forecast of aviation demand

Ontario International Airport

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Prepared

June 23, 2005

Keiser Phillips Associates Aviation Consultants [email protected]

Ontario International Airport Aviation Demand Forecast

Keiser Phillips Associates June 23, 2005

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Contents

SECTION 1: DEMAND FORECAST SUMMARY ................................................................. 1-1

SECTION 2: AVIATION INDUSTRY PROFILE ................................................................... 2-1 2.1 INDUSTRY TRENDS.......................................................................................................... 2-1

Industry Forecasts ................................................................................................................ 2-2 SECTION 3: PROFILE OF REGIONAL AVIATION ACTIVITY ...................................... 3-1

SECTION 4: ECONOMIC FACTORS...................................................................................... 4-1 4.1 UNITED STATES ECONOMY........................................................................................... 4-1

U.S. Economic Forecast ....................................................................................................... 4-1 4.2 CALIFORNIA....................................................................................................................... 4-1 4.3 LOS ANGELES-LONG BEACH-RIVERSIDE .................................................................. 4-2

Future Regional Growth Forecasts...................................................................................... 4-2 SECTION 5: AIR CARRIER PASSENGER FORECAST ..................................................... 5-1

5.1 ENPLANED PASSENGERS ............................................................................................... 5-1 Historical Review of Passenger Activity .............................................................................. 5-1 Enplanements by Carrier Type............................................................................................. 5-2 Enplaned Passenger Forecasts ............................................................................................ 5-5 Regression Model Verification ............................................................................................. 5-6 Market Share Models ........................................................................................................... 5-8 Time-Series Models ............................................................................................................ 5-10 Forecasts by Others............................................................................................................ 5-12 Selected Passenger Forecast .............................................................................................. 5-17

5.2 AIR CARRIER OPERATIONS FORECAST.................................................................... 5-19 Enplaned Passenger Forecast Allocations......................................................................... 5-19 Air Carrier Fleet Characteristics ....................................................................................... 5-21 Commercial Passenger Operations Load Factors ............................................................. 5-23 Commercial Passenger Operations Forecast..................................................................... 5-24

5.3 PEAKING CHARACTERISTICS ..................................................................................... 5-27 Enplaned Passenger Peaking ............................................................................................. 5-27 Passenger Carrier Operations Peaking ............................................................................. 5-28

SECTION 6: AIR CARGO.......................................................................................................... 6-1 6.1 AIR CARGO INDUSTRY PROFILE .................................................................................. 6-1

Factors Affecting Industry Growth....................................................................................... 6-1 Inhibitors to Growth ............................................................................................................. 6-2 Industry Air Cargo Forecasts............................................................................................... 6-2

6.2 REGIONAL AIR CARGO PROFILE .................................................................................. 6-3 6.3 REGIONAL AIR CARGO-AIRPORT ISSUES .................................................................. 6-7 6.4 OVERVIEW OF AIR CARGO ACTIVITY AT ONTARIO INTERNATIONAL AIRPORT..................................................................................................................................................... 6-8

Air Cargo at ONT by Carrier Type....................................................................................... 6-9



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Freighter Aircraft Operations .............................................................................................. 6-9 Air Cargo Fleet Mix ........................................................................................................... 6-10

6.5 ONTARIO INTERNATIONAL AIRPORT AIR CARGO FORECAST .......................... 6-11 Cargo Tonnage Forecast.................................................................................................... 6-11 Historical Trend Model ...................................................................................................... 6-12 Regression Analysis............................................................................................................ 6-12 Market Share Model ........................................................................................................... 6-13 Growth Rate Projections .................................................................................................... 6-14 Forecasts by Others............................................................................................................ 6-15 Summary of Projections ..................................................................................................... 6-16 Preferred Unconstrained Forecast..................................................................................... 6-17 Forecast of Air Cargo By Carrier Type ............................................................................. 6-19 Air Cargo Aircraft Fleet Mix.............................................................................................. 6-22 Forecast of Freighter Operations ...................................................................................... 6-23 Freighter Aircraft Operations Peaking Activity ................................................................. 6-26

SECTION 7: GENERAL AVIATION FORECAST ................................................................ 7-1 7.1 GENERAL AVIATION BACKGROUND.......................................................................... 7-1

General Aviation Operations Forecasts............................................................................... 7-2 General Aviation Aircraft Operational Peaking .................................................................. 7-4

7.2 BASED AIRCRAFT AND FLEET MIX FORECAST........................................................ 7-5 General Aviation Aircraft Fleet Operations by Type ........................................................... 7-6

SECTION 8: MILITARY OPERATIONS ................................................................................ 8-1

SECTION 9: TOTAL OPERATIONS ....................................................................................... 9-1 9.1 AIRCRAFT OPERATIONS................................................................................................. 9-1

Future Operations by Aircraft Type ..................................................................................... 9-2 9.2 PEAK HOUR OPERATIONS.............................................................................................. 9-5



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Aviation Demand Forecasts The purpose of this forecast effort is to produce a reasonable forecast of future air cargo conditions at Ontario International Airport (ONT) in order to assess the potential environmental impact of the Pacific Gateway Air Cargo Center (PGCC). Year 2020 has been determined to be the first year that the PGCC will be fully operational. Therefore, forecasts of aviation operations and air cargo tonnages are required for 2020. Section 1: Demand Forecast Summary The major demand forecast elements are summarized in Exhibit 1-1. Subsequent sections of this paper describe the development of the various demand elements in detail. In summary, passenger enplanements1 are forecast to grow from 3.3 million in 2003 to 12.7 million in 2020. Similarly, total passengers are expected to increase from 6.6 million to 25.4 million over the same time period. Between 2003 and 2020, the percentage of passengers enplaned by large air carriers (those air carriers operating aircraft over 70 seats) are expected to decline somewhat as the regional/commuter carriers (those carriers typically operating aircraft with 70 seats or less) take on an expanded role and increase their share of the passenger market. In 2003, the large air carriers enplaned 95 percent of all passengers at Ontario International Airport. By 2020, the large air carriers are forecast to enplane 87 percent of all passengers at Ontario International, an eight percent drop in passenger share. In contrast, regional/commuter carriers enplaned only five percent of all Ontario International passengers in 2003 – well below national averages. By 2020 regional/commuter enplanements are forecast to constitute 13 percent of all passengers, reaching over 1.6 million enplanements and 3.3 million total passengers by the end of the forecast period. Passenger charter carrier enplanements are expected to remain limited to approximately one percent or less of total passengers. Total aircraft operations at the airport are forecast to increase from 135,183 in 2003 to 398,083 in 2020. The operations growth is driven primarily by the scheduled passenger carriers. By 2020, large carrier and regional/commuter activity add over 208,000 additional aircraft operations over 2003 levels. Annual aircraft operations by all-cargo carriers operating large freighter aircraft (greater than 60,000 pounds maximum gross weight) are expected to increase from 15,930 to 39,920, representing approximately 11 percent of the total. Aircraft operations from the all-cargo air taxi/cargo feeder carriers are expected grow from 15,130 in 2003 to 28,000 by the end of the period. General aviation operations are forecast to grow from the current 28,598 to 45,917 in 2020.

1 A revenue passenger boarding on an aircraft in service in air commerce whether or not in scheduled service. The definition also includes passengers who continue on an aircraft in international flight that stops at an airport in any of the 50 States for a non-traffic purpose, such as refueling or aircraft maintenance rather than passenger activity. Enplanements at airports that receive scheduled passenger service are also referred to as Passenger Boardings. Source: http://www.faa.gov/arp/planning/stats/index.cfm?nav=cargo



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Exhibit 1-1

Summary of Forecasts*

Activity Indicator Existing (2003) 2020 Total Passengers - Total 6,571,154 25,362,900 Enplaned Passengers - Total 3,285,577 12,681,450 - Large Air Carrier 3,111,383 11,020,180 - Regional/Commuter 170,334 1,648,590 - Charter 2,285 12,680 Annual Operations - Total 135,183 398,083 -Large Air Carrier 65,406 205,721 - Regional/Commuter 9,810 77,961 - Charter 98 354 -Large All-Cargo Carrier 15,930 39,920 - Air Taxi All-Cargo Carrier 15,130 28,000 - General Aviation 28,598 45,917 - Military 211 210 Peak Hour Operations - Total 49 115 - Passenger Carriers 15 66 - General Aviation 19 27 - Air Cargo (freighter + air taxi) 15 36 - Military <1 <1 Air Cargo (tons) 571,892 1,610,800 - Integrator/Express 518,590 1,205,840 - Traditional 42,338 324,460 - Belly Freight 10,965 80,500

Source: Keiser Phillips Associates *Many of the factors influencing future aviation demand cannot necessarily nor readily be quantified. As a result, the forecast process should not be viewed as precise, particularly given the major structural changes that have occurred in the industry since airline deregulation and 9/11. Actual future traffic levels addressed here may differ materially from the projections presented herein because of unforeseen or unrealized events.

An assessment of regional market conditions indicates that international freighter activity will begin to migrate to Ontario International Airport from Los Angeles International (LAX) in the



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2010 to 2020 timeframe as facilities at LAX become increasingly congested and low margin all-cargo carriers begin to look for more economical alternatives. The growth in cargo activity is expected to occur at Ontario International regardless of the development of the PGCC. Air cargo handled at Ontario International is projected to increase from 572,000 tons in 2003 to 1.6 million tons in 2020.



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Section 2: Aviation Industry Profile The US commercial aviation industry consists of 40 large air carriers (operating jet aircraft with over 70 seats) and 75 regional/commuters (operating smaller piston, turboprop and jet aircraft) who provide both domestic and international air service between points in the US and to foreign destinations. Additionally, there are 26 large all-cargo carriers that provide domestic and or international air cargo service. Due to the impacts of 9/11, commercial air carriers sharply reduced capacity in the months that followed. Although capacity has recovered from the low levels immediately following the terrorist attacks, capacity has yet to return to pre-September 11, 2001 levels. After growing at an average annual rate of 2.9 percent during the 1994-2000 period, US commercial air carrier system capacity (domestic plus international), as measured by available seat miles (ASM), has declined for the past two years – down 8.7 percent in 2002 and 0.4 percent in 2003. 2.1 INDUSTRY TRENDS There are three distinct trends that have emerged in the commercial aviation passenger market since 9/11, trends that have, in effect, reshaped the industry. The first is a major restructuring and downsizing that has occurred among the so-called legacy carriers (this group includes Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines, United Airlines and US Airways). The second is the rapid growth among the low-cost carriers (such as American Trans Air, America West, Air Tran, Frontier, Southwest, JetBlue etc.), particularly in nontraditional long-distance markets. The third trend is the phenomenal growth that has occurred among the regional/commuter carriers. This trend is due in part to the downsizing of the legacy carriers. The combined enplanements of the low-cost carriers and regional/commuters have increased by 22.5 percent since 2000. In 2003 the combined passenger count represented 36.8 percent of the US system commercial enplanements, up from 27.6 percent in 2000. In 2003 the large US carriers’ system capacity declined by 1.8 percent, on top of a 9.9 percent decline in 2002. The system-wide load factor2 in 2003 increased 2.2 points to 73.4, an all-time high. Since 2000, the legacy network carriers have reduced their domestic capacity by 16.8 percent, while the low-cost carriers have reported capacity increases of 25.9 percent. During the first seven months of 2004, US airlines carried 7.9 percent more domestic passengers and flew 3.5 percent more domestic flights than they did during the same period last year. For this period, the airlines carried 367.8 million domestic passengers up from the 340.9 million in 2003. These passengers were carried on 5.7 million flights, up 3.5 percent from the flights operated in 2003. Although the regional/commuter carriers were impacted by the events of 9/11, the negative impact was of relatively short duration and most of the impact since appears to have been largely positive. This is due, in a large part, to the fact that the regionals/commuters have been the beneficiary of the downsizing and restructuring that has taken place among their larger code-

2 Enplaned passengers divided by the number of seats available.



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share partners. This has allowed the larger carriers to rationalize their capacity and cut costs while still maintaining a presence in the markets transferred to their smaller code-share partners. Regional/commuters enplaned a total of 108.7 million passengers in 2003, up 18.9 percent over 2002 and 31.3.percent over 2001. In addition, regional/commuters achieved an all-time high load factor of 64.7 percent in 2003, up 3.4 percent over 2002. Industry Forecasts In 2015, the FAA forecasts that US commercial aviation industry, consisting of large air carriers and regional/commuter airlines, will fly a total of over 15 trillion ASMs, (up 4.6 percent annually) and transport over 1.1 billion passengers (up 4.3 percent annually) just over 1.1 trillion passenger miles (up 4.8 percent annually). Load factors are expected to increase average 74.5 in 2015. The large domestic carrier enplanements are forecast by the FAA to increase 3.6 percent over the 12 year FAA forecast period. Much of this growth is expected to come from the low-cost carriers. Regional/commuter passengers are forecasted by the FAA to increase an average of 6.3 percent per year. In 2015, regional/commuters are expected to transport 21.4 percent of all passengers in scheduled commercial air service, up from 16.9 percent in 2003. Load factors are expected to remain constant for 2004, declining somewhat in 2005, before increasing gradually to reach 67.1 percent in 2015.



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Section 3: Profile of Regional Aviation Activity Southern California, which encompasses a rapidly urbanizing geographic area of some 38,000 square miles, with 184 cities in six counties; is a demographically and culturally diverse population of approximately 15.6 million. The region is projected to grow to 23 million people over the next two decades. It has approximately 15 airports able to accommodate commercial air carriers, which between them handled over 70 million passengers and approximately three million tons of cargo in 2000. To understand the future role of Ontario International Airport it is necessary to view the airport as part of a system of Southern California airports serving the transportation needs of this rapidly growing area. Eight airports provide the principal support for passenger and cargo movements in the region and will continue to play an important role in the future of air transportation in the Los Angeles basin and surrounding area. A summery of passenger and aircraft activity is shown in Exhibit 3-1.

Exhibit 3-1 Southern California Regional Airports: Enplanements and Operations

Enplanements Total Operations

Airport 1993 2003 AAGr 1993 2003 AAGr Burbank 2,063,436 2,369,729 1.27% 207,460 178,079 -1.38% John Wayne 2,992,900 4,274,960 3.29% 494,378 349,124 -3.11% Long Beach 312,815 1,445,725 14.93% 425,956 338,807 -2.06% Los Angeles 23,465,822 27,438,232 1.43% 681,845 622,378 -0.83% Ontario 3,042,722 3,166,489 0.36% 152,914 146,413 -0.39%Palmdale 16,982 - -- 62,968 30,737 -- Palm Springs 456,538 625,938 2.91% 91,447 93,068 0.16% San Diego 5,883,093 7,389,966 2.09% 208,606 193,222 -0.69% Total 38,234,308 46,711,039 1.84% 2,325,574 1,951,828 -1.58%Source: Airport and FAA historical records. AAGr = Average Annual Growth from 1993 through 2003 Each of the key commercial service airports in the Southern California region are briefly profiled below.

Burbank Airport (BUR): The Bob Hope (Burbank) Airport is the closest airport to downtown Los Angeles and major Southern California tourist attractions. The airport is served by four air carriers providing direct service to West Coast and Mid-Western U.S. destinations, with connecting flights to points beyond. Approximately 2.5 million people live within a 15 mile radius of the airport. The airport's passenger capacity is estimated at 9.4 million passengers per year. John Wayne Airport (SNA): John Wayne Airport, located approximately 35 miles south of Los Angeles between the cities of Costa Mesa, Irvine, Newport Beach and Santa Ana, is the only commercial service airport in Orange County, California. The airport service



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area includes 3 million people within the 34 cities and unincorporated areas of Orange County. The airport is served by 12 major passenger commercial and two commuter air carriers operating approximately 95 direct flights per day to East Coast, West Coast, and selected Mid-West destinations as well as Hawaii. As one of only two Orange County airports serving general aviation, John Wayne Airport provides basing facilities for a large number of general aviation aircraft. The airport has a statutory passenger limitation of 10.8 million passengers per year. In 2003, more than 8.5 million passengers were served. Long Beach (LGB): Long Beach Airport is located midway between Los Angeles and Orange County, California. The airport operates under significant restrictions, being limited to 41 air carrier flights per day to minimize noise impacts on the surrounding community. This restriction was imposed prior to passage of the Airport Noise and Capacity Act of 1990 (that restricted airport curfews) and is thus legally enforceable. The airport also has an allowance of 25 commuter flights per day (weight based), although very little of the commuter allowance is currently utilized. The passenger capacity of the airport is estimated at 3 million annual passengers. The airport is currently served by four passenger carriers: Alaska Airlines, American Airlines, America West Airlines and JetBlue Airways. Direct daily non-stop flights are available to various locations throughout the U.S. Los Angeles International Airport (LAX): Los Angeles International Airport, part of the Los Angeles World Airports (LAWA) system, is the world's fifth busiest passenger airport and sixth ranked air cargo facility by tonnage. Clearly the dominant airport in Southern California, the airport is served by approximately 80 passenger carriers operating from nine separate terminal facilities. There are 20 cargo carriers using the airport. LAX serves not only the Southern California region but is a major U.S gateway to Asia and Pacific destinations as well. In 2003, the airport handled 55 million domestic and international passengers as well as two million tons of freight and mail. Nearly 50 percent of LAX air cargo activity is international in origin or destination. An estimated 72 percent of regional passenger activity and 79 percent of the region's air cargo is handled through LAX, which accommodates over 1,000 commercial arrivals and departures daily. Ontario International Airport (ONT) : Ontario International Airport, another member of the LAWA system, is located approximately 55 miles east of LAX in the center of the Southern California Inland Empire. The airport's service area primarily includes San Bernardino and Riverside Counties, portions of north Orange County and east Los Angeles County - encompassing a population of approximately six million people. Ontario International Airport is a medium-hub, full-service airport with commercial passenger service to major U.S. cities and through service to international destinations. The airport's 214 daily passenger flights are provided by 14 air carriers. The airport is also the US West Coast regional hub for United Parcel Service (UPS).



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In 2003, 6.5 million passengers and 547,461 tons of air freight passed through the airport. In 1998, new terminals were completed boosting the airport's passenger through-put capacity to 10 million passengers a year. The airport has the capacity to expand terminal capacity once passenger levels exceed the 10 million passenger mark. Palmdale Regional Airport (PMD): Palmdale Regional Airport, part of the LAWA system, is located approximately 70 miles northeast of LAX. The airport is operated under a Joint-Use Agreement between the U.S. Air Force and Los Angeles World Airports. Under the agreement, LAWA operates a passenger terminal on a 70-acre site adjacent to Air Force (AF) Plant 42. The 9,000 square-foot passenger terminal, capable of handling an estimated 300,000 passengers per year, opened in 1971. However, the facility has seen only sporadic passenger service in the intervening years and no scheduled service was available in 2003 or 2004. The airport is the subject of an on-going master plan study expected to be completed some time in 2005. According to recent press release, Palmdale Regional Airport will reopen for scheduled airline service December 29, 2004 with Scenic Airlines that will begin daily schedule service between PMD and North Las Vegas Airport (Airport Code VGT). Palm Springs International Airport (PSP): Palm Springs International Airport is the only commercial service airport in Riverside county. Located approximately 100 miles east of Los Angeles, the airport service area includes a population base of more than one million, and extends from the communities of Yucca Valley and Twentynine Palms on the north; Banning and Beaumont to the west; Hemet to the south; and Indio, Coachella and Thermal to the southeast. The Airport primarily serves the local passenger market as well as individuals flying into the desert resort community from outside the area, At present, nine passenger carriers offer 88 daily flights to U.S. destinations, including Alaska, as well as Canada. Approximately 1.2 million total passengers were accommodated at PSP in 2003. San Diego International (SAN): San Diego International Airport, located approximately 120 miles south of LAX and 2 miles from downtown San Diego, primarily serves the southern San Diego County area. For northern San Diego County residents, LAX, LGB, SNA and ONT are all potential alternative airports. There were an estimated 2.9 million people living in San Diego County in 2002. The airport is served by 18 scheduled carriers ranging from short-haul regional service to domestic U.S. and international service as well. Passenger terminal facilities include Terminal 1, serving domestic carriers with 19 gates, Terminal 2 with 21 gates for both domestic and international carriers, and a separate commuter terminal with 4 gates and 10 aircraft parking positions. Although the only major hub airport in the U.S. constrained to a single-runway system and one of the smallest in terms of land area, the airport is still the country's 29th busiest airport in terms of enplaned passengers. In 2003, the airport served approximately 15



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million enplaned and deplaned passengers in spite of significant "leakage" of passengers to other Southern California airports.

