Airport Updates

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Jerry Orr from Charlotte-Douglas International Airport and Chuck Allen from USAirways provide updates on the airport's performance and plans for expansion.

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Airport Updates

  1. 1. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R T Connecting the Carolinas to the World
  2. 2. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R T2010 IATA Eagle Award • The International Air Transport Association (IATA) singled out CLT’s achievements with the prestigious Eagle Award in June 2010 • Recognizes outstanding performance in customer satisfaction, cost efficiency and continuous improvement • CLT joins exclusive group of only five U.S. airports to receive award “Charlotte Douglas has the winning combination: low costs, low debt, and solid service levels. The strong financial and operational model at Charlotte Douglas works well for airlines, passengers, and the airport. There can be no greater accolade than the continued support from its major airline customers through this Eagle Award.” (Giovanni) Bisignani, (Director General and CEO, IATA)
  3. 3. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TAirport Mission “Charlotte Douglas International will be the preferred airport and airline hub by providing the highest quality product for the lowest possible cost.”
  4. 4. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TAirline Cost Per Enplaned Passenger $28.00 $24.00 $20.00 $16.00 $12.00 $8.00 $4.00 $0.00 MIA DEN-UA DEN-No UA IND ANC LAX DAL ABQ PBI ORD TPA CMH CLE PHL PIT ATL FLL SDF DFW RSW SFO CVG CLT O&D STL DTW CLT Total Group Median
  5. 5. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TCLT Enplanements 20 18 16 Millions of Passengers Enplaned 14 12 10 8 6 4 2 0 5
  6. 6. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TAirport Fast Facts • 2nd Largest Airport on Eastern Seaboard • 677 Daily Departures (February 2011) • Non-stop service to 134 destinations; 33 int’l • Over 18,000 Employees • 529,101 aircraft operations in 2010 • 38,254,207 passengers in 2010; 10.7% increase over 2009 • Nationwide Rankings 2010: • 7th in Movements/Operations • 11th in Passengers • Worldwide Rankings 2010: • 7th in Movements/Operations • 25th in Passengers * Rankings for 2010 based on preliminary data
  7. 7. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TIndustry TrendsEmerging Hub Trends in the U.S.“Hub access is the name of the game…” • The role of Airline Alliances • Extensive Capacity Reductions • Future Fleet Demand
  8. 8. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TEmerging Hub Trends in the U.S.The Role of the Alliance • Passengers have access to worldwide destinations through airline partners in the alliance • Allows airlines to funnel passengers through hubs rather than extensive point-to-point international destinations • Allows airlines to sell additional tickets by routing passengers through the alliance network • Reduces redundancy of routes by multiple carriers
  9. 9. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TEmerging Hub Trends in the U.S.Capacity Reductions • Airlines taking control of their fate through capacity rather than pricing • Volatility of fuel costs • Effective in reducing costs • Seat capacity system-wide fell 9% in 2009; forecasted to fall another 10% in 2010 • Focus on more hub activity rather than point-to-point service • Capacity cuts include: • Older aircraft with high maintenance costs • 50 and 70 seat aircraft
  10. 10. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TEmerging Hub Trends in the U.S.Fleet Demand in North AmericaMuch higher demand for replacement aircraft than new aircraft over next 18-20 yrs
  11. 11. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TEmerging Hub Trends in the U.S. What does this mean to CLT? • Airlines will continue to focus on hub airports as they look for ways to return to profitability • Airports must focus on the metrics that make an attractive hub for the airlines • Geographic location • Expansion Capabilities • Financial Structure
  12. 12. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TUS Airways CLT Direct Routes
