND CARGO STATISTICS SUMMARY RNO reported a 13% decline in total passengers during the month of August 2008, 61,856 fewer total passengers than in August 2007. This represents the lowest monthly number of total passengers recorded for RNO during the month of August since 1992. The significant decrease in RNO traffic in August is a direct result of the severely struggling economy, softened demand for air travel and 48% higher jet fuel costs than one year earlier. Year-to-date RNO traffic has dipped 9.1% to 3.17 million total passengers or 273,310 fewer passengers than one year earlier. The average airline load factor for RNO during the month of August was 79.1% which is consistent with the summer months of June and July 2008, reporting 79.5% and 79.8% respectively. RNO airlines, who offered 1,000 fewer seats and four fewer flights per day in June, July and August 2008, were cognizant of the fact that passenger demand would drop as the economy worsened. The entire Reno-Tahoe region must continue to work together to stimulate demand in order to reverse this negative trend through aggressive and creative marketing efforts.
Total cargo for the month of August was reported at 9,763,038 pounds of freight, representing a 16.8% decrease compared to August 2007. This is the sixth month in the 2008 calendar year that RNO cargo has dipped year-over-year as a result of the downturn in the economy, high cost of fuel, and a shift in transportation modes to truck and rail in order to cut costs. Domestic air cargo throughout the US is down five percent for the first half of 2008, according to the Bureau of Transportation Statistics. Year-to-date air cargo at RNO is down 6.9% compared to the first eight months of 2007. TOTAL PASSENGERS In the month of August, 412,002 total passengers travelled to and from RNO, a decline of 13% year-over-year and 61,856 fewer passengers. August marks the fifth straight month this year that Total Passenger count has declined by 12% or higher. August 2008 also marks the lowest number of Total Passengers recorded in any August at RNO since 1992. Year-to-date 2008, a total 3,176,614 passengers have flown in and out of RNO, which is a 9.1% decline and 273,310 fewer passengers versus the same period in 2007. TOTAL CARGO A total 9,763,038 pounds, or 4,427.7 metric tons, of freight handled during the month of August represents a 16.8% decrease, or 1.97 million fewer pounds, compared to the record month of August 2007. FedEx maintained the largest market share in August with 54.3% of the total cargo volume while UPS followed with 31.9%. FedEx and UPS both posted negative losses for the month of August with 10.3% and 25.8% respectively. FedEx s quarterly profits for its fiscal first quarter ending August 31 dropped 22% citing challenging economic conditions. All carriers with the exception of Southwest Airlines posted a loss in freight activity for RNO. The high costs of jet fuel in the first six months of 2008 have caused cargo carriers and supply-chain managers to change transportation strategies. The trucking business is becoming more prevalent and cost efficient than air service for domestic cargo. The Cass Freight Index, a measure of the expansion or contraction of freight shipments, fell 11.3% in August according to Traffic World Online. The August 11.3 percent year-over-year decline follows a 14.9% dip in July and a 12.3% reduction in June. Year-to-date 2008 air cargo is down 6.9% for a total of 78,845,018 pounds. AIRLINE LOAD FACTORS RNO airlines reported an average load factor of 79.1% for the month of July which is 2.8% less than one year earlier. Five airlines at RNO reported load factors over 80% in the month of August compared to six carriers in August 2007. Among those five airlines Delta reported a 94.4% load factor on mainline Delta, meaning an average 173 seats of 183 total available seats were occupied on the RNO-ATL flight every day between August 1 and August 19, 2008 when Delta discontinued RNO-ATL for the off-peak season. Alaska/Horizon had the second highest load factor with 86.4%. Both carriers reported a gain of 8 points over their domestic system wide averages. Allegiant Airlines improved their RNO load factor over 15 points in their year-over-year comparison reporting 83.9%. This increase is a result of stimulated international traffic due to the weaker American dollar compared to the Canadian dollar and the proximity of Bellingham, WA to
