WJ Advisors
Aviation Management Consultants
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Overview

Our mission is to help our clients achieve their goals and vision.

Partnering with Clients

WJ Advisors (WJA) is a client-centered firm that provides strategic advice and analysis on a broad range of airport-related topics based on the following principles: (1) the provision of truly independent strategic, financial, and business planning airport advisory services, (2) dedicated airport industry expertise and experience, and (3) the successful achievement of client-defined goals.

As a management consulting firm, WJA regularly partners with clients to (1) identify near-term challenges, (2) understand current and longer-term risks in meeting financial and other goals, and (3) create a strategy that is adaptable and achievable.

Our collaborative and dedicated approach to client service means that WJA often partners with clients on a multiyear basis in advising senior level management, including clients in positions such as Chief Financial Officer, Chief Commercial Officer, Chief Operating Officer, and Chief Executive Officer.

Experience

Helping our clients set new standards of excellence and performance.

We develop unparalleled insights

Our strategic and advisory services reflect front-line, direct experience in solving the challenges facing our clients, as well as other airport operators in the United States and around the world. We have a shared passion for problem solving, which, when coupled with our direct experience, means that we are able to provide broad organizational and strategic perspectives on the right considerations, the right approaches, and the right solutions.

Services

We focus on our clients' most critical issues and opportunities.

The constantly changing aviation industry creates challenges that require experience, insight, and commitment in the services provided to clients. Based on pragmatic yet creative solutions, WJ Advisors has assisted the operators of airports of all sizes, from non-hub to large-hub airports.

Airline Negotiations

At most airports, one of the largest sources of revenues is the rentals, rates, fees, and charges paid by the airlines that operate from and use airport facilities. As the airline industry continues to change, airport operators are faced with increasing challenges in developing adaptable business provisions that meet the needs of airline tenants, while allowing the airport operator to achieve its stated goals for the airport enterprise.

WJ Advisors assists senior management at small-, medium- and large-hub airports in (1) understanding their options regarding the adoption of an airline agreement versus setting rates by ordinance, (2) anticipating likely airline representative reactions to key business, capital, and facility control provisions, (3) determining if their goals are achievable, and (4) defining and achieving a successful outcome. WJ Advisors has assisted in negotiating new or amended airline agreements and establishing rates by ordinance at more than 12 airports, and often works collaboratively with organizations representing the airlines or representatives of the major airlines in achieving—to the extent possible—the right balance to sustain and grow air service and activity while meeting the stated financial goals of our clients.

Strategic Financial and Business Planning

Creating a higher degree of certainty in future financial results is a goal of many Chief Financial Officers, and we recognize that it is often necessary to establish broader organizational goals. WJ Advisors consistently helps to develop near- and longer-term strategic financial and business goals and plans that result in achievable results for clients. Our plans include operating expense, revenue, and capital expenditure targets for the key functional areas of an airport organization to ensure a commonality of goals and increase the likelihood of achieving the desired results.

In developing these plans, we work with senior level airport management, financial advisors, and bond underwriters to identify financial metrics that are most relevant for the market that is served by the airport and are achievable given the business structure of key leases and agreements, including those with airline, rental car companies, and other airport tenants. Lastly, our longer-term perspective also results in strategic, financial, and business plans that can be easily adapted for the requirements of issuing airport revenue bonds.

Debt Financings

Airports are capital intensive and airport operators must rely on municipal debt markets to fund most near- and longer capital improvement projects. Through our advice and assistance on the issuance of over $10 billion in airport revenue bonds, WJ Advisors works collaboratively and effectively with financial advisors and bond underwriters to develop the optimal capital structure for each client. We evaluate and incorporate all available sources of funds for each project, including federal grants, passenger facility charge (PFC) revenues, and discretionary cash flow/airport equity, as well as private sources of capital, and translate the use of these funds into key financial results. We constantly review key financial metrics as well as alternative structures and strategies for funding capital improvement programs to ensure a higher degree of certainty during the credit rating process.

WJ Advisors also assists financial advisors and bond underwriters in developing credit rating strategies and investor briefings to ensure that bond buyers correctly understand the credit and risk profiles of our clients.

