International Air Service Development at Boston Logan

June 7, 2012

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Presentation Overview

Logan Today

How Massport Identifies Opportunities

What Airlines Look For

How Massport Won JAL Service to Tokyo

Next International Targets

How You Can Help

Logan International Airport Today

Record 28.9 Million Passengers in 2011 – Up 5.4% Y/Y

Ranked as 3rd Fastest Growing Airport in the United States – Up 5.2% in 2012 YTD

Served by 34 Air Carriers

Including 18 Foreign Flag Carriers and 6 Low-Fare Carriers

High-Value Cargo Market

Not Dominated by Any Carrier or Any Airline Alliance Not a hub for a U.S. carrier

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Boston Logan Has Nonstop Domestic Service to 72 Destinations

Note: Includes Seasonal Service, Source: OAG & Innovata Schedules

MontrealHalifax

Praia

PontaDelgada

Terceira

Reykjavik

DublinShannon London LHR

FrankfurtMunichParis

RomeMadridLisbon

Amsterdam

ZurichToronto

YYZ & YTZ

BOS

Bermuda

Santo Domingo

Punta CanaSt. Maarten

ProvidencialesNassau

Aruba

Montego Bay

Cancun Santiago

TokyoNRT

Ottawa

Boston Logan has Nonstop International Service to 31 Destinations

Note: Includes Seasonal Service, Source: OAG & Innovata Schedules 5

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Massport Has a Focused, Thorough and Proactive Route Development Strategy

Use Industry Data Sources, Analyze, Identify and Prioritize Market Opportunities and the Airlines/Alliances Best Suited to Succeed

Monitor and Influence Federal International Regulatory Matters Affecting Boston Air Service

Connect Worldwide to Meet with Airlines and to Participate in Industry Conferences

Partner with Government, Businesses, and Educational Institutions to Win New Airline Service

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In Selecting New Target Markets for International Service, Massport Considers a Number of Factors Before

Approaching Airlines

*Orders Pending

Largest BOS International O&D Markets Without Nonstop ServiceYE 2Q2011

O&D Average Global Airline AdequateRank Market Passengers Fare Connecting Hub Aircraft

1 Tokyo 69,187 $1,141

2 Barcelona 60,321 $4403 Shanghai 57,816 $937 *4 Tel Aviv 56,949 $674 5 Beijing 56,893 $778 *6 Vancouver 54,387 $320 7 Athens 50,984 $4608 Hong Kong 50,741 $1,133 9 San Jose 49,788 $248

10 Guatemala City 47,627 $238 11 Seoul 45,390 $908 *12 Mexico City 42,613 $262 13 Sao Paulo 39,202 $739 14 Mumbai 38,510 $726 *15 Delhi 34,028 $791 *

Airlines Are Attracted to the Strength of the Market Served by Logan

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7th Largest Metropolitan Area in the U.S.

5th Highest Per-Capita Income in the U.S.

Worldwide Leader in the Diverse, High-Value Industries Finance, Healthcare, Consulting, Higher Education, Biotechnology, Telecommunications, Technology

Nation’s Center of Education and Innovation Due to 270 Colleges and Universities in New England

Attractive Tourist Destination With Over 20 Million Annual Visitors

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While Airports Are Able to Influence Airline Decision Making About New Routes, the Final Say Rests with the Airline

– and It Is Almost Always Based on Profitability

Competitive Profile Major origin and destination traffic (as opposed to connecting) Significant percentage of business and first class passengers Expected route profitability compared with other route choices Strategic fit with airline/alliance route network Presence of significant high-value cargo market Aircraft in fleet appropriate to serve the proposed route

Comparison to Other Market Options Opportunity cost Willingness of airport/community to share risk at beginning of service Integration with economic and tourism development partners

to ensure success after service start Presence of relevant ethnic population Airport costs

International airlines are risk averse – In selecting new markets they look for key market attributes and business model fit

How Do We Win in Such a Competitive Environment?

An Unserved Market with No Existing Carrier to Compete for Passengers

The Right Aircraft

An Airport Incentive Program

The Asia Task Force Connected the Customers to the Carrier

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The JAL Example

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For JAL/AA, many other cities within the 787 range of Tokyo were candidates for new service

Shenyang

Saipan

San Francisco

Seattle

Tokyo

Denpasar-Bali

Cebu

QingdaoJeju

Washington DCBoston

Toronto

Fuzhou

Rome IstanbulBarcelona

AmsterdamMunich

Milan

Cairns

Vienna

JAL/AA AnnualRank Market Passengers

1 San Francisco 431,0002 Denpasar-Bali 247,0573 Saipan 233,5234 Rome 194,8115 Mactan 163,6816 Milan 156,5787 Istanbul 149,0518 Jeju 139,4329 Munich 134,99410 Seattle 133,25311 Cairns 132,67812 Qingdao 118,63213 Washington 116,98914 Amsterdam 111,57115 Vienna 102,89816 Barcelona 100,73617 Las Vegas 99,24718 Shenyang 95,55319 Fuzhou 88,07520 Toronto 86,79421 Boston 85,005

