COLUMBUS CHARLOTTE AIR SERVICE RECRUITMENT PLAN THIS IS A CENTERED - - PowerPoint PPT Presentation

THIS IS A CENTERED DATELINE

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COLUMBUS – CHARLOTTE

AIR SERVICE RECRUITMENT PLAN

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AGENDA

WHY AN INCENTIVE IS NECESSARY AIRLINE MERGERS PILOT SHORTAGE AIRPORTS USED BY COLUMBUS PASSENGERS FAA RESTRICTIONS ON AIRPORT INCENTIVES THE COLUMBUS – CHARLOTTE MARKET HOW SERVICE BENEFITS COLUMBUS OUR HEAD START GOAL AND TIMELINE REVENUE GUARANTEE DETAIL SUCCESS STORIES NEXT STEPS

WHY AN INCENTIVE IS NECESSARY

FIRST SECTION

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18 MAJORS HAVE BECOME FOUR

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2000 Today 1978 1990

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51 LCCs HAVE BECOME SEVEN

Today 2006 2010 2002 1998 1978 1984 1990 1994

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AIRLINES FACE A PILOT SHORTAGE

CUMULATIVE NUMBER OF US MAINLINE AIRLINE PILOTS REACHING RETIREMENT AGE

PROJECTED FOR CALENDAR YEAR 2016 – CALENDAR YEAR 2022 SOURCE: REGIONAL AIRLINE ASSOCIATION (RAA)

1,449 3,064 4,797 6,808 9,014 11,575 14,171

2,000 4,000 6,000 8,000 10,000 12,000 14,000

2016 2017 2018 2019 2020 2021 2022

REGIONALS CURRENTLY EMPLOY 17,000 PILOTS FEWER THAN 1,000 PILOTS ARE CERTIFIED PER YEAR

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AIRLINES RETIRED 11% OF FLEET

US AIRLINE TOTAL FLEET SIZE

CALENDAR YEAR 2000 – CALENDAR YEAR 2015 SOURCE: AIRLINES 4 AMERICA

5,900 6,000 6,100 6,200 6,300 6,400 6,500 6,600 6,700 6,800 6,900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

6,050 6,762 6,763

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AIRPORTS HAVE LOST CAPACITY

CHANGE IN SCHEDULED DEPARTING AIRLINE SEATS

CALENDAR YEAR 2005 – CALENDAR YEAR 2015 SOURCE: OAG DATA

CSG IS A NON-HUB

• 2.3%
• 24.7%
• 2.8%
• 14.3%
• 6.9%
• 30.0%
• 25.0%
• 20.0%
• 15.0%
• 10.0%
• 5.0%

0.0%

Large Hub Medium Hub Small Hub Non-Hub EAS

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ONLY 9% OF LOCALS USE CSG

CSG: 9% ATL: 90% MGM: 0.3% BHM: 0.5%

COLUMBUS GENERATES 3,300 PASSENGERS PER DAY JUST 300 USE CSG ALMOST 3,000 PER DAY DRIVE TO ATLANTA

SOURCE: COLUMBUS AIRPORT TRUE MARKET STUDY

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CSG FORECASTS POORLY

DUE TO ATL “LEAKAGE,” CSG-CLT FORECASTS POORLY MUST OVERCOME POOR FORECAST BY MITIGATING RISK NEW ROUTES ARE A MAJOR INVESTMENT CHARLOTTE SERVICE COSTS $7,000 ROUNDTRIP TWICE-DAILY SERVICE IS A $5 MILLION ANNUAL INVESTMENT LARGE MARKETS WITH MORE TRAFFIC SEEM LESS RISKY CONSUMER BEHAVIOR IS DIFFICULT TO CHANGE FREQUENT FLIER LOYALTY CORPORATE CONTRACTS AIRPORT PREFERENCE LOCAL FINANCIAL SUPPORT IS PARAMOUNT IN RECRUITMENT

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AIRPORT INCENTIVES ARE LIMITED

SOURCE: FAA AIR CARRIER INCENTIVE HANDBOOK

“[THE] FAA ALLOWS PROMOTIONAL INCENTIVES TO AIR CARRIERS FOR NEW SERVICE TO INCREASE TRAVEL USING THE AIRPORT AND/OR PROMOTE COMPETITION…”

THE COLUMBUS – CHARLOTTE MARKET

SECOND SECTION

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AA/CLT CONNECTS TO 107 CITIES

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AA/CLT CONNECTS TO 107 CITIES

ONE HOUR FLIGHT ACCESSES 2,220 DAILY CSG-AREA PASSENGERS WOULD PROVIDE COMPETITION IN ALL MARKETS WOULD HELP TO LOWER CSG FARES

