Forecasting Methodology Presentation
COVID-19 activity scenarios methodology and latest update October 8, 2020 Financial Planning Activity Scenarios: Post COVID-19 approach Inputs (data) Assumptions Activity scenarios Published advance airline Time to return to 2019 (pre- Multiple scenarios ("high, schedules (seats) COVID-19) levels baseline, low") Travel restrictions limiting Shape, length, and extent Passengers (domestic/int'l) domestic and international of a recovery Aircraft operations (also activity Passenger load factors informs landed weight) Airline service (percent of occupied seats) Benchmark to industry announcements (additions, trends recovery scenarios reductions, aircraft mix) Average aircraft size Consultations with airline (average seats per and travel industry operation) representatives Post-recovery annual growth trends (master plan) September updates to 2020 & 2021 scenarios DATA Actual performance through August Flight schedules (Sep. OAG + Q4 est. based on airline announcements) Load factors (assumed gradual increase for remainder of 2020 informed by YTD history) Fleet mix (used OAG and airline-reported trends to inform 2020) SHAPE/PACE OF RECOVERY Growth trajectory for Sep Dec is flat/slow growth, representing the latest guidance from airlines and other industry sources. For 2021, growth loaded into second half of year, to better reflect impact to travel demand of early- to mid-2021 vaccine distribution. SEA seat capacity steady Aug thru Oct Daily seats WHO pandemic declaration Capacity No significant capacity changes increase July to August Capacity low point Rapid (mid-Apr. late May) schedule drawdown Frequent, incremental increases in Summer schedule Source: Official Airline Guide (Diio) SEA daily screened volume largely flat since July TSA screened volume is a proxy for SEA originating passenger demand; does not include connecting passengers. Screened volume Little change in this period Source: Transportation Security Administration (TSA) Load factor declined with increased Aug. seat capacity Load factor is percentage of seats occupied. Load factor 90% 80% 70% 60% 50% 50% Alaska Airlines 47% All SEA airlines 40% 38% Delta Air Lines 30% 20% 10% 0% Jan Feb Mar Apr May Jun Jul Aug Source: calculated by BI from airline-reported and OAG schedule data. Passenger recovery assumptions shifting 2021 recovery focused in Q1 & Q2 Assumed steady May % diff. vs. recovery through scenario Year 2019 2020 update 2020 -61% 2021 -30% 2021 recovery focused in Q3 & Q4 Recovery stronger in Q2,weaker in September % diff. vs. Q3 & Q4 scenario Year 2019 update 2020 -59% 2021 -29% 2020 SEA monthly passengers vs.2019 Actual Forecast % change vs. 2019 Year-end 2020 vs. 2019 All passengers -59% International only -77% 8 Risks Fall 2020 pandemic surge? Will leisure travel demand make up for lack of business travel? Capacity cuts as CARES funds expire Oct. 1. Lifting of travel restrictions to int'l destinations. Vaccine distribution timing in 2021? Appendix 10 Slower recovery for airports with high int'l passenger share SEA passenger recovery progressing more rapidly than U.S. peer airports (in the 40-60 million annual passenger range) with a higher international passenger share. Passengers 2019 Airport 2019 total Aug 2020 2019 Int'l rank 1 Name Code (millions) vs. 2019 2 share 6 Kennedy Int'l JFK 62.6 -86% 55% 15 Miami Int'l MIA 44.8 -78% 49% 14 Newark Liberty Int'l EWR 45.9 -75% 31% 7 San Francisco Int'l SFO 57.5 -86% 27% 16 Houston Intercontinental IAH 44.8 -71% 25% 17 Boston Logan Int'l BOS 42.5 -83% 20% 10 Orlando Int'l MCO 50.6 -69% 14% 8 Seattle-Tacoma Int'l SEA 51.8 -74% 11% 13 Phoenix Sky Harbor PHX 46.3 -60% 8% 9 Las Vegas McCarran LAS 51.5 -63% 7% 12 Charlotte-Douglas Int'l CLT 50.0 -68% 7% Notes: 1) Passenger activity rank among all North American airports. 2) Transportation Security Administration (TSA) checkpoint throughput data used as a proxy for airport passenger activity. Sources: airport websites (passenger data); TSA (checkpoint volume). 11 Projected Industry ScenariosDuration of the Recovery Recovery to 2019 passenger traffic levels are projected in 2023 or 2024 Recovery to 2019 passenger traffic levels are projected in 2023 or 2024 12 COVID-19 Pandemic Recovery Scenarios
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