Total revenue by fiscal year

Executing a Successful Financial Strategy

 

Every decision we make at the San Diego County Regional Airport Authority is intended to advance at least one of our core organizational strategies: Financial, Customer, Community, Employee or Operational. Although all of the strategies are vitally important to carrying out our mission, one strategy – financial – serves as the bedrock for all the others.

 

Without a carefully thought-out and well-executed strategy that enhances the financial position of the Airport Authority, none of our goals related to the other strategies can be realized.

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With that in mind, here is a list of 2015 successes related to our financial strategy:

 

  • Recent air service additions have led to increased revenues that support the organization’s financial health. When a route is performing well, it further incentivizes airlines to expand.
  • Innovative marketing solutions, such as the parking card incentive program, have spurred growth in parking revenues over the last quarter.
  • The Airport Authority received its seventh consecutive “clean” audit. It was the 10th clean audit in the past 12 years. The most recent audit showed no material weaknesses, which is another testament to our financial stability.
  • Anyone who would question the financial strength of the Airport Authority need look no further than our strong A+ credit rating, which we’ve maintained while incurring over $1.3 billion of debt to fund our capital improvement program.
  • All of this has resulted in multiple years of awards, with the Airport Authority earning recognition for Excellence in Procurement, Financial Reporting, Budgeting, Debt Policy, and Investment Policy.

 

Moving forward, it is essential to continue building upon this success. There are many unknowns that will affect the business in the future – industry changes, disruptive technology, evolving financial reporting standards, economic volatility, geopolitical events, regulatory changes, human capital needs – but by supporting innovation and driving tactful initiatives, the organization can achieve its mission without compromising its ability to remain a financially enduring and resilient enterprise.

Air Service Development Takes off at SAN

Air Service Development underpins one of our most important strategies – forging connections between San Diego and the world. We know that regional economic competitiveness relies on efficient air transportation to domestic and global markets.

 

San Diego International Airport’s (SAN) network of nonstop air service is constantly evolving. By this summer, we will offer nonstop service to 60 destinations.

 

SAN has attracted 12 new passenger flights over the past two years to important destinations for business and leisure travelers, including Kona, HI; Dallas, Chicago, Houston and Denver. Other new nonstops to be added in 2016 include Vancouver, Milwaukee, Stockton, El Paso and San Jose.

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While attracting new air service, especially international, is highly competitive, SAN is convincing airlines that we have the demand. For example, our daily British Airways flights to London are 87 percent full, on average, compared to an average of 84 percent for all British Airways flights from the U.S. to London. That kind of route validation plants the seeds for expanded opportunities.

 

And we are always looking ahead. Domestically, we will continue to monitor opportunities for nonstop service to places such as Washington (National), Norfolk, Indianapolis, Raleigh, Tampa and Spokane.

 

Internationally, our current nonstop destinations include London, Tokyo, Mexico and Canada. We are targeting additional service to Europe, Central and South America, and China in the medium term.

 

Expanding our air service adds fuel to the economic engine that is SAN. The San Diego Tourism Authority estimates that domestic flights bring a total $30 million annual impact, and the JAL nonstop to Tokyo alone brings in $90 million in annual impact.

 

Growing our air service grows our revenues, supporting our ability to forge even more connections. That can be seen in the record 20 million passengers SAN served in 2015.

 

The 2015 total represents a 7 percent increase over 2014. SAN also posted record-breaking passenger totals in 2014.

 

“Crossing the 20-million-pasenger threshold is an important and meaningful milestone,” said Thella F. Bowens, President/CEO of the San Diego County Regional Airport Authority. “But more important is the fact that the airport has seen consistent and sustainable growth in the post-recession years.”

 

In another important category, SAN set a record for total enplanements, or departing passengers, in 2015 with just over 10 million; a 7 percent increase over the previous record set in 2014.

 

SAN also served nearly 700,000 international passengers in 2015, an increase over 2014 of nearly 4 percent.

 

Bowens attributed the increases to a number of factors, including the improved economy and robust tourism industry.

 

SAN also set a new record for air carrier operations – flights with more than 60 seats – with nearly 165,000 flights. The previous record for this category was set in 2008. This is indicative of the airline industry’s trend away from smaller, propeller-driven aircraft in favor of larger jets on short-haul routes, such as San Diego-Los Angeles.

 

Detailed reports of SAN air traffic statistics are available at www.san.org/News/Air-Traffic-Reports.

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20,000,000

PASSENGERS IN 2015

RCC_Center_02
The $316 million facility generated approximately 4,600 construction jobs. About $186 million in construction contracts went to local businesses, with $70.4 million of that going to small businesses.

Airport Authority Moving Forward with Improvements

San Diego International Airport officially opened in 1928 on a plot of land by San Diego Bay, and 88 years later, it’s still in the same location. Today, SAN is the busiest single-runway airport in the nation on a footprint of just 661 acres.

 

There is no immediate opportunity to expand or relocate the airport. So we have to look at everything through the prism of sustainability. That means building not just bigger, but smarter.

 

In 2015, the San Diego County Regional Airport Authority Board and the California Coastal Commission green-lit the design and construction of a long-anticipated parking plaza adjacent to Terminal 2, which will provide 3,000 much-needed, close-in parking spaces.

 

The Airport Authority has also revamped the north side of SAN, opening the Economy Lot at the corner of Pacific Highway and Washington Street, offering travelers the lowest parking rate among on-airport lots at $13/day; and collaborated with Signature Flight Support on a new general aviation complex that features a cutting-edge 19,000-square-foot terminal, 250,000-square-foot ramp and five hangars.

 

But the crowning achievement on the north side is the new consolidated Rental Car Center, which officially opened in January 2016.

