CONNECTING THE WORLD GROW THE CORE BUSINESS OPERATIONAL EXCELLENCE CUSTOMER SATISFACTION COST COMPETITIVE EMPLOYEE ENGAGEMENT

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1 CONNECTING THE WORLD GROW THE CORE BUSINESS COST COMPETITIVE CUSTOMER SATISFACTION OPERATIONAL EXCELLENCE EMPLOYEE ENGAGEMENT BUILDING A FUTURE TOGETHER: DFW INTERNATIONAL AIRPORT STRATEGIC PLAN 2012

2 VISION: DFW INTERNATIONAL AIRPORT CONNECTING THE WORLD. MISSION: DFW International Airport will provide our customers outstanding facilities and services, expanding global access and economic benefits to those we serve.

3 Updating our Strategic Plan for Continued Excellence DFW International Airport last revised its Strategic Plan in This updated Plan recognizes the realities of today, identifies the major challenges of the coming years, and outlines our approach to take DFW to even greater heights in the future. We have successfully served the Dallas/ Fort Worth area for over three and a half decades, and have grown to be the fourth busiest airport in the world in terms of operations. Over this period, we seized opportunities, surmounted obstacles and worked hard to achieve recognition throughout the region and the airport industry for our high standards, accomplishments and excellence at all levels. Our vision of Connecting the World and our mission to provide our customers outstanding facilities and services, expanding global access and economic benefits to those we serve, is unchanged. Our Primary Business Goal and Key Results also remain the same. We believe that we will realize our Primary Business Goal to Grow the Core Business of domestic and international passenger and cargo airline service by achieving the four Key Results: keeping DFW cost-competitive, creating customer satisfaction, delivering operational excellence, and fostering employee engagement. This is reinforced through our Core Beliefs. Inside you will find the strategic objectives and initiatives necessary to ensure our continued excellence. It is with great confidence that we can look forward to the future. Sincerely, Jeffrey P. Fegan Chief Executive Officer 1

4 DFW is currently the fourth busiest airport in the world based on the number of operations, and the eighth busiest in terms of passengers. As of late 2011, 18 passenger airlines provide air service from DFW to 145 domestic and 47 international destinations. In addition, we have 13 cargo airlines providing worldwide freighter service to DFW. The new realities of doing business in the 21st century require DFW to be flexible in accommodating ongoing change while shaping economic growth in a global economy. Objectives the Plan strategically focuses on include: The initiation of a seven-year, $1.9 billion Terminal Renewal and Improvement Program (TRIP) to renovate and modernize our four older terminals. An increased emphasis on becoming a business partner with airlines, concessionaires, federal agencies, and contractors to provide superior services to our passenger guests. The impact of global airline alliances on airline and airport competition, and our increased focus on becoming the most preferred Super Global Hub in the world. A new 10-year Airline Use Agreement that redefines our business model and relationship with the airlines. An expanded definition of our primary customer groups beyond the passenger to include airlines and tenants. A critical shift in focus that all employees either directly or indirectly support our customers. A new financial plan that establishes our financial targets through FY By achieving our primary business goal and the four Key Results outlined in this Strategic Plan, we can ensure our continued growth and help build a brighter future for the Dallas/Fort Worth area. 2

5 TABLE OF CONTENTS GROW THE CORE BUSINESS 4 11 COST COMPETITIVE CUSTOMER SATISFACTION OPERATIONAL EXCELLENCE EMPLOYEE ENGAGEMENT

6 STRATEGIC OBJECTIVES AND INITIATIVES GROW THE CORE BUSINESS Position DFW as the most attractive and competitive Global Super Hub for airlines and their alliances. Maintain a competitive airline incentive program to attract new passenger and cargo airlines, and increase international and domestic destinations. Aggressively market DFW s advantages to passenger and cargo airlines through direct sales calls, analytical research, focused campaigns, and strategic presence at major industry events/ conferences. Expand facilities as necessary to ensure sufficient gates for future domestic and international routes. Reposition relationships with airlines from landlord to business partner to expand services, grow revenue, enhance customer satisfaction, and improve operational effectiveness. Partner with airlines to create the Airport of the Future at DFW. Advance DFW s competitive position relative to cargo and corporate aviation airports. Create a positive global brand awareness of DFW s economic opportunity with a consistent worldwide message. Ensure that the customer experience is consistent with DFW s brand attributes. Identify new avenues to extend DFW s positive brand identity and exposure. Develop external stakeholder support for DFW s vision of Connecting the World. Engage local businesses, associations, and organizations to actively support and participate in international air service marketing efforts. Market directly to consumers around the world who have a choice to use DFW as a preferred gateway to enter North and South America. 4

7 Grow the core business DFW Airport s primary business goal is to grow the core business of domestic and international passenger and cargo airline service. Growth of the core business comes in different forms: It means adding more airlines and more flights to more destinations. It also means serving more passengers, and landing more cargo at our Airport. But as DFW already ranks among the largest and busiest airports in the world, some people might question why more growth is necessary. The simple answer is that the Airport s growth is good for the Dallas/Fort Worth region. As DFW continues to expand, it creates new economic opportunities for our owner and host cities and the region in general. As more flights and passengers come through the Airport, new companies and business partnerships are formed, revenue flows into our communities, jobs are created, and the net result is a better quality of life for the people of Dallas/Fort Worth. 5

