Massachusetts Port Authority Board Meeting - October 21, 2021 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
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Massachusetts Port Authority Board Meeting October 21, 2021 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Report of the CEO Lisa Wieland 2 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport Goals • Maintain safe, secure and healthy facilities • Enhance the customer experience • Adapt our business model and mitigate financial risks • Embed DE&I into our organizational DNA • Re‐establish environmental leadership • Bring about digital transformation • Maintain strong relationships with business partners, customers, stakeholders, elected officials, surrounding communities and employees 3 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
State and Federal COVID‐19 Requirements State Requirement Federal Requirement 4 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
TSA firearm catches at U.S. airport checkpoints set a 20‐year record in first nine months of 2021 “The number of firearms that our TSA officers are stopping at airport checkpoints is alarming. Firearms, particularly loaded firearms, introduce an unnecessary risk at checkpoints, have no place in the passenger cabin of an airplane, and represent a very costly mistake for the passengers who attempt to board a flight with them” – TSA Administrator David Pekoskesrator David Peko • Nationally, 4,495 firearms violations surpasses the previous record of 4,432 firearms identified in 2019 o This is despite national passenger volumes being 20% below 2019 • Rising trend at airports across the country (firearms per one million passengers screened): o 2021 – 11 firearms o 2020 – 10 firearms o 2019 – 5 firearms • This data only represents firearms and does not include other restricted items or contraband caught by TSA 5 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
The uptick in TSA firearm/contraband catches at Logan Airport checkpoints is consistent with the national trend • TSA at Logan has detected more firearms to date than in 2019 Firearms Passengers 2021 YTD 15 15.2M 2020 11 12.6M 2019 18 42.5M • Firearms identified within carry‐ons tend to be loaded • Other restricted items including ammunition, stun guns/tasers, knives, and other weapons are being detected on a daily basis 6 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport Goals • Maintain safe, secure and healthy facilities • Enhance the customer experience • Adapt our business model and mitigate financial risks • Embed DE&I into our organizational DNA • Re‐establish environmental leadership • Bring about digital transformation • Maintain strong relationships with business partners, customers, stakeholders, elected officials, surrounding communities and employees 7 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Boston Public Market opened a new concession at Logan Airport Boston Public Market – Terminal C • Includes The Market Bar, Market Bagels, Red’s Best (Boston Fish Pier tenant), and more brands that feature ingredients from New England farmers, artisans, and food entrepreneurs to be added • The 6,000‐square‐foot location at Logan reflects the same mission and high quality food as the very popular and innovative flagship market at 100 Hanover Street 8 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Logan Airport concessions continue to re‐open, but adjust schedules in line with flight activity Open Concession Units at Logan Airport Stephanie’s – Terminal B 150 105 96 86 71 54 Pre‐COVID Sep 2020 Jan 2021 Apr 2021 Jul 2021 October • One of Boston's iconic neighborhood 2021 To Date restaurants, Stephanie’s serves sophisticated comfort food incorporating salads, pastas, meats, fish and chicken into seasonal menus 9 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
HOV options to Logan Airport continue to expand Route • P&B providing new daily bus service from the West Bridgewater Park and Ride lot to South Station and Logan Airport o New stop added to recently launched Woods Hole route • The service started October 16 with six round trips a day and expects to add a seventh soon • Parking is free at state‐owned lot on Route 106 and bus tickets are $22 one‐way to Logan Benefits • “To me, this is a game‐changer for the West Bridgewater area…People that live as far away as Mansfield, Easton, Brockton, Norton, Bridgewater, and Raynham can avoid the stress of driving in traffic and of paying to park. And every bus can take up to 55 cars off the road, so it is the greener way to go” – P&B President John Cogliano 10 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport Goals • Maintain safe, secure and healthy facilities • Enhance the customer experience • Adapt our business model and mitigate financial risks • Embed DE&I into our organizational DNA • Re‐establish environmental leadership • Bring about digital transformation • Maintain strong relationships with business partners, customers, stakeholders, elected officials, surrounding communities and employees 11 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Financial Performance: August August Activity Highlights August Financial Performance • Logan served 2.6 million passengers, 936K higher than plan Revenues $68M • Conley Terminal processed 9,614 containers, 1,022 above plan Expenses ($55M) • Real Estate revenue was $0.4M higher than plan due primarily to more Contribution $13M parking at SBWTC • Expenses were $2.8M lower than budget for the month due to cost controls 12 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Logan Airport is trending better than forecast, but uncertainty remains and we expect a full recovery will take 3‐5 years Forecast Logan Passengers FY22 to FY23 4,500,000 Encouraging Trends Amid CY19 Actual 42.5 M Continuing Uncertainty 4,000,000 FY23 • Vaccinations increasing 3,500,000 FY22 32.2 M Actual FY21 • COVID‐19 case counts 3,000,000 23.1 M 12.2 M declining 25.5 M 2,500,000 • Strong domestic bookings Oct/Nov for holiday travel 2,000,000 Estimates • International borders 1,500,000 18.5 M opening in November 1,000,000 • Business travel recovery progressing more slowly than airlines anticipated 500,000 • Impact of Delta variant in 0 Northeast/Midwest during Jul‐20 May‐21 Jul‐21 May‐22 Jul‐22 May‐23 Oct‐20 Jan‐21 Oct‐21 Jan‐22 Oct‐22 Jan‐23 Nov‐20 Mar‐21 Nov‐21 Mar‐22 Nov‐22 Mar‐23 Aug‐20 Sep‐20 Dec‐20 Feb‐21 Apr‐21 Jun‐21 Aug‐21 Sep‐21 Dec‐21 Feb‐22 Apr‐22 Jun‐22 Aug‐22 Sep‐22 Dec‐22 Feb‐23 Apr‐23 Jun‐23 the winter months is uncertain FY19 Actual Estimate Actual Low High 13 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
