NET INCOME€¦ · TRAVELER PROGRAM AMONG AIR TRAVELERS 62% 78% 66% 78% 61% 73% 0% 25% 50% 75% 100%...

November 5, 2002Air Transport Association

NET INCOME

-10

-8

-6

-4

-2

0

2

4

6

80 82 84 86 88 90 92 94 96 98 '00 '02e

$ Billions

EXPECTED

TRAFFIC


-5

0

5

10

15

20

J1999

F M A M J J A S O N D J2000

F M A M J J A S O N D J2001

F M A M J J A S O N D

TRAFFIC GROWTHPercent Change in Revenue Passenger Miles

International

DomesticY2K = -6.5 million passengers


-40

-30

-20

-10

0

10

20

30

40

J-99

F M A M J J A S O N D J-00



F M A M J J A S

TRAFFIC GROWTHPercent Change in Revenue Passenger Miles

International

Domestic


30

35

40

45

50

55

60

J F M A M J J A S O N D

2000 2001 2002

PASSENGERS ENPLANEDStill well below 2000 levels

Millions

Travel Industry Associationand

Bureau of Transportation Statistics

AIR TRAVEL SURVEY

September 2002


AIR TRAVEL FOR BUSINESS AND LEISURE TRAVEL, LAST 12 MONTHS

21%21%

49%

59%

30%

20%

0%

10%

20%

30%

40%

50%

60%

70%

More Same Less

Business

Leisure

Source: TIA and BTS


REASONS FOR TRAVELING LESS BY AIR, PAST 12 MONTHS

18%

38%33%

35%

20%19%

17%17%

27%8%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Less Need

Price/Economy

Safety/Security

Hassle / Inconven

Lack time/ability

Business

Leisure

Source: TIA and BTS


REASONS FOR TRAVELING LESS BY AIR FOR BUSINESS

38%

54%

35%

27%

17%

16%

19%

5%

8%

5%

0% 10% 20% 30% 40% 50% 60%

Less Need

Price/Economy

Hassle / Inconven

Safety/Security

Lack time/ability Next 12 Months

Last 12 Months

Source: TIA and BTS


REASONS FOR TRAVELING LESS BY AIR FOR LEISURE

33%33%

18%

31%

17%26%

27%

21%

20%

11%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Price/Economy

Less Need

Hassle / Inconven

Lack time/ability

Safety/SecurityNext 12 Months

Last 12 Months

Source: TIA and BTS


INTEREST IN TRUSTED TRAVELER PROGRAM AMONG AIR TRAVELERS

62%

78%

66%

78%

61%

73%

0%

25%

50%

75%

100%

All Air Travelers Business Air Travelers Leisure Air Travelers

Total

Frequent

Source: TIA and BTS


CURRENT TRAVEL POLICIES AMONG AIR BUSINESS TRAVELERS

20%

26%

34%

45%

46%

56%

0% 10% 20% 30% 40% 50% 60%

Drive instead of fly

Restrict # people on trip

Restrict class of hotel

Upper mgmt approval

Per diem limits

Restrict class of air 10% in past year

11% in past year

11% in past year

6% in past year

8% in past year

9% in past year

Source: TIA and BTS


USE OF ALTERNATIVE TECHNOLOGIES AMONG BUSINESS AIR TRAVELERS IN PAST YEAR

42%

17%15%

38%

15%13%

45%

18%17%

57%

25%24%

0%

10%

20%

30%

40%

50%

60%

Total 1 - 2 Trips 3 - 7 Trips 8+ Trips

TeleconferenceVideoconference

Webcasting

Source: TIA and BTS


AIR TRAVEL FOR BUSINESS, LAST YEAR AND NEXT 12 MONTHS

21%

29%

49%

55%

30%

13%

3%

0%

10%

20%

30%

40%

50%

60%

70%

More Same Less Not at All

Last Year

Next 12 Months

Source: TIA and BTS


AIR TRAVEL FOR LEISURE, LAST YEAR AND NEXT 12 MONTHS

21%23%

59%63%

20%

11%

3%

0%

10%

20%

30%

40%

50%

60%

70%

More Same Less Not at All

Last Year

Next 12 Months

Source: TIA and BTS

CAPACITY


AIRCRAFT ORDERS AND OPTIONSATA U.S. Members

1324 1242 1160 1078850

699 716 736 621 491 537 478 547842 935 938 1051 1123 1057 1115 1165

955 852713

14241390

13021253

12071281 1178 1077

930

813 753633 481

543

1477 1435

1579

1823

1554 1555 15491663

11951193

D90 J91 D91 J92 D92 J93 D93 J94 D94 J95 D95 J96 D96 J97 D97 J98 D98 J99 D99 J00 D00 J01 D01 J02

2,748

1,906


EXPECTED DELIVERY DATESATA U.S. Members

2002 2003 2004 2005 2006 2007 2008

238

139

276 282267

197

270


59.0

60.7

59.2

61.460.3

62.3 62.563.2

62.4 62.663.6 63.5