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WE HAVE A HEAD START

COLUMBUS AIRPORT WON A FEDERAL AIR SERVICE GRANT $750,000 FOR NEW CHARLOTTE SERVICE ROUGHLY HALF OF THE TARGETED TOTAL

GOAL AND TIMELINE

THIRD SECTION

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TARGET: $1.7 MILLION IN FUNDING

NEW SERVICE, BY THE NUMBERS UP TO $3,500 IN AIRLINE COST, EACH WAY UP TO $7,000 AIRLINE COST, ROUNDTRIP UP TO $5 MILLION ANNUAL AIRLINE INVESTMENT

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TARGET: $1.7 MILLION IN FUNDING

NEW SERVICE, BY THE NUMBERS UP TO $3,500 IN AIRLINE COST, EACH WAY UP TO $7,000 AIRLINE COST, ROUNDTRIP UP TO $5 MILLION ANNUAL AIRLINE INVESTMENT COLUMBUS AIRPORT INVESTMENT $200,000 IN WAIVERS AND MARKETING CASH $750,000 IN GRANT FUNDING $950,000 CURRENT AIRLINE INCENTIVES

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TARGET: $1.7 MILLION IN FUNDING

NEW SERVICE, BY THE NUMBERS UP TO $3,500 IN AIRLINE COST, EACH WAY UP TO $7,000 AIRLINE COST, ROUNDTRIP UP TO $5 MILLION ANNUAL AIRLINE INVESTMENT COLUMBUS AIRPORT INVESTMENT $200,000 IN WAIVERS AND MARKETING CASH $750,000 IN GRANT FUNDING $950,000 CURRENT AIRLINE INCENTIVES WHAT IT WILL LIKELY TAKE CURRENT INCENTIVE MITIGATES JUST 19% OF RISK AIRLINES WANT RISK MITIGATION OF 35%+ TOTAL PACKAGE $1.7 MILLION+

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MINIMUM REVENUE GUARANTEE

ACCOUNTING FOR PARTICIPANTS’ FUNDING INDIVIDUAL LETTERS OF CREDIT, OR; PARTITIONED LOCAL BANK ACCOUNT QUARTERLY INVOICING AIRLINE WILL REPORT REVENUE AGAINST TARGET IF REVENUE IS BELOW TARGET FUNDING DRAWN BY PERCENTAGE FROM EACH ACCOUNT IF REVENUE IS ABOVE TARGET NO PAYMENT IS OWED GRANT FUNDING USED FIRST NO LOCAL FUNDING TOUCHED UNTIL GRANT EXHAUSTED END OF PROGRAM: TWO YEAR PERIOD

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STRUCTURE OF EFFORT

$1.5 MILLION

OUR GOAL IN REVENUE GUARANTEES

Determine Your Company’s Interest Make Pledge Pledges Aggregated Airport Negotiates With Interested Airlines Service Agreement Reached Revenue Guarantee Contract Signed Service Begins Airline Completes Quarterly Revenue Reports No Payment Guarantors Invoiced Only if Grant Funding is Exhausted Grant Funding Invoiced To a Total of $750,000 Project Complete Flights Self-Sustaining

Today Ultimate Goal

Pledges Converted to Cash On Account or Letters of Credit Remaining Funds Returned to Guarantors Revenue Above Target Revenue Below Target

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EXAMPLE: ROCHESTER, MN

ROCHESTER, MINNESOTA – ATLANTA COMMUNITY COALITION $950,000 IN VARIOUS FUNDING DAILY SERVICE ON DELTA USED LESS THAN $200,000

Rochester Atlanta

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EXAMPLE: NORTH BEND, OR

NORTH BEND, OREGON – DENVER RESORT AND BUSINESS COALITION $1.2 MILLION MRG TWICE-WEEKLY SERVICE ON UNITED GOING INTO THIRD SEASON

North Bend Denver

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EXAMPLE: TUCSON, AZ

TUCSON – NEW YORK KENNEDY CHAMBER MEMBERSHIP $2.9 MILLION ON ACCOUNT DAILY SERVICE ON AMERICAN BEGAN OCTOBER 7TH

Tucson New York Kennedy

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POTENTIAL TIMELINE

DEVELOP PLEDGES FEBRUARY 2017 FINAL DEADLINE TAKE PLEDGES TO CARRIERS FEBRUARY – APRIL 2017 CONVERT PLEDGES TO CASH ON AIRLINE’S REQUEST SEPTEMBER 2017 SIGN CONTRACT WITH CARRIER/ANNOUNCE SERVICE SEPTEMBER – DECEMBER 2017 SERVICE LAUNCH LATE 2017 INTO 2018

THIS IS A CENTERED DATELINE

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CONTACT INFORMATION

RICHARD HOWELL AIRPORT DIRECTOR COLUMBUS AIRPORT 3250 WEST BRITT DAVID ROAD COLUMBUS, GEORGIA 31909 RHOWELL@FLYCOLUMBUSGA.COM 706.324.2449, EXT. 1410