The Shutdown Viewed from the Heartland

Sometimes when things are really intense in Washington it is good to spend time outside the Beltway to see and feel what’s going on in the country.  That’s what I’ve been doing this week.

I began the week in Lexington, Ky., visiting with their excellent airport director Eric Frankl and having a chance to see their beautiful airport. Tuning in to both the national and local media it was plain that the FAA shutdown is an important story outside the Beltway. People are concerned about the jobs and the implications for our national transportation system. They have many questions, many about safety. (I always assure them that the safety of the system is being maintained, while also pointing out that many of the cancelled projects would have safety benefits  It is also a good chance to point out that these projects are paid for from dedicated revenue and that shutting down the FAA does not cut the deficit.)

Wes Hargis, Inside Tucson Business

I was in Lexington when my blog about the airlines raising fares to include the amount that would have been covered by the temporarily suspended ticket tax was posted. It generated a lot of comment, especially when on Monday night, the Los Angeles Times did a piece on it.

So, on Tuesday morning when I was touring the Louisville airport with their veteran airport director, Skip Miller, the blog came up in several conversations, including during a tour the great folks at UPS gave me of their operations center. The subject came up not just during the tour, and not just because of the blog.  It is clear that the FAA is a concern of a number of people; it is also clear that no one “out here” understands why or how we could have come to this point. The FAA should be the basic business of government and to not have it authorized seems hard to understand.

I am in Champaign, Ill., now, visiting my wife’s family (they are a four-generation University of Illinois family).  Yesterday, I was on a local station here, WDWS 1400, as part of a daily talk show, Penny for Your Thoughts, with a local broadcast legend, Jim Turpin.  Jim was the broadcaster for Illinois sports teams for more than three decades and still does a daily, two-hour talk show. We had a wide-ranging discussion and a number of callers. We talked about the FAA shutdown, also about security and a number of other important topics. The shutdown has been covered here in the local press.

To be honest, many people wonder if we can’t even keep the FAA open, what hope do we have for a solution on the debt crisis (by the way, I recommend a piece written on the CNN web site by Fareed Zakaria about the debt limit and how it is a crisis of our own making). After 20 extensions, I was pretty sure we’d seen everything. Turns out, that was just the pre-game show.

We at ACI-NA have been very active these past several days working with our members to collect stories about the impact of the shutdown and getting that message to the Hill and to the press. We also use the opportunity to talk about the wonders performed by airports on a daily basis and what could be possible if we remove the Nixon-era economic shackles placed on airports by federal law. Chicago Mayor Rahm Emanuel is famous for saying never let a good crisis go to waste.  The FAA shutdown never should have happened, but we are using the “opportunity” to tell the airport story and set the stage for better days to come.

The Great Double Whammy Rip-Off

Passengers are rightly upset that the airlines quickly raised their fares in order to pocket more than $25 million a day in federal aviation taxes that cannot be collected because Congress has not extended the FAA reauthorization bill.  But passengers should also be upset that we are draining the aviation system’s bank account.

This is the great double whammy rip-off that Congress has allowed by not acting.  Not only are the airlines keeping money that should be flowing into the Airport and Airways Trust Fund, but they are also using air traffic control services without paying the bill.  Airlines are literally getting a free ride!  The big losers here are passengers, airports, communities and of course the more than 4,000 FAA employees who are out of work through no fault of their own.

Under normal circumstances- and this is anything but normal -every time a passenger buys a ticket, he or she contributes to keeping the runways maintained, as well as the air traffic controllers, their equipment and the buildings in which they work. Ticket taxes provide the majority of the money in the Trust Fund, which also helps pay for FAA personnel who conduct airport and airlines inspections to maintain the safest aviation system in the world.

Right now we are draining the Trust Fund piggy bank in order to maintain the ‘essential services’ that allow the airlines to continue to fly while losing $200 million a week that we will never get back.  We can’t maintain the safest aviation system in the world this way.

ACI-NA has heard from airports all over the country about important safety projects that have stopped because FAA does not have the legal authority to pay for airfield maintenance, snow removal equipment and taxiway improvements.  This is money that passengers paid, through the ticket tax, for airport safety and now that money is being used to subsidize airline revenues, allowing the carriers fatten up their profits. This can’t continue! Congress needs to act now and extend FAA reauthorization.

THIS SHOULDN’T COME AS A SURPRISE

I guess it was bound to come to this.

