Aug 13, 2025 Airport Advisory Commission

[00:00:01]

I WANNA UNDERLINE MY THANKS.

AND, AND MR THANKS FOR THE, FOR THE GYMNASTICS THAT WE'RE DOING FROM AN AB STANDPOINT HERE, IT'S, WE'RE NOT IN OUR NORMAL ROOM AS EVERYBODY KNOWS.

I REALLY APPRECIATE WE ALL DO THE WORK THAT'S ALLOWS THE SHOW TO GO ON.

UH, AND I APPRECIATE THOSE COMMERS WHO JOINING ON, ON SCREEN.

UM, PLEASE, PLEASE INTERJECT AND, AND, AND VISIT JUST AS YOU WERE, AS IF YOU WERE IN THE ROOM.

AND THANK YOU, UH, SECRETARY VALDEZ AND OUR OTHER COMMERS WHO ARE, WHO ARE IN PERSON TODAY.

WE'VE GOT, UM, A REALLY CONSEQUENTIAL AND EXCITING AGENDA TODAY.

AND THERE'S A LOT OF WORK THAT'S GONE INTO IT.

WE'LL TALK ABOUT THAT, BUT IT'S APPROPRIATE TO TALK ABOUT IT.

[PUBLIC COMMUNICATION: GENERAL]

UM, SO LET'S, LET'S GO AHEAD AND START THAT.

MR. ALEXANDER, DO WE HAVE AN ORDER FOR THOSE SPEAKERS? WE DO.

UM, THANK YOU FIRST, KIRK.

WE CAN GO AHEAD AND GET YOU START WITH YOU MR. MIXON.

THAT'D BE GREAT.

AND FOLLOWED BY SHERRY.

GREAT.

GOOD.

KIRK, THANK YOU FOR BEING WITH US.

SURE.

TODAY.

S CHAIR.

YEAH.

SO WHOEVER YOU WANNA SIT, I JUST PUT THERE, IT'S LIKE A FIRESIDE CHAT.

THERE YOU GO.

EXACTLY.

UH, MY NAME'S KIRK MIX.

I'M WITH DELTA AIRLINES.

APPRECIATE YOU GUYS, UH, HAVING US HERE AND ALLOWING US TO JUST SAY A FEW COMMENTS.

I'M IN OUR CORPORATE REAL ESTATE GROUP, UH, DIRECTOR IN OUR AIRPORT AFFAIRS TEAM.

SO, UH, AS YOU GUYS KNOW, WE'VE BEEN WORKING PROBABLY FOR THE LAST YEAR AND A HALF OR TWO YEARS ON AN AIRPORT USE AND LEASE AGREEMENT.

UH, AND IT HAS BEEN, YOU KNOW, CHALLENGING AT TIMES, BUT I THINK WE'VE ENDED UP IN A GOOD SPOT.

DELTA CERTAINLY SUPPORTS THE USE AND LEASE AGREEMENT THAT YOU GUYS ARE, UH, HAVE IN FRONT OF YOU TODAY.

I THINK THAT, UM, THE USE AND LEASE AGREEMENT WILL REALLY ENABLE AUSTIN CENTRAL TEXAS, AND IT'S GONNA ENABLE GROWTH THAT YOU GUYS HAVE ALREADY SEEN.

AND WE FEEL LIKE IT, IT'S GROWTH THAT YOU'RE GONNA CONTINUE TO SEE.

YOU KNOW, I THINK IT'S A CRITICAL NEXT STEP, UH, TO INVEST IN AIRPORT, YOU KNOW, ASSETS BECAUSE THE AVIATION GROWTH THAT YOU'VE SEEN, AGAIN, IS, IS WE BELIEVE, GONNA CONTINUE.

I THINK THE LEASE STRUCTURE ALSO SUPPORTS THREE CRITICAL PIECES THAT, THAT ARE EMBEDDED IN IT.

IT'S, IT'S OPERATIONAL SUSTAINABILITY, WHICH IS IMPORTANT FOR AIRLINES.

IT'S THE CAPITAL INVESTMENT THAT'S REQUIRED TO ADD THE ASSETS SO THAT, YOU KNOW, THE AVIATION GROWTH CAN CONTINUE.

AND I THINK AS IMPORTANT AS THAT IS THE CUSTOMER EXPERIENCE, INVESTING IN THE CUSTOMER EXPERIENCE, YOU GUYS HAVE SEEN SOME OF THE, THE LINES AND THE SECURITY CHECKPOINTS THAT HAPPEN.

AND I THINK INVESTING, UH, IN THAT CUSTOMER EXPERIENCE, FOR EXAMPLE, CURBSIDE, THAT'S GONNA ALLOW TRAFFIC FLOW, UH, SECURITY CHECKPOINTS THAT ARE CONSOLIDATED SO YOU DON'T HAVE MULTIPLE CONFUSING, UH, CUSTOMER POINTS, UH, FOR, YOU KNOW, TRANSIT THROUGH SECURITY CHECKPOINT.

SO WE'RE EXCITED ABOUT, YOU KNOW, THE LEASE, WE'RE EXCITED ABOUT THE INVESTMENT.

CERTAINLY DELTA SUPPORTS, UH, THIS OPPORTUNITY.

AND, UH, LOOKING FORWARD TO PARTNERING WITH, WITH AUSTIN, WITH CONTINUE TO PARTNER WITH THE AIRPORT AND, AND OBVIOUSLY THE COMMUNITIES AROUND CENTRAL TEXAS TO, TO ENABLE THIS GROWTH THAT WE THINK IS CRITICAL.

WE APPRECIATE YOU BEING HERE, MR. MIXER.

SURE.

VERY, VERY MUCH.

YEAH.

AND I THINK MS. HALL IS HERE AS WELL.

THANK YOU.

I TAKE THE HOT SEAT.

UM, GOOD AFTERNOON.

UH, MY NAME IS SHERRY HALL.

I'M THE DIRECTOR OF GOVERNMENTAL AFFAIRS FOR SOUTHWEST AIRLINES.

AND FIRST OF ALL, I, I WANNA THANK THE CHAIRMAN AND THE COMMISSION, ALL OF THE COMMISSIONERS FOR, UM, THE HARD WORK THAT YOU ARE DOING TODAY AND, AND, AND REVIEW THIS ITEM.

AND THANK YOU SO MUCH FOR YOUR SUPPORT.

I ALSO WANT TO THANK, UM, CEO GZA BOI, AND THE ENTIRE AUSTIN BERGSTROM INTERNATIONAL STAFF, THE AIRPORT STAFF.

THIS HAS BEEN, LIKE KIRK SAID, A LONG PROCESS.

WE'VE WORKED THROUGH IT, UM, FOR SEVERAL YEARS.

AND, UH, WHAT YOU'RE REVIEWING TODAY IS SIGNIFICANTLY IMPORTANT, NOT JUST FOR CENTRAL TEXAS AND CREATING A WORLD CLASS AIRPORT FOR A WORLD CLASS CITY, UM, BUT ALSO FOR SOUTHWEST AIRLINES IN OUR FUTURE PLANS, UH, TO SERVE THE MARKET.

AND I CAN SAY THAT BECAUSE I'VE HAD THE FORTUNE OF WORKING FOR SOUTHWEST FOR 37 YEARS, AND 36 OF THOSE HAVE BEEN RIGHT HERE IN AUSTIN.

AND SO SEEING THAT GROWTH, I'M EXTREMELY PROUD OF, UM, SOUTHWEST OUR PROJECTED GROWTH PLANS HERE IN AUSTIN.

AND THEN ALSO, UM, WHAT WE ARE DOING TOGETHER AS A COMMUNITY WITH, OF AIRLINE PARTNERS WITH THE CITY, UH, DELIVERING THIS NEXT GENERATION OF FUTURE TRAVEL.

SO WE LOOK FORWARD, UH, PENDING

[00:05:01]

WE'RE GONNA GROW OUR GATES, HOPE, YOU KNOW, TO 18 GATES, UH, PENDING EXECUTION, PENDING APPROVAL.

AND THAT'S HUGE.

WHEN YOU THINK ABOUT THAT GROWTH THAT SIGNALS NOT JUST A LOT OF GATES, BUT A LOT OF FLIGHTS.

A LOT OF FLIGHTS MEANS A LOT OF PASSENGERS.

AND A TREMENDOUS ECONOMIC IMPACT TO THE CITY OF AUSTIN, THE GREATER, UM, AUSTIN AREA, LIKE KIRK SAID, CENTRAL TEXAS.

