ITEM NO.  7a_Supp_1 
DATE OF 
MEETING  6/14/2011 
International Air Service Growth 
Seattle-Tacoma International Airport 



For Port of Seattle 
Commission Briefing 
June 14, 2011

Focus Issues 
Industry trend and new competitive landscape:
Why alliances, JV, mergers are needed, and
what it means to Seattle. 
Seattle's International Passenger Growth: 
34% growth since 2006 for Europe and Asia.
2010 success has led to nearly 20% capacity
growth in Summer 2011 vs. Summer 2010. 
Challenges and Opportunities Ahead 

2

Global Commercial Airline Profitability Is
Characterized by Boom-and-Bust Cycle 

Global Commercial Airline Profitability 
8                                          20
EBIT Margin (Left) 
6                          Net Gains/Losses (Right)   15
Revenues (Percent)    4                                              10
2                                          5
US$B 
0                                          0
-2                                                  -5
-4                                                  -10
-6                                                  -15
-8                                                  -20
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10F'11F
Source: IATA January 2011 Forecast, MIT International Center for Air Transportation                                3

Airline industry is highly fragmented 
if compared to other industries 
Source: Boston Consulting Group 2010 
MIT International Center for Air Transportation 
Top 10 = 85%      Top 10 = 76%      Top 10 = 63%      Top 10 = 36% 
100%
Delta 7% 
Toyota 13%       Maersk 17%      American 4% 
United 4% 
80%   Nokia 39%      GM 11%               Air FranceKLM 
MSC 11%      EmiratesLufthansa 
British Airways 
Continental
Ford 10%       CMA CGM 8%       Southwest 
US Airways 
Global Share   60%                               Hapag-Lloyd 
Samsung 16%                  Evergreen 
Volkswagen             APL 
Renault              NYK Line 
Hyundai              Hanjin 
Honda              Etc. 
40%    LG 8% 
Fiat 
Suzuki 
Sony Ericsson             Etc. 
RIM 
Sharp 
Motorola 
20%     Apple 
Etc. 
15%          24%          37%          64% 
0%
Mobile Handsets     Automotive    Container Shipping      Airline
4 
Top 3       Top 4-10       All Others

Airline Industry is Highly Fragmented 
but Alligned by Alliances 

The Airline Industry is Highly Fragmented        Alliances Reduce Fragmented Competition 
DL 
Others 
UA/CO 
Others 
AF/KL 
AA 
LH 
BA 
QF 
US 
CZ 
SQ  CX 
Source: Airline Business 2010/11 Airline ranking by traffic measured in RPK                                        5 
MIT International Center for Air Transportation

Seattle: Delta's Pacific Gateway 
Delta needs to fill the void in the
Western US but does not have
many new aircraft on order. 
Partnership with Alaska Airlines
allows Delta to substitute organic
growth of their own.
Asia is the growth market, for
which Seattle is well-positioned
to provide less circuitous routing. 
Delta operates four international
routes out of Seattle successfully
(Amsterdam, Beijing, Osaka and
Tokyo) and has increased its
local presence. 
6

Air Service Development
Airlines' goals 
Immediate  not potential  profitability 
Minimum risk 
Air service development work is highly data-
intensive. 
Any proposal must be compelled by solid
profitability analysis backed by historical traffic
data, and not by general economic development
discussion.

Direct Revenue to the Port and
Regional Economic Benefit 
One international route generates an average of
$1.5 million annually in landing fees and terminal
revenues to the Port, plus PFC (Passenger
Facilities Charge) revenues. 
International passengers typically contribute
higher amounts in parking, concession and other
related passenger revenues. 
International routes bring additional traffic in
domestic routes via new connections. 
Overarching benefit to the regional
economic growth 
8

Seattle's Nonstop International Services 

Reykjavik 
London 
Heathrow    Frankfurt 
Amsterdam 
Seoul             Seattle                       Paris 
Tokyo 
Beijing 
Osaka 
Taipei                                              2007
2008 
New nonstop services 
In 2007  2010 
Scheduled for summer 2011            2009 
Existing services through 2006           2010  Osaka and Beijing 

2011

Growth Trend Continues in 2011 
Nearly 20% increase in available seats for the
3rd Quarter 2011 vs. same period 2010 
Europe 
+23% seats in summer 2011, compared to Summer 2010 
= almost 2,000 more seats per week one way 
= 43 flights per week, up from 36 flights
Asia 
+16% increase in seats vs. Summer 2010
= +2,000 more seats per week one way
= 51 flights per week, up from 45 flights 
Europe and Asia Combined 
Total 13 additional flights per week, 19% more seats, or
4,000 more seats per week during Jul-Sept
Based on 3rd Quarter 2011 scheduled seats vs. 3rd Quarter 2010 
10