8 GROW THE CORE BUSINESS A LOOK AT DFW TODAY There are currently 12 Global Super Hubs throughout the world, but others will emerge in the future, especially in the ever-growing Asia and India markets. The power of Super Hubs becomes clear when two are connected. For example, American Airlines and British Airways use the DFW-London Heathrow route to feed traffic across their global networks. By linking logical connections over the DFW-Heathrow market, American Airlines and British Airways can build over 28,000 individual alliance connections, creating a powerful competitive weapon that will support growth at DFW. Not only is DFW a Global Super Hub, but the size and resilience of the Dallas/Fort Worth market makes DFW a top target for alliances that want to feed passenger traffic across their Super Hubs and into their networks. AMERICAN AIRLINES American Airlines (AA) is DFW s largest carrier and is critical to our success. In FY 2010, American Airlines, and its regional partner American Eagle (AE), carried approximately 85 percent of our passengers. Combined, they serve 145 domestic destinations and 41 international destinations from DFW. NON-HUB CARRIERS DFW currently has four non-hub legacy airlines serving 16 cities. These airlines accounted for approximately 7 percent of DFW s passenger traffic in FY The other non-hub legacy carriers include: Delta Continental United Alaska Airlines As DFW builds on its relationships with the global airline alliances, our longrange goal is to increase international destinations to 62 or more by FY

9 LOW-COST CARRIERS Five low-cost carriers (LCCs) provide service from DFW to 13 cities and collectively carried approximately 5 percent of DFW travelers in FY US Airways Frontier Spirit Sun Country Virgin America JetBlue (May 2012) FOREIGN-FLAG AIRLINES Emirates announced service from DFW in QANTAS began service to Brisbane and Sydney Australia in 2011, and Emirates will begin service to Dubai in These airlines enhance our international reputation by offering global networks through their principal hubs overseas. For example, by flying to Frankfurt on Lufthansa, passengers can connect to 130 destinations on Lufthansa s network which extends through Europe, Africa, the Middle East, and the Indian Sub-Continent. Growth opportunities in this category are relatively strong, as the international marketplace continues to grow and foreign-based carriers receive new deliveries of previously ordered long-range aircraft. Foreign-flag airlines are important because they offer international service that connects DFW with the rest of the world. As of 2011, we have seven foreign-flag airlines to eight destinations. Air Canada British Airways Emirates Grupo Taca KLM Korean Air Lufthansa QANTAS CARGO SERVICE Sometimes referred to as the great unseen passenger, cargo continues to be a key contributor to DFW s success, primarily due to the emerging global economies in Asia and the increased demand for timesensitive freight deliveries. Cargo represented approximately 8.5 percent of DFW s total landed weight in FY These airlines carried approximately 14 percent of our total international passenger traffic in FY 2010 (with American Airlines providing the rest). Both QANTAS and 7

10 GROW THE CORE BUSINESS MAJOR OPPORTUNITIES FOR GROWTH BE THE BEST GLOBAL SUPER HUB Position DFW as the most attractive and competitive Global Super Hub for airlines and their alliances. The most significant change occurring in the airline industry is the emergence of global airline alliances, partnerships between multiple airlines designed to increase convenience for travelers and profitability for the airlines. As these airline alliances have grown, some of the world s largest airports are adapting to meet their needs, positioning themselves as Global Super Hubs. To reflect DFW s significant role in these developments, we have added a new strategic objective to our Plan. Advance DFW s competitive position relative to cargo and corporate aviation airports. As growth in the air cargo industry materializes, we have an opportunity to expand our cargo operations. Our long-term goal is to increase cargo landed weights by 22 percent from 3.0 billion pounds today to 3.6 billion pounds in FY BE A BUSINESS PARTNER, NOT A LANDLORD Another new element in our Strategic Plan relates to how we work together with the various companies and organizations that operate at the Airport. Reposition relationships with airlines from landlord to business partner to expand services, grow revenue, enhance customer satisfaction, and improve operational effectiveness. This new objective requires us to think holistically about the services provided to our guests. Most passengers do not distinguish between who is providing the service to them, whether it is an airline, a concessionaire, TSA or any Airport partner, and they expect a seamless travel experience. This requires collaborative work for the overall success of the Airport. By leveraging new technologies we will improve the customer experience and enhance operational effectiveness. This new vision includes paperless check-in, self-bag tag and bag drop, self-boarding, RFID bag tracking, use of smartphone applications to track parking and concessions options, and increased use of social media. 8

