Data Sources (Domestic)

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2008 ACI-NA Air Service Data & Planning Seminar

AIRPORTS COUNCIL INTERNATIONAL-NORTH AMERICA 1775 K Street, NW, Suite 500

Washington, DC 20006

2008

ACI-NA Air Service Data& Planning Seminar

The Hot Stuff on Airline Recruiting

ACI

ACI--NA Air Service Data & Planning SeminarNA Air Service Data & Planning Seminar January 24

January 24--25, 2008, in New Orleans25, 2008, in New Orleans

Overview of O&D and T-100

Data Sources (Domestic)

Howard Mann

Director, Policy & Market Analysis

InterVISTAS-ga2 _Consulting

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Overview of Presentation

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Domestic DB1B – What Is It? Domestic DB1B – What Is It?

A DOT database that is a holdover from the heavily regulated, pre-Deregulation era

Measures passenger trips from origin to destination, via one or more intermediate points if applicable

10% Sample

Contains a wide variety of market data y Passengers / Carrier (s) / Routings / Revenues

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Domestic DB1B – Source / History Domestic DB1B – Source / History

Provided to the U.S. government by domestic carriers

DB1B replaced the original DB1A in 1998, adding new information on marketing vs. operating carriers (reflecting the rise of code-sharing)

Combined with the original DB1A, historical data

collected by the DOT (and the CAB before that) goes back to the late 1960s

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Strengths - Domestic DB1B Strengths - Domestic DB1B

Large Sample Size (10% sample)

Wide variety of data

y Passengers / Carrier(s) / Routings / Fares / Yields / etc.

Historical data going back to 1998 (with DB1A historical data starting back in the late 1960s)

Most detailed airline traffic reporting in the world y Good for airports and investors

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Weaknesses - Domestic DB1B Weaknesses - Domestic DB1B

Provided only quarterly, not monthly

y Not finely calibrated for seasonality analyses (i.e., 3rd _{quarter includes 2}

months in peak season plus 1 month in shoulder season)

y Smoothes out month-to-month changes in passengers and fares within a quarter

Time lag of data

y At least 3-4 months old when released by DOT

y Contrasts with forecasts that can go 18-24 months into the future

Potential errors/late reporting/mis-reporting of data by carriers

y It’s rare but it does occasionally happen

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Weaknesses - Domestic DB1B Weaknesses - Domestic DB1B

Can be less accurate in small markets y Due to statistically small sample size

y Generally less than 10 passengers PDEW

y Examples: Rutland, VT / Jackson, TN / Tyler, TX / Inyokern, CA

Think of O&D Data as “Airport Traveled From” Data.

O&D Data Leakage will understate, or overstate, true traffic

demand (i.e., one city’s leakage OUT is another city’s

leakage IN)

y Boston Æ Providence (Southwest effect)

y Providence Æ Boston (JetBlue effect)

y Palm Springs Æ Ontario/LAX

y Colorado Springs Æ Denver

y Salem, OR Æ Portland, OR

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Washington, DC (composite market)

Domestic DB1B – Local Traffic (PDX-WAS) Domestic DB1B – Local Traffic (PDX-WAS)

Portland

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Washington, DC (composite market)

Domestic DB1B – Connecting Traffic (PDX – WAS) Domestic DB1B – Connecting Traffic (PDX – WAS)

Portland

ORD

DFW

MSP

DEN

ATL

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Domestic DB1B – Connecting At Hubs Domestic DB1B – Connecting At Hubs

SEA MSP ORD DFW IAH DTW ATL CVG IAD CLT PHL SFO LAX LAS PHX EWR JFK DEN MIA MEM SLC

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Domestic DB1B – Connecting Traffic (via MSP) Domestic DB1B – Connecting Traffic (via MSP)

Minneapolis/ St. Paul

BOS

SFO

BOI

SEA

PHL

FLL

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Domestic DB1B – Online Connecting Traffic Domestic DB1B – Online Connecting Traffic

Online Single Connection

Minneapolis/ St. Paul

EWR

SFO

BOI

SEA

PHL

FLL

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Domestic DB1B – Online Connecting at Non-Hubs Domestic DB1B – Online Connecting at Non-Hubs