With the exception of Palmdale Airport, passenger enplanements grew at each individual airport between 1993 and 2003. The average annual enplanement growth at Long Beach (14.93 percent) far outpaced the remaining airports in the region, although total 2003 enplanements remained modest compared to other Southern California airports. As expected, Los Angeles International Airport dominates the region with nearly 60 percent of total 2003 enplanements and over 30 percent of regional operations. Between 1993 and 2003, total aircraft operations at the major airports within the region declined at an average rate of 1.58 percent per year. However, further examination of the operations decline indicates that, except for Palmdale Airport, the all remaining airports experienced positive growth rates for air carrier operations. The relative distribution of regional enplanement and operations activity between the Southern California airports is presented in Exhibit 3-2 below. The comparative relationships in the percent distribution of activity between airports remained essentially unchanged from 1993 to 2003. Clearly, Los Angeles International Airport dominates both passenger enplanements and operations by wide margins. San Diego International Airport ranks second in enplanements while John Wayne Airport ranks second in total operations. In 2003, Ontario International Airport ranked fourth out of the eight airports in enplanements and sixth in overall operations.

Exhibit 3-2

Distribution of Regional Enplanements and Operations (by percent)

Enplanements Operations Airport 1993 2003 1993 2003

Burbank 5.4% 5.1% 8.9% 9.1% John Wayne 7.8% 9.2% 21.3% 17.9% Long Beach 0.8% 3.1% 18.3% 17.4% Los Angeles 61.4% 58.7% 29.3% 31.9% Ontario 8.0% 6.8% 6.6% 7.5% Palmdale 0.0% 0.0% 2.7% 1.6% Palm Springs 1.2% 1.3% 3.9% 4.8% San Diego 15.4% 15.8% 9.0% 9.9% 100.0% 100.0% 100.0% 100.0% Source: Airport and FAA historical records.

The capacity of an airport to accommodate aircraft operations is dependent on a wide variety of factors including physical configuration and limitations of the airport facilities and instrumentation, the air traffic control system, the mix of aircraft using the facility, regional topography, meteorological conditions as well as environmental and statutory restrictions on activity to minimize community impacts to name a few.



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The FAA calculated Annual Service Volume (ASV)3 for each of the major Southern California area airports is presented in Exhibit 3-3 along with their relative percent capacity based on 2003 aircraft operations. As evident from the exhibit, Los Angeles, Long Beach and John Wayne are all nearing their ASV thresholds. The airports with the greatest reserve capacity are Palmdale, Palm Springs and Ontario International. Of the three airports with the greatest available operations capacity, Ontario International is the more centrally located geographically within the Los Angeles basin to support the most heavily used regional airports.

Exhibit 3-3

Annual Operations v. Airfield Capacity

2003 Operations

FAA ASV

Relative % of Capacity

Available Capacity

Burbank 178,079 230,000 77.4% 22.6% John Wayne 349,124 355,000 98.3% 1.7% Long Beach 338,807 370,000 91.6% 8.4% Los Angeles 622,378 675,000 92.2% 7.8% Ontario 146,413 355,000 41.2% 58.8% Palmdale 30,737 270,000 11.4% 88.6% Palm Springs 93,068 230,000 40.5% 59.5% San Diego 193,222 225,000 85.9% 14.1% Source: Keiser Phillips Associates

Exhibit 3-4 summarizes the enplanement, and operations data presented above by rank ordering the airports for each information category.

Exhibit 3-4 Southern California Regional Airport Rankings

Enplanements

(Ranked Highest to Lowest) Operations

(Ranked Highest to Lowest) 1 Los Angeles 1 Los Angeles 2 San Diego 2 John Wayne 3 John Wayne 3 Long Beach 4 Ontario 4 San Diego 5 Burbank 5 Burbank 6 Long Beach 6 Ontario 7 Palm Springs 7 Palm Springs 8 Palmdale 8 Palmdale

Source: Keiser Phillips Associates

As is evident from Exhibit 3-4, Ontario International Airport ranks fourth in regional enplanement levels. As noted in the profile discussion, ONT has an estimated capacity of 10

3 A reasonable estimate of an airport’s annual capacity. A measure used by airport planners to calculate the number of aircraft operations that can be reasonably accommodated at an airport over a period of a year without unacceptable delay. Source: http://www.faa.gov/programs/oep/v6/Smart%20Sheets/AD/AD-1%20V6.htm



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million annual passengers using existing terminal facilities, and capabilities to construct additional facilities as the need arises. In 2003, total passengers at ONT amounted to approximately 6.5 million or 65 percent of current passenger capacity. From an operations standpoint, Ontario International Airport ranks lower than any airport in the immediate Los Angeles area. This is likely due, in part, to the low number of general aviation based aircraft and the "gauge" or size of scheduled commercial carrier aircraft able to carry greater numbers of passengers in fewer operations. A more detailed analysis of the character of aviation activity at ONT will be presented in the following section of the report. Lastly, with a "Reserve Capacity" of nearly 60 percent of its ASV, ONT ranks third in region airports in its ability to accommodate additional growth in activity. Los Angeles International, Long Beach, John Wayne, and San Diego airports have limited growth potential due to their current high levels of enplanements and operations. In addition, statutory constraints on the number of allowable commercial operations at Long Beach and John Wayne further limit the airports’ ability to grow. Ontario International, Palmdale and Palm Springs airports have the greatest potential to absorb additional passenger and cargo activity and support continued growth and development in the Southern California region. The geographic location of Ontario International in the heart of the L.A. Basin indicates that the airport will likely play a key role in supporting Southern California's future air transportation infrastructure.



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Section 4: Economic Factors 4.1 UNITED STATES ECONOMY The US economy experienced its eighth consecutive quarter of expansion after the recession that encompassed the last 3 quarters of FY 2001. Recovery from the economic downturn and terrorist attacks has proceeded in a sluggish manner, being marred by the war in Iraq. On an annual basis, US Gross Domestic Product (GDP) grew by 1.7 and 2.7 percent in fiscal year 2002 and 2003, respectively. This compared to an average of 3.2 percent annual growth during the previous 10 year expansion period. Seasonally adjusted quarterly growth has ranged from a low of 1.3 percent in the 3rd quarter FY 2002 to a high of 8.2 percent in 4th quarter FY 2003. However, the recent broad expansion in US economic activity (up an average of 5.8 percent over the last half of FY 2003) has continued well into 2004. U.S. Economic Forecast In the short term, the US Office of Management and Budget (OMB) projects the US GDP to grow 4.0 percent during 2004. Moderate price inflation is expected to accompany the economic rebound in 2004 and 2005. The long-term economic outlook for the economy shows real GDP growth averaging 3.3 percent over the next 12 years. Long-term economic growth depends on growth in the factors of production – labor, capital, and technology. The relative mix of these factors combined with the state of technology determines productivity of each factor. 4.2 CALIFORNIA California is the fifth largest economy in the world. It is the largest state economy in the U.S. and represents 13% of the nation’s GDP. The population of California in 2003 was 35,484,453, ranking it first in the nation. In 2003 California had a per capita personal income (PCPI) of $33,403. This PCPI ranked 11th in the United States and was 106 percent of the national average, $31,459. The 2003 PCPI reflected an increase of 1.7 percent from 2002. The 2002-2003 national change was 2.2 percent. In 1993 the PCPI of California was $22,635 and ranked 12th in the United States. The 1993-2003 average annual growth rate of PCPI was 4.0 percent. The average annual growth rate for the nation was 4.0 percent. In 2003 California had a total personal income (TPI) of $1,185,301,773. This TPI ranked 1st in the United States. In 1993 the TPI of California was $707,906,053 and ranked 1st in the United States. The 2003 TPI reflected an increase of 3.1 percent from 2002. The 2002-2003 national change was 3.2 percent. The 1993-2003 average annual growth rate of TPI was 5.3 percent. The average annual growth rate for the nation was 5.1 percent. Earnings of persons employed in California increased from $901,796,800 in 2002 to $938,914,130 in 2003, an increase of 4.1 percent. The 2002-2003 national change was 4.1 percent. The average annual growth rate from the 1993 estimate of $546,481,838 to the 2003 estimate was 5.6 percent. The average annual growth rate for the nation was 5.3 percent.



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4.3 LOS ANGELES-LONG BEACH-RIVERSIDE Los Angeles-Long Beach-Riverside is one of 179 US Bureau of Economic Analysis (BEA) Economic Areas in the nation. Its 2002 population of 18,687,181 ranked 2nd in the nation. In 2002 Los Angeles-Long Beach-Riverside had a per capita personal income (PCPI) of $30,453. This PCPI ranked 29th in the United States and was 99 percent of the national average, $30,906. The 2002 PCPI reflected an increase of 1.7 percent from 2001. The 2001-2002 national change was 1.2 percent. In 1992 the PCPI of Los Angeles-Long Beach-Riverside was $21,893 and ranked 14th in the United States. The 1992-2002 average annual growth rate of PCPI was 3.4 percent. The average annual growth rate for the nation was 4.0 percent. In 2002 Los Angeles-Long Beach-Riverside had a total personal income (TPI) of $569,072,664. This TPI ranked 2nd in the United States. In 1992 the TPI of Los Angeles-Long Beach-Riverside was $361,965,537 and ranked 2nd in the United States. The 2002 TPI reflected an increase of 3.3 percent from 2001. The 2001-2002 national change was 2.3 percent. The 1992-2002 average annual growth rate of TPI was 4.6 percent. The average annual growth rate for the nation was 5.2 percent. Earnings of persons employed in Los Angeles-Long Beach-Riverside increased from $430,651,762 in 2001 to $443,944,468 in 2002, an increase of 3.1 percent. The 2001-2002 national change was 1.5 percent. The average annual growth rate from the 1992 estimate of $283,936,307 to the 2002 estimate was 4.6 percent. The average annual growth rate for the nation was 5.3 percent. Future Regional Growth Forecasts As stated above, the service area for Ontario International Airport includes San Bernardino and Riverside Counties, portions of north Orange County and east Los Angeles County. This area lies within the boundary of the Southern California Association of Governments (SCAG) which includes Imperial, Los Angeles, Orange, Riverside, San Bernardino, and Ventura Counties. The SCAG Forecasting Section is responsible for producing socioeconomic projections and developing, refining and maintaining SCAG's regional and small area forecasting models. The most recent SCAG socioeconomic forecast for the region was completed in 2004 and extends through 2030. Key findings of the forecast relevant to Ontario International Airport include: • Overall population growth in the region is expected to reach 22.9 million by 2025, an

increase of 6.26 million over 2000 levels. The average annual population growth per year between 2000 and 2030 is forecast at 1.25 percent.

• The composition of the region’s population will change with those individuals 65 and older increasing from 10 percent to 17 percent of the total population by 2030. This is expected to increase the demand for public transportation. In contrast, the 16 to 64 age group is expected to decline nearly 4.5 percentage points during the same period.

• Los Angeles County’s share of the regional population will decline from 57.6 percent to 53.4 percent over the 30-year period, however the population of the Inland Empire (Riverside and



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San Bernardino counties) will increase in regional share from 19.7 percent to 25.6 percent during the same period.

• Total regional employment is expected to grow by 3 million jobs between 2000 and 2030 to 10.5 million, however annual employment growth is expected to be only 1.4 percent, one-half the rate experienced over the past 20 years. The lower rate is attributed to the aging of the baby boomer generation which will slow labor force and employment growth.

• Employment is expected to continue to migrate from the coastal areas east to the Inland Empire. The share of regional employment captured within the Inland Empire is expected to increase from 15 percent today to 22 percent by 2030. In contrast, Los Angeles County is expected to see a 4 percent decrease in its share of regional employment over the 30-year time frame.

In summary, key indicators point toward continuing growth and development within the Ontario International Airport’s service area, with Ontario International Airport likely to play an increasingly important role in the region with its room for physical expansion and available reserve of operational capacity.



5-1

Section 5: Air Carrier Passenger Forecast The aviation forecasts prepared for Ontario International Airport are presented below and address the following demand elements: • Annual Enplaned Passengers • Annual Passenger Carrier Operations • Enplaned Passenger Peaking • Passenger Carrier Peaking

5.1 ENPLANED PASSENGERS The forecast effort begins with projections of enplaned passengers. Several other forecasts are then derived from the enplanement forecast. The enplanement forecast presented here consists of two sections. The first is a historical review of past year enplanements and the second presents a two-step process for the development of new enplanement projections and a selection of a preferred enplanement forecast for this study. Derivative and other forecast follow these sections. Historical Review of Passenger Activity The preceding discussion identified historical enplanement and operations activity at Ontario International (ONT) relative to other major airports in the Southern California region. Provided below is a more detailed breakdown of recent historical activity at Ontario. This information is important to understand the character of recent aviation activity at the airport, as well as needed to prepare the future activity forecasts found later in this analysis. A 10-year review of the historical airline passenger activity levels at Ontario is provided in Exhibit 5-1 and shown graphically in Exhibit 5-2.

Exhibit 5-1 Ontario International Airport Historical Enplanements

Year Enplanements Percent Change 1993 3,074,039 1994 3,200,478 4.1% 1995 3,210,582 0.3% 1996 3,132,803 -2.4% 1997 3,153,825 0.7% 1998 3,212,487 1.9% 1999 3,268,661 1.7% 2000 3,360,634 2.8% 2001 3,354,400 -0.2% 2002 3,259,866 -2.8% 2003 3,285,577 0.8%

Average Annual Growth 0.7% Source: LAWA Airport Records



5-2

Exhibit 5-2 Ontario International Airport Historical Enplanements

2,900,000

2,950,000

3,000,000

3,050,000

3,100,000

3,150,000

3,200,000

3,250,000

3,300,000

3,350,000

3,400,000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: LAWA ONT records

Enplanements by Carrier Type Passenger enplanements at ONT were broken down by carrier type for the reporting period. Air passenger carriers were classified as follows based on the character of their business: • Large Air Carriers: These carriers fly scheduled service with large aircraft on domestic and

international routes. The major and national carriers often affiliate with regional/commuter carriers who feed passengers into the larger carrier's system.

• Regional/Commuter Carriers: The regional/commuter carriers fly scheduled service on

established route systems. However, the majority of their aircraft have 70 seats or less, and the primary mission of the carrier is to provide connecting service for its major or national carrier code-share partners.

• Non-Scheduled Charter Carriers: These carriers fly passengers using a wide variety of

aircraft from large commercial-class to smaller aircraft. They do not maintain an established route system nor are they obligated to fly on a regularly scheduled basis. A typical example of this type of operation would be "casino" charter flights to the gaming centers in Nevada.

Between 1999 and 2003, seventy-eight separate scheduled passenger and charter carriers reported enplanements over 16 million passengers at Ontario International. Exhibit 5-3 provides a breakdown of enplaned passengers by carrier type by year. As indicated in Exhibit 5-3, between 1999 and 2003 total enplaned passengers remained essentially static with only minor variations from year to year. The average annual growth



5-3

between 1999 and 2003 showed a slight declining trend in overall enplanement activity. The large carriers dominated passenger enplanements by a wide margin during the period by consistently capturing well over 90 percent of all enplaned passengers. Regional/commuter carriers, while enplaning a small percentage of total enplanements, demonstrated strong growth in market share throughout the period with an average annual growth rate of 38.7 percent. This trend suggests an increasing reliance of the large national carriers on the regional/commuters to support their networks. The non-scheduled charter carriers enplaned less than one percent of enplaned passengers in any year however did show some overall growth in market share with a peak share of 0.4 percent in 2001.

Exhibit 5-3 Annual Enplanements by Carrier Type

Large

Carriers Regional/

Commuter Scheduled Charter

Total

Enplanements 3,212,723 54,253 1,685 3,268,661 1999 Market Share 98.3% 1.7% 0.1% 100.0% Enplanements 3,295,711 63,133 1,790 3,360,634 2000 Market Share 98.1% 1.9% 0.1% 100.0% Enplanements 3,159,024 55,433 13,055 3,227,512 2001 Market Share 97.9% 1.7% 0.4% 100.0% Enplanements 3,158,572 96,350 4,944 3,259,866 2002 Market Share 96.9% 3.0% 0.2% 100.0% Enplanements 3,111,383 170,334 2,285 3,285,577 2003 Market Share 94.7% 5.2% 0.1% 100.0%

Enplanement AAGr -0.8% 38.7% 129.9% 0.2% Source: LAWA Airport records Note: AAGr = Average Annual Growth between 1999 and 2003 Exhibit 5-4 presents a more comprehensive breakdown of 1999 to 2003 passenger enplanement activity by specific carrier. As is apparent from Exhibit 5-4, Southwest Airlines has consistently captured half of the total annual enplanements at Ontario International over the five-year period. The Southwest Airlines market share is over five times that of its nearest competitors among the Major/National scheduled passenger carriers.