11 STRENGTHEN THE DFW BRAND AND EXTERNAL STAKEHOLDER SUPPORT Two additional objectives aim to enhance the ways in which we and others present DFW Airport to the outside world. Create a positive global brand awareness of DFW s economic opportunity with a consistent worldwide message. This objective emphasizes the importance of DFW s international brand and its correlation to driving new international destinations. Integrating our brand attributes into our marketing and public affairs strategies will help people around the world to associate the DFW name with being professional, world class/international, leading-edge, unique, and caring/friendly/responsible. Develop external stakeholder support for DFW s vision of Connecting the World. Stakeholders are our owner cities, host cities, the North Texas community, the chambers of commerce, and convention and visitors bureaus. They receive indirect and direct benefits from the success of DFW Airport. With these mutual interests in mind, we will work with our stakeholders to actively support and participate in international air service marketing efforts and to market directly to consumers around the world who have a choice to use DFW as a preferred gateway to other destinations. 9

12 GROW THE CORE BUSINESS: KEY PERFORMANCE INDICATORS (KPI) To know if DFW is truly succeeding in growing its core business, we must have quantifiable measures in place. For that purpose, we have identified three Level 1 Key Performance Indicators: passengers, international destinations, and cargo landed weights. The following table summarizes FY 2011 results with our targets for FY 2015 and FY Historically, total passenger growth in the United States has been correlated with our country s gross domestic product. The trends during the 1990s and 2000s follow that pattern. Our Financial Plan includes the assumptions that passengers will grow at a 2.1 percent average over the next 10 years. We will most likely see ups and downs over this period due to fluctuations in the economy. In addition, we may face external challenges such as the financial struggles of American Airlines (including settlement of their labor agreements, the opening of the new terminal at Dallas Love Field in 2014 (currently not expected to have a significant impact), and the possibility of major disruptive events similar to 9/11. Although the domestic market is relatively mature, the opportunities for international expansion are significant. New and longer-range aircraft such as the Boeing 787 allow airlines to serve destinations that cannot be reached today with non-stop service. In addition, the growth of the global alliances will create opportunities for Super Hub flows like DFW-London. We will continue to aggressively market to bring service to major under-served international destinations. The global aviation future is bright and DFW is positioned at the leading edge of the industry. Our experienced and talented team has never failed to meet a challenge head-on or to seize an opportunity in advance of the competition. 10

13 KEY RESULTS The following sections provide historical context and future strategies that will enable DFW to grow the core business through the achievement of the four Key Results. KEEP DFW COST COMPETITIVE Keeping airline costs low increases our ability to initiate or expand air service at DFW. CREATE CUSTOMER SATISFACTION Consistently delivering excellent customer service creates customer loyalty. DELIVER OPERATIONAL EXCELLENCE Striving for excellence in all areas of the business helps maintain DFW s stellar reputation in the aviation industry. FOSTER EMPLOYEE ENGAGEMENT Engaged employees will ensure that DFW can achieve its objectives well into the future. 11

14 STRATEGIC OBJECTIVES AND INITIATIVES COST COMPETITIVE Maintain a cost structure that is competitive with other large-hub airports in DFW s peer group. Strengthen DFW s financial position: diversify revenues; manage cash reserves and debt outstanding at levels acceptable to the financial markets; ensure sufficient funds for capital replacements; and invest in new facilities, assets, and technologies. Grow net revenues of passengerdependent businesses. PARKING Expand and modernize parking products, services, processes, and systems; implement DFW-to-consumer marketing; enhance yield management techniques and industry outreach; and provide an excellent customer experience resulting in an increase in net revenue per originating passenger. CONCESSIONS Implement a customerdesired mix of food, beverage, retail, and advertising options as part of TRIP; initiate DFW-to-consumer marketing strategies; and enhance passenger way finding options, resulting in higher customer satisfaction and an increase of net revenues per enplanement. RENTAL CAR CENTER Ensure a desired mix of products and services to optimize net revenue per destination passenger. Grow net revenues of non-passengerdependent businesses. NATURAL GAS Manage the natural gas exploration program to maximize revenue; ensure safety and compatibility with existing and future operations and development; and maintain DFW s standard of environmental excellence. COMMERCIAL DEVELOPMENT, TAXIWAY ACCESS Globally promote the development and redevelopment of airline hangars, air cargo, and logistics facilities and operations. COMMERCIAL DEVELOPMENT, LAND DEVELOPMENT Globally market, develop, and lease the commercially available land at DFW. Negotiate favorable tax-sharing arrangements with host cities to allow further development of property within their city limits. Evaluate and implement other business opportunities that diversify DFW s revenue stream, achieve the required financial returns, leverage the DFW talent base, and remain consistent with DFW s mission. HOTELS Continue to achieve the positive operating and customer satisfaction results of the Grand Hyatt Hotel and explore other hotel options on the DFW campus. 12

15 For DFW Airport to succeed in its primary goal to Grow the Core Business, remaining cost-competitive is a critical requirement. Keep DFW cost-competitive Staying cost-competitive means doing what is necessary to make DFW a great place to do business from a financial standpoint. Passenger and cargo airlines choose to operate at airports that give them the best opportunity for success. So it s up to us to ensure that DFW is a better deal than our competitors, offering an exceptional value for the costs airlines pay to use our facilities. To make that a reality, we need to carefully manage our own financial resources. That means making smart decisions about how, when, and where we spend money. It also means increasing the revenue we earn from sources other than airlines, so we can continue to invest in new facilities and technology while keeping costs as low as possible. Finally, remaining costcompetitive entails managing our debt wisely, making prudent and responsible use of borrowed money as DFW grows. 13

