Another Airline Tax…er…Fee

I saw an article in USA Today about yet another tax…er…fee imposed by the airlines.  This one is a tax…er…fee of anywhere between $10 and $30 for travel during “peak” times.  

Click for day-by-day, airline-by-airline 'peak' surcharges.

You might be interested to know that “peak” includes essentially every day of summer except for July 4.  So, if you want to go on a summer vacation, in addition to the $480 of extra taxes…er…fees imposed by the airlines for each person in a family to check a couple of bags; this fee would add an extra $240 for a family of four if you want to travel…I don’t know…during your summer vacation.  $720:  To bring some clothes and travel during your summer vacation.   

Yet, they fight a $2.50 increase in the allowable passenger facility charge ($20 – $40 for a family of four, depending on whether there is a connection or not).  That $2.50 would go toward runways, taxiways and terminals to make travel safer, more secure and more efficient.  

The bag and peak fees?  What do they go for?

From ICAO’s Air Navigation Council

Bonjour!  I’m in Montréal where the ACI World Governing Board has just completed its semi-annual meeting. 

John Clark (former ACI-NA chair and CEO of the Indianapolis Airport) and I in the chamber that houses the ICAO Air Navigation Council.

Montréal is the home of the International Civil Aviation Organization (ICAO). This United Nations organization sets and oversees global standards on such matters as noise, emissions, safety, technical and operational issues and other matters. Its members are more than 190 countries. Airports Council International is the officially accredited airport representative to ICAO. 

Prior to the board meeting a number of us met with the U.S. representatives to ICAO, as well as with the ICAO secretary general and president of the ICAO Council. ACI staff and members from other countries met with their nations’ representatives to ICAO. 

It is critical that airports have a voice here and as the global voice of airports, ACI plays a critical role in promoting a safe, secure and efficient air transportation system on a global level. 

The role of ICAO and the fact that aviation is a truly global business often get lost in the hurly burly of everyday life. But a truly effective international air transportation system would be impossible without the work done here and ACI’s role ensuring airport (and passenger) interests are taken into account, is very important. It is also a factor that helps make ACI truly unique among aviation organizations.

A Visit to the Green O’Hare

I’m up in Montreal, one of my favorite cities, at a meeting of the ACI World Governing Board. I’ll have more to say about this trip next time. But I promised that I would write about my trip to Chicago and tour of their sustainability project. 

Chicago Aviation Commissioner Rosemarie Andolino and Greg on the green roof covering the new FedEx building at O'Hare.

Along with this post is a picture of me with Chicago Aviation Commissioner Rosemarie Andolino on the green roof covering the new FedEx building at O’Hare International Airport. This is the largest green roof at any airport and is very impressive. 

You might know that O’Hare has been engaged in a huge airfield project, re-building and re-aligning runways and taxiways, building a new tower, moving a 90 inch water main, moving a cemetary, moving a rail line and so forth. A huge project. 

One of the most interesting things about this is that Chicago has pursued it using a set of sustainability principles that they have worked to develop and implement. It is a very impressive effort. They have also engaged the assistance and involvement of airports around the country to share their views, experiences and best practices. As I said, a very impressive and interesting effort. 

You ought to go to the O’Hare project’s web site and check it out.

There Is Not Enough Intellectual Honesty Today

I just got back from Chicago visiting with Aviation Commissioner Rosie Andolino and her staff. I had planned to write about the tour I had and the sustainability initiatives they have undertaken. Then, I saw the ridiculous letter written by airline CEO’s to Congress opposing the PFC. So, I will write about Chicago in my next post 

I am always amused by airline arguments on this issue. I have previously written that any sane person would conclude that PFCs are a financing mechanism that airlines should embrace. Their shortsightedness on this just amazes me; they are arguing against their own interests. 

If the letter was just the normal illogical nonsense I wouldn’t have raised an eyebrow. But the letter was filled with untruths and I have to say something.

For one, the letter says the House bill’s proposal to add $2.50 to the PFC would place an additional $112 on a trip for a family of four. This is not true. (See my Letter to the Wall Street Journal.)