  13. 13. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TSouthwest RDU Direct Routes
  14. 14. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TThe Economic Development Platform • Generates nearly $10 billion in annual economic impact • 100,000 jobs are directly or indirectly supported by the Airport
  15. 15. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TThe Economic Development Platform Economic Impact 12,000 Total Economic Impact 10,000 10,000 1976 - $117,000,000 1996 - $4,000,000,000 8,000 2004 - $10,000,000,000 Millions 6,000 4,000 4,000 2,000 117 0 Employment 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 120,000 100,716 100,000 80,000 71,392 Employment 60,000 1976 - 1,342 jobs 40,000 1996 - 71,392 jobs 2004 - 100,716 jobs 20,000 1,342 0 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 15
  16. 16. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TExpansion Plans
  17. 17. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TIntermodal Train Facility
  18. 18. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TGlobal Movement of Goods
  19. 19. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TExisting Intermodal Facility
  20. 20. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TPlanned New Intermodal Facility
  21. 21. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TWest Blvd/I-485 Interchange
  22. 22. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R TEnvironmental Intermodal trains produce about one third as much CO2 per ton-mile as trucks
  23. 23. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R T Connecting the Carolinas to the World
  24. 24. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R T
  25. 25. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R T
  26. 26. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R T
  27. 27. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R T
  28. 28. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R T
  29. 29. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R T
  30. 30. C H A R L O T T E D O U G L A S I N T E R N AT I O N A L A I R P O R T
  31. 31. Charlotte Chamber of CommerceTransportation Summit 2011 April 8, 2011
  32. 32. 4Q10 / 2010 Highlights• 2010 profit of $447M* - second highest profit in Company history• 4Q10 profit of $28M - first 4Q profit since 2006• $2.3B in total cash, $364M restricted• Accrued $47M in profit sharing for 2010• 4Q unit costs* down 1.7% on 4.2% increase in flying• Outstanding operational performance - $24M in operational incentive payouts• A la carte baggage fees generated $483M in 2010, up $81M vs. 2009 * Excludes special items
  33. 33. US Airways - 4th Largest Major Network Airline 4Q10 YTD System Capacity Major Network Airlines 250.0 200.0 190.7* 175.7 Low Cost/Other Total ASMs (Bil) 150.0 124.2 100.0 73.6 64.8 50.0 26.2 21.0 18.2 0.0* Pro forma (United + Continental)
  34. 34. Capacity Discipline • Since 2006 US has removed significant domestic capacity • And that trend continued into 2010 Domestic ASM Changes 3Q10 YTD Change in Total ASMs (YOY) (2010 vs. 2006) 8.0% 10.0% 8.0% 7.0% 6.7% 5.0% 6.0% 5.0% 4.1% 4.0% 3.8% - 3.0% (5.0%) 2.0% 1.1% 1.0% 0.5% 0.2% 0.1% (10.0%) 0.0% -0.2% -1.0% (13.1%) (15.0%) (14.4%) -1.1% -2.0% (20.0%) Legacy US LCC3Q 2010 YOYCapacity Change Source: SEC filings and company reports
  35. 35. Industry Capacity Outlook• Industry capacity* growth between 2 and 3 percent in 2011• US Airways’ system capacity growth of approximately 2 percent• Domestic capacity growth not expected to exceed GDP growth 2011 Estimated System Capacity Growth* 12.0% 7.8% 7.3% 8.0% 4.9% 3.3% Ind. Avg = 2.3% 4.0% 2.0% 0.8% 0.5% 0.0%* J.P. Morgan industry estimates, Feb. 2011. US Airways capacity growth based on company guidance
  36. 36. Seismic Changes in Industry Landscape• New a la carte revenue streams – Baggage fees – Choice seating – In-flight charges
  37. 37. A la Carte Revenue• Recent Initiatives: A La Carte Revenue ($ mil) – GoGo® Inflight WiFi $514 $425 – Choice Seats – Online bag pre-pay – Premium snacks and beverages $165 – Power-Nap Sack• Generated more than 2008 2009 2010 $500M in revenue in 2010 Bag Fees Other A La Carte