Privatization

The privatization of airport assets in the United States and internationally can take many different forms, from the acquisition of assets to the investment of private capital in the airport. Understanding federal regulations about privatization in the United States, as well as the “lessons learned” from past privatizations, will facilitate the decision-making process and increase the likelihood of a successful outcome.

“Reverse privatization” is also occurring in the United States, as more and more airport operators realize that retaining control and ownership of airport assets allows them to more quickly adapt to an ever-changing aviation environment. Reverse privatization can take the form of acquiring airline-owned-and-operated terminals or entire airports. WJ Advisors has the experience and knowledge to value these assets.

Internationally, WJ Advisors assists private companies and airport operators in identifying opportunities for acquisition or investment, or in implementing key financial and business initiatives at the airports.

Commercial Development

The broader financial and business goals of an airport operator are closely linked to the performance of in-terminal concessions, parking, and rental car operations, as well as investments in commercial development, such as on-airport hotels. With broad and directly related experience, WJ Advisors can translate concession business and financial plans into specific goals and key performance indicators for these revenue sources that are pragmatic, achievable, and strategically oriented.

Governance

Increasingly, airport operators are seeking greater levels of decision-making authority and control in achieving their goals and vision, which will likely have an even greater economic impact on the region served by the airport. Understanding the considerations involved in, for example, transition from traditional municipal ownership to an authority structure, as well as the role of key stakeholders, will create a more effective environment for a successful outcome.

Rates and Charges

Often, the year-to-year achievement of airport financial and business goals begins with the establishment of airport rentals, rates, fees, and charges for airline and other tenants. The calculation of these rates and charges needs to be consistent with the legal instrument between the airport operator and tenant. Given our broad industry experience, WJ Advisors has the benefit of not only having negotiated many of these legal instruments (e.g., airline agreements), but we also understand the expectations of tenants and other key stakeholders.

WJ Advisors consistently produces reports documenting the calculation of airline rates and charges that are considered by most airline and other key stakeholders as the industry standard in providing the right information and the right level of transparency.

Clients

Ask us to partner with them on a broad range of key initiatives.

Our client-centered approach allows us to establish multiyear relationships with our clients and involvement in all areas of the strategic, financial, and business planning of their airports. Services we provide are described below.

A. B. Won Pat International Airport at Guam
  • Airline Negotiations

  • Strategic Financial and Business Planning

  • Debt Financings

Albuquerque International Sunport
  • Airline Negotiations

  • Strategic Financial and Business Planning

  • Rates and Charges

  • Debt Financings

  • Commercial Development

Austin Bergstrom International Airport
  • Rates and Charges

  • Commercial Development

Baltimore/Washington International Thurgood Marshall Airport
  • Airline Negotiations

  • Commercial Development

Colorado Springs Airport
  • Strategic Financial and Business Planning

  • Debt Financings

  • Commercial Development

Denver International Airport
  • Airline Negotiations

  • Strategic Financial and Business Planning

  • Rates and Charges

  • Debt Financings

Double Eagle II Airport
  • Strategic Financial and Business Planning

  • Commercial Development

Dupage Airport
  • Rates and Charges

Fresno Yosemite International Airport
  • Debt Financings

  • Commercial Development

Juan Santamaria International Airport
  • Privatization

Kansas City International Airport
  • Airline Negotiations

LaGuardia Airport
  • Airline Negotiations

  • Strategic Financial and Business Planning

  • Privatization

Los Angeles International Airport
  • Airline Negotiations

  • Strategic Financial and Business Planning

  • Rates and Charges

  • Commercial Development

  • Debt Financings

McCarran International Airport
  • Strategic Financial and Business Planning

Midway International Airport
  • Privatization

Minneapolis St. Paul International Airport
  • Airline Negotiations

  • Strategic Financial and Business Planning

Ontario International Airport
  • Strategic Financial and Business Planning

  • Commercial Development

  • Privatization

Orlando International Airport
  • Airline Negotiations

Perth Airport
  • Privatization

Santa Monica Airport
  • Rates and Charges

Seattle-Tacoma International Airport
  • Airline Negotiations

  • Debt Financings

  • Rates and Charges

Sydney Kingsford Smith International Airport
  • Privatization

Tulsa International Airport
  • Airline Negotiations

  • Strategic Financial and Business Planning

  • Rates and Charges

  • Debt Financings

  • Governance

Vancouver International Airport
  • Rates and Charges

Vantage
  • Privatization

Featured Projects

Our advisory services and recommended solutions result in measurable outcomes that achieve client-defined goals. Want to learn more? Email us at inquiry@wj-advisors.com.

