Southern California International Airport Exploratory Study 2.1 Prepared By: CSUSM FEMBA Cohort Class 2014 Entry Southern California International Airport Exploratory Study 2.1 Table of Contents 1. Executive Summary ............................................................................................................. 1 2. Funding Benchmarking ........................................................................................................ 4 2.1. Introduction .......................................................................................................................... 4 2.2. New Airports and Large Infrastructure Improvement .......................................................... 5 2.3. Capital Funding .................................................................................................................. 12 2.4. Operating Revenues ........................................................................................................... 17 2.5. Operational Viability .......................................................................................................... 21 2.6. Discussion .......................................................................................................................... 25 3. Airline Hub ......................................................................................................................... 29 3.1. Introduction ........................................................................................................................ 29 3.2. What is an Airline Hub? ..................................................................................................... 30 3.3. Attracting a Hub Airline and the Role It Plays .................................................................. 36 3.4. How Travel Trends Necessitate a Hub Airline at SCIA .................................................... 41 3.5. Benefits and Challenges of a Hub Airline at SCIA ............................................................ 47 3.6. Discussion .......................................................................................................................... 49 4. Economic Impact ................................................................................................................ 52 4.1. Introduction ........................................................................................................................ 52 4.2. Benchmarking .................................................................................................................... 53 4.3. Impact on Retail ................................................................................................................. 57 4.4. Hospitality .......................................................................................................................... 60 4.5. Potential Industries Attracted ............................................................................................. 68 4.6. Impact on Real Estate ......................................................................................................... 73 4.7. Discussion .......................................................................................................................... 83 5. Conclusion .......................................................................................................................... 86 6. References .......................................................................................................................... 88 7. Appendix A: SCIA Affordability Statistical Data .............................................................. 99 7.1. Data Set .............................................................................................................................. 99 7.2. Summary Statistics ........................................................................................................... 100 7.3. Correlation Matrix ............................................................................................................ 100 7.4. Regression Results ........................................................................................................... 101 7.5. Line Fit Plots .................................................................................................................... 101 8. Appendix B: Hub Cities and Flight Maps for United Airlines, American Airlines and Delta Airlines .............................................................................................................................. 103 8.1. United Airlines U.S. Flight Map ...................................................................................... 103 8.2. United Airlines International Flight Map ......................................................................... 104 8.3. American Airline Hubs and Cities Map ........................................................................... 104 8.4. American Airlines International Flight Map .................................................................... 105 8.5. Delta Airlines U.S. Hubs and Cities Map ........................................................................ 105 Page i Southern California International Airport Exploratory Study 2.1 8.6. Delta Airlines Asia Hubs and Cities Map ........................................................................ 106 8.7. Delta Airlines Flight Map LAX to Asia ........................................................................... 106 8.8. Delta Airlines Flight Map U.S. to Asia ............................................................................ 107 9. Appendix C: Cohort 2014 - California State University San Marcos .............................. 108 9.1. Funding Benchmarking Team .......................................................................................... 108 9.2. Airport Hub Team ............................................................................................................ 108 9.3. Economic Impact Team .................................................................................................... 108 Page ii Southern California International Airport Exploratory Study 2.1 Table of Figures Figure 1: Number of new airport projects by region (investment, USD), July-2015 ..................... 5 Figure 2: All airport project investment by all types, activity by region in USD as of Jun-2015 .. 6 Figure 3: Architectural Rendering of Mexico City International Airport ....................................... 7 Figure 4: Abu Dhabi International Airport Midfield Terminal Complex ..................................... 12 Figure 5: Cost per Enplaned Passenger ........................................................................................ 14 Figure 6: SLC Funding by Type ................................................................................................... 15 Figure 7: Comparison of Revenues per Enplanement .................................................................. 23 Figure 8: Percent of Total U.S. Enplanements ............................................................................. 31 Figure 9: Top 50 Mega Hubs, Share by Region ........................................................................... 32 Figure 10: Sketch of Hub-and-Spoke Network ............................................................................ 33 Figure 11: Map of Hub Cities ....................................................................................................... 36 Figure 12: Direct Departure International Flights ........................................................................ 44 Figure 13: Total International Direct Flights to Regions .............................................................. 44 Figure 14: Percentage of International Direct Flights to Asia and Europe by Region ................. 45 Figure 15: International Direct Flights from West Coast Airports ............................................... 45 Figure 16: Average Individual International Passenger Personal and Business Trip Spending ... 56 Figure 17: International Traveler Anticipated Spending by Industry ........................................... 57 Figure 18: Number of ADS Countries and International Departures from China ........................ 58 Figure 19: Dining Near the SCIA Region..................................................................................... 62 Figure 20: Lodging Near SCIA Region ........................................................................................ 62 Figure 21: Top 10 Most Popular Activities of Los Angeles’ International Visitors .................... 63 Figure 22: Forecast Passenger Volume......................................................................................... 65 Figure 23: Forecast Occupancy – LAX ........................................................................................ 65 Figure 24: San Diego Visitor Forecast (millions) ......................................................................... 66 Figure 25: San Diego Visitor Forecast (year over year % growth) .............................................. 66 Figure 26: San Diego Hotel Sector Forecasts (year over year percentage growth) ...................... 67 Figure 27: Los Angeles County and San Bernardino County Have Been Growing Their Share of Apparel Wholesaling Jobs ............................................................................................................ 69 Figure 28: L.A. County Average Weekly Waged: Apparel Wholesaling