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The 2-million-square-foot Rental Car Center houses most of the rental car companies serving the airport, including national brands, as well as local, independent and small business rental car companies, in one central location off Pacific Highway. Fourteen rental car company brands are operating out of the facility, which can accommodate up to 19 brands in total. The facility has room for more than 5,000 cars.

 

The new facility replaces the group of buildings on Harbor Drive that have for years housed most rental car companies serving the airport. In a related change, all rental car customers are now carried to and from the terminals in 16 – soon to be 25 – new shuttles owned and operated by the Airport Authority. This fleet replaces the approximately 81 shuttles previously operated by the rental car companies. The new shuttle buses will operate almost exclusively on a new interior airport roadway.

 

The building, which is a candidate for LEED Silver certification, also features three new works of public art, with a fourth expected to debut at the end of 2016.

 

The $316 million facility generated approximately 4,600 construction jobs. About $186 million in construction contracts went to local businesses, with $70.4 million of that going to small businesses.

 

The next master-planning phase at SAN is the Airport Development Plan. This will identify the best way to replace the aging Terminal One. It will also help provide a physical connection to a planned multi-modal transportation center.

 

And most importantly, it will enable the airport to meet demand through 2035. That’s when projected passenger levels are projected to reach capacity for the airport’s single runway. It is clear that being able to continue to provide these airport services in the future is critical, both in terms of a public service and an economic driver for the entire San Diego region.

Planning for the Long-Term

The San Diego County Regional Airport Authority has completed a 20-year Capital Improvement Planning effort to define capital investment needs aligned with the airport’s key strategies for the future. Those key strategies include a sustainability strategy which considers the “Total Cost of Ownership” (TCO) for capital improvements. TCO includes a project’s construction costs as well as ongoing operations and maintenance costs for the total life of the asset or facility.

20

YEAR CAPITAL IMPROVEMENT PLAN

Small Business Development Program Hits its Stride

In 2015, the San Diego County Regional Airport Authority made significant strides in its efforts to ensure that local and small businesses had every opportunity to do business with the airport.

 

The $316 million Rental Car Center project completed construction with tremendous contributions from the local business community. Local businesses received more than $186.2 million in construction contracts, amounting to nearly 60 percent of the total project cost. Of the contracts that went to local businesses, $70.4 million – or 38 percent – went to small businesses. Also noteworthy is that $70.4 million represented nearly the entire amount ($73 million) that was available for small businesses.

 

The strategy of our Small Business Development Program is to build relationships with the business community that encourage dialogue and participation, provide education and increase diversity in our contracted workforce.

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This strategy begins with this philosophy: “There’s room at the inn for everybody.”

 

From our beginning as an Airport Authority, the goal has been to create a level playing field that attracts businesses of all sizes; that provides opportunities for all workers of all genders and ethnicities.

 

That philosophy has grown into a firm commitment from the Board and a passionate belief by staff that everyone can benefit from being a part of the work we provide.

 

As one of the largest infrastructure builders in San Diego County, the Airport Authority takes its commitment to inclusion seriously.

 

The Airport Authority is proud to be the recipient of awards from the San Diego Chapter of the American Subcontracting Association, Airport Minority Advisory Council, San Diego Hispanic Chamber of Commerce and the Federal Aviation Administration for its small business outreach and contracting efforts.

 

But we’re not done yet.

 

More opportunities to work with the airport are available as the Parking Plaza across from Terminal 2 approaches groundbreaking later this year. And the next phase of master planning, which we call the Airport Development Plan (ADP), maps out the future of Terminal 1 and the redevelopment of the former Teledyne-Ryan property.

 

Our ambitious capital improvement plans are evidence of the Airport Authority’s commitment to the growth of the San Diego region.

 

And most everything we do in service of that commitment is designed to foster opportunities for small, local and underrepresented businesses, because we believe those businesses are the heart and soul of San Diego’s economy. There are plenty of opportunities at the airport, no matter who you are.

 

And we truly believe that there is still room at the inn for everybody.

There's room at the inn for everybody.
60%

OF CONSTRUCTION CONTRACTS WENT TO LOCAL BUSINESSES

38%

WENT TO SMALL BUSINESSES

Business Continuity Planning Key to Recovering from Crises

San Diego depends on reliable air transportation service to help maintain the region’s economic prosperity and protect its quality of life. The San Diego County Regional Airport Authority has processes in place that ensure airport operations continue at the highest possible level during and after a disruptive event.

 

Specifically, the Airport Authority has developed the Business Continuity Management System (BCMS), an integrated strategy to prepare for, respond to and recover from emergencies or other business disruptions.

 

The BCMS makes safety and security a top priority, and also ensures continued regulatory compliance while preserving the Airport Authority’s ability to meet contractual obligations to its business partners.

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The BCMS is comprised of four complementing plans that incorporate the Airport Authority’s critical systems and mobilize key employee teams, as follows:

 

  • Airport Emergency Plan – Provides a blueprint for responding to incidents with a goal of mitigating their impact and positioning the airport for rapid physical recovery, if necessary.
  • Crisis Communication Plan – Outlines goals, strategies and recommended approaches for communication with the media and general public during and after an emergency.
  • IT Disaster Recovery Plan – Addresses how the Information & Technology Services Department responds to a disruptive event, and how the technology infrastructure, applications, and resources will be optimally recovered, restored, or redeployed after a disruption.
  • Business Continuity Plan – Offers a roadmap for identifying mission-critical business functions and establishing procedures to maintain or resume those functions during disruptions.

 

The Airport Authority is committed to working with key operational partners to align its BCMS with their emergency-response plans to ensure business interruptions are eliminated or minimized to the fullest extent possible.

 

The BCMS is regularly reviewed, tested and refined for maximum effectiveness and relevance. A formal test schedule is implemented by senior management.