5-4

Exhibit 5-4 Annual Enplanements by Carrier

Year

Type

1999

2000

2001

2002

2003

2003 Market Share

Active Arrow C 972 <0.1% Aerolitoral C 1,337 <0.1% AeroMexico C 910 12,740 18,328 <0.1% Aerovias De Mexico C 23,439 0.7% Air Canada C 5,284 55 <0.1% Air France L 356 <0.1% Air Laughlin C 3,684 75 <0.1% Air Wisconsin Airline RC 904 <0.1% Alaska Airlines L 241,176 229,656 226,900 227,064 231,785 7.1% Allegiant Air L 35 81 611 440 <0.1% Aloha Airlines L 21 66 418 <0.1% America West Airlines L 199,362 189,491 227,981 237,859 246,105 7.5% American Airlines L 198,753 186,039 187,156 262,853 224,634 6.8% American Trans Air L 300 2,499 <0.1% Ascend Aviation, Inc. C 49 <0.1% ATA L 284 199 <0.1% Atlantic Southeast Airlines Inc RC 47,901 1.5% Azteca Airlines C 800 <0.1% Brendan Airways RC 129 <0.1% Casino Express Airlines C 5,589 120 <0.1% Champion Air C 855 166 <0.1% CMA Mexicana Airlines L 117 <0.1% Continental Airlines L 82,467 85,562 80,055 87,070 93,491 2.8% Corse-Air International SA C 539 <0.1% Delta Air Lines L 260,137 281,229 268,481 267,386 205,772 6.3% Eagle Jet C 98 <0.1% Elite Air C 45 <0.1% Grand Holdings Inc C 364 <0.1% Hawaiian Airlines L 32,486 75,926 2.3% Horizon Air RC 111 <0.1% JetBlue Airways L 22,919 69,091 50,687 50,496 1.5% Laker Airways L 533 <0.1% Lan Chile Airlines L 174 <0.1% Lineas Aereas Azteca L 21,379 0.7% Mesa Airlines L 19,726 30,180 0.9% MGM Grand RC 5 <0.1% Miami Air International L 503 347 <0.1% Midwest Express Airlines C 47 84 149 <0.1% National Airlines C 50 <0.1% North American Airlines C 98 384 135 47 496 <0.1% Northwest Airlines L 88,869 89,386 85,912 85,836 87,929 2.7% Omni Air International C 1,330 1,460 <0.1% Paradigm Air C 50 <0.1%



5-5

Exhibit 5-4 (continued) Annual Enplanements by Carrier

Year

Type

1999

2000

2001

2002

2003

2003 Market Share

Planet Airways C 56 167 <0.1% Pro Air/Air Routing Intl C 50 <0.1% Qantas Airways L 348 244 <0.1% Roush Air C 45 125 <0.1% Royal Air Force C 70 <0.1% Ryan International C 44 551 750 208 <0.1% Select Aviation Inc. C 27 <0.1% Sierra Pacific RC 85 80 334 1,413 <0.1% Sky King C 38 309 162 <0.1% Sky Service Airlines C 49 <0.1% SkyQuest Charters C 375 <0.1% Skywest Airlines RC 63,048 55,272 76,161 89,936 2.7% Southwest Airlines L 1,651,784 1,720,018 1,756,321 1,736,486 1,705,001 51.9% Sports Hawk C 256 <0.1% Sports Jet C 210 456 <0.1% Star Air C 222 <0.1% Sun Country Airlines L 318 <0.1% Sun West International C 76 <0.1% Sunworld International C 118 <0.1% TACA International Airlines SA C 67 <0.1% TEM Enterprises Inc C 37 <0.1% Trans Meridian Airlines C 299 <0.1% Trans World Airlines L 88,031 104,489 50,731 <0.1% United Airlines L 401,292 380,428 317,692 151,090 143,921 4.4% United Express (West Air/Mesa) RC 54,253 <0.1% Varig Brazilian Airlines SA L 178 <0.1% Virgin Atlantic Airways Ltd L 318 <0.1%

Total Enplanements 3,268,661 3,360,634 3,354,400 3,259,866 3,285,577 100.0% Source: LAWA Airport records L = Large Air Carrier RC = Regional/Commuter C = Charter

Enplaned Passenger Forecasts Preparing the aviation demand forecasts for passenger enplanements is a two-phase process. The first phase is the analytical phase, which involves applying statistical techniques to historical data to establish a basis for modeling future growth. The second or subjective phase, adds experience, knowledge, and other non-mathematical valuation to the process. The combination of techniques is essential to the development of a final preferred forecast. For the analytical phase, past trends in passenger enplanements are extended into the future using a variety of techniques and assumptions. The products of these analyses are trend lines, which produce projections for specific time periods. A number of projections are developed since the



5-6

most reliable approach to estimating future demand is often obtained using more than one technique. Methodologies that are commonly employed include correlation and regression analyses, time series extrapolation (trend data), and market share analyses. • Regression Analysis involves projection of an aviation demand element (the dependent

variable), prepared based on one or more outside indicator, such as population or other socioeconomic factors (the independent variables). Historical values for both the dependent and the independent variables are tested using correlation analyses to determine whether a relationship exists. If it is determined that there is a relationship, it can be used to define future aviation activity levels based on a continuation of the relationship into the future using forecasts of the independent variables prepared by others.

• Time-Series Analysis is perhaps the simplest, most widely used forecasting technique. This

analytical technique identifies historical trends without regard to the reasons for the trend. It fits growth curves to historical data and uses past trends and growth rates to forecast future activity levels. Time-Series Analysis assumes that historical patterns of activity will continue in the future.

• Market-Share Analysis techniques involve a review of the historical activity levels at the

airport as a percentage share of a larger market. This share factor is compared to forecasts for the larger market to determine the likely future activity level.

These three analytical techniques share a common shortcoming. They assume that relationships that existed in the past will continue unchanged into the future. Consequently, they do not allow for the effects of changing or unanticipated socioeconomic conditions, increased service levels, or other changes independent of past indicators. Similarly, they do not permit the analysis of the impact of single-event point-in-time activity changes, such as the impact of the 9/11 terrorist attacks, followed by resumption of previous growth rates. To counter this weakness, the second phase of forecasting involves a judgmental analysis. During the second phase, decisions are made regarding the growth projections resulting from the analyses of each demand element. These decisions require that a number of intangible factors, such as policy and objective changes, be considered. These elements are considered in combination with the forecaster’s experience at other airports, industry trends, knowledge of the aviation community, and other information gathering techniques that may be available. Despite all of these efforts, the level of confidence in forecasts decreases beyond five years, and the numbers generated should be used as guides rather than absolutes. Regression Model Verification Before a forecast regression model can be relied upon as a basis for projecting future activity, it must pass certain statistical tests verifying that a legitimate relationship exists between the dependent and independent variables used in each particular model. The correlation coefficient (Pearson’s ‘r’) and coefficient of determination (r2) measure the strength of the association between changes in the dependent variable (such as enplaned passengers) and the independent variable (such as population). An r2 of greater than 0.95 indicates that the relationship is strong and can be used as a good predictor of future activity. An



5-7

r2 value of 0.00 indicates that no correlation whatsoever exists between the variables. An r2 value below 0.90 may be useful in the absence of any other information but cannot typically be relied upon as a predictive tool. As noted above, the forecast models evaluated for this analysis included regression models, time-series (trend analyses), and market share analyses. Of the three methodologies, the regression models were suited to verification by testing the coefficients of correlation and determination between their respective dependent (in these case enplanements) and independent variables. Eight potential independent variables were tested for regression modeling purposes against historical enplanements at Ontario International between 1993 and 2003. The independent variables evaluated included: • Regional and State Population, • Regional Per Capita Income, • Regional Total Personal Income, • Regional employment, • Total California Passenger Enplanements • Total FAA Southwest Region Passenger Enplanements, and • Total U.S. National Passenger Enplanements.

Exhibit 5-5 presents the results of correlation tests between historical reported enplanements at Ontario International and the independent variable for each regression model.

Exhibit 5-5 Regression Models Tested

ONT Enplanements 1993 to 2003 compared to: R2 Value Accept/Reject

Los Angeles Basin1 Population 0.603 Reject California State Population 0.568 Reject Los Angeles Basin Per Capita Income 0.628 Reject Los Angeles Basin Total Personal Income 0.196 Reject Los Angeles Basin Employment 0.442 Reject California State Enplanements 0.505 Reject Southwest Region Enplanements 0.322 Reject U.S. National Enplanements 0.445 Reject

Sources: Socioeconomic data from California Dept. of Finance and Bureau of Labor Statistics. Note: 1Los Angeles Basin defined as Imperial, Los Angeles, Orange, Riverside, San Bernardino, and

Ventura counties None of the independent variables tested demonstrated sufficient correlation to historical passenger enplanements at Ontario International to be deemed reliable for forecasting purposes. As a result, the trend (time series) and market share forecasting models were selected as the most appropriate forecasting tools for Ontario International. Enplanement data extending from 1993 to 2003 was used as the historical period. The forecasts and an explanation of the models used to create them are presented in the following discussion.



5-8

Market Share Models The Market Share models tested for enplanement forecasting purposes included those identified in Exhibit 5-6. The models were based on the average of Ontario International enplanements as a percentage share of the larger market enplanements over the ten-year period between 1993 and 2003.

Exhibit 5-6 Market Share Model Comparisons

ONT Enplanements as Share of : 10 -Year Average

Market Share Standard Deviation

Regional Enplanements 7.72% 0.6% California State Enplanements 4.17% 0.3% Southwest Region Enplanements 2.46% 0.2% U.S. National Enplanements 0.52% 0.04%

Source: Keiser Phillips Associates Note: Based on 10-year period from 1993 to 2003. Due to the variation in annual enplanements levels at Ontario International, as indicated in Exhibit 5-2 earlier in this analysis, the standard deviation of the annual Ontario International market share percentages was calculated to determine the consistency of the market share relationships from year to year. The lower the standard deviation, the more the percentage relationship between Ontario International and the comparison market remained consistent from year to year. The U.S. National Enplanement and FAA Southwest Region Market Share models were selected as having the most consistent percentage relationship throughout the base period. In addition, for comparison purposes, the trend lines of the National and FAA Southwest Region market share percentages were also calculated over the base period and extrapolated out through 2020. The average and trend-adjusted market share percentages were applied to FAA National and FAA Southwest Region enplanements forecasts through 2020. The results of this analysis are presented in Exhibit 5-7. The market share forecasts are plotted graphically in Exhibit 5-8.



5-9

Exhibit 5-7 ONT Market Share Model Enplanement Forecasts

Average Market Share Models Market Share Trend Models U.S. National

Enplanements Ontario Intl

Enplanements FAA SW Region

Enplanements

Ontario Intl. Enplanements

US National Enplanements


FAA SW Region

Enplanements


1993 520,038,158 3,074,039 108,664,532 3,074,039 520,038,158 3,074,039 108,664,532 3,074,039 1994 562,061,343 3,200,478 117,493,064 3,200,478 562,061,343 3,200,478 117,493,064 3,200,478 1995 582,044,933 3,210,582 124,236,865 3,210,582 582,044,933 3,210,582 124,236,865 3,210,582 1996 613,639,513 3,132,803 133,481,033 3,132,803 613,639,513 3,132,803 133,481,033 3,132,803 1997 636,769,629 3,153,825 136,849,354 3,153,825 636,769,629 3,153,825 136,849,354 3,153,825 1998 649,071,662 3,212,487 135,652,337 3,212,487 649,071,662 3,212,487 135,652,337 3,212,487 1999 675,566,091 3,268,661 139,613,489 3,268,661 675,566,091 3,268,661 139,613,489 3,268,661 2000 704,897,797 3,360,634 147,357,030 3,360,634 704,897,797 3,360,634 147,357,030 3,360,634 2001 693,186,394 3,354,400 144,571,120 3,354,400 693,186,394 3,354,400 144,571,120 3,354,400 2002 630,196,671 3,259,866 129,050,627 3,259,866 630,196,671 3,259,866 129,050,627 3,259,866 2003 643,431,258 3,285,577 132,435,204 3,285,577 643,431,258 3,285,577 132,435,204 3,285,577

Forecast 2010 835,634,531 4,318,943 173,586,152 4,277,466 835,634,531 3,504,833 173,586,152 3,629,818

2020 1,107,298,156 5,723,026 230,153,577 5,671,386 1,107,298,156 3,745,269 230,153,577 4,097,102

AAGr 3.32% 3.26% 0.77% 1.31% Source: Keiser Phillips Associates Note: AAGr = Average Annual Growth



5-10

Exhibit 5-7 Market Share Enplanement Models

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

1993 1998 2003 2008 2013 2018

Enpl

anem

ents

ONT Historical U.S. National FAA SW Region

US National Trend FAA SW Region Trend


The U.S. National and FAA Southwest Region average market share models produced nearly identical results with enplaned passengers growing from 3.2 million in 2003 to 5.7 million by 2020. Under the average market share models, enplaned passengers at Ontario International would grow at an average annual rate of approximately 3.3 percent. Historically, between 1993 and 2003, the enplaned passenger growth rate at Ontario International averaged 0.7 percent and fluctuated between an overall range of a 4.1 percent increase to a 2.8 percent decline on an annual basis. The U.S. National and FAA Southwest Region market share trend models depict much more modest growth rates of 0.8 percent and 1.3 percent respectively. The underlying trend lines of these two models suggest decreasing Ontario International market shares into the future thereby moderating the effects of the anticipated growth in regional and national enplanements over the forecast period. Time-Series Models Two time-series enplanement models were tested. The first model identified the trend line of historical passenger enplanements at Ontario International between 1993 and 2003 and extrapolated the line into the future through the end of the planning period. The second time-series model applied long-term passenger enplanement growth rates used by the FAA in its national Terminal Area Forecasts (TAF) published in March 2004. The FAA TAF presents demand forecasts for airports active in the National Plan of Integrated Airport Systems and is based on the FAA Aerospace Forecast, Fiscal Years 2004-2015 (March 2004), as well as



5-11

airport-specific factors that influence future activity levels. By analyzing individual TAF files, implied growth rate forecasts for airports based on their share of the total U.S. enplanements can be derived. for each airport category through 2020. The airport classifications and the anticipated future enplaned passenger growth rates through 2020 are presented in Exhibit 5-8.

Exhibit 5-8 FAA Airport Classifications

Airport

Classification Percent of Total

U.S. Enplanements Forecast Annual

Enplanement Growth 2002 to 2020

Large Hub 1 percent or more 3.3 percent Medium Hub 0.25 to 0.99 percent 3.0 percent

Small Hub 0.05 to 0.249 percent 2.5 percent /Non-Hub Less than 0.05 percent Undefined

Source: FAA Terminal Area Forecasts, FY 2003 to 2020

At 0.52 percent of total U.S. enplaned passengers, Ontario International is classified as a medium hub airport. As a result, the forecast 3.0 percent annual enplanement growth rate was applied to 2003 enplaned passengers at Ontario International in the second time-series forecast model. The results of the Historical Trend and Growth Rate forecast models are presented in Exhibit 5-9.

Exhibit 5-9 Time Series Forecast Models

ONT Trend Model Growth Model

Historical 2003 3,285,577 3,285,577

Forecast 2010 3,479,090 4,040,845 2020 3,687,925 5,430,560

AAGr 0.7% 3.0% Source: Keiser Phillips Associates In Exhibit 5-10 below, the results of the time series models are plotted along with the previous market share forecasts for comparison purposes.



5-12

Exhibit 5-10

Time Series Forecast Models

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

1993 1998 2003 2008 2013 2018

Enpl

anem

ents

ONT Historical U.S. National FAA SW RegionUS National Trend FAA SW Region Trend ONT TrendFAA Growth

Source: Keiser Phillips Associates The forecast methodologies investigated above seek to predict future passenger enplanement activity at Ontario International by examining historical trends or relationships and projecting those trends or relationships into the future. Historical trend and time series forecasting models can only be used where a stable forecasting environment is found, i.e. where there is reasonable certainty that the fundamental historical relationships between the forecast variables will continue into the future. However, such is not the case for Ontario International and the airports in the Southern California region. Presented below are alternative passenger forecasts for Ontario International that seek to address the anticipated changes in aviation demand, and impacts on Ontario International in particular, resulting from future changes in the Southern California region. Forecasts by Others Ontario International Airport falls within the planning area of the Southern California Association of Governments (SCAG). In SCAG’s 2004 Regional Transportation Plan, part of the larger Destination 2030 plan for the Southern California region, a comprehensive strategy is identified to meet the future air transportation needs of the region while minimizing the impacts on system capacity resulting from the constraints and limitations at existing Southern California commercial airports. While the planning horizon for this analysis is 2020, the 2030 SCAG forecasts and implementation strategies have a direct bearing on this forecasting process. Under the Regional Aviation Plan, a component of the 2004 Regional Transportation Plan, SCAG anticipates a regional demand of 170 Million Annual Passengers (MAP) by 2030 compared to



5-13

77.8 MAP in 2002. The 170 MAP passenger demand is predicated upon a variety of factors ranging from future regional population distribution and job growth, to increasing congestion at urban airports and construction of a regional Maglev high-speed train system to help shift passenger demand to the outlying suburban airports. The Regional Aviation Plan relies on the “decentralization” of aviation demand as a key strategy in meeting the future air transportation needs of the region. In preparing the Regional Aviation Plan, SCAG evaluated various forecast scenarios ranging from a “constrained” scenario assuming that the existing physical and capacity constraints at urban airports remain in place, resulting in 140.8 MAP in the region, to an “unconstrained” scenario where all barriers to growth are removed resulting in 192 MAP. The Preferred Plan results in 170 MAP by 2030 in the region based on the following assumptions: • Los Angeles International Airport (LAX) has a maximum capacity of 78 MAP dictated by

physical constraints • Burbank Airport (BUR) could increase capacity to 10.7 MAP by constructing new remote

terminal gates • Long Beach Airport (LGB) will increase capacity to 3.8 MAP through larger aircraft and

higher load factors • John Wayne Orange County Airport (SNA) will obtain governmental agreements as

needed to accommodate 10.8 MAP • Ontario International (ONT) will expand to 30 MAP (the physical capacity of the runway

system) • Other commercial airports in region will develop unconstrained including San Bernardino

International (SBD), Palmdale Regional (PMD), March GlobalPort (MAR) and Southern California Logistics Airport (SCL) and Palm Springs (PSP)

• A MagLev system will be developed which could help distribute passenger demand to suburban airports

• Airport ground access improvements will be constructed as identified in the SCAG Plan • Market incentives and management strategies will be instituted to help shift passenger traffic

to outlying airports The SCAG passenger forecasts for commercial service airports in the region are presented in Exhibit 5-11.



5-14

Exhibit 5-11

SCAG Regional Aviation Plan Passenger Forecasts by Airport (in Million Annual Passengers)

Airport 2002 (Actual) 2010 2020 2030

Burbank 4.6 7.4 10.7 10.7 John Wayne 7.9 10.2 10.8 10.8 LAX 56.2 73.7 78.0 78.0 Long Beach 1.4 2.5 3.8 3.8 March GlobalPort 0.0 0.5 2.9 8.0 Ontario Intl. 6.5 10.3 18.1 30.0 Palm Springs 1.1 2.1 3.1 3.2 Palmdale 0.0 1.1 5.5 12.8 San Bernardino 0.0 0.7 4.2 8.7 SCL 0.0 0.2 1.8 4.0

Total 77.8 108.7 138.9 170 Source: Southern California Association of Governments 2004 Regional Transportation Plan/Regional

Aviation Plan As Exhibit 5-11 indicates, all airports in the region demonstrate continued growth until the 2020 time frame. Beyond 2020, four of the airports including Burbank, John Wayne, LAX and Long Beach are at maximum capacity while Ontario International, Palmdale Regional March GlobalPort and San Bernardino continue to absorb the additional growth in passenger activity. Based on the SCAG forecast of Ontario International passengers, the average annual growth in passengers between 2002 and the 2020 forecast horizon for this analysis is 6.1 percent. During the same 2002 to 2020 time period, total SCAG forecast regional passengers are expected to grow at a 3.3 percent average annual growth rate. The average annual growth rate of enplanements at Ontario International extending over the entire SCAG Regional Aviation Plan 2002 to 2030 forecast period is 5.6 percent. In parallel to the SCAG forecasts for Ontario International under the 2004 RTP Regional Aviation Plan are preliminary forecasts prepared by HNTB in March, 2004 for use in the Ontario International Airport Master Plan. (It should be noted that these were preliminary forecasts and have not yet been approved by FAA or LAWA. However, they provide information that was deemed worthy of consideration for this forecast). The HNTB forecasts cover the period from 2000 through 2030, with forecast benchmarks in 2010 and 2020. A variety of complex forecast methodologies were tested, eventually arriving at a “bottom-up” model, a “top-down” regionally unconstrained model, and a “top-down” regionally constrained model. As with the SCAG 2004 RTP Regional Aviation Plan forecast, the HNTB top-down constrained model assumes limitations to growth and expansion of other airports in the Southern California region will contribute to a shift in demand to Ontario International. The results of the three forecast approaches are summarized in Exhibit 5-12 below.