As everyone knows, Congress could not agree on a 21st extension of FAA’s authorization. Not only will FAA have to cut off investment in infrastructure and facilities and research, but the ticket tax paid by air passengers to finance the trust fund has expired and won’t be collected.

So….you might expect that airlines would pass the savings along to the passengers. If you expected that you must have been living under a damn rock. Of course the airlines won’t pass that along; they will just raise fares and pocket the difference.

It must be executive bonus season at the airlines.

One analyst estimates that the airlines will collect $25 million PER DAY!!!!  That might cover an executive bonus or two. They certainly won’t use it to hire customer service agents.

For 4 full years, most of the aviation community has been working hard to pass a reauthorization. Not so the airlines. They never lifted a finger, didn’t even sign any of the industry letters urging a bill. Maybe they figured this day would come, and they could collect that money.

At the same time, airlines have been fighting the idea that airports should be able to use a mechanism to fund infrastructure, a tool that is being used around the world to beat our brains in — namely a user fee or passenger facility charge. They said it would bring them to ruin somehow.

Yeah right.

Even more, they went around and told congressmen and senators that if the PFC cap was raised they would remove service from communities around the country. Delta is especially adept at this, and it has an intimidating impact. Even though it was complete horse poop. Now, with Congress not contemplating raising the cap, Delta has announced it is removing service from 24 small communities. How do you spell loyalty?  Certainly not a-i-r-l-i-n-e.

So, they do nothing to get a bill passed, nothing! When it expires they reach into passengers’ pockets to extract every cent they can; the idea of passing the savings along never seems to have occurred to them if you read their comments. And after BS’ing communities around the country with threats to pull service if the PFC was raised, they go ahead and pull the service anyway.

If you ever doubted for a moment that airlines have a view that the purpose of air transportation is to line their own pockets (forget all that moving people and goods stuff) these developments ought to disabuse you.

ACI Regional Reunion in Montreal

Greg and ACI World Staff and Regional Directors

Earlier this week I traveled to Montreal to beat the heat, to escape the increasingly frustrating atmosphere in Washington and to visit the new ACI World offices. The ACI World organization moved to Montreal this past year; an important move as ACI World is the official airport representative at the International Civil Aviation Organization (ICAO) and ICAO is based in Montreal.

Why is this important, you might ask? Well, ICAO sets aviation standards on a wide variety of important issues such as safety, security and environment. Increasingly, ICAO is delving into economic issues as well, so it is critical that airports be represented there and ACI World’s activities play an increasingly critical role in protecting and advancing airport interests. Angela Gittens, a true airport professional, leads ACI’s world efforts and has built an impressive team.

One of her initiatives has been to get the five of us who run the ACI regional offices together twice a year. In this way, our efforts are well coordinated and have benefitted airports and travelers everywhere. For example, ACI Europe and North America worked together with World on the matter of the European Commission’s poorly considered effort to lift restrictions on the carriage of liquids and gels. The Commission’s plan would have been unworkable and impacted travelers everywhere, and the work we did together helped stop this from happening.

While I was up in Montreal I also met with the U.S.  Ambassador to ICAO Duane Woerth. I first met Duane when he was President of the Air Line Pilots Association and he has been an important part of the aviation community for a number of years. He does an excellent job representing the U.S.  in Montreal. The big issues now are a push to impose an unworkable, impractical and counter-productive mandate for airport employee screening; as well as what to do about the European Commission’s effort to impose an emissions trading scheme that would impact airlines and travelers everywhere in a punitive way. These are issues that would affect all travelers and interests in aviation in a negative way and it is important that the country and airports are as well represented there as airports are represented by Angela Gittens and her team at ACI World.

Salt Lake, San Francisco, and San Diego

I just returned from a few days on the road visiting members in Salt Lake City, San Francisco and San Diego. A few observations:

Salt Lake City Airport

First, I am more convinced than ever that we must as a country stop kicking ourselves in the “you know where” and get with the program. I keep hearing how the debt problem means we can’t invest in infrastructure. Getting the feds out of the damn way and letting airports generate their own resources builds infrastructure in a way that does not increase federal spending or the debt and can reduce both.  I can see the positive impact this can have at all the places I visited.  The term “no brainer” was invented for this. Unfortunately they also have a term for what we, as a country, are doing to ourselves:  “self-inflicted wound.” (And yes, kicking our own asses!!!). We are holding our own selves back!