Simple math:  add $2.50 on each segment of a roundtrip. That’s $5 per person; $20 for the family of four. If there is a connection one or both ways it would add an additional $5 per person, $20 for the family. So, at MOST, an additional $10 per person, at MOST a total additional of $40 per family. 

Hey, that’s not even enough to cover a second checked bag at most airlines, not even enough for ONE PERSON to carry on ONE BAG on Spirit Airlines. 

The PFC all goes to projects to improve infrastructure and promote competition. (Which is a reason airlines hate it, inadequate infrastructure is a barrier to entry and impedes competition.) The bag and other taxes charged by airlines ($7.8 BILLION taken in by airlines in 2009) don’t go to anything that serves the passenger, but that airline-charged money goes to million dollar executive bonuses. 

The airline letter also says that airports have “up to” $21 billion in unrestricted cash. They know this is not true, we are working with the FAA to better define this item and the airlines have been part of the discussion. The true number is a fraction of what the airlines claim. They are counting on the fact that it is too hard to explain and so they are trying to get by with this. Saying airports have “up to” $21 billion is like saying my vertical leap is “up to” 36 inches. I guess that’s not a lie, but it isn’t intellectually honest either. 

Part of the problem in Washington today is that there is not enough intellectual honesty in our debates. This letter is a good example of that.

Reflecting on Jefferson and Transportation

Thomas Jefferson's restored retreat house at Popular Forest

I’m back in Washington after my short tour of The Commonwealth (in Virginia, we just call it “The Commonwealth”).  Touring Jefferson’s Poplar Forest was just fascinating.  He wanted a place he could “read, think and study.”  Poplar Forest is a great place to do just that.  They are working on further restoring the house and I look forward to visiting again.  My wife also bought three boxwood plants that were grown there, which she will plant and attempt to grow at our house (thereby establishing some sort of link between us and Jefferson). 

I did find myself wondering a little bit what Jefferson might have made of politics and government today.  Certainly, he was not in favor of a strong central government (in theory at least, read the story of how we consummated the Louisiana Purchase, all the way up to bluffing Napoleon into thinking he might have to fight a war with the U.S. over it – it seems central government was an ok thing at times, even to Jefferson). 

I would like to think that, were he alive today, he would see the need for a strong air transportation system.  I think he would see it as a public interest.  I’m certainly not going to suggest he would be in favor of a PFC increase or anything like that.  But I think he would understand that in the world as it exists today (very different than his world, of course), a strong aviation system would be critical.  I don’t think he would have much time for anyone arguing against improving the system because “the time was not right” as some airline executives have said.  

In truth, we could never know what he, or any other historic figure, might think about these things.  But it is clear that he had great hopes for our country, and I think that a man who invented so many gadgets and designed so many architectural wonders, would have been fascinated by flight.  He might even have designed an airport terminal or two (and if you look at the design of Ronald Reagan Washington National Airport, you will actually see Jefferson’s University of Virginia Rotunda design mimicked at the new terminal).

Discovering More of Virginia

It is Sunday night at Peaks of Otter Lodge, a very quiet and beautiful place just off the Blue Ridge Parkway. There is no internet or blackberry service here; sort of like being on a very long plane flight without being able to communicate, only with more leg room! 

We found ourselves here after spending yesterday and last night at the wedding of our VP for Security and Facilitation, Chris Bidwell, and his very lovely bride Kristen. The wedding took place in Salem and the reception was in Roanoke at the Hotel Roanoke. After living in the area for more than three decades and working for a Virginia governor, I had seen many of the cities in the Commonwealth but not Roanoke. It is a very nice town, with a well-preserved downtown. The Hotel Roanoke is beautiful, we stayed there. Roanoke also boasts an excellent airport with a first rate director, Jacque Schuck but I didn’t have time to knock on her door. 

National D-Day Memorial in Bedford, Va.

On Sunday, we enjoyed the downtown, attended Mass at their beautiful church and had a great brunch at the Horizon Bar + Grill. Then we drove to Bedford and visited the National D-Day Memorial. Having been to Normandy a couple of years ago, the memorial was quite meaningfulg. And the setting, surrounded by the Blue Ridge, is hard to beat. You’ve got to see it. 

