7e Covid 19 Financial Briefing
COVID-19 Financial Overview March 24, 2020 Background The accelerating COVID-19 infection rate and government response is having a significant impact on Port business operations The airport is currently experiencing the most severe impacts; this year's cruise season is also at significant risk Some Maritime/EDD commercial businesses affected Financial impacts to NWSA appear moderate at present 2 Airport activity is dropping precipitously TSA checkpoint activity down 80%+ in recent days 3 Airline Capacity Cuts (as of 3/23/20) Alaska: -10% April; -15% May Delta: -70% network-wide (next few months) United: -60% network-wide (April & May) American: -20% April, -30% May domestic Southwest: -20%, 4/14-6/5 Hawaiian: flights suspended from late March UFN JetBlue: reducing from 7 flights/day to 3 flights/day in April Spirit: reducing from 6 flights/day in April to 2-3 flights per day Int'l service: Europe, Asia & Canada services mostly suspended, Mexico service changes unknown (Int'l capacity reduction of 90%+) 4 Airport COVID-19 Impact Projection (March 20) Monthly Enplanement Change vs. Prior Year 35% reduction vs. 20% 13% 10% 6% 2019. 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -10% -3% -3% -9% -8% -20% -30% -31% -40% -50% -53% -60% -70% -72% -80% -75% -75% -75% 5 9/11 Monthly Enplanement Change vs. Prior Year 40% 26% 20% 11% 1% 0% -20% -11% -9% -7% -6% -6% -7% -5% -7% -5% -16% -14% -40% -26% The COVID-19 crisis is -60% -80% -100% projected to have a S-01 O-01 N-01 D-01 J-02 F-02 M-02 A-02 M-02 J-02 J-02 A-02 S-02 O-02 N-02 significantly greater impact Great Recession 40% on SEA passenger traffic than 20% 1% 3% 0% previous downturns -20% -2% -8% -4% -6% 0% 0% -9% -5% -4% -5% -4% -3% -5% -40% -60% -80% -100% O-08 N-08 D-08 J-09 F-09 M-09 A-09 M-09 J-09 J-09 A-09 S-09 O-09 N-09 D-09 COVID-19 (est. as of 3/20) 40% 20% 0% -20% -9% -3% -3% -8% -40% -31% -60% -53% -80% -75% -75% -75% -72% -100% M-20 A-20 M-20 J-20 J-20 A-20 S-20 O-20 N-20 D-20 J-21 F-21 M-21 A-21 M-21 6 Cruise season at risk Outbreaks of COVID-19 onboard and quarantined ships have raised significant concerns. CLIA has announced voluntary suspensions of cruises from US ports for 30 days. Canada has closed its ports to cruise ship calls until July 1. 7 Financial Considerations COVID-19 will result in significant revenue reductions Impacts are difficult to estimate given substantial uncertainty regarding the depth and duration of the crisis, with new information arriving almost daily Key considerations are operating cash balances, operating & non- operating cash flows, and capital spending Revenue bond debt service coverage is also a key measure Unlike many other governments, the Port is not required to match revenue reductions with equivalent expense reductions Credit markets are currently stressed, limiting access to outside capital 8 Responses/Early Actions Conducting detailed financial analyses to assess impacts on cash flow and liquidity Hiring freeze in place Identifying Port-wide operating and capital expenditure reductions Reviewing other expenditures that may be deferred Pursuing $200 million bank credit facility for additional liquidity Planning for airport bond refunding for debt service savings/possible restructuring when markets recover Advocating for federal funding for economic support and recovery, particularly for airports and small businesses 9
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