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LONG BEACH, CALIFORNIA

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Mario RodriguezExecutive Director Long Beach AirportMario.Rodriguez@longbeach.gov

Strategic Planning and

Achieving Your Vision

LONG BEACH, CALIFORNIA

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Using Strategic Planning To Achieve Your Vision

• Vision

• Traditional Master Planning

• Strategic Planning

• The Long Beach Airport Commercial

Using Strategic Planning To Achieve Your Vision

Vision

TraditionalMaster Planning

Non-TraditionalStrategic Planning

Rigid Approach

FlexibleApproach

Achieving the Vision

Over-BuildingUnder-Building

Wrong Location Obsolete Facility

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LGB Vision: Improve Customer Service

• To Continuously Exceed Our Customer’s Increasing Expectations

– How will We Achieve Our Vision

• Personnel Training and Commitment

• Maintaining The Existing Facilities In Top Condition

Providing Unique and Superior Facilities Providing Unique and Superior Facilities

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LGB Vision: Improve Customer Service

• What Are Our Customer’s Expectations?

– Ease of Use and Convenience• 20 minutes from curb to plane

– Low Cost• Passengers - Lowest ticketed price in CA and 2nd lowest in US

• Airlines - 2nd lowest EPAX in CA

Unique and Superior FacilitiesUnique and Superior Facilities

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LGB Vision: Improve Customer Service

• The Challenge - Delivering Unique and Superior Facilities Without:

– Reducing The Existing Ease of Use and Convenience

– Increasing Cost to Passengers and Our Airline Partners

Right-Sizing and Developing Flexible Facilities Right-Sizing and Developing Flexible Facilities

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Traditional Master Planning

• Approach– FAA AC 150/5070-6A

– ICAO – Airport Planning Manual

• Development – Forecast (Pick One)

– Alternative Development Scenarios for the Forecasts

– Preferred Alternative Selection

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Traditional Master Planning

• The Risk with Master Planning – Forecasts are Always Wrong

– Fails to Take A Business Approach to Development

• Market conditions place practical constraints on deliverables

– Fails to Anticipate the Risk of Change in Market Conditions

– Seldom Analyzes Financial Implications

Public Works Approach vs. Business Approach Public Works Approach vs. Business Approach

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Why Strategic Planning?

• Strategic Planning recognizes that that there is a massive uncertainty in long range forecasting and planning

Unworkable Projects LanguishUnworkable Projects Languish

Strategic Planning

• Endeavors to understand the dynamics of development

• Factors in market realities to place practical constraints on what can be achieved

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Strategic Planning

• Strategic Options Should Define a Wide Range of Possible Developments

- Taking Into Consideration • Business Reasons

• Costs

• Risks

• Flexibility

Your Plan Should Only Commit to Immediate First Stage Decisions. Your Plan Should Only Commit to Immediate First Stage Decisions.

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Designing LGB’s Future

• Home to over 15,000 Full-Time Jobs

• LGB’s Economic Impact: $4.12 billion

• Over 3 Million Annual Passengers

Your Decisions Have Lasting Effects Your Decisions Have Lasting Effects

• 41 Daily Commercial Service Flights & 25 Commuter Flights

• Averages 310,000 Annual Operations

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Current Market Conditions

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Current Market Conditions

• FAA Scaled Back Forecasted Industry Growth from 2% to 0.4% in 2010

• System-wide Capacity Expected to Drop by Another 1.6% in 2010

• Commercial Operations Expected to Drop 2.2% in 2010

No Rapid Recovery for Aviation IndustryNo Rapid Recovery for Aviation Industry

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Current Market Conditions

• 39 National Airports Have Received Downward Airport Bond Rating Outlooks

• Significant Reductions in Passenger Traffic for Competitors

- LAX and John Wayne experienced traffic decreases above 5% compared to 2008

- Ontario International enplanements decreased 21.6% compared to 2008

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The LGB Commercial

Uncommon Solutions

• Focused on Our Core Mission & Vision

- Customer Service

- Safety & Security

• Employed a Strategic Approach- Demand for new construction

- Scalable Development

- Flexible Development

Employ Enterprising Solutions!Employ Enterprising Solutions!

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The LGB Commercial

Right-Sizing Development

• Meet Short-Term Needs

• Scalable

• Immediate Return or Financed by Leveraging PFCs

• CIP Structured to Maximize AIP and Minimize use of Airport Funds

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The LGB Commercial

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The LGB Commercial

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The LGB Commercial

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Terminal Improvement Strategy

• Right-Sized Project Scope to Fit Market Conditions

• Ensures LGB Meets Customer Needs

• Maintains Airport’s viability into the Future

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Terminal Improvement Strategy

Project Priorities

• Passenger Experience - Providing a Unique Experience

- Convenience: Maintaining What is Great About LGB

- Comfort: Replacing Existing Trailer Facilities

- Safety: Building Location and Orientation

• Cost Control - Balancing Airport Needs and Affordability

- No Undue Financial Burden to the Airlines

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Terminal Improvement Strategy

Project Priorities

• Meet Immediate Needs

- Permanent Holdrooms

- Enhanced Concessions

- Consolidated Passenger Screening

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Terminal Improvement Strategy

Building a Better Way to Fly!

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Strategic Outcomes

Development Outcomes

• No Negative Effect on Airlines’ Rate-Base

• Designed Common Area for Provide a Unique Experience

• Prioritized Revenue Generating Areas

• Financed with GARB and PFC-Backed Bond

Empty Gates & Concessions Do Not Make MoneyEmpty Gates & Concessions Do Not Make Money

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Outcomes

Airport Enterprise Fund Outcomes

• Passenger Traffic Remained Stable in 2009 and 2010

• Bond Rating Outlook Remains Stable

• Maintained Low EPAX for Airlines – $6.45 compared to statewide competitors averaging $10 - $20

• Attracted Two New Airlines in 2010 – Frontier and Allegiant

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Using Strategic Planning To Achieve Your Vision

Question & Answer Period

Mario RodriguezExecutive Director Long Beach AirportMario.Rodriguez@longbeach.gov

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Mario RodriguezDirector The Long Beach AirportMario.Rodriguez@Longbeach.gov

Strategic Planning and

Achieving Your Vision

LONG BEACH, CALIFORNIA