The Economics of Meeting Planning

I’ve started to see stories in the press about federal agencies and others cutting way back on travel and meetings, along with possible bans on travel to certain cities.  Las Vegas and Orlando are mentioned fairly regularly.
Now I worked for lots of politicians and I understand the value of political symbolism.  I also understand the damage the wrong kind of picture taken in certain places can cause.  But this is just plain gratuitous.
Our economy depends on lots of different kinds of jobs and activity.  It might be news to certain folks, but some of those jobs and some of that activity occurs in places like Las Vegas and Orlando. I remember watching the unfolding Nevada Caucuses last year and seeing all those hotel workers going in to vote for Barack Obama or Hillary Clinton (a few voted for John Edwards, I guess).  I doubt very many of them made big money; they were doing the best they could to support their families.  Those are the people who will suffer if we gratuitously remove places like that from hosting meetings.
One more thing:  we have found that rates for meeting facilities and hotel rooms are quite reasonable in those two cities.  We will be holding conferences in each of them in 2010.  Our organization will save, our members and attendees will save, and those who live and work there will benefit.
I wrote a piece earlier this year about my late father-in-law.  One thing his son said during his eulogy was that my father-in-law always made a point to talk to the staff at the various hotels he visited; he was friendly to everyone, he cared about everyone.  Perhaps the people who are making rules such as this ought to take a page out of his book and look into the eyes of the people they will be hurting.

Health Care Reform

Lots of news in Washington today.  Looks like a bipartisan group of senators on the Finance Committee are moving toward a deal on health care legislation. It also looks like House Democratic leaders have a deal with Blue Dog Democrats.

So, perhaps we may get somewhere on health care.  I must admit I don’t really understand health policy, I worked on it during the four years in the mid-80’s when I worked for Sen. Biden but always struggled with it.  I don’t know what the answer is, but I am pleased that members of different ideologies are working together on this.

That’s the way it should be, our system works best when this happens. That’s what the Founders intended. I commend all the members of both parties who are working so hard on this.

I also commend members of both parties who are working on FAA Reauthorization.  Some of the best members of both houses of Congress are working on the FAA bill and I am confident we will have a result….eventually. And as I said in a recent blog post on National Journal, an FAA Bill would be an economic stimulus bill.

One final note.  I see that Sen. Schumer wants to outlaw texting while driving.  I agree. You shouldn’t text while you drive. That’s what red lights are for!

Energy . . . Still . . .

I am reading an interesting new book by a fellow named Richard Haass called War of Necessity, War of Choice.  As you might guess it is about the two wars we have fought with and in Iraq.  Haass is one of the nation’s top foreign policy thinkers and was a key part of both Bush administrations and of both decisions to go to cover

I just started the book and am still in the section that deals with Desert Shield/Desert Storm in 1990/1991.  The scene is early August, 1990; right after Saddam Hussein’s Iraq invades Kuwait.  The United States has decided that the invasion cannot stand and has gone to the United Nations for backing.  A group of policy makers is meeting to plan for the various Sunday morning news shows that will be interviewing administration officials.  They are game planning for the questions they will get and going over suggested answers. 

Haass throws this one on the table:  A primary policy goal of the United States is continued access to Persian Gulf oil.  Why does the United States still have no energy policy? 

Haass reports a moment or two of silence, then nervous laughter.  “Good question!” says one participant. 

Of course, that scene can be replicated today, or any of the thousands of days since 1990.  I wrote about this topic a lot last summer when gas was over $4 a gallon.  When I drove across seven states the other day in a truck I saw prices between $2.25 and $2.50.  There is simply no clamor for any action on energy now, and with health care taking up all the oxygen in Washington (with climate change to follow) we will not see any action on energy for a long time to come. 

A year ago when the price was starting to come down, an oil analyst Peter Beutel was on the radio saying that he thought the price would go to $37 (he nailed it), that people would lose interest (he nailed it), but it would start to go back up (he nailed it) and would eventually go to $300 or so a barrel (ohhhhh noooooo).  And, then we’d really be in the soup. 

High and unstable energy prices hurt airlines and airports alike, and were the leading edge of the economic problems that have reduced air service to so many communities these past several months.  A year ago I wrote about being in the Gerald Ford museum in Grand Rapids and seeing an exhibit on this issue and listening to a Ford speech on energy.  It is really hard to believe we’ve done so little since that time.  But it is easy to believe we will do nothing any time soon.  Unfortunately.

St. Louis . . . and Beyond

The ACI-NA Small Airports conference wrapped up in St. Louis last Friday.  As I wrote last week, those men and women who run our smaller airports are knee-deep in every issue.  They also keenly feel the impacts of economic changes, as well as the increased costs of regulatory mandates; since airlines are increasingly conscious of costs and anything that adds costs for airports or airlines puts their air service in peril.  We are in a tough time. 

Government can do a few things.  Congress can pass a multi-year FAA reauthorization bill so we can avoid having any more short term extensions.  When the authorization is extended on a short term basis, the FAA can only make infrastructure grants on a piecemeal basis.  This makes planning impossible, especially for smaller airports that depend heavily on federal grants for their capital budgets. 

