Panama and Latin American airports

I’m starting this in the car on the way to Tocumen Airport in Panama City. ACI-Latin America/Caribbean is holding its annual conference in this historic city.

 Earlier this week, ACI-North America cosponsored a seminar with ACI-LAC on air service data and planning. Airports from more than a dozen countries sent representatives and I am very appreciative of all the experts who took the time to come down and share their perspectives Greg Principato - ACI-NA Presidentwith the group.

As in the U.S. and Canada, air service development is a critical activity for airports in this region. Airlines make route decisions based on cold hard facts and analysis and the purpose of the seminar was to help airport officials access and use data in making their case to airlines.

By all accounts, the seminar was well-received and is an excellent example of the cooperation that occurs between and among ACI’s five regions.

I was also part of a panel with colleagues from around the world to discuss the current state of the industry in every corner of the world. Of course, this became a panel on the economy as the uncertain state of the economy over shadows all. There is a certain optimism down here as they feel poised for growth. Indeed, we are already seeing growth from the U.S. to this region, especially South America.

I was fortunate enough to visit the Panama Canal twice, once on a private tour with some colleagues (Sunday afternoon) and once with the conference attendees (Monday night). On Monday night in particular, we were fortunate enough to see several ships traverse the set of locks closest to the Pacific Ocean. When you see the beautiful, yet rugged, topography in the area you can see that it took a real visionary to conceive and complete the project. They are in the process of building new locks to increase the capacity of the canal. Whenever I drove along the Pacific coast I could see a line of ships waiting their turn. The economy might be down, but a massive amount of traffic continues to flow here.

There was a great deal of enthusiasm among the attendees here in Panama. Everyone knows what they are up against, but they are confident in their ability to persevere. I should also mention there was great interest in the U.S. election (to show what a small world it is, the Montreal airport director told me he followed the election returns closely — from Shanghai where it was 11 am when the election was called. The woman from the Bahamas — who is Canadian, by the way — told me she followed it from a meeting she was attending, in Bangkok!  It is hard to overstate the degree of hope and optimism the election results have engendered around the world).

Have a great Thanksgiving!

Three New Runways

Just got back from attending the dedication of the new runway at Washington DullesGreg Principato - ACI-NA President International Airport.  Presiding at the dedication were Jim Bennett, President and CEO of the Metropolitan Washington Airports Authority (MWAA); Virginia Governor Tim Kaine; U.S. Secretary of Transportation Mary Peters; FAA Administrator Bobby Sturgell; and MWAA Vice Chair Charles Snelling.

After the dedication was over, Secretary Peters, Administrator Sturgell and other DOT and FAA officials got on the FAA plane and flew to Chicago to dedicate a new runway there.  Once they are finished in Chicago, they will get back on the plane and dedicate a new runway in Seattle.

Three runways in one day.  This is the largest addition of airport capacity in one day in a long time.  And it is good news for the air traveler.

Investment in airport and air traffic control infrastructure is our #1 priority for the new administration and, more importantly, for the traveling public.  There are a lot of reasons for the delays and congestion so many travelers must endure, including weather and airline over-scheduling.  There is nothing we can do about the weather, and the current financial situation in the airline industry might actually force some rationality into airline schedules (I once testified at a hearing and the House Aviation Subcommittee chair asked a representative of the airline industry how it is that one airline can schedule 56 departures from the same airport in one 15-minute period — no amount of air traffic control reform can solve that equation!).

But what is absolutely true, and has been the conclusion of every blue ribbon commission ever to study aviation in this country, is that we must do all we can to make needed investments in air traffic control modernization and in the runways, taxiways, terminals and other ground infrastructure. We need to keep the system in good working order to make sure we are ready for growth.

Some say that investment in infrastructure should wait till the airlines make profits or until we reach a certain enplanement number, or for some other occurrence (The Lions winning the Super Bowl maybe??).  But if we wait until the day when we can’t live without critical infrastructure to start planning and building it, then we’ve waited way too long.

We know where the breaking point is.  In 2000 we enplaned nearly 750 million people in this country and the system broke down.  We got back to that number in 2007, and the system broke down.  We are in a lull, dealing with the after-effects of the summer’s high fuel prices and the current effects of the slumping economy.  We are bumping along just below that breaking point.  We must not allow ourselves to be convinced that the time has come to pass on needed investments in aviation infrastructure.

Three new runways in one day is something that will not happen often, if ever again.  But it is a needed reminder that we have work to do, that the benefits of that work are great, and that we must not heed those who counsel inaction in the face of overwhelming evidence to the contrary.

My next post will be from Panama; I will be attending the ACI-Latin America/Caribbean annual conference and speaking on a panel next Tuesday.  I look forward to sharing impressions of the region and of its impressive aviation initiatives.