PHX

DCA

DFW

Online Single Connection

Dallas/Fort Worth

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Domestic DB1B – Online Connecting Traffic Domestic DB1B – Online Connecting Traffic

CHS

YUM

PSC

TLH

Online Double Connection

Salt Lake

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Domestic DB1B – Interline Connecting Traffic Domestic DB1B – Interline Connecting Traffic

DTW

PHX

SMF

PDX

JFK

ATL

Denver

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Domestic DB1B – Interline Connecting Traffic Domestic DB1B – Interline Connecting Traffic

ANC

ORD

OME

IAD

Interline Double Connection

This Doesn’t Happen Often!

SEA

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Domestic DB1B – Connecting Traffic Domestic DB1B – Connecting Traffic

Extraordinarily Rare! These usually happen only during very

heavy travel periods, such as major holidays.

Triple Connections? Quadruple Connections?

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O&D Traffic Analysis

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Domestic DB1B – Trend Analysis Domestic DB1B – Trend Analysis

By Market 150 175 200 225 250 275 300 325 350 YE 6/30/05 YE 6/30/06 YE 6/30/07 (PDX - WAS) O & D P a sse n g e rs ( 0 0 0 )

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By Composite Airport 0 20 40 60 80 100 120 140 YE 6/30/05 YE 6/30/06 YE 6/30/07 (PDX - WAS) O& D P asseng ers ( 0 0 0 ) IAD DCA BWI

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By Carrier 0 20 40 60 80 100 120 140 UA WN DL AA NW US HP AS F9 CO

(PDX - WAS Year Ended 6/30/07)

O& D Annual P a ss eng er s ( 000)

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By Carrier -40% -30% -20% -10% 0% 10% 20% 30% WN AS US UA DL NW F9 AA CO

Ye a r-O ve r-Ye a r P A X G ro w th

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By Airport -20% -15% -10% -5% 0% 5% 10%

DCA IAD BWI

Ye a r-O ve r-Ye a r P A X G ro w th

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Domestic DB1B – Market Share Analysis Domestic DB1B – Market Share Analysis

By Carrier 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% UA WN DL AA NW US HP AS F9 CO

Pa ss e n g e r M a rk e t S h a re

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Domestic DB1B – Market Share Analysis Domestic DB1B – Market Share Analysis

By Airport 20% 22% 24% 26% 28% 30% 32% 34% 36% 38%

IAD DCA BWI

Pa ss e n g e r M a rk e t S h a re

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Carrier O&D Mkt Share

F9, 2% Other, 2% NW, 5% UA, 5% AA, 44% WN, 30% DL, 5% CO, 3% US, 4%

St. Louis

Domestic DB1B – Airport O&D Market Share Domestic DB1B – Airport O&D Market Share

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YE 2Q 05 YE 2Q 06

YE 2Q 07

65%

62%

53%

44%

41%

45%

57%

55%

57%

58%

54%

57%

52%

Domestic DB1B – Initiated Trips Analysis Domestic DB1B – Initiated Trips Analysis

Kansas City – Washington DC

Passengers initiated from MCI

Kansas City – Washington DC

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Proposed BTR-SEA Stimulation Rate Is Reasonable Proposed BTR-SEA Stimulation Rate Is Reasonable

63.5% 96.5% 147.3% 100.0% 93.5% 0% 20% 40% 60% 80% 100% 120% 140% 160%

SHV-SEA SAT-SEA LIT-SEA MSY-SEA BTR-SEA

Yea r-O ve r-Yea r St im u la ti o n R a te 2001 2004 2004 2005 Proposed 200X = Year Route Started

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O&D Data can be analyzed to highlight flows over hubs O&D Data can be analyzed to highlight flows over hubs

Helps analyze a new nonstop route to see if self-diversion is going to take place.

Net traffic gain – vs. New nonstop.