5-15

Exhibit 5-12

HNTB Draft Master Plan Passenger Forecasts Ontario International Airport

2002

(Actual)

2010

2020 2002 to

2020 AAGr Bottom-Up Approach 6,176,870 9,515,103 13,004,780 4.2%

Top-Down Approach, Regionally Unconstrained 6,176,870 9,314,716 13,254,360 4.3%

Top-Down Approach, Regionally Constrained 6,176,870 9,314,716 25,362,904 8.2%

HNTB Recommended Forecast Top-Down Approach, Regionally

Constrained 6,176,870 9,930,988 25,362,904 8.2%

Source: Ontario International Airport Phase I Master Plan Draft. The HNTB draft forecast assumes that regional constraints will begin to impact the allocation of demand between airports by 2010, and increase significantly through 2015. This assumption is clearly evidenced by the 8.2 percent average annual growth rate in enplanements between 2002 and 2020. This growth rate is approximately 33 percent higher than 6.1 percent rate projected in the SCAG forecast for Ontario International during the same period. It is noted that the SCAG and HNTB 2002 actual passenger numbers differ slightly. This is attributed to the use of different data sources and rounding. While both HNTB and SCAG forecasts project Ontario International to reach its maximum passenger capacity of 30 MAP by 2030, the HNTB recommended forecast suggests a faster growth rate during the middle-years of the forecast period. However, a review of the SCAG forecast allocations in Exhibit 5-11 suggests that the key regional airports still show reserve capacity in 2010. It is not until around 2020 that Burbank Airport, John Wayne Airport, LAX, and Long Beach Airport reach their theoretical maximum passenger limits. It is believed that SCAG forecast is built upon a more robust regional analysis and more accurately reflects likely passenger growth rates in the 2002 to 2020 time frame. The published FAA Terminal Area Forecasts also provide projections for key aviation activity indicators, including anticipated enplanement levels through 2020. The TAF forecasts are provided for individual airports listed in the National Plan of Integrated Airport Systems (NPIAS) based on a variety of factors, including historical airport activity as well as the FAA’s national aviation forecast model. The TAF forecasts are unconstrained; i.e., the forecasts assume the airport and air traffic system can accommodate whatever level of demand may be placed upon them. Existing FAA Terminal Area Forecasts (TAF) for each of the commercial passenger airports contained in the SCAG were aggregated to compare FAA TAF enplanement forecasts for the region with SCAG forecasts. The comparison of FAA TAF and SCAG enplanement forecasts are summarized in Exhibit 5-13.



5-16

Exhibit 5-13

SCAG Region Passenger Forecasts v. FAA TAF (in Million Annual Passengers)

2002

(Actual) 2010 2020 AAGr

2002 to 2020SCAG Regional Passenger Forecast 77.8 108.7 138.9 3.3% FAA TAF Regional Passenger Forecast1 72.9 99.7 135.2 3.5% Source: Southern California Association of Governments 2004 Regional Transportation Plan/Regional

Aviation Plan. 2004 FAA TAF forecasts for same airports as reflected in SCAG Regional Aviation Plan

Note: 1FAA TAF forecast are for enplanements only. FAA enplanements have been doubled to reflect total passengers for comparison to SCAG forecasts.

Although the average annual growth rate of SCAG forecast passengers is slightly lower than the FAA TAF rate, the higher reported number of 2002 passengers results in a higher number of total regional passengers in 2020. A major difference with the TAF forecast is that it assigns 95.8 MAP to LAX in 2020. A comparison of SCAG, HNTB and FAA TAF passenger forecasts specific to Ontario International is presented in Exhibit 5-14.

Exhibit 5-14 Comparison of Existing ONT Passenger Forecasts

(in Million Annual Passengers)

2002 (Actual)

2010 2020 AAGr 2002 to 2020

SCAG ONT Passenger Forecast 6.21 10.3 18.1 6.1% HNTB ONT Passenger Forecast 6.21 9.9 25.4 8.2% FAA TAF ONT Passenger Forecast 6.21 8.4 11.3 3.4% Source: Southern California Association of Governments 2004 Regional Transportation Plan/Regional

Aviation Plan. 2004 FAA TAF forecasts include same airports as contained in SCAG Regional Aviation Plan

Notes: 1Adjusted from original forecast to 2002 Actual for consistency. 2FAA TAF forecast are for enplanements only. FAA enplanements have been doubled to reflect total passengers for comparison to SCAG and HNTB forecasts.

At the regional level, total FAA TAF passengers attributed to SCAG region airports, as cited in Exhibit 5-13 above, are similar to SCAG projections in both growth rate and overall passengers in 2020. In contrast, the passenger growth rates attributed to Ontario International by SCAG and FAA differ significantly. The FAA TAF forecast for Ontario International assumes a 3.4 percent average annual growth rate, substantially below the 6.1 percent rate contained in SCAG’s Preferred Aviation Plan. The FAA TAF growth rate more reflects the historical trends at Ontario International rather than anticipating the fundamental changes in regional aviation demand patterns and allocation strategies contained in the SCAG forecast.



5-17

In summary, the draft HNTB passenger forecast model may be aggressive in the 2010 to 2020 time frame, resulting in substantially higher passenger levels at Ontario International in 2020 than projected by SCAG. The HNTB forecast assumes that capacity constraints at other airports in the region may not be overcome and it is therefore prudent for Ontario International to plan to absorb a greater share of regional traffic (Phase I Master Plan Draft). While this scenario may some day materialize, it is believed that the impacts on Ontario International would be mostly evident beyond the 2020 time frame once the urban area airports have reached capacity. Nevertheless, the HNTB draft forecast does provide a “worst case” scenario from which to assess potential environmental impacts. The FAA TAF forecast for Ontario International is withdrawn from further consideration in that it is based on historical patterns. LAWA anticipates patterns will change due to capacity constraints at other airports. Selected Passenger Forecast As outlined in Section 1 of this report, the purpose of this forecast effort is to produce a reasonable estimate of future aviation demand at Ontario International Airport in order to assess the potential environmental impact of the Pacific Gateway Air Cargo Center (PGCC). A forecast of passenger enplanements must be selected to calculate the number of aircraft operations that, when added to forecasts of air cargo and general aviation operations, will provide a baseline level for determining total airport aircraft operations. Recognizing that it is highly unlikely that a single passenger forecast for Ontario International can precisely define future enplanements at the airport, three forecast scenarios are identified below which are believed to more likely characterize the range of future passenger activity that may be expected through the end of the forecast period. None of the historical trend or market share models tested in the preceding analyses anticipate the level of activity likely to occur at Ontario International based on how passengers will be distributed among airports within the region in the future. Consequently, the trend and market share models were rejected as a basis for future passenger forecasts at Ontario International. As previously noted, the growth of the Southern California region in general, and the Ontario International Airport service area in particular, will see enplanement activity increase beyond normal historical growth rates. The SCAG 2004 Regional Transportation Plan acknowledges that urban airports will become constrained over the RTP planning period thereby forcing additional activity to the outlying suburban airports, including Ontario International. In fact, shifting future demand to the suburban airports is a key aspect of SCAG’s “decentralization” strategy in the 2004 Regional Transportation Plan. Under SCAG’s Regional Aviation Plan, an optimal environment for passenger growth is created by managing future aviation demand through a series of local and regional actions. Taking into consideration that SCAG predicts air traffic to significantly increase at Ontario International due to shifting demand, and that a forecast has already been produced under the direction of LAWA that has factored in these market dynamics, the HNTB Master Plan Phase I Draft forecast has been chosen as the selected forecast of passenger demand from which to



5-18

develop the rest of the analysis required in this report. The HNTB draft forecast predicts Ontario International to reach 25.4 MAP by 2020. The Regional Aviation Plan was selected by SCAG as the best alternative to accommodate the greatest passenger growth within the region and at each airport within the regional system. As a result, the SCAG Regional Aviation Plan forecast is recommended as a secondary alternative forecast as it represents the greatest level of demand that can be accommodated in an “optimized” system environment. The SCAG Plan forecast anticipates 18.1 MAP at ONT in 2020. Lastly, a low alternative forecast for Ontario International is based on an average annual growth rate of 5.9 percent, slightly less than the 6.1 percent rate used in the SCAG forecast, and also reflects updated and more recent passenger data than was available during the development of SCAG’s plan. Under this scenario, Ontario International Airport’s share of the regional passenger market increases from 8.4 percent in 2002 to 13 percent in 2020, reflecting the increasing role the airport will play in the region, with passengers reaching 17.3 MAP by the end of the forecast period. The three passenger forecast projections for Ontario International through 2020 are presented in Exhibit 5-15. A graphic comparison of the passenger forecasts for Ontario International are presented in Exhibit 5-16 on the following page.

Exhibit 5-15 Selected, Secondary and Tertiary Passenger Forecasts

20031

(Actual) 2010 2020 AAGr

2002 to 2020 Selected Forecast (HNTB Draft) 6,571,154 9,930,988 25,362,904 8.3%2 Secondary Passenger Forecast 6,571,154 10,300,000 18,100,000 6.1% Tertiary Passenger Forecast 6,571,154 9,783,130 17,273,740 5.9%

Source: Keiser Phillips Associates Notes: 1All forecast models updated to reflect 2003 Actual Passengers.

2Growth rate adjusted to reflect 2003 Actual passengers.



5-19

Exhibit 5-16

Passenger Forecast Summary

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Tota

l Pas

seng

ers

Tertiary Forecast Secondary Forecast Selected Forecast (HNTB Draft)


5.2 AIR CARRIER OPERATIONS FORECAST Forecasting the number of passenger carrier operations at the airport helps to establish a number of factors that are important to airport planning. An aircraft operation is defined as a take-off or a landing; thus each flight consists of two operations. Forecasting operations relies on a process that determines the historical average number of enplaned passengers per air carrier departure, projects changes in this ratio, and applies these changes to the forecast of enplaned passengers. Enplaned Passenger Forecast Allocations In order to generate air carrier operations forecasts, the air carrier fleet and operations characteristics discussed above must be analyzed in conjunction with passenger enplanement forecasts for Ontario International. The enplaned passenger forecast must be allocated between the large, regional/commuter, and charter carriers to establish their individual shares of the overall future passenger market at the airport. The allocation of the passenger forecast between carrier types, shown in Exhibit 5-17, was prepared using a combination of existing data and historical trends. In recent years, charter carrier enplanements have constituted only 0.1 percent of total enplanements. For forecasting purposes it was assumed that the market share of charter carriers would remain at 0.1 percent through the end of the forecast period. In contrast, regional/commuter enplanements have shown a significant increase in market share in recent years, and yet remain well below the national average.



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The FAA long-range forecasts indicate that in 2003, regional/commuter carriers enplaned over 18 percent of US domestic passengers compared to 5.5 percent at Ontario International. By 2020, the FAA projects regional commuter carriers to enplane nearly 25 percent of domestic US passengers, for an average annual growth rate in the percentage share of passengers carried by regional/commuters of approximately 2 percent between 2003 and 2020. Extrapolation of recent regional/commuter enplanements through 2020 results in a 22 percent share of forecast Ontario enplanements and a 16 percent annual growth rate. However, while a 22 percent share of 2020 Ontario International enplanements approximates FAA forecasts of regional/commuter enplanement share nationally for the same time period, conversations with local industry experts indicates that it may be somewhat high for the Southern California market. The geographic location of Ontario International Airport relative to potential regional markets likely contributes to the lower regional/commuter passenger share relative to national averages, and will likely impact growth potential in the future as well. Therefore, for forecasting purposes, a regional/commuter passenger share of 13 percent of total 2020 Ontario International enplanements has been selected, slightly more than one-half the FAA’s projected national average for 2020. This passenger forecast allocation to regional/commuter carriers still results in a 6.1 percent average annual growth rate for regional/commuter carrier passengers at Ontario International, three times the FAA national growth rate for regional/commuter carriers between 2003 and 2020.



5-21

Exhibit 5-17

Enplaned Passenger Allocation by Carrier Type

Large

Carriers Regional/

Commuter Charter Carrier

Total Enplanements

Forecast

2010 4,560,077 400,452 4,966 4,965,494 2020 11,020,181 1,648,589 12,682 12,681,452

Source: Keiser Phillips Associates Air Carrier Fleet Characteristics Knowledge of the composition of the passenger aircraft fleet is an important component of the aviation demand forecasts for Ontario International. A five-year record of passenger aircraft landings by type are presented in Exhibit 5-18. To calculate total passenger carrier operations, the reported landings would be doubled based on the assumption that each aircraft arrival (landing) has a corresponding departure (take-off) thus resulting in two operations. The exhibit reflects all commercial passenger operations at Ontario International including large scheduled carriers, regional/commuter carriers and non-scheduled passenger charter operations and identifies the 5-year average percent of total passenger operations by each aircraft type.



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Exhibit 5-18

Historical Commercial Passenger Operations by Aircraft Type

Aircraft Type 1999 2000 2001 2002 2003

5-Year Ave. Share of Passenger Operations

A319 84 461 663 663 1,018 1.3% A320 740 1,803 1,179 1,180 3,774 3.6% B727-100 5 4 4 10 188 <0.1% B727-200 630 742 17 12 50 0.7% B737-100 9 5 3 1 4 <0.1% B737-200 2,079 1,268 649 565 956 2.6% B737-300 18,456 17,624 16,844 16,844 28,566 44.2% B737-400 728 1,102 1,150 1,152 2,348 2.8% B737-500 2,943 3,721 3,007 3,006 7,146 8.6% B737-700 1,508 3,609 3,835 3,848 9,292 9.2% B737-800 9 9 63 63 848 0.3% B737-900 0 2 4 4 104 <0.1% B747-100 1 1 1 1 <0.1% B747-200 0 0 2 2 8 <0.1% B747-400 0 1 2 2 6 <0.1% B757-200 510 700 648 652 1,264 1.7% B767 0 2 0 0 2 <0.1% B767-200 0 0 0 0 2 <0.1% B767-300 1 1 47 47 946 0.3% B777-200 0 0 0 0 2 <0.1% BAC111-200 0 0 0 0 2 <0.1% CRJ-100 0 0 78 397 1,470 0.7% CRJ-200 0 0 0 669 1,378 0.7% CRJ-700 0 0 0 0 1,766 0.5% DC9 0 39 27 1 4 <0.1% DC10-10 3 4 122 123 2 0.1% DC10-30 1 0 8 8 <0.1% EMB-120 3,386 3,935 2,918 2,804 5,162 8.2% EMB-140 0 0 0 0 4 <0.1% F-27 0 52 52 3 <0.1% L1011-100/500 2 10 0 0 <0.1% MD-11 0 0 0 0 2 <0.1% MD-80 3,640 4,000 4,354 4,424 5,882 10.2% MD-83 942 91 0 0 456 0.7% MD-87 1,815 1 10 9 4 1.0% MD-88 0 23 47 48 16 <0.1% MD-90 383 737 1,027 1,045 1,286 2.0% SF-340 675 0 3 138 12 0.4%

Source: LAWA ONT operations records



5-23

At 68 percent of total commercial passenger activity, Boeing 737 series aircraft contribute the majority of commercial operations by a wide margin. The Boeing 737 is the fleet aircraft for Southwest Airlines, the dominant passenger carrier at Ontario International, which explains the high percentage of B-737 operations. Over the 5-year period, large carrier passenger aircraft contributed on average 90 percent of commercial passenger operations, with regional/commuter aircraft operations averaging slightly over nine percent of annual passenger operations. Charter passenger carrier operations averaged less than one percent of total annual passenger operations over the same time period. Commercial Passenger Operations Load Factors A direct relationship exists between the number of passenger carrier operations and the level of passenger enplanements. The average number of passengers on a departing aircraft helps determine the frequency of flights and/or the size of the aircraft being used on that route. This relationship is measured using a passenger load factor, which is typically expressed as a percentage of seats filled per departing aircraft. If a carrier has a high load factor, say 70 to 80 percent, it may choose to increase the number of flights or use an aircraft with greater seating capacity. The historical average enplanement load factors per departure for the large air carriers, regional/commuter carriers and non-scheduled charter carriers are presented in Exhibits 5-19, 5-20 and 5-21, along with projections for 2010 and 2020 derived using FAA long-range growth factors for aircraft seating capacity, load factors, and enplanements.

Exhibit 5-19 Large Carrier Enplanements per Departure

Year Average Seats Per Departure

Load Factor

Average Enplanements Per Departure

1999 141.3 66.7% 94.3 2000 143.0 64.6% 92.3 2001 145.8 60.5% 88.2 2002 143.5 65.4% 93.9 2003 143.5 66.3% 95.1

5-yr. Average 143.4 64.7% 92.8 2010 148.6 67.2% 99.9 2020 156.20 68.6% 107.1

Source: Keiser Phillips Associates and LAWA ONT operations records



5-24

Exhibit 5-20

Regional Carrier Enplanements per Departure


Load Factor


1999 30.1 53.3% 16.0 2000 30.0 53.4% 16.0 2001 30.5 60.5% 18.5 2002 35.6 69.7% 24.9 2003 43.3 80.2% 34.7

5-yr. Average 33.9 63.4% 22.0 2010 45.8 81.8% 37.4 2020 49.6 85.3% 42.3

Source: Keiser Phillips Associates and LAWA ONT operations records

Exhibit 5-21 Charter Carrier Enplanements per Departure


Load Factor


1999 180.6 42.4% 76.6 2000 169.9 58.5% 99.4 2001 101.9 62.8% 64.0 2002 69.6 36.6% 25.5 2003 170.3 27.4% 46.6

5-yr. Average 138.4 45.6% 62.4 2010 155.7 46.1% 71.7 2020 155.7 46.1% 71.7

Source: Keiser Phillips Associates and LAWA ONT operations records Commercial Passenger Operations Forecast Forecasts of future passenger carrier activity at Ontario International were prepared based on the passenger enplanement allocation presented above and projections of future aircraft seating capacity and load factors. Growth rates for regional carrier aircraft seating capacity and expected load factors were drawn from the FAA Long-Range Aerospace Forecasts – Fiscal Years 2020, 2025 and 2030. FAA growth rates for each forecast element were applied to existing aircraft seating and load factors to provide adjusted rates applicable to ONT. The FAA long-range forecasts for growth in load factor and seats per departure were applied to the existing Ontario International large carrier and regional/commuter fleets. Charter carrier load factors and seats per departure were assumed to remain unchanged through 2020. Specifically, the forecast of passenger carrier operations has been determined from the derived ratio of passenger enplanements per operation discussed and using the following methodology:



5-25

• Determine the future aircraft load factors and seats per aircraft departure using FAA long-range growth rates.

• Multiply the future seats per departure by the projected load factor to determine enplaned

passengers per departure. • Divide the allocated number of annual enplaned passengers by the number of passengers per

departure to calculate total number of departures. • Multiply total departures by two to obtain total operations. The forecast of annual passenger carrier operations, including air carrier, regional/commuter and charter carriers, was developed using the above methodology. The passenger carrier operations forecast is presented in Exhibit 5-22.

Exhibit 5-22 Passenger Carrier Operations Forecast

Large

Carrier

Regional Carrier/

Commuter Charter Carrier

Total Operations

Historical 2003 65,406 9,810 98 75,314

Forecast 2010 91,285 21,389 139 112,813 2020 205,721 77,961 354 284,036 AAGr 7.0% 13.0% 7.8% 8.1%

Source: Keiser Phillips Associates Over the forecast period, large air carrier operations as a percentage of total passenger operations drop from 87 percent of total operations in 2003 to 72 percent in 2020. In contrast, regional/commuter operations, which constituted 13 percent of 2003 total passenger operations, grow to 27 percent of total passenger operations during the same time period. While the 13 percent average annual growth rate for regional/commuter air carrier operations appears high in comparison to the large carrier operations growth rate, it is a result of the increase in total passengers expected to be captured by the regional carriers as already discussed under the enplaned passenger market allocations above. An estimate of future passenger carrier operations by aircraft type is provided in Exhibit 5-23. This exhibit is derived from information presented in Exhibits 5-18 through 5-22. The 5-year history of passenger carrier operations by aircraft type was used to compile consolidated list of passenger aircraft. Allocation of operations between aircraft type was calculated using a combination of historical percentage of operations by type at Ontario International, FAA long-range forecasts of average seats per departure and passenger carrier operations by carrier as presented in Exhibit 5-22.



