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State of Aviation Industry

State of Aviation Industry. Slide 1 of 575. Presented by: Bill Cooksey Presented To: NWS Aviation Conference August 26, 2009 . Journey In Today’s World: Bumpy. National Scene: Mergers, Oil Prices, Bankruptcies, contributing factors … What’s It Meant For Shreveport?

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State of Aviation Industry

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  1. State of Aviation Industry Slide 1 of 575 Presented by: Bill Cooksey Presented To: NWS Aviation Conference August 26, 2009

  2. Journey In Today’s World: Bumpy • National Scene: Mergers, Oil Prices, Bankruptcies, contributing factors … • What’s It Meant For Shreveport? • What’s It Mean for Louisiana? • Why I’m Bullish on Aviation in Louisiana Slide 2 of 23

  3. What’s Driving This Meltdown? • Oil at $148 a barrel in Summer 2008 • Oil back above $70 • Economic Meltdown • Business Travel budgets cut • Leisure Traveler: Skip vacation • Anti Aviation Mentality

  4. For the first time in the industry’s history, the cost of jet fuel exceeds the cost of labor. Fuel OperatingCost ex-Fuel/Labor Fuel Operating Cost ex-Fuel/Labor Labor Labor 2002 1Q 2008 5

  5. In 2008, jet fuel cost the aviation industry an incremental $20 billion over the prior year. Equivalent of 267,000 Airline Jobs2 or 286 New Narrow-body Jets3 6

  6. AirlinesThat Have Gone Under Since 2007 • Aloha (Liquidated) • ATA (Liquidated) • Champion Air (Liquidated) • Skybus (Liquidated) • Frontier (Chapter 11) • EOS (Liquidated) • Midwest Express (Liquidated) • Northwest (now merged with Delta)

  7. Meet New Face of Airline Planning

  8. Air Cargo Struggling As Well • Shipping down due to economic pressures • DHL shuts down US operations: lays off 95,000 • FedEx, UPS revenue air cargo flat • US Postal pulling out of airports

  9. And What About General Aviation? • The new scapegoat for corporate travel • Industry reeling with economy • Multiple manufacturers’ failures: Adams, Eclipse, Saphire • Unfriendly views in DC toward GA

  10. Corporate Jets: The new evil empire "There's a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand," Rep. Gary Ackerman (D-Queens) told the CEOs of Ford, General Motors and Chrysler at a House hearing. "It's like seeing a guy show up at the soup kitchen in high hat and tuxedo. Kind of makes you a little bit suspicious," he said.

  11. The Fall-Out on General Aviation …

  12. Bottom Line: Airports & Aviation Reeling • Airport Traffic Down Double digits: SHV is -10% • Less traffic = Less Revenue • Most Airports Self Funded • Budgets: Time to cut • Forecast: Negative to 2011

  13. In Shreveport … • Traffic down 10 percent • Flight Schedule: 27/day • Parking, rental car, PFC revenues down • Expenses Up • Stress Levels Up • But it could be worse …

  14. The Good News: DTN at No. 1 • Shreveport Downtown largest GA airport in state: Aircraft based at field • New hangars • A&P school growing

  15. So What About Louisiana? • State economy so far has weathered storm better than many states • Job Growth: + in 2008 • Airlines adding service: New Orleans, Shreveport, Lake Charles, Monroe • Relationships strengthening

  16. Louisiana’s Aviation Climate • Louisiana Airport Managers & Associates’ (LAMA) efforts • LAMA’s renewed Efforts between airports, Louisiana, DOTD and FAA • La. Economic Development • Louisiana Municipal Association • Good reputation for doing business

  17. Remember the good things … In Shreveport: • New air cargo facilities online: Summer 2008 • Allegiant Air increases schedule • Louisiana Honor Air

  18. About Allegiant Air • Operates scheduled service on limited basis • Uses MD-80 aircraft – 140 seats • Arrives/Departs: Wednesday, Saturday • Typically provides packages to customers - $500 range for air fare, hotel • Fares starting at $49 each way!!!!! • Guess what: They’re Profitable!

  19. Film Industry In La. • Eight Productions Filmed at Shreveport Regional, DTN • Requests for Direct Flights to LAX • Looking at all options

  20. What about more airline service? • We’re Working on it: DAILY! • Retention is key issue • New service has to be grand slam • Watch out for airlines that never start up

  21. Remember Santa May Be Coming To Town... But Southwest Isn’t.

  22. And Other Low Cost Guys? Tough Sell • AirTran • Frontier • JetBlue • Spirit

  23. Questions?Thank You Shreveport Regional Airport “Your Hometown Hub” www.flyshreveport.com

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