Wild cards for self diversion discussion can be those

airports with

restricted market access – LGA, DCA, ORD ABQ ATL BWI CVG DCA DEN DFW EWR HOU IAH MCI MDW MSP ORD STL IAD

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Revenue O&D Analysis

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O&D Revenue Share - by Airport

US, 5% CO, 3% DL, 7% WN, 22% AA, 46% UA, 6% NW, 6% Other, 3% F9, 2%

St. Louis

Domestic DB1B – O&D Revenue Share Domestic DB1B – O&D Revenue Share

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Domestic DB1B – Average Fare Comparison Domestic DB1B – Average Fare Comparison

$100 $110 $120 $130 $140 $150 $160 $170 $180 2004 2005 2006 2007 Av er ag e P asseng er F ar e Network 1 Network 2 LCC

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The Carriers usually are looking for Net System Revenue Gain

Carrier comparing two new cities for a new route to Chicago Carrier wants to

maximize new revenue throughout its system BNA could have higher

local O&D sector

revenue to Chicago but with lower net system revenue contribution, the carrier may prefer to add the RDU route

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Overview of T-100

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T-100 Data Set T-100 Data Set

What types of data are included in the T-100

How to Benchmark with T-100 data

Using T-100 for Trend Analysis

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T-100 Data is reported by the airlines to the United States Department of Transportation

Also known as “Form 41 Traffic”, “Form 41 Schedule T-100”, and “Airline Market and Segment Data”

Requirement for the Airlines to report T-100 data is found in 14 CFR 241

Must be reported by (1) U.S. carriers and (2) foreign carriers for routes involving at least one point in the United States

Collected Monthly

U.S. Major and National Airlines beginning in August 1981 (incorporating legacy T9S and ER586 databases)

Foreign Flag Airlines beginning in July 1990 (T-100f) – subject to a six-month delay

Commuter Airlines beginning in October 2002

Cargo Airlines

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All data collected in the T-100 databank are related to single-plane flights

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T-100 data are collected on four tables T-100 data are collected on four tables

Domestic Segment – traffic and capacity information for single-plane flights regardless of origin and destination of traffic

Domestic Market –“local” traffic on single-plane flights

International Segment – same as Domestic Segment for International flights

International Market – same as Domestic Market for International flights

Remember – T-100 is operating carrier and not marketing carrier

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Operations and capacity are collected monthly by airline, aircraft type and city-pair

Stage Length

Departures scheduled

Departures performed

Available seats departed by class of service

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Traffic data is collected monthly by airline, aircraft type, and market; and include:

Passengers transported by class of service

Freight transported

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With these capacity and traffic data, more statistics can be calculated

Revenue Passenger Miles/Revenue Ton Miles

Available Seat Miles/Available Ton Miles

Load factor

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T-100 data should be used to supplement other data sources during a presentation

An effective presentation should describe sources of demand in an airport’s market, i.e. potential customers for the target airline

T-100 data should be used to show certain demand patterns in the market

“Interesting Facts” should be presented in the context of the over-all demand picture rather than as stand-alone pieces

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Examples of Graphs

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Calculating Traffic Share and Capacity Share Calculating Traffic Share and Capacity Share

UA, 0% NW, 9% CO, 8% WN, 35% AA, 23% DL, 17% F9, 3% US, 4% ONBOARD PASSENGER MARKET SHARE Year-ended September 30, 2007

SEAT CAPACITY SHARE

Year-ended September 30, 2007 UA, 0% CO, 8% WN, 37% AA, 22% DL, 16% F9, 4% US, 5% NW, 9%

Little Rock

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T-100 helps benchmark your airport’s performance with competitors

T-100 helps benchmark your airport’s performance with competitors 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

San Antonio Baton Rouge Little Rock Kansas City Amarillo Oklahoma City

Tulsa Austin Wichita

Airport

LOAD FACTOR VERSUS PEERS

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Load Factors must be checked against changes in capacity to tell an accurate story

Comparison of Available Seats and Average Load Factors 0 5,000 10,000 15,000 20,000 25,000 2004 2005 2006 2007 A v ai lab le S eat s 72% 74% 76% 78% 80% 82% 84% Loa d Fa c tor s Available Seats LFs

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T-100 is not intended to be an O&D Data Source T-100 is not intended to be an O&D Data Source

Only reliable in cases where the nonstop route has no connections beyond either end of the route

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Identify a possible service deficiency by analyzing completion factors

Identify a possible service deficiency by analyzing completion factors 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Hew a Bora AeroSvit Southern Winds Wardair East-West Airlines Jetsgo DanAir London TOA Domestic UTA Airline 100% COMPLETION FACTOR

Mann InterContiNational Airport

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2008 ACI-NA Air Service Data & Planning Seminar 22 22 23 24 25 26 27 29 30 31 32 32 33 34 35 36 10 15 20 25 30 35 40 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year

T-100 data can be used to highlight cargo trends as well. T-100 data can be used to highlight cargo trends as well.

