Thomas McKenna Assistant Director of Aviation - Marketing

FAA Economic Forecast 2.0 percent increase in domestic enplanements for percent increase in domestic enplanements in long run ( ) Traffic returns to Pre-911 totals by 2006 Low fare carriers increase market share == falling fares 5.0 percent increase in air cargo for 2003 and beyond

Industry Overview - Airlines Bankruptcy – Chapter 7 or 11 Vanguard US Airways United “Who’s Next??” American Delta Midwest Northwest Capacity Cuts Layoffs/Unions Reduction of flights/destinations Regional Jets/Low-cost carriers Alliances/Partnerships/Merges

Regional Jets 91 Regional Jet Airlines 1/3 of U.S. commercial airline fleet Fastest growing segment in commercial aviation 1 out 8 domestic airline passengers flies on a regional airline 82.8 million passengers boarded in 2001; double 1991 totals Source: Regional Airline Association; April 2002

Industry Overview - Airports AIR-3 Reauthorization Establish a new federal – airport partnership Protect capacity investments Increase airport financial flexibility PFC streamlining Essential Air Service Small Airports – affordable access to Air Service Security Mandates Expand federal reimbursement

Economic Impact of KCI $3.2 billion to the Kansas City Economy 67,400 total employment $1.5 million in total payroll expenses Headquarter Relocation Program Geographic Location Life Style Air Service

Source: Official Airline Guide, schedules for the week of March 10 – 16, 2003, February 2003, Max edition and announced new service. Nonstop Destinations55 Daily Nonstop Departures212 Daily Nonstop Seats23,811

NEBRASKA IOWA OKLAHOMA MISSOURI ARKANSAS KANSAS DMA = Designated Market Area. Source: Sales & Marketing Management, Survey of Buying Power, September 2002 NEBRASKA IOWA OKLAHOMA MISSOURI ARKANSAS KANSAS Sioux City Omaha Lincoln Des Moines Waterloo Iowa City Cedar Rapids Davenport Wichita Columbia St. Louis Springfield Joplin Lawton Enid Oklahoma City Tulsa Fayetteville Ft. Smith Little Rock Pine Bluff Memphis Texarkana DMA’s of Kansas City, St. Joseph and Topeka Dubuque KCI DMA Populations = 2,780.0 Income (EBI in billions) = $49.9 Approximate Population of San Diego

Year Ended March 2002, Enplanements Note: Includes only U.S. carriers reporting T-100 data. Source: U.S. DOT, T-100 data, via Data Base Products. KANSAS CITY IS NOT DOMINATED BY A HUB CARRIER

PROFILE OF THE KANSAS CITY DOMESTIC MARKET (Year Ended March 2002) Domestic O&D passengers Average yield Average passenger haul Sources: U.S. DOT Origination-Destination Passenger Survey, year ended March 2002, via Data Base Products, 8,885, ¢ 930 miles

Seats Source: U.S. DOT, T-100 Data, via Data Base Products. Passengers Year Ended Load factor has improved by 6 points to 64% over the last ten years Seats/Passengers

KCI Over 150,000 Nearly 50,000 Nearly 60,000 Nearly 80,000 Over 60,000 Europe Mexico Asia Canada/Greenland Caribbean/ Central America/ South America Over 430,000 international passengers in YE June 2001 Source: U.S. DOT Origination-Destination Passenger Survey via Data Base Products, YE June 2001.

KCI PROJECTS Terminal Improvement Project Consolidated Rental Car Facility Economy Lot

KCI’s $258 million Terminal Improvement Project will: –Better distribute passenger traffic among the three terminals –Widen walkways in all terminals –Improve information displays for flights and baggage The short curb-to-gate distance of 75 feet will not change TERMINAL IMPROVEMENT PROJECT

KCI’s $258 million Terminal Improvement Project will: –Provide unique baggage claims areas for all airlines –Add many PC outlets and establish a new business center –50% more concession space Expected completion: 2004

B A C New Employee Lot KCI’s $62 million Economy Lot will provide: – Dedicated terminal lots & shuttles – Real time parking& airport information (Kiosks) – 15,000 new low cost parking spaces – Additional security cameras for patrons’ safety – Faster travel time from new lots to terminal Economy Lot Expected completion: 2003

Consolidated Rental Car Facility Benefits to the airport user: – Customer convenience – Closer to the terminals – Flight information display – Additional on-airport rental choices Expected completion: 2005 Expected cost: $86 million

Air Cargo

Air Cargo means business at KCI ! All Cargo Carriers (20 flights per day) –Airborne, BAX Global, DHL Worldwide, Emery Worldwide, FedEx, Kitty Hawk, UPS, and United States Post Office Largest cargo airport in six-states –(NE,IA,MO,KS,OK,AR) Air cargo buildings on airport - 6  89% of all air freight is processed by the eight all-cargo carriers

FTZ Attributes at KCI Zone No Site 3 One of Largest FTZ airports in the US Benefits including: Deferral payment of duties until goods are entered in the commerce of the United States Works with Greater Kansas City Foreign Trade Zone, Inc to attract companies that need airport location and FTZ benefits.

Types / Modes of Distribution Pipeline Water Rail Truck Air

Cost of Modes Pipeline Water Rail Truck Air 0.02 per ton mile 0.03 per ton mile 0.40 per ton mile 0.90 per ton mile

What percentage of World Commerce goes by Air? About 2% of World Trade by Volume About 40% of World Trade by Value –About 2.5 trillion dollars of goods are uplifted by aircraft each year

What types of commodities move by Air?

Limits of Air Cargo History Belly Cargo Weight Size –747 today = 100 tons (total Aircraft load) (118 inches high, 96 inches wide, 240 inches long)

Intermodal Air Cargo Air - Truck Sea - Air Air - Rail

Air Cargo Information Flow Freight Fowarder Custom Hose Broker Air Carrier Banks Customs Service Dept. of Agriculture Shipper Consignee ACS (Automated Customs System)

Not Just Jets Remote location (Helicopter) Airships (lighter than Air) Rockets (Satelitte Delivery)

DISCUSSION