Activity Forecasting SessionMSP 2040 Long-Term Comprehensive Plan (LTCP)
Forecast Elements
2Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Data Collection
Complete
Market Assessment and Factors Affecting Aviation Activity
Complete
Baseline Aviation Activity Forecast Development
Complete
Alternative Demand Scenarios
Complete
Peaking Metrics and Design Day Flight Schedule Development
In Progress
Documentation
In Progress/Ongoing
Percentage of MSP’s Aircraft Operations
Metropolitan Airports Commission | Activity Forecasting Session | October 2019 3
Commercial
Passenger
Operations
91%
Source: 2018 MAC activity statistics
Air Freight 4%
General Aviation and Air Taxi 5%
Military <1%
Passenger Airline Activity Forecast Process Flow
4
Disaggregate Passenger
Types at MSP
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Who is traveling to and from MSP?
Passenger Airline Activity Forecast Process Flow
5
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
How are they getting there?
Is the service profitable and sustainable?
Passenger Airline Activity Forecast Process Flow
6
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Predict How Passenger
Types Will Grow Over
Time
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
How will the various passenger types grow over time?
Passenger Airline Activity Forecast Process Flow
7
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Predict How Passenger
Types Will Grow Over
Time
Consider the Effects of
Competition From Other
Services
Other Airports,
Connecting Hubs,
Nonstop Flights, Etc.
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Could those passengers choose other routings?
Could other passengers choose MSP?
Passenger Airline Activity Forecast Process Flow
8
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Predict How Passenger
Types Will Grow Over
Time
Consider the Effects of
Competition From Other
Services
Other Airports,
Connecting Hubs,
Nonstop Flights, Etc.
Model If and How
Airlines Might Elect to
Accommodate
Passenger Growth at
MSP
Fleet Changes,
Additional Flights, etc.
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Is it likely that the new demand will be accommodated?
Passenger Airline Activity Forecast Process Flow
9
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Predict How Passenger
Types Will Grow Over
Time
Consider the Effects of
Competition From Other
Services
Other Airports,
Connecting Hubs,
Nonstop Flights, Etc.
Model If and How
Airlines Might Elect to
Accommodate
Passenger Growth at
MSP
Fleet Changes,
Additional Flights, etc.
Enplaned Passenger
Forecast
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Passenger Airline Activity Forecast Process Flow
10
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Predict How Passenger
Types Will Grow Over
Time
Consider the Effects of
Competition From Other
Services
Other Airports,
Connecting Hubs,
Nonstop Flights, Etc.
Model If and How
Airlines Might Elect to
Accommodate
Passenger Growth at
MSP
Fleet Changes,
Additional Flights, etc.
Enplaned Passenger
Forecast
Allocation of Fleet,
Load Factors,
Mission Requirements
Passenger Aircraft
Operations Forecast
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Passengers Using MSP
11Metropolitan Airports Commission | Activity Forecasting Session | October 2019
MSP Serves Passengers From Around the US and the World on
an O&D Basis…
12
GREAT
LAKES
NORTH
EAST
SOUTH
EASTSOUTH
CENTRAL
MOUNTAIN
SOUTH
WEST
NORTH
WEST
ALASKA &
HAWAII
NORTH
CENTRAL
CANADA/
GREENLAND
SOUTH
AMERICA
AFRICA
SOUTH
PACIFIC
EUROPE
ASIA
MIDDLE
EAST
CARIBBEANMEXICO
CENTRAL
AMERICA
Domestic O&D: 53% of Total Passengers International O&D: 7% of Total Passengers
Source: US DOT O&D Survey and Sabre MIDT data (four quarters ending Q2 2018)
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
…and On a Connecting Basis (Domestic Connections)