ONBOARD CARGO (Tons) Mann InterContiNational Airport

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2008 ACI-NA Air Service Data & Planning Seminar 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 Janu ary Febr uary Marc h April May June Ju ly Augu st Septe mber Octo ber Nove mbe r Decem ber Month

T-100 also portrays if a market is seasonal or not T-100 also portrays if a market is seasonal or not

TOTAL PASSENGERS

Mann InterContiNational Airport

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Short-comings of T-100 Data Short-comings of T-100 Data

Only provides traffic and capacity for single-plane flights, does not provide origin and destination of traffic

Does not include revenue information

International data lags six months from when date occurred (Domestic lags three months)

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Conclusions Conclusions

Great for understanding capacity and traffic trends at your airport.

Key to comparing your airport against others.

Supplements other DOT sources for a comprehensive analysis

Well respected, accepted by Airlines

Captures most activity for passenger and cargo airlines for flights involving a U.S. airport

Can be employed in a variety of analyses to advance arguments

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Case Studies

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Network Route 1: No Nonstop Service (Short Haul) Network Route 1: No Nonstop Service (Short Haul)

Market Dynamics

Data

O&D Traffic to Hub Increasing O&D

Loads on Current Services are High T-100

Traffic & Revenue show growth for

new beyond markets O&D LCC presence in competing market O&D, T-100

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Network Route 2: No Nonstop Service (Long Haul) Network Route 2: No Nonstop Service (Long Haul)

Market Dynamics

Data

O&D Traffic to Increasing O&D

Loads to connecting hubs vary T-100

1-Stop service by competing LCCs

shows no change in fares, traffic O&D International market connections

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Network Route 3: New Frequencies Sought Network Route 3: New Frequencies Sought

Market Dynamics

Data

O&D Traffic Increase O&D

New Hub connections show market

growth O&D

Composite market has increased

Network and LCC Presence O&D Loads remain high on current

services, however competing service shows lower loads “spillage”

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Market Dynamics

Data

O&D Traffic High O&D

Average Fare constant O&D

LCC already in market on a one stop

basis O&D

Network carrier has high frequency and has a large share of O&D market,

loads constant

O&D, T-100 LCC Route 1: No Nonstop Traffic (Short Haul) LCC Route 1: No Nonstop Traffic (Short Haul)

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Market Dynamics

Change

No nonstop service in market, carriers in connect market all show

O&D and revenue growing

O&D

Load Factors on other long-haul

services by same carrier high T-100 Revenue situation on Network

carriers in 1-stop market show modest growth

O&D LCC Route 2: No Nonstop Traffic (Long Haul) LCC Route 2: No Nonstop Traffic (Long Haul)

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LCC Route 3: New Focus City Access LCC Route 3: New Focus City Access

Market Dynamics

Change

Target Focus City has good market

growth O&D

Load Factors on other new services

remain high T-100

Competing Network carrier service @

Focus City shows Higher Fares O&D Competing Network carrier service

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Wildcards Wildcards

Fleet Availability

Corporate Reorganization

Relationship with Regional Carriers

Alliance Flows

Gate Availability @ Hubs (and spokes!)

Incentives

Airport Costs

Competitive Reactions in your market or a totally different market

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Conclusions Conclusions

What O&D/T-100 items should your ASD team look at to supplement your proposal?

y Look at all aspects of key O&D Traffic trends in your market … and trends in competing markets

y Analyze T-100 loads in similar size markets and competing markets

y Identify revenue trends in your market and competing markets

y Understand revenue impact in similar markets where carrier has already started new service

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Thank you! Thank you!