The New Generation Aircraft Made Boston a Competitive Option for Nonstop Service to Asia, and the Economics of

the Tokyo Route Look Promising

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B787 and A350 Designed for Mid-Sized Markets

– 200-250 Seats

Fuel-Efficient Aircraft

Ability to Fly to Long-Distance Markets Fully Loaded from Shorter Runways

Boston is Now in the Running for Service to New Regions of the World

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Massport Created an International Air Service Incentive Program to Help Attract and Support

New International Flights to Logan

Targeted to New Destinations in: Asia/India Mideast/Africa Central America/South America and Mexico City

Requires Nonstop, Year-Round Scheduled Air Service, Operated at Least 4 Roundtrips/Week, Continuously, for at Least 1 Year

Financial Incentives Include: Landing fee rebates Marketing support

Nearly every international airport in the world offers financial incentives

for new/expanded air service

Boston Logan International Air Service Incentive Program

Massport Created the ‘Asia Task Force’ to Help Attract and Support New Nonstop Service to Tokyo

Members Include Top Executives from the 250+ Massachusetts and New England Companies and Organizations Which Travel Extensively to Japan and Asia

Surveys and Discussions With Asia Task Force Members Provided Key Information On Travel Demand to Japan and Asia Including members’ overwhelming support for nonstop service over

their existing frequent flier club benefits

In Early 2011, Massport Arranged Separate Meetings Between the Asia Task Force and Two Airlines Interested in Serving Boston from Their Respective Tokyo Hubs Japan Airlines’ top executives were impressed to hear directly from their

‘future customers’

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Massport plans to use this Asia Task Force ‘template’ for other new international targets

BOSBeijing / Shanghai

Delhi / MumbaiDubai /

Abu Dhabi /QatarMexico City

Tel Aviv

Sao Paulo

Massport is Focusing on These Top International Opportunities

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Nonstop Service to China is Now Our Top Priority: Boston is the Largest Unserved U.S. Market for Both Beijing and Shanghai – and the

4th and 7th Largest Unserved Global Market from These Cities

Strategy Continue discussions with 4 Chinese carriers and CAAC

Air China, China Eastern, China Southern, Hainan Educate Chinese carriers and CAAC about economic relationship between

Massachusetts and China Retained dedicated China market representative Demonstrate success of Boston–Tokyo

Targeted Start Date – 1Q 2015

Challenges 787 Delivery Schedule U.S.–China Bilateral Agreement Difficulty in obtaining visas for

Chinese nationals Limited awareness of Massachusetts beyond

Harvard/MIT Cities around the world are aggressively pursuing

service to China 16

Other International Targets

Mexico: Mexico City Carrier Targets: AeroMexico, Volaris Targeted Start Date: 2Q 2013

Israel: Tel Aviv Carrier Target: El Al Targeted Start Date: 4Q 2014

Middle East: Dubai, Abu Dhabi or Qatar Carrier Targets: Emirates, Etihad, Qatar Targeted Start Date: 2Q 2015

Brazil: Sao Paolo Carrier Target: TAM Targeted Start Date: 4Q 2015

India: Delhi/Mumbai Carrier Targets: Jet Airways, Air India Targeted Start Date: 2Q 2016

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The Regional Economic Impact of New International Service is Significant

Source: ICF SH&E Analysis Note: Annual numbers, steady state, may not add due to rounding Economic Impact figure includes: Direct, Indirect, and Induced economic impacts, as well as Income and Sales Tax

Economic Impact ofNew Intl Market New Intl Air ServiceFrom BOS (millions)

Beijing $113

Delhi $98

Mexico City $57

Sao Paulo $94

Tel Aviv $46

Tokyo $187

Total New Markets $595

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Working Together, Logan Can Secure Valuable Air Service to New Destinations

Broaden the Business Case Beyond the Standard Airline Data Sources

Build Air Carrier Awareness of the Economic Relationship Between New England and Our Target Markets

Identify Top Business Customers and Strategically Connect Them to the Air Carrier Through a Coordinated, Organized, Efficient Effort

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Massport Contact Information

David Mackey Interim CEO and Executive Director DMackey@massport.com Edward Freni Director of Aviation EFreni@massport.com

Betty Desrosiers Director of Aviation Planning and Strategy BDesrosiers@massport.com Yil Surehan Director of Airline Route Development YSurehan@massport.com