The government can also pay closer attention to the cumulative costs of the regulations they issue.  Each regulation, on its own, carries a cost that can be borne, but on a cumulative basis it is much tougher, especially for smaller airports. 

When I was in state government, our governor and legislature raised revenue to invest in transportation infrastructure, including airports.  A fair amount of that money went to airports in smaller communities.  Whenever the governor would talk to a company about investing in our state they always had two questions:  how is the education system and what kind of transportation links do you have.  Judging by the success we had, it seems like those are the real keys to economic development. 

missouri-busch-stadiumA couple of random points:  went to a game in the new Busch Stadium, my first time there.  What a great stadium.  Lots of food choices.  Two home runs by Albert Pujols, the best player in baseball today.  And they make great use of the arch, the old capitol and the rest of downtown St. Louis to give you a real feel for where you are at the ballpark. 

After attending a family wedding and visiting some family in Champaign, Ill., we drove a truck filled with family heirlooms back 14 hours through 7 states.  Saw lots of road work being done, some with stimulus money (according to the signs). I thought about the fact that nearly every penny of the airport money in the stimulus package is already spoken for; making it among the most effective and efficient parts of the stimulus package.  When you combine that with the tax changes enacted in the stimulus that freed up the market for airport bonds, you’d have to say that airports really are a stimulus success story.  

Now, just think about the all the infrastructure that will be developed and JOBS that will be created, when the Congress passes a long term FAA reauthorization — with an increase in the passenger facility charge, the SINGLE MOST EFFECTIVE AND EFFICIENT USER FEE IN AMERICAN TRANSPORTATION TODAY.

In St. Louis talking with small airports

I’m writing from our Small Airports Conference in St Louis. We have nearly 70 attendees with airport directors or senior staff from more than two dozen different airports. That’s one sixth of our total membership!  We have some non-members as well. 

Smaller airports are facing enormous challenges today. st louisAirlines are pulling service from communities all over the country. Cost concerns are especially acute at smaller airports which have to meet all the rules and regulations faced by larger airports with far fewer resources and staff. 

Over these two days we will be talking about almost any issue you can imagine. Security, environment, IT, human resources, operations and fuel supply are all on the agenda. The men and women who run smaller airports deal with each of these and more, day in and day out. 

Right now we are talking about customer service among other things. As airlines have pulled back from caring for their customers, airports have had to fill the breach. One speaker just pointed out that discussions with two major carriers recently revealed that their goals are to not have to ever deal with 85 percent or more of their customers. They want those folks to check-in online or at a kiosk, drop or carry on their own bags and all the rest by themselves. It is hard to imagine another customer service business where the company has such a goal. But that’s the way it is in today’s airline industry. 

All of this increases pressure on airports. I often say that airports are the public face of aviation in their communities. In many ways, that is magnified in smaller communities. Airlines can fly their main asset 500 mph away from your community, but the airport remains, working to attract competitive air service while having to maintain and improve current infrastructure. That is proving increasingly difficult for smaller airports, requiring all of us to think anew about the future of our industry. I will be writing more about this topic in the near future.

Thinking snow and ice in July

Still in Brussels,  but I saw the Aviation Daily story on the deicing management conference ACI-NA organized in Cincinnati together with two major passenger airline associations, the Air Transport Association and the Regional Airline Association

Decing in Detroit.

Deicing in Detroit.

Deicing is a very important matter for anyone traveling in the colder months. The Environmental Protection Agency (EPA) will be publishing draft regulations (effluent limit guidelines) on management of the runoff of deicing fluid later this year. 

This is an issue ACI-NA has worked on for years, and we have made a special effort to work closely with the airlines. We are working to educate EPA and the Office of Management and Budget on the practical problems that must be taken into account in any rule. We certainly don’t want a rule that puts impractical limits on how aircraft are deiced: that decision must be based on safety needs. 

We hold this annual conference, work so closely with airlines and spend so much money on this issue (six figures) in order to help inform and shape an outcome that enhances the environment while ensuring safe operations at our airports. 

So, on a warm July day, in one of my favorite European cities, deicing is on my mind.

Brussels Day 2 and the EU

Day 2 in Brussels brings back memories of my first ever visit here, 20 years ago nearly to the day. I had helped organize a National Governors Association trip here. The Europeans were mildly disappointed that then-Governor Mike Dukakis didn’t come as he had been the Democratic nominee for president the previous year. The importance of the fact that then-Governor Bill Clinton was on the trip was not yet apparent. 

Had breakfast this morning with Daniel Calleja. He is looking for a way to make progress in the US-EU aviation relationship and we discussed some of his ideas. We also discussed security and environment among other issues. 

Remember my great chocolate debate from the trip in December? Went with Mary’s this time.

Remember my great chocolate debate from the trip in December? Went with Mary’s this time.

Many of the issues faced across the Atlantic are similar, as are the political dynamics. There are differences in approach but we should ultimately have a much more open, liberal, air service relationship. And hopefully we will one day have a single US-EU perimeter for security and facilitation. 

Almost forgot, went back to Mary Chocolatier. You might recall I tried Pierre Marcolini last time. It was excellent. But I did feel I owed Mary another visit, and it was more convenient to where I was staying.