What a Week It Was

This past week was really something. 

On Monday, the Senate passed, by a vote of 93-0, its version of the FAA reauthorization bill.  This is the first time since we began working on this that both houses of Congress have passed the legislation.  In a meeting in his office just three weeks ago, Senate Majority Leader Harry Reid told me face-to-face that he would bring this bill up and we’d get it passed.  He was right! 

On Thursday, the House had to pass (again) their version of the bill so a conference can begin.  We are hopeful conferees will be chosen soon, that we can get an agreement (that includes the House-passed passenger facility charge number and does not include any newly mandated FAA regulatory action to change an already safe and effective Aircraft Rescue and Firefighting regime). 

On Monday, I spent time (along with our Executive VP for Policy and External Affairs Debby McElroy) with Sue Baer, the Aviation Director for the Port Authority of New York and New Jersey in her offices in New York City.  Sue is the first person to have been the airport manager at all three major New York Area airports (JFK, LaGuardia and Newark) and then to have been appointed aviation director for the Port Authority.  She has more on her plate than is possible to describe or contemplate, but she has the talent and the team to tackle all those challenges.  The chance to spend so much time with her was invaluable. 

Grant's Tomb, I have now been to 22 of the 38 presidential gravesites.

While in New York, I had the chance to find out who is buried in Grant’s Tomb (President Grant, and Mrs. Grant).   I have now been to 22 of the 38 presidential gravesites. 

Wednesday morning, I flew to Sacramento for a meeting of the board of the newly formed California Airports Council.  The council includes all of California’s 30 commercial service airports.  We met with state legislators and staff, and I also made a presentation to the council’s board.  After the meeting, I spent some time with the council’s Executive Director, Jim Lites.  California airports see more than 10 percent of the take offs and landings that occur every day in the United States, so their collective voice is important.  The council also includes current, former and future ACI-NA board members such as our current chair Hardy Acree (Sacramento), past chair Gina Marie Lindsey (L.A.), current second vice chair Thella Bowens (San Diego), John Martin (San Francisco), Bill Sherry (San Jose), and Russ Widmar (Frenso).  We discussed a great many issues impacting the entire industry during my two days there, and I was also able to give them updates on House considering of the FAA bill as they occurred during their board meeting. 

On the way out to Sacramento, I had a layover in Denver and was able to spend time with Kim Day who runs the Denver airport.  Kim is also on our board of directors.  She once ran LAX and is an experienced and effective airport leader.  It might also interest you, (and you might have noticed reading this) that the directors of some of our nation’s largest airports/airport systems are women:  Sue Baer (Port Authority of New York and New Jersey), Gina Marie Lindsey Los Angeles World Airports and Kim Day (Denver) have already been mentioned in this post, and you can add Rosemarie Andolino who is the Commissioner of Aviation in Chicago and is responsible for O’Hare and Midway.  Angela Gittens, former Director in Atlanta and Miami, is current Director General of ACI World. The glass ceiling has been breached in the airport business, to the benefit of travelers everywhere. 

So, our major legislative priority made great headway, I was able to visit with nearly two dozen members, and spent time in New York and Sacramento (they have a beautiful state capitol building, by the way).  I settled into my seat on the plane in Denver on Friday, looking forward to a pizza and beer and the NCAA tournament when I got home, when the pilot made an announcement that joining us on the flight to Washington from Denver that day would be the body of a young soldier killed in the service of our country (a Private First Class McElroy, I believe).  He would be going home to a very different reception, and would be going home for the last time.  The feeling I had about this can’t be described.  And on my drive home from the airport, I found myself in a group of cars traveling behind his hearse and escort on the Dulles Access road.  I certainly felt honored to have been there, and I hope all of you will say a little prayer for this young private, his family and all those serving our country and their families.

Fegan, Piccolo Won Tops Honors from ARN

I’ve returned from Houston and the 2010 Airport Revenue News conference.  It was my honor at the awards banquet to present the award for Best Director of a Large Airport to Jeff Fegan of Dallas-Fort Worth.  Jeff is not only a very nice, engaging, person; he is also a great leader and it was a real honor for me to be asked to make the presentation.  I can say all the same things about the Best Small Airport Director winner, Rick Piccolo of Sarasota.

A large number of awards were presented to airports and concessionaires.  Toronto, JFK and Ottawa were airports that won a large number of awards.  I’m sure the representatives from those airports incurred a weight penalty when they tried to bring the actual trophies home!  Paradies, Hudson and SSP were among concessionaires who won multiple times. 

Airports and their concessionaires have done a great job of finding new and innovative ways to serve the traveling public.  Their roles are magnified during delays and flight cancellations, when passengers are forced to make the airport their temporary home. 

Houston’s Bush Intercontinental has an excellent array of food and retail offerings.  I had breakfast at Real Food; some of the best blueberry pancakes I ever had!  And their music selection was good too. 

