Airport Experience® News - Retail & Amenities Issue 2023

DIREC TOR’ S CHA IR

strong, trusted relationships is a prerequisite to achievingmutually beneficial results. I’vemade substantial progress with some work that still needs to be done in coming weeks andmonths. Also, we are going through an employee engagement survey to understand the sentiments of our employees to see how we can better their work environment. We are initiating an enterprise-wide conversation to determine if our pre-pandemic mission, vision and values are still relevant. With all of that said, obviously a few items have emerged since I got here. Probably the most significant was our airline lease negotiations. We’ve entered into an agreement with our airline partners for a three-year agreement with two additional one-year options, and the airlines have committed to about $935 million in projects over this period of time. Our second focus area is tomake sure that we are prepared for 2026. In 2026, we’re celebrating the birth of our nation, and [Philadelphia] a focal community for that celebration. We’re also welcoming FIFA World Cup, as well as many other events that are going to be happening. Our focus at this stage is onmaking the necessary investments in infrastructure, technology, our people and processes to ensure that people who are traveling to us in 2026 will have best possible customer experience.

WARD: I’d like to dig deeper on a few of those items, but first let’s talk about your passenger traffic. PHL isn’t quite back to 2019 levels yet. Is that due to a slower rebound for business and international travel? SAEED: In 2022 we welcomed about 25.2 million passengers. That was up 28.5% from 2021 but it’s still down about 23.6% from 2019, which was a record setting year for us. Through May 2023, our passenger volumes are down about 17% as compared to May of 2019 and our operations are down about 25%. To speak to the point about what is missing, it is in part the international connectivity and in part the connectivity that would lead to those international flights. During the pandemic American Airlines retired a lot of their equipment …and many of those planes were used for transatlantic connectivity. Since then, they’ve restored most of our primary destinations in Europe, but we’re still missing nine of what we would call boutique or secondary European markets, and that’s primarily because they do not have equipment to put on those routes. They are publicly committed to receiving [new planes] in the near future, and their commitment is that most of those planes

Above: Philadelphia International Airport’s passenger numbers are off their 2019 peak but are slowly building back as American Airlines restores routes cut during the pandemic.

will come to our market to restore that connectivity. On the other hand, the regional connectivity is impacted because of the pilot shortage. Lastly, there’s a component of connectivity from around the country, where they were bringing people here to connect them to European markets. [Some of] that is missing. All in all, we feel really good about where our overall air service is…and we have very clear commitment from American Airlines that they’ll bring service back. WARD: With the major events you mentioned happening in 2026, will those require some capital investment? What’s happening on that front? SAEED: There are some capital programs that are already in progress. For example, we’ve got a rest room renovation program. We’re investing $100 million in reconstructing all our passenger-facing

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