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San Luis Obispo Denver Non-Stop Service Opportunities for Business - - PowerPoint PPT Presentation
San Luis Obispo Denver Non-Stop Service Opportunities for Business - - PowerPoint PPT Presentation
San Luis Obispo Denver Non-Stop Service Opportunities for Business Savings and Support Agenda Inefficiencies of Current Air Travel Cost of Drive Diversion to Other Airports Lost Employee Time Potential Service: Denver/United Service
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Inefficiencies of Current Air Travel
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Airport Passengers PDEW Share 1 San Luis Obispo, CA 239,440 328.0 42.8% 2 Los Angeles, CA 142,551 195.3 25.5% 3 San Francisco, CA 63,711 87.3 11.4% 4 Santa Maria, CA 30,056 41.2 5.4% 5 San Jose, CA 28,298 38.8 5.1% 6 Oakland, CA 25,760 35.3 4.6% 7 Burbank, CA 19,897 27.3 3.6% 8 Santa Barbara, CA 8,101 11.1 1.4% 9 Monterey, CA 1,665 2.3 0.3% Total San Luis Obispo Area Passengers 559,479 766.4 100.0%
Originating Airport For San Luis Obispo Area Passengers
True Market with LCC Adjustment
Tw elve Months Ended June 2010 Rank
SBP, 42.8% SMX, 5.4% SBA, 1.4% SFO, 11.4% OAK, 4.6% SJC, 5.1% BUR, 3.6% LAX, 25.5%
SLO Retains Just 43% of its Passengers
Source: Sixel Consulting Group San Luis Obispo True Market Study
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The Average LAX Drive Cost is $211 Roundtrip
Sources: Sixel Consulting Group and Google Maps Average Drive Time
Airport Mileage (O/W) IRS Rate One Way Cost Roundtrip Cost Los Angeles (LAX) 187 $0.565 $105.66 $211.31 San Francisco (SFO) 225 $0.565 $127.13 $254.25 San Jose (SJC) 193 $0.565 $109.05 $218.09 Santa Barbara (SBA) 94 $0.565 $53.11 $106.22 Direct Drive Costs: San Luis Obispo Alternate Airports
Sources: Sixel Consulting Group, Google Maps, Internal Revenue Service
As of September 2013
San Francisco (SFO)
225 Miles 3:25 Drive Time
San Jose (SJC)
193 Miles 2:57 Drive Time
SBP Santa Barbara (SBA)
193 Miles 1:30 Drive Time
Los Angeles (LAX)
187 Miles 3:10 Drive Time
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A Company with 100 Trips Spends $21K
Sources: Sixel Consulting Group and Google Maps Average Drive Time
Los Angeles (LAX)
187 Miles 3:10 Drive Time
SBP
Annual Roundtrips Cost per Roundtrip Annual Cost 10 $211.31 $2,113.10 50 $211.31 $10,565.50 75 $211.31 $15,848.25 100 $211.31 $21,131.00 150 $211.31 $31,696.50 200 $211.31 $42,262.00 250 $211.31 $52,827.50 300 $211.31 $63,393.00 350 $211.31 $73,958.50 400 $211.31 $84,524.00 450 $211.31 $95,089.50 500 $211.31 $105,655.00 1,000 $211.31 $211,310.00 1,500 $211.31 $316,965.00 2,000 $211.31 $422,620.00 2,500 $211.31 $528,275.00 5,000 $211.31 $1,056,550.00 Direct Drive Cost: San Luis Obispo - Los Angeles (LAX)
Sources: Sixel Consulting Group, Google Maps, Internal Revenue Service
As of September 2013
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100 Trips Represents $31K in Personnel Costs
Sources: Sixel Consulting Group and Google Maps Average Drive Time
Los Angeles (LAX)
187 Miles 3:10 Drive Time