16 COST COMPETITIVE MAJOR OPPORTUNITIES FOR DFW KEEP OUR COSTS LOW Maintain a cost structure that is competitive with other large hub airports in DFW s peer group. For airlines to want to expand their service at DFW Airport, they need to know that the costs they pay are in line with (or lower than) alternative airports. Ideally, DFW s costs would always be lower than competing large-hub airports. However, we have to balance the needs of each Key Result in our Strategic Plan, even if it means our costs will be slightly higher. Our goal is to remain competitive in terms of our costs, preferably among the lowest 25 percent. It s important to note that while our costs have risen over the years, so has the quality and extent of services and facilities airlines find at DFW. From a comparative standpoint today, DFW remains one of the most cost-effective large-hub airports in the world, especially if we include all of the costs airlines incur to operate at an airport. MAINTAIN FINANCIAL STRENGTH Strengthen DFW s financial position: diversify revenues; manage cash reserves and debt outstanding at levels acceptable to the financial markets; ensure sufficient funds for capital replacements; and invest in new facilities, assets, and technologies. Keeping DFW cost-competitive is not only about keeping expenses low. It also requires strategic thinking for every financial decision we face as an organization. Diversify revenues refers to growing revenues from our non-airline sources. This objective also addresses the need to make smart investments in infrastructure and technology to meet our customers needs, and ensure that cash reserves and debt outstanding are maintained at reasonable levels. Our bond ratings were very strong in 2011; our goal is to maintain or exceed those ratings over the next 10 years. 14

17 GROW NET REVENUES FROM NON-AIRLINE SOURCES BREAKING DOWN NON- AIRLINE REVENUE SOURCES Grow net revenues of passenger and non-passenger-dependent businesses. DFW is able to keep its costs to airlines relatively low primarily due to its many streams of revenue that come from other sources such as parking, concessions, commercial development, natural gas development, and more. These diversified revenue sources provide us with income that is not directly tied to the airline business and are a cushion during economic downturns and airline disruptions. A more diversified revenue stream allows the Airport to reinvest in its infrastructure and maintain its bond ratings and helps keep costs low for our airline partners. Non-airline revenue comes both from sources that depend on passenger traffic at DFW (parking, concessions, hotels and rental cars), and sources that are not passengerdependent (commercial development and natural gas). The major initiatives of these businesses are discussed below. PARKING Our goals for the Parking Business Unit are to provide excellent customer service and increase net revenues per originating passenger (travelers who begin their trip at DFW). Future plans include: More covered spaces at the North and South Express lots An expanded and updated Terminal A garage 15

18 COST COMPETITIVE New parking guidance systems that will help our guests find terminal parking spaces through automated wayfinding signs and new smartphone applications New parking entrance plazas A new automated parking control system that will allow us to provide innovative new parking products such as discounted weekend rates and reserved parking A frequent parking program and other consumer-focused marketing programs to communicate directly with our customers CONCESSIONS The overall goals for our concessions program are to achieve higher customer satisfaction and increase net revenues per enplanement. Renovations of our four original terminals provide us with a fantastic opportunity to implement new and improved concessions programs. Over the next six years, we will implement a new concessions program that will provide our customers (i.e., passengers and employees) with exciting new options for dining, shopping, and other amenities. Concessions locations will be concentrated around Skylink stations and the entrances to the secure side of the terminals. We will also initiate DFW-to-consumer marketing strategies to identify and communicate directly with our customers. This includes leveraging technology to help passengers find the concessions they re seeking. RENTAL CAR Our world-class rental car facility at DFW is one of the first built in the country. We will work closely with the rental car companies to provide products and services that maximize car rental revenue. GRAND HYATT HOTEL DFW owns one of the premier airport hotels in the world, the Grand Hyatt DFW. It has been successfully managed by our business partner, Hyatt, since the hotel opened in The Grand Hyatt DFW is one of the Hyatt chain s highest-rated hotels for customer service. Management will continue to look for opportunities to expand hotel options on the Airport, either through the Grand Hyatt model, or through more traditional commercial development land lease options. COMMERCIAL DEVELOPMENT DFW s 6000 acres of undeveloped land is a blank canvas of opportunity to generate diverse and steady revenue streams to the Airport and host cities. The Board and owner cities recently approved a Land Use Plan that will streamline and support development. DFW has the capacity to significantly expand cargo operations on the south and east sides of the Airport. The next planned commercial opportunities include development of areas around Southgate, the DART rail station, and Founders Plaza. In addition, the conclusion of the DFW Connector project with frontage roads on the north side of the Airport will provide excellent development opportunities in the future. NATURAL GAS There are significant proven and probable natural gas reserves that will provide the Airport with a non-airline revenue stream for years to come. DFW has received over $300 million in revenue from natural gas royalties and bonus payments since These proceeds are primarily dedicated to funding terminal renovations and other capital projects. 16