Featured Projects

Reaching Commercial Agreement for the Largest Rental Car Facility in the United States

In November 2016, Los Angeles World Airports distributed a non-binding Memorandum of Understanding (MOU) for the financing, development, and operation of a new rental car center (RCC) at Los Angeles International Airport (LAX).  The new RCC is expected to have approximately 5.5 million square feet, and a cost of over $1.0 billion dollars.  As of January 2017, rental car companies representing over 60% of gross revenue market share have signed the MOU.

In collaboration with LAWA executive management, WJ Advisors assisted in the development of proposed business arrangements that were included in the MOU as well as preparation of the MOU.  Over a period of approximately 2 years, WJ Advisors participated in and with LAWA, led commercial discussions with the rental car companies serving LAX regarding proposed business terms.

Largest Aviation Public Private Partnership Project in the United States

On June 1, 2016, LaGuardia Gateway Partners (LGP) successfully transitioned responsibility for the operation and management of the existing central terminal building (CTB) at LaGuardia Airport (LGA) from the Port Authority of New York/New Jersey, and recently began the construction of new Terminal B at LGA.  New Terminal B is expected to be fully operational by 2023; LGP will operate and manage new Terminal B until 2050.  LGP consists of Skanska Infrastructure Development, Meridiam, and Vantage Airport Group.

The redevelopment of the CTB represents the largest public private partnership aviation project in the U.S.

WJ Advisors served as a strategic advisor to LGP over an approximate 3-year period, and was primarily responsible for developing proposed business arrangements between LGP and the airlines, and in negotiating the terms and conditions of a non-binding term sheet that supported the commitment of $200 million in infrastructure funds from LGP, and the issuance of approximately $2.4 billion in revenue bonds to fund the cost of building new Terminal B.

Successful Issuance of Los Angeles International Airport Series 2016A and Series 2016B Bonds

In May 2016 and again in November 2016, the Los Angeles World Airports issued approximately $289.2 million and $451.1 million, respectively, in Subordinate Revenue Bonds to fund the cost of projects in the airport’s multi-year capital improvement program.  Credit ratings for both series of bonds were reaffirmed.

Los Angeles International Airport is the third largest airport in the United States as measured by total passengers in 2015 and the third busiest international gateway in the U.S. as measured by international enplaned passengers for the 12-month period ended February 2016.

WJ Advisors prepared financial feasibility reports for the issuance of both series of 2016 Bonds.

Successful Issuance of Port of Seattle Series 2015 Bonds

In July 2015, Port of Seattle (Port) management successfully issued approximately $583 million in Series 2015 Intermediate Lien Revenue and Refunding Bonds.  The Port currently owns, operates, manages, and maintains Seattle-Tacoma International Airport and other Port businesses, including cruise, bulk cargo, recreational and commercial, and some industrial and commercial properties.  The Port also owns and currently manages containerized cargo terminals.

All Port bond credit ratings were reaffirmed.  WJ Advisors prepared the financial feasibility report (Report of the Independent Consultant) to support the issuance of the Series 2015 Bonds.

Rate-Setting Strategies and Alternatives at Vancouver International Airport

WJ Advisors was recently retained by senior management at Vancouver Airport Authority (Authority) to identify strategies and alternatives to revise the methodology for calculating the rates and charges paid by key tenants at Vancouver International Airport (YVR).   We focused on increasing the alignment of the rate-setting approach with key Authority goals and initiatives, such as more efficient utilization of facilities as well as cost competitiveness.

In 2014, YVR was named #1 airport in North America for the fifth consecutive year by Skytrax World Airport Awards, an honor that has only been achieved one other time in the history of this award.