13
Domestic Connections: 31% of Total Passengers
GREAT
LAKES
NORTH
EAST
SOUTH
EASTSOUTH
CENTRAL
MOUNTAIN
SOUTH
WEST
NORTH
WEST
ALASKA &
HAWAII
NORTH
CENTRAL
Source: US DOT O&D Survey (four quarters ending Q2 2018)
Top 10 Connecting Flows
Portion of
Total Psgrs
Great Lakes-Southwest 4%
Northeast-Southwest 3%
North Central-Northeast 2%
North Central-Southeast 2%
Great Lakes-North Central 2%
Mountain-Northeast 2%
North Central-Southwest 2%
Great Lakes-Mountain 2%
Great Lakes-Northwest 2%
Southeast-Southwest 1%
Top 10 Flows 22%
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
…and On a Connecting Basis (International Connections)
14
CANADA/
GREENLAND
SOUTH
AMERICA
AFRICA
SOUTH
PACIFIC
EUROPE
ASIA
MIDDLE
EAST
CARIBBEANMEXICO
CENTRAL
AMERICA
International Connections: 9% of Total Passengers
Source: US DOT O&D Survey and Sabre MIDT data (four quarters ending Q2 2018)
Top 10 Connecting Flows
Portion of
Total Psgrs
Canada-Southeast 1%
Canada-Great Lakes 1%
Canada-Northeast 1%
Canada-North Central 0%
Europe-North Central 0%
Europe-Southwest 0%
Canada-Southwest 0%
Mexico-North Central 0%
Europe-Mountain 0%
Canada-South Central 0%
Top 10 Flows 5%
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Four General Groupings of Flight Segments at MSP
15
Close-In Domestic: 22% of Seat Capacity
North Am/Carib/CA Int’l: 4% of Seat Capacity Longer International: 3% of Seat Capacity
Longer Domestic: 71% of Seat Capacity
Source: Innovata schedule data (twelve months ending May 2019)
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
In Total, Domestic Segments Play the Most Important Role
16
Close-In Domestic:
22% of Passengers
N. Am/Car/CA Int’l:
4% of Passengers
Longer International:
3% of Passengers
Longer Domestic:
71% of PassengersCarrier Seat Share
Delta 75%
Southwest 11%
United 7%
American 7%
Other 0%
Sun Country 0%
Spirit 0%
Frontier 0%
JetBlue 0%
Carrier Seat Share
Delta 69%
Sun Country 8%
American 6%
Spirit 5%
Southwest 4%
United 4%
Frontier 2%
Other 1%
JetBlue 1%
Carrier Seat Share
Delta 75%
Sun Country 17%
Air Canada 8%
Southwest 0%
United 0%
American 0%
Spirit 0%
Frontier 0%
JetBlue 0%
Carrier Seat Share
Delta 78%
Other 22%
Southwest 0%
Sun Country 0%
United 0%
American 0%
Spirit 0%
Frontier 0%
JetBlue 0%
Carrier Seat Share
Delta 71%
Sun Country 6%
American 6%
Southwest 6%
United 4%
Spirit 3%
Other 2%
Frontier 1%
JetBlue 1%
Source: Innovata schedule data (twelve months ending May 2019); US DOT O&D Survey and Sabre MIDT data (four quarters ending Q2 2018)
Air FranceCondorKLMIcelandair
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Airline Profitability is Examined at Multiple Levels
▪ By airline
▪ By specific route
▪ By specific passenger type
Metropolitan Airports Commission | Activity Forecasting Session | October 2019 17
Airfares and
Other
Revenues - Airline Costs = Profit
Passenger Airline Activity Forecast Process Flow
18
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
How are they getting there?
Is the service profitable and sustainable?
Passenger Airline Activity Forecast Process Flow
19
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Predict How Passenger
Types Will Grow Over
Time
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
How will the various passenger types grow over time?
Drivers of Growth – O&D Passengers
20Metropolitan Airports Commission | Activity Forecasting Session | October 2019
O&D Passenger Forecast Approach
▪ Evaluated relationships between O&D passengers and socioeconomic factors
▪ Identified markets where O&D activity may be affected beyond typical market influences
▪ Near-term new and expanding O&D markets were modeled based on recent airline growth patterns
▪ Longer term O&D forecasts considered socioeconomic-driven demand and the airline business decision process
(i.e., is demand growth profitable growth?)
