Broward County Aviation Department Recommended Budget Fiscal Year 2014

Transcription

1 Broward County Aviation Department Recommended Budget Fiscal Year 2014

2 Overview Experienced Management Primary Air Trade Area (Broward County) Strong economy, growing population Major tourist destination, including Port Everglades Air Service: South Florida s Leading Domestic O&D Airport 55% of South Florida s Domestic O&D Traffic 1 91% O&D traffic Strong LCC presence, including top three carriers Top four airlines each have between 13 19% of market share (FY 2012) Capacity Driven Capital Improvement Program Runway project to enable future growth Major portion of CIP based on passenger growth Solid Financial Performance Residual Airport Revenue diversity Management focus on cost containment Low Cost Airport Compares very favorably to competing facilities 1. U.S. DOT, Air Passenger Origin Destination Survey 2

3 Airline Activity

4 History of Strong Enplanement Growth Compound average enplanement growth from measured 3.5% In 2012, enplanements reached record levels According to ACI, in FY 2011 FLL ranked 13 th among U.S. airports in terms of domestic origindestination passengers and 21 st among U.S. airports in terms of total passengers 4

5 Non stop Domestic and Canadian Air Service Note: Air service to Puerto Rico and U.S. Virgin Islands is shown on the international service map (Figure 4 5). Passengers arriving from Toronto and Montreal are pre cleared and as a result are not processed through Customs and Immigration at FLL. Source: Official Airline Guide. FLL offers over 600 flights a day to more than 100 domestic and international destinations including Canada, the Bahamas, the Caribbean, Mexico, Latin America and Europe 5

6 Non stop International Air Service Notes: Includes the domestic markets of Puerto Rico and U.S. Virgin Islands. Passengers arriving from Freeport, Nassau, and Aruba are pre cleared and as a result are not processed through Customs and Immigration at FLL. Source: Official Airline Guide. 6

7 New Service JetBlue o Medellin, Colombia in June 2013 o San Jose, Costa Rica in June 2013 United o New service to San Francisco in March 2013 Silver o New service to Orlando in January 2013 Frontier o New service to Trenton, NJ in February 2013 Norwegian Air Shuttle o New service to Stockholm and Copenhagen in November

8 Airline Diversity and Growth of LCCs ¹ In FY 2014 the nine² Signatory Airlines are expected to represent 93.8 % of enplanements Market share of enplanements in 2014 of the top five airlines totals 78.0% with no carrier above 21.6% The Low Cost Carriers (LCC) market share of enplanements is expected to increase from 31.6% in 2004 to 61.0% in Legacy Carriers 68.4% 39.0% Low Cost Carriers 31.6% 61.0% Notes: 1. Forecasted Enplanements 2. Southwest Airlines and AirTran combined as one Delta Air Lines and Northwest merged in December Continental and United merged in October US Airways and America West Airlines merged in September Other Legacy category includes foreign enplanements and other airlines. 8

9 More choices, lower fares, no congestion, easy access: Passengers prefer FLL South Florida Domestic O&D Wide Service Offered 2 Market Share (FY 2012) 1 All but one major domestic airline PBI 16% provides service Non stop flights to 49 of top 50 domestic markets MIA 29% FLL 55% FLL Versus Miami Flights to 24% more US destinations 2,3 21% lower domestic fares 2,4,5 FLL s market share increased from 34% in FY 1995 to an estimated 55% in FY 2012 FLL s market share has ranged from 52% to 55% since Data is from U.S. DOT Quarterly Origin and Destination (O&D) DB1B report. The percentages represent each airport s share of the total MIA, PBI & FLL domestic O&D passengers, based on a sample of tickets sold by US carriers. 2. As of March Official Airline Guide. 4. U.S. DOT, Air Passenger Origin Destination Survey. 5. Data based on average domestic fare yield. 9

10 Financial Performance

11 FY 2014 Key Budget Highlights Compared to FY 2013 Budget FY 2014 budgeted enplanements are anticipated to reach 12.4 million, which represents a 4.1% increase over the FY 2013 forecast. Actual enplanements in FY 2012 were 11.7 million. FY 2014 budgeted enplanements are 1.5% higher than the FY 2013 budget of 12.3 million. The increase in FY 2014 enplanements is due to a significant increase by jetblue of 24% over FY 2013 estimates. Operating revenue is expected to increase by $3.1 million or 1.6%. $1.6 million of this increase relates to non airline revenues and the remaining $1.5 million to airline revenues. Operating expenses are projected to decrease by $2.5 million or 1.9%. The forecast operating expenses for FY 2013 are $6.8 million or 5.2% lower than the FY 2013 budget. FY 2014 debt service includes new debt service of $11.3 million for the runway financing and $13.0 million for the CIP (including Terminal 4 and Concourse A). Debt service is paid from Operating Revenues, Federal and State Grants, the Runway LOI and Passenger Facility Charges. 11