The IATA 77th Annual General Meeting took place in Boston from October 3‐5 Conference • IATA represents 290 members, 82% of total air traffic • 600 delegates and media attended, including CEOs and senior leaders from across the aviation industry • Governor Charlie Baker delivered an in‐person address to welcome members • The keynote address was delivered by Rachel Kyte, Dean of the Tufts University Fletcher School, and former special representative of the UN Secretary‐ General and Chief Executive Officer of Sustainable Energy for All • U.S. Secretary of Transportation Pete Buttigieg addressed members virtually • Massport coordinated with IATA on the conference and had the opportunity to meet with key aviation partners and stakeholders 14 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
IATA expects a continued improvement in global airline recovery even as the Delta variant tempers growth Recovery Outlook • The COVID‐19 crisis will cost global aviation $201B in losses before a return to profitability in 2023 o 2020: $138B loss o 2021: $52B loss o 2022: $12B loss • Passenger activity will remain 25% below 2019 levels in 2022 • North America will see a faster return to profitability and passenger traffic 15 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
IATA called for an end to inconsistent COVID‐19 travel restrictions that are hindering global airline recovery COVID‐19 Travel Measures • IATA urged governments to implement simplified regimes to manage the risks of COVID‐19 as borders re‐open to international travel • IATA’s position: o Vaccinated travelers should not face any barriers to travel o Testing should enable those without access to vaccines to travel without quarantine o Sunset strategies for COVID‐19 travel measures are needed o Digital health credentials for vaccination status and test results are necessary • The U.S. is planning to allow fully vaccinated international travelers to enter beginning November 8 16 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
IATA approved a resolution for the global air transport industry to achieve net‐zero carbon emissions by 2050 Fly Net Zero • This commitment aligns airlines with the Paris Agreement goal for global warming not to exceed 1.5°C • Requires cooperation from all industry stakeholders including: o Fuel‐producing companies bringing large scale, cost‐competitive sustainable aviation fuels (SAF) to the market o Airport operators providing the infrastructure needed to supply SAF, at cost, and in a cost‐effective manner o Governments and air navigation service providers eliminating inefficiencies in air traffic management and airspace infrastructure o Aircraft and engine manufacturers producing radically more efficient airframe and propulsion technologies (e.g., electric, hydrogen, hybrid) o Use of approved offsets, including carbon capture and storage, is part of the strategy 17 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
The FAA awarded Logan Airport $7.7M in supplemental AIP grant funding for Logan Airport infrastructure improvements Taxiway M Rehabilitation Project • Funding will be used to rehabilitate a portion of Taxiway M and improve airfield geometry • Massport’s 25% local match funded by the American Rescue Plan Act • This is in addition to the $10.6M in FAA FY21 AIP grant funding received for capital projects at Logan, Hanscom, and Worcester airports 18 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport Goals • Maintain safe, secure and healthy facilities • Enhance the customer experience • Adapt our business model and mitigate financial risks • Embed DE&I into our organizational DNA • Re‐establish environmental leadership • Bring about digital transformation • Maintain strong relationships with business partners, customers, stakeholders, elected officials, surrounding communities and employees 19 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
FY22 Q1 Update: Charitable Contribution Program DE&I Initiative Contributions Organizations • In FY22, 50% of Massport’s charitable giving budget • The Dimock Center* will be awarded to organizations and programs that • NO BOOKS NO BALL* serve predominately people of color • HarborCOV* • Goal increased from 40% in FY21 • South Boston Chamber of Commerce • As of Q1, eight organizations received grants totaling • Children's Trust $33,500 • Catholic School's Foundation* • $23,500, was awarded to six organizations that • YW Boston* predominately serve people of color • ZUMIX* o Four organizations are run by a person of color *Denotes an organization or program that serves predominately people of color 20 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport selected Green International, an MBE firm, as prime consultant for Haul Road Realignment and Signalization project • RFQ was issued in June 2021 • Green International was awarded the contract • The MBE firm had been a sub‐ consultant for more than 20 years and as a result of our continued partnership they were now able to win their first job as a prime • Project M/WBE goal is 60% 21 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport Goals • Maintain safe, secure and healthy facilities • Enhance the customer experience • Adapt our business model and mitigate financial risks • Embed DE&I into our organizational DNA • Re‐establish environmental leadership • Bring about digital transformation • Maintain strong relationships with business partners, customers, stakeholders, elected officials, surrounding communities and employees 22 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
