In the Temple of Free-Enterprise, I Say: Remove the Economic Shackles on Airport Funding

Yesterday, I had the privilege to participate in the U.S. Chamber of Commerce Annual Aviation Summit.  The chamber makes an important contribution by involving the broader business community in the aviation debate and I commend them for their work.

Making my point during a panel on April 27 at the U.S. Chamber of Commerce.

I was on a panel discussing airport issues.  The moderator was Craig Fuller, president of the Aircraft Owners and Pilots Association (and a former chief of staff to then-Vice President George H.W. Bush).  My co-panelists were Lynn Hampton, CEO of the Metropolitan Washington Airports Authority and Daniel Goodwin, chairman of the DuPage County (Illinois) Airport Authority.  The event was filmed by C-SPAN and a video of our panel can be viewed on the web. (My part is about 20 minutes in.)

We had a lively hour-long discussion and I pressed over and over again the point made in my Memphis speech two weeks ago:  airports need to have the economic shackles removed from them, shackles imposed with the tacit complicity of the airlines and the U.S. government.  Together with Lynn, we explained to this conservative business audience why blowing the lid off the PFC is a solid, conservative, prudent financial approach to building aviation infrastructure.  I think I am pretty good at reading a crowd from the stage, and I could tell they were interested.  Certainly the comments afterwards backed that impression up, including some comments by an airline CEO who was in the audience.

We are in a long campaign to change attitudes and educate a broader range of people on the importance of the airport economic engine; and about the fact that current government policies are killing this golden goose.  The final question from Craig went something like this:  If you walk out of here today and run into the President (The White House is literally across Lafayette Park from the chamber) what would you tell him.  Thirty seconds or less.  My answer was something like this:  You want to create jobs and build infrastructure without increasing the deficit.  Blow the lid off the PFC, set our airports free, and you will do all three on a scale that cannot be matched by any other decision you will make.

I must finish this post on an unrelated note.

Yesterday, the people of Maryland buried former Governor (and Baltimore mayor) William Donald Schaefer.  Gov. Schaefer served at the same time as my former boss, former Virginia Gov. Jerry Baliles, and I met him several times.  While Govs. Baliles and Schaefer could not have been more different in style (the first time I ever saw Gov. Schaefer he was mayor of Baltimore and dressed in a 1920’s era swim suit down by the Baltimore Inner Harbor, let’s just say that Gov. Baliles would not do that); they shared an ability to develop and articulate a vision and then assemble a first rate, loyal and dedicated staff to get it done.  I loved watching the two of them work.  Gov. Schaefer was a true and unique original and I am very glad I got to meet him and work up close to him.  William Donald Schaefer, RIP.

Thoughts on Canada and Infrastructure

Just back from Ottawa, Canada, where I attended the biannual Airports Canada Conference and Exhibition sponsored by the Canadian Airports Council. More than 200 people gathered to discuss and debate some key issues, including the Canadian airport financial model, traffic leakage to the U.S., the overall economic context within which airports operate and security.

We also had a hilarious dinner speech from Joel Cohen, co-executive producer of The Simpsons, and a native of Calgary.

Canada’s airports are run by some of the most impressive people in our industry. Many come from outside the airport industry and have brought some needed fresh thinking. Canadian airports are searching for a new economic model, even though they enjoy a level of economic freedom that is the envy of many American airports. We will be working closely together on these economic issues across borders in the coming months and years as U.S. airports also consider new economic models to replace the current broken approach.

While up there I saw an article in the Toronto Globe and Mail (a great paper by the way, they cover U.S. politics better than most American papers) describing a study by the Canadian Finance Department. The study found that every dollar in corporate tax cuts created 20 cents in economic activity while every dollar in infrastructure investment created $1.50 in economic activity.

These results are not a surprise to me and they comport with what I saw in state government many years ago. Companies didn’t want tax cuts (though they do want a sane and predictable tax regime). They wanted world-class infrastructure and world-class education. That’s how they made their decisions.

A friend of mine who worked in the electronics industry was with a group of corporate leaders from that industry once, touring a southern state and considering an investment. The local officials kept asking what kind of tax relief the corporate executives wanted. They kept replying they didn’t want that; they wanted great transportation and great education. The local officials kept coming back to tax cuts. The investment went elsewhere.

Airport leaders on both sides of the U.S.-Canada border are looking for new, better and different models. They want to build needed infrastructure in a cost-effective manner, one that meets the needs of travelers, shippers and airlines. As I have said before, governments and airlines on both sides of the border (but especially in the U.S.) are pushing in the opposite direction. Here’s a tug of war we all need to hope the airport community wins.