19 COST COMPETITIVE: KEY PERFORMANCE INDICATORS (KPI) Maintaining DFW s cost-competitive position requires us to keep our costs per enplanement low compared to other large-hub airports; manage our financial resources carefully to maintain our high bond ratings; and increase revenue from non-airline sources. We can measure those results through the following key performance indicators and targeted figures. 17

20 STRATEGIC OBJECTIVES AND INITIATIVES CUSTOMER SATISFACTION Ensure that the customer experience is consistent with DFW s brand attributes: professional, world-class/international, leading-edge, unique, and caring/ friendly/responsive. Collaborate with business partners to satisfy customers. Determine satisfaction metrics and capture the required data to determine current and potential customer satisfaction. Retain existing customers. Attract new customers. Ensure all employees directly or indirectly support customer groups. 18

21 Create customer satisfaction Today s airline passengers have many choices when they travel. Aside from choosing their destination and preferred airline, travelers departing the Dallas/ Fort Worth area can choose, to some extent, between airports. Those who fly from DFW can also choose whether or not to park here and spend money in our shops and restaurants. Connecting passengers throughout the United States and the world can choose whether to connect at DFW or at another major domestic hub airport. Naturally, most passengers will make these choices based on prior travel experiences. A positive experience at DFW increases the likelihood that they will want to come back. That s why one of our desired Key Results is to consistently deliver excellent customer service to the travelers who pass through our facilities. Great service creates customer loyalty, and ensures that passengers continue to choose DFW as their preferred airport. Ultimately, repeat business from satisfied passengers contributes to DFW s primary business goal to Grow the Core Business. 19

22 AN EXPANDED DEFINITION OF CUSTOMER Historically, DFW has focused on customer satisfaction for passengers. While these customers are important, the airlines and tenants are two other customer groups vital to our future. Airlines are DFW s customers because they pay the Airport to use our airfield and conduct business in our terminals. Tenants are also customers because they lease land and buildings on DFW property, providing an important source of revenue for the Airport. To help increase focus on all customer groups, they will be measured as part of the Customer Satisfaction Key Result. Some DFW departments work directly with these customer groups, but many more Airport employees serve them indirectly, working through business partners such as the TSA, concessionaires, and bussing contractors. Each of these business partners plays an integral role in ensuring high customer satisfaction, so our relationships with these partners are also important. 20

23 MAJOR OPPORTUNITIES FOR DFW To underscore the importance of Customer Satisfaction in the years to come, we have developed six updated strategic objectives, based on research of best practices in our industry and others. LIVE THE BRAND Understanding the DFW brand and demonstrating its key attributes in our work is essential to building customer satisfaction. Ensure that the customer experience is consistent with DFW s brand attributes: professional, world-class/ international, leading-edge, unique, and caring/friendly/responsive. DFW s brand is exemplified by every DFW employee s actions every day. Professionalism is a characteristic that we should all demonstrate in any situation, whether in meetings with contractors or when assisting a customer in the terminals. It is essential that we project a world-class and international image that will resonate with each customer group. DFW is a leading-edge airport, offering unique solutions to our customers that go beyond the status quo. A caring, friendly, and responsive attitude must be demonstrated in all of our customer interactions. DFW S BROADENED CUSTOMER FOCUS Retain existing customers. This objective requires us to listen to our customers by asking them what is working and how we can improve our services to meet and exceed their expectations. To retain current customers, we also need an effective complaint/comment management process to quickly respond to problems and prevent them from recurring. Finally, we must recognize and take advantage of the fact that satisfied customers can be one of our most effective sales channels. Attract new customers. In order to meet our aggressive growth goals we must continue to attract new customers. This objective requires us to identify customer and market requirements for new products and services, then to quickly develop and implement those new products and services. It also requires us to understand our competition, so we can aggressively market our advantages to new customers. 21

24 CUSTOMER SATISFACTION TAKE A TEAM APPROACH Collaborate with business partners to satisfy customers. Most of our products and services to customers are provided through our business partners (e.g., concessionaires, bussing contractors, security agencies, ground transportation providers, and others) who also need to be focused on customer satisfaction. We must help business partners understand how working with us will be mutually beneficial. The key to success is to integrate the service delivery processes with our business partners and make them seamless to our customers. DEVELOP ADDITIONAL MEASUREMENTS Determine satisfaction metrics and capture the required data to determine current and potential customer satisfaction. Without reliable data and metrics, success cannot be accurately measured. For many years DFW has used the ACI Passenger Satisfaction Survey for gathering and analyzing passenger data. We need to broaden our measurements to include our airline and tenant customer groups. A special objective to develop a more comprehensive approach to measurement has been added. CHANNEL OUR EFFORTS Ensure all employees directly or indirectly support customer groups. Our final Customer Satisfaction strategic objective calls for a collective focus on serving customers. We must work as a team to meet customers needs, regardless of how much direct customer contact we might have. Each DFW employee should understand how their job impacts our customers: the airlines, tenants, and passengers. This requires clear communication of customer needs and desires to our employees, so they have the information and direction to take actions to improve the Airport s performance. This also requires feedback mechanisms to let employees know when we have been successful in satisfying our customers, or when improvement is needed. 22