The FAA awarded Massport a $4M Voluntary Airport Low‐ Emission (VALE) grant VALE Grant • VALE grants support clean air and airport emissions reduction initiatives • Massport to acquire electric charging stations for electric ground support equipment (eGSE) • Grant will help advance Massport’s collaboration with airlines to electrify their GSE fleets and lower Logan Airport’s greenhouse gas emissions • Massport’s 25% local match funded by the American Rescue Plan Act 23 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport Goals • Maintain safe, secure and healthy facilities • Enhance the customer experience • Adapt our business model and mitigate financial risks • Embed DE&I into our organizational DNA • Re‐establish environmental leadership • Bring about digital transformation • Maintain strong relationships with business partners, customers, stakeholders, elected officials, surrounding communities and employees 24 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
FlyLogan Mobile App will fully launch the beginning of November before the holiday travel season The FlyLogan Mobile app consolidates several Logan features into a single platform, providing a new way for passengers to take advantage of our service offerings Current Features Google and Apple app stores • Flight Information • Logan Express E‐Ticketing • Parking Reservations • Food Ordering and Delivery • Virtual Live Customer Service • Airport Information o Terminal Maps o Accessibility o COVID‐19 Information 25 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport Goals • Maintain safe, secure and healthy facilities • Enhance the customer experience • Adapt our business model and mitigate financial risks • Embed DE&I into our organizational DNA • Re‐establish environmental leadership • Bring about digital transformation • Maintain strong relationships with business partners, customers, stakeholders, elected officials, surrounding communities and employees 26 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
The ICA Watershed had a successful 4th season, bringing an impactful art installation to the East Boston community • Acclaimed artist, Firelei Báez installed her largest sculpture to date at the Watershed – Art Rises From the Deep Sea o The sculpture of tilted walls and archways surge from the seafloor and the perforated canopy covers the space like ocean’s surface, or the night sky • Season 4 was a success from start to finish o Total attendance was 22K o Had this been a normal season attendance would have set a record • Public interest was both local and national o Featured in the New York Times, Boston Globe, WBUR, and the PBS News Hour • Water shuttle service served as a key transport link o 56% of visitors travelled to the Watershed by the ICA’s water taxi from South Boston (12K passengers) o 1K water taxi trips for the season 27 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport continues its commitment to the Piers Park Sailing Center Piers Park Sailing Center (PPSC) provides accessible, recreational, and educational programs PPSC reported a successful Summer 2021 season: • 600 children participated, including 430 from East Boston • Two‐thirds identified as economically disadvantaged and attended for free or paid an enrollment fee of less than $50 • 66 jobs created, many with the support of Massport’s Community Summer Jobs Program (the most ever in PPSC history) • 1,600 people participated in free community sailing & kayaking programs through other partnership programs 28 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Report of the Director of Aviation Ed Freni 29 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Logan Airport activity levels dipped in September due to the off‐season and the impacts of the Delta variant Logan Activity Summary September 2021 % Change Over: Pre‐Pandemic Amount Last Year Last Month (2019) Passengers 2,226,035 252% ‐14% ‐37% Aircraft Operations 27,504 104% ‐0.7% ‐31% 30 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Logan reached a new pandemic milestone for outbound passengers last week • 319,000 passengers screened last week (w/e 10/17) • Highest weekly total since March • Up 6% compared to prior week (277K) 8, 2020, when 351K outbound passengers were screened • Down 32% over 2019 (467K) Weekly TSA Screened Passengers Since Mid‐April 2020 500,000 Sep to Mid Nov 2019: 431,000 weekly 450,000 400,000 350,000 319K 313K 300K 300,000 250,000 200,000 150,000 100,000 Sep to Mid Nov 2020: 86,000 weekly 50,000 0 4/19/2020 4/26/2020 5/3/2020 5/10/2020 5/17/2020 5/24/2020 5/31/2020 6/7/2020 6/14/2020 6/21/2020 6/28/2020 7/5/2020 7/12/2020 7/19/2020 7/26/2020 8/2/2020 8/9/2020 8/16/2020 8/23/2020 8/30/2020 9/6/2020 9/13/2020 9/20/2020 9/27/2020 10/4/2020 11/1/2020 11/8/2020 12/6/2020 1/3/2021 1/10/2021 1/17/2021 1/24/2021 1/31/2021 2/7/2021 2/14/2021 2/21/2021 2/28/2021 3/7/2021 3/14/2021 3/21/2021 3/28/2021 4/4/2021 4/11/2021 4/18/2021 4/25/2021 5/2/2021 5/9/2021 5/16/2021 5/23/2021 5/30/2021 6/6/2021 6/13/2021 6/20/2021 6/27/2021 7/4/2021 7/11/2021 7/18/2021 7/25/2021 8/1/2021 8/8/2021 8/15/2021 8/22/2021 8/29/2021 9/5/2021 9/12/2021 9/19/2021 9/26/2021 10/3/2021 10/11/2020 10/18/2020 10/25/2020 11/15/2020 11/22/2020 11/29/2020 12/13/2020 12/20/2020 12/27/2020 Actual Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Psgrs: 95K 203K 438K 738K 702K 634K 782K 756K 805K 740K 733K 1.07M 1.43M 1.74M 2.12M 2.57M 2.59M 2.23M 31 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Delta plans to grow its hub at Logan Airport, confident about the future of the city and airport Expansion • By summer 2022, Delta expects that its Logan capacity will be at least 20% higher than pre‐ pandemic, with nearly 4,000 additional daily seats • With new routes, larger planes, and more frequencies, travelers headed to or from Boston are expected to be the big winners “We’re expecting Boston to continue to grow…These are some long lead‐time decisions as to where you place your assets in your markets. We’re coming out of this stronger...there’s no