SO WE'RE EXCITED ABOUT THAT.

UM, AND AS YOU KNOW, WE'RE EMBARKING ON A, ON A, AN ENORMOUS SOUTHWEST TRANSITIONAL, UH, PLAN FOR THE FUTURE.

UH, WE'RE CHANGING, UM, THE SOUTHWEST THAT YOU KNOW, TODAY INTO SOMETHING THAT DELIVERS THAT SAME WORLD CLASS EXPERIENCE THAT KIRK TALKED ABOUT FOR OUR CUSTOMERS OF THE FUTURE.

AND WE WE'RE EVOLVING, UH, IN THAT LANDSCAPE.

AND, UH, WE REALLY VIEW AUSTIN AS, UH, A CENTRAL FOCAL POINT OF WHAT THOSE PLANS COULD LOOK LIKE.

SO WE'RE EXCITED TO WORK ALONGSIDE YOU.

WE APPRECIATE THE PARTNERSHIP, AND AGAIN, WE APPRECIATE THE COMMISSION.

I APPRECIATE YOU CHAIR, UH, FOR THIS CONSIDERATION AND, AND THE SUPPORT OF THE PROJECT, SO THANK YOU SO MUCH.

THANK YOU, SHERRY.

UM, I DON'T WANNA GET AHEAD OF OURSELVES AND, UH, I DON'T WANNA SPEAK TOO LONG ON THIS, BUT I DO WANNA SAY, UH, TODAY'S CONSEQUENTIAL A TREMENDOUS AMOUNT OF WORK HAS GONE INTO THIS EFFORT.

I WANT TO THANK, UH, OUR PRIVATE SECTOR PARTNERS WHO HERE, WHO MAKE THIS INVESTMENT POSSIBLE.

AND, UH, COMING INTO THIS ROLE, NOT KNOWING HOW AIR SERVICE WORKS, HOW PUBLIC PRIVATE PARTNERSHIP THAT NATURE OF THE EXPANSION WORKS, AND TO SEE OUR PRIVATE SECTOR PARTNERS HERE TODAY MEANS A LOT TO ME PERSONALLY AND TO US AS A COMMISSION, I KNOW TO OUR PROFESSIONAL STAFF.

AND SO, THANK YOU SHERRY, AND THANK YOU VERY MUCH.

OKAY.

LET'S GET INTO THE, LET'S GET INTO THE AGENDA, THE APPROVAL OF

[APPROVAL OF MINUTES]

THERE, THERE IS, JASON, WALK US THROUGH THE, THE, UH, SMALL TWEAK WE WANNA MAKE TO THIS BEFORE I ACCEPT A MOTION AND A SECOND.

SURE.

SO, JUST ONE SMALL CHANGE, WE REALIZED THAT, UH, WE INADVERTENTLY REVERSED, UH, VICE CHAIR BROWN AND SECRETARY VALDEZ ON THE ATTENDANCE RECORD, SO WE CAN LISTEN TO RSB IN PERSON THE LAST MEETING.

AND, UH, DOLE IS BEING, UH, VIRTUAL SWITCH.

SO WE'LL MAKE THAT, UH, EDIT, GET THAT AND, UH, SECRETARY VALDEZ.

DO I HAVE A MOTION? INCORPORATES THAT SMALL WEEK, I MOVE APPROVAL OF THE WEEK THAT MR. JUST SAID, UH, UH, ON MINUTES.

GREAT.

IS THERE A SECOND? SECOND.

THANK YOU, MR. WILSON.

ALL IN FAVOR? I ANY OPPOSED? LET THE RECORD REFLECT THAT MR. C**N IS HERE TO MAKE THAT VOTE.

WELCOME, JONATHAN.

I HAVE X ISSUES.

GLAD YOU'RE HERE.

UM, ALRIGHT, LET'S GET INTO THE STAFF

[2. Briefing on June 2025 Financial Results presented by Rajeev Thomas, Chief Financial Officer]

AND MR. THOMAS, UH, AFTERNOON COMMISSIONERS ALREADY FROM, FOR THE AUSTIN AVIATION.

UH, SOME POSITIVE NEWS ON THE EMPLOYMENT SIDE FOR THE MONTH OF JUNE.

THAT WAS, YOU KNOW, FINALLY WE HAD A ALMOST 0.1% INCREASE IN OUR UNEMPLOYMENTS VERSUS WHAT WE SAW IN THE PRIOR MONTH.

SO THAT WAS GOOD NEWS FOR THE MONTH OF JUNE.

UM, OUR, OUR DAILY DEPARTURES ALSO INCREASED BY ABOUT 17 DAY DEPARTURES VERSUS, UH, JUNE OF LAST YEAR.

SO WE SAW LANDED RATES ALSO GO UP, UM, ABOUT 4.3% VERSUS THE PRIOR YEAR.

UM, CARGO UNFORTUNATELY WAS DOWN ABOUT 14%, BUT YEAR TO DATE, FISCAL YEAR TO DATE, WE ARE DOWN ABOUT 7% OF CARGO RATES.

SO WHAT IT, WHAT IT TRANSLATED TO IN TERMS OF REVENUES, WHERE REVENUES FOR THE MONTH OF JUNE ARE UP ABOUT 12 20%, UH, UP 3.6 OR $3.7 MILLION.

YEAR TO DATE, WE ARE UP ABOUT 10% ON THE OPERATING REVENUE.

UM, AND OUR OPERATING EXPENSES FOR THE MONTH OF JUNE, WE ARE ABOUT 15% HIGHER THAN LAST YEAR, BUT YEAR TO DATE, WE ARE ABOUT 10.6%.

UH, FOR THE MONTH OF JUNE, IT WAS BECAUSE OF SOME CATCH UP ON SOME EXPENSES, UH, THAT THEY HAD AND YEAR OVER YEAR, UM, CURRENTLY WE, WE ARE UP ABOUT 7.6% IN TERMS OF THAT REVENUES VERSUS PRIOR VERSUS BUDGET.

WE ARE ATTRACTING VERY WELL ON THE OPERATING ON THE OPERATING REVENUES.

UM, WE ARE ABOUT $900,000 SHORT OF WHERE WE BUDGETED, SO ABOUT GOING 3% OFF.

UM, I THINK, YOU KNOW, LOOKING AT MAYBE HOW THE PARKING REVENUE MIGHT COME IN FOR THE MONTH OF JULY AND AUGUST, WE MIGHT ACTUALLY MAKE THAT DIFFERE OUT, UM, FOR THE REST OF THE YEAR.

UH, VERSUS OUR CURRENT YEAR ESTIMATE, WE ARE UP ABOUT $4.8 MILLION ON THE OPERATING REVENUE SIDE.

ON THE OPERATING

[00:10:01]

WE ARE ABOUT 851,000 FAVORABLE TO BUDGET, AND SLIGHTLY, UH, ABOUT HALF A MILLION OFF OF OUR CURRENT YEAR ESTIMATE.

AND ON THE NET REVENUE SIDE, WE ARE TRACKING TO BUDGET ABOUT 10.4 MILLION AND WHAT WE BUDGETED, AND PRIMARILY THAT IS BECAUSE OF THE SAVINGS AND THE DEBT SERVICE, UH, FUND AND THE, THE RELEASE OF THE DEBT SERVICE RESERVE FUND.

UM, IS THE, UH, CARGO TONNAGE, UH, SAW THAT'S DUE TO CHANGE FEDEX CARGO ACTIVITY, IS THAT SEASONAL OR IS THAT SOMETHING THAT'S GOING TO POSSIBLY CONTINUE ON A DEBRIEF? WE DON'T KNOW YET.

UM, RIGHT NOW, YOU KNOW, WE WE'RE KIND OF LOOKING INTO IT.

I'LL LET YOU KNOW IF IT IS A SEASONAL THING OR IF IT IS SOMETIMES A LOSS OF BUSINESS OR SO THAT MIGHT BE PERMANENT AND I'M QUITE SURE, YEAH, THOMAS.

OKAY.

IT'S INTERESTING, MR. THOMAS, THAT THE, UH, THE POSITIVE TREND COMPARED TO JUNE 24 IS THE FIRST TIME WE'VE BEEN UP.

YEAH, 24 ON MONTH, EVERY MONTH BASIS.

DECEMBER OF 2024, WHICH IS ALSO ON THE FISCAL YEAR, RIGHT.

WAS ALSO UP.

BUT FROM, UH, JANUARY THROUGH PRESENT, YEAH.

YEAH, WE WENT DOWN.

THANKS.

