1

FAA Aviation ForecastsFiscal Years 2005-2016

Presented at the 30th Annual FAA Aviation Forecast Conference By Robert L. BowlesManager, Statistics and Forecasts, FAAMarch 17, 2005

2

: : Domestic Passengers Up 6.7% in 2004

627.2

587.9574.5

641.2

626.8

540

560

580

600

620

640

660

2000 2001 2002 2003 2004

Enp

lane

men

ts (M

illio

ns)

2000 Passenger Level

Down 2.2 % from 2000

3

: : International Passengers Up 11.7% in 2004

134.0

120.0120.8

140.6128.8

50

75

100

125

150

175

2000 2001 2002 2003 2004

Enp

lane

men

ts (M

illio

ns) 2000 Passenger Level

Down 4.7 %from 2000

4

: : Domestic Yield Down 18.3% Since 2000

11.4611.73

11.88

14.0313.53

10.00

11.00

12.00

13.00

14.00

15.00

2000 2001 2002 2003 2004

Yie

ld (C

ents

/RPM

)

2000 Yield Level

5

: : Low Cost & Regional Carriers Increase Market Share

43%40%

37%

30%33%

0%

10%

20%

30%

40%

50%

2000 2001 2002 2003 2004

Dom

estic

Pas

seng

er M

arke

t Sha

re

Up 13 points From 2000

6

: : Air Cargo Revenue Ton Miles Up Almost 5% in 2004

35.133.5

27.830.1 28.5

0

5

10

15

20

25

30

35

40

2000 2001 2002 2003 2004

Bill

ions

of R

TM

s

2000 RTM Level

7

: : Commercial Air Carriers Have Lost $25 Billion Since 2000

($4.7)($5.4)

($10.9)

$3.6

($4.5)

-$12.0

-$9.0

-$6.0

-$3.0

$0.0

$3.0

$6.0

2000 2001 2002 2003 2004

Net

Pro

fit/L

oss (

$B)

8

: : General Aviation Hours Flown Have Bottomed Out

27,25527,04927,040

29,958

27,017

20,000

22,000

24,000

26,000

28,000

30,000

32,000

2000 2001 2002 2003 2004(E)

Hou

rs F

low

n (0

00)

2000 Hours Flown Level

Down 9 % from 2000

9

: : FAA/Contract Tower Instrument Operations Up 2% in 2004

24.8 23.2 23.2 21.9 21.8

27.426.326.328.2 27.8

0

10

20

30

40

50

60

70

2000 2001 2002 2003 2004

Ope

ratio

ns (M

)

Commercial Non Commercial

2000 Instrument Operations Level

Down 7.2 %From 2000

10

: : Recovery In Activity Not Uniform Among All Airports

LAS

SLC DEN

SAN

MSPORDMDW

DTW

IAH

CVG

FLL

LGA

MEM ATL

CLT

DCA

PHL

In 2004 Commercial Operations at 17 of 35 Major U.S.Airports Already At 2000 Levels

11

: : U.S. Economy Grows An Average Of 3.2% Annually

$15,646

$11,916$11,528$10,738 $11,137

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

2004 2005 2006 2007 2016

GD

P (B

illio

ns o

f 200

0$)

12

: : World Economy Grows An Average Of 3.2% Annually

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

2004 2005 2006 2007 2016

GD

P (B

illio

ns o

f 200

0$)

North America Europe Latin America Asia

$34,821$37,142 $38,338

$50,825

$35,981

13

: : Energy Prices Spike in 2005 Then Fall Over Next 3 YearsAll Signs Point to Continued Recovery

139.4

118.1120.2127.9

141.6

103.3

116.8

80

90

100

110

120

130

140

150

2003 2004 2005 2006 2007 2008 2016

Oil

& G

as I

ndex

(20

00=

100)

14

: : Domestic Real Yield Falls An Average Of 1.7% Annually

9.37

10.4710.6210.81

11.4612.00

12.45

15.38

14.38

8.0

10.0

12.0

14.0

16.0

2000 2001 2002 2003 2004 2005 2006 2007 2016

Rev

enue

Per

RPM

(200

4 C

ents

)

39% Lower Than 2000 Level

15

: : Domestic Passengers Return to Pre 9/11 Levels in 2005

649.6

627.2

587.9574.5

641.2

626.8

520

540

560

580

600

620

640

660

2000 2001 2002 2003 2004 2005

Enp

lane

men

ts (M

illio

ns)

