Thomas McKenna Assistant Director of Aviation - Marketing

1. Thomas McKenna Assistant Director of Aviation - Marketing

2. FAA Economic Forecast • 2.0 percent increase in domestic enplanements for 2003 • 3.5 percent increase in domestic enplanements in long run (2004-2014) • Traffic returns to Pre-911 totals by 2006 • Low fare carriers increase market share == falling fares • 5.0 percent increase in air cargo for 2003 and beyond

3. Industry Overview - Airlines • Bankruptcy – Chapter 7 or 11 • Vanguard • US Airways • United • “Who’s Next??” • American • Delta • Midwest • Northwest • Capacity Cuts • Layoffs/Unions • Reduction of flights/destinations • Regional Jets/Low-cost carriers • Alliances/Partnerships/Merges

4. 91 Regional Jet Airlines 1/3 of U.S. commercial airline fleet Fastest growing segment in commercial aviation 1 out 8 domestic airline passengers flies on a regional airline 82.8 million passengers boarded in 2001; double 1991 totals Regional Jets Source: Regional Airline Association; April 2002

5. Industry Overview - Airports • AIR-3 Reauthorization • Establish a new federal – airport partnership • Protect capacity investments • Increase airport financial flexibility • PFC streamlining • Essential Air Service • Small Airports – affordable access to Air Service • Security Mandates • Expand federal reimbursement

6. Economic Impact of KCI • $3.2 billion to the Kansas City Economy • 67,400 total employment • $1.5 million in total payroll expenses • Headquarter Relocation Program • Geographic Location • Life Style • Air Service

7. Nonstop Destinations 55 Daily Nonstop Departures 212 Daily Nonstop Seats 23,811 Source: Official Airline Guide, schedules for the week of March 10 – 16, 2003, February 2003, Max edition and announced new service.

8. IOWA NEBRASKA KANSAS MISSOURI OKLAHOMA ARKANSAS IOWA NEBRASKA Dubuque Waterloo Sioux City Cedar Rapids Des Moines Davenport Iowa City Omaha Lincoln KCI KANSAS Columbia St. Louis Wichita Springfield Joplin MISSOURI Enid Tulsa Fayetteville Ft. Smith Oklahoma City Memphis Little Rock Lawton Pine Bluff OKLAHOMA DMA Populations = 2,780.0 Income (EBI in billions) = $49.9 Approximate Population of San Diego Texarkana ARKANSAS DMA’s of Kansas City, St. Joseph and Topeka DMA = Designated Market Area. Source: Sales & Marketing Management, Survey of Buying Power, September 2002

9. KANSAS CITY IS NOT DOMINATED BY A HUB CARRIER Year Ended March 2002, Enplanements Note: Includes only U.S. carriers reporting T-100 data. Source: U.S. DOT, T-100 data, via Data Base Products.

10. PROFILE OF THE KANSAS CITY DOMESTIC MARKET(Year Ended March 2002) 8,885,500 13.0¢ 930 miles Domestic O&D passengers Average yield Average passenger haul Sources: U.S. DOT Origination-Destination Passenger Survey, year ended March 2002, via Data Base Products,

11. Load factor has improved by 6 points to 64% over the last ten years Seats/Passengers Seats Passengers Year Ended Source: U.S. DOT, T-100 Data, via Data Base Products.

12. Canada/Greenland Over 430,000 international passengers in YE June 2001 Nearly 60,000 KCI Over 150,000 Europe Nearly 50,000 Asia Nearly 80,000 Over 60,000 Caribbean/ Central America/ South America Mexico Source: U.S. DOT Origination-Destination Passenger Survey via Data Base Products, YE June 2001.

13. KCI PROJECTS • Terminal Improvement Project • Consolidated Rental Car Facility • Economy Lot

14. TERMINAL IMPROVEMENT PROJECT • KCI’s $258 million Terminal Improvement Project will: • Better distribute passenger traffic among the three terminals • Widen walkways in all terminals • Improve information displays for flights and baggage • The short curb-to-gate distance of 75 feet will not change

15. KCI’s $258 million Terminal Improvement Project will: • Provide unique baggage claims areas for all airlines • Add many PC outlets and establish a new business center • 50% more concession space • Expected completion: 2004

16. Economy Lot • KCI’s $62 million Economy Lot will provide: • Dedicated terminal lots & shuttles • Real time parking& airport information (Kiosks) • 15,000 new low cost parking spaces • Additional security cameras for patrons’ safety • Faster travel time from new lots to terminal New Employee Lot C B • Expected completion: 2003 A

17. Consolidated Rental Car Facility • Benefits to the airport user: • Customer convenience • Closer to the terminals • Flight information display • Additional on-airport rental choices • Expected cost: $86 million • Expected completion: 2005

18. Air Cargo

19. Air Cargo means business at KCI ! • All Cargo Carriers (20 flights per day) • Airborne, BAX Global, DHL Worldwide, Emery Worldwide, FedEx, Kitty Hawk, UPS, and United States Post Office • Largest cargo airport in six-states • (NE,IA,MO,KS,OK,AR) • Air cargo buildings on airport - 6 • 89% of all air freight is processed by the eight all-cargo carriers

20. FTZ Attributes at KCI • Zone No. 15 - Site 3 • One of Largest FTZ airports in the US • Benefits including: Deferral payment of duties until goods are entered in the commerce of the United States • Works with Greater Kansas City Foreign Trade Zone, Inc to attract companies that need airport location and FTZ benefits.

21. Types / Modes of Distribution • Pipeline • Water • Rail • Truck • Air

22. Pipeline Water Rail Truck Air 0.02 per ton mile 0.02 per ton mile 0.03 per ton mile 0.40 per ton mile 0.90 per ton mile Cost of Modes

23. What percentage of World Commerce goes by Air? • About 2% of World Trade by Volume • About 40% of World Trade by Value • About 2.5 trillion dollars of goods are uplifted by aircraft each year

24. What types of commodities move by Air?

25. Limits of Air Cargo • History • Belly Cargo • Weight • Size • 747 today = 100 tons (total Aircraft load) (118 inches high, 96 inches wide, 240 inches long)

26. Intermodal Air Cargo • Air - Truck • Sea - Air • Air - Rail

27. Air Cargo Information Flow Freight Fowarder Custom Hose Broker Air Carrier Banks Customs Service Dept. of Agriculture Shipper Consignee ACS (Automated Customs System)

28. Not Just Jets Remote location (Helicopter) Airships (lighter than Air) Rockets (Satelitte Delivery)

29. DISCUSSION