66.267.0

69.370.3 70.9 71.1

72.4

70.0

72.2

55

60

65

70

75

80

82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02

LOAD FACTORPercent of Seats Filled

Breakeven


LABOR COSTS PER EMPLOYEE Wages and Benefits

35

40

45

50

55

60

65

70

75

80

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002e

74.7

64.8

$42.4

1986-2001

Compensation Annual Growth Rate +3.6%

CPI Annual Growth Rate +3.2%

$ Thousands


30

45

60

75

90

105

J-96

J-97

J-98

J-99

J-00

J-01

J-02

J-03

10

15

20

25

30

35

JET FUEL PRICE TRENDSExcludes Taxes

WTI (right scale)

Jet Fuel (left scale)

Forec

ast

Cents per Gallons $ per Barrel


PASSENGER COMMISSION COSTSPercent of Passenger Revenue

0

2

4

6

8

10

12

14

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002e

$7.6 B

$2.4 B

Percent


HOW PASSENGER TICKETS ARE SOLD ONLINE

0 20 40 60 80

Own Web Site

GDS/CRS Web Site

Online Travel Agencies

Joint Airline Site/alliance web site

New Media Site

Auction/bid sites

Joint alliance web siteMost ImportantCurrently Used

Source: Airline Business

Online Sales %2002 10.1%2000 5.2%


32.8 32.8 37.687.2 86.4 86.3

75.0 79.8 87.3

178.5

296.3 327.6

1 2 3 4 1 2

Aircraft Passenger & Corp.

INSURANCE COSTSMajors and Nationals

($ Millions)

2001 2002


400

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1976 1979 1982 1985 1988 1991 1994 1997 20004

6

8

10

12

14

16

AIRCRAFT DELAYS AND DEPARTURESAir Traffic Control System Delays

ATA Estimates

Controller Strike

Delays (Left Scale)

Departures (Right Scale)

Daily Delays Departures (millions)

REVENUE


10.5

11.0

11.5

12.0

12.5

13.0

13.5

14.0

14.5

15.0

15.5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2002 2001 2000

PRICE TRENDSDOMESTICRevenue per Passenger Mile

Cents

2000

2001

2002


CORPORATE PROFITSWere Beginning to Slide in 4Q2000

Percent Change from Year Ago Period

-80

-60

-40

-20

0

20

40

60

3 4 1 2 3 4 1 2 3 4 1 21999 2000 2001 2002


REVENUE TRENDSBusiness vs. Personal/PleasurePreliminary Data

-60

-50

-40

-30

-20

-10

0

10

20

J F M A M J J A S O N D J F M A M J J A S

Business Personal

$ Billions

20022001

OUTLOOK


CEOs AND CONSUMERS HAVE MIXED VIEWS

20

25

30

35

40

45

50

55

60

65

70

11999

3 12000

3 12001

3 12002

3

INDEX

CEO CONFIDENCE

80

85

90

95

100

105

110

115

120

11999

7 12000

7 12001

7 12002

7

CONSUMER SENTIMENT

Source: Conference Board Source: Univ. of Michigan


-40%

-30%

-20%

-10%

0%

10%

20%

2001 1990/91 System 1990/91 International

CURRENT TRAFFIC TRENDS COMPARED TO GULF WAR

Percent Change

FEB ‘91

SEP ‘01

Gulf War Int’l

Gulf War System


TRAFFIC GROWTH COMPARED TO GDPAnd Forecast for 2002 and 2003

-10

-8

-6

-4

-2

0

2

4

6

8

10

19931

19941

19951

19961

19971

19981

19991

20001

20011

20021

20031

-20

-15

-10

-5

0

5

10

15

20

GDP Percent

TRAFFIC FORECAST

2001: - 6.0%

2002: - 1.5%

2003: + 1.0 %

Traffic Percent


NET PROFIT MARGINUS.INDUSTRY VS. AIRLINES

-10

-8

-6

-4

-2

0

2

4

6

8

80 82 84 86 88 90 92 94 96 98 00 02e

Percent

AIRLINES

U.S. INDUSTRY


CASH FLOWFour Quarter Moving Total Majors and Nationals

-4

-2

0

2

4

6

8

10

12

14

80/4 82/2 83/4 85/2 86/4 88/2 89/4 91/2 92/4 94/2 95/4 97/2 98/4 00/2 01/4 03/2

$ Billions

FO

RE

CA

ST


AIRLINE BALANCE SHEETSDebt as a Percent of Total Capital

Percent

0

10

20

30

40

50

60

70

80

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002e

AIRLINES

U.S. INDUSTRY

[email protected]

NET INCOME€¦ · TRAVELER PROGRAM AMONG AIR TRAVELERS 62% 78% 66% 78% 61% 73% 0% 25% 50% 75% 100%...

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