5-26

Exhibit 5-23

Future Passenger Carrier Operations by Aircraft Type

2003 (Actual) 2010 2020 TurboProp EMB-120 5,162 8,510 17,830 SF-340 12 1,800 1,010 F-27 2 -- -- Regional Jet CRJ-100 1,470 3,340 17,670 CRJ-200 1,378 3,860 18,680 CRJ-700 1,766 3,610 19,700 EMB-140 4 250 3,050 Narrow Body BAC111-200 2 -- -- A319 1,018 1,390 5,800 A320 3,774 5,150 6,270 B727-100 188 210 210 B727-200 50 240 360 B737-100 4 -- -- B737-200 956 -- -- B737-300 28,566 36,540 58,560 B737-400 2,348 4,660 21,900 B737-500 7,146 9,290 21,560 B737-700 9,292 10,990 26,520 B737-800 848 1,810 11,880 B737-900 104 910 5,640 B757-200 1,264 2,620 8,520 DC9 4 -- -- MD-80 5,882 8,160 12,870 MD-83 456 990 2,390 MD-87 4 910 9,100 MD-88 16 450 3,470 MD-90 1,286 2,920 3,120 Widebody A310 800 2,920 DC10-30 2 560 1,300 B747-200 8 20 50 B747-400 6 150 250 B767 2 -- -- B767-200 2 -- -- B767-300 946 2,500 1,650 B-787 - 1,500 B777-200 2 150 230 MD-11 2 -- -- Total Operations 73,972 112,813 284,036

Source: LAWA ONT Airport Records Keiser Phillips Associates

Note: Numbers may not sum due to rounding



5-27

5.3 PEAKING CHARACTERISTICS Enplaned Passenger Peaking Peak passenger levels may impact the need for airport facilities such as terminal area requirements, as well as impact aircraft operations levels as seen from the preceding discussion. Forecasts of peak passenger enplanement levels were prepared using three key indicators of peak aviation activity including: • Peak Month Enplaned Passengers: Defined as that month in the calendar year when the

highest overall activity levels occur. The term “Design Month” is interchangeable with peak month.

• Average Day Enplaned Passengers: Defined as the average day within the peak month. This

indicator is developed by dividing the peak month activity by the number of days within that month.

• Peak Hour Enplaned Passengers: Defined as the peak hour activity within the average day.

Exhibit 5-24 1999 to 2003 Average Historical Monthly Enplanements (by percent)

Month Average Monthly

Enplanements Average Percent of Total

Annual Enplanements January 242,703 7.4% February 234,775 7.1% March 279,404 8.5% April 283,446 8.6% May 289,583 8.8% June 300,416 9.1% July 302,667 9.2% August 315,496 9.6% September 240,953 7.3% October 270,805 8.2% November 264,557 8.0% December 264,052 8.0%

Source: LAWA ONT operations data Exhibit 5-23 above presents a historical average distribution of passenger enplanements by month. Based on a 5-year sample of data, peak month passenger activity occurs during August with 9.6 percent of the total annual enplanements. Consequently, for forecasting purposes, peak month enplanements were calculated at 9.6 percent of annual enplanements. Enplaned passenger peaking forecasts for the planning period are presented in Exhibit 5-25 below. In the forecasts, Average Day enplanement forecasts were derived by dividing peak



5-28

month enplanements by 31. Future peak hour enplanements were forecast using estimates of peak hour departures as a percentage of average day activity based on guidance provided by the FAA in Advisory Circular 150/5360 – Planning and Design Guidelines for Airport Terminal Facilities. Based on FAA methodology, the peak hour enplanements were calculated as 9.5 percent of Average Day enplanement activity.

Exhibit 5-25 Enplaned Passenger Peaking Forecast

Total Annual Enplanements

Peak Month Enplanements

Average Day Enplanements

Peak Hour Enplanements

Historical 2003 3,285,577 315,181 10,167 966

Forecast 2010 4,965,494 476,687 15,377 1,461 2020 12,681,452 1,217,419 39,272 3,731

Source: LAWA ONT operations data Keiser Phillips Associates

Exhibit 5-26 1999 to 2003 Average Commercial Passenger Operations Peaking

Month Ave. Monthly Operations Ave. Percent of Annual Operations

January 3,595 8.4% February 3,253 7.6% March 3,654 8.5% April 3,578 8.3% May 3,694 8.6% June 3,598 8.4% July 3,731 8.7% August 3,766 8.8% September 3,520 8.2% October 3,587 8.3% November 3,452 8.0% December 3,535 8.2%

Source: LAWA ONT operations data Passenger Carrier Operations Peaking Between 1993 and 2003, average monthly passenger carrier operations ranged from a low of 7.6 percent of total annual operations in February to a high of 8.8 percent of annual operations in August. The forecast of future peak month activity has been projected at the rate of 8.8 percent of projected annual operations. Average day operations were calculated by dividing peak month operations by 31 days. Lastly, peak hour operations were calculated by dividing peak hour Enplanements cited in Exhibit 5-25 by a weighted average, by forecast year, of forecast seats per departure based on percentage of operations by carrier type derived from Exhibit 5-22. The



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resulting product represented peak hour departures, which were then doubled to yield total peak hour operations accounting for aircraft arrivals and departures.

Exhibit 5-27 Passenger Operations Peaking Forecast

Total Annual Operations

Peak Month Operations

Average Day Operations

Peak Hour Operations

Historical 2003 75,314 6,552 211 15

Forecast 2010 112,813 9,928 320 25 2020 284,036 24,995 806 66

Source: LAWA ONT operations data Keiser Phillips Associates



6-1

Section 6: Air Cargo 6.1 AIR CARGO INDUSTRY PROFILE In its simplest form, the air cargo market is made up of freight and mail. Airmail is contracted out by the U.S. Postal Service (USPS) and travels in the lower deck baggage/cargo compartments of commercial passenger aircraft and on freighters operated by contractors. Air freight refers to all cargo other than mail and passenger baggage. Air freight activity can be divided into a number of components: that conducted by the passenger airlines, the traditional all-cargo carriers, and the service oriented integrated/express all-cargo carriers. The passenger airlines and traditional all-cargo airlines provide similar types of service, that is, inexpensive transport and little through service, although at different scales. The passenger airlines, such as Southwest Airlines and United Airlines, emphasize the use of lower hold, or “belly space”, of their scheduled passenger aircraft, while the traditional air cargo airlines, such as Kitty Hawk, Polar Air Cargo, and Evergreen, have entire fleets dedicated to air cargo and have few limits on cargo size or type. Some passenger carriers also have aircraft dedicated to hauling freight, such as EVA Airlines or Korean Air Lines or run “combis," i.e. aircraft that are designed to carry a combination of both cargo and passengers on the main deck, such as Alaska Airlines. Both passenger carriers and the all-cargo carriers are often dependent on an established support structure of freight forwarders and consolidators located on or near the airport. The traditional services provided by these two types of carriers are generally oriented to the needs of large-volume shippers, such as manufacturers who ship in large quantities. The integrator/express carriers use their own aircraft and ground transport, and essentially provide door-to-door service for both small package and heavy freight. The express services, formally geared to the smaller shippers, such as businesses, professional associations, retailers, and individuals, who require individual attention, are also attracting large scale shippers as clients by providing a full range of logistics services. Representative of this type of service are Federal Express, United Parcel Service (UPS), DHL, TNT Express and BAX Global. Factors Affecting Industry Growth The air cargo industry, like most industrial groups, is dependent upon population growth, gains in the economy, and growth in international trade. The volume of freight shipped by air will also be sensitive to the shipping tariffs of other modes of transportation. In addition to the primary influence of economic activity, many other factors can influence the levels of world air cargo, particularly the express and small package carriers. These factors include changing inventory management techniques, deregulation and liberalization of trade, national development programs, and a never ending stream of air-eligible commodities. At the local level, many of these same factors apply. However, extreme change in freight volumes at a small hub, or non-hub airport, more often results from the initiation of new carriers or services than from overall industry growth or decline.



6-2

Inhibitors to Growth While certain factors mentioned above have increased air cargo activity faster than GDP in some markets, other factors have come into play that have caused air cargo tonnages to drop at many airports. Among these factors are: • FAA security directives • Modal shift from air to other modes (especially trucks) • The downsizing of passenger aircraft fleet. In October 2001 the FAA issued a new security directive under 14 CFR Part 108 to strengthen security standards for transporting cargo on passenger flights. The directive, which exempts all-cargo flights at this time, was in response to the September 2001 terrorists attacks. This significantly impacted air cargo activity in 2002, including a shift from passenger carriers to all-cargo carriers. The Transportation Security Administration (TSA) issued additional security directives in November 2003. These directives, which require the carriers to conduct random inspections of cargo, will impact the transportation of cargo on both passenger and all-cargo flights. Another key factor affecting the growth of air cargo at many airports is the shift from air to trucks, particularly by the integrator/express carriers and the USPS. This shift, which results from improved service and economies of motor carriers, is being accelerated by additional security costs associated with air service, the higher costs of on-airport facilities, and the growth in popularity of time-definite second, third and fourth day delivery products. In 2003, the fleet of passenger jet aircraft for US large carriers decreased by an estimated 120 aircraft. This marks the third consecutive annual decline in the passenger jet aircraft fleet of the large carriers. Since 2000 the large air carrier passenger fleet has shrunk by 405 aircraft. By contrast, the regional/commuter aircraft fleet has expanded at well over 100 aircraft per year since 1997. As a result, the belly capacity available for freight has shrunk significantly, driving many shippers to turn to trucks. Industry Air Cargo Forecasts According to most industry analysts, worldwide air cargo is expected to rise between six and seven percent per year over the next 20 years. This growth relates to an improved world economy and accelerating rates of international trade, spurred by the rapid globalization of business and the spread of free trade agreements and open skies policies. Moreover, the increasing adoption by businesses of new manufacturing practices that use just-in-time (JIT) delivery of component parts and finished products to keep inventory costs low, as well as lower rates in the air cargo industry because of increased efficiencies and excess aircraft capacities, have prompted shippers to use air transport to deliver many products with relatively low value-to-weight ratios that previously were rarely shipped by air. The various industry forecasts for worldwide air cargo growth are fairly consistent. The projected growth rates range from a low of 5.3 percent by the Airbus Industrie to 7.5 percent by the Boeing Company. The International Air Transport Association (IATA) forecasts a six percent growth in air



6-3

cargo for the 2004-2008 time period. The average of the various projections for worldwide air cargo growth is about 6.0 percent average annual growth rate over the next 20 years. Detailed market analysis in the 2004/2005 Boeing World Air Cargo Forecast projects annual world air cargo growth of 5 percent to 7.5 percent over the next 20 years — approximately double the forecasted economic growth. This growth reflects continuing fundamental changes in global trade patterns such as supply chain innovations, “just-in-time” production and distribution and e-commerce sales. Other significant air cargo industry developments mentioned by Boeing include service innovations and improvements, partnerships and alliances and the extraordinary growth in the international express market. On a regional basis, Boeing forecasts indicate that markets involving Asia will achieve the highest growth rates, predicting 10.6 percent growth for inter-Asia freight traffic, 7.0 percent growth Asia-North America traffic. The North Atlantic market is projected by Boeing to grow about 5 percent, South America-North American market at 6.2 percent northbound and 5.6 percent southbound. Boeing predicts that U.S. domestic air cargo traffic will grow at 4.1 percent, while Airbus predicts a 2.7 percent average annual growth rate for domestic US air cargo. The FAA forecasts total US air cargo volumes carried by US commercial carriers to average 4.5 percent per year over the next 12 years, with a 3.5 percent growth rate for domestic cargo and a 5.3 percent growth rate for international air cargo. Cargo carried by the US commercial all-cargo carriers in the US is expected to increase at a 3.9 percent growth rate, while belly cargo is projected to only grow at 2.0 percent annually. 6.2 REGIONAL AIR CARGO PROFILE The Los Angeles regional air cargo market, defined in this report as the six county area represented by the Southern California Association of Governments (SCAG), is very well served by a combination of passenger carriers offering both lower deck and full freighter capacity, by the integrated/express and traditional all-cargo carriers providing both door-to-door service and by line haul airport-to-airport service, and by an extensive network of freight forwarders, consolidators, customs brokers, and air trucking firms. Air cargo volumes in the region have risen steadily over the past 10 years, increasing 45 percent from approximately 1.88 million tons in 1993 to 2.71million tons in 2003. This is a somewhat slower growth rate than the region experienced between the years 1990 and 2000, when air cargo grew at over 100 percent during that ten year period. The decreased growth rate is the result of a slowing of the world economy in late 2000 and the terrorist attacks of 2001. From a high of 2.87 million tons in 2000 regional air cargo has declined 6.85 percent. Air cargo is gradually making a come-back, increasing 3.4 percent in 2003 over 2002 levels. Historical air cargo activity in Los Angeles basin is reported below in Exhibit 6-1.



6-4

Exhibit 6-1

Historical Air Cargo Activity (tons)1

Airport

1993

2003

Percent Change

Average Annual Growth Rate

Los Angeles Intl (LAX) 1,462,330 2,022,076 38.3 3.3 Ontario Intl. (ONT) 353,302 571,892 61.9 4.9 Palmdale (PMD) 5 0 -100 -- Long Beach (LGB) 30,656 55,850 82.2 6.2 Burbank (BUR) 28,444 47,634 67.5 5.3 Orange Co. (SNA) 0 15,406 100 100 Palm Springs (PSP) 313 110 -64.9 -9.9

Total 1,877,043 2,714,971 44.7 3.8 Source: SCAG 1 Throughout this report tons refers to US short tons. One US short ton is equivalent to 2000 pounds (avoirdupois). One US short ton is equivalent to 0.907 metric tonnes. As can be seen in Exhibit 6-1, the dominant air cargo airport in the region is Los Angeles International Airport (LAX), with a 75 percent market share, followed by Ontario International (ONT), with a 21 percent market share. Nationally, LAX ranks as the second largest air cargo airport in the country behind Memphis International Airport (the primary hub for FedEx). Ontario International is ranked 15th in the US due primarily to its location as the West Coast regional hub for United Parcel Service (UPS). UPS accounts for over 73 percent of the freight tonnage at Ontario International. Los Angeles International Airport dominates the region in air cargo due to a number of factors. The most significant reasons include the number of wide-body aircraft in service, the variety of destinations served, the frequency of departures and arrivals, the large investment in infrastructure and facilities, and the network of air freight forwarders that has developed in the immediate vicinity of the airport. Statistics are not kept on the volume of air cargo moved in the belly of passenger aircraft versus freighters. Based upon the existing fleet mix and responses to the Los Angeles International Airport Master Plan Cargo Survey, it is estimated that approximately 63 percent of the air cargo generated at regional airports is carried by freighters operated by both the all-cargo carriers and the combination carriers. International freight carried on freighters is estimated to be approximately 60 percent of the total. Brief profiles of the SCAG regional air cargo airports are provided below: Los Angeles International Airport In 2003 Los Angeles International handled of 961,415 tons of domestic freight and 961,707 tons of international freight (total cargo volumes at LAX may vary somewhat depending upon the source due to inconsistencies in air carrier reports). Mail volumes totaled 97,191 tons, with international mail accounting for approximately 3 percent of total mail. Reported mail volumes have declined since 2001 because of a change in reporting details by FedEx.



6-5

The dominant freight carrier at LAX is FedEx, which handled over 20 percent of cargo volumes in 2003. The second, third and largest freight carriers are United Airlines, American Airlines and Korean Air with 5.9 percent, 5.3 percent and 5 percent of the market respectively. The top domestic freight carrier at LAX by a wide margin was FedEx with 33 percent of the domestic market In comparison, the next closest competitors in the domestic market was United Airlines and Delta Air Lines, both with a 9.3 percent market share. International air cargo market shares were more evenly distributed than domestic. The top international carrier at LAX in 2003, in terms of reported tonnage, was Korean Air with 10.3 percent of the international tonnage, followed by Singapore Airlines with a 7.1 percent share of the international market, closely followed by the Taiwan carrier EVA Airways with a 6.5 percent share. It should be noted that the airport is served by a number of ACMI (aircraft, crew, maintenance, and insurance) providers such as Atlas Air, Gemini and Evergreen Airlines. Freight volumes reported by these carriers represents freight volumes generated by other airlines, primarily Asian air carriers, which may mean that certain airlines may have a larger share of the market than statistics indicate. Ontario International Airport Ontario International Airport (ONT) is one of four airports owned by the City of Los Angeles and operated by Los Angeles World Airports. Air cargo service at Ontario International is dominated by the all-cargo carriers. In 2003 Ontario accommodated 571,892 tons of air cargo. Over 98 percent of the freight volumes at ONT were generated by the integrator/express carriers. UPS was the largest carrier with 73 percent of the freight market, followed by FedEx with 18 percent, and Airborne/DHL with 4 percent. Although Ontario reported only 10,280 tons of international cargo for 2003, it should be noted that a significant amount of international freight is handled by UPS and FedEx at Ontario, but flown as domestic cargo to their hubs in Anchorage and the Midwest. Ontario International is the site of the proposed Pacific Gateway Cargo Center (PGCC), an air cargo complex in the northwest section of the airport. The property, being developed by Aero Ontario, LLC, measures approximately 105 acres and includes the former Lockheed Martin site, vacated in 1998, as well as a LAWA controlled aircraft parking area.



6-6

Emerging Air Cargo Airports In addition to Los Angeles International and Ontario International, there are a number of airports in the Los Angeles Basin and Inland Empire that have emerged within the past few years that have the propensity and interest in capturing a portion of the regional air cargo market. These airports are all former, or joint use, military facilities and are listed in Exhibit 6-2.

Exhibit 6-2 Emerging Air Cargo Airports

Airport Name Location Longest Runway (ft)

Palmdale Regional (PMD) Palmdale 12,002 San Bernardino Intl.(SBD) San Bernardino 10,001 Greater LA/March Global Port (RIV) Western Riverside Co. 13,300 Southern California Logistics (VCV) Victorville 15,050

Palmdale Regional Airport, a joint use facility, has had commercial air service from time to time but service ceased in early 1998. It is currently renewing its efforts to attract passenger air carriers to the airport. Palmdale Regional Airport is located 73.4 miles, approximately 1 hour and 30 minutes, northeast of LAX. The facility itself is located on leased land from the Air Force at Palmdale Production/Test Installation Air Force Plant No. 42, a military installation. Palmdale Regional does not have the large surplus aircraft parking ramps associated with the other former and joint military bases in the region. The Southern California Logistics Airport (SCLA), the former George Air Force Base, has aggressively marketed itself as an air cargo airport, and for a period of time in 2000, accommodated once a week 747 freighter flights by SwissGlobal Cargo. SCLA is located in Victorville, 105 miles, or approximately 2 hours and 10 minutes, East of LAX. It is served by a 15,050 x 150-foot primary runway and a parallel 10,000 foot cross wind runway. Formerly the George Air Force Base, the airport is now managed by Stirling Airports International. Stirling’s development goal is to develop SCLA into a multi-modal logistics hub. The 5,000-acre facility has considerable expansion potential and good highway access from Interstate 15. Adequate hangar and building space is available and the airport has over 1 million square feet of aircraft parking ramp. The greatest obstacle to the development of air cargo for SCLA is its distance from the primary market areas of Orange and Los Angeles Counties. San Bernardino International is located 78 miles, approximately 1 hour and 35 minutes, east of LAX and 24 miles east of Ontario International. San Bernardino International Airport is supported with a 10,000 x 180-foot runway, a new instrument landing system, and an Automated Weather Observation System III (AWOS). Adjacent to the runway and taxiways are 1,000,000 square feet of apron space, 650,000 square feet of hangar space, and over 1,500,000 square feet of warehouse space. These facilities are located next to Interstate 10. The San Bernardino International Airport Authority (SBIAA) is a Regional Joint Powers Authority responsible for redevelopment of the airport facilities at the former Norton Air Force Base. The SBIAA property, together with that of the Inland Valley Development Agency (IVDA), comprises almost 2,000 acres of land known as the San Bernardino International Airport and Trade Center (SBIATC). Surrounding the Airport and Trade Center is another 13,000 acres of redevelopment project area which is largely zoned commercial and industrial.