Making the Airport’s Case before the World

I’m in Memphis for the annual Airport Cities conference. A lot of airport leaders come to, and speak at, this meeting which is held all over the world. I was honored to be asked to deliver the first welcoming address.

I thought about delivering the usual opening comments (glad you’re here in this great place, let’s have two great days, etc etc). But I decided to do something different.

Catch some of the local news coverage. While I got quoted, Delta’s Richard Anderson did not get a pass from the crowd. See The Commercial Appeal, the Memphis Business Journal, WMC TV-5 and AirportBusiness.

“A very large boot is being placed on the neck of economic growth.”

When I thought about the idea behind the conference (maximizing economic growth and development around the airport), and thought about all the people attending from around the world (630 from every continent), and thought about all that is happening around the globe to promote aviation infrastructure development, and thought about how government and airlines hamper such investments in this country; I decided to say something different.

Greg in Memphis at the Airport Cities conference.

You can read the speech for yourself, if you’d like. But, what I wanted to do is point out that 5,000 years of human history show us that those who invest in transportation infrastructure grow and prosper and those who don’t invest fail to grow and prosper. And, that right now, the United States belongs to that second group.

Airlines around the world support a push to a system that utilizes user fees to invest in infrastructure. In many parts of the world, the results of this decision are apparent and aviation growth is taking off. In the U.S. though, airlines are nostalgic for the days when they controlled airports, pre-deregulation. They do not want communities to have the ability to generate resources to build infrastructure. Why?  Because they want to control airports and keep out competition, plain and simple. The need to invest in aviation infrastructure is subordinated to a short-term, short-sighted, highly questionable, business decision.

The purpose of air transportation is to move people and products. Airlines seem to think the purpose is to move airline stock prices and balance sheets. Last week in Phoenix I was on a panel with several airline people, good folks all. But when we were asked by the moderator whether we support the need for a national aviation policy, the airline reps turned it into a question about the need for a national airline policy. We do need a national aviation policy. We do NOT need a national airline policy any more than we need a national cereal company policy or a national grocery company policy.

As long as airlines see the aviation system as being about nothing but their financial health, and as long as government abets this by standing in the way of airports and communities planning for their future, we are destined to watch cities around the world take off while we sit back and stagnate. It is that simple.

Please look at the speech and let me know what you think. The federal government and the airlines have joined forces to place a heavy boot on the neck of the airport economic engine. It is time to do something about that.

In KC, After Stops in California

On Sunday, Kansas City Royals beat the Los Angeles Angels. 12-9, to win the three-game series.

Writing from Kansas City, halfway through a road trip. I started in Sacramento with a meeting with the California Airports Council . California is a large state facing large problems. The airports out there have rapidly formed a state association that is becoming a real force on state and local issues. They have some of the largest airports in the country and some of the smallest and do a great job of melding a bunch of different perspectives.

While in Sacramento, I was interviewed on a local radio station about the project underway there to build a new terminal; an experience that was repeated in Fresno the next day when I drove down there with Russ Widmar, the airport director in Fresno. Russ and I were on a local talk show for an hour and a half where we talked about local airport issues, as well as national matters such as security, fuel prices and the financial strength of the industry.

Had a chance to meet with Russ’s excellent staff the next day and to see all he has done at the airport (the way they have re-created a little bit of the Yosemite Park in the terminal is really terrific, as is the project they have undertaken to generate solar power). The city of Fresno is facing some big challenges and Russ and his staff are trying to navigate the airport through them.

I’m in Kansas City now to attend ACI-NA’s joint conference put on by our Public Safety and Security Committee and our Operations & Technical Committee.

Burial site for President Dwight D. Eisenhower in Abilene, Kan., his boyhood home.

Before coming to KC, I spent Saturday in Abilene, Kansas to see the boyhood home and gravesite of President Dwight D. Eisenhower. Eisenhower was president when I was born and I still remember the announcement in school when I was in 7th grade that he had died.

The Eisenhower complex is quite nice; the museum is good but not as good as some of the others such as JFK, Ford, Truman, Reagan and Hoover. This makes 24 of the 38 president gravesites that I have visited, I have solid plans for at least five more this year.

On Sunday I attended the Kansas City Royals — Los Angeles Angels baseball game. So for me, this has been a great weekend — a presidential grave site and a big league ball game. Doesn’t get much better than that!