3b supp
Item No.: 3b Meeting Date: July 29, 2014 2015 2019 Aviation Division Business Plan July 29, 2014 1 Industry / Business Context Airline industry is profitable U.S. airline industry profitable each year, 2010- 2013 Consolidation, reduced capacity, higher load factors, strengthening economy Alaska and Delta have highest operating profit margins Alaska and Delta -- growing competition at Sea-Tac Alaska:> 50% of passengers at Sea-Tac for 2012 and 2013 Delta: 10 daily intercontinental flights, increasing domestic service; 95 departures by year-end 2014, up from 43 in 2013 2 Industry / Business Context Implications for Sea-Tac Likely will see above average growth in operations and passengers in near term (~5 years) Increase in connecting passengers Pressure on terminal facilities Is growth sustainable? Intercontinental seats per GDP at Sea-Tac far less than peers (YVR, SFO, LAX) Air service consultants' and staff's assessment is that both airlines can be successful at Sea-Tac 3 Summary of Airport Strategies Operate a world-class international airport by: Ensuring safe and secure operations Anticipating and meeting the needs of tenants, passengers and the region's economy Managing Airport assets to minimize long-term total cost of ownership. Become one of the top customer service airports in North America. Lead the U.S. airport industry in environmental innovation and minimize the airport's environmental impacts. 4 Summary of Airport Strategies Keep airline costs as low as possible without compromising operational and capital needs. Maximize non-aeronautical net operating income consistent with current contracts, appropriate use of Airport properties and market demand. Continually invest in a culture of employee development, organizational improvement and business agility. Maintain valued community partnerships based on mutual understanding and socially responsible practices. 5 Major and New Initiatives Reconstruct Runway 16C/34C in 2015 Complete Sustainable Airport Master Plan in 2015 Make staffing and process changes for successful capital program Put in place emergency-back-up power facility Lease off-airport properties for air cargo and/or aeronautical purposes Design and construct International Arrivals Facility Complete NorthSTAR project Create Master Record As-built Drawing System Update South Satellite concourse interior 6 Major and New Initiatives Articulate new long-term environmental goals within the Sustainable Sea-Tac Strategy Plan (S3) Implement Airport Dining and Retail Master Plan Implement improvements to the parking revenue control system Complete RFP for taxi and limousine contracts. Grow Continuous Process Improvement at Sea-Tac and Port Implement new programs under the updated Part 150 noise mitigation plan. Renegotiate the Port of Seattle / City of SeaTac Interlocal Agreement Increase value of Airport contracts with small businesses 7
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