6-7

March Air Force Base, located in Western Riverside County, is 73 miles, or approximately 1 hr and 30 minutes, from LAX and 28 miles southeast of Ontario International. March is served by a 13,300 x 300-foot primary runway stressed for heavy aircraft, and it has more than one million square feet of ramp area fully stressed to accommodate aircraft weighing up to 900,000 pounds. It is accessed by Interstate 215. The March Joint Powers Authority (JPA) and the U.S. Air Force (USAF) have established March Air Field as a joint-use airport. The civilian airport portion of the airport is named the March Inland Port (MIP), operated by the MIP Airport Authority (MIPAA). The Authority's marketing partner is the March Inland CargoPort LLC. The airport is marketed as the Greater Los Angeles/March Global Port. According to recent industry news reports DHL is planning to build a $65 million West Coast Hub at March. Operations are anticipated to begin in the fall of 2005 with eight aircraft operating nine daily flights. 6.3 REGIONAL AIR CARGO-AIRPORT ISSUES The key issue to emerge in the region in regard to air cargo is the capacity of Los Angeles International Airport to accommodate future growth. Regional air cargo tonnage projections by the Southern California Association of Governments (SCAG) forecast regional enplaned and deplaned air cargo to increase to over eight million tons in 2030. A combination of physical and policy constraints cap the air cargo capacity of LAX to approximately three million tons. That leaves approximately five million tons of air cargo to be accommodated elsewhere. Problematic to the capacity constraints at LAX is the issue of how to manage future air cargo growth both at LAX and region-wide. There are certain economies of scale and various market dynamics that drive the air cargo industry and influence the location of air cargo activities. Many of these factors are beyond the influence of local and regional policy makers. Anecdotally, the general consensus among current air cargo carriers and forwarders is to remain at LAX for the reasons described previously, that is, as a major international gateway airport LAX supports a large number of widebody passenger aircraft servicing a variety of destinations with frequent departures and arrivals, a large investment in infrastructure and facilities, and a network of air freight forwarders, consolidators, customs brokers and warehouse operators that has developed in the vicinity of the airport. Numerous studies have been performed by a variety of public agencies, private consulting firms and real estate investors as to which underutilized regional airport is most likely to increase their portion of their regional air cargo market share from the overflow of air cargo from LAX. The selection of an airport by an air carrier to provide cargo and/or passenger service is not a random process. A variety of criteria are used in the decision-making process dependent upon the type, scope and longevity of operations that are being anticipated by an individual airline. Each airline will have criteria that are unique to its own operation and financial and strategic objectives. Typically, airport selection criteria by carrier can be divided into three distinct areas: airport market area, airport location, and airport infrastructure. All three criteria are inter-related and important to cargo carriers, although priorities will vary among different airlines.



6-8

Given existing industry trends and market dynamics that drive air carrier location decision-choices, perhaps the only certainty as to where future air cargo will be accommodated within the SCAG/Los Angeles region is that it will most likely be concentrated in one or two locations. It is unlikely that the over-flow cargo from LAX will ever be evenly distributed at airports through out the region. The most likely candidate airport for the dominate share of the future regional air cargo market will be that airport that develops a critical mass of widebody passenger and freighter service, ground handling opportunities, forwarder, customs broker, and air trucking networks, and has the ability to absorb future growth. 6.4 OVERVIEW OF AIR CARGO ACTIVITY AT ONTARIO INTERNATIONAL AIRPORT Ontario International Airport (ONT) is the second largest air cargo airport, in terms of tonnage, in Southern California, outranked only by Los Angeles International Airport (LAX). It is the fourth largest air cargo airport in the State of California and ranked 15th among all US airports in 2004. Historical enplaned and deplaned air cargo tonnages for Ontario International Airport are presented in Exhibit 6-3.

Exhibit 6-3

Historical Air Cargo Tonnages for Ontario International Airport (Tons)

Year Freight Mail1 Total Cargo Percent Change 1993 -- -- 353,302 -- 1994 -- -- 379,911 7.53 1995 370,614 16,337 386,951 1.85 1996 416,038 21,101 437,138 12.97 1997 436,909 24,839 461,748 5.63 1998 434,799 19,436 454,235 -1.63 1999 471,059 17,716 488,775 7.60 2000 489,647 22,110 511,758 4.70 2001 441,443 21,342 462,785 -9.57 2002 520,398 27,063 547,461 18.30 2003 561,222 10,670 571,892 4.46 Source: LAWA 1 Beginning in 2001, actual mail tonnages are artificially low due to reporting irregularities. Air Cargo grew an average of 4.93 percent from 1993 to 2003. Air cargo tonnages decreased 9.57 in year 2001 over 2000 due to the decline in the world economy and the events of September 11, 2001. In year 2002, air cargo increased a dramatic 18.3 percent due both to a recovering US economy and the result of the West Coast dock workers strike, which shifted a lot of what would have been ocean freight to air. In 2003 air cargo grew at 4.46 percent, typical for an airport dominated by domestic cargo. The drop in mail tonnages is due to the shifting of mail from passenger carriers to freighters and the changing of reporting procedures by certain air carriers.



6-9

Air Cargo at ONT by Carrier Type A break out of air freight and air mail by carrier type is presented below in Exhibit 6-4. Belly freight represents the volume of freight carried in the lower decks, or bellies, of passenger airplanes.

Exhibit 6-4 Historical Reported Air Cargo Activity at ONT by Carrier Type (Tons)

Belly Carriers All-Cargo Carriers 1

Year Freight Mail Subtotal Freight Mail Subtotal 1998 4,920 12,773 17,693 429,880 6,663 436,542 1999 5,243 11,570 16,813 465,913 6,538 472,451 2000 5,217 12,825 18,042 484,620 9,949 494,569 2001 4,900 8,517 13,417 436,543 12,826 449,369 2002 5,357 5,047 10,404 515,041 22,016 537,057 2003 6,464 4,501 10,965 554,758 6,169 560,928 Source: Keiser Phillips Associates 1 Beginning in 2001, actual mail tonnages by the all-cargo carriers are artificially low due to reporting irregularities. As can be seen in Exhibit 6-4, air cargo service at Ontario International Airport is dominated by the all-cargo carriers with 98 percent of the market in 2003. United Parcel Service (UPS) is the dominant air cargo carrier at Ontario, with 74 percent of the air cargo market, up from 69 percent in 2001. UPS is followed by FedEx with 18 percent and Airborne/DHL with 3.8 percent (Airborne Express was acquired by DHL Airways in 2003). UPS utilizes Ontario International as their primary West Coast hub, supporting their primary hub in Louisville, Kentucky and their international gateway in Anchorage, Alaska. The volume of mail being shipped by air through ONT has remained fairly consistent over time, but has begun to shift from the belly carriers to the all-cargo carriers. This shift is due to the shrinking size of the passenger jets serving ONT, the security measures put into place after September 11, 2001 restricting the carriage of air mail on passenger aircraft, and the U.S. Postal Service (USPS) consolidating a large number of air mail contracts into one contract with FedEx. The USPS/FedEx mail contract went into effect in August 2001 and it is expected to expand in size and scope in the coming years. Freighter Aircraft Operations An aircraft operation refers to either the taking off or landing of an aircraft. Annual all-cargo freighter operations for Ontario International are shown in Exhibit 6-5 for both air taxi utility feeder aircraft (less than 60,000 lbs. maximum gross landing weight (MGLW) and typically operating under FAR Part 135), and transport all-cargo aircraft (greater than 60,000 MGLW and operating under FAR Part 121).



6-10

Exhibit 6-5 Historical Freighter Aircraft Operations at ONT for 2001 - 2003

Year Air Taxi Feeders Transport

Freighters Total

2001 14,226 16,340 30,566 2002 14,220 16,534 30,762 2003 15,130 15,930 31,060 Source: Keiser Phillips Associates As can be seen in Exhibit 6-5, transport jet freighter accounted for approximately 55 percent of all-cargo aircraft landings and takeoffs in 2003. Of the transport freighter aircraft operations, 94 percent were performed by the three integrator carriers, UPS, FedEx and Airborne. UPS alone accounted for 70 percent of all freighter operations. The only other transport freighter operations at ONT were associated Kitty Hawk, a domestic line-haul operator, and with charter activity performed by carriers such as Polar, Atlas Air and Volga-Dnper. Air Cargo Fleet Mix As described in the previous section, the all-cargo aircraft fleet mix is made up of both transport category jet aircraft and smaller air taxi feeder turbo-props and single-engine piston utility aircraft. The all-cargo freighter transport fleet mix for Ontario International for 2003 is reported in Exhibit 6-6.

Exhibit 6-6 Transport Freighter Fleet Mix for ONT (2003)

Transport Aircraft

Percent of Transport Jet Fleet Average Capacity (Lbs.)

Boeing 767-300 28% 100,000 Boeing 757-200 20% 75,600 Boeing 747-100/200 13% 234,000 Boeing 727-100/200 12% 55,000 A300-600 8% 108,600 DC8-60/70 8% 90,600 MD11 7% 103,600 DC10-10 4% 139,800 Others 1% 100 Source: Keiser Phillips Associates As can be seen in Exhibit 6-6, the transport category fleet of air cargo freighters is dominated by the medium wide-body Boeing 767 and the large narrow-body Boeing 757.



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6.5 ONTARIO INTERNATIONAL AIRPORT AIR CARGO FORECAST The purpose of this section is to provide a baseline forecast of air cargo volumes and freighter operations for a 17 year planning horizon for Ontario International Airport. The base year will be 2003 and forecast year will be 2020. Demand elements to be addressed in the forecast will include: • Cargo Volumes • Freighter Operations, • Operations Peaking Activity, and The development of the air cargo demand forecasts will involve both quantitative analysis and subjective judgment. In general, past air cargo activity data are examined in anticipation of identifying past trends that will give an indication of future activity levels. Typically, the most reliable approach to estimating aviation demand is through the use of more than one analytical technique. Methodologies considered for forecasting generally include both a bottom-up and top down approach using regression analysis, time-series extrapolation, and market share analysis. Many of the factors influencing future aviation demand cannot necessarily nor readily be quantified. As a result, the forecast process should not be viewed as precise, particularly given the major structural changes that have occurred in the air cargo industry since airline deregulation, trucking deregulation, the advent of Open Skies, and the war on terrorism. Actual future traffic levels addressed here may differ materially from the projections presented herein because of unforeseen or unrealized events. Cargo Tonnage Forecast It is usual to project air freight separately from air mail, as air freight is a different product from air mail. Airfreight moves through the airport with a separate and distinct pattern of flows and timing. However, because FedEx, the largest carrier of air mail at Ontario does not distinguish between freight and mail in their reports to the airport or USDOT, a separate breakout of freight from mail would be misleading. For this reason, only one air cargo forecast, made up of both freight and mail, will be performed. A variety of projection models were developed using trend analysis, correlation analysis, per capita ration analysis and market share analysis. These projection models are discussed below.



6-12

Historical Trend Model The trend of historical inbound and outbound air cargo from 1993 through 2003 was evaluated and the projection of this relationship through the year 2020 was calculated using least squares extrapolation. The times series model is useful to determine if a relationship is positive or negative. The time series model is shown in Exhibit 6-7.

Exhibit 6-7

Ontario International Air Cargo Time Series Model (tons)

Year Historical Trend Projection Historical

1993 353,302 1994 379,911 1995 386,951 1996 437,138 1997 461,748 1998 454,235 1999 488,775 2000 511,758 2001 462,785 2002 547,461 2003 571,892

Forecast 2010 696,000 2020 893,000

The trend analysis resulted in a correlation coefficient of 0.95. The correlation coefficient is used to tell the strength of the relationship between or among the variables. The closer the value is to plus or minus 1, the stronger the relationship. A correlation of 0.95 indicates a relatively strong positive relationship for the data, however, since a sequential year is not a random variable, a strong correlation coefficient may be misleading. Nevertheless, the time series provides a reasonable benchmark for assessing projections generated through other models. Regression Analysis As mentioned previously, the air cargo industry, like most industrial groups, is dependent upon population growth, gains in the economy, and growth in international trade. In this section, tonnages of air cargo were projected on the basis of US domestic gross national product (GDP), world GDP and population growth in the SCAG region. The source for historical real US GDP and world GDP was the World Bank adjusted to a 2000 base as reported by the US Department of Agriculture. Forecast of US and world GDP were taken from US Energy Information Administration, Annual Energy Outlook, 2004 and reproduced earlier in Exhibit 4.1. Regional population forecasts were produced by SCAG.



6-13

Historical values for each variable were analyzed to determine the relationship between the independent and dependent variables. This relationship was then used to project future the air cargo volumes. The resulting projections are shown in Exhibit 6-8.

Exhibit 6-8

Ontario International Air Cargo Regression Models (tons)

US GDP (millions)

ONT Cargo US GDP Model

World GDP

(millions)

ONT Cargo World GDP

Model

SCAG

Population

ONT Cargo Population

Model Historical

2003 $10,356,338 571,892 $33,554,324 571,892 17,027,637 571,892 Forecast

2010 $12,861,131 708,800 $41,669,802 743,000 19,054,847 719,600 2020 $14,765,384 828,700 $48,306,721 898,100 21,300,909 909,700

As can be seen in Exhibit 6-8, the regression models produced fairly similar results. Projections, estimated ranged from a low of 828,700 to a high of 909,700 tons of air cargo for Ontario International. With a correlation coefficient of 0.94 and 0.95, both US GDP and world GDP correlated well with air cargo growth at Ontario International. Historically, SCAG regional population growth and air cargo growth at Ontario International had a lower correlation coefficient of 0.92. Market Share Model As mentioned previously, the market share technique involves a historical review of activity at an airport as a percentage of a larger regional, state, or national market. The resulting historical market share trend may then be projected into the future either as a static, or dynamic, share of the larger market. To develop a useful market share model, Ontario International’s market share of Southern California Association of Government’s (SCAG) region over the past ten years was analyzed. Market share projections were developed by applying various market shares percentages for Ontario International to the forecast of regional air cargo volumes prepared by SCAG. The market shares utilized were: • The average 10 year Ontario International regional market share of 18.45 percent, • An increasing market share based on Ontario International’s 10 year 1.13 average annual

growth rate in regional market share, and • An aggressive year 2020 market share of 40 percent based upon a subjective assessment the

estimated ability of each airport within the SCAG region capture a proportion of the SCAG forecasted 2020 air cargo volumes. (LAX was assumed to be capped at 3 million tons).

The market share projects generated the widest range of 2020 forecasts. These projections are shown in Exhibit 6-9.



6-14

Exhibit 6-9

Ontario International Airport Air Cargo Market Share Projections (tons)

Regional Air Cargo

Ontario Air Cargo

ONT

Average Market Share

Ontario Air Cargo

ONT 10 Yr.

AAGR in Market Share

Ontario Air Cargo

ONT

Dominate Market Share

Historical 1993 1,875,050 353,302 18.84% 353,302 18.84% 353,302 18.84% 1994 2,142,390 379,911 17.73% 379,911 17.73% 379,911 17.73% 1995 2,226,562 386,951 17.38% 386,951 17.38% 386,951 17.38% 1996 2,417,537 437,138 18.08% 437,138 18.08% 437,138 18.08% 1997 2,619,411 461,748 17.63% 461,748 17.63% 461,748 17.63% 1998 2,605,632 454,235 17.43% 454,235 17.43% 454,235 17.43% 1999 2,759,973 488,775 17.71% 488,775 17.71% 488,775 17.71% 2000 2,867,064 511,758 17.85% 511,758 17.85% 511,758 17.85% 2001 2,529,198 462,785 18.30% 462,785 18.30% 462,785 18.30% 2002 2,623,044 547,461 20.87% 547,461 20.87% 547,461 20.87% 2003 2,712,968 571,892 21.08% 571,892 21.08% 571,892 21.08%

Forecast 2010 3,300,000 607,200 18.45% 752,700 23.0% 1,056,000 32.0% 2020 6,312,000 1,161,400 18.45% 1,610,800 25.5% 2,524,800 40.0%

As can be seen in Exhibit 6-9, based on a SCAG forecast of regional air cargo, the 2020 market share projections for Ontario International range from a low of 1.16 million tons to a high of 2.5 million tons of air cargo. Of the three projections, the historical 10 year market share of 18.45 percent seems the least likely to occur as cargo begins to shift from LAX to alternative airports. Ontario’s share of the market will continue to increase. Growth Rate Projections As a West Coast hub for UPS and a significant regional sort center for FedEx much of the air cargo passing through Ontario International is, for the most part, unrelated to the local economy, but influenced more by factors related to the national and world economies. Events that will have the most impact on freight volumes at Ontario International include the state of the US and Asian economies, the value of the US dollar, the Yuan, and the Yen, the opening of new international markets in China, the continuing list of countries with which the US signs Open Skies agreements, international exchange rates, the emergence of e-commerce and the growing importance of air transportation in the logistics management of global supply chains. To get a more global perspective on the future growth of air cargo at Ontario International, various industry growth rates were applied to existing air cargo tonnages at the airport. These projections are shown in Exhibit 6-10.



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Exhibit 6-10

Growth Rate Projections of Ontario Intl. Air Cargo (Tons)

Airbus US Domestic

Growth Rate

FAA Growth Rate

ONT 10 Year Growth Rate

Boeing World Growth Rate

SCAG Regional Air

Cargo Growth Rate

Historical 2003 571,892 571,892 571,892 571,892 571,892

Forecast 2010 689,100 778,200 801,000 871,300 804,700 2020 899,500 1,208,600 1,296,000 1,590,100 1,376,300

Source: Keiser Phillips Associates As can be seen in the Exhibit 6-10, year 2020 projections for air cargo at Ontario International ranged from a low of 899,500, using the Airbus predicted 2.7 percent average annual growth rate for US domestic air cargo, to a high of 1.6 million tons, utilizing Boeing’s forecasted word cargo average annual growth rate of 6.2 percent. The three other projections utilized were the FAA’s predicted 4.5 percent average annual growth rate for both domestic and international US air cargo, Ontario International Airport’s 4.93 ten year historical average annual growth rate, and a SCAG predicted 18 year growth rate for regional air cargo of 5.0 percent. The SCAG growth rate was determined by comparing the historical air cargo volume for the SCAG region in 2002 with SCAG’s 2020 forecast of 6.312 million tons of air cargo as documented in SCAG’s Preferred Aviation Plan (Technical Appendix D-6 of the Final 2004 RTP). Forecasts by Others As previously mentioned, the Southern California Association of Governments (SCAG), as a part of its 2004 Regional Transportation Plan (RTP), prepared aviation forecast of air passenger and air cargo demand. The assumptions that went into this forecast are detailed in Appendix D-6 Aviation of the Final SCAG 2004 RTP and are summarized in this report in Section 5.1. The preferred SCAG air cargo forecast of Ontario International Airport is produced below in Exhibit 6-11.