SEE YEAH, NICE TO SEE THAT UPSTAIRS.

ANY OTHER QUESTIONS FOR MR. THOMAS ON SCREEN? LET THE RECORDS REFLECT THAT MR. FONG HAS JOINED US TOO.

GREAT.

WELCOME, COMMISSIONER.

UH, WONDERFUL.

THANK YOU.

JE, UH, MS.

[3. Briefing on Air Service Update provided by Jamy Kazanoff, AUS Air Service Development]

FAIR S UM, THE REPORT WAS SUBMITTED AUGUST 3RD, AND THERE'S A COUPLE OF OTHER HIGHLIGHTS I WANNA MENTION.

ONE IS THAT BANS HAD OUR PANAMA FLIGHT FOR DECEMBER AND JANUARY, SO GOING FOR FOUR TO FIVE OVER WINTER MONTHS.

AND, UH, ALSO ALASKA HAS ADDED SAN DIEGO NUMBER THREE STARTING JANUARY 7TH.

SO THESE ARE SOME TIME OVERALL.

UH, WE HAVE 2.5% MORE SEATS THIS QUARTER, JULY, SEPTEMBER THAN THE SAME TIME LAST YEAR.

SO WE HAD THE SEATS FOR SALE, THANKS TO MOSTLY OUR TWO LARGEST CARRIERS, SOUTHWEST AND DELTA AND SO MUCH.

AND WHEN WE LOOK AT NEXT QUARTER, WE'RE UP IN THE FOURTH QUARTER, 10% YEAR OVER YEAR.

UH, IT'S ARE FOR SALE FOR CUSTOMERS, SO THAT'S WONDERFUL.

SAME, UH, A MEXICO, UNFORTUNATELY DOWN TO ONE TIME, UH, DAILY, STARTING AUGUST 18TH.

THEY WERE PLANNING TO GO TO TWO TIMES DAILY, BUT WITH MEXICO DEMAND, THEY BUMPED BACK TO ONE, UH, AIR CANADA ADDED IN THE TYPICAL MONTREAL FREQUENCY.

ON MARCH 30TH, A IS CURRENTLY SERVING SIX MARKETS.

THEY POP UP TO SEVEN THIS FALL.

AMERICAN AIRLINES IS ADDING GOLF FAST.

WHITES, VA, WE'RE IN THE MIDDLE OF THEIR DOUBLE DAILY RIGHT NOW ALL DAYS, BUT SUNDAY.

BUT THEY ARE PLANNING NEXT SUMMER TO GO TO DOUBLE DAILY EVERY DAY FOR 14 A WEEK.

DELTA NOW ARE NUMBER TWO CARRIERS FOR PASSING AMERICAN, ADDING NEW MARKETS, EXTENDING AWAY.

WE APPRECIATE THAT THEY'RE ALSO ADDING FOOTBALL.

AND, UH, DELTA IS BY FAR, NOT BY FAR, BUT DELTA FOR AUGUST THROUGH DECEMBER, WHAT THEY HAVE VOTED IS ADDING THE MOST CAPACITY IN AUSTIN, FOLLOWED BY SOUTHWEST.

NUMBER THREE IS FRONTIER AND ON FOUR UNITED.

AND WHEN I SAY CAPACITY, I MEAN IT'S BETTER.

UH, CITY JETBLUE ANNOUNCED TWICE A DAY TO FORT LAUDERDALE SERVICE.

THIS IS STARTING NOVEMBER 20TH.

FRONTIER AS SERVICE TO 11 NEW MARKETS.

UH, LU TANZA IS SWITCHING THE DATES IN THE FALL FOR WHEN THEY WANT TO FRONT FOOT.

THEY'RE MOVING THEIR SEMI-WEEKLY SERVICE.

WE, WE WANNA MAKE SURE OUR CUSTOMERS ARE AWARE OF THAT.

SOUTHWEST IS AT ITS LARGEST IMPRINT YEAR OVER A YEAR, RECENTLY EXTENDING THEIR SCHEDULES TO THE END OF MARCH.

UH, UNITED IS ADDING COLLEGE FOOTBALL GAMES TO, WHICH IS NEW, NEW THIS YEAR TO THE OVERALL AUGUST 25 COMPARED TO 24.

WE ARE DOWN FIVE DESTINATIONS YEAR OVER YEAR, BUT WE'RE UP BY DEPARTURES 2% AND OUR SEATS ARE UP 2%.

SO THAT'S ALL VERY GOOD NEWS FOR ALSO TEXAS.

AND THEN ON THE, UH, REPORT, UH, THE UPCOMING NONSTOPS, WE JUST CELEBRATED SOUTHWEST INTO, UM,

[00:15:01]

WE HAVE SOUTHWEST STARTING JACKSONVILLE, OCTOBER THE SECOND DELTA STARTING CANCUN DECEMBER 20TH.

DELTA STARTING CAVO DECEMBER 20TH, DELTA STARTING PALM SPRINGS, NOVEMBER THE EIGHTH.

AND JETBLUE FOR LAUDERDALE, I MENTIONED PREVIOUSLY KNOWN.

SO SALE CUSTOMERS, .

THANK YOU, MS. KANO.

ANY QUESTIONS FOR JAMIE? I'D BE REMI WITH, WITH KIRK.

YOU IN THE ROOM AND I WON'T TURN AROUND AWKWARDLY, BUT I'LL SAY TO YOU, UH, THANK YOU SEEING THESE, UH, YOU KNOW, YOUR GROWTH HERE.

, APPRECIATE SAME THING, CHAIR.

IT'S NICE TO HAVE YOU IN THE ROOM TO SAY THANKS.

APPRECIATE.

GREAT.

UM, OKAY,

[4. Briefing on Journey with AUS (AUS AEDP/Capital Improvement Program) Active Projects provided by Lyn Estabrook, Deputy Chief Development Officer]

GOOD AFTERNOON.

UH, COMMISSIONER LENTA, GREG AIRPORT, DEPUTY CHIEF OF DEVELOPMENT IN YOUR PACKET.

UM, ON PAGE 27 AS WE'LL START THE UPDATE THAT PROJECT IS THE WEST END BILL AND, UH, TSH , UM, THAT WE'RE ADDING.

UM, WHAT'S BEEN EXCITING IS THAT WE'RE DOING INTERIOR FINISHES, SO THAT MEANS WE'RE CLOSED.

SO WE'VE GOT THE FLOOR DOWN, UM, AS WELL AS OTHER CLEAR FINISHES BEING ADDED.

UM, WE'VE COMPLETED, UM, THE SCREENING MACHINES HAVE ARRIVED, WHICH IS ALSO VERY EXCITING FROM TSA AND, UM, ALL THE ELECTRICITY IS CURRENTLY BEING CONNECTED.

AND IN THE IMAGE THERE, YOU CAN SEE THE NEW BELTS THAT, UH, GO TO THOSE MACHINES AND SOME EXTERIOR PLATINGS BEING PUT UP IN THE BUILDING.

SO IT IS ON TRACK FOR FIRST QUARTER OF 26.

THAT'S REALLY GREAT TO HAVE THAT CAPACITY FOR OUR REST.

UM, ON THE NEXT PAGE ON 28 IS THE WEST GATE EXPANSION.

THIS ONE ALSO HAS GOT SOME EXCITING, UM, MILESTONES HERE WITH THE GLASS, AS YOU CAN SEE IN THE IMAGE BEING PUT UP.

UM, AND THE DUCT WORK, ALL THE MECHANICAL SYSTEMS, ELECTRICAL SYSTEMS ARE BEING PUT IN PLACE.

UM, AND THEY'VE BEGUN SOME INTERIOR FINISHES AS WELL.

UM, THIS PROJECT IS ALSO ON TRACK FOR THE FIRST QUARTER OF 26, SO WE WILL HAVE MORE SQUARE FOOTAGE FOR OUR PASSENGER DECK QUARTER.

IT'S JUST ALSO, UM, EXCITING.

AND THEN IF YOU SKIP A PAGE OVER TO PAGE 30, WHICH IS THE PARKING GARAGE, UM, THE YELLOW GARAGE IS WHEEL CALL.

IT IS QUICKLY GOING UP AND, UM, IT IS UNDER CONSTRUCTION AND IT HAD A GREAT MILESTONE OF THE THIRD FLOOR DECK BEING POURED ON THE SOUTHERN PATH.

THIS PROJECT, AS A REMINDER, IS BEING BUILT TO HALVES SO THAT WE CAN EXPEDITE THE CON THE CONSTRUCTION OF THE EXPANSION PROGRAM WITHOUT LOSING PARKING IT.

