It Was Only a Matter of Time . . .

Just read a story that really caught my attention.  It appears that Ryanair is considering charging passengers to use the restroom on its flights. 

I sure hope this is one of those  joke stories.  But it is a fact that the unbundled fees that airlines now charge here in the U.S. in lieu of a fare increase (I  recently wrote about the $7 fee for a blanket in a bag on one airline) really got their start as a result of a trend begun by Europe’s low fare carriers — especially Ryanair.  

An earlier Ryanair parody.

An earlier Ryanair parody.

I was amused at the comments of Ryanair CEO Michael O’Leary that no one in the history of Ryanair has ever gotten on board one of their planes with less than a British pound in their pocket.  But I am amused at the thought of a planeload of well-lubricated British soccer “fans” returning from a match somewhere on the continent, lining up and fumbling in their pockets for a pound.  Hmmm.  Sounds like fun.  Maybe they will need a credit card machine on the door.  And will they charge by the use, or put a timer on it so someone who, ahem, takes a little longer can’t get out without putting a second pound into the slot. 

This all sounds like a skit on Saturday Night Live or Mad TV, but remember what I said earlier.  A lot of these airline fees charged in the U.S. got their start on Ryanair. There was a time when people laughed at the thought of a charge for a pillow or a blanket.  No one is laughing now. 

There is a silver lining though.  The folks who write those Flomax commercials will have a lot more material to work with!

Others join the cause to fight congestion

I’m writing this on the Amtrak Acela Express, returning from New York. I was attending the Port Authority of New York and New Jersey‘s NextGen Symposium

NextGen refers to the project to (finally) modernize air traffic control and turnnyc_reportcover1 it into a satellite-based system. The Port Authority runs the New York area airports which are among the most consistently delayed in America. Modernizing air traffic control would go a long way to alleviating those delays. 

The Partnership for New York City estimates that delays and congestion will rob the area of $80 billion in economic activity the next decade and a half. I think that number might be low. But even it if it right, if you look at the country as a whole the number would be more than a trillion — easy. Anyone think we have a trillion dollars of economic activity to throw away? 

The Port Authority brought together a number of aviation interests, but more significantly, brought together leaders in the business, labor and civic communities. The National Alliance to Advance NextGen is composed of nearly 100 organizations representing millions of people. ACI-NA is a member of this coalition. 

That is critical. Failure to do something about this issue has an enormous economic cost. But participation in this debate has been limited to aviation interests. By expanding the universe, the Port Authority has performed a valuable service by demonstrating the true economic cost of inaction.

An Aviation Gentlemen Retires

The conclusion of this week will also mark the retirement of one of the industry’s great airport managers and one of its true gentlemen, Don Smithey.  

Don runs the airport in Omaha, Nebraska, and has done so since 1989. During that time, traffic has doubled, and he has managed to attract and retain service from Southwest Airlines.

"Dance of the Cranes" at Omhama's Eppley Airfield entrance

"Dance of the Cranes" at Omaha's Eppley Airfield entrance

Doing that means that inflation adjusted prices out of Omaha are actually far lower than they were in 1989, a difficult feat for a mid-sized city like Omaha. Don has also invested heavily in improving the safety of the airport. 

Don has also mentored a number of impressive airport professionals over the years including Brad Livingston, who now runs the airprot in Madison, Wisconsin and Steve Coufal, who will take over from Don next week. 

When I was in state government, it was a truism that the companies we tried to recruit to come to our state wanted to know about two things:  transportation and education.   don’t know much about the education system in Omaha and in Nebraska, but, now that I know Don and the work he has done, it is no surprise to me that so many businesses have located in Omaha.  Susie Buffett (yes, from THAT Buffett family) is on the airport board out there. 

A number of years ago, I helped put on a conference in Omaha sponsored by ConAgra, a major agricultural and food company. The CEO of ConAgra was there, as was then-Nebraska Gov. Kay Orr – all for our little conference. But what I recall was the spirit and energy of the place. I didn’t know Don then, and that conference would have occurred early in his tenure. But given what I know now, it is clear that Omaha is the kind of place where the community works hard together to make it a better place, and that Don Smithey was right in the middle. 