Exhibit 6-11 SCAG Air Cargo Forecasts

Year Regional Forecast Ontario Intl. Forecast ONT Market Share

2010 3,300,000 876,000 26.5% 2020 6,312,000 1,536,000 24.3% 2030 8,724,000 2,252,000 25.8% Source: Southern California Association of Governments 2004 Regional Transportation Plan/Regional

Aviation Plan.



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The preferred SCAG regional air cargo forecast acknowledges that urban airports will become constrained over the RTP planning period thereby forcing additional activity to the outlying suburban airports, including Ontario International. Summary of Projections Using a variety of forecast models, 13 projections of 2020 air cargo volumes for Ontario International Airport were developed in this section of the report. These projections ranged from a low of 828,700 annual tons to a high of 2,524,800 million tons. The projections are summarized in Exhibit 6-12 and shown graphically in Exhibit 6-13.

Exhibit 6-12 Summary of 2020 Ontario Air Cargo Projections (tons)

Forecast Model 2020 Projection 17 year AAGR

US GDP Regression 828,700 2.21% Time Series Least Squares 893,000 2.66% World GDP Regression 898,100 2.69% Airbus US Dom AAGR 899,500 2.70% SCAG Population Regression 909,700 2.77% Average Regional Market Share 1,161,400 4.26% FAA AAGR 1,208,600 4.50% ONT 10 year AAGR 1,296,000 4.93% SCAG Regional Cargo AAGR 1,376,300 5.30% SCAG Forecast 1,536,000 5.98% Boeing World AAGR 1,590,100 6.20% Increasing Regional Market Share 1,610,800 6.28% 40% Regional Market Share 2,524,800 9.13%

ONT 2003 Actual 571,892 The large range of projections are the result of varying assumptions that went into the various forecast models.



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Exhibit 6-13

Summary of Air Cargo Projections

As can be seen in Exhibit 6-12 and 6-13, the lowest range projections resulted from the regression analysis based on GDP and population. The most optimistic projection is that based on Ontario International becoming the primary alternative air cargo airport for LAX and gaining a 40 percent regional market share of the six county SCAG projected 2020 air cargo volumes. In between the high and low ranges are a variety of projections based upon the application of various air cargo growth rates, generated by a variety of air cargo industry organizations and institutions, and by the application of regional air cargo market shares that Ontario International Airport can reasonably be expected to achieve of the SCAG 2020 six county regional forecast of air cargo. Falling almost in the center between the lowest and the highest air cargo projection is the forecast based upon Ontario International Airport achieving a 24 percent market share of the 2010 SCAG regional air cargo forecast, up from 21.1% in 2003, and growing to a 26 percent share of the SCAG regional air cargo forecast by 2020. Preferred Unconstrained Forecast The following section provides the rationale for the selection of a preferred “unconstrained” air cargo forecast for Ontario International. The term “unconstrained” refers to the assumption that

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1993 2003 2010 2020

40% Reg Mrkt Share Increasing Reg Mrkt Share Boeing World AAGRSCAG Forecast SCAG Reg Cargo AAGR ONT 10 year AAGRFAA AAGR Avg Reg Mrkt Share SCAG PopAirbus US Dom AAGR World GDP Time SeriesUS GDP



6-18

there are no infrastructure constrains, such as runway capacity limitations, aircraft parking limitations, or other physical constraints that would likely limit the capability of the airport to accommodate the forecast of air cargo. According to the Boeing Commercial Airplane Group, worldwide, air cargo is expected to triple over the next 20 years. The Southern California Association of Governments (SCAG) predicts regional air cargo to more than double in 17 years from 2.7 million tons in 2003 to 6.3 million tons by 2020. Los Angeles International Airport, which currently has a 75 percent market share, is expected to reach capacity at approximately 3 million annual tons of air cargo. Most of air cargo not accommodated at LAX in future years is expected to be accommodated by other airports in the region. As described in Section 6.3, it is unlikely that the future air cargo growth will be evenly distributed at airports throughout the region. The most likely scenario is that one, maybe two, airports within the region with the right mix of market size, location and infrastructure will dominate the future market. Utilizing Ontario International’s 10 year average share of the regional air cargo market, 18.45 percent, against the SCAG 2020 forecast of regional air cargo to project future growth, results in a 2020 air cargo volume of 1.2 million tons for ONT. Given that Ontario International’s share of the regional market is most likely to increase over time as cargo is diverted away from LAX, suggests that the 10 year ONT market share projection is low. At the other end of the spectrum, assuming that Ontario International becomes the dominate alternative to Los Angeles International airport, and it achieves a 40 percent share of the regional air cargo market, yields a 2020 forecast of 2.5 million tons. Most likely to occur is that Ontario International’s share of the regional market will incrementally increase as both the passenger belly carriers and the all-cargo carriers begin shifting from LAX to Ontario to take advantage of Ontario’s existing infrastructure. Over the past ten years, Ontario International’s share of the regional market has increased from 18.84 percent in 1993 to 21.08 percent in 2003. Applying this annual rate of growth in Ontario International’s regional market share to SCAG’s 2020 forecast of regional air cargo results in 1.6 million tons. As a check against an incorrect SCAG forecast, both the Boeing 6.2 world cargo average annual growth rate and the Ontario International 10 year air cargo growth rate of 4.93 fall well within the high and low range of cargo projections based upon SCAG’s regional forecast. The preferred air cargo forecast for Ontario International is presented in Exhibit 6-14.



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Exhibit 6-14

Preferred Ontario International Air Cargo Forecast (Tons)

Low Preferred High Historical 2003 571,892 571,892 571,892 Forecast 2010 607,200 752,730 1,056,000 2020 1,161,400 1,610,800 2,524,800

AAGR 4.26% 6.28% 9.13% Forecast of Air Cargo By Carrier Type The purpose of this section is to determine the breakout of future air cargo demand by carrier type. Distinguishing between carrier types is important in calculating future aircraft operations and facility needs. Belly and All Freighter Air Cargo As demonstrated in Exhibit 6-15, air cargo service at Ontario International Airport is dominated by the all-cargo carriers. In 2003, the all-cargo carriers handled slightly over 98 percent of total airport air cargo tonnages.

Exhibit 6-15 ONT Air Cargo by Carrier Type

Year Belly Carriers % of Total All-Cargo Carriers % of Total Total 1999 16,813 3.4% 472,451 96.7% 488,775 2000 18,042 3.5% 494,569 96.6% 511,758 2001 13,417 2.9% 449,369 97.1% 462,785 2002 10,404 1.9% 537,057 98.1% 547,461 2003 10,965 1.9% 560,928 98.1% 571,892 The high ratio of freighter cargo at Ontario International is typical of airports that do not have wide-body passenger service, since narrow-body aircraft do not lend themselves to containerization. The situation has been further exacerbated by new air cargo security regulations imposed after the September 11, 2001 terrorist attack that prohibit air passenger aircraft from carrying air cargo tendered by unknown shippers and, in most cases, US mail over 16 ounces. It is expected the ratio of belly cargo to freighter cargo will increase during the last few years of the forecast period as the Ontario air passenger market matures and wide-body service is introduced at the airport. Exhibit 6-16 presents the forecast of cargo for Ontario International by carrier type. The significance of this evaluation is that since belly cargo is carried on passenger aircraft no additional aircraft operations will result from an increase over time in belly cargo.



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Exhibit 6-16

Forecast of Belly and Freighter Cargo at ONT (Tons)

Belly

Freighter

Total Air Cargo

Freighter Cargo as a Percentage of

Total Historical

2003 10,965 560,928 571,892 98% Forecast

2010 22,600 730,100 752,700 97% 2020 80,500 1,530,300 1,610,800 95%

Source: Keiser Phillips Associates Totals may not add up due to rounding The ratio of freighter cargo to belly cargo at Ontario International is not expected to change dramatically during the 17 year forecast period. Transport Freighter and Air Taxi Breakout The forecast mix air cargo associated with transport freighters (aircraft over 60,000 lbs) versus air taxi feeder volumes is shown in Exhibit 6-17. The key air taxi operators at the airport include Ameriflight, Empire Air, Union Air and West Air.

Exhibit 6-17 Forecast of Air Taxi and Transport Freighter Cargo at ONT (Tons)

Transport Freighters

Air Taxi Feeders

Total Freighter

Cargo

Air Taxi as a Percentage of

Total Historical

2003 550,131 10,797 560,928 1.9% Forecast

2010 715,500 14,600 730,100 2.0% 2020 1,507,300 23,000 1,530,300 1.5%

Almost all of the air cargo carried by the air taxi carriers is in support of UPS and FedEx operations. Integrator/Express Cargo The integrator all-cargo airlines (so called because they integrate the pick-up, tracking, customs clearance and delivery functions seamlessly in-house from shipper to consignee) have significantly different operating and facility needs from the traditional line-haul carriers, who typically provide only airport-to-airport service and operate with the assistance of a large network of air freight forwarders. The integrator carriers operate large hub and spoke networks and, depending on the individual



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carrier, have a very efficient warehouse throughput ratios and operate at different times of the day from the non-integrator carriers. As mentioned previously, UPS is largest air carrier utilizing Ontario International. United Parcel Service (UPS), an integrator/express all-carrier, operates a 600,000 square foot facility on 159 acres of land immediately adjacent to airport property. The UPS facility is outside the boundary of the airport and as such, is considered a through-the-fence operation. The significance of differentiating between UPS generated air cargo and non-UPS air cargo tonnages relates to the ability of existing and planned on-airport air cargo facilities at Ontario International Airport to accommodate projected air cargo demand. Among the all-cargo carriers, United Parcel Service is the dominant air cargo carrier at Ontario International, handling 74 percent of the reported air cargo tonnage at Ontario International in 2003. This is in contrast to its 1.3 percent of the total air cargo market at Los Angeles International Airport in 2003. The Ontario UPS facility serves a dual function: 1) as service center for UPS air freight generated in the local Riverside and San Bernardino Counties, and portions of north Orange County and east Los Angeles County; and 2) as a UPS West Coast gateway sort center supporting the UPS primary hub in Louisville, Kentucky and the UPS international gateway hub in Anchorage, Alaska. The UPS Ontario West Coast gateway operation draws and distributes air freight from a geographical area roughly defined as everything West of Denver, Colorado, north to the Canadian border and south to the Mexican border. Federal Express (FedEx), another integrator carrier, is the second largest air cargo operator at Ontario International. FedEx has its own on-airport facilities located on a 630,000 square foot site along Mission Blvd adjacent to Runway End 8R-26L. A breakout of all-cargo tonnages by all-cargo air carrier type is presented in Exhibit 6-18.

Exhibit 6-18 Historical All-cargo Air Freight by Carrier Type (tons)

Year

UPS

FedEx

Other

Integrator

Non-

Integrator

Total Transport Freighter

Cargo

Percent

UPS/FedEx

1999 356,394 54,061 50,647 7,851 468,953 87.5% 2000 376,266 68,108 34,816 11,256 490,446 90.6% 2001 317,123 72,719 21,908 27,946 439,696 88.7% 2002 359,875 114,447 14,998 38,456 527,776 89.9% 2003 415,624 102,966 21,718 9,823 550,131 94.3%

Source: LAWA airport records. Over the past five years enplaned and deplaned freighter only (on aircraft dedicated to carrying only cargo) cargo tonnages have averaged 3.49 percent growth per year. UPS air cargo tonnages have grown an average of 3.12 percent per year and FedEx 13.75 percent over the same five year period. The jump in non-integrator cargo tonnages in 2002 is related to the West Coast dock



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workers strike that shifted high volume ocean cargo to air. The significant increase in FedEx tonnages reflects the new US Postal Service mail contract awarded FedEx in August 2001. In the future it is expected that the UPS portion of the total air cargo tonnages forecasted for Ontario International will decline as more non-UPS generated air cargo volumes shift from Los Angeles International to Ontario International. If a UPS five year historical 3.5 percent growth rate is applied to 2003 UPS air cargo tonnage volumes it results in 745,900 tons in year 2020, or a 46 percent market share of the projected 1.6 million tons of cargo, forecasted in the previous section, for Ontario international. Reflected in Exhibit 6-19 are the future cargo tonnage projections for UPS and others.

Exhibit 6-19 Projected All-Cargo Large Aircraft Freighter Tonnages

Year

UPS UPS as % of

Total All

Others Total Freighter

Cargo Existing

2003 415,624 76% 134,507 550,131 Forecast

2010 429,300 60% 286,200 715,500 2020 753,650 50% 753,650 1,507,300

It is expected that the “All Others” category of cargo tonnages will be primarily comprised of a combination of FedEx traffic that will shift over to Ontario from LAX (FedEx is currently the largest air cargo carrier at Los Angeles International Airport moving 412,768 tons in 2003), by international flag carriers and charter operators operating fleets of 747 and MD 11 freighters such as Korean Air Lines, EVA Kalitta Air and Polar, and by smaller domestic all-cargo carriers, such as Kitty Hawk, utilizing narrow-body freighters. Air Cargo Aircraft Fleet Mix The dominate freighter aircraft in use at Ontario International in 2003 is the medium wide-body Boeing 767 and the large narrow-body 757 series freighters utilized by UPS. Together, these two aircraft models comprise 48 percent of the fleet. UPS also utilizes a significant number of older Boeing 747-100 and 200 series large wide-bodies. The remainder of the UPS fleet at Ontario is comprised primarily of older large narrow-body DC8-60/70s aircraft. In future years, UPS is expected to replace their aging DC8s and B757s/767s with A300 aircraft and its inefficient 747-200s with newer MD-11s. UPS is also expected to put into service at Ontario the new large wide-body Airbus A380 by 2008. FedEx, the second largest air carrier at Ontario International, is currently utilizing a mix of older Boeing 727-200s and DC10s and newer A300-600s and MD11s. It is expected that FedEx will phase out all of their 727s and DC10s by 2010 to be replaced with A310s, A300s,retro-fitted DC10s and MD11s.



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Over the forecast period, as cargo begins to shift from LAX to Ontario International, the airport can expect to see an increase in longer range wide-body aircraft such as the B747-400, B777F and the MD-11 to be used in international service. The air cargo freighter fleet mix forecast for Ontario International is shown in Exhibit 6-20.

Exhibit 6-20 Forecast Of ONT Transport Freighter Fleet Mix

Existing Forecast Average Capacity (lbs)* 2003 2010 2020 Small Narrow-Body MD 80F 42,000 B 737-300/400F 43,000 <1% <1% <1% B 727-200F 55,000 12% 4% A 320 65,000 <1% 7% 7% Med Narrow-Body 757 75,600 20% <1% <1% DC8-70 100,000 8% Medium Wide-Body

A 310 79,200 <1% 2% 2% A 300-600 108,600 8% 25% 25% B 767F 100,000 28% 20% 10% B 7E7 100,000 5% DC10-10 110000 4% Large Wide-Body DC10-30 162,000 <1% MD 10/11 200,000 7% 15% 15% B 777F 220,000 2% 4% B 747-200F 234,000 13% B 747-400 F 248,000 <1% 25% 30% A-380 330,000 <1% 2%

100% 100% 100% Source: Keiser Phillips Associates *Capacities will vary widely depending on carrier. Forecast of Freighter Operations In 2003 all-cargo freighters accounted for 29 percent of annual commercial aircraft operations at Ontario International with all-cargo transport freighters accounting for 15 percent of the total and taxi feeder operators accounting for 14 percent. The peak month for all-cargo transport aircraft operations in 2003 was December, representing 11 percent of total annual operations. The average payload per transport freighter aircraft operation for the airport as a whole for 2003 was



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69,069 pounds (34.5 tons). The average payload per utility feeder aircraft was 1,427 pounds (0.71 tons). The average payload per aircraft operation for UPS was 74,605 pounds (37.3tons). The UPS payload per aircraft operation has increased an average of six percent per year since 1999 and FedEx increased their average payload per aircraft operation 4.6 percent over the same five year period. According to the 2004/2005 Boeing Commercial Airplane Air Cargo Forecast, efficient wide-body freighters will begin to replace aging standard-body freighters, driving a gradual increase in average freighter payload capability of 22 percent over the next 20-years. It is expected that as air cargo volumes at Ontario International increase, the average payload per freighter aircraft will increase. This increase is based on a number of assumptions, but primarily on the shifting of long range international freighter operations from LAX to Ontario International, a shrinking of belly capacity as passenger baggage competes for space with cargo as passenger load factors remain high, new security regulations limiting the use of lower belly holds for cargo in passenger aircraft, the continued downsizing of passenger aircraft to regional jets and the replacement of aging standard-body freighters with wide-body freighters. The forecast for air cargo transport freighter operations is shown in Exhibit 6-21. To project future aircraft operations, a one percent increase was added to the average payload per aircraft for each year of the forecast period.



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Exhibit 6-21

Forecast of Transport Freighter Operations at ONT Existing Forecast 2003 2010 2020 UPS cargo (tons) 415,624 429,300 753,650 UPS aircraft operations 11,142 10,756 17,268 Average aircraft payload / operation (lbs) 74,605 79,827 87,288 Other cargo (tons) 134,507 286,200 753,650

Other aircraft operations 4,788 9,223 22,653

Average aircraft payload / operation (lbs) 56,185 62,063 66,540

Total Aircraft Operations 15,930 19,980 39,920 Source: Keiser Phillips Associates As shown in Exhibit 6-21, freighter transport aircraft operations are expected to increase approximately 150 percent over the forecast period, with UPS accounting for approximately 43 percent of all large cargo aircraft operations at Ontario International. The forecast of air taxi operations is shown is Exhibit 6-22. The average payload per air taxi operation is also expected to increase over time, although not as fast a rate in the larger transport category aircraft. This increase in payload will come from the retirement of smaller turboprops such as the PA31 and Beech 99s and are they are replaced with specialized air taxi air cargo aircraft.

Exhibit 6-22 Forecast Air Taxi Freighter Operations at ONT

Freighter Volumes

(Tons) Operations Payload Per Operation (lbs.)

Historical 2003 10,797 15,130 1,427

Forecast 2010 14,600 20,000 1,450 2020 23,000 28,000 1,640

Source: Keiser Phillips Associates Total air cargo freighter operations are shown in Exhibit 6-23.



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Exhibit 6-23 Forecast of Total Freighter Operations at ONT

Air Taxi Transport Aircraft Total

Historical 2003 15,130 15,930 31,060

Forecast 2010 20,000 19,980 39,980 2020 28,000 39,920 67,920

As demonstrated in Exhibit 6-23, there is only an incremental increase in freighter aircraft operations from 2003 to 2010, and then almost a doubling in freighter aircraft operations over the next ten year period. This is pattern is consistent with the SCAG expectation that regional airport capacity constraints will not be experienced until later in the forecast period. Freighter Aircraft Operations Peaking Activity The peak month for cargo aircraft landings in 2003 was December, representing 11 percent of total annual freighter operations. There are three peak periods at Ontario related to the integrator carriers. These periods generally run from approximately from 2:00 am to 3:00 am, again from 5:30 a.m. to 9:30 a.m., and then between 5:30 p.m. and 10:00 p.m. The peak hour for Ontario International was estimated to be approximately 15 percent of the peak day. Projected peaking activity is shown in Exhibit 6-24.

