ACI World Economics Committee Meeting Abu Dhabi, UAE

1. ACI World Economics Committee MeetingAbu Dhabi, UAE Lynn Hampton, Vice President for Finance & Chief Financial Officer Metropolitan Washington Airports Authority January 2008 Report from ACI-NAAir Traffic Congestion at JFK US Visit Program

2. Air Traffic Congestion • Since 1969: “Slot” based High Density Rule (HDR) • DCA, JFK, LGA, ORD: “Buy-and-Sell” since 1985 • In 2000, slots were phased out at all airports, except DCA, in the name of competition • Immediate problems resulted at each airport • Severe congestion occurred on the East Coast

3. Case of LGA LGA has Two 7,000 ft Cross-Wind Runways

4. Case of LGA • Early 2000: About 1050 flights each weekday • April 2000: Air-21 (Wendell-Ford Aviation Act for the 21st Century) • Immediate exemption from HDR for aircraft seating 70 or less on service between small communities and LGA • Eventual elimination of HDR (by 2007) • November 2000: Airlines added over 300 flights per day with more planned • Virtual gridlock at LGA (25% of all OPSNET delays in Fall 2000) • December 2000: FAA and PANYNJ implemented slot lottery and announced intent to develop long-term policy to access LGA • June 2001: Notice for Public Comment posted with regards to long-term policy • August 2001: FAA temporarily assigned slots by lottery

5. LGA Demand Before and After the Lottery Scheduled operations per hour on weekdays • Scheduled operations reduced by 10%: from 1,348 to 1,205 per day Capacity of 75/hr does not include allocation of six slots for g.a. operations Time of day, e.g. 5 = 0500 - 0559 November 2000 as a representative profile prior to slot lottery at LaGuardia; August 2001 as a representative after slot lottery. Source: Official Airline Guide

6. 120 Nov, 00 Aug, 01 100 80 60 40 20 0 5 7 9 11 13 15 17 19 21 23 1 3 Small Reduction in Demand May Lead to Dramatic Reduction in Delays Minutes of delay per operation • Average delay reduced by over 80% during evening hours • Lottery was critical in improving operating conditions at LGA Time of day Capacity = 75 operations/hr

7. Distribution of Aircraft Size at LaGuardia • Average aircraft size at LGA is 102 seats - or 52,000 kg MTOW - corresponding to about $1,600 USD per hour in direct operating costs* • Four (4) aircraft-hours of delay translate to approx. $6,400 USD congestion cost per marginal operation Frequency of Operations * Prof. Amedeo Odoni, MIT Aircraft seating capacity (e.g. 40 = 21 - 40 seats)

8. All Except One of the Existing Runways at O’Hare Intersect Case of O'Hare

9. Case of O'Hare • August 4, 2004: The Federal Aviation Administration told the airline industry to clear congestion at Chicago's O'Hare airport by reducing flight schedules • If the airlines refuse, the FAA said the government will do it for them • The FAA proposed an interim solution to reduce flights by all carriers until 2008

10. Case of O’Hare • City Management is committed to a $6 billion Capital Investment Plan • The Plan involves a reconfiguration of the airfield and additional terminal space • The Plan’s first new runway is slated for completion in 2008-2009 • Terminals 3 and 5 will undergo expansion • A new west terminal with western access into the airport is also planned • However, additional land acquisition is necessary requiring the relocation of approximately 2,800 residents • The Program will expand the airport's capacity to over 3,800 operations per day; up from the present capacity of 2,700 and will vastly increase passenger throughput capacity  • The Plan will decrease delays by an estimated 79%

11. Case of O'Hare Added Removed Lengthened

12. Case of JFK • On-time arrivals at JFK are 62% • Departures at JFK affect the aviation system around the entire world • October 2007: Secretary Peters created the Aviation Rulemaking Committee (ARC) to review potential solutions to the congestion problems in the NYC region • The ARC provides the Secretary with an understanding of the implications of any actions that are designed to reduce congestion

13. Case of JFK JFK has Two Sets of Parallel Runways

14. Case of JFK • Group 1: Operational/Infrastructure Improvements; NY Airspace Czar; Voluntary Reductions • Group 2: Congestion Pricing, Auctions, and Aircraft Gauge • Group 3: Gate Utilization and Perimeter Rule • Group 4: Priority Aviation Traffic Preferences • Group 5: IATA Scheduling Guidelines, Other Administrative Options

15. Case of JFK • In order to alleviate congestion at JFK, which is now ranked as third most-delayed airport in the country behind Newark Liberty International and LaGuardia, the FAA recommended a severe cut back in air traffic. The agency would like to reduce JFK to about 80 flights an hour – significantly less than the 100-odd flights currently scheduled at peak times. Port Authority officials claim the plan rolls back the clock about 40 years at the airport. “Limiting the flights to pre-1969 levels would be a disaster to JFK, and an economic disaster to the region,” said Port Authority executive director Anthony Shorris during a Monday press conference call. • Port Authority Officials estimate that last year 3.5 million passengers would have been prevented from traveling out of the airport. The limits would also impact cargo flights for companies such as FedEx and DHL, as well as General Aviation, which includes private and charter jets.