Metropolitan Airports Commission | Activity Forecasting Session | October 2019 21
Socioeconomic Drivers Present a Range of Growth at MSP –
Combined Domestic and International O&D Passengers
0
2
4
6
8
10
12
14
16
18
20
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
An
nu
al C
om
bin
ed
Ori
gin
ati
ng
Pass
en
gers
(m
il)
22
For both the US and the region:
• Time series
• Population
• Non-farm employment
• Non-farm earnings
• Personal income
• Net earnings
• Per capita personal income
• Gross domestic product
Regional non-farm employment (2.3% CAGR)
Regional per capita personal income (1.1% CAGR)
Average (1.7% CAGR)
Note: CAGR measured from 2017
Source: BTS RITA data (2018 is four quarters ending Q3 2018), MAC activity statistics, Woods & Poole Economics, Inc., Ricondo (analysis)
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Comparison of Socioeconomic Forecasts and Regions
23
Woods & Poole Data CAGR Metropolitan Council Data CAGR
2000- 2010- 2020- 2000- 2010- 2020-
Independent Variable Area 2010 2040 2040 2010 2040 2040
Population US 0.9% 0.8% 0.9%
CSA / 7 County Region 1.0% 1.0% 1.0% 0.7% 0.9% 0.8%
Non-farm employment US 0.5% 1.4% 1.2%
CSA / 7 County Region 0.4% 1.5% 1.3% 0.2% 0.9% 0.6%
Non-farm earnings US 1.1% 1.9% 1.7%
CSA / 7 County Region 0.5% 2.2% 1.7%
Personal income US 1.7% 2.1% 1.8%
CSA / 7 County Region 1.2% 2.3% 1.9% 1.0% 2.5% 2.2%
Net earnings US 1.0% 2.0% 1.7%
CSA / 7 County Region 0.5% 2.3% 1.8%
Per capita personal income US 0.7% 1.2% 0.9%
CSA / 7 County Region 0.2% 1.3% 0.8%
Gross domestic product US 1.7% 1.8% 1.6%
CSA / 7 County Region 1.3% 2.1% 1.7% 1.1% 2.2% 2.2%
Source: Woods & Poole Economics, Inc., Metropolitan Council data
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Drivers of Growth – Connecting Passengers
24Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Connecting Passenger Forecast Approach
▪ Evaluated relationships between passengers and socioeconomic factors in markets likely to connect in MSP
▪ Reviewed other forecasts for connecting flows
▪ Analyzed the historical development of the MSP hub and impact on connecting passengers
▪ Considered external factors that could affect passenger choice of MSP (other hubs, alternative nonstop flights)
as well as the airline business decision process for accommodating demand growth
Metropolitan Airports Commission | Activity Forecasting Session | October 2019 25
Connections Have Been Affected by Other Hubs and Nonstop
Flights
26
For Domestic Journeys, The Percentage of
Passengers Using Nonstop Itineraries Has Grown in
the Last Decade
A BFrom 68% in 2008 to 74% in 2018
Connecting Passengers Tended Toward Increased
Use of These Hubs
ATL
ORD/
MDW
STL
SLC
LAX
SFO
SEA
DFW
HOU
CLT
EWR
MSP’s Domestic Connections Have Fallen By 12% Since 2008
Source: US DOT O&D Survey (2018 is four quarters ending Q2 2018)
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Examples of External Developments That May Impact
Connecting Activity
27
Upside:
▪ Several competing hubs are approaching capacity
▪ Others that have shown recent rapid growth are beginning to slow
Downside:
▪ Development at some competing hubs will add capacity for growth
▪ Growth of ULCCs and their expanding fleets will increase the number of nonstop options to bypass hubs
▪ Increased use of Canadian hubs to carry passengers from the US to Europe and Asia
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Airline Profitability is Examined at Multiple Levels
▪ By airline
▪ By specific route
▪ By specific passenger type
Metropolitan Airports Commission | Activity Forecasting Session | October 2019 28
Airfares and
Other
Revenues - Airline Costs = Profit
Passenger Airline Activity Forecast Process Flow
29
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Predict How Passenger
Types Will Grow Over
Time
Consider the Effects of
Competition From Other
Services
Other Airports,
Connecting Hubs,
Nonstop Flights, Etc.
Model If and How
Airlines Might Elect to
Accommodate
Passenger Growth at
MSP
Fleet Changes,
Additional Flights, etc.
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Is it likely that the new demand will be accommodated?
How will the various passenger types grow over time?
Could those passengers choose other routings or vice versa?
Passenger Airline Activity Forecast Process Flow
30
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Predict How Passenger
Types Will Grow Over
Time
Consider the Effects of
Competition From Other
Services
Other Airports,
Connecting Hubs,
Nonstop Flights, Etc.
Model If and How
Airlines Might Elect to
Accommodate
Passenger Growth at
MSP
Fleet Changes,
Additional Flights, etc.
Enplaned Passenger
Forecast
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Forecast Results – Passenger Enplanements
31Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Enplaned Passenger Forecast – O&D vs. Connecting
0
5
10
15
20
25
30
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
An
nu
al R
eve
nu
e E
np
lan
ed
Pass
en
gers
(m
il)
O&D Connecting
32
Forecast
2018-2040 CAGR: 1.8%
2018-2040
CAGR: 1.9%
2018-2040
CAGR: 1.7%
Historical
1990-2018 CAGR: 2.4%
Sources: US DOT T100 and O&D Survey data (actual); Sabre MIDT (actual); Ricondo (forecast)
Note: Enplaned passengers reflect revenue passengers only, and may include a small portion of same-plane “Thru”
passengers. Figures shown may not reflect those reported by the Commission.