12 FY 2014 Projected Revenues and Proposed Appropriations Projected Revenues $000s Operating Fund Balance $ 66,710 Capital Fund Balance 43,220 Debt Service Fund Balance 108,158 Bond Reserve Fund Balance 67,332 Operating Revenues 195,334 Passenger Facility Charges 51,648 Bond Proceeds 345,500 Interest Income 2,647 State and Federal Grants 246,834 Total $ 1,127,383 Proposed Appropriations Operating Budget $ 128,085 Capital Budget 355,535 Debt Service Budget 116,903 Operating Reserves 61,459 Capital Reserves 44,078 Reserve for Future Debt Service 353,991 Bond Reserve 67,332 Total $ 1,127,383 12

13 Operating Revenues by Source Fiscal Years Ended September 30 $000s Actual Budget Forecast Budget FY14 vs. FY13 Variance Budget Airline Revenues $ 47,031 $ 53,274 $ 49,266 $ 54,765 $ 1, % Rental Cars 55,158 57,094 56,427 59,045 1, % Parking 39,661 41,395 39,980 42, % Concession Revenues Food & Beverage 9,907 10,475 10,615 11,680 1, % News & Gifts 6,629 6,452 6,297 5,224 (1,228) 19.0% All Others 6,194 6,631 7,527 6, % Total Concession Revenues 22,730 23,558 24,439 23, % General Aviation and Fixed Based Operators 6,480 7,638 6,587 6,303 (1,335) 17.5% Non airline Terminal Rent and Other Rents 4,411 3,597 4,000 3, % North Perry Airport 1, ,131 1, % Cargo 1,743 1,807 1,978 1,552 (255) 14.1% Miscellaneous Operating Revenues 2,703 2,924 2,704 2,713 (211) 7.2% Total Operating Revenues 180, , , ,334 3, % Airline Deferred Revenue Adjustment¹ 1,331 1,707 Total Reported Operating Revenues $ 182,283 $ 192,259 $ 188,219 $ 195,334 $ 3, % CPE $4.00 $4.34 $4.12 $ The Airline Agreements require that landing fees and terminal rentals be reviewed annually and adjusted, as necessary, so that the total revenue is sufficient to meet BCAD s requirements, as determined by the Airline Agreements. At the end of the Fiscal Year, after all required deposits have been made, any remaining excess funds are used to meet the requirements in the following Fiscal Year. This excess is recorded as a deferred revenue accounting adjustment against current year operating revenues. 13

14 Revenue Diversity Contributes to Solid Financial Performance Non airline revenue accounts for 72% of total operating revenue Proactive approach to increasing non airline revenues includes renovation of concession areas and soliciting new vendors General Aviation and FBOs 3% Operating Revenue Diversity Budget FY 2014 Concession Revenues 12% Other Non- Airline Revenues¹ 3% Non-airline Terminal Rent and Other Rents 2% Rental Cars 30% Parking 22% Airline Revenues 28% 1. Other Non Airline includes non airline terminal rent and other rents, North Perry Airport, cargo, and miscellaneous operating revenues.

15 FY 2012 Airline versus Non Airline Revenue 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 74.0% 26.0% Fort Lauderdale / Hollywood 51.5% 48.5% 67.8% 69.9% 69.6% 68.4% 67.2% 32.2% 30.1% 30.4% 31.6% 32.8% 51.0% 49.0% Miami ¹ Palm Beach Jacksonville Orlando Tampa Fort Myers Industry Average ¹ Airline Revenue Non-airline revenue 1. FY 2011 Data 15

16 Cost per enplanement was $4.00 in FY 2012, forecast at $4.12 in FY 2013 and budgeted at $4.40 in FY 2014 Competitive Rates Cost per Enplanement Low airline cost structure makes FLL attractive to air carriers, especially low cost carriers 16