16. Case of JFK “We’re pleased the DOT adopted many of our task force's recommendations for expanding capacity. In addition, a broad coalition convinced the administration not to implement congestion pricing and, instead work with airlines to better rationalize schedules and improve customer service.But the DOT is simply wrong to go forward with restrictive caps and auctions that will cut the number of passengers at JFK, reduce travel options, and increase prices for every passenger. We hope the DOT will take a better approach at Newark Airport by acknowledging the capacity of the airport rather than artificially shrinking it, and working closely with the airlines to help rationalize the schedule process.”Port Authority of New York and New Jersey December 19, 2007

17. Case of DCA Still “Slot” Controlled Limited Congestion Related to Weather and Other Airports Congress …

18. Case for Demand Management • Conclusions: We cannot build our way out of congestion • Better ATC Management • Opening military routes during holidays • Traffic control from the cockpit

19. US-Visit

20. US-Visit • US-VISIT is a top priority for the U.S. Department of Homeland Security • Enhances security for our citizens and visitors • Facilitates legitimate travel and trade • Ensures the integrity of our immigration system • Protects the privacy of our visitors • US-VISIT is part of a continuum of security measures that begins overseas and continues through a visitor’s arrival in and departure from the United States.  It incorporates eligibility determinations made by both the Departments of Homeland Security and State.   • US-VISIT is helping us demonstrate that we remain a welcoming nation and that we can keep America’s doors open and our nation secure • 10 Fingerprint Scanners to deploy at all Ports of Entry • Enrollment Requirements: US-VISIT currently applies to all visitors (with limited exemptions) holding non-immigrant visas, regardless of country of origin

21. US-Visit Program • Homeland Security to Require 10 Fingerprints from US Visitors • Under US-VISIT, the Department of Homeland Security Customs and Border Protection will begin collecting a full set of fingerprints from foreign visitors to the U.S. (IAD Pilot 11/29/07) • Since 2004, US-VISIT has only required the collection of two fingerprints. Their database now includes 90 million sets of prints. • EPIC* has said that the system lacks adequate privacy and security safeguards * Electronic Privacy Information Center

22. US-Visit

23. Current State of International Travel to the United States • Overseas travel to the U.S. - excluding Canada and Mexico - is down 17% since 2000 RESULT: • 58 million fewer visitors • 194,000 lost jobs • $94 billion in lost spending • $15.6 billion in lost tax revenue

24. The Good, The Bad, and The Disturbing… • Good News: Inbound Canadian (+19%) and Mexican flights (+15%) are forecasted to grow between 2006 and 2011 • Bad News: Overseas travel to the U.S. will not reach 2000 levels until 2010 • Disturbing: Even by 2010, Japan, Germany, and France are forecasted to be below 2000 levels

25. Why the drop since 2000? • September 11th Attacks • New security procedures related to Visa issuance and entry into the U.S. • Perception that the U.S. is no longer a “Welcoming Country” • Competition from other destinations (Dubai, Turkey, South Africa, etc.)

26. You Win Some…You Lose Some • Weakened dollar a major advantage, but 10 years to recover from 9/11? • United States may be winning on “Price”, but losing the “Perception” battle

27. Biggest Perception Challenges… • Visa Wait Times (the State Department goal is that no wait be longer than 30 days) • Entry Process is viewed by some travelers as unprofessional and inefficient • U.S. is no longer a “Welcoming Country” and that we do not invite travelers to travel here

28. Solutions… • Visa Reform: Reducing Visa wait times • Entry reform: Establishing a “Model Ports” program and creating a more efficient and welcoming entry inspection process • Travel Promotion: Creating an international promotion program to win the perception fight and market the U.S. as a destination

29. Rice-Chertoff Joint Vision • Announced on January 16, 2006 • Three Parts to the Initiative: • Renewing America’s Welcome with Improved Technology and Efficiency • Travel Documents for the 21st Century • Smarter Screening

30. Model Ports Program… • Enhanced queue management • Improved signage • Reduced “Touch Time” with travelers • Smoother transitions for travelers transferring to domestic flights • Improved “Welcome” • Enhanced professionalism All the while maintaining security!

31. International Travel Greatest Opportunity is Public Diplomacy • Public Diplomacy Benefit of Inbound International Travel • People in the U.S. are our greatest asset for Public Diplomacy • International Travel to United States = Spending and Jobs…But, So Much More