SUSTAINABILITY REPORT Calendar Year 2017
Our Community Strategy is to be a trusted and highly responsive regional agency.
Our Customer Strategy is to achieve the highest level of internal and external customer satisfaction.
Our Employee Strategy is to ensure the highest level of employee committment & performance.
Our Financial Strategy is to enhance the financial position of the Airport Authority.
Our Operational Strategy is to operate the airport in a safe, secure, environmentally sound, effective, and efficient manner.
Enhance the financial position of the Airport Authority.
In 2017, the San Diego County Regional Airport Authority completed a major bond sale that will help cover construction costs of the Terminal 2 Parking Plaza and international arrivals facility slated to open in 2018.
On July 18, more than $291 million in bonds were issued. The Airport Authority earned the lowest interest rate the organization has ever attained. Proceeds from the sale will go toward funding vital capital improvement projects including airfield and terminal enhancements. The Airport Authority secured a favorable all-in borrowing cost of 3.74 percent for the bonds, which is a lower long-term rate than comparable issuances in 2010 and 2013. Accessing the market at a favorable interest rate saves an estimated $43.4 million in reduced debt service cost over the 30-year term of the bonds. The bonds also received exceptional demand from investors, with $4 million sold to retail investors and $287 million sold to 80 separate institutional investors.
The bond sale’s advantageous circumstances were due to several factors, including the Airport Authority’s careful timing of market entry for the sale, pricing during a time when rates were more attractive and its strong financial profile as evidenced by favorable credit ratings for Airport Authority bonds from the nation’s top three ratings agencies: Fitch Ratings, Moody’s Investor Services and Standard & Poor’s.
The Authority has processes in place that ensure airport operations continue at the highest possible level during and after a disruptive event. In October 2017, the Authority conducted a training exercise simulating a mass casualty event on the airfield called “AirEx.” The exercise, which included about 500 participants and took place on the former Commuter Terminal ramp, is required by the FAA every three years. The 2017 AirEx involved emergency service agencies from around San Diego County responding to a simulated crash landing of a jetliner. SAN also took delivery of two new Aircraft Rescue and Firefighting (ARFF) vehicles to replace older, maintenance-intensive equipment. These specialty vehicles are critical for SAN’s effective and timely response to any airport ground emergency.
Safety and security are top priorities at SAN and require the active engagement and coordinated response of many different partners. To ensure proper coordination, emergency incident responsibilities for tenants, responding agencies and appropriate Authority departments must be constantly reinforced and practiced.
The Airport Authority will be revising its Airport Emergency Plan (AEP) to include references to the new Airport Communication Center, which serves as a centralized node and dispatch facility for all airport functions, including airport traffic officers, terminal and airside operations, ground transportation and all other operational needs. The AEP will also be revised to include the addition of the Security and Emergency Response Coordinator (SERC) position to the Authority.
One of the Airport Authority’s top priorities is constantly analyzing the air service markets and making sure that SAN is serving the needs of the region. In 2017, SAN offered nonstop service to 62 destinations in the U.S. and nine international destinations. Of note was the new seasonal service between San Diego and Zurich, Switzerland on Edelweiss Air.
Developing new direct routes that serve San Diego contributes to the Airport’s overall $10 billion economic annual impact. International flights are an especially critical part of this economic impact with international visitors on average staying 30 percent longer and spending 43 percent more than domestic visitors.
In June 2017, the Authority joined a group of public agencies, academic institutions and private businesses on a trade mission to Vancouver organized by the San Diego Regional Economic Development Corporation (EDC). The trip was intended to explore and highlight economic development opportunities between two of North America’s greenest cities. It is noteworthy that, with SAN’s direct flight to Vancouver, it is quicker to fly to that city from San Diego than it is to drive to Los Angeles.
Aircraft are movable assets, and if an airline sees that a flight isn’t typically full, they can send it somewhere else. The Airport Authority, working with regional partners such as the San Diego Regional Economic Development Corporation, the San Diego Regional Chamber of Commerce, the San Diego Tourism Authority and others, must compete effectively for air service with other cities around the world.
The Airport Authority continues to aggressively pursue new air service opportunities to Asia, especially to another Asian hub, as well as China and the Philippines. In the U.S., the focus is on establishing new nonstops to large markets such as Washington, D.C.’s Reagan National, as well as Norfolk, Milwaukee, Indianapolis, Raleigh-Durham, Pittsburgh and Cleveland.
In 2018, the airport will continue to engage with the San Diego Brand Alliance, a group of more than 90 regional companies and organizations that have come together to talk about new and fresh ways to highlight San Diego’s growing innovation economy and startup opportunities.
In addition to the Parking Plaza and new international facilities, SAN has been working on several other major capital improvement projects including a runway rehabilitation project. In November 2017, the Airport’s single Runway 9-27 was closed from midnight to 5:00 AM to allow milling, paving, and re-striping activities to occur. Each night, a 22.5-foot-wide by approximately 2,100-foot long lane was replaced with new asphalt paving with the runway being completed in only 74 days.
In 2017, the Authority began using a Rubberized Emulsion Aggregate Slurry (REAS) to repave SAN’s landside Terminal 2 loop road. REAS is a slurry seal product that uses recycled automobile tires, while improving overall asphalt properties. Although it doesn’t have the structural strength and thickness of an asphalt concrete overlay, for every dollar spent on preservation REAS has been calculated to save $6 to $10 in maintenance in the long term and helps to preserve the environment.
As the Authority pursues implementation of its new $1.2 billion five-year Capital Improvement Program and potentially the Airport Development Plan, the organization will need to create a robust financial plan to support the unprecedented level of construction activity at SAN.
In 2018, the Authority will continue its efforts to rehabilitate its single runway. Specifically, the current runway lights will be replaced with energy-saving LED lights, the runway pavement will be grooved and stripped and eight cross taxiways will be rehabilitated. The Authority will also be further evaluating several large capital projects such as the Airport Support Facilities and the Airport Development Plan.