Exhibit 6-24 Forecast of Transport Freighter Operational Peaking At ONT

Annual Freighter

Operations

Peak Month

Peak Day

Peak Hour Historical 2003 15,930 1,752 57 8 Forecast 2010 19,980 2,198 71 11 2020 39,920 4,391 142 21 Source: Keiser Phillips Associates



7-1

Section 7: General Aviation Forecast The general aviation forecasts prepared for Ontario International Airport are presented below and address the following demand elements: • General aviation operations • General Aviation based aircraft • General aviation aircraft fleet

Air taxi’s are considered general aviation and are included in this section with the exception of information related to all-cargo air taxi feeder operations. 7.1 GENERAL AVIATION BACKGROUND The Southern California region has 45 general aviation airports, in addition to the commercial service airports serving scheduled air carriers. As a result, a wide range of choices are available to the general aviation pilots and aircraft owners in the region. Between 1993 and 2003, the general aviation activity at Ontario International represented only approximately three percent of the total general aviation activity at the major commercial service airports in the region. A ten-year history of general aviation (GA) operations at Ontario International Airport, as reported by FAA, is presented in Exhibit 7-1. Between 1993 and 2003, although general aviation activity fluctuated on a yearly basis, operations averaged approximately 30,000 per year and constituted slightly less than 20 percent of total annual aircraft operations at Ontario International over the ten-year period.

Exhibit 7-1 Historical ONT General Aviation Activity

Itinerant GA Operations

Local GA Operations

Total GA Operations

GA as Percent of Total ONT Operations

1993 24,407 3,076 27,483 18.0% 1994 26,965 2,941 29,906 18.9% 1995 24,185 2,857 27,042 17.1% 1996 23,165 4,585 27,750 18.0% 1997 27,887 5,624 33,511 20.8% 1998 17,783 4,142 21,925 15.4% 1999 26,465 6,834 33,299 21.1% 2000 20,968 9,858 30,826 20.1% 2001 22,317 12,588 34,905 22.2% 2002 21,564 11,741 33,305 22.3% 2003 20,592 8,006 28,598 19.6%

10-Year Average 29,868 19.4% Source: FAA 2003 Terminal Area Forecasts Based on the historical general aviation activity data presented in Exhibit 7-1, the split between local and itinerant operations at Ontario International averaged 21 percent local and 79 percent itinerant. Local operations include training or touch-and-go activity and, by definition, do not leave



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the local air traffic control (ATCT) area. Itinerant operations typically occur when an aircraft departs the airport for another destination or arrives at Ontario International from another airport. Historical based aircraft for Ontario International as reported by the Southern California Association of Governments in the 2003 System Study for the SCAG Region are reported in Exhibit 7-2.

Exhibit 7-2 Historical General Aviation Based Aircraft at ONT

1984 1993 1997 2001 2004

ONT Based Aircraft 25 19 28 37 37 San Bernardino County Based Aircraft – All Airports 2,184 2,197 2,547 2,690 Not

ReportedONT Based Aircraft as % of County Aircraft

1.14% 0.86% 1.10% 1.38% --

Sources: SCAG 2003 System Study for the SCAG Region. 2004 data from AirNav, January 2005. As can be seen from Exhibit 7-2, Ontario International Airport’s share of total San Bernardino County based aircraft is negligible. Furthermore, the geographic location of Ontario International in the extreme southwestern San Bernardino County area suggests an even larger potential market of general aviation aircraft for the airport to draw from considering its proximity to Los Angeles, Orange and Riverside Counties with a combined total of over 7,100 additional based aircraft reported in 2001. There are seven general aviation airports in the vicinity of Ontario International which are assumed to absorb the bulk of the pressure for basing general aviation aircraft. Based on data from AirNav as of January, 2005, the composition of the existing general aviation fleet at Ontario International is as follows: • 5 Single Engine Aircraft • 7 Multi Engine Aircraft • 18 Turbine/Jet Aircraft • 7 Helicopters General Aviation Operations Forecasts The SCAG 2003 System Study for the SCAG Region was prepared as part of SCAG’s responsibility for aviation system planning in the region and to integrate general aviation into the overall Regional Transportation Plan under development at the time. The SCAGG Study also sought to understand the impacts on and implications for general aviation resulting from the strategy to decentralize aviation activity at the key commercial passenger service airports in the region as discussed in Section 5 of this report. This is particularly important because of the increasing role played by general aviation airports in serving corporate and business aviation. The SCAGG Study concluded that, similar to the pattern expected with the urban commercial service airports where growth pressures will drive activity to the outlying suburban airports, general aviation activity at the urban commercial and general aviation airports will also migrate to the suburban airports as well. The larger suburban airports are expected to feel the effects of this migration first, with activity ultimately shifting to the suburban general aviation airports. This



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trend will be reinforced by the same population and employment shifts within the region that will drive passenger activity to the suburban commercial service airports as well. However the study acknowledges that as passenger operations increase at the suburban commercial service airports general aviation activity will shift to the outlying Corporate Reliever and General Aviation Reliever facilities in the region. The SCAG Study states that the West San Bernardino County/West Riverside County/East Los Angeles County not only has the highest concentration of pilots in the Inland Empire, it will also be one of the areas to feel the first pressure as general aviation activity migrates from the more congested facilities. General aviation activity and based aircraft are expected to increase at a higher rate than other areas within the region. The SCAG Study concludes that, even with passengers at Ontario International expected to reach 30 million by 2030, the airport will still have sufficient operational capacity to accommodate 52,000 general aviation operations. It is assumed that the future general aviation activity will be primarily larger, faster turbine-powered aircraft as the slower, smaller piston aircraft seek other facilities elsewhere. General aviation activity is expected to grow at a rate of 2.0 percent annually for itinerant operations and 1.2 percent annual growth for local operations from 2005 through 2030. By 2030, total general aviation operations are expected to be slightly less than 51,000 operations. These growth rates translate into 42,395 general aviation operations in 2020. When compared to reported 2003 general aviation operations, the 2020 SCAG forecasts of 42,395 results in an average annual growth rate of 2.3 percent. General aviation operations forecasts were also prepared by HNTB as a part of the preliminary forecast for the Master Plan for Ontario International. Comparing actual 2003 general aviation operations with HNTB 2020 preliminary forecast yields an average annual growth rate of 2.8 percent. The FAA TAF general aviation operations forecasts are presented for comparison purposes. As with the passenger forecasts presented in Section 5, the FAA TAF forecasts do not reflect the fundamental changes and redistribution of aviation demand expected in the Southern California region over the forecast period. The TAF 2020 general aviation operations projections yield a 1.3 percent average annual growth rate when compared to 2003 actual general aviation operations. Lastly, FAA long-range growth rates presented in the FAA Aerospace Forecasts – FY 2004 to 2015, and FAA Long-Range Aerospace Forecasts 2020 to 2030 were also examined. Applying the general aviation operations growth rates contained in these reports results in a 2020 general aviation operations forecast of 36,250 and a composite annual growth rate of 1.4 percent from 2003 through 2020. The results of the above general aviation forecasts are presented in Exhibit 7-3.



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Exhibit 7-3

General Aviation Operations Forecast for ONT

2005 2010 2015 2020 SCAG Forecast 32,379 35,413 38,742 42,395 HNTB (Draft) Forecast -- 40,531 -- 45,917 FAA TAF Forecast 29,348 31,313 33,409 35,645 FAA Long-Range Growth Rate Forecast 29,580 32,180 35,010 36,250 Sources: SCAG 2003 System Study for the SCAG Region, HNTB Phase I Master Plan (Draft), FAA

Terminal Area Forecasts 2003 – 2020 and Keiser Phillips Associates.

The HNTB preliminary forecast has been selected as the general aviation operations forecast under this analysis for the same reasons as cited in Section 5 for the passenger forecasts. Specifically, as the highest and most aggressive general aviation operations forecast of those identified, it provides a “worst case” scenario from which to assess potential environmental impacts at Ontario International Airport. General Aviation Aircraft Operational Peaking Because many facility needs are related to activity levels during peak demand periods, projections were developed for peak month, average day, and peak hour operations as shown in Exhibit 7-4. The peak operating month for general aviation activity typically occurs in the summer months. A 5-years review of the air traffic control tower activity statistics indicated that peak month operations average approximately 9.1 percent of total annual GA operations. It was assumed that this monthly peaking factor would remain constant throughout the planning period. Average daily operations were estimated by dividing the peak month by 31 days. To develop peak hour operations projections, an hourly peaking factor was applied to the number of average daily operations. Past studies have shown this factor to be approximately 20 percent for airports with activity levels comparable to those experienced at Ontario International Airport. A 20 percent hourly peaking factor accounts for brief periods of relatively heavy use, including periods when several aircraft are in the pattern performing touch-and-go operations.

Exhibit 7-4 General Aviation Peaking

Year Total Operations Peak Month

Operations Average Day Peak Month Operations

Peak Hour Operations

2003 29,728 2,902 94 19 Forecast

2010 40,530 3,688 119 24 2020 45,917 4,178 135 27

Source: 2003 operations data – LAWA Records Forecast years – Keiser Phillips Associates



7-5

7.2 BASED AIRCRAFT AND FLEET MIX FORECAST The FAA TAF forecast for Ontario International projects general aviation based aircraft to reach 34 by the end of the forecast period in 2020. However, the TAF underreported based aircraft at the airport between 1998 and 2003, and shows based aircraft growing to 34 by 2020, fewer aircraft than are presently based at the airport. As a result, the FAA TAF based aircraft forecasts are discounted from further consideration. Neither SCAG nor HNTB produce specific based aircraft forecasts for Ontario International. However, the HNTB Draft forecast does note that “the relative growth of the [general aviation] aircraft categories is forecast to track FAA projections (HNTB Phase I Master Plan Draft). The FAA long-range growth forecasts for general aviation aircraft presented in the FAA Aerospace Forecasts FY 2004 to 2015, and through 2020 anticipate the total general aviation fleet to grow at a 1.3 percent annual growth rate until 2015 and then 0.8 percent through 2030. However, different segments of general aviation are expected to grow at different rates. The FAA projected growth rates for different types of general aviation aircraft are as follows. • Piston Aircraft (both single and multi-engine): 0.2 percent annual growth 2003 to 2030. • Turbine Aircraft (including turboprop and turbojet): 3.7 percent annual growth from 2003 to

2015 and 3.2 percent for the balance of the forecast period. • Rotorcraft: 0.7 percent growth annual 2003 through 2015 and assumed to continue through

2020. The above growth rates, when applied to the existing based aircraft fleet result in the following based aircraft forecast and fleet mix for Ontario International Airport through 2020.

Exhibit 7-5 ONT General Aviation Based Aircraft and Fleet Forecasts

2004 2010 2020

Single-Engine Piston 5 5 5 Multi-Engine Piston 7 7 7 Turboprop/Turbojet 18 22 31 Rotorcraft 7 7 8

Total Aircraft 37 42 52 Source: Keiser Phillips Associates As noted in Exhibit 7-5, the most significant growth in general aviation based aircraft at Ontario International is in the sophisticated, higher performance turbine aircraft fleet. The FAA expects turbojet aircraft to increase at over three times the rate of turboprops so it should be assumed that the growth in turbine aircraft at Ontario International will be primarily jet aircraft. Furthermore, in the HNTB Draft forecast, turbojet aircraft are reported to contribute 70 percent of general aviation operations at Ontario International. Over time, it is anticipated that general aviation activity at Ontario International will be almost entirely corporate and business-related flying activities as the smaller private aircraft used for



7-6

recreational flying and non-business purposes migrate to other general aviation airports in the region. General Aviation Aircraft Fleet Operations by Type As noted above, the general aviation operations forecast from the HNTB Phase I Master Plan (Draft) was adopted as the general aviation forecast for this analysis. The HNTB forecasts do not specifically identify helicopter/rotor operations by type. However, most rotor operations would be expected to fly a pattern separate from fixed-wing aircraft and therefore have little impact on aircraft operations capacity. Under the HNTB forecast, future general aviation operations are allocated by aircraft type as noted in Exhibit 7-6.

Exhibit 7-6 General Aviation Aircraft Fleet Operations by Type

20031 2010 2020

Itinerant Aircraft Operations Single-Engine Piston n/a 1,660 1,631 Multi-Engine Piston n/a 2,010 1,911 Turboprop n/a 2,514 2,515 Turbojet n/a 19,559 23,524

Total Itinerant Operations 25,743 29,581 Local Aircraft Operations

Single-Engine Piston n/a 1,341 1,505 Multi-Engine Piston/Turboprop n/a 2,519 2,599 Turbojet n/a 10,928 12,232

Total Local Operations 14,789 16,336 Total Operations 28,598 40,531 45,917

Source: HNTB Phase I Master Plan Draft Note: 12003 operations data not available by specific aircraft type.



8-1

Section 8: Military Operations Exhibit 8-1 shows historical and forecast military operations for Ontario International Airport. The number of military operations occurring at the airport has little or no correlation with local population, economic or other civilian air traffic indicators.

Exhibit 8-1 Historical and Forecast Military Operations

Year

Local

Itinerant

Annual Operations

Peak Month Operations

1999 77 98 175 45 2000 284 150 434 119 2001 166 120 286 65 2002 2 120 122 45 2003 129 82 211 67 Forecast 2010 130 80 210 67 2020 130 80 210 67

Source: ONT FAA Airport Air Traffic Control Tower records. For the most part, the level of military activity at any airport is determined solely by the requirements of the Department of Defense. At Ontario International Airport there is no basis for a military operations forecast other than assuming a continuation into the future the present level of activity. Historical military operations at Ontario International are reported to be approximately 60 percent C-130 aircraft and 40 percent small military tactical jets. It is assumed that future military activity at the airport will follow a similar pattern.



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Section 9: Total Operations Aviation demand forecasts for passenger carrier, air cargo, general aviation and military aircraft operations at Ontario International Airport through 2020 were presented in the preceding analyses. The findings and conclusions of these analyses are summarized below and address the following demand elements: • Total aircraft operations • Future operations by aircraft type • Instrument operations • Peak hour operations

9.1 AIRCRAFT OPERATIONS Aviation demand forecasts for passenger carrier, air cargo, air taxi, general aviation and military operations are presented in Exhibit 9-1.

Exhibit 9-1 Summary of Operations Forecasts

Large Air

Carrier Regional/

Commuter Pax

Charter Large

All-Cargo All-Cargo Air taxi

GA

Mil

Total

Historical 2003 65,406 9,810 98 15,930 15,130 28,598 211 135,183 Forecast 2010 91,285 21,389 139 19,980 20,000 40,530 210 193,535 2020 205,721 77,961 354 39,920 28,000 45,917 210 398,083 Source: Keiser Phillips Associates As noted in Exhibit 9-1, large air carrier activity increases by over 140,000 annual operations between 2003 and the end of the forecast period while constituting slightly more than 50 percent of the total operations at Ontario International. In contrast, regional/commuter activity increases by 68,000 annual operations and 19 percentage points to 26 percent of total operations from 2003 to 2020. Overall passenger operations including large air carriers, regional/commuters and passenger charter carriers generate 56 percent of existing operations and are expected to increase to 72 percent of total operations by 2020. At present, air cargo freighter and air taxi/feeder operations approximately equal one another at 15,930 and 15,130 operations respectively. However, by 2020 freighter operations are expected to exceed feeder operations. Combined cargo freighter and feeder operations are expected to decrease as a percentage of total aircraft operations at Ontario International from 23 percent of existing operations to approximately 17 percent in 2020. While general aviation operations are expected to increase from approximately 28,600 to 46,000 in 2020, general aviation activity will represent a decreasing share of total aircraft operations at Ontario International. The long-term trend in general aviation activity at Ontario International is consistent with expected regional trends as small aircraft migrate from the large, busy commercial service airports to other general aviation facilities in the Southern California area.



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Future Operations by Aircraft Type A breakdown of expected future operations by aircraft type for passenger carriers, cargo/freighter, general aviation and military operations are summarized below in Exhibits 9-2 through 9-5. The operations activity in these exhibits has been carried over from the individual forecast sections as presented the preceding analyses.



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Exhibit 9-2 Future Passenger Carrier Operations by Aircraft Type

2003 (Actual) 2010 2020

TurboProp EMB-120 5,162 8,510 17,830 SF-340 12 1,800 1,010 F-27 2 -- -- Regional Jet CRJ-100 1,470 3,340 17,670 CRJ-200 1,378 3,860 18,680 CRJ-700 1,766 3,610 19,700 EMB-140 4 250 3,050 Narrow Body BAC111-200 2 -- -- A319 1,018 1,390 5,800 A320 3,774 5,150 6,270 B727-100 188 210 210 B727-200 50 240 360 B737-100 4 -- -- B737-200 956 -- -- B737-300 28,566 36,540 58,560 B737-400 2,348 4,660 21,900 B737-500 7,146 9,290 21,560 B737-700 9,292 10,990 26,520 B737-800 848 1,810 11,880 B737-900 104 910 5,640 B757-200 1,264 2,620 8,520 DC9 4 -- -- MD-80 5,882 8,160 12,870 MD-83 456 990 2,390 MD-87 4 910 9,100 MD-88 16 450 3,470 MD-90 1,286 2,920 3,120 Widebody A310 800 2,920 DC10-30 2 560 1,300 B747-200 8 20 50 B747-400 6 150 250 B767 2 -- -- B767-200 2 -- -- B767-300 946 2,500 1,650 B-787 -- 1,500 B777-200 2 150 230 MD-11 2 -- -- Total Operations 73,972 112,813 284,036

Source: LAWA ONT Airport Records Keiser Phillips Associates



9-4

Exhibit 9-3 Future Cargo Operations by Type

Existing Forecast 2003 2010 2020 Transport Freighter Small Narrow-Body MD 80F B 737-300/400F B 727-200F 1,912 799 A 320 1,399 2,794 Med Narrow-Body 757 3,186 DC8-70 1,274 Medium Wide-Body A 310 400 798 A 300-600 1,274 4,995 9,980 B 767F 4,460 3,996 3,992 B 7E7 1,996 DC10-10 637 Large Wide-Body DC10-30 MD 10/11 1,115 2,900 5,988 B 777F 400 1,597 B 747-200F 2,071 B 747-400 F 4,995 11,976 A-380 97 798

Total Freighter Operations 15,930 19,980 39,920 All-Cargo Air Taxi Single engine turboprop 8,048 11,000 15,120 Twin engine turboprop 6,570 8,600 12,320 Twin engine turbofan 4 200 280 Others 508 200 280

All-Cargo Air Taxi Operations 15,130 20,000 28,000 Source: Keiser Phillips Associates



9-5

Exhibit 9-4

Future General Aviation Aircraft Operations by Type

20031 2010 2020 Single-Engine Piston n/a 3,001 3,136 Multi-Engine Piston/Turboprop n/a 7,043 7,025 Turbojet n/a 30,487 35,756

Total GA Operations 28,598 40,531 45,917 Source: HNTB Phase I Master Plan Draft Note: 12003 operations data not available by specific aircraft type.

Exhibit 9-5 Future Military Aircraft Operations by Type

2003 2010 2020

C-130 n/a 126 126 Military (Small) Jet n/a 84 84

Total GA Operations 175 210 210 Source: Keiser Phillips Associates 9.2 PEAK HOUR OPERATIONS Peak hour operations were forecast for passenger, cargo and general aviation in Sections 5, 6 and 7 respectively. Peak hour activity calculations are an important consideration in evaluating future airport capacity and delay. The hourly operations capacity of the Ontario International Airport runway system may be compared against hourly demand projections to assess whether the existing runway system is capable of accommodating the anticipated future demand. The Peak hour activity projections are presented in Exhibit 9-8.

Exhibit 9-8

Peak Hour Aircraft Operations Forecast

Passenger Carriers

Cargo Freighters

Cargo Air Taxi

General Aviation

Total

Historical 2003 15 8 8 19 50 Forecast 2010 25 11 11 24 71 2020 66 21 15 27 129 Source: Keiser Phillips Associates

forecast of aviation demand

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