2011 Year In Review

2011 Y E A R I N RE V I E W

65 YEARS OF SERVING OUR COMMUNITY

2011 YE AR IN REVIEW

sixty-five years of serving our community

milestones Our Humble Beginning In 1946, the first terminal building (pictured above) was completed allowing Delta Air Lines and Eastern Airlines to provide Lexington’s first commercial passenger flights.

The first terminal was officially dedicated by World War I ace fighter pilot, Eddie Rickenbacker in 1946.

Looking at the modern Blue Grass Airport of today, it’s difficult to imagine the humble beginning of flight in Lexington and the incredible path taken to establish Blue Grass Airport as a regional airport with competitive non-stop service to 15 destinations. On little more than 500 acres, Blue Grass Airport welcomed its first commercial passengers to Lexington, Kentucky, on October 13, 1946. Then known as Blue Grass Field, the airport was served by two airlines—Delta Air Lines and Eastern Airlines. Over the years, Blue Grass Airport has grown to include flights from six airlines and offers commercial air service to approximately one million passengers every year. To our corporate business executives, athletic teams, civic groups and leisure travelers, thank you for supporting your local airport and joining us for 65 years of progress in providing passenger service.

Share Your Airport Memories To commemorate important moments in the airport’s history, Blue Grass Airport is collecting memorabilia and photographs of the early days at the airport, including the original terminal and airfield. If you have items of interest that can be scanned for our files and used in publications, please contact us at info@bluegrassairport. com. Photos will be promptly returned. Help us document our history!

Message from the Executive Director While 2011 proved to be another tumultuous year in the airline industry, Lexington’s Blue Grass Airport was fortunate enough to make additional air service improvements. We were pleased to announce Allegiant’s non-stop service to Ft. Lauderdale and Las Vegas.

The airline industry will likely continue to be challenged in the foreseeable future as it struggles with high fuel prices, mergers, bankruptcies, hub closures and reductions of aircraft. These challenges may in turn affect the air service at Blue Grass Airport. However, if our community continues to support our local airlines, we stand a better chance of maintaining the great passenger service that we have enjoyed over the past few years.

This past year marks a unique example of great passenger service and our community’s support of it. We were pleased to celebrate 65 years of passenger service with Delta Air Lines. In this day and age, a partnership between an

airline and the community for that length of time is truly remarkable. Delta has consistently had a strong presence at Blue Grass Airport during that entire time and has served central Kentucky very well. Congratulations, Delta!

Just as important as the passenger air service offered to central Kentuckians is the number of jobs supported by the airport operation and the annual economic output the airport produces for central Kentucky. Last year, Wilbur Smith Associates completed an Economic Impact Study of Blue Grass Airport and determined that our airport is responsible for over $370 million in annual economic impact and supports over 3,500 jobs. We are certainly proud to do our part to make Lexington a great place to live! On behalf of the Airport Board and staff, we sincerely thank our customers, the community, our airlines and all of our stakeholders for a fantastic year.

Eric J. Frankl, A.A.E. Executive Director

2011 Board of Directors Les Kimbrough, Kelley Sloane, Ed Lane (Secretary), Doris Benson, J. Robert Owens, Nancy Wiser, Porter G. Peeples (Vice Chairman), Larry Deener (Treasurer), Roszalyn Akins, Richard Hopgood (Chairman)

2011 At A Glance Commercial Passenger Statistics Statistics

2011

Airline Market Share 2010

Variance

∆%

Enplanements

547,115 554,285 (7,170) -1.3%

Deplanements

544,363 550,273 (5,910) -1.1%

Total Passengers

1,091,478

1,104,558

(13,080)

10%

6%

11%

-1.2%

46%

11%

Top 10 Passenger Destinations

16%

1. Orlando

5. Atlanta

9. Los Angeles

2. Ft. Lauderdale

6. Dallas

10. Las Vegas

3. New York LaGuardia

7. Chicago O’Hare

4. St. Petersburg/Clearwater

8. Washington, DC

Delta 46%

United/Continental 11%

US Airways 16%

Allegiant Air 10%

American 11%

Airtran 6%

Non-Stop Destinations Minneapolis Detroit

New York

Chicago Washington DC

Lexington Las Vegas

Charlotte Atlanta Dallas

Orlando Sanford Orlando International

Houston Tampa Bay Punta Gorda/ Ft. Myers

Ft. Lauderdale

2011 Y E AR IN R EVIEW

growing Central Kentucky’s Economy

The growth of an airport and the region’s social and economic well being are intrinsically linked. In 2010, the Lexington-Fayette Urban County Airport Board commissioned an economic impact study to determine Blue Grass Airport’s role as a contributor. This study, conducted by well-respected aviation consulting firm Wilbur Smith Associates, quantifies the economic contributions as well as numerous qualitative benefits that Blue Grass Airport provides to the community.

