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Appendix A. Market Analysis for Long Beach Airport

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Appendix A. Market Analysis for Long Beach Airport Feasibility Study for a Federal Inspection Service Facility at Long Beach Airport Appendix A. Market Analysis for Long Beach Airport PLEASE NOTE: The information, analysis, assessments and opinions contained in this document are intended for general evaluation purposes only. This document is intended for use only by its specified client and is NOT intended for use, reliance or in making financial/investment decisions by outside parties. W9Y17400-1 THIS PAGE INTENTIONALLY LEFT BLANK La Costa Consulting Group Market Analysis For Long Beach Airport Federal Inspection Service Facility Feasibility Study Prepared by LaCosta Consulting Group 9/26/2016 LaCosta Consulting Group - Long Beach Feasibility FIS - Confidential Table of Contents Executive Summary ................................................................................................................................. 1 Benchmarks Studies ................................................................................................................................. 2 Past and Current Flight Activities .......................................................................................................... 2 Air Carrier Activity at Long Beach Airport.............................................................................................. 4 Comparison - Similar Size US Airports ................................................................................................... 5 California Airports .................................................................................................................................. 6 Airline Interviews ................................................................................................................................... 8 General Aviation Community Interviews .............................................................................................. 8 Airline Industry Practices and Trends .................................................................................................... 9 Current Aircraft Types and Capabilities Analysis ................................................................................. 12 Port of Entry / User Fee Designation Evaluation ................................................................................. 13 Port of Entry / User Fee Designation Recommendation................................................................ 14 Probability of Receiving Designation Assessment ......................................................................... 14 Outline of Optimal Process ............................................................................................................ 14 Traffic Analysis ....................................................................................................................................... 16 Projection of Future Flight Activities ................................................................................................... 17 Potential Destinations ......................................................................................................................... 17 Probable Destinations ......................................................................................................................... 19 Forecast - Market Demand at LGB ...................................................................................................... 20 Operations and Traffic Statistics .................................................................................................... 20 Potential International Destinations Analysis ..................................................................................... 21 LGB Flight Activity Evaluation .............................................................................................................. 21 Simulated JetBlue Station Activity Report Including International Flights .................................... 22 Simulated International and Domestic Activity with All Carriers .................................................. 23 Aircraft Analysis Potential Changes ..................................................................................................... 24 General Aviation ............................................................................................................................ 24 Current General Aviation Activity – International Flights Impact Assessment .............................. 24 Potential General Aviation Activity Evaluation .............................................................................. 24 List of Airports Where CBP Inspection Services are Normally Available in California ......................... 25 Approach and Methodology ................................................................................................................ 26 Forecast Departure Assumptions –Spool Up and Steady State .......................................................... 26 Forecast methods used in this report are consistent with those approved by the Federal Aviation Administration Office of Aviation Policy and Plans Statistics and Forecast Branch. © 2016, LCG Inc. All rights reserved. This is intended to be used as the deliverable to Jacobs for support of Long Beach Airports RFQ AP-15- 203. This Report is Confidential and Proprietary information of LCG, Inc. prepared for Jacobs. LCG. Inc., the LCG. Inc. logo design and names of LCG, Inc. products are trademarks and/or service marks of an affiliate of LCG, Inc. All other trademarks, service marks, and trade names are owned by their respective companies. Executive Summary The analysis contained herein is provided in response to Section 3.1 Market Analysis of City of Long Beach (City) Request for Qualifications (RFQ) Number AP15-203, Feasibility Study for a Federal Inspection Service (FIS) Facility (Study) at Long Beach Airport (LGB). The Market Analysis is organized in two sections, Benchmark Studies and Traffic Analysis. The Benchmark Studies section focuses on the following: Flight activities at Long Beach Airport, similar size US airports, and California airports Long Beach airlines and General Aviation (GA) community interviews Current aircraft types and capabilities analysis US Customs and Border Protection designation analysis Airline industry practices and trends analysis LGB is owned and operated by the City of Long Beach with four US passenger airlines providing nonstop flights to thirteen destinations (with seasonal service to Anchorage), including hubs/focus cities for American Airlines, Delta Air Lines, JetBlue Airways (JetBlue) and Southwest Airlines. This analysis investigates potential international service to/from LGB using market forecast and airline network analysis. The airline carriers and the fleet types currently deployed at LGB are capable of serving domestic and international markets within a range of approximately 3,200 miles. Interviews with airline carriers identify a desire to increase service to current markets with JetBlue indicating a desire to initiate international service to profitable destinations to complement their existing network. The findings in the Benchmark Studies section identify potential passenger demand for domestic and international growth in Southern California and nationally. The Traffic Analysis section focuses on the following: Market sizes and forecast statistics for LGB Future international flight activity projection (commercial and GA) Potential and probable international markets Airline carrier network analysis 2015 US DOT data reported that the Southern California aviation market grew at a rate of 6%, versus 4.7% nationally. Over the past ten months (fiscal year to date April 2016) the international segment at Los Angeles International Airport (LAX) has grown 11% versus the 6.5% domestic traffic (LAX traffic comparison report TCOM). The US and Mexico modernized the bilateral air services agreement, effective January 1, 2016. Historically, modernizing bilateral air services agreements have generated growth, new services, and benefits to both countries. LGB is a slot controlled airport with airlines using 74% of the available slots in 2015 and based on a recent review of its noise budget, the airport issued nine supplemental slots for 2016. The underutilized slots offer air capacity for potential domestic and international operations. This analysis assumed a maximum of 50 air carrier slots (the most recent year’s budget), equal to the 41 minimum daily air carrier flights provided by Long Beach Municipal Code Chapter (LBMCC) 16.43 plus nine supplemental slots. This analysis identifies potential international markets for air carriers at LGB. 1 Prepared By LaCosta Consulting Group Inc. Benchmarks Studies Past and Current Flight Activities This section documents past and current flight activities at Long Beach Airport, other Southern California airports and select airports in the US that are comparable to LGB. LGB operates under LBMCC16.43 which requires the Airport to operate under a budgeted noise level each year producing a specific number of slots that can be operated. For 2016 the budget allows for an average of 50 slots per day, and that is the slot availability assumed in this analysis. Noise budgets are reviewed each year to ensure compliance with specific levels. This analysis is based on the assumption that the nine slot increase for 2016 will be included in the long term noise budget and the addition of another carrier (Southwest Airlines) that has been awarded slots. Long Beach Airport flight
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