17 Key Comparative Performance Data FY 2012 Fort Lauderdale / Hollywood Miami ¹ Palm Beach Jacksonville Orlando Tampa Fort Myers Number of Enplaned Passengers (in thousands) 11,744 18,701 2,817 2,644 17,730 8,441 3,677 Number of Operations 255, , ,812 87, , ,300 78,805 Landed Weight (million lbs) 13,927 32,517 3,461 3,665 21,143 10,022 4,192 Cost per Enplaned Passenger (CPE) $4.00 $20.21 $7.76 $7.44 $5.32 $4.99 $7.22 Debt Service Coverage Revenue Bonds - Moody's Rating A1 A2 A2 A2 Aa3 A1 A2 1. FY 2011 Data 17

18 Operating Expenses Comparison Fiscal Years Ended September 30 $000s Actual Budget Forecast Budget FY14 vs. FY13 Variance Budget Salaries, Wages and Benefits $ 30,922 $ 33,964 $ 32,518 $ 33,322 $ (642) 1.9% Contractual Services 36,030 42,332 38,909 41,547 (785) 1.9% Law Enforcement and Fire Rescue 24,953 25,123 25,123 24,967 (156) 0.6% Utilities 8,479 8,871 8,879 8,678 (193) 2.2% Insurance 5,589 5,876 5,392 5,740 (136) 2.3% Services Provided by Other County Departments 5,672 5,020 5,244 4,816 (204) 4.1% Maintenance, Equipment and Supplies 3,537 3,647 2,706 3,529 (118) 3.2% General and Administrative 4,366 5,770 5,000 5,486 (284) 4.9% Total Operating Expenses $ 119,548 $ 130,603 $ 123,771 $ 128,085 $ (2,518) 1.9% 18

19 Operating Expense Distribution Services Provided by Other County Departments 4% Insurance 4% Operating Expense Distribution Budget FY 2014 Maintenance, Equipment and Supplies 3% General and Administrative 4% Utilities 7% Law Enforcement and Fire Rescue 20% Salaries, Wages and Benefits 26% Contractual Services 32% 19

20 Capital Improvement Projects (CIP)

21 Airport Expansion Program and Terminal Modernizations Terminal Modernizations Terminal 1 Concourse A 21 Terminal 4 Gate Expansion South Runway Expansion

22 FY 2014 Capital Improvement Budget with Funding Sources Funding Sources $000s TOTAL BCAD CASH FAA FDOT BONDS Terminal FLL Terminal Modernization 200, ,000 Concourse A 139, , , ,000 Machinery, Equipment, Vehicles & Other Equipment Replacement Facility Improvement Allowance New and Replacement Vehicles 1, ,570 2, General and Administrative IS Renewal & Replacement Closed Circuit TV (CCTV) System Capability Airport Operations Control Center (AOCC) Enhancements 1,200 1,200 FLL Airport Master Plans and Airport Layout Plans 1, ,125 Wireless Network Enhancement Gate 100/101 Lighting, CCTV & Generator ,440 4,315 1,125 Parking Shuttle and Ground Transportation Facility 6,500 6,500 Callbox Replacement 1,150 1,150 7,650 1,150 6,500 North Perry Airport (HWO) GA Terminal and Hangar Facilities & Building Repairs Master Plan and ALP Updates Security Enhancements for Access Control Total Capital Projects $ 355,535 $ 8,008 $ 1,553 $ 475 $ 345,500 22

23 Aviation Capital Projects FY 2014 FY 2018 Fiscal Years Ended September 30 $000s Airfield Rehabilitation of North Airfield Pavements 28,000 Total Airfield 28,000 Terminal FLL Terminal Modernization 200,000 Concourse A 139,000 Terminal Roadway Improvements/Multi Use Path 10,000 Terminal 4 Federal Inspection Service (FIS) Facility Renovation 2,600 22,400 Total Terminal 339,000 12,600 22,400 Machinery, Equipment, Vehicles & Other 2,570 4,650 1,400 25,950 1,350 General and Administrative 5,440 26,310 11,170 5,860 3,385 Parking 7,650 North Perry Airport , Total Capital Projects $ 355,535 $ 44,185 $ 68,317 $ 31,960 $ 4,885 23

24 Plan of Finance

25 Schedule of Runway Project Related Bond Issues Debt to be issued ¹ in $ millions Estimated Issue Date Sep 13 Sep 14 Sep 15 Sep 16 Total New Runway $ $ Concourse G (T 4) $ $ 90.8 $ Terminal Renovations Concourse A (T 1) Ground Transportation Land & Facilities FIS Design, Utilities, Cargo & Roads Rehab 10L/28R and FIS Renovation Total $ $ $ $ 59.0 $ 1, Principal amounts 25

26 Estimated Impact of Debt Service on Long Term CPE Cost per Enplanement 26