When I returned to D.C., I found the FAA reauthorization bill still on the floor.  We are told a final vote is possible Monday night, after which the Senate and House will conference together and, we hope, a final version will be agreed.  As I’ve said in this space before, Congress will have few, if any, other opportunities to promote job creation with no impact on the federal deficit this year. The FAA bill does all these things. 

Finally, please don’t forget to go to www.greenbeanscoffee.com/coj to by a cup of coffee for a service member overseas, and perhaps write them a note of thanks too.  And, if you’d like to contribute to a relief fund we and the American Association of Airport Executives have organized to benefit airport employees in Haiti and Chile, please go to www.aci-na.org and click on the link.

The Directors Panel at ARN

I’m in Houston for the annual Airport Revenue News Conference and Exhibition. They have a good crowd this year, and the overall mood here, I think it is fair to say, is one of cautious optimism. Though the emphasis is more on the first word than the second. 

This conference is heavily geared to airport concessions and the main players in food, beverage and retail are all here. As I told the crowd this morning when I moderated a panel of airport directors, it is airports and their concessionaire partners who have really stepped up to the plate to fill the customer service needs of our passengers — needs filled in earlier and better times by airlines. So, it is great to be able to spend time with these folks. 

On the directors panel we had Ben DeCosta (Atlanta), Steve Grossman (Jacksonville), Jeff Fegan (Dallas-Ft Worth), Eric Potts (Houston), Brad Penrod (Pittsburgh) and Lou Terpin (former director at Toronto and San Francisco). These gentlemen are excellent representatives of an industry that is as good at meeting a challenge as any I have ever seen. All expressed concern about security and wondered if we will ever be able to break free from a mindset that has us reacting from crisis-to-crisis. They all talked about customer service demands and how much more business-like the airport industry has become. There was general agreement that airport privatization will become somewhat more prevalent, with all but Potts saying they thought there would be more than six airport privatizations in the U.S. in the next decade. 

As I mentioned, this conference is heavily geared toward concessionaires. I wanted to mention one in particular; because they are doing something that I think is pretty neat. Green Beans Coffee, which has a presence on many overseas military bases (11 in Afghanistan alone), has a program called Cup O’ Joe for a Joe. You can buy a cup of coffee for a soldier and also send a note of thanks. A portion of the proceeds is donated to charities that help military families and their children. Go to greenbeanscoffee.com/coj to learn more. 

And, if anyone knows about another company doing good work like this that I can highlight in a future post, please let me know

FAA Bill Nears Vote in Senate

The U.S. Senate has brought the FAA reauthorization bill to the floor.  We still have a ways to go before the bill is voted on by the full Senate, and before a conference with the House yields final legislation that can be signed into law by President Obama.  But I feel like we are as close as we’ve been since this process started more than three years and eight extensions ago. 

FAA Administrator Randy Babbitt made an excellent argument in his speech to FAA’s annual Forecast Conference on the need to invest in aviation infrastructure, and John Infanger, one of the best aviation journalists, wrote an excellent blog on the same subject.  For the life of me, I just can’t understand those who say the correct response to our air transportation challenges is to reduce our investment in infrastructure.  Just doesn’t make sense. 

The purpose of air transportation is to move people and products to destinations and markets.  When I worked in state government helping the governor sell Virginia as a place to do business, that was always a big selling point – and businesses responded (400,000 jobs were created in Virginia during those four years).  It has been a fact of economic life since the earliest days of human existence:  when you can transport goods and people to destinations and markets, you promote economic activity and job creation.  Economic activity and job creation place even more pressure on the transportation system.  When you improve your infrastructure, more jobs are created, and it goes on and on throughout the entirety of human existence.  Those who argue otherwise might as well argue against the laws of physics. 

This bill will lead to the creation of more than 360,000 jobs over its life (assuming the House provision on the Passenger Facility Charge is accepted in conference); and the preservation of tens of thousands more.   By improving our infrastructure and by improving air traffic control, it will make our economy more efficient and help the environment.  And, because the airport grant program is already paid for and the PFC user fee is a local fee, spent and collected locally, all this will be accomplished without increasing the federal deficit.  We can leave our children and grandchildren an air transportation system worthy of the 21st century that will promote job creation and opportunity for them, and leave them a cleaner environment.  And, we can do this without adding to their debt burden. 

Man, I’d like to be a politician delivering THAT speech to my constituents after having voted for this bill.

The FAA Bill — A Jobs and Deficit-Reduction Bill

The FAA released their traffic forecast this week.  They say that traffic will begin to turn the corner this year and then trend upward at about 2.5 percent a year afterwards.  I think they are right; I hope they are right – most importantly, we need to plan as if they are right. 

I remember a time when FAA forecasts were routinely exceeded by actual performance.  In the post-9/11 world; in the post-Great Recession world, all bets are off – if this was Las Vegas they wouldn’t even set an “over-under.” 