Don will retire to his place in Iowa, but has assured me that he will actively follow events and trends in our industry. I will miss his support and his active involvement and wish him all the best.

Who Wants to Invest in Infrastructure?

The National Governors Association (NGA) is meeting in Washington right now.  When I was in state government in Virginia, I was very involved in these meetings and I know the three-day NGA Washington meeting is among the most substantive and important on the calendar here in D.C. 

Obama hosted the nation's governors at the White House Sunday evening. They take up the stimulus and other issues today.

Obama hosted the nation's governors at the White House Sunday evening. They take up the stimulus and other issues today.

The meeting comes just days after the President signed the stimulus bill.  On Saturday, the governors held a debate on infrastructure investment, sponsored by the University of Virginia’s Miller Center.  I had dinner the night before with former Virginia Gov. Gerald Baliles, my former boss who is the Director of the Miller Center and who persuaded Pennsylvania Gov. Ed Rendell to hold the debate.  Rendell is chair of the NGA.  That event, part of the Miller Center’s debate series, will air on PBS sometime in the next few weeks.  There is a lot of talk at the governors’ meeting about investment in infrastructure. 

As I was preparing earlier this week for a presentation to the board of directors of Jacksonville Airport Authority, I thought a lot about the NGA and the infrastructure debate. I thought about the work I have done on this topic over the years, including one high level commission in 1992 that recommended more than $10 billion in new infrastructure spending annually (over and above what was already authorized) — and was criticized for being TOO TIMID!  Times have changed. 

Aviation is the transportation mode that is best able to generate its own investment, whether from the ticket tax, from the passenger facility charge (PFC), from airport bonds, or from airport revenues.  Yet, incredibly, our users, as represented by the airlines oppose generating resources for investment.  To me, this is incredible!   I have never met a passenger who feels we have more infrastructure than we need, but airlines have largely succeeded in pushing the passenger out of the way in this debate. 

Airports do not need new general tax dollars to invest in our nation’s economic future.  (Though the general fund should support more of the FAA’s operating budget than it does now, but that is the subject for a future piece).  Airports are ready to go.  Congress, by allowing more bond financing in the stimulus bill, has already made a start, and can go even further by raising the limit on the PFC user fee (local money that is project based and does not support a bureaucracy). 

I was on a flight last week and was told I could have a blanket — for $7!!  It came with ear plugs and eye shades and a drawstring bag with the airlines’ logo on it.  And the airlines don’t want Congress to add $2.50 to the PFC limit to build runways, taxiways, terminals and other important infrastructure.  Is there a group of passengers out there who really believe we have all the infrastructure we need and has been pushing for that $7 blanket bag?  I doubt it.

An Airport Victory

Friday night, Congress finished work on the economic stimulus package and sent it to President Obama for his signature. We all hope it has the desired effect of stimulating economic activity and creating jobs. recovery_webshot

Infrastructure investment is an important part of the package — and that includes aviation. 

The package includes $1.1 billion in new Aviation Improvement Program (AIP) funds. This new money will not require a local match, which is important with so many communities hurting financially. It is important to note that $1.1 billion represents 33 percent of a full year’s AIP program. While the House had proposed more, this is not an insignificant sum and it can be spent quickly and effectively on job-creating projects of importance to our air transportation system. 

It also includes $1 billion for new security equipment to screen bags and passengers. 

Critically, the package also includes relief from the Alternative Minimum Tax for private purpose bonds issued over the next two years and also allows non-AMT refunding of AMT bonds issued over the last five years. 

Incredibly, many airport bonds are treated as private purpose bonds rather than public purpose and so are subject to the AMT. Most people would see airport projects as public purpose but many of our bonds are not classified that way. 

One of our top priorities at ACI-NA the past 3 years has been to change this and the stimulus package gave us the chance to make something happen. ACI-NA arranged sponsors in both Houses and worked with our members to ensure leadership support. 

We will continue to work on the ultimate goal of removing all airport bonds from the private purpose classification, but this provision is huge news for the traveling public and for all aviation stakeholders. 

