Lehigh Northampton Airport Authority

1
Lehigh Northampton Airport Authority

• Managing LVIA Through Uncertain Times
• George F. Doughty, Executive Director
• March 18, 2005

2
Governance

• Lehigh-Northampton Airport Authority
• Pennsylvania Municipal Authorities Act
• Nineteen Members Appointed by Lehigh and
  Northampton Counties
• All Municipal Powers Except Power to Tax

3
Sources of Revenue 2005 Budget
Total - 21,078,269
4
Expenses 2005 Budget
Total - 15,859,187
5
LVIA Market - 2.5 million people (40 mile radius)
6
Our Chronic Issue Most of our passengers use
other airports

• Frequency
• Nonstops
• Price

• Real potential of LVIA Market is not known, but
  probably is at least 5 million passengers

7
Why have major airlines not exploited the
potential of LVIA?

• Yield not volume
• Premium price for convenience
• Hub concentration PHL, EWR
• If you dont want to pay us 1,000 at ABE
  then we will take 500 from you at PHL.

8
Historical Successes

• Major Carriers
• AC, CO, DL, NW, UA, US
• Scheduled Charter
• Southeast Airlines
• Initiated Service - August 2002
• Carried 516,048 passengers through 11-30-04 (PIE,
  SFB, FLL, LAS)
• Service reliable and well received
• Saved LVIA passengers over 10 Million
• Brought 2 Million Income to LNAA
• Proved LVIA to FL market

9
Historical Successes

• Southeast terminated on 11-30-04
• 30 of market replaced with
• TransMeridian Airlines (started on 2-10-05)
• Lehigh Valley Air (start on 3-24-05)

10
More Bad News Possible

• UA, US in Chapter 11
• DL Weak
• Continued flat growth by majors
• Loss of short haul business traveler

11
Strategies

• Cost Containment
• Staff Reductions
• Defer Capital Projects/Expenses
• Focus on Mission Critical Items
• Debt Refinancing/Restructuring
• Moving Functions In-House
• Fixed Base Operator (FBO) - LVAS
• Ground Handling Services
• Aircraft Fueling

12
Strategies - continued

• Revenue Management
• Vehicle Parking Lot Rate Adjustments
• Hangar Rental Rate Adjustments
• Airline Fee Adjustments
• Verification of Full Cost Recovery

13
Future Options

• New Service
• Expand LVAir
• Real Estate Development