Irish football, cheap gas and what about an energy policy

I went up to Baltimore last Saturday to see the Notre Dame – Navy game.  It turned out to be a typical ND-Navy game, hard fought right to the end.  It featured monsoon-like rains in the fourth quarter and two straight successful onside kicks for Navy, the kind of thing that only happens in the movies.  Greg Principato - ACI-NA PresidentLuckily for my Irish, we held them off.

The second most interesting thing I saw in Baltimore was gasoline for sale for $1.97 per gallon.  That’s a price that seemed impossible just a few months ago (I wonder what happens now with all those car dealers who promised someone who bought their car that they’d have gas for $2.99 per gallon for a full year.  Certainly over the summer, $2.99 seemed like a good price).

Anyway, it got me to thinking about a point I have made in this space before.  When oil was selling at more than $140 per barrel, it just seemed certain that this country would finally make those hard decisions necessary to not only achieve energy independence, but also to develop alternative sources of energy and other technologies and an energy policy worthy of the name.  The sort of thing that had been promised so many times before, and then was forgotten when prices came back down.

But as the price came down these past three months, first below $4, then below $3.50, then below $3, $2.50 and now, in some places, below $2, it seems almost like the idea of a real energy policy has disappeared into thin air.

If we let that happen, we will deserve what we get the next time prices spike, probably to $200 per barrel or more.  I’m no economist, but I am old enough to know that the recessions of the early 1970′s, the late 70′s and early 80′s, early 90′s and now 2008 were (and are) all accompanied by fuel price spikes.  I’m sure someone has written an academic book about why this is so; but all I have to go on are my own eyes.  It is undeniable that fuel price spikes and hard economic times go together like peanut butter and jelly.  By the way, if you look at those periods of history, they are came with enormous national security challenges.  It is all intertwined.

When will we learn?  If we don’t learn this time, when will we learn?  Certainly, in our industry, the impact of fuel prices is more than acute and lasts long past that time when prices retreat to what seem like more normal levels.

I watched President-elect Obama’s interview the other night on 60 Minutes. Steve Kroft asked him about this, and whether the lower prices have made the need to move on energy less important.  The President-elect’s answer was the right one:  he said that it has never been more important and that we can’t be lulled into a false sense of security on this because prices have come down some.  Music to my ears, and I hope he is able to make progress on this important issue.

In the end, the important issue really isn’t price alone.  It involves prices for sure, it also involves availability, it involves the environmental impacts, it involves national security, it involves business confidence, and it involves a whole host of things.  Oil price spikes are an indicator that bad times are upon us.  But the challenge isn’t just to avoid spikes, it is to develop and implement a real national energy policy that makes oil price spikes irrelevant.

I will be traveling to Panama later this week to attend the ACI-Latin America/Caribbean annual conference and look forward to reporting on events and trends from that fast growing region.

Airport Concessions

These past two days I’ve had the honor of attending and participating in the ACI-NA Concessions Conference in Toronto. I think it is fair to say that concessions have never been more important to airports and, more importantly, to passengers than ever before. Greg Principato - ACI-NA President

Our passengers spend more time in airports than ever before, whether because they arrive earlier to account for security requirements, or perhaps because their flights were delayed or cancelled. A well-designed, well thought-out, concessions program is a critical part of an airport’s customer service strategy.

Add on top of that the need for airports to generate more non-aeronautical revenue. Airline finances are under pressure and airports wanting to retain or attract service are doing all they can to make their communities an economically viable option for airlines.

So, with finances under extraordinary pressure and passengers having to spend more time than ever at airports, it is easy to see why I say that concessions have never been more important.

I didn’t know what to expect at this conference. With the economy under pressure and the meeting being held outside the United States, I didn’t know what kind of attendance we would attract. But we have more than 300 here and in talking to them it is clear that they believe concessions have never been more important to airports and passengers.

The sessions have covered a wide range of topics and provided everyone with a lot of great ideas. Perhaps more important, airport staff and concessionaries can be spotted all over the hotel and downtown Toronto having one-to-one meetings, networking, building their business and figuring out new ways to meet passenger and airport needs.

The energy level at this conference is as high as at any I’ve ever attended. There is realism about current economic conditions, but optimism that airports and concessionaires can work together to find new and innovative ways to meet passenger needs.

Because the meeting is in Canada, we’ve had great participation from Canadian airports large and small. One of the things I’ve learned in this job is that airports around the world share very similar needs and challenges. The fact that our organization includes airports on both sides of the border is a real strength.

Toronto is one of the world’s great cities. The theater, food, sports and shopping options are outstanding. The airport here is one of the world’s great airports and the staff is just great to work with. They are smart, energetic and fully focused on customer service.

I can’t end this without a mention of hockey. Our host airport event last night was held at the Hockey Hall of Fame. Attendees competed against one another in interactive games to see if they could score on all time great goalies and see if they could stop the shots of some of the NHL’s greatest players. A lot of folks brought their hockey jerseys, and we had special ACI-NA jerseys made for our staff and the planning committee.