Extension of Rental Car Concession Agreements at LA/Ontario International Airport

Los Angeles World Airports (LAWA), which owns and operates LA/Ontario International Airport (ONT), recently executed an amendment to rental car concession agreements at ONT.  Warren Adams, Managing Partner of WJ Advisors, was a key member of a two-person team that advised senior LAWA management on identifying key changes to the concession agreements while maintaining alignment, as needed, with certain business terms and conditions of rental car concession agreements at Los Angeles International Airport (LAX), which are also being extended.  LAX is owned and operated by LAWA.

Airport Staff Training:  Understanding the Basics of Airport Business and Financial Operations

WJ Advisors was retained by executive management of one of the largest hub airports in the United States to train all airport employees on the business and financial aspects of the airport.  The training is part of a broader program to create better alignment between each department’s goals and objectives and the broader strategic initiatives of executive airport management.  The training also focuses on the risks associated with hub airports as well as the competitive positioning of the airport relative to other large-hub airports in the U.S.

A Public-Private Partnership to Improve LaGuardia Airport

WJ Advisors was retained by Vantage Airport Group on behalf of LaGuardia Gateway Partners (LGP) (http://laguardiagatewaypartners.com) to provide strategic financial and business advisory services in connection with the submission of a proposal to the Port Authority of New York & New Jersey (PANYNJ) to build a new central terminal building at LaGuardia Airport (LGA).  Specifically, WJ Advisors advised executive management at Vantage and LGP on alternative airline business arrangements for existing and new central terminal building facilities as well as to advise LGP on the considerations of each alternative.  WJ Advisors also briefed shareholder groups of certain LGP consortium members on the financial and business considerations of proposed airline business arrangements.

New Commitment: United Airlines at Denver International Airport (DEN)

DEN management recently executed a new lease amendment with United Airlines that will continue United’s presence at DEN from the original lease expiration in 2025 through 2035.  WJ Advisors assisted DEN management and legal counsel with the amendment in the following areas: financial analysis, strategic advice, and development of business arrangements.  Similar to other innovative business arrangements at DIA, the 2014 amendment with United Airlines will, among other things (1) reduce the annual cost of operating at DEN for passenger and cargo airlines by restructuring capital costs, (2) allow United to modify its leased premises at DIA, and (3) maintain United’s current system-wide aviation activity at DEN through 2025, or pay certain penalties.

New Airline Business Arrangements at Orlando International Airport (MCO)

New airline business arrangements at MCO include: rates by resolution to govern airline use of MCO facilities, a letter of authorization to lease space, and a rate and revenue-sharing agreement between the airlines and the Greater Orlando Aviation Authority (Authority or MCO). The new business arrangements are in effect and will continue through September 30, 2016. WJ Advisors worked collaboratively with outside legal and special counsel to advise senior MCO management during the airline consultation process, refine the airline business arrangements, identify and understand the considerations associated with various airline proposals, and develop strategies to successfully implement the new business arrangements.

New Landing Fee Rate at Santa Monica Municipal Airport (SMO)

WJ Advisors LLC was retained by the City of Santa Monica to establish a new landing fee rate at SMO.  As part of this effort, we established airport cost centers to allocate the cost of operating, maintaining and improving SMO facilities between aeronautical and non-aeronautical users, reviewed trends in aviation activity as well as operating expenses and capital expenditures at SMO, and developed certain tools for use by city and airport management each year to recalculate the landing fee rate. We also developed considerations as well as advantages and disadvantages associated with alternative methodologies for calculating the landing fee rate. The recommended landing fee rate is currently in effect.

New Air Service at Albuquerque International Sunport (ABQ)

ABQ management recognized the need to proactively influence the provision of future air service at ABQ after multiple years of declining-to-stable aviation activity. As part of its broad-based plan, ABQ management implemented a new multiyear marketing initiative to increase air service and also developed an aggressive air service incentive program. WJ Advisors and other consultants assisted ABQ management in developing the new air service incentive program, as well as the broader marketing plan. Albuquerque residents and visitors now enjoy new daily nonstop service on JetBlue Airways to New York.

