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Aviation Activity Forecast AVIATION ACTIVITY FORECAST August 2008 Jacobs Consultancy Team TABLE OF CONTENTS PAGE EXECUTIVE SUMMARY ...............................................................................................ES‐1 ES.1 The Price of Air Travel ...................................................................................ES‐2 ES.2 The Ability to Pay for Air Travel..................................................................ES‐3 ES.3 Enplanements Forecast ..................................................................................ES‐5 ES.4 Air Cargo Tonnage Forecast..........................................................................ES‐6 ES.5 Aircraft Operations Forecast .........................................................................ES‐8 1 FORECAST APPROACH ................................................................................................. 1‐1 2 ECONOMIC BASE THAT GENERATES AIR TRAVEL DEMAND....................... 2‐1 2.1 SDIA Catchment Area...................................................................................... 2‐2 2.2 San Diego County Socio‐Economic Trends................................................... 2‐3 2.2.1 Population.................................................................................................... 2‐4 2.2.2 Income Trends ............................................................................................. 2‐7 2.2.3 Employment .............................................................................................. 2‐10 2.3 Tourism/Cruise Industry ............................................................................... 2‐11 2.3.1 San Diego County Tourism Trends........................................................ 2‐11 2.3.2 Visitor Profile............................................................................................. 2‐12 2.3.3 Attractions and Lodging.......................................................................... 2‐13 2.3.4 San Diego Cruise Industry....................................................................... 2‐14 2.4 United States and Global Economy.............................................................. 2‐15 2.4.1 U.S. Economy............................................................................................. 2‐16 2.4.2 U.S. Regional Socio‐Economic Factors................................................... 2‐19 2.4.3 World Economy ........................................................................................ 2‐21 2.5 Military Bases .................................................................................................. 2‐22 3 HISTORICAL AVIATION ACTIVITY ......................................................................... 3‐1 3.1 Market Overview .............................................................................................. 3‐2 32 Historical Aviation Activity ............................................................................ 3‐5 3.2.1 Passenger Traffic ......................................................................................... 3‐5 3.2.2 Air Cargo Traffic ......................................................................................... 3‐6 3.2.3 Aircraft Operations..................................................................................... 3‐7 AVIATION FORECASTS PAGE TOC-i TABLE OF CONTENTS (continued) PAGE 3.3 Domestic Passenger Air Service and O&D Traffic....................................... 3‐9 3.4 International Passenger Air Service ............................................................. 3‐14 3.5 Near‐Term Air Service Changes at SDIA .................................................... 3‐18 3.5.1 Carrier Near‐Term Plans.......................................................................... 3‐18 3.5.2 2008 SDIA Traffic Estimate...................................................................... 3‐21 4 FACTORS THAT AFFECT THE COST OF AIR TRAVEL ........................................ 4‐1 4.1 Price of Fuel ....................................................................................................... 4‐2 4.2 Domestic Capacity ............................................................................................ 4‐9 4.3 Airline Economics........................................................................................... 4‐11 4.3.1 Airline Profitability................................................................................... 4‐11 4.3.2 Airline Bankruptcies................................................................................. 4‐14 4.3.3 Airline Mergers/Alliances........................................................................ 4‐16 4.4 Aircraft Economics.......................................................................................... 4‐17 4.4.1 Current Domestic Airline Fleet............................................................... 4‐17 4.4.2 Aircraft Operating Costs.......................................................................... 4‐19 4.4.3 Airline Fleet Initiatives............................................................................. 4‐23 4.4.4 SDIA Fleet Base ......................................................................................... 4‐24 4.5 Cost of Carbon................................................................................................. 4‐26 5 ENPLANEMENTS FORECAST ...................................................................................... 5‐1 5.1 Domestic O&D Enplanements Forecast ........................................................ 5‐2 5.1.1 Approach...................................................................................................... 5‐2 5.1.2 Key Assuptions ........................................................................................... 5‐4 5.1.3 Aggregate Forecast Scenarios.................................................................. 5‐10 5.1.4 Regional Baseline Forecast....................................................................... 5‐11 5.1.5 Forecast Scenario Compilation................................................................ 5‐18 5.2 International O&D Enplanements................................................................ 5‐20 5.2.1 Approach.................................................................................................... 5‐20 5.2.2 SDIA Enplaned Passengers Bound for International Destinations through U.S. Gateways .................................................. 5‐21 AVIATION FORECASTS PAGE TOC-ii TABLE OF CONTENTS (continued) PAGE 5.2.3 International O&D Enplanements Forecast .......................................... 5‐26 5.2.4 Forecast Summary and Comparison...................................................... 5‐32 5.3 Connecting Passengers................................................................................... 5‐33 5.3.1 Historical Trends....................................................................................... 5‐33 5.3.2 Connecting Enplanements Forecast ....................................................... 5‐36 5.4 Forecast Summary and Market Share.......................................................... 5‐38 5.4.1 Forecast Summary .................................................................................... 5‐38 5.4.2 Market Share.............................................................................................. 5‐42 6 AIR CARGO TONNAGE FORECAST.......................................................................... 6‐1 6.1 Air Cargo Industry Historical Trends and Future Forecasts...................... 6‐2 6.2 Historical Cargo Volumes at SDIA................................................................. 6‐5 6.3 Air Cargo Volume Forecast ............................................................................. 6‐7 6.3.1 Baseline Forecast ......................................................................................... 6‐7 6.3.2 High Scenario Forecast............................................................................... 6‐9 6.3.3 Low Scenario Forecast.............................................................................. 6‐10 6.3.4 Air Cargo Tonnage Forecast Summary ................................................. 6‐11 7 AIRCRAFT OPERATIONS FORECAST....................................................................... 7‐1 7.1 Commerical Passenger Operations ................................................................ 7‐1 7.1.1 Gauge and Load Factor Assumptions ..................................................... 7‐2 7.1.2 Commerical Passenger Operations Forecast........................................... 7‐7 7.1.3 Commerical Passenger Fleet Mix.............................................................. 7‐9 7.2 Air Cargo Operations ..................................................................................... 7‐12 7.2.1 Forecast Assumptions .............................................................................. 7‐13 7.2.2 Air Cargo Fleet Mix .................................................................................. 7‐13 7.3 Non‐Commerical Operations........................................................................ 7‐15 7.3.1 Civil Operations ........................................................................................ 7‐15 7.3.2 Military Operations .................................................................................. 7‐23 7.4 Aircraft Operations Summary....................................................................... 7‐24 AVIATION
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