question about it” – Delta CEO Ed Bastian 32 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Delta announced new nonstop service to in‐demand domestic and international destinations as well as new best‐in‐class aircraft New Service Additions International • Athens commencing on May 27, 2022 • Tel Aviv commencing on May 26, 2022 Domestic • Baltimore, Denver, and San Diego commencing on July 11, 2022 • Charlotte and Dallas, two key business routes, began this month • Worcester Airport to LaGuardia commencing Nov. 1 Modernized Aircraft • Delta is bringing new aircraft to Logan Airport that “We are excited to welcome new Delta flights to will enhance the passenger experience Boston, connecting visitors and travelers to o Airbus A321neos: new aircraft will launch on exciting destinations around the world…These Boston transcontinental routes flights coming to Logan Airport in 2022 will allow more people to access hundreds of o Airbus A220s: doubling the number of flights destinations and the global economy” o Boeing 767‐300s: retrofitted with significant – Governor Charlie Baker updates will be used on the Lisbon and Edinburgh routes 33 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Delta delivered a profit in Q3 2021 for the first time without government aid Logan Airport Outlook From Delta President Glen Hauenstein: “I think we were clear about our intentions to be Boston's preferred airline pre‐pandemic. If you go back and listen to the calls then, it was something that was our intent. And we saw some opportunities in the pandemic that availed themselves, and we're believing that next summer is going to be a relatively robust demand set to Europe. So we wanted to fill out some of the big demand international markets from Boston and then some of the opportunistic markets in the pandemic for Boston business. So very happy with our – we have a great team in Boston. They do a phenomenal job. We have a great facility in Boston, best in class up there. And I think when you put the suite of our products and services, it really is a winning hand for Boston.” “I think what we see is our products suit the Boston market quite well, being a premium carrier and having Boston be a very affluent city with a huge component of corporate travel. We think that we are best suited to deliver the best products and services to the customers of Boston. And we’re going to, as I said in previous calls, we don’t want to be the biggest, we just want to be the most loved and the most profitable” 34 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Frontier is planning to operate its first international flight from Logan Airport In September, Cancun and Mexico City were the busiest foreign gateways to/from the U.S. New International Service Demand • Daily seasonal service between Boston and • Mexico continues to be the top international Cancun to operate from December 16 to destination for U.S. passengers during the early April pandemic • Will operate with the 186‐seat Airbus A320 • This demand is propelled by beach seekers • Cancun will be Frontier’s 3rd Boston destination after Orlando and Miami 35 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
There has been a surge in bookings for transatlantic travel following reopening announcement by White House Logan Airport • Logan is well situated to take advantage of any uptick in demand for transatlantic travel as the U.S. reopens to international passengers starting November 8 • A majority of Logan international flights are to the UK and Europe, including: o London o Amsterdam o Paris o Rome o Madrid o Reykjavik o Lisbon o Munich • Virgin Atlantic reported that bookings to the U.S. o Ponta Delgada o Frankfurt increased by 91% in the hour following the announcement on September 20, 2021 o Terceira o Zurich • British Airways reported searches for holidays to o Additionally, airlines continue to expand their big U.S. destinations like New York, Orlando, Las transatlantic service at Logan – Delta is Vegas, Miami, Los Angeles and Boston had shot up starting service to London on October 31 36 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Airline services at Worcester Regional Airport will be restored to pre‐pandemic levels as of November 2 Worcester Regional Airport Service Restoration Plan Aug 19 New York JFK Oct 21 New York JFK – 2nd daily flight Oct 21 Fort Lauderdale Nov 1 New York LaGuardia Nov 2 Philadelphia Five daily departures by November 2, 2021 37 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport began a $2.1M taxiway rehabilitation project at Worcester Regional Airport Taxiway B Rehabilitation Project • Rehabilitating Worcester’s longest taxiway, will: o Restore pavement condition o Install energy efficient LED edge lighting and signage o Reconfigure geometry • Anticipated early November completion – in time for American and Delta service resumptions • Funded by a $2.1M FAA AIP grant o Massport’s 10% match covered with funds from the American Rescue Plan Act 38 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Hanscom activity boosted by an uptick in private air travel demand during the pandemic 6‐Month Aircraft Operations Details • Robust activity at Hanscom consistent 2019 2020 2021 14,000 with national trend of steady high 13K demand for private aviation travel 12,000 11K 11K 10,000 • Operations are still dominated by leisure 8,000 travel consistent with national trend 6,000 4,000 2,000 0 August March June July September May April % Change vs 2019 ‐3% ‐4% ‐2% 9% ‐16% ‐5% ‐16% 39 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Looking ahead, a sharp rise in the price of fuel threatens the airline industry’s recovery in Q4 and beyond Fuel Costs • Oil prices are surpassing $83 a barrel, the highest level in seven years, as demand recovers from the pandemic • The price of jet fuel in the U.S. has more than doubled over the past year to $2.26 per gallon • Airlines will either have to pass on the increasing fuel costs to passengers, potentially dampening travel demand, or take a financial loss • Delta Air Lines has already announced that the rise in fuel prices will negatively impact Q4 financial performance and ability to remain profitable: “A $0.05 movement in fuel equates to roughly $40 million of [quarterly] expense” – Delta President Glen Hauenstein "Higher jet fuel prices lead to higher ticket prices…Ultimately, we’ll pass that through” – United CEO Scott Kirby 40 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Report of the Director of Maritime Mike Meyran 41 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