SO THAT PATH WILL BE UP FIRST BEFORE WE TEAR DOWN ANY OTHER PARKING.

SO THAT ONE IS ALSO ON TRACK FOR THE FINAL COMPLETION OF BOTH PHASES IN, IN 2028.

UM, AND SO THAT'S THE HIGHLIGHTS WE WANTED TO FOCUS ON, ON TIME DELIVERIES FIRST QUARTER NEXT YEAR.

IT'S EXCITING, IT'S EXCITING.

I KNOW SOME OF YOU MAY HAVE TOUR SPACES AND SO, UM, I, YOU KNOW, WHAT I'VE TALKED ABOUT.

IF YOU WERE REPORT, THEN GO ON ANY, UH, QUESTIONS ON SCREEN OR IN THE ROOM FROM MS. ESTABROOK.

GREAT, THANK YOU.

YOU WELCOME.

UH,

[5. Briefing on Austin Aviation’s Fiscal Year 2025-2026 Budget presented by Rajeev Thomas, Chief Financial Officer]

DO WE OR DO WE WE DON'T.

I MEAN, IT'S, IT'S A SEPARATE BREAK.

IT, IT IS A SEPARATE BRIEF, THAT'S RIGHT.

JUST FOR THE NEXT FISCAL YEAR.

MY FAULT.

LET'S TALK ABOUT THE FUTURE.

ALL RIGHT.

YEAH, SORRY.

ALRIGHT.

I DON'T THAT THE, THE TEXT ARE BEING DISPLAYED THERE OR NOT, BUT, UM, OR YOU HAVE IT IN FRONT OF YOU.

SO WE CAN JUST GO OVER PAGE.

I'LL JUST READ OUT PAGE.

OKAY.

LET'S START WITH THE, UH, START WITH PAGE 44 AND THEN JUST PUT YOUR POINT BY YOU, DON'T MIND.

SO, UM, THIS IS, YOU KNOW, UH, OBVIOUSLY THE, THE BUDGET HASN'T BEEN APPROVED BY COUNCIL YET.

THEY'RE THE GRADING.

SO THE NEXT THREE DATES HERE.

SO, UH, I'LL JUST GIVE YOU WHAT WE'VE SUBMITTED TO THE CITY AND IF GETS FORECAST IS THIS IS WHAT IS GOING TO GO.

SO SOME OF THE MAJOR ASSUMPTIONS, UM, REGARDING THE, UM, REGARDING THE BUDGET, UM, THAT WE, THAT WE PUT INTO PLACE IS, UM, SO OBVIOUSLY THE MOST SIGNIFICANT EFFECT ON THE FISCAL IS THAT NEW AIRLINE .

AND THAT, HOW THAT IS GOING CHANGE.

SO 800, AND I'LL GET THAT, GET TO THAT IN, IN A FEW MINUTES HERE.

NEXT,

[00:20:03]

THAT PHYSICAL ONE? YEAH.

YEAH, KEEP GOING TO 44 OR FOUR FIVE ON THE RIGHT SIDE.

BUT, UH, RIGHT PRESENTATION, WRONG SIDE OR NO PRESENT.

NO, KEEP GOING.

PAGES, YEAH.

SEPARATES THE OTHER ONE.

THERE WE GO.

OKAY.

AND ON THESE, ON THE ISTIC SIDE, WE ASSUMED THAT 3%, UH, PASSENGER GROWTH, UH, THIS WAS WITH , WITH THE AIRLINES IN THE TILL 2030 TILL WE CAN DELIVER THE NEW CONCOURSE FEE, WE HAVE ASSUMED A 3% PASSENGER GROWTH.

UH, AFTER THAT IT GOES TO ABOUT FOUR TO 5%.

UH, YOU KNOW, BACK TO NORMAL OR AVERAGE THAT WE HAVE DONE IS ABOUT 5% SINCE 1999.

SINCE THE AIRPORT, UH, THE UNEMPLOYMENT GROWTH IN FISCAL YEAR 25 IS EXPECTED TO BE FLAT, EVEN THOUGH HIT TO DATE, WE ARE DOWN ABOUT 45%.

SO I THINK WE WILL PROBABLY COME IN ABOUT 10.7 MILLION IN MAINTENANCES.

WHAT THAT FORECASTING.

AND THIS ONE, AS YOU'LL SEE IN THE NEXT SLIDE, WE DON'T HAVE TO GO TO THE NEXT SLIDE YET.

UM, IT'LL KIND OF SHOW YOU WHAT WE ARE.

TARGET.

UH, WE HAVE A WAGE ADJUSTMENT OR INCREASE OF 4%.

THIS IS, UH, THE CITY GUIDANCE.

THIS CITY OF AUSTIN GUIDANCE, WE ARE HAVING, UM, WE ARE ADDING 24 FTES IN FISCAL YEAR 26 AND ON THE 20 IN FISCAL YEAR 27.

AND THE REASON FOR THAT IS WE ARE GOING TO GET INTO CONSTRUCTION AND WE ARE GOING TO MEET SOME PEOPLE, ESPECIALLY GUEST SERVICES AND FOLKS TO KIND OF DIRECT TRAFFIC, UH, WHERE THE PASSENGERS NEED TO GO.

AND ALSO IN FISCAL YEAR 26, AS WE DELIVER SOME OF THESE NEW PROJECTS THAT THE WESTGATE EXPANSION, AND AMENT, WE ARE GONNA BE ADDING CLOSE TO ABOUT 180,000 SQUARE FOOT INCH TO.

SO WE NEED SOME FACILITIES, SERVICES, PERSONNEL, ET CETERA.

WE CAN HANDLE THAT SOME SORT.

SO MORE OPERATIONAL.

SOME, UH, THERE IS AN INCREASE IN THE RETIREMENT CONTRIBUTION, UH, THAT WE HAD TO BUDGET FOR FROM 8.7% TO 9.6%.

WE DID INCREASE SOME COSTS ON COMPETITIVE MAINTENANCE.

I'LL GET THAT, GET TO THAT IN FEATURE SLIDE.

AND THEN ON THE A PD SIDE, ON THE, ON THE POLICE DEPARTMENT SIDE, WE ADDED THREE UNUSUAL OFFICERS FOR THE CHECKPOINT COVERAGE, WHERE WILL HAVE MULTIPLE CHECKPOINTS.

AND THAT WAS WHAT WAS KIND OF REQUIRED.

AND IN THIS NEW USE AND LEASE AGREEMENTS, THERE IS A MAJOR COMPONENT WHERE THE AIRLINES ARE PROVIDING $13 MILLION ANNUALLY TO A MAJOR MAINTENANCE FUND.

AND THAT IS GOING TO GO TOWARDS CIP PROJECTS IN THE, UH, THIS, THE AIRLINE S TERMINAL AIRFIELD AND APRIL S.

SO THAT IS RECOVERED THROUGH THE RATES AND CHARGES SO THAT IT'S KIND BUILT IN.

NEXT SLIDE PLEASE.

SO THIS IS OUR UNEMPLOYMENT FORECAST.

AS YOU CAN SEE, UH, WE ARE LEAVING FISCAL 25 FLAT.

YOU KNOW, WE HAD BUDGETED ALMOST 11.6 MILLION UNEMPLOYMENTS, BUT OBVIOUSLY, YOU KNOW, WE ARE IN THE LATEST RESULTS THAT WE HAVE IS JUNE.

SO THREE QUARTER OF THE YEAR HAS ALREADY GONE.

AND, UH, WE THINK, YOU KNOW, WE WILL COME IN PROBABLY UNDER WHAT WE DID LAST YEAR, OR HOPEFULLY IF THE UNEMPLOYMENT TRAFFIC PICKS UP AT LEAST FLAT.

AND FOR FISCAL YEAR 26, WE ARE FORECASTING 11.3 MILLION UNEMPLOYMENTS.

UM, AND THAT IS JUST THE 3% FROM WHERE WE HAVE OUR ESTIMATE CURRENTLY ESTIMATED 25.

AND YOU CAN SEE ON THE OTHER GRAPH ONTO THE RIGHT SIDE, OUR DAILY DEPARTURES HAS GONE DOWN HERE TO DATE ON AN AVERAGE ABOUT 10 TO 80 DEPARTURES DOWN, AND KNOW MOST OF THAT WAS DUE TO AMERICAN PULLING OF THOSE FLIGHTS FROM THE WORK THAT THAT THEY DID.

IN NEXT SLIDE, PLEASE.