Annual Roundtrips Roundtrip Drive Time Hourly Wage Personnel Cost Annual Roundtrips Roundtrip Drive Time Hourly Wage Personnel Cost 10 6.33 $20.00 $1,266.00 500 6.33 $20.00 $63,300.00 6.33 $35.00 $2,215.50 6.33 $35.00 $110,775.00 6.33 $50.00 $3,165.00 6.33 $50.00 $158,250.00 50 6.33 $20.00 $6,330.00 1,000 6.33 $20.00 $126,600.00 6.33 $35.00 $11,077.50 6.33 $35.00 $221,550.00 6.33 $50.00 $15,825.00 6.33 $50.00 $316,500.00 100 6.33 $20.00 $12,660.00 1,500 6.33 $20.00 $189,900.00 6.33 $35.00 $22,155.00 6.33 $35.00 $332,325.00 6.33 $50.00 $31,650.00 6.33 $50.00 $474,750.00 200 6.33 $20.00 $25,320.00 2,000 6.33 $20.00 $253,200.00 6.33 $35.00 $44,310.00 6.33 $35.00 $443,100.00 6.33 $50.00 $63,300.00 6.33 $50.00 $633,000.00 300 6.33 $20.00 $37,980.00 2,500 6.33 $20.00 $316,500.00 6.33 $35.00 $66,465.00 6.33 $35.00 $553,875.00 6.33 $50.00 $94,950.00 6.33 $50.00 $791,250.00 400 6.33 $20.00 $50,640.00 5,000 6.33 $20.00 $633,000.00 6.33 $35.00 $88,620.00 6.33 $35.00 $1,107,750.00 6.33 $50.00 $126,600.00 6.33 $50.00 $1,582,500.00 Personnel Time Cost: San Luis Obispo - Los Angeles International Airport (LAX) As of September 2013
Sources: Sixel Consulting Group, Google Maps
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Sources: Sixel Consulting Group and Google Maps Average Drive Time
San Francisco (SFO)
225 Miles 3:25 Drive Time
SBP
A Company with 100 Trips Spends $25K
Annual Roundtrips Cost per Roundtrip Annual Cost 10 $254.25 $2,542.50 50 $254.25 $12,712.50 75 $254.25 $19,068.75 100 $254.25 $25,425.00 150 $254.25 $38,137.50 200 $254.25 $50,850.00 250 $254.25 $63,562.50 300 $254.25 $76,275.00 350 $254.25 $88,987.50 400 $254.25 $101,700.00 450 $254.25 $114,412.50 500 $254.25 $127,125.00 1,000 $254.25 $254,250.00 1,500 $254.25 $381,375.00 2,000 $254.25 $508,500.00 2,500 $254.25 $635,625.00 5,000 $254.25 $1,271,250.00 Direct Drive Cost: San Luis Obispo - San Francisco (SFO) As of September 2013
Sources: Sixel Consulting Group, Google Maps, Internal Revenue Service
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Sources: Sixel Consulting Group and Google Maps Average Drive Time
San Francisco (SFO)
225 Miles 3:25 Drive Time
Annual Roundtrips Roundtrip Drive Time Hourly Wage Personnel Cost Annual Roundtrips Roundtrip Drive Time Hourly Wage Personnel Cost 10 6.43 $20.00 $1,286.00 500 6.43 $20.00 $64,300.00 6.43 $35.00 $2,250.50 6.43 $35.00 $112,525.00 6.43 $50.00 $3,215.00 6.43 $50.00 $160,750.00 50 6.43 $20.00 $6,430.00 1,000 6.43 $20.00 $128,600.00 6.43 $35.00 $11,252.50 6.43 $35.00 $225,050.00 6.43 $50.00 $16,075.00 6.43 $50.00 $321,500.00 100 6.43 $20.00 $12,860.00 1,500 6.43 $20.00 $192,900.00 6.43 $35.00 $22,505.00 6.43 $35.00 $337,575.00 6.43 $50.00 $32,150.00 6.43 $50.00 $482,250.00 200 6.43 $20.00 $25,720.00 2,000 6.43 $20.00 $257,200.00 6.43 $35.00 $45,010.00 6.43 $35.00 $450,100.00 6.43 $50.00 $64,300.00 6.43 $50.00 $643,000.00 300 6.43 $20.00 $38,580.00 2,500 6.43 $20.00 $321,500.00 6.43 $35.00 $67,515.00 6.43 $35.00 $562,625.00 6.43 $50.00 $96,450.00 6.43 $50.00 $803,750.00 400 6.43 $20.00 $51,440.00 5,000 6.43 $20.00 $643,000.00 6.43 $35.00 $90,020.00 6.43 $35.00 $1,125,250.00 6.43 $50.00 $128,600.00 6.43 $50.00 $1,607,500.00
Sources: Sixel Consulting Group, Google Maps
Personnel Time Cost: San Luis Obispo - San Francisco International (SFO) As of September 2013
100 Trips Represents $32K in Personnel Costs
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Potential Service: Denver/United
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Proposed SBP – Denver Service
One Daily Flight in Each Direction, on “Business Schedule” Operated by SkyWest, Doing Business As (DBA) United Express Canadair CRJ700 (CRJ) Aircraft, Seating 70 Six First Class 16 Economy Plus 48 Economy
Origin Destination Departs Arrives Elapsed Time Aircraft SBP DEN 6:05am 9:35am 2:30 CR7 DEN SBP 9:50pm 11:20pm 2:30 CR7 Proposed Schedule: San Luis Obispo - Denver Operated by SkyWest dba United Express
Sources: Sixel Consulting Group Analysis of United Airlines Denver Hub
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San Luis Obispo – Denver Connectivity