25 CUSTOMER SATISFACTION: KEY PERFORMANCE INDICATORS (KPI) Through our extensive ACI Passenger Satisfaction Survey, DFW is able to better understand the needs and desires of its domestic, international, local, and connecting passengers. Using this research, we have implemented short-term programs to meet our passengers needs, resulting in steadily increasing customer satisfaction survey scores (shown in the accompanying chart). Long term, many of DFW s customer needs will be addressed through TRIP, helping us reach even higher levels of customer satisfaction over the next decade. We have a long-term goal of remaining the highest-ranked airport among our competitive set of North American large-hub airports. In the future, we will compare ourselves against the other major international hub airports. We are excited about our expanded focus on the customer to include airlines and tenants. We look forward to developing internal processes to satisfy these customer groups and new metrics to gauge our success. While it will take several years to deploy these new concepts throughout the organization, we believe we are on the right path. 23

26 STRATEGIC OBJECTIVES AND INITIATIVES OPERATIONAL EXCELLENCE Achieve excellence in Airport safety, security, and operational preparedness. Recognize and act on existing and emerging threats/risks to ensure public and employee safety and to protect critical assets. Continually update and implement an Airport-wide Safety Management System to ensure safety compliance with federal regulations (14 CFR Part 139). Continually update and implement DFW s comprehensive emergency management program to ensure business continuity and recovery from disasters or incidents that occur on or near DFW. Create and implement a pandemic preparedness plan that supports operational objectives, business continuity, and DFW s emergency and safety plans. Plan, design, and build capital projects, including the Terminal Renewal and Improvement Program (TRIP), consistent with Airport s Master Plan and Financial Plan. Continuously update the master plan and financial plan to support the affordability, sustainability, growth, and synergies of all business activities. Design and construct renovations to Terminals A, B, C, and E on schedule and within budget during TRIP. Implement communications, business continuity, and facility transition plans to ensure Operational Excellence, high levels of customer service, and preservation of revenues during construction of TRIP, DFW Connector, and parking plazas. Facility Replacement (non-trip) Ensure timely, cost-effective, and sustainable replacement, restoration, or demolition of parking facilities, technology systems, and other aging infrastructure. Access Roadway and Mass Transit Expansion Identify and construct new DFW infrastructure necessary to support DFW s future development and the mass transit connections at DFW. Utilities Systems Ensure timely, costeffective, and sustainable replacement or restoration of DFW s water, sanitary sewer, electric, and natural gas systems. Instill sustainability principles throughout the DFW community to ensure Triple Bottom Line results (i.e., financial, environmental, and social). Develop and communicate DFW s sustainability standards to DFW s employees, contractors, and tenants. Implement advancements in DFW s sustained economic viability, operational efficiency, natural resource conservation, and social responsibility. 24

27 Ensure an efficient and inclusive supply chain. Continue to evolve and implement effective Disadvantaged Business Enterprise (DBE) and Minority/ Women-Owned Business Enterprise (M/WBE) programs. Adopt and implement the Availability and Disparity Study findings. Streamline and automate the supply chain process to enhance responsiveness and cost effectiveness while ensuring compliance with applicable regulations. Continuously improve DFW s business processes. Systematically align DFW s Strategic Plan with the Master Plan, Financial Plan, enterprise risk management assessment, Annual Work Plan and budget, employee goals and initiatives, measurement, and compensation programs. Utilize enterprise risk management processes to identify, evaluate, and mitigate significant organizational risks. Utilize continuous forecasting and benchmarking to monitor financial and operational progress, providing management the flexibility to adjust to changing situations. Leverage technology to enable innovative solutions, sound decision making, and high performance. Enhance network connectivity of customer information and security systems throughout the terminals and DFW campus. Ensure business continuity and disaster recovery capabilities for all critical intelligence technology systems. Implement information security processes and systems to protect private information and comply with required regulations. Implement technologies and systems that allow employees to: - Access, interact with, and analyze information to improve performance - Collaborate to expedite decision making - Migrate from paper to electronic files Implement the new Parking Control System (PCS). Develop and execute strategic relationships with governments, community leaders, and media to help achieve DFW s goals and objectives. Utilize collaboration, innovation, and cross-functional teams to review and improve strategic business processes. 25

28 Rather than focus solely on monetary success, we have an obligation to obtain optimal results in the areas of finance, environmental stewardship, and social responsibility; a Triple Bottom Line of positive outcomes in our business practices. 26

29 Deliver operational excellence Operational Excellence means not only doing what s good for the Airport, but doing things the right way, with faithful consideration of the countless stakeholders who feel the impact of our actions. Our pursuit of excellence is validated by the national recognition DFW has received for programs in safety and security, sustainability, vendor diversity, technology, business processes, and other operating practices. DFW is known for efficiency, ingenuity, leadership, and inclusiveness. As our pursuit of growth continues, so does the responsibility to preserve and enhance our positive reputation. The better we become at what we do, the more customers will want to be associated with our Airport. That is how Operational Excellence helps us grow our core business. 27