ON THE, ON THE REVENUE SLIDE, UM, AGAIN, AS I MENTIONED BEFORE, UH, 3% IN PAYMENT GROWTH, UH, LANDED RATES ARE FORECASTED TO INCREASE ABOUT 2%.

AND I MENTIONED THE NEW AIRLINE USE AND LEASE AGREEMENT METHODOLOGY.

UH, THERE IS A RATE INCREASE KIND OF FACTORED IN WITH THE FISCAL YEAR 26 PROJECT ON THE PARKING REVENUES.

AND WE'VE SEEN OUR TNC ACTIVITIES, WHICH IS OUR ACTIVITIES ACTUALLY INCREASE, UH, ALMOST EIGHT TO 10% YET TO DATE.

WE EXPECT THAT GROWTH TO KEEP CONTINUING .

UM, YEAR TWO.

AND THEN TERMINAL CONCESSION GROWTH IS REALLY BASED ON THE PASSENGER GROWTH THAT WE FORECASTED.

THAT'S RIGHT.

SO ON THE REVENUE SIDE, AS YOU CAN SEE ON THE TOP, UM, AIRLINE REVENUES ARE INCREASING $77 MILLION.

UM, AND ON THE NON-AIR AIRLINE REVENUE SIDE IS GOING DOWN ABOUT A MILLION DOLLARS BECAUSE WE GIVE, TAKING INTO ACCOUNT ECONOMIC CONDITIONS,

[00:25:01]

UM, AND YOU KNOW, WE KIND OF BE RISK ON THE RATE A LITTLE BIT ON THAT SIDE JUST TO KEEP THE YEAR OVER YEAR NON AIRLINE REVENUE FLAT.

UM, BUT THE AIRLINE REVENUES ARE GOING UP BECAUSE OF THE NEW USE OF LEASE AGREEMENT.

UM, TALK ABOUT, YOU KNOW, THE LANDING FEE REVENUES GOING UP WITH THE INCREASING THE LANDED WAGE, BUT ALSO THE AIRFIELD REQUIREMENTS ARE GOING INTO.

UM, AND, UH, THE, THE, ANOTHER MAJOR COMPONENT HERE IS THE LES, OR THE, THE RAINMAKING METHODOLOGY IS CHANGING FROM A COMPENSATORY TO A COMMERCIAL COMPENSATORY METHODOLOGY, WHERE PREVIOUSLY WHEN WE CALCULATED THE TERMINAL RENTAL RATES, OUR DEVICE WAS PRODUCTIVE SPACE, WHICH INCLUDED OUR CIRCULATION SPACE, INCLUDING RESTROOMS AND THINGS LIKE THAT, THAT WE REALLY PUT IN LEASE.

SO NOW THE DEVICE IS OUR LEASEABLE SPACE.

SO LAST YEAR WHEN WE HAD 600,000 SQUARE FOOT AS OUR DEVICE, NOW IT IS 400 BUCKS.

SO THAT HAS TAKEN UP OUR TERMINAL RENTAL REV RATES ITEM.

SO THAT'S WHAT YOU ARE SEEING HERE.

UH, ON THE, THE, THE BIG INCREASE IN THE TERMINAL RENTAL RATES OR TERMINAL RENTAL RATES GOING UP 51% OR $56 MILLION, THAT'S WHAT IS DRIVING.

SO TOTAL OPERATING REVENUE'S GOING UP ABOUT $74 BILLION OF WHICH 77 MILLION IS ACTUALLY COMING FROM LN.

NEXT SLIDE PLEASE.

SO IF THERE'S ANY QUESTIONS, JUST LET ME KNOW.

ON THE, ON THE REVENUE SIDE, I'M JUST GOING TO OPERATING EXPENSES.

SO ON THE OPERATING EXPENSES, AS I MENTIONED BEFORE, 4% WAGE INCREASE, 24 ADDITIONAL NEW FTS OR, YOU KNOW, THE RETIREMENT CONTRIBUTIONS INCREASE FROM EIGHT POINTS PERCENT, 9.6%.

AND WE ALSO HAD TO MAKE A LEGACY ALIGNMENT PAYMENT OF SIX, $604,000 TO THE RETIREMENT FUND, UH, WHICH IS SORT OF A FIXED PAYMENT THAT WE HAD TO DO.

AND THAT JUST ACROSS ALL CITY DEPARTMENTS, UH, AS I MENTIONED, THE INCREASE IN THE BUILDING MAINTENANCE COSTS ON THE CONTRACTUAL SIDE, I'LL GET TO THE, THE REASONS FOR THAT.

THE A PD OFFICERS GOING UP, YOU KNOW, BY THREE FTES.

AND THEN THE VIRTUAL RAMP CONTROL OPERATION, INITIAT INITIATION OF THAT, RIGHT NOW IT'S SEPTEMBER, UM, OPERATION AND IT IS GOING TO A PERMANENT OPERATION.

SO THAT WILL HAVE SOME ADDITIONAL COSTS.

BUT WE ALSO FOUND SOME COST SAVINGS TO OFFSET SOME OF THOSE INCREASES.

YOU KNOW, WE HAVE THE SOFTWARE CLOSURE.

UH, WE HAD ABOUT $1.2 MILLION IN SAVING FROM INFORMATION SYSTEMS. AND ALSO WE HEARD OUR INCREASE IN THE SUPPORT SERVICES.

WE REALLY HELP IT FLAT OR DOWN YEAR OVER YEAR.

SO JUST LOOKING AT THE NEXT STEP, JUST LOOKING AT IT IN TOTAL ON THE OPERATING EXPENSES SIDE, OPERATING EXPENSES ARE GOING UP ABOUT 5.3% OR $9.8 BILLION YEAR OVER YEAR.

UH, NEXT SLIDE PLEASE.

AND SOME OF THE MAIN REASONS FOR THAT IS ON THE PERSONNEL SIDE.

AS I MENTIONED BEFORE, YOU CAN SEE ON THE RIGHT SIDE, YOU KNOW, WHAT'S MAKING THE COMPONENTS.

AND I'LL JUST GET TO THE CONTRACTUAL SIDE.

ONE IS THE BUILDING MAINTENANCE COSTS.

WE ARE HIRING A COUPLE OF FTES TO KIND OF HANDLE THE ELEVATORS AND ESCALATORS.

UH, WE'VE HAD CHALLENGES KEEPING THEM OPERATIONAL AND RUNNING.

UH, WE ARE ALSO, UH, ADDING, UH, SOME MAINTENANCE EXPENSES TO OUR, OUR SECURITY CAMERAS TO MAKE SURE THAT THEY ARE OPERATIONAL ALL THE TIME.

SO WE ARE SPENDING SOME MONEY THERE.

AND ALSO, AS I MENTIONED BEFORE ON THE, UH, THE RAMP CONTROL, UH, OPERATIONS GOING PERMANENT VERSUS TEMPORARY NEXT YEAR.

SO THAT IS ADDING ABOUT $1.2 MILLION AS YOU CAN SEE TO THE RIGHT WHERE THE NUMBERS ARE KIND OF BROKEN DOWN.

THAT BUILDING MAINTENANCE EX EXPENSES GOING UP ABOUT $1.9 MILLION A PD EXPENSES GOING UP, UP ABOUT $1.7 MILLION.

AND WE ARE OFFSETTING IT WITH, YOU KNOW, $1.2 MILLION IN SAVINGS, AS I MENTIONED, THE SUPPORT SERVICES AND THE IT FUNCTIONS.

AND ALSO THE , UM, SOUTH TERMINAL CLOSING.

UM, ON THE NON-CAPITAL SIDE, UM, LAST YEAR WE DID BUY, OR FISCAL YEAR 25, I SHOULD SAY PROBABLY, WE DID BUY A LOT OF REPLACEMENT TERMINAL WASTE BINS, WHICH WE ARE NOT DOING NEXT YEAR.

SO YOU'LL SEE ABOUT A HUNDRED THOUSAND DOLLARS SAVINGS THERE.

NEXT SLIDE PLEASE.

AND AS YOU CAN SEE ON A FINANCIAL SUMMARY BASIS, WHAT YOU'RE SEEING THERE IS, YOU KNOW, THE OPERATING REVENUE IS GOING UPSIDE $4 MILLION.

OUR TOTAL REQUIREMENTS ARE GOING UP ABOUT $8 MILLION.

AND FOR AN NET INCOME OF ABOUT SIX $66 MILLION IS ESSENTIALLY, UH, THE CHANGE YEAR OVER ON THE NET INCOME SIDE.