85 One-Stop Cities 25 Non-Duplicated Connections
Sources: Sixel Consulting Group Analysis of United Airlines Denver Hub
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New Service Support
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Mitigating Airline Risk
Due to Drive Diversion, New Routes Forecast Poorly in Airline Models SBP-DEN Forecasts $722,000 Loss in Years One and Two Total Forecast Loss Near $1.5 Million in “Start-Up” Phase Must Overcome Poor Forecast Through Risk Mitigation Additional Funds Required to Reduce Risk and Secure Flights Business Commitment to Use New Service is Paramount Commitment Can Be Leveraged to Save Money Lock in Discounts with Corporate Contracts Opportunity to Reduce Drive Costs Employee Time Lost to Ground Transportation
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Mitigating Losses in “Start-Up” Phase
Targeted Risk Mitigation Amount: $1,500,000 Funding Already Secured: $500,000 Funding Still Needed: $1,000,000 Request for Business Pledges to Take to Carrier Pre-Purchased Tickets Funds in Escrow Account for Use on New Service Draw from Account for Discounted Fares Optimum Formula: Take Direct Cost Savings from Drive to Other Airports and Commit that Funding to the Project
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Examples from Other Communities
Bismarck $250,000 Guarantee None Used Branson $3 Million Guarantee None Used Duluth $300,000 Guarantee Drew $50,000 Idaho Falls $500,000 Guarantee None Used Kalispell $500,000 Guarantee Drew $500,000 Manhattan $2 Million Guarantee None Used Springfield $500,000 Guarantee Drew $500,000 Myrtle Beach $500,000 Guarantee Drew $500,000 Panama City $25 Million Guarantee None Used
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Impact of New Service in Other Communities
Bismarck Passengers Up 23% Branson Passengers Up 52% Duluth Passengers Up 18% Idaho Falls Passengers Up 9% Kalispell Passengers Up 2% Manhattan Passengers Up 165% Springfield Passengers Up 12% Myrtle Beach Passengers Up 19% Panama City Passengers Up 179% Average Passenger Growth: 53%
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United Airlines PassPlus Program
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United Airlines’ Corporate Accounts
Pre-Paid United PassPlus Program Lock-In Discounts Based on Mileage Flown Designees Access Through Mileage Plus Account Can Be Used on Last Minute Fares Benefits Business Travelers the Most Discount Program Fare Type Domestic Discount Int’l Discount First, Business, Full Fare Y 20% 20% 14-Day Advance Coach 5% 20% Deep Discount Coach 2% No Discount Other Benefits Premier Level Memberships and Upgrades Priority Check-In Economy Plus Seating at No Charge
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Example PassPlus Fares from San Luis Obispo
United PassPlus Fares on Select San Luis Obispo Routes
September 2013; Sources: ExpertFlyer; United Airlines; Sixel Consulting Group
Fare Type Current Fare Discount Fare
San Luis Obispo – Denver
21-Day Advance Coach $308 $302 7-Day Advance Coach $350 $333 Walk-Up Coach (Books Into First) $770 $616
San Luis Obispo – Chicago
21-Day Advance Coach $380 $372 7-Day Advance Coach $450 $428 Walk-Up Coach (Books Into First) $1,156 $925
San Luis Obispo – New York/Newark
21-Day Advance Coach $410 $402 7-Day Advance Coach $550 $523 Walk-Up Coach (Books Into First) $1,286 $1,029
San Luis Obispo – Washington/Baltimore
21-Day Advance Coach $410 $402 7-Day Advance Coach $550 $523 Walk-Up Coach (Books Into First) $1,286 $1,029
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