Vancouver, BC, Canada. Despite the year-over-year load factor growth by Allegiant, their System Load Factor exceeded the performance in RNO by 9.5 points. Eight of RNO s 10 airlines reported load factors below their domestic system-wide average load factor for the month further indicating the severe drop in demand being experienced in the Reno-Tahoe region. Airline Reno LF System LF Difference Delta 94.4% 86.3% 8.1 Alaska/Horizon 86.4% 78.1% 8.3 Allegiant 83.9% 93.4% -9.5 Continental 82.2% 84.9% -2.7 American 81.9% 84.3% -2.4 ExpressJet 76.2% 78.2% -2.0 United 73.8% 86.2% -12.4 US Airways 73.3% 85.8% -12.5 Delta Connection* 73.2% 83.3% -10.1 Southwest 66.0% 74.6% -8.6 *Delta Connection Inc. carrier includes SkyWest and ExpressJet AIRLINE MARKET SHARE Adjustments in RNO airline market shares for the month of August are a result of three major airline scheduling changes. Delta Air Lines dropped from 5.2% market share to 1.2% by temporarily discontinuing its daily flight to Atlanta (ATL) for an off-peak seasonal adjustment and withdrawing one of its three daily flights to Los Angeles (LAX). ExpressJet discontinued half of the markets they served in August dropping one daily flight to both Spokane, WA and Tucson, AZ while maintaining its RNO to Long Beach (LGB) and Ontario (ONT) flights. In mid-august, US Airways discontinued its daily flight from Reno to Las Vegas which affected their RNO market share, dipping 1.1 points to 6.8%. These adjustments are reflected in the market share percentage changes identified on the following chart. Airline AUGUST. 2008 AUGUST. 2007 Change Alaska 9.08% 9.18% -0.10 Allegiant 1.17% 0.55% 0.62 American 8.33% 7.45% 0.88 Continental 3.50% 3.31% 0.19 Delta 1.23% 5.18% -3.95 Delta Connection 4.36% 1.24% 3.12 *Express Jet 2.42% n/a n/a Southwest 49.42% 48.43% 0.99 United 12.43% 11.72% 0.71 US Airways 6.84% 7.98% -1.14 Non-Scheduled 1.20% 1.33% -0.13 *Annual comparison not available
Southwest Airlines maintains the largest market share in RNO for the month of August with a 49.4% market share, which is one point higher than August 2007. Delta Connection s RNO market share increased 3.1 points to 4.36% compared to one year earlier as a result of additional contracted service with Delta. Allegiant, American, Continental, and United flights each posted modest market share gains for the month. DOMESTIC AND INTERNATIONAL CHARTER PASSENGERS RNO charter traffic decreased in August 2008 by 11.5% with a total of 4,947 charter passengers as compared to the same month last year. This decrease is a direct result of a sharp decline in the Harrah s Charter program due to a slumping economy. Total charter traffic for the first eight months of 2008 is down 3.6%, or 1,515 passengers, compared to the same period in 2007. SCHEDULED DEPARTURES AND SEATS During the month of August, RNO reported 2,455 scheduled departures, 7.1% less than one year earlier due to the reduction in airline capacity seen throughout the nation as a direct result of increased fuel costs and a struggling economy. Monthly available seats totaling 281,406 represents a 12.0% decrease year over year. The reduction in seats is attributable to airline flight reductions and the downgrading of aircraft equipment to regional jets (RJ), which has decreased market frequency and increased the percentage of RJ aircraft at RNO from 24% in 2007 to 33.3% or one-third the total daily departures in 2008. TOTAL OPERATIONS During the month of August 2008, total airport operations at RNO dipped 1.8% to 11,837 operations. Total airport operations consists of air carrier arrivals and departures, air taxi flights, general aviation landings and take-offs, and military aircraft operations. Year to date, total airport operations has decreased 9.7% compared to one year earlier. 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 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% 370,145-12.10% June 445,018 458,338 2.99% 403,441-11.98% 2nd Q Total 1,265,078 1,285,653 1.63% 1,128,354-12.23% July 466,271 465,487-0.17% 411,332-11.63% August 452,866 473,858 4.64% 412,002-13.05% 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% 3,176,614-9.12% 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 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC CARGO (IN POUNDS) PERCENT Month 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 9,923,064 4,500.3-7.42% June 9,772,322 10,483,160 8,893,972 4,033.5-15.16% 2nd Quarter 27,801,311 30,855,623 28,732,272 13,031-6.88% July 9,580,355 10,377,947 9,811,115 4,449.5-5.46% August 11,153,394 11,736,465 9,763,038 4,427.7-16.81% 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 78,845,018 35,757.4-6.92% % change YTD