BUT 30 MILLION OF THAT IS REALLY BEING SET ASIDE TO FUND THE CIP MAJOR

[00:30:01]

AND THEN YOU CAN SEE THE DIFFERENCES.

YOU KNOW, $68 MILLION IS THE BEST TRANSFER TO CAPITAL FUND IN THIS FISCAL YEAR, WHAT WE BUDGETED.

AND IT'S SUPPOSED TO GO TO $103 MILLION NEXT YEAR.

AND THE RE THE PART OF THE REASON WHY WE ARE DOING THIS IS, AND THE CHANGE IN THE RATE METHODOLOGY IS TO FUND AS MUCH OF THE A EDP WITH CASH AS POSSIBLE.

SO WE HAVE TO ISSUE LESS DEBT GOING FORWARD.

SO THIS WAS SOMETHING THAT WE NEGOTIATED WITH THE AIRLINES ON THIS RATE METHODOLOGY, UH, THE SUSPENDED DEPART GATE , MR. THOMAS, I THINK MR. MODELTO HAS A QUESTION ON, ON, UH, SOME OF THE EXPANSION FOR SECURITY, UH, PERSONNEL'S NOT BEING YEAH, THAT'S WHAT THE 24 ENTITIES THAT I MENTIONED.

ARE YOU TALKING ABOUT TSA PERSONNEL? I'M TALKING ABOUT TSA, UM, IS THAT NOT CHOKE POINT? YEAH, BUT THE TS A PERSONNEL COSTS DON'T COME INTO, UH, EXPENSE.

DOES THAT MAKE YEAH, YEAH.

SO WE'RE INVESTING THAT AMOUNT OF MONEY, NOT NECESSARILY, BUT I THINK THAT, BUT I THINK GLA IS BE TALKING TO THE TSA TO HAVE SUBMISSION PERSONNEL TO LAND ALL THOSE.

SO I DON'T THINK WE ARE GOING TO BE SHORT.

I MEAN, WE ARE GETTING ALL INTO TO, TO, YOU KNOW, TO THE CHECKPOINT GREEN.

SO THEY SHOULD HAVE THE PERSONNEL TO OPERATE.

WELL, I, I DON'T GET OUT THERE, BUT ONCE A ONCE A WEEK, BUT EVERY TIME I DO, ONE THING I REALLY NOTICE ON WEST SIDE IS MAN, THEY'RE BUSY AND FIND THOSE FOLLOWING.

AND IF, HOW, HOW DO WE, WE MAKE SURE THAT OUR FRIENDS TSA UNDERSTAND THEY NEED TO COME OUT.

SO WITH, YEAH, SO JOLENE HAS BEEN GOING TO WASHINGTON VERY FREQUENTLY TO MEET WITH TSA AND CPP, ALSO FAA.

SO THESE ARE CONVERSATIONS THAT SHE'S HAVING WITH THE OFFICIALS, WASHINGTON DC TO FACILITATE THE PURCHASE OF THE EQUIPMENT AND ALSO THE PERSONNEL THAT WE NEED TO OPERATE.

SO THOSE CONVERSATIONS ARE ALREADY TAKING PLACE ON A ALLY.

NO, AND I THINK, I THINK JASON HAS BEEN GONE WITH, YEAH, I VALIDATE WHAT YOU SAID.

UH, STATTING ISSUES ARE A KNOWN ISSUE AND IT'S SOMETHING THAT WE'VE BEEN WORKING WITH JASON ON FOR A WHILE.

SO IT'S KEEPING COORDINATION EFFORT IS WHAT I WOULD SAY ABOUT THAT.

SO CONVERSATION DOES CONVEY ABSOLUTELY.

YEAH.

I'LL, I'LL BRIEFLY ADD THAT.

UM, I WANT TO EXPRESS REAL APPRECIATION FOR OUR PROFESSIONAL STAT AS WELL AS OUR CONGRESSIONAL ALLEGATION WITH PARTICULAR THANKS TO CHAIRMAN TED CRUZ FOR HIS HARD WORK IN A REALLY GREAT POSITION TO ADD VALUE TO THESE DISCUSSIONS.

AND I KNOW IT'S HARD AT WORK AT THAT, AND I'D LIKE TO PERSONALLY SAY THANKS, UH, TO HIS TEAM AND TO SENATOR FOR HIS WORK THERE.

SO WE CAN KEEP GOING.

BUT I APPRECIATE THAT, AND I KNOW IT'S A TEAM SPORT THIS QUICKLY.

YOU MENTIONED ON SLIDE GOING BACK A LITTLE BIT, 46.

OKAY.

UH, THE APPOINTMENTS YEAH.

ARE RELATIVELY FLAT.

YEAH.

OR EXECUTIVE PLAN CLARIFICATION, I THINK I HEARD YOU SAID THAT WAS DUE TO FOUR ROUTES THAT EITHER WERE NOT DELIVERING ON POOL, IS THAT CORRECT? NO, THAT'S DUE TO FOUR ROUTES.

I MEAN, ONE IS, YOU KNOW, WHEN AMERICAN PULLBACK ON THE EXPANDED FLIGHTS THAT THEY DID IN 2223, WE DID THOSE PROTECTING PASSENGERS THAT AMERICAN WAS FACILITATING OUR GERMAN.

SO THAT WAS ONE THING.

BUT THE DECLINE IN LAMENT CURRENTLY IS SEEN AT OTHER AIRPORTS TOO.

WE BEEN CHECKING, LIKE EVEN LIKE WITH THE REPORTS AND OTHER ORIGINATION AND DESTINATION AIRPORTS, UH, WE ARE STARTING TO SEE SOME .

SO THIS IS NOT UNCOMMON.

LIKE YOU WHEN, LIKE AT SAN ANTONIO, YOU LOOK AT TAMPA, ET CETERA, THEY ARE STARTING TO SEE, YOU KNOW, DECLINES.

AND I THINK THAT THAT'S JUST THE GENERAL ECONOMIC CONDITION, I THINK, AND ALSO INTERNATIONAL LAY AND DOWN.

SO THAT MIGHT ALSO

[00:35:01]

THANK YOU.

WE'RE NOT ON MUTE.

YES, WE ARE NOT.

RIGHT.

UH, CAN I GO TO THE NEXT ONE, PLEASE? YEP.

SO THESE ARE SOME OF THE FACILITIES THAT I MENTIONED THAT WILL BE BASED, UH, THERE'S A COUPLE OF, UH, PICTURES HERE THAT I SHOULD SAY WE ARE ACTUALLY COMPLETED, WHICH IS THE ARRIVAL, THE CAME AHEAD OF SCHEDULE.

SO IT'S REALLY THE FACILITIES, THE WEST GATE EXPANSION, THE WESTIN BILL AND THE ATRIUM BILL THAT WE COMPLETED IN FISCAL YEAR 26.

AND THAT'S WHAT I WAS TALKING ABOUT, UNDER 80,000 ADDIT EDITION SQUARE PER, THAT WILL ADD TO THAT CAP TO OUR TOTAL TERMINAL SQUARE PER AGE THAT THIS STATES THE FACILITY SERVICES.

AND SOME ADDITIONAL NEXT SLIDE.

SO FOR NEXT YEAR, UM, EIP CAPITAL SPEND, UM, THIS IS MUCH LARGER THAN I'VE EVER SEEN PREVIOUSLY, SO WE ARE FORECASTING AN $800 MILLION SPEND NEXT YEAR.

UH, MAJORITY OF THAT, AS YOU CAN SEE, IS REALLY DRIVEN BY A EDP.

UH, AND THE MAJOR PROJECTS, YOU KNOW, THAT ARE IN PLAY IN THE EDD IS THE MIDFIELD TAXI WAY THAT IS UNDER CONSTRUCTION, THE WEST GARAGE, THAT IS ALSO UNDER CONSTRUCTION.

UH, WE HAVE THE WESTGATE EXPANSION THAT WILL BE COMPLETED NEXT YEAR, THE ATRIUM INFILL.

AND WE ARE ALSO IN THE CENTRAL UTILITY PLAN DESIGN, BUT THE OTHER DESIGN COMPONENTS OF COMPOST B AND THE AD HALL TOO.

BUT THOSE ARE SOME OF THE SIGNIFICANT COST DRIVERS AND A DD.

AND ON THE RENEWAL AND REPLACEMENT R AND R SIDE, YOU CAN SEE WE ARE GOING THROUGH A PROJECT WHERE WE ARE, UH, REPLACING AIR HANDLING UNITS IN THE TERMINAL FOR HVAC, WE HAVE SOME, EACH ISSUES AS, AS YOU KNOW, PEOPLE HAVE EXPERIENCED IN THE TERMINAL.