Seattle - Europe Onboard Passengers 
2010: Traffic Up 27% from 2006
2011: Up 14% as of April YTD vs. 2010 same period
Annual Scheduled Service Passengers by Carrier 
900,000                                                810,912                714,837 
800,000                                                           733.985   (-2.7% vs 2009) 
136,968
700,000                                     619,945                  63,327
22,234         69,182
563,163 
600,000               539,523                             98,852
518,482                                           128,875
145,969                                  140,920
500,000                                                 108,151
164,831        157,706
164,842                                   67,188                     110,760        122,283
400,000
168,351      161,417      217,900
300,000                182,688                                        187,905
167,811                                                              213,451
200,000
100,000    185,829      192,004      237,106      245,371      249,041      220,884      169,001
0
2004        2005        2006        2007        2008        2009        2010
British Airways      Delta     Air France      Lufthansa     Icelandair     Scandinavian

Source: Port of Seattle data, as reported by carriers. Delta passengers combine pre-merger Northwest Airlines
passengers. Icelandair started Seattle service in July 2009 and SAS discontinued in July 2009.  Northwest (premerger
Delta) operated Seattle-London Heathrow for six months starting in June 2008. 
11

Seattle - Asia Onboard Passengers 
2010: Record year with 29% additional traffic vs. 2009 
2011: Up 14% as of April YTD vs. 2010 same period
Annual Scheduled Service Passengers by Carrier 
882,835 
900,000
64,668
800,000
717,797 
678,603                 683,666        133,690
700,000                                                     26,890
626,388 
583,620       567,479                   71,013        64,517        46,615
600,000                             69,078                                           128,994
102,783         119,616         121,523
37,390          62,676
500,000                             78,725
80,150                                                                                110,161
77,565                        87,526          95,075          102,052
400,000      81,192                    84,681
79,734
85,956          93,827          86,683          101,928         138,455
300,000                  43,246
143,597
138,798       136,857       138,281       126,771       127,925
200,000
306,867
100,000     221,291       165,460       171,091       185,173       198,245       183,623
0
2004        2005        2006        2007        2008        2009        2010
Delta     United     Korean     Asiana     EVA     China Airlines     Hainan
Source: Port of Seattle data and US-DOT Database T100 for EVA and China Airlines in 2003 - 2008. Passengers on EVA
and China Airlines are adjusted to exclude Newark and Houston domestic through-passengers for the period. Delta
passengers combine pre-merger Northwest Airlines passengers. China Airlines started Taipei service in June 2004 and
discontinued in September 2008; Korean Airlines started Seoul in June 2005; Hainan Airlines started Beijing in June 2008;
Delta added Beijing and Osaka services in June 2010. 
12

Profitable International Operation
Requires Connecting Traffic Feed 
Delta Seattle-Tokyo Route Sample 
Need connecting support on both ends of the line 

Alaska 
Canada and
Pacific NW 
Cities 
Seattle 
Las Vegas 
Tokyo                       Phoenix 
California 
Shanghai      Japanese cities 
(Nagoya, Okinawa) 
Hong Kong 
Manila, Singapore

Delta Air Lines Seattle-Tokyo NRT Flight 
On-board Passenger Composition 
195,000 Estimated On-Board Passengers in CY2010 

Top Beyond-Tokyo Cities                   Top Behind-Seattle Cities 
Manila                                           Las Vegas 
Nagoya                                          Anchorage 
Seoul                                            Vancouver 
Hong Kong                                       Salt Lake City 
Singapore                                        Fairbanks 
Taipei                                           Spokane 
Osaka                                           San Diego 
Shanghai                                         Minneapolis 
Busan                                           Phoenix 
Guam                                           Calgary 

Sources: MIDT unadjusted booking data CY2010, non-directional. 
On-board passengers - Port of Seattle Carrier Reports CY2010.           14

Delta Air Lines Seattle-Amsterdam Flight 
On-board Passenger Composition 
213,000 Estimated On-Board Passengers in CY2010 
Top Beyond-Amsterdam Cities                Top Behind-Seattle Cities 
Delhi                                              Anchorage 
Kiev                                              Vancouver, BC 
Nairobi                                            Spokane 
Moscow                                           Portland 
Bucharest                                         San Francisco 
Paris                                             San Diego 
Teheran 
Victoria 
Dublin 
Mumbai                                           Pasco 
London                                            Eugene 
Sacramento 

Sources: MIDT unadjusted booking data CY2010, non-directional. 
On-board passengers - Port of Seattle Carrier Reports CY2010.           15

2011  2020 Potential 
Fragmentation of the route network is not
effective. Reinforcing strong route system
with existing carriers or alliance partners
leads to more sustainable growth. 
Looking ahead for: 
Hong Kong nonstop 
Shanghai nonstop 
Additional reinforcement to large hub markets such as
Tokyo, Seoul and London 
Emerging markets of Middle East (which provides
effective connections to India) and Southeast Asia
16

Challenges 
Airlines are cautious of further development in
the environment where competition tends to
create over-capacity. 
Fuel takes up the highest portion of airlines'
cost and its price hike is eroding profitability. 
Peak time scheduling will likely to remain due to
our geographical location and optimized
connectivity on both ends.

17 

17

Strategies Going Forward 
Focused efforts need to be made on key markets
and key carriers, based on alliance synergy and
hub alignment.
Maximize the benefit of the Commission-
approved New Air Service Incentive Program.
Provide effective and customer-friendly facilities
to be the premiere West Coast Gateway of
travelers' choice. 


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