We ended our day at this beautiful lodge where I write this. I’ll have to save it and send tomorrow when we drive into an area with service. On the way home we plan to stop at Poplar Forest, Thomas Jefferson’s getaway, near Lynchburg before heading home. I’ve never been there, but my former boss – former Virginia Gov. Gerald Baliles – has always spoken highly of it and has taken an interest in its restoration. 

I’m biased, but I think the Commonwealth of Virginia has as much diverse natural and architectural beauty as any state I can think of. Come visit some time, fly into Jacque’s airport, get a car and enjoy this wonderful area.

Airlines’ focus on self harms national interests

I just read an article that says U.S. airlines made $7.8 billion (with a “B”) in revenue from fees last year.  Most of it from checked bag taxes (remember, if they can call an airport fee a tax, I can call an airline fee a tax).  They may say they can’t raise “fares” but clearly they have pricing power in this area.  Whether a fare is bundled or unbundled, it still comes out of the passenger’s pocket. 

This makes some things I saw reported from executives at US Airways quite interesting. 

First, the good. 

US Airways CEO Doug Parker admits that airlines brought the new passenger rights rules on themselves.  If airlines had just kept the promises made after the series of strandings in 2000, he says, the rules would have been unnecessary.  He is right, and I give him credit for saying so.  It would have been far better had these rules been made unnecessary by the airlines’ own initiative.  Good for him for saying so. 

Now, the bad. 

Mr. Parker also said that air traffic control modernization is not worth it if it costs the airlines any money.  Never mind that whatever costs there are would be made up over time in better efficiency (and would amount to less than a year’s worth of bag and other fees, err, taxes).  If reforming air traffic control would cost airlines money in terms of equipage and so forth then airlines aren’t interested, at least his isn’t.  Remember that the next time an airline executive blames an antiquated air traffic control system for their problems.  (And remember it was airlines that were the main culprit in killing air traffic control modernization in the 1990’s because, as one airline CEO told me, it doesn’t put money onto our bottom line). 

Now the ugly. 

Another US Airways executive trotted out the “Do No Harm” mantra that airlines like to put out when arguing against anything that might improve infrastructure and lead to a more efficient system and more competition.  He took out after the proposed increase in the passenger facility charge (PFC) from $4.50 to $7 (that’s a $2.50 change; can’t even check 10 percent of your bag for that much on some airlines).  “Do No Harm” means, other words, do nothing to improve runways, taxiways and terminals because, airlines think, it will lead to a reduction in revenue to them.  You see, airlines believe every nickel spent while a person is in the air transportation system, be it on an air fare, a bag tax, an airport fee, a hamburger or a newspaper, belongs to them.  That the reason the system exists, essentially, is to provide revenue to airlines (notice I didn’t say profit, they care more, MUCH MORE, about revenue than profit, but more on that another time). 

I looked up the origins of the “Do No Harm” expression, which comes from the Hippocratic Oath, taken by doctors when they begin their careers.  In its most common use, the phrase is “First, Do No Harm,” more than implying that you move on to fix whatever problem exists.  The word “first” is not part of the original oath; it became part of the usage later.  But if you look at the oath, and its origins, you see that the purpose of “doing no harm” is to move on to actually fix the patient’s problem – it acknowledges that the doctor’s expertise and training can be used in both positive and negative ways, and the oath clearly points the doctor away from the negative and toward the positive.  But the way it is used by airlines in the context of legislative debates is something completely different.  In essence:  do not fix air traffic control, do not build or improve infrastructure, do not promote competition, ensure that we can access every penny that is in a traveler’s pocket. 

We work closely with airlines on a host of important issues – security, facilitation, environment, technical and other issues.  Even on financial issues, I can’t think of a single airline that has not supported specific projects financed with PFC’s because they see those projects as being in their interests and understand that financing them another way will not be as efficient or effective.  That is why I just don’t understand the blind spot many in the industry continue to have on air traffic control and on financing infrastructure.  And that is why I hope that after this reauthorization is completed, the airport community and the airlines can come together and figure out a better way forward.