Airline Costs per Enplaned Passenger

Revenues derived from the airlines are often expressed on a per enplaned passenger basis. The average airline cost per enplaned passenger at Stapleton in 1993 was $5.02. However, this amount excludes costs related to major investments in terminal facilities made by United Airlines in the mid-1980s and, therefore, understates the true historical airline cost per passenger.

Average airline costs per enplaned passenger at the airport in 1995 and 2000 are forecast to be as follows:

Total average airline costs per enplaned passenger Year Current dollars 1990 dollars

2000 17.20 11.62

The forecasted airline costs per enplaned passenger at the airport are considerably higher than costs at Stapleton today and the highest of any major airport in the United States. (The cost per enplaned passenger at Cleveland Hopkins is $7.50). The relatively high airline cost per passenger is attributable, in part, to (1) the unusually large amount of tenant finishes, equipment, and systems costs being financed as part of the project relative to other airport projects and (2) delayed costs incurred since the original opening date for purposes of the Plan of Financing (January 1, 1994).

The City estimates that, as a result of the increased capacity and efficiency of the airfield, operation of the airport will result in annual delay savings to the airlines of $50 million to $100 million per year (equivalent to about $3 to $6 per enplaned passenger), and that other advanced technology and systems incorporated into the design of the airport will result in further operational savings. In the final analysis, the cost effectiveness of operating at the airport is a judgment that must be made by the individual airlines in deciding to serve the Denver market.

It is assumed for the purposes of this analysis that the city and the airlines will resolve the current disputes regarding cost allocation procedures and responsibility for delay costs, and that the airlines will pay rates generally in accordance with the procedures of the use and lease agreements as followed by the city and as summarized in the accompanying exhibits.

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