A New Hotel at Baltimore/Washington International Thurgood Marshall Airport (BWI)

BWI management is planning its future customer services and amenities to include a new on-airport hotel. As part of this planning, WJ Advisors and other consultants assisted BWI management in understanding the market potential and ownership alternatives for a new hotel. Management took the first step in bringing a new hotel to BWI by issuing a Request for Information (RFI) to hotel developers regarding construction and operation of a new hotel at the airport. WJ Advisors assisted in preparing the RFI and evaluated various ownership and operating structures for a new hotel.

A New Airline Agreement in a Diverse Market at Seattle-Tacoma International Airport (SEA)

SEA senior management recently completed negotiation of a new 5-year airline use and lease agreement with adoption of the agreement by the Port of Seattle Commission. The SEA region is a diverse and expanding market for international service, particularly by Delta Air Lines, and is the largest market served by Alaska Airlines. The new airline agreement is estimated to generate about $1.0 billion in revenues. WJ Advisors worked collaboratively with outside legal counsel and another consultant to assist senior airport management in creating the business arrangements and negotiating the new agreement.

Planning for the Future and Organizational Realignment of Albuquerque International Sunport (ABQ)

Since 2006, Warren Adams, Managing Partner at WJ Advisors, has led annual senior staff retreats at ABQ that have resulted in year-to-year priorities and initiatives that have successfully been implemented by ABQ management. ABQ management evaluated such priorities as marketing and branding ABQ as part of a broader strategy to attract new air service, realigning organizational functions to more quickly implement new programs that would increase passenger convenience and services, and reaching consensus and alignment of goals within ABQ to control operating expenses and increase operating revenues. As part of these senior staff retreats, existing risks are validated or discarded, and new risks are identified and adopted by ABQ senior management. A key risk identified in the 2007 through 2009 timeframe was the likely decline in air service at ABQ, which would place increasing pressure on future financial performance and margins. Understanding the risks associated with this outcome, ABQ senior management realigned the focus of ABQ and, over a 2- to 3-year period, has been able to financially withstand significant declines in passengers and air service.

New Airline Business Arrangements at Los Angeles International Airport (LAX)

Since 2007, Warren Adams, Managing Partner of WJ Advisors, has assisted senior management of Los Angeles World Airports (LAWA) in developing a strategy to implement new airline rate-making methodologies and business arrangements for the LAX terminal area. The overarching goal of the Board of Airport Commissioners was to develop a financial platform that would support the renovation, expansion, and improvement of terminal facilities at LAX. Some of the terminal buildings were owned and operated by the airlines or airline consortiums; other terminal buildings were owned and operated by LAWA. Different business arrangements and cost structures were in place in each terminal, making it difficult to reach consensus with the airlines on many issues. Warren assisted LAWA senior management in preparing a valuation analysis that led to the acquisition of four LAX terminal buildings from the airlines. The four terminals are now under LAWA ownership and operation, which was key to reaching consensus with the airlines on new and common business arrangements in all LAWA-owned terminals. After years of negotiations with the airlines, in late 2012, the Board formally adopted a new tariff, new rate-setting methodology, and a new rate agreement. Warren worked with LAWA senior management to and outside legal counsel in developing the strategy for reaching consensus with the airlines, as well as the airline business arrangements.

Success for Denver International Airport (DEN) in the Bond Market

In July 2013, DEN management successfully issued over $700 million in airport subordinate revenue bonds to fund a significant portion of the $1.4 billion airport capital program. The bond issue was the final step in a multiyear effort that included evaluating various bond structures, understanding impacts on key financial metrics under a variety of scenarios, and identifying the risks of changes in service by United, Southwest, and Frontier airlines. All DEN credit ratings were reaffirmed as part of the bond issuance process. As a key member of the financial team, WJ Advisors prepared the financial feasibility report (Report of the Airport Consultant) to support the issuance of the bonds.

 

Contact

Your inquiry is very important to us

Contact us in our Denver office to learn more about the services we provide.
T: (720) 542-8692 or E: inquiry@wj-advisors.com