UH, SO WE ARE REPLACING THOSE AIR HANDLING UNIT UNITS.

UH, WE ARE LOOKING AT ELEVATOR REFURBISHMENT AND ALSO REPLACEMENT WHERE IT WARRANTS BECAUSE, UM, I THINK THEY ARE ASSESSING THE CONDITION OF SOME OF THOSE ELEVATORS.

AND ALSO THE PASSENGER BOARDING BRIDGE REPLACEMENTS THAT WE ARE GOING THROUGH, WHICH IS IN MULTIPLE PHASES.

SO THAT'S ALSO DRIVING THE ARM.

AND THEN ON THE VEHICLE SIDE, WE ARE LOOKING AT PURCHASING OF CO BUSES AND OBVIOUSLY JUST ANNUAL REPLACEMENT CYCLES THERE.

AND THEN ON THE IT SIDE, VIRTUAL RAMP CONTROL, AS I MENTIONED BEFORE, THOSE ARE THE, THE, UH, MATERIAL COSTS ASSOCIATED RELATED TO THAT, THE CAPITAL ON THAT.

THEN ALSO SELF-SERVICE PATH AND PROCESS.

THOSE ARE THE KIOSK, SELF-SERVICE KIOSK, AGAIN, FOR COMMON USE.

UM, ITS, AND ALSO WE ARE LOOKING AT REPLACING CAMPUSWIDE, UH, DIGITAL SIGNAGE, UM, BECAUSE THEY'RE GETTING TO END OF THE MIC.

MR. , I'LL JUST BRIEFLY ADD, UH, NOT ONLY IS THAT IT VERTICAL INCLUDE, UH, CONVENIENCE AND, UH, BREAKING THIS FORWARD ON THIRD BULLET, BUT THAT VIRTUAL RAMP PATROL IS REALLY A SAFETY ISSUE, RIGHT? SO SAFETY IS CRITICALLY IMPORTANT TO ALL OF US.

I KNOW IT IS THE CITIZENS OF AUSTIN AND CERTAINLY THOSE PEOPLE WHO WORK TRAVEL THROUGH, UH, A US.

WE APPRECIATE THAT INVESTMENT.

I THINK THAT'S WORTH HIGHLIGHTING HERE SPECIFICALLY.

SO THANK YOU FOR THAT.

THANK YOU.

SO THAT WAS THE END OF MY SLIDE.

THAT WAS THE QUICK QUESTION.

YEAH, MR. THOMAS, BACK TO SLIDE 52.

OKAY.

AND THE YEAR OVER YEAR AND PROPOSED CHANGE IN REVENUE, UH, ACKNOWLEDGING THAT THE USE AND LEASE AGREEMENT IS EFFECTIVE AS OF JANUARY 1ST.

YES, BUT THE RATES ARE EFFECTIVE AS OF OCTOBER 1ST.

GOTCHA.

SO THAT'S REALLY 12 MONTHS WORTH OF BENEFIT OF THAT, BUT NOT TIME.

OKAY, GOOD.

YEAH, THAT WAS MY QUESTION.

OKAY, THANKS.

ANY QUESTIONS ON SCREEN FOR MR. THOMAS? IT'S WORTH NOTING, UH, THAT NONE OF THIS DISCUSSION IS AFFECTED BY TAX RATE ELECTION, OR NOT TAX RATE ELECTION OR IF TAX RATE ELECTION, HOW MUCH TAX RATE ELECTION.

NONE OF THIS, BECAUSE WE'RE AN ENTERPRISE FUNDS FACT THAT'S CORRECT.

ABOUT THOSE IMPORTANT AND ONGOING DISCUSSIONS.

SO WHAT YOU HAVE IS SOMETHING THAT STANDS ON ITS OWN PART, SELF SUSTAIN AGAINST WORTH, WORTH MENTIONING IN THE CONTEXT OF WHAT'S HAPPENING IN CITY HALL.

OKAY.

BEST, THANK YOU.

BIG JOHN.

COMMISSIONER C**N.

YES, SIR.

I WAS JUST CURIOUS.

SO, UM, IT'S A PRETTY BIG JUMP IN REVENUE, RIGHT? IN 26 AND 27.

UM, YOU KNOW, IT, IT SOUNDS LIKE THAT DISCUSSION HAS GONE WELL WITH THE AIRLINES.

IS THE, HOW DO THEY, UH, ABSORB THOSE COSTS? I ASSUME THOSE WILL JUST END UP IN TICKET FAIRS.

WHAT'S THE TOTAL JUMP? IT IT, LOOK, IF I'M ADDING THE MATH UP, RIGHT, IT'S SOMETHING LIKE, UH, ABOUT A $77 MILLION

[00:40:02]

SO FROM A COST PER AND LAYMAN STANDPOINT, UM, IN FISCAL YEAR 25, IT IS $15.

IT'S THE COST PER , IT IS JUMPING TO ABOUT $20 IN BICO 26.

SO IT'S A $5 JUMP COST PER .

AND I CAN'T SPEAK FOR HOW THE AIRLINES WILL, YOU KNOW, MANAGE THAT.

UH, I'M SURE THEY HAVE STRATEGIES TO MANAGE THAT, SO I DON'T WANNA SPEAK ON THEIR BEHALF ON THAT, BUT, UH, YEAH, I MEAN, BUT IT'S, UH, I MEAN THERE ARE OTHER AIRPORTS WITHIN THAT RANGE CURRENTLY, UH, WHERE, YOU KNOW, THEY ARE AT $20 BUS, AIRPLANE, ET CETERA.

SO I THINK THE AIRLINE STRATEGIES PROBABLY, YOU KNOW, COUNT FOR HOW THEY ADDRESS.

AND IS THAT JUST NEGOTIATED OR WE JUST KIND OF ASSESS THAT BASED ON WHAT IT NEEDS TO BE? IT IS BASED ON WHAT IT NEEDS TO BE, BECAUSE AS I MENTIONED BEFORE, UM, YOU KNOW, IT IS TO GENERATE ENOUGH NET REVENUES IN THE, IN THE, THE, IN, IN, IN THE EARLIER YEARS SO THAT WE CAN FUND AS MUCH OF THE A A DP NEW CASH AS POSSIBLE WITH CASH.

UM, SO I MEAN, SO THAT IS SORT OF THE STRATEGY IS TO ISSUE LESS DEBT BECAUSE THE MORE DEBT THAT YOU ISSUE IT IS GOING TO REALLY AFFECT YOUR CPU OVER THE LONG RUN.

UM, WHEREAS IF YOU CASH FUND AS MUCH AS POSSIBLE NOW, IT'LL KIND OF FALL OFF MUCH FASTER THAT COST.

SO THAT IS THE STRATEGY NOW TO KIND OF, UM, ABSORB SOME OF THE PAIN NOW SO THAT IN THE FUTURE WE CAN USE THAT ADDITIONAL CASHFLOW TO BUY DOWN DEBT OR TO FUND FUTURE PROJECTS AS MUCH AS POSSIBLE.

YEAH.

JUST TO BE CLEAR, I VIEW THAT AS A POSITIVE THAT WE'RE ABLE TO DO THAT AND IT DOESN'T HAVE THAT MUCH IMPACT ON FAR.

YEAH, I MEAN, I MEAN, I THINK, YOU KNOW, LIKE, UH, AS, UH, I WOULD SAY, I MEAN WE HAVE, I'M VERY GRATEFUL FOR THE AIRLINES FOR, YOU KNOW, FOR WHAT WE NEGOTIATED.

I THINK IT REALLY PUTS THE AIRPORT IN A GOOD FINANCIAL POSITION GOING FORWARD BECAUSE WE ARE TAKING A LOT OF RISK.

WE HAVE , YOU KNOW, FOUR TO $5 BILLION IN REVENUE BONDS IN THE FUTURE.

SO, YOU KNOW, IT IS IMPORTANT THAT WE HAVE THE FINANCIAL TY AS AN , AND WE NEED A GOOD USE OF THIS AGREEMENT THAT, THAT ENABLES THAT THAT FINANCIAL STATEMENT.

THANKS.

THANK YOU, MR. C**N.

ANY OTHER QUESTIONS ONLINE OR IN THE ROOM? THANK YOU, MR. THOMAS.