30 OPERATIONAL EXCELLENCE MAJOR OPPORTUNITIES FOR DFW MAINTAIN EXCEPTIONAL SAFETY AND SECURITY Achieve excellence in Airport safety, security, and operational preparedness. Safety and security are ingrained in DFW Airport s DNA, yet we must constantly remind ourselves of their monumental importance. DFW dedicates significant resources to meeting this objective. DFW is recognized globally for our forward-thinking, commonsense approach to safety and security. The FAA and TSA use DFW Airport to test and develop many of their operational system programs before they are deployed nationally. DFW Airport is proactive and thorough in its emergency planning. We reach out to our local, state, national, and international partners in developing robust plans to guide our Airport in the event of an emergency. Many airports seek our counsel when they encounter their own urgent situations. Excellence, we must keep our facilities in peak condition and build new infrastructure where it s necessary. DFW currently plans to spend about $3.2 billion on hundreds of capital projects over the next 10 years. There are a few expansion projects, but most are required to replace aging infrastructure at DFW. The most significant project to be completed is TRIP. This $1.92 billion program will renovate and improve our four older terminals through FY One of the most important strategic initiatives for this objective is to mitigate any negative impacts that TRIP construction could have on parking and concessions revenues, and on overall customer satisfaction. Although TRIP will consume a significant amount of attention, we also have to stay focused on other scheduled and future projects, including a new automated parking control system and control plazas, two new rail stations in between Terminals A and B, and expansion and replacement of the roadway/bridge system. IMPROVE AND EXPAND DFW FACILITIES Plan, design, and build capital projects, including the Terminal Renewal and Improvement Program (TRIP), consistent with the Master Plan and Financial Plan. Buildings, roadways, and airfields make up the Airport s physical appearance and define its operational capabilities. To deliver Operational Instill sustainability principles throughout the DFW community to ensure Triple Bottom Line results (i.e., financial, environmental, and social). Sustainability is a top priority for DFW, reflecting our commitment to conduct business so that benefits flow naturally to all of our stakeholders. The idea of sustainability relates to the way we choose to do business responsibly. Rather than focus solely on monetary success, we have 28

31 an obligation to obtain optimal results in the areas of finance, environmental stewardship, and social responsibility; a Triple Bottom Line of positive outcomes in our business practices. Our goals often mutually support one another. For example, when we reduce operating costs by conserving energy, we also preserve our physical assets, improve the quality of our work environment, limit regulatory interventions, increase the pace of innovation, and improve our reputation and brand value. By operating so that our business interests and the interests of the environment and society intersect, DFW has positioned itself as a strong corporate and community partner, a recognized industry leader, and an organization poised to thrive for the long term. EFFECTIVELY MANAGE THE SUPPLY CHAIN Ensure an efficient and inclusive supply chain. DFW contracts for millions of dollars of goods and services each year, and uses third parties to provide many vital services directly to customers. It is critical that our procurement processes are efficient and streamlined, while also meeting state and federal procurement rules and regulations. A significant portion of our annual expenditures are made with local businesses, a practice that strengthens the local economy. We also spend a considerable portion of our annual budget with minority and woman-owned business enterprises (M/WBE). Because it is important to monitor and update our M/WBE program, we will adopt and implement findings from our latest Availability and Disparity Study which identifies contracting opportunities for the types of goods and services DFW purchases each year. Continuously improve business processes. Business processes is an umbrella term for the work performed by employees. These processes ensure the timely flow of business information and transactions, to keep the entire DFW organization focused and moving toward common goals. The Airport further enhances its operational excellence when we re able to make those processes faster, more accurate, or more effective. 29

32 OPERATIONAL EXCELLENCE One of the most important business processes at the Airport is our Leadership System which integrates our Strategic Plan across the enterprise, including the master plan, financial plan, enterprise risk management assessment, annual work plan and budget, employee goals and initiatives, measurement, and compensation programs. If done well, we have a higher probability of increasing employee engagement and achieving outstanding business results. provide employees with the information they need to make more timely and effective decisions, and reduce paper consumption. We can develop systems that enhance collaboration and teamwork to advance our culture and improve our work environment. BUILD POSITIVE RELATIONSHIPS WITH STAKEHOLDERS TAKE ADVANTAGE OF TECHNOLOGY Leverage technology to enable innovative solutions, sound decision making, and high performance. Technology is integral to any organization s success. It is incumbent upon us to make the most of this resource to reach every objective and key result in our Strategic Plan as efficiently as possible. We must ensure a robust information and communication network throughout the Airport campus so that employees, customers, business partners, and vendors have a platform to carry out their business needs. With advanced technological capability, systems can be implemented to enhance the passenger travel experience, minimize stress, and make traveling more convenient. Systems can also improve inefficient processes, Develop and execute strategic relationships with governments, community leaders, and media to help achieve DFW s goals and objectives. Just as DFW s actions can have an impact on the world outside the Airport, our external stakeholders can also make an impact on us. Engagement and decisions by opinion leaders and policymakers at the local, state, national, and international levels affect DFW s ability to grow its core business and achieve its annual goals and initiatives. This objective entails working to enhance DFW s reputation and influence among stakeholder groups, and communicating with them to build mutually beneficial relationships that support core business growth. 30