MONTHLY ENPLANED PASSENGERS PASSENGERS¹ Jan Month 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 201,560 206,369 183,861-10.91% July June 218,312 226,577 201,271-11.17% Aug July 230,715 229,238 205,791-10.23% Sept August 222,404 232,031 205,576-11.40% 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 1,595,051-7.70% 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
MONTHLY DEPLANED PASSENGERS PASSENGERS¹ Month 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 205,261 211,521 186,284-11.93% June June 223,935 228,762 202,170-11.62% July July 232,477 233,323 205,541-11.91% Aug August 227,304 238,540 206,426-13.46% 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 1,581,563-9.32% 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
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% 72.54% 79.51% 79.86% 79.13% ENPLANED PASSENGERS* LOAD FACTOR (%) DIFFERENCE Month (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 201,560 206,369 183,861 80.28 77.46 72.54-4.9 June 218,312 226,577 201,271 85.37 82.96 79.51-3.5 July 230,715 229,238 205,791 85.29 80.75 79.86-0.9 August 222,404 232,031 205,576 81.23 81.89 79.13-2.8 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 1,595,051 80.05 76.96 75.2-3.5 * 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 21,280 19,525 86.4% 89.4% -3.0 Allegiant 1,330 1,132 83.9% 68.4% 15.5 American* 19,680 16,631 81.9% 88.4% -6.5 Continental 9,254 7,163 82.2% 90.7% -8.5 Delta 4,941 4,457 94.4% 89.5% 4.9 Delta Connection 12,248 9,373 73.2% 82.6% -9.4 ExpressJet 6,900 5,434 76.2% n/a n/a Southwest 154,917 99,650 66.0% 75.5% -9.5 United 33,904 25,519 73.8% 78.3% -4.5 US Airways 21,200 14,548 73.3% 78.3% -5.0 AVERAGE** 285,654 203,432 79.1% 81.9% -2.8 *LOAD FACTORS REPORTED BY AIRLINES ** TOTAL AVERAGE 2007 does not include Aloha, Fronteir or Atlantic Southeast Airlines percentages *** ENPLANED PASSENGERS DOES NOT INCLUDE CHARTER PASSENGERS Airline Load Factor 100.0% 90.0% 80.0% Average 79.1% 70.0% 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 9,000 8,800 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 9,433 9,645 9,645 9,645
TOTAL AIR CARRIER MARKET SHARE Carrier Passengers Alaska Air Group 37,412 9.08% Allegiant 4,825 1.17% American 34,331 8.33% Continental 14,434 3.50% Delta 5,074 1.23% Delta Connection* 17,962 4.36% ExpressJet 9,987 2.42% Southwest 203,622 49.42% United 51,216 12.43% US Airways 28,192 6.84% Non-Scheduled 4,947 1.20% Totals 412,002 100.00% *Delta Connection carriers: ExpressJet and SkyWest Percentage of Total Delta, 1.2% Alaska Air Group, 9.1% Allegiant, 1.2% American, 8.3% Continental, 3.5% Delta Connection*, 4.4% ExpressJet, 2.4% Non-Scheduled, 1.2% US Airways, 6.8% United, 12.4% Southwest, 49.4%
TOTAL AIRLINE MARKET SHARE Carrier Passengers Percentage of Total Alaska Air Group 37,412 9.08% Allegiant 4,825 1.17% American 34,331 8.33% Continental 14,434 3.50% Delta 5,074 1.23% ExpressJet - Delta 5,095 1.24% ExpressJet - Branded 9,987 2.42% Mesa Air Group 5,558 1.35% Skywest 12,867 3.12% Southwest 203,622 49.42% United 51,216 12.43% US Airways 22,634 5.49% Non-Scheduled 4,947 1.20% Totals 412,002 100.0% *Delta Connection carriers: ExpressJet and SkyWest Allegiant, 1.2% Alaska Air Group, 9.1% American, 8.3% ExpressJet - Delta, 1.2% Delta, 1.2% ExpressJet - Branded, 2.4% Continental, 3.5% Mesa Air Group, 1.4% Skywest, 3.1% Non-Scheduled, 1.2% US Airways, 5.5% United, 12.4% Southwest, 49.4%
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 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 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 365,271 4,874 0 0 370,145 4,874 5,824-16.3% June 397,396 6,045 0 0 403,441 6,045 5,585 8.2% July 407,235 4,097 0 0 411,332 4,097 5,586-26.7% August 407,055 4,947 0 0 412,002 4,947 5,587-11.5% September October November December TOTALS 3,136,068 40,546 0 0 3,176,614 40,546 42,061-3.6% 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 2,401 2,445 2,515 2,455
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 301,118 284,419 307,910 280,220 278,666 278,969 287,630 281,406
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 Number of Operations 07 to 08 Percent Month 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 10,807-15.13% June 12,956 11,733 11,753 0.17% July 11,977 12,657 11,599-8.36% August 13,421 12,057 11,837-1.82% 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 88,028-9.70% % change YTD