1. California Air Travel Update and LAX Modernization Plan Preview Prepared for: October 30, 2009 Pasadena Conference Center Pasadena, California The 21 st Annual Southern California Visitor Industry Outlook COnference

2. 1 The Two Major Demographic Factors That Drive Demand for Air Travel: Population Growth and GDP/Household Income

3. 2 Los Angeles is the Second-Largest Metro Area in the U.S. and Still Growing Note: Combined Statistical Area Populations; Washington Includes Baltimore MSA Source: Population Division, U.S. Census Bureau, Release Date March 27, 2008 2007 Metro Area Population for U.S. Large Hubs (000s) Los Angeles Los Angeles is Growing Faster, in Terms of Total Population Increase, Than Any Other U.S. Metropolitan Area

4. 3 California’s Population Will Increase by Almost 12.6 M by 2030 – With Over Half the Increase Concentrated in Greater Los Angeles Source: U.S. Census, 2005 Projected Population Growth of Top 10 States (Millions) 2000 - 2030 California

5. 4 Population in the Los Angeles has Exceeded the U.S. Growth Rate Area Since 2000 - Impressive for the Second-Largest City in the U.S. Average Annual Population Growth Rate in Los Angeles, California, and the U.S. 2000-2007 Note: LA Area Includes LA, Orange, Ventura, Riverside and San Bernardino Counties Source: U.S. Census Bureau, American Factfinder

6. 5 Los Angeles’ GDP Ranks Third Among Major Cities In the World, and its Economic Strength is Projected to Continue Through the Next Decade GDP Estimates for Major Cities In the World 2005 & 2020 Note: GDP is Estimated at 2005 Purchase Price Parity (PPP) Using UN Population Definitions and Projections Source: PricewaterhouseCoopers Projections

7. 6 23 Fortune 500 Companies are Headquartered in the Los Angeles Region Source: "America's Largest Private Companies," Special Report, Forbes.com, November 3, 2008. "Fortune 500 Rankings," CNN Money.com (2008). Fortune 500 Companies Headquartered in Southern California 2008

8. 7 The Los Angeles Region is Also Home to Some of America’s Largest Privately-Held Companies Source: "America's Largest Private Companies," Special Report, Forbes.com, November 3, 2008 "Fortune 500 Rankings," CNN Money.com (2008) Largest Privately-Held Companies in America Headquartered in Southern California 2008

9. 8 Personal Income in the Los Angeles Area has More Than Doubled In the Last Two Decades Note: Southern California Includes LA, Orange, Ventura, Riverside and San Bernardino Counties Source: U.S. Department of Commerce, Bureau of Economic Analysis, http://www.bea.doc.gov/ (April 2008) Total Personal Income for Five-County LA Region and Year-Over-Year Percent Growth 1991 - 2007

10. 9 Trends in the California Air Travel Market

11. 10 Most Major U.S. Airlines and Low Cost Carriers Made Money During 3Q 2009 (Fewer Seats + Ancillary Revenue Overcome Weak Fares) Operating Profit Margin of U.S. Carriers 3Q 2009 Note: System Totals Source: Airline Press Releases

12. 11 California has Weathered the Recent Downturn in Air Travel About as Well as Have its Peer States, but… Source: Sabre Airline Solutions MIDT Passenger Bookings Percentage Change in O-D Passenger Traffic Activity YE July 2007 Peak versus YE July 2009

13. 12 California’s O-D Passenger Traffic Growth Lagged That of its Peers During Recent Years, Then Declined as Rapidly During the Past 12 Months Source: Sabre Airline Solutions MIDT Passenger Bookings Annual Percentage Change in Origin-Destination Passenger Bookings 12 Months Ending July 31 st

14. 13 This Holds True for Domestic O-D Passenger Traffic… Source: Sabre Airline Solutions MIDT Passenger Bookings Annual Percentage Change in Domestic Origin-Destination Passenger Bookings 12 Months Ending July 31 st

15. 14 … as Well as International Activity Note: Combined Statistical Area Populations; Washington Includes Baltimore MSA Source: Population Division, U.S. Census Bureau, Release Date March 27, 2008 Annual Percentage Change in International Origin-Destination Passenger Bookings 12 Months Ending July 31 st

16. 15 Nevertheless, California Remains the Largest O-D Passenger Market in the U.S., in Terms of Both Passenger Traffic… Source: Sabre Airline Solutions MIDT Passenger Bookings Annual Indexed O-D Passenger Traffic, Versus California Total 12 Months Ending July 31 st

17. 16 …as Well as Revenue Generation Source: Sabre Airline Solutions MIDT Passenger Bookings Annual Indexed O-D Passenger Revenue, Versus California Total 12 Months Ending July 31 st

18. 17 Within California, Demand Has Declined Sharply in Each of the Three Major Metropolitan Areas… Except for International Demand in the Bay Area Source: Sabre Airline Solutions MIDT Passenger Bookings Percentage Change in O-D Passenger Traffic Activity YE July 2007 Peak versus YE July 2009

