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Lehigh Northampton Airport Authority

Lehigh Northampton Airport Authority. Managing LVIA Through Uncertain Times George F. Doughty, Executive Director March 18, 2005. Governance. Lehigh-Northampton Airport Authority Pennsylvania Municipal Authorities Act Nineteen Members Appointed by Lehigh and Northampton Counties

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Lehigh Northampton Airport Authority

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  1. Lehigh Northampton Airport Authority Managing LVIA Through Uncertain Times George F. Doughty, Executive Director March 18, 2005

  2. Governance • Lehigh-Northampton Airport Authority • Pennsylvania Municipal Authorities Act • Nineteen Members Appointed by Lehigh and Northampton Counties • All Municipal Powers – Except Power to Tax

  3. Sources of Revenue – 2005 Budget Total - $21,078,269

  4. Expenses – 2005 Budget Total - $15,859,187

  5. LVIA Market - 2.5 million people (40 mile radius)

  6. Our Chronic Issue – Most of our passengers use other airports Real potential of LVIA Market is not known, but probably is at least 5 million passengers • Frequency • Nonstops • Price

  7. Why have major airlines not exploited the potential of LVIA? • Yield – not volume • Premium price for convenience • Hub concentration – PHL, EWR • “If you don’t want to pay us $1,000 at ABE – then we will take $500 from you at PHL.”

  8. Historical Successes • Major Carriers AC, CO, DL, NW, UA, US Scheduled Charter Southeast Airlines Initiated Service - August 2002 Carried 516,048 passengers through 11-30-04 (PIE, SFB, FLL, LAS) Service reliable and well received Saved LVIA passengers over $10 Million Brought $2 Million Income to LNAA Proved LVIA to FL market

  9. Historical Successes • Southeast terminated on 11-30-04 • 30% of market replaced with: TransMeridian Airlines (started on 2-10-05) Lehigh Valley Air (start on 3-24-05)

  10. More Bad News Possible • UA, US in Chapter 11 • DL Weak • Continued flat growth by majors • Loss of short haul business traveler

  11. Strategies • Cost Containment • Staff Reductions • Defer Capital Projects/Expenses • Focus on Mission Critical Items • Debt Refinancing/Restructuring • Moving Functions In-House • Fixed Base Operator (FBO) - LVAS • Ground Handling Services • Aircraft Fueling

  12. Strategies - continued • Revenue Management • Vehicle Parking Lot Rate Adjustments • Hangar Rental Rate Adjustments • Airline Fee Adjustments • Verification of Full Cost Recovery

  13. Future Options • New Service • Expand LVAir • Real Estate Development

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