New ship to shore cranes successfully deployed on first vessel 42 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Severe port congestion hits the East Coast in September, creating massive delays to ships headed for Boston • 20+ ships waiting off of Savannah up to 12 days • Ningbo port shutdown for two weeks in August sent a wave of ships to the East Coast in late September, early October • 3 weeks of cargo arrived in one week • Total delays to ships arriving in Boston are 30+ days 43 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Extreme port and supply chain bottlenecks creating 30+ day vessel delays to Boston, impacting port activity Monthly Containers – Actual and Forecast 16,000 September 2021 14,000 ASIA N. EUROPE Volumes (# containers) 12,000 • Total: ‐100% • Total: ‐1% • Imports: ‐100% • Imports: ‐2% 10,000 • Exports: ‐100% • Exports: ‐20% 8,000 6,000 FYTD 2022 4,000 ASIA N. EUROPE 2,000 • Total: ‐73% • Total: 12% 0 • Imports: ‐71% • Imports: 12% • Exports: ‐42% • Exports: ‐9% Apr‐21 May‐21 Jul‐21 Oct‐21 Nov‐21 Dec‐20 Mar‐21 Jan‐21 Dec‐21 Feb‐21 Jun‐21 Aug‐21 Sep‐21 Jan‐22 Current Year Actual + Forecast Current Year Budget Previous Year Actuals Forecast * October 2021 through January 2022 volumes based on forecasted scenarios as of 10.8.21, FYTD22 reflects actual volumes through September 30, 2021 44 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
More containers are coming off ships than are being picked up by trucks, causing ports like Savannah and LA to back up FACTORY TRUCK PORT ASIA US SHIPS Shut downs Dwell times: create uneven Up to 10 days waves of ships TRUCK PORT WAREHOUSE CHASSIS Dwell times: Dwell times: 4.5 days ‐> 12 3.5 days ‐> 14 days days 45 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Why not just ship everything through the Port of Boston? Ship to Los Angeles through Boston? • Lack of truck and rail capacity make long distance moves between ports logistically unworkable at scale Box retailers divert Savannah cargo to Boston? • Supply chains have been set up around distribution centers and warehousing Reroute ships while in transit to the next available U.S. Port when other ports get backed up? • Routing is planned well in advance and large scale last minute changes create chaos which further interrupts efficient flow SOME NETWORK SOLUTIONS ARE SLOWLY MOVING FORWARD • Alternate to nearby ports: Charleston or Jacksonville vs Savannah • Change port rotation: call least congested ports first ‐ Oakland vs LA • Cut port calls to speed up schedule: multiple port examples 46 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Commercial priorities and efforts SE Asia direct connection to Boston • Target: Alliance carriers on SE Asia to Boston direct service • Deployment is typically in May, decisions made by January ( 2‐3 months delayed this year) Regional importers direct ship charters • Find importers in the region who are considering chartering their own ships and offer service • 1 opportunity in the pipeline ‐ Xiamen to Boston Regional Port Strategy • Pitch carriers on development of a new regional port strategy, using small regional ports to remain fluid in 2022 and beyond Smaller niche carriers / feeder services • Connect Boston to smaller markets ‐ North/South • Attract smaller non‐alliance carriers into the mix on transatlantic or transpacific 47 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Audit and Finance 48 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Independent Audit Massport FY21 Audited Financial Statements Peter Breiling 49 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
FY 2021 Financial Statement Highlights • Ernst & Young (EY) issued a “clean (unmodified) opinion” for the Authority’s FY 2021 Financial Statements; no material weaknesses • Authority‐wide financial performance adversely impacted by business reductions caused by the pandemic o Operating revenue was $657M, $168M lower than prior year o Operating expenses of $404M were $103M less than last year o Depreciation expense of $308M increased $8M, as new assets were placed into service • As expected, we ended the year with a $55M operating loss and used CARES Act funding to eliminate the deficit 50 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
As anticipated, reduced business activity adversely impacted FY 2021 financial results Logan Airport Passengers Parking Exits LEX Riders FY21 12.2 M 585 K 408 K FY20 30.4 M 1,707 K 1,467 K FY19 41.9 M 2,472 K 1,880 K Containers Cruise Real Estate Maritime (TEUs) Passengers Revenue FY21 248 K 0 $ 38 M FY20 283 K 298 K $ 49 M FY19 307 K 396 K $ 46 M 51 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
FY 2021 Revenue of $ 657M, 20% below Prior Year Logan Airport: $523M, 21% decrease • Airline Rates and Charges revenues declined with cost reductions, compensatory model prevented significant revenue fluctuation • Activity based revenues tied to passenger activity declined the most o Parking revenue down $78M, Concessions and rental car revenue down $42M , Ground Transportation revenues (LEX, Ride App, other) declined $16M Hanscom & Worcester Airports: $ 16M, $ 1M less than last year • Hanscom produced $14 M in revenue, down only 3.4% o New FBO agreements increased ground rents • Worcester Airport generated $2.0 M in revenue o New ground leases and rental car revenues softened impact of suspended commercial service Maritime: $ 80M, 14% decrease • Conley generated $70M, only $5M lower than previous year • No Sail Order shutdown Cruise operations resulting in $8M revenue reduction Real Estate: $ 38M, $ 10M