Location : Arizona League of Cities and Towns – Tucson, AZ Date: August 31, 2011

1. The Future of Aviation in Arizona Stacy Howard – Aircraft Owners and Pilots Asoociation Casey Denny, CM, CAE – AzAA Immediate Past President Jennifer Maples, AAE – AzAA President (2011-2012) Location: Arizona League of Cities and Towns – Tucson, AZ Date: August 31, 2011

2. Today’s Agenda • “Aviation System” and Funding Basics • The FAA Shutdown – What is happening in Congress? • Future of Aviation in Arizona

3. Membership: 160 Executive 125 Associate 85 Corporate Formed in 1979 AzAA’s Mission Provide information, expertise and support Assist in development of air transportation in Arizona Network with pilots, operators, and aviation businesses Arizona Airports Association

4. How many airports are in AZ? • A. Less than 20 • B. 35 • C. 83 • D. Over 200

5. Arizona’s Airports • Over 200 airports • 83 “system” airports • Commercial (11) • General Aviation (48) • Private (24) • Military (5) • 55 eligible for state funding Source: 2008 ADOT System Plan

6. Commercial Aviation Activity • Air Cargo – Small Package (light weight, time critical) • Aerospace, Automotive, • Computer, Banking • Perishable • Pharmaceutical, Medical • Passenger Service • Scheduled Airlines • Charters • Air Tours

7. General Aviation Activity

8. 29 Civil Air PatrolSquadrons Arizona Highway Patrol Air Ambulance Service Volunteer Flights for Life Fire Suppression & Rehabilitation Aerial pipeline & power line patrol Flight Training Business Aviation Personal Transportation General Aviation Activity

9. Business or residential “Airpark” Distribution & warehousing Manufacturing Non-Aeronautical Activity

10. Arizona’s Aviation Activity • 43,000,000+ passengers • 680,000+ tons of cargo • 4th in total number of registered pilots • 11th in total number of aircraft • 5 of the Top 20 busiest GA airports • Deer Valley, Falcon Field, Prescott, Goodyear, Scottsdale • 5 of the 8 largest Flight Schools Source: AOPA, FAA

11. Aviation Activity = Economic Activity • $38.5 Billion annual economic impact to Arizona • $1.8 Billion in annual tax revenue • Direct and indirect employment of 470,000 jobs • $14.7 Billion in payroll (10% of the total AZ employment) • Core “system” of infrastructure is user funded! • Federal - Airport and Airway Trust Fund • State Aviation Fund Source: 2008 ADOT System Plan

12. National Airport & Airway Trust Fund

13. National Airport & Airway Trust Fund 165 500 19

14. Airport Improvement Program (AIP) Grant program for airport capital projects No General Fund revenue used in AIP 5-year planning cycle May fund up to 95% of eligible costs National Airport & Airway Trust Fund

15. AZ AIP Funding in 2010 How much AIP funding did Arizona airports receive in 2010? • A. Less than $25 Million • B. $75 Million • C. $100 Million • D. Over $150 Million

16. AZ AIP Funding in 2010 How much AIP funding did Arizona airports receive in 2010? • A. Less than $25 Million • B. $75 Million • C. $100 Million • D. Over $150 Million

17. Airport Improvement Program (AIP)

18. AIP – More than Pavement

19. AIP - More than Pavement

20. User fees and taxes Flight property tax, aviation fuel tax, registration fees May fund up to 90% of eligible costs May fund 2.5% match to federal grants (federal/state/local) Pavement Maintenance Statewide System Planning Considered one of the best state aviation systems State Aviation Fund

21. Over 200 airports; 83 system airports; 55 eligible for capital funding High level of aviation activity in Arizona Aviation Activity = Economic Activity = $38.5 Billion Capital Programs Support by User Fees Federal AIP State Aviation Fund System & Funding Basics

22. Current Issues

23. FAA Shutdown

24. Congress failed to “reauthorize” spending authority of the FAA How long has it been since Congress approved a multi-year FAA authorization? Over 3 months? Over 6 months? Over 2 years? Over 4 years? FAA Shutdown What Happened?!

25. Long term reauthorization stopped in 2007 20 “short term” continuing resolutions since that time, with last expiring July 22, 2011 July 23: FAA Authorization Stops Completely! 4,000 FAA staff furloughed (ATC not affected) 250 projects: 28,000 to 40,000 jobs on hold Why? FAA Shutdown What Happened?!

26. 28 AZ projects worth $58 million immediately in jeopardy Reimbursement of existing projects halted 109 projects worth $250 million Airspace reviews stopped Change order approval stopped Grant coordination stopped $200-$300 million in system revenue GONE PROBLEM IS NOT SOLVED! FAA Shutdown – Az Impacts

27. Look – a cool airplane!

28. State Airports System Plan (SASP) The SASP identifies the actions needed to ensure that Arizona has a system of airports to meet its needs. When considering all identified needs to meet the 20-year performance goals: $2.45 billion State Aviation Needs

29. State Aviation Needs

30. State Aviation Needs

31. Az System Needs 2,450,000,000 FAA – AIP (75,000,000 x 20=) 1,500,000,000 State Aviation Fund (18,000,000 x 20=) 360,000,000 Shortfall <590,000,000> Do the math…

32. Diversion of Aviation Funds What percentage of State Aviation Funds were diverted between 2000-2009? • A. Less than 10% • B. 22% • C. 43% • D. Over 50%

33. State Aviation Funding Equals 43% of TOTAL Revenue

34. Airport Capital Funding is being disrupted Federal Level: No long term AIP funding authorization for over four years. State Level: Legislative Sweep of State Aviation Funds Airport Capital Fund Issues

35. The Result? Your communities & airports are losing: Revenue Jobs Related economic impact Airport Capital Fund Sources

36. Future of Aviation in Arizona

37. Forecast Growth • Arizona will continue to have the perfect climate for aerospace • Weather, Workforce, Industry, Tourism • All the needed elements for aviation growth

38. Forecast Growth

39. Implementation of Next Gen Overhaul of the National Airspace System Conversion from ground based to satellite based Aircraft will be able to fly more precisely, closer together, more directly PHX already implementing more efficient flight procedures Technology

40. Technology

41. Unmanned Aerial Systems Arizona has potential to be a center of UAS development Currently lagging in this race Technology

42. Arizona State University Aviation “Collaboratory” Industry, University, and Government coming together to address aviation system issues Arizona Commerce Authority Aerospace & Defense is one of 3 key target areas Economic Development

43. Funding? • Will legislature leave the State Aviation Fund alone? • Will federal government pass long term reauthorization? • Decades of success – uncertain future.

44. Include the State Aviation Fund on your government affairs watch list – protect it! Lobby your congressional delegation to pass long term FAA reauthorization bills If successful, do it again in 2-3 years! Include airport development in your communities economic development efforts Contact us if you need a hand! How You Can Help…

45. Third week in January Aviation interests host a luncheon for State legislators Aviation displays on the Capitol Mall Over 400 people attended in 2011 Arizona Aviation Day

46. Open Discussion stacy.howard@aopa.org cdenny@phxmesagateway.org jennifer.maples@phoenix.gov @AzAirports www.azairports.org

47. Airplane Mishaps