FAA 2006-2017

Forecast

By: Nan Shellabarger

Date: February 28, 2006

Federal Aviation
Administration

Agenda
2005 Review
Assumptions
Forecast Overview

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

Review of 2005
Traffic growth strong
RPMs up 8.0%
Domestic +6.9%, International + 11.6%

Passengers up 7.1%
Domestic +6.6%, International + 12.1%

Real yield decline

Domestic down 4.8%
International up 1.1%

Workload Growth
En-Route Traffic up 2.8%
Commercial + 3.7%, Non Commercial + 0.3%

Tower Ops down 0.1%

Commercial +3.7%, Non Commercial - 2.6%
OEP 35 Commercial + 3.9%

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

Assumptions 2006-17
External Environment
Economic growth about 3% per year
Higher Oil Prices in near term

Industry
Domestic capacity shrinks in FY 2006
DL and NW in bankruptcy shrink 10% to 20%
AA, US announced reductions

RJ fleet growth slows in near term

Production of 50 seat RJs stopped
At least 107 aircraft to be grounded in FY 2006
Significant 70/90 seat aircraft demand

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

Domestic Capacity Trends

Source: Official Airline Guide (OAG)

FAA 2006-2017 Forecast
February 28, 2006

Federal Aviation
Administration

Assumptions 2006-17 cont.

Industry
Domestic Yield
Increases in 2006, then resumes long run decline
Y/Y turned positive in May 2005 and is increasing
Tight capacity with current demand => prices up
Competition and productivity increases drive long term decline

Load factor increasing

Domestic above 78% by 2017
International approaching 80% by 2017

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

Domestic Yield Trends

Source: Air Transport Association (ATA)

FAA 2006-2017 Forecast
February 28, 2006

Federal Aviation
Administration

Forecast Overview FY 2006-17

Slow growth in 2006, rebound in 2007, return to
historical trends after that
Demand continues to grow
Passengers: +3.1% per year
Domestic +2.9%, International + 5.0%

RPMs: +4.1% per year

Domestic +3.6%, International + 5.5%

Load Factor Higher

Domestic: 78.1% in 2017
International: 79.4% in 2017

Aircraft size continues to shrink

Domestic seats/mile falls until 2011

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

Forecast Overview FY 2006-17

Real Yield continues long term decline
Domestic: - 0.8% per year
International: -0.8% per year

Cargo continues to grow

System 5.2% per year; Domestic 3.2%, International 6.3%

General Aviation fleet and activity rising

New products stimulate growth

Workload continues to increase

En-Route Aircraft Handled + 3.0% per year
Commercial + 3.2%, Non-Commercial + 2.4%

Tower Ops: + 2.0% per year

Commercial +2.4%, Non-Commercial + 1.8%

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

System Enplanements
Actual

2005-2006:

0.3%

2006-2007:

3.9%

2007-2017:

3.4%

FAA 2006-2017 Forecast

February 28, 2006

Forecast

Federal Aviation
Administration

10

System Enplanements
Actual

Forecast

2005-17 Avg. Annual Growth

Mainline Domestic:

2.5%

Regional Domestic:

4.2%

International:

5.0%

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

11

System Revenue Passenger Miles

Actual

2005-2006:

1.5%

2006-2007:

4.8%

2007-2017:

4.3%

FAA 2006-2017 Forecast

February 28, 2006

Forecast

Federal Aviation
Administration

12

System Revenue Passenger Miles

Actual

Forecast

2005-17 Avg. Annual Growth

Mainline Domestic:

3.1%

Regional Domestic:

6.7%

International:

5.5%

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

13

System Load Factor

Actual

2005-2006:

0.5 Points

2006-2007:

0.2 Points

2007-2017:

0.1 Points

FAA 2006-2017 Forecast

February 28, 2006

Forecast

Federal Aviation
Administration

14

Domestic Aircraft Size

Actual

2005-2006:

-1.4 Seats

2006-2007:

-0.6 Seats

2007-2017:

0.1 Seats

FAA 2006-2017 Forecast

February 28, 2006

Forecast

Federal Aviation
Administration

15

Domestic Real Yield

Actual

2005-2006:

0.4%

2006-2007:

-1.0%

2007-2017:

-0.9%

FAA 2006-2017 Forecast

February 28, 2006

Forecast

Federal Aviation
Administration

16

Cargo RTMs
Actual

Forecast

2005-17 Avg. Annual Growth

Domestic:

3.2%

International:

6.3%

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

17

Total General Aviation Fleet

Actual

2005-2006:

1.0%

2006-2007:

1.8%

2007-2017:

1.4%

FAA 2006-2017 Forecast

February 28, 2006

Forecast

Federal Aviation
Administration

18

Total General Aviation Flight Hours

Actual

2005-2006:

2.5%

2006-2007:

3.1%

2007-2017:

3.2%

FAA 2006-2017 Forecast

February 28, 2006

Forecast

Federal Aviation
Administration

19

General Aviation Flight Hours

Actual

Forecast

2005-17 Avg. Annual Growth

Piston:

1.8%

Turbine:

6.4%

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

20

En-Route Aircraft Handled

Actual

2005-2006:

-0.6%

2006-2007:

2.7%

2007-2017:

3.4%

FAA 2006-2017 Forecast

February 28, 2006

Forecast

Federal Aviation
Administration

21

FAA and Contract Tower Operations

Actual

2005-2006:

-0.4%

2006-2007:

2.7%

2007-2017:

2.2%

FAA 2006-2017 Forecast

February 28, 2006

Forecast

Federal Aviation
Administration

22

Forecast Risks

Terror attacks/Pandemic
Impact of high oil prices
Mainline carrier financial woes
Growth of VLJs and impact on workload
Sufficient Capacity

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

23

Forecast Summary
Slow growth in 2006, rebound in 2007,
return to historical rates afterwards
Demand continues to grow in line with
economy
Real yield continues to fall
Aircraft continue to get smaller
Workload gets higher

FAA 2006-2017 Forecast

February 28, 2006

Federal Aviation
Administration

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