19. 18 However, O-D Revenue Has Held up Comparatively Well, Particularly for International Traffic in Southern California Source: Sabre Airline Solutions MIDT Passenger Bookings Percentage Change in O-D Passenger Revenue YE July 2007 Peak versus YE July 2009

20. 19 In Fact, Market Share of O-D Passenger Demand Within the State has Remained Relatively Constant, in terms of Both Domestic Traffic… Source: Sabre Airline Solutions MIDT Passenger Bookings Annual Indexed Domestic O-D Passenger Traffic, Versus Southern California Total 12 Months Ending July 31 st

21. 20 …as Well as International Passenger Activity Source: Sabre Airline Solutions MIDT Passenger Bookings Annual Indexed International O-D Passenger Traffic, Versus Southern California Total 12 Months Ending July 31 st

22. 21 Within California, O-D Passenger Demand has Actually Declined More Rapidly than Seat Capacity (i.e., Supply)… Source: Sabre Airline Solutions MIDT Passenger Bookings Percentage Change in Seat Capacity and O-D Passenger Traffic YE July 2007 Peak versus YE July 2009

23. 22 O-D Passenger Traffic has Declined at Every Airport in Southern California, Although Disproportionately so at LA/Ontario Source: Sabre Airline Solutions MIDT Passenger Bookings Percentage Change in Seat Capacity and O-D Passenger Traffic YE July 2007 Peak versus YE July 2009

24. 23 In the Bay Area, O-D Passenger Demand and Seat Supply Have Increased at San Francisco, but Declined Drastically at Oakland Source: Sabre Airline Solutions MIDT Passenger Bookings Percentage Change in Seat Capacity and O-D Passenger Traffic YE July 2007 Peak versus YE July 2009

25. 24 What’s Ahead for the Southern California Air Travel Market

26. 25 Although Traffic at LAX Never Recovered to 2000 Peak Levels, the Southern California Region Did Grow by 3.4M Passengers (at Least Until 4Q 2008) Passenger Traffic Growth at Southern California Airports (in millions), 1975 – 2007 Source: Airport records. Only domestic traffic declined – international actually grew to record levels

27. 26 However, Since the Second Half of 2008, LAX has Begun to Re-Gain Market Share Within the Region, a Trend that Will Likely Continue Until Recovery Percentage Share of Southern California Passenger Traffic YE3Q 2008 vs. YE3Q 2009 Source: Airport records.

28. 27 LAX Passenger Traffic Exceeded 2008 Forecasts and New Air Service Should Help the Airport to Weather Existing Economic Turbulence… LAX Total Airport Passengers CY 2000 – CY 2009 Source: Airport Records 16.6 42.7 17.2 45.2 17.4 49.9 16.0 14.8 14.6 16.5 17.5 16.9 45.7 41.4 40.4 44.2 44.0 44.1 67.3 61.6 56.2 61.0 62.4 59.4 61.5 55.4 60.7 39.8 55.0 15.6 New LAX Service: Emirates (Dubai) V Australia (Sydney) Delta (Sydney) Korean (São Paulo) Delta (Sydney & São Paulo) JetBlue (New York JFK and Boston) Mexicana (Oaxaca) Allegiant (13 U.S. cities) Southwest (St. Louis) 16.7 43.1 59.4

29. 28 …but LAWA Has Serious Cause for Concern Regarding the Health of its Other Major Commercial Airport, LA/Ontario ONT Total Airport Passengers CY 2000 – CY 2009 Source: Airport Records 6.8 6.7 6.5 6.9 7.2 7.0 7.2 6.2 5.2

30. 29 LAX Modernization (Yes, even in a global recession)

31. 30 Seven New Large Aircraft Gates will be Added to TBIT by August 2012 New NLA gates

32. 31 Overview of the LAX Modernization Plan New Terminal Facilities Are Shown in Blue TBIT Midfield Concourse

33. 32 View of Taxi Lane Between the New TBIT and the Midfield Concourse from the North New Terminal Facilities Are Shown in Blue TBIT Midfield Concourse

34. 33 View of Taxi Lane Between the New TBIT and the Midfield Concourse from the North TBIT Midfield Concourse New Terminal Facilities Are Shown in Blue

35. 34 View of Taxi Lane Between the New TBIT and the Midfield Concourse from the Southwest TBIT Midfield Concourse New Terminal Facilities Are Shown in Blue

36. 35 New Terminal Facilities Are Shown in Blue View of Taxi Lane Between the New TBIT and the Midfield Concourse from the Northeast TBIT Midfield Concourse

37. 36 View of LAX from the East After Completion of New Facilities New Terminal Facilities Are Shown in Blue

38. 37 Interior View of the New TBIT

39. 38 Interior View of New Concessions Space Within the New TBIT

40. 39 View of the Elevated Walkway Between the New TBIT and the Midfield Concourse (not shown) from the West TBIT

41. 40 Thank You for Your Time!