HomeMy WebLinkAboutFY 2020 Proposed Budget PresentationProposed FY20 Budget Dallas Fort WorthInternational Airport
2DFW International Airport Rankings•4thin global flights •15thin global passengers• 164 Gates• 7 Runways• 190 Domestic Destinations, 63 International• $37 Billion Annual Economic Impact
372.4 Million passengers in 2019
4DFW’s Hybrid Use Agreement ModelAirfield and terminal cost centers are “residual.” DFW retains profits from non-airline revenues up to the “Upper Threshold,” then shares 75% with the airlines to reduce landing fees.DFW Cost CentersAirfield Terminal DFWNet Cost = Landing Fees Net Cost = Terminal Rentals Non- Airline RevenuesDFWCC Net RevenuesOperating Revenue and Expense FundAirline Cost CentersTotal Airline Cost
5FY 2020 Budget OverviewKey ThemesLowest increase in Airline Cost since 2011 (2.3%); all airline KPIs improving for first time• Lower cost per enplanement (down $0.28)• Lower landing fees (down $0.22)• Lower terminal rentals (down $3)Record passenger forecast of 75.7M (4.6% increase)Record DFW Cost Center net revenues of $164M; increase of $18.3M (12.6%)Modest increase in expenditure budget; up 2.3% ($23.1 million)• Assumes DFW takes-over Terminals A & C custodial work from AA; without this budget up 1.4%• Funds strategic priorities for Customer Experience, Safe and Secure, and Operational Excellence ($9.1 million)• Lower net debt service (savings of $10.1 million; 3.0%)
6Expenditure BudgetFY 2020 Budget is $1.032 billion, a $23.1 million (2.3%) increase from FY 2019 Outlook; 1.4% excluding Terminals A & C custodial.Operating expense increases relate to:• Terminals A & C custodial• Strategic priorities• Fixed contract increases, salary annualization and merit poolManagement identified $15.5 million of cost reductions and budget savings (3.1% of Outlook)FY20B v FY19B FY20B v FY19OLFY20 Inc (Dec) Inc (Dec)Annual Budget (Millions) Budget Amount % Amount %Operating Expenses $529.3 $28.6 5.7% $32.3 6.5%Gross Debt Service 502.8(9.4) (1.8%) (9.2) (1.8%)Total Expenditures Budget $1,032.0 $19.2 1.9% $23.1 2.3%
7FY 2020 Budget Walkforward from FY 2019 OutlookFunding Terminals A & C custodial, strategic priorities, fixed contract increases, salary annualization and merit pool account for 96.9% of the budget increase.Operating Expenses (in Millions) TotalFY 2019 Outlook $497.0Cost savings and budget reductions(15.5)Strategic PrioritiesA & C Custodial Transfer 7.5Customer Experience 3.3Safe and Secure 3.3Operational Excellence 2.5Salary/Benefits annualization and merit pool 14.7Contract increases 7.2Restore budgets 5.6Other increases 3.7Net increase 32.3FY 2020 Budget $529.3
8FY 2020 Revenues48.6% of the $1.032 billion Expenditure Budget is funded by airlines, with the balance coming from the non-airline sources.$501.5$318.0$146.0$66.5FY 2020 Revenues$1.032 billionAirline Fees and ChargesNon-Airline RevenuesPassenger Facility ChargesOther Sources
9DFW Cost Center RevenuesFY 2020 Revenues are $411.5M, a $15.7M (4.0%) increase, and a new record.FY19 FY20Budget Category (in Millions) Outlook Budget Amount PercentRevenuesParking $178.0 $181.4 $3.4 1.9%Concessions 78.0 83.1 5.1 6.5%Concessions - Advertising 14.3 14.6 0.3 2.4%Rental Car (RAC) 33.6 33.3(0.3) (0.9%)Commercial Development 50.1 55.3 5.2 10.5%Miscellaneous 41.9 43.8 1.9 4.6%Total Revenues $395.8 $411.5 $15.7 4.0%Increase (Decrease)
10Airline Cost (Revenue to DFW)The airlines pay landing fees and terminal rentals to DFW based on the cost to operate the airfield and terminals (including debt service).DFW remains cost competitive versus other large hub airports and compares favorably with AA’s other large hub airports• FY 2020 Budget is the lowest increase in Airline Cost (2.3%) since 2011• CPE, landing fee and terminal rates have all collectively decreased for the first time compared to the prior yearFY19 FY20 Increase (Decrease)Key Performance Indicator Outlook Budget Amount PercentAirline Costs (Ms) $490.1 $501.5 $11.4 2.3%Airline Cost Per Enplanement (CPE) $13.24 $12.96($0.28) (2.1%)Landing Fee $2.45 $2.23($0.22) (9.0%)Terminal Rents $310 $307($3.15) (1.0%)
11FY 2020 Budget ApprovalRequest approval of FY 2020 Budget of $1.042 billion, including $10 million of contingency outside of rates. This contingency may only be used with Board approval.FY19 FY19 FY20 Increase (Decrease)Annual Budget (Millions) Budget Outlook Budget Amount PercentOperating Expenses $500.7 $497.0 $529.3 $32.3 6.5%Gross Debt Service 512.2 511.9 502.8(9.2) (1.8%)Total Expenditures Budget $1,012.9 $1,009.0 $1,032.0 $23.1 2.3%Contingency O/S Rate Base 10.0Total Budget w/Contingency $1,042.0
12Tax Sharing to Owner CitiesHost Cities Euless, Irving, Coppell, and Grapevine (south of HWY 114) have tax sharing arrangements with DFW and the Owner Cities.Revenues split between “Host City” (1/3rd)and Owner Cities (2/3rd)• Split between Dallas and Fort Worth is based upon 7/11thand 4/11thownership, except for Rental Car Center taxes which are shared equallyHost Cities paid $14.1 million in FY18• Dallas - $7.6 million• Fort Worth - $6.5 millionOwner Cities received $0.8 million (5.6%) increase from prior year
131313Next StepsDallas City Council Consideration August 28, 2019Fort Worth City Council Consideration September 10, 2019
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