For a recent lunch and learn, the Adam Smith Society hosted Gisela Shanahan, the CFO of Denver International Airport. One of the first women in the airport industry, Ms. Shanahan has been with DIA for the last 10 years. Much of her talk touched on the history of DIA and the opportunity for future growth.
Soon to celebrate 25 years of flight, DIA is one of the youngest international airports in the US. It claims the 5th spot for busiest airport in the country – despite Denver ranking only 19th in size of metro area. Although a financially independent entity, the CEO does report to the Mayor of Denver, and DIA is owned by the government.
Gisela Shanahan discussing DIA’s sources of revenue.
In general, the airport industry is conservative financially to ensure that if the revenue mark is missed, operating costs are covered. This means planning 20 to 30 years out. For projections with such longevity, DIA stays on top of emerging technologies and changing travel patterns. Likewise, the nature of the airport industry means understanding operations in many different industries such as car rental, retail, aviation, and now hotel.
As a monopoly in the region with a seven-state reach, DIA has a competitive advantage and potential to continue expanding its business. Also, Denver’s location serves DIA well as the city continues to attract new companies and the economy grows. DIA anticipates serving 70 million passengers in 2019; by 2025 that number is projected to jump to 82 million.
Already Colorado’s largest economic driver, DIA is one of the few airports in the US with growth potential. The airport owns 53 square miles, which means DIA has space to physically expand. Additionally, Denver’s population growth consists of two primary groups: Baby Boomers and Millennials. Both demographics travel more than the average American, meaning DIA sees higher frequencies of average travel than other equivalent airports. Furthermore, new aviation technology, like the Boeing Dreamliner, doesn’t require international flights to stop on the coasts. With all these industry drivers, the future looks bright for DIA.
Lining up for Illegal Pete’s.
Optional lunch and learns like this are a good example of the academic but extracurricular offerings that Leeds MBA students enjoy. They help students glimpse unfamiliar industries, network with local businesses, and meet local executives.