Findings from the study show that the airport contributes to the employment of approximately 3,478 jobs and an annual economic output of $370 million. The economic impact of Blue Grass Airport was estimated using a Federal Aviation Administration-approved methodology that has been widely accepted by the aviation industry.

The analysis considers the impacts associated with airport operations, onairport capital improvement projects, visitors who arrive via commercial airlines and visitors who arrive on general aviation/private aircraft.

In addition to serving as a catalyst for economic growth, the airport provides numerous qualitative and societal benefits to the region by offering services for Medevac flights, search and rescue operations, law enforcement personnel and, in the case of Lexington, horse transport as well.

For a detailed overview of the economic impact study, visit bluegrassairport. com/econimpact.html.

The Sky’s the Limit The first passenger flight arrived in Lexington at 8:14 am on October 13, 1946. It was a Delta Air Lines flight from Atlanta, and it departed Lexington for Cincinnati filled with local dignitaries, mail and freight. In 1946, Delta’s fares from Lexington averaged between $15 and $45.

Economic Impact of Blue Grass Airport Blue Grass Airport provides a multitude of benefits to the economies of Lexington and Kentucky. In order to quantify the economic benefits of the airport, the Lexington-Fayette Urban County Airport Board commissioned an economic impact study of Blue Grass Airport.

jobs payroll output

3,478

$104 million

$370 million

air service Blue Grass Airport began its first commercial flights 65 years ago with Delta Air Lines and Eastern Airlines . During its first full year of service in 1947, Delta had enplaned 5,708 passengers from Blue Grass Airport.

By comparison, Delta enplaned 282,268 passengers in 2010. Today, the air carrier serves more than 40 percent of Blue Grass Airport’s passengers. Delta and Blue Grass Airport proudly celebrated this partnership of 65 years in October 2011 with festivities for passengers.

For leisure travelers, Allegiant made several exciting announcements in September 2011 regarding new flights. In addition to Orlando, St. Petersburg/Clearwater and Punta Gorda (Southwest Florida) service, Allegiant announced non-stop flights to Ft. Lauderdale and Las Vegas.

The Jet Age Piedmont’s first passenger flight left Lexington on February 20, 1948 on a DC-3 bound for Cincinnati (pictured right). In 1965, Piedmont flew the first passenger jet flight into Blue Grass Field.

This twice-weekly service brings Allegiant to five destinations from Blue Grass Airport, demonstrating a strong commitment to the central Kentucky community.

The airline industry continues to experience changes as air carriers seek ways to refine their business models. AirTran Airways, which offers daily non-stop service to Orlando from Lexington, was recently acquired by Southwest Airlines. United and Continental continue the process of merging their operations, and although American Airlines has sought bankruptcy reorganization, its business continues to operate as usual with a strong presence in Lexington through its non-stop flights to Dallas and Chicago.

2011 Y EA R I N REVI EW

customer experience Blue Grass Airport prides itself on offering passengers a positive travel experience from their regional airport. The airport continues to provide an array of services such as free wireless internet service, an efficient security checkpoint, pleasant shopping and dining experiences and convenient parking.

To enhance communication between the airport and its customers, the airport now maintains a presence on Facebook, Twitter and YouTube. Passengers are encouraged to visit these social media resources for information about airport happenings, new flights, contests and aviation news.

Customers can now enjoy the convenient new location of the airport’s cell phone waiting area. Located close to the terminal and along the main roadway, customers can easily wait for arriving passengers free of charge in this designated location.

An Era of Expansion The 1970s and 80s brought a time of expansion at the airport. A new terminal opened on April 22, 1976 and a concourse expansion was completed in 1989 and 2007.

As passengers are traveling they have more ways of “connecting” in the terminal. Additional power outlets have been installed in Concourse A seating areas so passengers can continue performing necessary business functions.