decrease • Real estate portfolio held up nicely against significant headwinds; revenue decrease a function of fewer transaction rents 52 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Cost containment, sustainability plans, and liquidity strategies lowered FY 2021 Operating Expenses by $ 100M Aviation expenses were $ 253M, a $ 43M or 17% decrease • Logan Express and on‐airport shuttle bus expense down by $10M • Logan terminals service agreements renegotiated to produce $9M in savings • Workforce sustainability plans lowered costs by $18M • Professional Services were reduced $4M • Utilities down by $3M due to reduced demand Maritime expenses were $ 55M, $ 6M less than prior year • Conley expenses were lower by $3M due to fewer containers • Cruise expenses were cut $3M due to no activity General & Administrative and Other Expenses were $ 82M, down by $ 51M • G&A expense down due to cost containment of professional fees, marketing, computer services and workforce sustainability plan • Pension & OPEB expense were lowered due to strong investment returns 53 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
As expected, we ended the year with a $ 55 million operating loss and used CARES Act funding to eliminate the deficit FY21 FY20 $ Change % Change Revenue $ 657 M $ 825 M ($ 168 M) (20.4%) Operating Expenses ($ 404 M) ($ 507 M) ($ 103 M) (20.3%) Capital Depreciation ($ 308 M) ($ 299 M) $8M 2.8% Income/(Loss) ($ 55M) $ 19M ($ 74M) • Non operating income was $76 M for the year, a $10M decline o PFCs, CFCs, and Interest Income was down $66M, Federal Cares Act and CRRSA funding increased $60M, and interest on bonds declined $10 M • Capital Contributions from Federal & State Grants was $ 62 M, up $ 2 M 54 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
The Authority’s Balance Sheet increased 3% from capital grants and non‐operating revenues June $ % 2021 change change Observations Assets $ 6.2 B $ 372 M 6.4% • Capital Assets $4.1B • Cash and Investments $ 1.9B ($1.3B are restricted) Liabilities ($ 3.4 B) ($ 234 M) 7.3% • Debt outstanding $3.1B • Accounts Payable $0.2B • OPEB liability $0.1B Other Items ($ 103 M) ($ 55 M) 115% • Deferral of Pension and OPEB gains to future periods Net Position $ 2.6 B $ 83 M 3.3% 55 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
The pandemic’s disruption caused the Authority’s cash balance to decline by $45M at year end Change FY 2021 vs FY20 Observations Net Cash from Operating $ 207 M ($ 119 M) • Lower business activity produced Activities less cash Net Cash used for Capital & ($ 149 M) ($ 151 M) • New borrowing used for debt Financing Activities restructuring and capital project expenses. Cash also used to make annual debt payments Net Cash from Investing Activity ($ 201 M) ($ 49 M) • Cash generated from operations was invested • Cash received from CARES Act CARES Act Funds $ 98 M $ 63 M funding for airport operations Net Cash Increase/(Decrease) ($ 45 M) ($ 256 M) 56 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Conclusions • Staff and EY presented the audited results and financial statements to the Audit & Finance Committee on October 14. • The Authority received clean (unmodified) audit opinions from Ernst & Young for the Financial Statements and Retiree Benefits Trust (OPEB) with fewer staff than in prior years and with much work done remotely; Thank you to the team for successfully completing the audits on time • Massport ended FY2021 with a $55 million loss, but was trending favorably at the end of the year • Liquidity actions, cost reduction strategies, and investment returns on Pension/OPEB assets mitigated revenue loss caused by the pandemic • Looking ahead, Massport’s financial performance should improve as vaccination rates increase, but full recovery is still a few years away 57 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Community Outreach 58 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport CAC Update Alaina Coppola and Flavio Leo 59 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport CAC – RNAV Block 2 Study Information Session Recap • Massport hosted a public information session on the RNAV Block 2 Procedure Recommendations produced by MIT • Massport, the FAA and MIT participated and answered questions • Public comment period ended on October 4th • The Massport CAC plans to gather in December to vote on Block 2 recommendations 60 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Strategic Plan 61 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Ground Transportation Update Dan Gallagher 62 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Agenda 1. Provide update on Logan Ground Transportation activity • Logan Express • Parking • Pickup/Drop‐off • Ride‐apps (Uber/Lyft) 2. Outline plans for the restoration of services • Peabody Logan Express • Back Bay Logan Express 3. Next Steps 63 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Q1 initiatives have reduced the impacts of pickup/drop‐off (PU/DO) on congestion, but new challenges emerging Summary: • Logan Express initiatives have helped restore passenger utilization to the pre‐ pandemic rate • Virtual Economy parking pilot contributed to an increase in parking, especially for longer‐duration stays, but gains plateaued in August • Pickup and drop‐off mode share is down (from 37% in Q4 FY21 to 26% in September 2021) • Ride apps, taxis, and limos are increasingly absorbing most of the shift in ground access activity • Ride app deadhead rate is 50%, the lowest recorded, and down from 70% prior to centralizing operations in Central Parking Next Steps: • Continue to strengthen HOV services, ensure ride app compliance with trip reduction strategy, and develop strategies to respond to evolving ground access trends 64 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Logan Express utilization on restored services increased to the pre‐COVID rate Logan Express Ridership per 1,000 Enplanements 60 51 Riders per 1,000 Enplanements 50 50 43 45 40 39 40 34 30 20 10 0 Mar‐21 Apr‐21 May‐21 Jun‐21 Jul‐21 Aug‐21 Sep‐21 Framingham Braintree Woburn Pre‐COVID (Excludes Suspended Services) • Overall LEX ridership per 1,000 enplanements up 17% since June • Factors contributing to the increase: o Online ticketing – March 1 o Woburn restoration – June 1 o Online discount – July 1 o Increase to 30 minute service – July 24 Note: Excludes employees and suspended services 65 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