Metropolitan Airports Commission | 2040 LTCP Forecast | August 2019
18.519.4
21.8
23.7
25.5
27.3
O&D% 60% 60% 60% 60% 59% 59%
Passenger Airline Activity Forecast Process Flow
33
Disaggregate Passenger
Types at MSP
Determine Which Flights
Passengers Use to Get
To/From MSP
How do Passenger Types
Contribute to Flight
Profitability?
Predict How Passenger
Types Will Grow Over
Time
Consider the Effects of
Competition From Other
Services
Other Airports,
Connecting Hubs,
Nonstop Flights, Etc.
Model If and How
Airlines Might Elect to
Accommodate
Passenger Growth at
MSP
Fleet Changes,
Additional Flights, etc.
Enplaned Passenger
Forecast
Allocation of Fleet,
Load Factors,
Mission Requirements
Passenger Aircraft
Operations Forecast
Metropolitan Airports Commission | Activity Forecasting Session | October 2019
34Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Forecast Results – Passenger Airline Operations
Historical Passenger Growth Has Been Accommodated Primarily
Through Larger Aircraft and Higher Load Factors
Metropolitan Airports Commission | 2040 LTCP Forecast | August 2019 35
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
20
40
60
80
100
120
140
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Avg
. Lo
ad
Facto
rA
vera
ge S
eats
per
Dep
art
ure
Avg. Seats per Departure Avg. Load FactorSource: US DOT T100 data (actual)
Annual Percentage of Operations by Aircraft Seat Capacity at
MSP – All Airlines
36Metropolitan Airports Commission | Preliminary Passenger Airline Activity Forecast Results| July 2019
53% 54% 56% 56% 56%51%
46% 44% 42% 42% 40%36%
32% 30% 29% 26%
17% 15% 10% 7% 8%9%
10% 11%8% 8% 9%
13% 18% 21% 23% 28%
20% 22% 25% 26% 26%27%
28% 27%31% 27%
22% 22% 22% 21% 19% 17%
7% 5% 7% 7% 8% 10%13% 14% 16%
20%25% 26% 26% 26% 27% 27%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2025 2030 2035 2040
Perc
en
tag
e o
f A
nn
ual D
ep
art
ure
s B
y
Ave
rag
e A
ircr
aft
Seat
Cap
aci
ty R
an
ge
<101 101-130 131-160 161-199 200-240 241+
Source: Innovata schedule data; Ricondo (forecast)
Forecast in 5 Year Increments
0
100,000
200,000
300,000
400,000
500,000
600,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
An
nu
al Pass
en
ger
Air
craft
Op
era
tio
ns
Domestic International
Passenger Aircraft Operations Forecast
37
Forecast
2018-2040 CAGR: 1.2%
2018-2040
CAGR: 1.8%
2018-2040
CAGR: 1.2%
Historical
1990-2018 CAGR: 0.7%
369k 374k
401k430k
457k
482k
Sources: US DOT T100 data (actual); Ricondo (forecast)
Metropolitan Airports Commission | 2040 LTCP Forecast | August 2019
38Metropolitan Airports Commission | Activity Forecasting Session | October 2019
Forecast Results – Other Aircraft Operations
Cargo, General Aviation/Air Taxi, and Military Aircraft
Operations Forecast Methodology
▪ Cargo Aircraft Operations
– Cargo volumes were forecast for all-cargo and passenger airlines, separately
– The cargo aircraft fleet mix was developed considering known aircraft orders and expected future cargo
airline fleets
– Future tonnage per operation was estimated based on the cargo fleet mix, and was applied to projections of
all-cargo aircraft volumes
▪ General Aviation/Air Taxi Aircraft Operations
– MSP general aviation operations were modeled to grow at a rate slightly lower than that forecast by the FAA
for the US overall, similar to past trends
– Air taxi operations were combined with GA and grown in proportion to historical “other” commercial
operations
▪ Military Aircraft Operations
– The Department of Defense does not provide guidance for future military aircraft activity, the TAF’s projection
of military aircraft operations was adopted for use
Metropolitan Airports Commission | 2040 LTCP Forecast | August 2019 39
Forecast of Total Operations
Metropolitan Airports Commission | 2040 LTCP Forecast | August 2019 40
0
100,000
200,000
300,000
400,000
500,000
600,0001990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
An
nu
al A
ircr
aft
Op
era
tio
ns
Passenger Airline All-Cargo GA and Air Taxi Military
Forecast
2018-2040 CAGR: 1.2%
Historical
1990-2018 CAGR: 0.3%
Sources: US DOT and MAC (historical); Ricondo (forecast)
407k 413k441k
471k
499k526k