33 OPERATIONAL EXCELLENCE: KEY PERFORMANCE INDICATORS (KPI) Our most important KPIs for Operational Excellence are included in the following table. These are our Level 1 CEO goals and initiatives. A goal is a numeric target to be achieved, and an initiative is a task or project to be completed. We set high standards in each of these areas and the targets do not change from year to year. DFW s annual work plan normally consists of 30 to 40 Level 1 CEO goals and initiatives. We exceeded our target of completing at least 90 percent of these goals and initiatives annually, and we expect to achieve over 95 percent in FY Our standards for FAA regulatory and environmental compliance state that no deficiencies or violations are allowed. We plan to establish sustainability targets in FY Our aspirational M/WBE goals (which measure supplier diversity) are set based on our Availability and Disparity Study, and we have been successful at meeting and exceeding these goals in the past. 31

34 STRATEGIC OBJECTIVES AND INITIATIVES EMPLOYEE ENGAGEMENT Ensure that the workforce is productive, engaged, healthy, inclusive, and diverse. Implement DFW s comprehensive LiveWell health and wellness initiative. Implement DFW s Total Rewards program to align the benefits that employees value with the cost of compensation and benefits. Fully integrate inclusion practices to ensure workforce diversity. Update and implement DFW s performance management process to ensure that individual employee objectives are aligned with desired organizational goals and strategic objectives. Enhance a continuous learning environment by providing education, training, and career development opportunities. Develop sustainable leadership capabilities by implementing talent review and succession-planning initiatives. Create an organizational culture consistent with DFW beliefs. Execute comprehensive internal communication programs to educate employees on significant goals and strategic initiatives. 32

35 Foster employee engagement At DFW, engagement is more than employee satisfaction or employee loyalty. It is defined as the extent to which employees commit to something or someone in their organization, how hard they work, and how long they intend to stay because of that commitment. Engaged employees provide better overall support to their customers, whether those customers are internal or external. This creates a continuous cycle of greater customer satisfaction, better business results, and a more rewarding work experience for all DFW employees. 33

36 EMPLOYEE ENGAGEMENT CREATE AN ENVIRONMENT FOR EXCELLENCE Ensure that the workforce is engaged, productive, healthy, diverse, and inclusive. Employees play a key role in ensuring the Airport s excellence in all aspects of its business. It is critical for an employee to understand how their role contributes to the success of the Airport. In order for employees to be committed to the Airport, they must value, enjoy, and believe in their jobs, managers, teams, and the organization. Because of this commitment, employees are willing to go above and beyond, give of their discretionary efforts, and plan to stay with the Airport. This translates into performance and retention, which are both important elements of sustaining organizational success. Our performance management system is an annually structured, individual appraisal process. It is designed to ensure that individuals performance of their responsibilities are aligned with the goals of the Airport. The Airport establishes organizational goals and initiatives that are cascaded to all employees. An employee s overall performance success includes three key areas of accountability: annual goals/objectives and /or position responsibilities, job-specific knowledge, and leadership competencies. This process reinforces our pay for performance philosophy. DFW offers a comprehensive health and wellness program LiveWell. Our LiveWell program mission is to create a supportive work environment that educates, encourages, and empowers employees and their families to make lifestyle choices that optimize their health, wellbeing, safety, and contribution to the Airport and the community. The on-site LiveWell Center offers our employees a broad range of exercise and activities. LiveWell participation includes assessments, awareness and education, and interventions. Lastly, DFW provides incentives for employees who participate in the LiveWell program. The program will continue to evolve to meet the employees needs. At DFW, we strive to create a respectful and inclusive work environment that capitalizes on the diversity of all our employees, ensuring that everyone can develop, contribute, and be fully engaged. Our workforce mirrors the diversity of the customers we serve. We can better understand the needs and goals of our customers and communities by engaging people from different backgrounds and perspectives to serve as DFW employees. 34

37 DEVELOPING OUR EMPLOYEES ENHANCING OUR LEADERSHIP Enhance a continuous learning environment by providing education, training, and career development opportunities. When employees join DFW Airport, their education is far from over. Ongoing professional development is essential to building a capable workforce that is prepared to consistently deliver and innovate in a complex, ever-evolving environment. Airport employees have many opportunities to enrich their professional growth and development through on-the-job experiences, learning from others, and formal training. Employees are given the opportunity to improve their knowledge, skills, and abilities to maximize their performance in executing their job responsibilities. Develop sustainable leadership capabilities by implementing talent review and succession-planning initiatives. DFW s leadership team is responsible for creating the strategic direction and for ensuring the effective execution of the plan throughout the organization. The Airport has established a leadership competency model that represents a common set of expectations for how employees achieve their results. It is important for leaders to set the tone in their organizations and to model the appropriate behaviors. The leadership competencies are grouped into four success factors: enhancing personal effectiveness, applying integrative thinking, building relationships, and showing commitment. It is important for the Airport to have the appropriate sustainable leadership in place to minimize organizational disruptions as natural transitions occur internally and externally. The talent review and successionplanning process are intended to provide a systematic approach to assessing current and future talent needs. It also provides leaders with feedback about their career potential in the organization. 35