A highlight of this conference is our awards luncheon. The emcee was Dennis Hull, a former NHL player and a member of one of hockey’s royal families. Dennis was VERY funny and the audience was quite entertained. And the fact that someone such as him emceed the event added to what really is the academy awards of the concessions industry. We had a lot of winners and they can be found listed on our web site. Special mention should be made of the fact that Susan Bush of the Port Authority of New York and New Jersey was named Concession Person of the Year. The PANYNJ airports won a number of individual awards and Susan richly deserves this award.

Boston Logan was named the winner of the Richard A. Griesbach Award for overall concessions excellence. We do not announce these awards prior to the luncheon so no one knew what they would win (by the way, awards are determined by a panel of neutral judges). Standing on stage to present the awards I was able to see the reactions of the winners and it is obvious how much the ACI-NA concessions awards mean to the industry and to the winners. Click here to view a full list of the winners for the 2008 ACI-NA Concessions Contest.

So next time you are in an airport and need to pick up a newspaper or book or sandwich or drink, or perhaps some electronics or even a massage, keep in mind all the thought and effort that goes in to placing those goods and services in our airports, and know that airports and concessionaires have the interests, tastes and needs of passengers foremost in mind.

Airports and Customer Service

Let’s start with an observation. I’ve blogged about the need to deal with the nation’sGreg Principato - ACI-NA President energy crisis and financial crisis. Expectations are high now.

Here’s the observation:  When I worked on Capitol Hill in the late 70′s and early-mid 80′s the fastest growing federal expenditure was not defense, not Medicare or welfare. It was interest on the federal debt. Interest on the debt buys nothing, but it must be paid. It represents failure all around.

Unfortunately, we are back in that same boat. Interest is rising fast and must be paid. It buys nothing. And we probably have to borrow much of what we are paying in interest. Times are tough now and the debt will only increase in the short term as we try to address current economic challenges. But forgive me if I am a little sad that we are back in a situation in which the fastest growing federal expenditure is interest on the federal debt.

I am writing this from Toronto where I am attending the ACI-NA Concessions Conference. There are many reasons concessions have become more important: The financial pressure that airlines and airports face and the fact that people spend more time in airports now due to increased security since 2001.

But the main reason they are important has to do with customer service. In an aviation industry in which many people believe customer service is a forgotten concept, airports are designing their concessions programs with customers first in mind. I will write more from the conference in coming days.

The campaign is over. Now its time to govern.

And now it is finally over.  The long campaign for the presidency has come to Greg Principato - ACI-NA Presidentan end and Barack Obama will be the 44th president of the United States.

 

I thought the most important line in a very impressive speech last night was this:  “this victory is not the change we seek”.  In other words, this is great, let’s celebrate, but all that talk of change for the last two years didn’t refer to an election result, but to the work we must all do together as a nation.

 

Amen to that.

 

Perhaps there is no single day in any four year cycle when our country is more unified than it is the day after an election.  Yes, there were emotions rubbed raw and there are some hard feelings harbored by some people.  But, regardless of your political affiliation, this day is filled with the voices of people vowing to work with our new president.

 

Of course, it is hard to keep those vows for very long, especially in a Washington that has grown noticeably more cynical in the nearly 30 years I have been here.  The new president must keep his vow to reach across the aisle, as must his congressional allies.  And it is true that the party in power must make the first move.  But, the opposition party must then respond to those overtures and work together to do the basic business of the country.

 

There are certain issues that have always been overtly political and on which stalemate was likely.  These days, though, stalemate seems to be the order of the day for everything.  That was why the second most watched race of the day was whether the Democrats would reach the 60 seats needed to overcome filibusters.  When I first got to Washington, a filibuster meant that someone actually had to get up and talk for several hours, maybe even a day or two.  Only then would a cloture petition be filed. 

 

For those who don’t understand this, Senate rules allow unlimited debate unless there is unanimous consent for a time limit and a vote.  For most of history, and for most routine business, unanimous consent would be given to time limits for most legislation.  Bills to reauthorize the FAA were a good example of this; they were seen as part of the basic business of the country and it was recognized that they had to pass.  So, senators would agree on a time limit. 

 

A big exception was civil rights legislation, and the cloture process was devised as a way to bring civil rights bills to the floor.  At first, two-thirds of senators were required to invoke cloture, which was reduced to 60 senators in the 1960’s.

 

By the time I left the Senate (1986), cloture votes would be taken whenever someone threatened a filibuster; gone were the days when someone actually had to stand up and talk.  These days, it has further evolved (or devolved) and cloture votes are taken routinely.

 

Barack Obama is only the third president ever elected directly from the Senate (Harding and Kennedy were the other two).  Hopefully, that experience, and the bipartisan relationships he has developed, will help him take the necessary steps to govern effectively in these tough times.