Above 2000 Levels

16

: : International Passengers Return to Pre 9/11 Levels in 2005

145.4

134.0

120.0120.8

140.6

128.8

100

110

120

130

140

150

2000 2001 2002 2003 2004 2005

Enp

lane

men

ts (M

illio

ns)

Above 2000 Levels

17

Latin America -- 2004 Pacific -- 2005 Canadian Transborder -- 2005 Atlantic -- 2006

: : Every World Travel Region Returns to 2000 Levels by 2006

18

: : Total Passengers Exceed One Billion In 2015

10491015982951921893

865837811786755718

642688

0

200

400

600

800

1000

1200

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Enp

lane

men

ts (M

illio

ns)

One Billion Served !

19

: : By 2016 Low Cost and Regional Carrier Domestic Share ≈ 55%

Passenger Market Share

LowCost &Regionals/Commuters

LowCost &Regionals/Commuters

Large NetworkCarriers

Large NetworkCarriers

20162004

43%≈ 55%

20

: : Regional Jet Fleet Grows 38% Over Next Three Years

1,1041,156 1,1301,1821,2161,461

1,704 1,581

570 782 1,035

2,2512,0691,857

1,6301,349

0

500

1000

1500

2000

2500

3000

3500

4000

2000 2001 2002 2003 2004 2005 2006 2007

Reg

iona

l/Com

mut

er A

ircr

aft

NonJet Jet

21

: : Low Cost Carriers Drive Mainline Carrier Fleet Growth

655 706 766 791 895 922

3,445 3,271 3,107 2,969 2,932 2,954 3,0673,006

1,028 1,130

0

500

1,000

1,500

2,0002,500

3,000

3,500

4,000

4,500

5,000

2000 2001 2002 2003 2004 2005 2006 2007

Mai

nlin

e C

arri

er F

leet

Legacy Low Cost

22

: : Cargo Revenue Ton Miles Increase 82% By 2016

22.917.316.715.5 16.1

19.6 20.922.2

40.9

23.7

0

10

20

30

40

50

60

70

2004 2005 2006 2007 2016

Rev

enue

Ton

Mile

s (B

illio

ns)

Domestic International

23

: : General Aviation Hours Flown Up 20% By 2016

6,380 6,580 6,825 7,13010,350

20,875 21,320 21,505 21,62522,460

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2004(E) 2005 2006 2007 2016

Hou

rs F

low

n (0

00)

Turbine Piston

24

: : By 2016 Instrument Operations Up 29% At FAA/Contract Towers

24.8 23.2 23.2 21.9 21.8 21.9 22.0 22.2 22.4

25.5

37.831.230.529.628.327.426.326.328.2 27.8

0

10

20

30

40

50

60

70

2000 2001 2002 2003 2004 2005 2006 2007 2008 2016

Ope

rati

ons

(M)

Commercial Non Commercial

Back to 2000 Levels in 2008

25

: : Eight Additional Airports Exceed 2000 Levels by 2006

LAS

SLC DEN

SAN

MSPORDMDW

DTW

IAH

CVG

FLL

LGA

MEM ATL

CLT

DCA

PHL

HNL

IAD

BWI

MCOTPA

JFK

PHX

EWR

Commercial Operations at 25 Large U.S.Airports Will Exceed 2000 Levels By 2006

26

: : Implications For The FAA

Congestion On Rise As Demand ReturnsSeveral Airports Already Experiencing Delays

Change in Aircraft Mix Makes Future Workload More ComplexRapid Growth in RJsStrong Growth in GA Business Jets

Falling Yields Pose Risk To Matching FAA Funding Needs With Demand For FAA Services

27

: : Forecast Risks

Deteriorating Financial Condition Of Legacy Carriers

Sustained Higher Fuel Prices

Increasing Delays At U.S. Airports

28

: : Forecast Summary

Recovery of Traffic Continues In 2005 And Beyond Commercial Carrier and Domestic Passengers Return To Pre 9/11

Levels Commercial Carrier Passengers Exceed One Billion in 2015

Low Cost Carriers Increase Share => Falling Fares

Rising Demand For FAA Services

Downside Risks Are Significant