GREAT SEGUE,

[6. Authorize negotiation and execution of Signatory Airline Use and Lease Agreements and Signatory Cargo Agreements with the commercial passenger airlines and commercial cargo carriers or companies for use of the Austin-Bergstrom International Airport, for an initial term starting January 1, 2026, and ending September 30, 2035, with a two-year extension option; and authorize negotiation and execution of Non-Signatory Airline Agreements and Non-Signatory Cargo Agreements for a month-to-month term with those carriers or companies that choose not to become signatories under the new signatory agreements. Funding: There is no revenue impact for Fiscal Year 2024-2025 for the Aviation Department’s Operating Budget due to the proposed January 1, 2026, effective date for the Agreements. ]

UH, SO LET, LET ME JUST SET THE, WE'RE HANDING THIS BATON TO THE GREAT TRACY THOMPSON.

AS I DO THAT, LET ME SAY, AS I UNDERSTAND IT, WE'RE TALKING ABOUT TWO PLUS YEARS, TWO AND A HALF COMING UP, THREE YEARS OF REALLY EARNEST, FULL SPEED, CRITICALLY IMPORTANT WORK.

YES, SIR.

AND SO, WE'LL, WE'LL GET INTO THIS DISCUSSION, BUT I JUST WANT TO START BY SAYING THANKS FOR YOU AND THE TEAM AND OUR PRIVATE SECTOR PARTNERS, ALL THAT HARD WORK LEADING TO TODAY.

LET'S GET TO IT.

THANK YOU.

THANK YOU, CHAIR.

UH, AND BEFORE I GET STARTED, IT JUST A FOLLOW UP FROM WHAT RASHID SAID, UM, THIS IS NOT ONE PERSON'S SUCCESS.

THIS IS A VERY MUCH A COLLECTIVE SUCCESS TO, TO THE MILESTONE WE WENT IN, BUT THE FINANCE TEAM PUT TOGETHER IS A VERY SOPHISTICATED FINANCIAL AND A DB FUNDING PLAN.

SO THAT COULD NEVER BE EXPLAINED IN, IN ONE CITY.

SO KUDOS TO THE FINANCE TEAM TO PUT TOGETHER THE NUMBERS.

SO IT'S A COMBINATION OF NUMBERS AND WORDS, RIGHT? AND SO THE USE AGREEMENT ITSELF OF WHAT'S THE WORDS THAT REFLECT THE, OUR OVERALL, UM, PARTNERSHIP WITH OUR AIRLINES AND CHAIR.

I HAD PUT TOGETHER SOME PREPARED, UM, COMMENTS THAT I HAD HOPE TO MEMORIZE, BUT I COULDN'T DO THAT.

SO WITH YOUR ADULT, I'LL READ IT.

READ, READ IT, SPEAK.

OKAY.

WELL, MY APOLOGIES, MY STYLE, BUT I'LL JUST READ.

THANK YOU VERY MUCH.

SO WITH RESPECT TO, UH, THE RECOMMENDATION FOR ACTION FOR THE, UH, TO AUTHORIZE THE NEGOTIATION AND EXECUTION OF THE SIGNATORY AIRLINE USE AGREEMENTS, SIGNATORY CARGO AIRLINES AGREEMENTS FOR COMMERCIAL AND PROBABLE AIRLINES, ALONG WITH THE NONS SIGNATORY PASSENGER AND CARGO AIRLINE AGREEMENTS, I HAVE THESE COMMENTS.

THE AUSTIN BERGSTROM INTERNATIONAL AIRPORT, KNOWN AS A US, IS TAKING A MAJOR STEP IN SHAPING THE FUTURE OF AIR SERVICE AND THE AIRPORT EXPERIENCE BY ASKING CITY COUNCIL TO AUTHORIZE THE NEGOTIATION EXECUTION OF NEW AIRLINES USE AGREEMENTS FOR PASSENGER AIRLINES

[00:45:01]

THESE AGREEMENTS WILL GOVERN HOW THE COMMERCIAL PASSENGER AND CARGO AIRLINES OPERATED A US FOR THE NEXT DECADE, BEGINNING JANUARY 1ST, 2026, THROUGH SEPTEMBER 30TH, 2035, BUT OPTIONAL TWO YEAR EXTENSION.

THE NEGOTIATION AND EXECUTION OF THESE LONG-TERM AGREEMENTS IS A PIVOTAL MILESTONE FOR OUR IMMUNITY AND FOR OUR AIRPORT.

UNLIKE MANY LARGE AIRPORTS IN THE UNITED STATES, A US IS NOT A HUB TO ANY SINGLE AIRLINE.

AND THAT MAKES THIS A VOTE OF COMPETENCE FROM OUR COLLECTIVE SIGNATORY AIRLINE PARTNERS.

THEY'RE CHOOSING TO MAKE LONG TERM EMOTIONAL, THEY'RE CHOOSING TO MAKE LONG TERM COMMITMENTS IN BIG INVESTMENTS IN AUSTIN BECAUSE THEY BELIEVE IN THE GROWTH OF THIS MARKET.

IN OUR REGION'S FUTURE, AS PART OF THE SIGNATORY AIRLINE AGREEMENTS UNDER CONSIDERATION, AIRLINES ARE COMMITTING TO THE DEVELOPMENT OF THE AIRPORT EXPANSION AND DEVELOPMENT PROGRAM AND THE LEASING OF 20 PLUS NEW GATES THAT A US WILL DELIVER IN THE 2030 TIMEFRAME.

THE FUTURE TOTAL GATE COUNT AT A US, THE ALLOCATION OF GATES TO EACH AIRLINE, AS WELL AS THE TOTAL COST OF THE AIRPORT EXPANSION AND DEVELOPMENT PROGRAM WILL BE FINALIZED IN THE NEAR FUTURE AND SHARED WITH THE PUBLIC TENTATIVELY IN THE DECEMBER, 2025, JANUARY, 2026 TIMEFRAME.

THIS TIMEFRAME COINCIDES WITH THE TIMEFRAME FOR THE FINALIZATION OF THE COLLABORATION WITH THE AIRLINES TO FINALIZE AGREEMENTS AS A US CONTINUES TO GROW.

THESE AGREEMENTS REFLECT OUR SHARED RESPONSIBILITY TO DELIVER SAFE, MODERN, AND EFFICIENT AIRPORT FACILITIES THAT MEETS THE NEEDS OF THE TRAVELERS OF THE REGION READERS TO COME.

BUT THANK YOU FOR LETTING ME READ THAT, UM, INTO THE RECORD, AND I'M PLEASED TO ANSWER ANY QUESTIONS ABOUT THE RCA THAT WE HAVE ON PAGE 57.

THANK YOU.

UM, MS. THOMPSON, JUST TO SPEAK ABOUT PROCESS, THIS IS VERY SIMILAR TO THE ACTION WE TOOK, FOR EXAMPLE, ON THE FLINT HILLS PIPELINE NEGOTIATION.

YES.

WHERE THERE'S A REQUEST FOR COUNCIL ACTION THAT AUTHORIZES ULTIMATELY EXECUTION OF AN AGREEMENT THAT'S NOT YET FINAL.

CORRECT.

SO WE, WE SAID COMMISSIONERS IN THE ROOM AND ON THE SCREEN AND IN PLACE WHERE THIS IS NOT FINAL, THIS IS A REQUEST FOR COUNSEL ACTION THAT, TO AUTHORIZE YOU TO GET IT TO THE FINISH LINE.

CORRECT.

OKAY.

SO WE RECOGNIZE THAT.

WE RECOGNIZE THAT THERE'S GREAT PRECEDENT FOR THAT.

THAT'S HOW THIS WORKS.

UH, AND THE AUDIENCE ULTIMATELY, THIS, THIS BEING THE FOUNDATIONAL, THE FUNDING FOUNDATION FOR A DP, THE AUDIENCE REALLY IS THE BOND MARKET THE FIRST QUARTER OF NEXT YEAR.

THAT'S CORRECT.

THIS IN PLACE.

AND, UH, I THINK IT'S WORTH A COMMENT EXTERNALLY, UH, THAT THIS IS REALLY A TEAM SPORT HERE AND IT IS A CREDIT TO A US FOR WORKING SO WELL AS PROFESSIONAL STAFF WITH PRIVATE SECTOR PARTNERS WITH OUR FEDERAL FRIENDS, ALL OF IT TOGETHER TO PACKAGE THIS IN A PLACE THAT PUTS US ON A FIRM FOUNDATION IN THE FIRST QUARTER OF NEXT YEAR TO GO TO THE BOND MARKET, WHICH IS WHAT THIS IS ALL ABOUT.