The story is not over, of course. We continue to press for a long term Federal Aviation Administration (FAA) reauthorization bill that increases the Passenger Facility Charge (PCC) to permit needed investment in infrastructure and helps move us closer to true air traffic control modernization. 

ACI-NA just completed a capital needs survey and I will write more about that in the future. Suffice to say that it shows tens of billions in needs over the next five years. Anyone who has flown at any point in recent years knows our infrastructure is not yet adequate to the demand. Our study shows that in detail.

But in the meantime, this was a good week on Capitol Hill for aviation and we will continue to work to make it better. 

Here’s a quick addendum: 

I was having a very nice Valentines dinner with my wife on Saturday and she told me about a story that she had read about what some airports were doing to promote love and domestic bliss around the country. 

She told me that Denver would arrange for travelers’ Valentines Day greetings to be postmarked from Loveland, CO.  Phoenix Sky Harbor was handing out heart-shaped cookies while La Guardia was giving out chocolate hearts. 

Traveling can be a difficult experience, especially around a special occasion or holiday. These are just the latest examples of airports’ Passengers First Commitment.

Remembering Continental Connection 3407

Like all of us, I woke up Friday morning to the news of the Continental Connection crash in Buffalo. It is a horrible, heartbreaking story. The human costs can’t be calculated, they go wel beyond the numbers

Continental Connection 3407 - a Bombier Q400 - crashed into a house on approach to the Buffalo Niagara International Airport.

Continental Connection 3407 - a Bombardier Q400 - crashed into a house on approach to the Buffalo Niagara International Airport.

involved. I believe in prayer and all involved will be in mine.

At times like this it is always important to remember, as well, that the work of finding answers to why this happened is difficult and does not move at a pace most people find satisfactory. But finding those answers is critical, such work in the past has saved the lives of thousands as answers have been found to such problems as wind shear and controlled flight into terrain. And training has developed to the point that a plane can be “landed” in the Hudson and everyone gotten off.

I was watching ABC News last night when I got home from work because I knew they would cover it and I knew their aviation reporter, Lisa Stark, would put together a report that included critical information and perspective — which is exactly what she did. She, and her many colleagues who do the same, also provide a service to a public desperate for answers.

In this case the evidence seems to lead in a certain direction. Analysis will determine whether that is correct. And a lot of hard work will help find answers that might keep this from happening at some point in the future.

An Au Revoir, A Farewell and a Good Riddance

Au revoir to Charlie Isdell who was airport director in Philadelphia. Charlie did an excellent job in a very tough place and was well-regarded. He earned the plaudits sent his way by the mayor of Philadelphia.

Charlie Isdell

Charlie Isdell

I spoke to Charlie last week and he wants to become a teacher. He will spend the next few months on his student teaching before pursuing his new career. As someone who wants to teach later in life myself, I will probably be back in touch with him down the road a bit. Good luck to you Charlie.

Farewell to Larry Nagin who died this past week. I knew him as general counsel at United. He worked for a number of other great names in aviation such as Flying Tiger. He was also counsel to the airports in Los Angeles during the turbulent 70′s. We could use his perspective right now. RIP.

And good riddance to fomer Illinois Governor Rod Blagojevich. I was overseas when news of his arrest broke and it is hard the describe the embarrassment that comes with that.

I once worked for someone I think was among the best governors the country ever had and got to know and observe many of the nations governors during the golden period of governors in the 80′s including then-Illinois Governor Jim Thompson. A guy like Blaegojevich doesn’t belong in the same room with any of them.

I also follow Illinois politics closely as I once lived there, got married there, and all my in-laws live there. I have been around such people as former Senator Chuck Percy, former Congresman Bob Michel and his successor current Transportation Secretary Ray LaHood. The late Senator Paul Simon is one of my real political heroes and someone who helped me directly when I came to Washington.

I love history and have read of such giants as Senators Paul Douglas and Everett Dirksen. And, of course, the greatest of all, Abraham Lincoln.

Illinois has some problems to work out, but this guy obviously has no respect for his office, his state or the people he represents. The “press conference” he gave after his conviction was disgusting. Good riddance . . . and get a haircut!