The Virtual Economy pilot converted some PU/DO to parking, but a changing passenger mix requires more nuanced pricing Commercial Parking Duration per Exit (Days) 7 6 5.5 5.1 4.8 4.8 5 4.2 3.9 3.8 3.9 4.0 4 3.6 3 2 1 0 May‐21 Jun‐21 Jul‐21 Aug‐21 Sep‐21 Drive Up Reservation • Passengers on long‐duration trips primarily choose inexpensive PU/DO modes over on‐ airport parking • Over the summer, the Virtual Economy product was attractive to leisure passengers on longer‐duration trips • This trend lessened in September, as leisure travel slowed down • Staff is evaluating a pricing strategy that would attract leisure and long‐term parkers to the airport as a way to decrease PU/DO vehicle trips 66 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Initiatives are helping divert use of pickup/drop‐off to parking and HOV, but Ride Apps/Taxis/Limo are also gaining ground Recovery: Passengers vs. Vehicles Logan Air Passenger Ground Access Mode Share (estimates) (Avg Q1 FY22 vs. June) 20% 40% 37.0% Q4 FY19 Q4 FY21 32.7% 15% Jul FY22 15% 30% 27.1% 26.1% Aug FY22 12% Sep FY22 10% 20% 10.2% 11.3% 5% 10% 3.2% 4.3% 2.7% 3.3% 0% 0% Air Ground Pickup/Drop‐off Long‐Term Logan Express Private Sched. Ride App, Taxi & Passengers Access Trips Parking Bus Limo • In July/August, PU/DO diverted primarily to LEX, other HOV, and parking • In September, PU/DO continued to decline, but Ride App/Taxi/Limo increasingly absorbed passengers from all modes • These mode shifts reduced passenger vehicle trips by an average of 1,300 per day in Q1 67 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Logan Express System • Currently operating: o Braintree o Framingham o Woburn • Currently suspended: o Peabody (target: early 2022 relaunch) o Back Bay (under review) 68 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport’s target to launch a new Peabody Logan Express service is early 2022 North Shore Mall site offers: • Better proximity to population base • More convenient access to/from major highways • Ability to expand 12 8 12 8 Service Launch: North Shore Mall • Currently working with City of Peabody to repurpose site use to LEX use (zoning, permit, utilities) • Hourly service • Currently negotiating a longer term agreement with property owner • Will evaluate use of existing Peabody site upon successful launch of new location 69 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
We will evaluate Back Bay LEX service relaunch in 2022 • Our goal is to always provide a variety of transportation options for passengers • Like other transportation agencies, we continue to have challenges with the ongoing bus driver shortage • Prioritizing the four suburban Logan Express sites focuses our resources where we can have the biggest impact • Back Bay passengers can still use MBTA services to connect to all Logan terminals • We will continue to monitor and evaluate the restoration of the Back Bay service in 2022 70 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Next Steps • Target is to restore Peabody Logan Express in early 2022 • Present long‐term lease agreement for new North Shore LEX site at November Board meeting • Evaluate future use of existing Peabody site (Route 1) • Continue to monitor ground access trends and develop additional strategies for reducing vehicle trips 71 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Safety and Security 72 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Director of Cybersecurity Lisa Wieland 73 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Jarret Wright – Deputy Director of Corporate Security – appointment to Director of Cybersecurity • Jarret has served as Deputy Director of Corporate Security for over 2 years • In this role, Jarret has focused on maintaining a safe and secure environment at all Massport facilities while working with departments, law enforcement partners, and stakeholders to strengthen our capabilities to prevent and respond to different threats and emergencies • Prior to Massport, Jarret was Senior terrorism official at the National Counterterrorism Center (NCTC), DHS Protective Security Advisor for New England, and a U.S. Navy Intelligence Officer • He is a graduate of Boston College and holds a Masters in Cybersecurity Policy 74 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Operation Ready Drill Hank Shaw 75 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport and our partners conducted the 2021 BOS Operation Ready exercise on October 1 Purpose • FAA requires a full‐scale demonstration of the emergency plan every three years • Comprehensive test intended to evaluate our operational capabilities • Stress induced environment requiring actual mobilization and deployment to test coordination and response • All resources are utilized; requiring reaction from personnel/equipment normally available during an actual emergency Exercise • Eight months of planning/preparation (w/COVID considerations) • Massport Fire‐Rescue led ‐ conducted in partnership with over 20 federal, state, and local agencies, airline partners, and Massport departments • Five distinct training modules • Exercised critical elements required in the coordinated response, rescue, and recovery to an Alert 3 (plane crash) within Boston Harbor 76 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