Blue Grass Airport and the Lexington Convention and Visitors Bureau recognized National Tourism Week in May 2011 with an unveiling of a one-of-a-kind stained glass art in the airport terminal. Created by artist Zig Zeigler, the piece depicts the visitor bureau’s blue horse mascot—Big Lex. Customers traveling on the day of the unveiling received complimentary snacks and beverages in appreciation for their travels to the Bluegrass region.

Blue Grass Airport’s Guest Services team, all of whom are Certified Tourism Ambassadors, serve tourists on a daily basis providing information on attractions, hotels, restaurants and ground transportation.

2011 Y E AR IN R EVIEW

operations and safety Blue Grass Airport is dedicated to the highest safety standards and is committed to providing a secure airport. In 2011, more than 67,000 takeoffs and landings occurred on the airport’s two runways. For a fifth consecutive year, the airport successfully completed its annual Federal Aviation Administration inspection for an Airport Operating Certificate with zero discrepancies.

Airport Executive Director Eric Frankl was selected as Air Carrier Airport Manager of the Year by the Federal Aviation Administration Southern Region. Frankl oversaw more than $66 million worth of airport improvement projects in 2010 to ensure a safe and efficient airport for the traveling public. Since 2008, the Federal Aviation Administration has provided Blue Grass Airport with 17 grants in Airport Improvement Program funds.

In May 2011, the airport conducted a full-scale emergency training exercise with airport staff and local emergency response agencies. The exercise included more than 200 participants from fire and rescue teams, law enforcement agencies, local hospitals and the American Red Cross.

Simulated aircraft incidents are performed to ensure airport and community preparedness. This training is just a small part of the more than 3,458 combined hours of training Blue Grass Airport’s public safety team undergoes every year.

Blue Grass Airport’s fixed-base operator, TAC Air, continues to exceed expectations of general aviation passengers at its new flagship terminal. In spring 2011, TAC Air was voted the “#1 Large FBO Chain” by Professional Pilot magazine and its Lexington facility received a significant safety award for its continuous service without an accident.

Protecting Our Passengers During the early days of air service, security at Blue Grass Airport consisted of a fence around the airport perimeter and a night watchman. Today, the airport has 19 public safety officers fully trained in fire, police and emergency medical services.

To commemorate the tenth anniversary of the September 11th terrorist attacks, Blue Grass Airport hosted a memorial ceremony and terminalwide moment of silence. The airport continues to work closely with its local and federal partners at the Transportation Security Administration to provide a safe travel experience. In 2011, the airport’s operations department completed an airport-wide overhaul of the identification badge system, leading to better documentation and accountability.

With the completed refurbishment of the airport’s Regional Fire Training Center, the airport is once again hosting training courses for public safety officers and firefighters throughout the country. The modernized center includes the latest technology, a classroom with audio/visual equipment and certified, experienced instructors.

General aviation can take advantage of lower fuel prices with a new selfserve fuel station constructed in spring 2011. Private aircraft owners may fuel their aircraft at their convenience, which is a valuable service to the owners of the 115 aircraft based on airport property. Full-service fueling continues to be available through the airport’s fixed-base operator, TAC Air. Throughout the year, the airport continued to provide welcome services to the many conferences held in central Kentucky. The airport was proud to play an integral role on the planning committee for the National Organization of Black Law Enforcement Executives Conference in 2011. In partnership with local law enforcement organizations, Blue Grass Airport provided staffing assistance throughout the event. Airport staff was recognized with an award for excellence for its participation.

Preserving Aviation History In 1978, Wendell Murphy (left) and former Airport Board Chairman Dr. George Gumbert (right) co-founded the Kentucky Aviation History Roundtable, which eventually opened the Aviation Museum of Kentucky, located on the property of Blue Grass Airport.

Photo Courtesy of Jonathan Palmer

community outreach Blue Grass Airport continuously strives to improve the quality of life for its stakeholders through community partnerships and outreach. The airport was proud to partner with organizations such as the American Red Cross, Aviation Museum of Kentucky, Bluegrass Tomorrow, Broadway Live, Commerce Lexington and the Lexington Legends. The airport management team plays active roles on the boards of non-profits including the 5191 Memorial Commission, Bluegrass Hospitality Association, Hospice of the Bluegrass, Kentuckians for Better Transportation, Kentucky Blood Center, Lexington Dream Factory and LexArts.

tion facilities. Gumbert, an avid pilot and aviation enthusiast, was the airport’s longest standing chair, with 22 years in the position and a total of 27 years on the Airport Board.