It is worth remembering, though, what things were like right before 9/11; and what things were like right before the “Great Recession.” 

Before 9/11, we were approaching three-quarters of a billion passengers.  The media was cluttered with stories about delays and congestion – problems that had been festering all decade and had finally broken out into a full blown crisis.  There were lengthy tarmac delays and passengers who were upset.  This was about the time airlines finally discovered the importance of the air traffic control issue (sorry, couldn’t resist).  There were people on Capitol Hill calling for a greater effort; indeed, the Passenger Facility Charge (PFC) user fee limit was increased in the FAA reauthorization bill, as was the Airport Improvement Program (AIP).  It wasn’t going to be adequate to meet the demand, but it was a good start. 

The 9/11 attacks changed a lot of the calculations and the timing, but did not change the basic fact that this nation does not have the aviation infrastructure it needs.  When traffic rebounded back toward the three-quarters of a billion mark, we saw many of the same problems we saw in 1999-2000:  delays, congestion and passenger service issues.  ACI-NA launched the industry’s push for an increase in the PFC user fee limit to account for construction cost that had eroded half the user fee’s value since 2000; as well as for legislation to change the tax treatment of airport bonds. 

The financial collapse and the recession that followed have reduced traffic, but have not changed the basic fact:  our aviation infrastructure is not adequate to meet the demands our economy places upon it.  We were able to get a provision into the stimulus bill providing for a two year holiday on the tax treatment of bonds, but we want to make it permanent.  More importantly, we are working hard to get a new FAA reauthorization bill passed. 

We estimate (and this is a conservative estimate) that the AIP provisions that are in both the House and Senate versions of this legislation will create at least 80,000 jobs in the first year; and that the PFC provision in the House bill will create at least 40,000 in year one.  This is on top of the tens of thousands already created by the changes in tax treatment of airport bonds (1,600 in Las Vegas and 1,200 in Sacramento alone, for example).  And you know what?  This all happens WITHOUT INCREASING THE FEDERAL DEFICIT.  (AIP is all paid for by revenues already in place, and the PFC is a local fee).  I can’t think of another single item on Congress’s “to-do” list that meets this test.  The creation of hundreds of thousands of jobs, without increasing the deficit, over the life of this bill – indeed the taxes paid by the workers in those jobs that are created will make this a net reduction of the deficit.  Read that sentence again.  Wow.  And it is even better if we can couple that with a permanent change in tax laws on the treatment of airport bonds. 

Jobs are “Job 1” in Washington right now.  The federal debt and deficit are next in line.  There is NOTHING Congress can do right now that more effectively addresses both issues as impressively as does passing FAA reauthorization. 

We met with Senator Harry Reid last week and it looks as if the Senate will consider this legislation soon.  I am confident a good deal can be reached between House and Senate negotiators and we can get a bill signed into law. 

If someone can show me any bill that can creates hundreds of thousands of jobs, does not increase the deficit, and even reduces the deficit and the debt; I’d like them to do so.  Simply put, there aren’t any.  This is the best shot there is.  Congress, and the administration, ought to take it, right now.

Update: Please take a moment to read Airport Business’ John Infanger’s latest blog: “Slowing Down is a Mistake.” He concludes: 

“FAA does a good job each year of providing a barometer of where the industry is today and where it’s headed. The fact that many in Congress have come to the realization that ongoing NextGen investment is critical is encouraging. Now if we can just get the legislators to recognize that long-term system reauthorization is just as critical.”

Round Two: What Delta is Not Telling You?

Received an interesting response to my post on Richard Anderson’s poor attempt at propaganda published in the Delta in-flight magazine, Sky. 

Delta collected more revenue from its luggage fee in the 3rd quarter than any other airline.

Steve Denes points out that not only is Mr. Anderson mired in the past but that he conveniently left out the billions of dollars airlines make in fees for checked bags, changing reservations, seat selection, food and beverage, blankets and pillows and so on. 

Indeed, Anderson’s fictional person traveling on a $300 ticket (I’ve personally made four domestic reservations since Jan. 1 and only one was that low, but I digress) might pay $100 to check two bags, pay for food, a pillow and may pay $150, if he had to change his ticket.

Now I have no problem with airlines pricing their products this way personally, but as Mr. Denes points out, this has a policy ramification. Those fees are not subject to the federal ticket tax, reducing resources available for air traffic control and infrastructure. 

As I pointed out in my post, the airlines Mr. Anderson has worked for are known for doing all they can to stunt competition. A demonstrated lack of interest over the years in investing in infrastructure and air traffic control has yielded a system that restricts competition, as does his demonstrated interest in exerting as much control as possible over the running of airports served by his airlines. 

Mr. Anderson is free to say whatever he wants and he is under no obligation to ensure that what he says is correct or consistent. 

But next time you are sitting in a delay, or lament the lack of competition on a particular route, I hope you will look on his statements and others like it, in a different way.