BOS Operation Ready 2021 – Recap Training Objectives • Exercise and refine interagency emergency response procedures for a waterborne aircraft crash Scenario – Alert 3 • Report of a small explosion in airplane cabin 8 miles out on approach; 52 souls onboard • Aircraft crashes 1,000 feet short of runway into the water • Confirmed casualties and fatalities • Captain of the Port elevates to MARSEC Level II Goals Achieved Made proper incident announcements and notifications Conducted initial response to the accident location Performed search and rescue of trapped/injured patients Established unified command Triaged patients at casualty collection area Decontaminated patients Activated EOC Mobilized MPA Care Team Established Family and Friends Reception and Reunification area 77 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Real Estate and Strategic Initiatives 78 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Parcel A‐2 Section 61 Finding Andrew Hargens 79 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Parcel A‐2 (401 Congress) Section 61 Finding to approve extensive environmental mitigation package • 17‐story lab/office building / development team led by BGI • Fully permitted under MEPA and BPDA • Under 301 CMR 11, certain Agency actions (in this case, executing a ground lease) require Agency approval known as a Section 61 Finding to certify projects include adequate measures to mitigate its impacts • The building design/engineering and other commitments associated with the 401 Congress project feature a slate of mitigation measures, which address the project’s projected impacts (e.g., environmental, traffic) o $500K funding to MassDOT/MBTA for Silver Line and adaptive signals at key intersections o Transportation oriented development leverages adjacent Silver Line station o LEED Gold and WELL certified building o Building enabled for future all‐electric operations o 100,000 sf of indoor/outdoor programmed public realm, extensive landscape plantings throughout o First project in Boston to achieve SITES certification 80 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Mixed Income Housing Andrew Hargens 81 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Introducing mixed‐income housing • A mixed‐income residential development project on Massport’s Parcel D‐4 would respond to the prominent issues of housing availability and affordability and diversity, equity and inclusion in the South Boston Waterfront • Massport worked with the Central Artery / Tunnel Project to engineer and build the I‐ 90 tunnel to support a larger parking garage, and the remaining proportion of this structural capacity is well‐suited for a residential project • RE&AM has engaged a number of area leaders experienced in developing mixed‐ income projects • Defining project program and affordability categories are critical • Funding strategies are complicated and project timelines are lengthy, and based on RESI Committee feedback, staff is exploring options to accelerate the development process • The Massport RFQ/RFP process would apply the “Massport Model” regarding active DEI project participation and add housing affordability as a key outcome 82 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Parcel D‐4 is in the heart of Massport’s mixed‐use Commonwealth Flats section of the South Boston Waterfront 83 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Parcel D‐4 is located on D Street adjacent to the SBWTC Parcel D‐4 Development Site 84 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Massport real estate portfolio overview Existing Portfolio Future Build‐Out (currently planned) • Office: 2.58M SF • Office: 3.05M SF • Lab: 150K SF • Lab: 1.4M SF (includes 601 Congress conversion) • Residential: 1,784 units • Residential: 2,144 units • Hotel: 1191 rooms • Hotel: 2,245 rooms • Restaurant / Retail: 247K SF • Restaurant / Retail: 336K SF • Maritime Industrial: 2.51M SF • Maritime Industrial: 2.55M SF 85 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Housing affordability is a high priority for the State and City City of Boston: Concentration of Income Restricted Housing by Neighborhood • In Boston, 19.1% of all housing units are income‐restricted • In the South Boston Waterfront, it is only 8% – one of lowest among all neighborhoods • Residential (rental and ownership) options are expanding in the South Boston Waterfront; however, no affordable housing projects have been developed in the district *Source: City of Boston Income Restricted Housing in Boston 2020 Report 86 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Defining mixed‐income and workforce housing • Successful mixed‐income projects often 2021 Boston Area Median Income (AMI) include the following characteristics: Single Family of 4 o A combination of affordable, workforce and Person market‐rate units 30% AMI $25,400 $36,250 Low‐income o Include a range of affordability categories 60% AMI $50,750 $72,500 Low‐income o A range of unit types (i.e., studios, 1‐3 70% AMI $59,200 $84,550 workforce bedrooms) workforce 80% AMI $67,700 $96,650 o A mix of rental apartments and workforce 100% AMI $84,600 $120,800 condominiums 110% AMI $93,050 $132,900 workforce • Requires diverse financing from both private and public funding sources Job Salary • Affordability is based on % of Starting Salary for a JetBlue Flight $25,000‐$35,000 individual/household’s income relative to Attendant area’s median income (AMI) Entry‐level Seafood Industry $25,000‐$50,000 Employee • Workforce housing targets those who do Starting Salary for a TSA Screener $28,000‐$44,000 not meet low‐income affordability Mid‐level Seafood Industry $80,000‐$100,000 thresholds, but are not able to afford Employee market‐rate housing options 87 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
Proposed schedule • A key funding round in affordable housing financing accepts applications annually in September o Streamlining Massport selection process will put selected developer in the best position to be prepared for 2023 round or perhaps earlier o Continuing to explore other options for Massport to reduce project financing timeline • Outreach underway now to alert the market about the offering • Issue RFQ document in December • Issue RFP in early 2022 to a short‐listed group of RFQ respondents • Designate developer team in spring of 2022 88 Visual Materials for Massachusetts Port Authority Board Meeting October 21, 2021
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