In spring 2011, the Airport Board signed a resolution to name one of its roads after former Airport Board Chairman Dr. George Gumbert.

The new road is accessible from Versailles Road and leads visitors to the airport’s Regional Fire Training Center and future general avia-

The airport continued to host school groups and summer camp programs for educational opportunities. In collaboration with the Aviation Museum of Kentucky, the airport provided 350 students with an airport tour and interactive experience at the museum.

Supersonic Transport The world’s only supersonic passenger jet, the Concorde, visited Blue Grass Airport in August 1989 for a promotional travel tour.

For the second consecutive year, the airport partnered with the 2nd Sunday initiative, Downtown Lexington Corporation and University of Kentucky to host 2nd Sunday at Blue Grass Airport. This fitness event on the airport runway has quickly become a popular Lexington tradition and has garnered national publicity and three awards.

2011 Y EA R I N REVI EW

airport development The airport continues to invest in providing a first-class facility for our passengers. While many of our projects in 2011 were not quite as visible to our passengers as the terminal renovations from the past several years, the airport’s capital improvement projects focused on providing facilities that are more efficient, cost-effective and environmentally sustainable.

These projects included rehabilitation of the airport ramp and taxiways, terminal roof replacement, escalator and revolving door modernization and replacement of snow removal equipment.

The Aviation Museum of Kentucky relocated to a new hangar with 12,000 square feet of display area so the public can more easily enjoy its restored aircraft and memorabilia. Mustang Aviation, the aircraft maintenance provider at Blue Grass Airport, has moved into the museum’s previous location.

Global Gateway to Lexington Blue Grass Airport served as the gateway to international visitors for the 2010 Alltech FEI World Equestrian Games. Customers experienced more than $66 million in airport improvements, both inside and out.

A master plan process is underway that will guide the airport’s role in serving its customers and in support of the broader air transportation system. This planning effort will offer a focused emphasis on updating existing airport facilities, evaluating updated forecasts of aviation activity in all sectors and reassessing the next 20 years of the airport’s development.

Blue Grass Airport once again exceeded its Disadvantaged Business Enterprise goal for the year and is proud to be assisting in leading efforts locally. In partnership with Lexington-Fayette Urban County Government and community sponsors, the airport is actively participating in and hosting the Lexington Minority and Women Contractor Training Workshop. This program helps minorities and women effectively compete in the construction industry.

financial overview Blue Grass Airport makes a commitment to the community and its stakeholders that it will adhere to the strongest ethical standards and ensure fiscal responsibility. In 2011, the airport acted prudently to manage its operating expenses in a year of instability within the aviation industry and expenditures of more than $10 million in airport capital improvement projects.

Fiscal Year 2011 Gross Operating Revenue

Fiscal Year 2011 Gross Operating Expense

in (000s)

in (000s)

Airline

$ 4,512

Salaries and Benefits

4,354

Utilities 1,126

Parking 4,354 Car Rental

1,975

General Aviation

1,027

1,975

4,512

1,027

Concession 725 Other 325 Total

$ 12,918

1,126

$ 5,557

325

725

Maintenance and Supplies 1,095

1,095 819

5,557

647

Marketing 819 Other 647 Supplies and Equipment

580

Professional Services

508

Insurance 365 Training and Education Total

Note: Revenue and operating expense reflect Blue Grass Airport’s fiscal year, which began in July 1, 2010 and ended June 30, 2011.

114

$ 10,811

114 365

508

580

This past summer the 5191 Memorial Commission unveiled a sculpture to honor the 49 lives lost five years ago on August 27, 2006 during the Comair Flight 5191 accident. Created by renowned artist and Kentucky resident Douwe Blumberg, the 17-foot tall metal sculpture resides in the Arboretum in Lexington, Kentucky and includes 49 birds in flight in remembrance of each life lost. The granite base is inscribed with the names of those who were lost that day.

Photo Courtesy of Lexington Herald-Leader

in remembrance

4000 Terminal Drive, Suite 206 Lexington, KY 40510-9607 859.425.3100 bluegrassairport.com

Photos by Bill Straus Photography, unless otherwise noted