  38. 38. Focused Operational Performance Improvements On-time Departure Numbers On-time Arrival Numbers 2007 2008 2009 2010 2007 2008 2009 2010 DeltaFocused on:Northwest US Airways US Airways Delta US Airways United United Northwest US Airways United United Continental Northwest US Airways US Airways •Started boarding early Continental Delta Northwest American United Delta Northwest Continental United American Delta Delta Northwest Continental Continental American •Invested in ticket scanners American United American Continental American United Delta Delta •Closing door early US Airways Continental Continental US Airways American American Mishandled Bags Customer Complaints 2007 •Invested in baggage scanners 2008 2009 2010 2007 2008 2009 2010 Northwest Northwest Northwest US Airways Continental Northwest Continental American •Added block time Continental Continental Continental Continental Northwest Continental American Continental United US Airways US Airways Delta American American Northwest US Airways •Invested in GSE in key cities American United United United Delta Delta US Airways United •Reviewed daily and adjusted Delta American American American United United United Delta US Airways Delta Delta US Airways US Airways DeltaNote: Figures are through December 2010. Source: U.S. Department of Transportation
  39. 39. US Positioning vs. Other Legacy Carriers 2010 Stage Adjusted CASM (excluding fuel and special items) 2010 Stage Adjusted PRASM 13.77¢ 9.58¢ 15% Advantage 13% Disadvantage 8.37¢ 12.20¢ Network US Network USStage Adjusted to US Airways YTD average stage length of 981 miles;Network includes new United, American, Delta; Low Cost includesAirTran, JetBlue, and Southwest
  40. 40. US Airw ays System Facts 2008 2009 2010 4-05Jet Fuel/Gal $3.18 1.76 2.25 3.30Employees 34,000 32,381 31,367Destinations 230 210 201Daily Flights 3,700 3,256 3,200US Purchased 1.4 Billion Gallons of Fuel in 2010A $1 Increase in a Barrel of Oil Costs US $35 million per Year
  41. 41. Charlotte Facts 4Q08 4Q09 4Q10Daily Flights 550 575 624Employees 5,955 6,030 6,637Nonstop Destinations 121 126 133Domestic 104 102 106International 17 24 27 London Paris/Rio Rome FrankfurtExtensive Caribbean NetworkMadrid and Dublin in MaySao Paulo in November
  42. 42. Cities* with Hubs (Population)1. NYC 19.1 11. Phoenix 4.42. Los Angeles 12.8 12. San Francisco 4.53. Chicago 9.6 13. Seattle 3.44. Dallas 6.4 14. Minneapolis 3.35. Philadelphia 6.0 15. Denver 2.66. Houston 5.9 16. Cleveland 2.17. Miami 5.5 17. Cincinnati 2.28. Washington 5.5 18. Charlotte 1.79. Atlanta 5.5 19. Milwaukee 1.610. Detroit 4.4 20. Memphis 1.3 21. Salt Lake City 1.1 *1,000,000 people
  43. 43. W hat Do These Cities Have in Com m on• Baltimore• Pittsburgh• Portland All Larger in• Kansas City Population than• Las Vegas Charlotte• San Jose Former Hubs• Columbus• St. Louis
  44. 44. New Envoy Suite
  45. 45. Announcements/Statements• Introduced electronic boarding passes in Las Vegas, and Charlotte• Adding MAD and DUB in May• Adding Sao Paulo in November• Hiring 500 (recall of furloughed employees) and up to 200 for WS Call Center• Adding F/C to Express Fleet• Ranked #1 in Wichita State/Purdue AQR
  46. 46. The Industry Environment• Looking Ahead – 2011 industry capacity anticipated to be up approximately 2.5% – Industry in early rebound stages with robust business travel and recovering leisure travel – Wall Street very concerned about volatile fuel prices, pace of economic recovery, and high unemployment Wild Card--- Middle East Unrest
  47. 47. Summary• US Airways is well positioned and is outperforming relative to the industry: – Top tier operational performance – Reduced capacity – Aggressive cost management – Industry leading financial performance and margin improvement• US Airways will continue to look for ways to: – Enhance the product and optimize assets – Invest and build upon our safety culture• We Continue to Invest in Charlotte
  48. 48. Stock Price Performance 2010 Relative Return120.0% 106.8% $4.84 to $10.01100.0% 84.5%80.0% 64.0%60.0% 41.6%40.0% 21.3%20.0% 13.6% 12.8% 10.7% 0.8% 0.0%
  49. 49. Questions?

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