I am always so impressed with the caliber of people who run our airports and always return from such trips honored to have the opportunity to lead this organization. The men and women who lead our airports, the directors and all those who work for them, would be the best in any industry and we are lucky to have them. Maureen Riley, Randy Berg, Tamra Turpin and Deborah Loertscher at Salt Lake, John Martin at San Francisco and Thella Bowens, Matt Harris and Amy Caldera at San Diego — all of whom I saw on this trip– do such a wonderful job and do it with intelligence and passion. Those are just the people I saw at those places, and even at those three airports there are so many others.

I had a chance to meet and spend some time with Capt. Sully Sullenberger. He really is a fine gentleman. Someone once told me you can judge a person by how they treat people like waiters and waitresses. I think I do pretty well but he set a new standard. He just signed on with CBS News to provide commentary on aviation matters and we are all lucky to have people like him out there speaking up.

I also spent a lot of time on United. A few comments:

Without fail I found great service from the cabin crew and the pilots did a good job of updating us on any possible delays, as did the gate staff. On the flight home from San Diego last night, the first class cabin left some wine in the bottles so I got a free glass of Shiraz. Very nice touch.

On the flip side: please stop brow beating passengers into sitting down so we can have an on time departure. Maybe it’s because I know how your compensation is figured but it sounds like people are being herded and harangued.

To the airline: the trip from San Diego to D.C. was more than 4 hours. The poor cabin staff had to explain to people that they didn’t have much to offer as “buy on board” because the plane hadn’t been stocked with enough. That’s unacceptable.

Also, our flight landed at Dulles 20 minutes late, not bad considering a late arriving aircraft meant we left San Diego a half hour late. But there were families on board who likely were going to miss connections to foreign destinations. Those connect times for those kinds of flights are just too tight. A 20 minute delay shouldn’t be enough to make you miss your international flight.

It was a quick trip, IAD-SLC-SFO-SAN-IAD in just over 72 hours. It felt like a campaign swing (no babies to kiss though). It was exhilarating to see how many good people are out there making the system work and it reinforced my frustration about what, absent a few common sense policy changes, we are doing as a country to hold ourselves back.

A closing note:  these days, efforts to detect, prevent and cure breast cancer are common. The same is true for efforts to combat addiction. This was not always the case; there was a time when those things were kept quiet. The fact that things changed for the better and lives were saved owes much to former First Lady Betty Ford who passed away several days ago. She came to public attention as the spouse of President Ford but soon made her own name. She made a true difference. Betty Ford, RIP.

As We Kick Our Asses, Time for New Thinking

I was thinking a little more about my last blog about how we are getting a self-inflicted ass kicking in the global economy when it comes to our investment in critical infrastructure and how, if we were designing a system today we would NEVER, ABSOLUTELY NEVER, design it the way it is today.  Not for aviation and not for surface.  NEVER!!!

I was thinking about Steve Van Beek’s thoughtful response to my comments on this subject.  I was thinking about how NO ONE is seriously out there saying we have the best system for financing any of this infrastructure.  I was also thinking about the fact that so many of our global competitors are, in reality, starting with a blank sheet of paper and we are not much further along right now, given our political paralysis, than we were when Henry Clay and James Madison were talking about whether investing in “internal improvements” was even constitutional back in the 1810’s (Clay said yes, Madison, the author of the Constitution, was for it before he was against it).

“A country that is kicking itself in the ass doesn’t usually notice the obvious.”

I was also thinking about all the political pressures in Washington that exist today, and how there is so much centrifugal force.  I was thinking what if we did something bold and really designed a system that would promote investment?  And then, I thought about all the benefits that would bring, from making our nation more competitive to creating jobs.  From lowering federal spending to lowering federal taxes.  From reducing our national debt to getting Washington out of matters that are best left to localities.  By removing the Nixon-era federal financial shackles from local communities and their airports, we could do so much good and kick some real political ass in the meantime.  Make the Tea Party happy and make the liberals happy – on ALL sides.

So I wrote to the President, the Vice President and the Congressional leadership and told them that (no, I didn’t use the “A” word).  This seems so obvious.  But then, a country that is kicking itself in the ass doesn’t usually notice the obvious.  Let’s work to make this time different.

Funding the Transportation System

I was reading this morning’s Washington Post, which carried an article on page A2 about congressional plans to slash investment on highway and transit programs.  The article also mentioned identified needs in the U.S. for investment in those modes, and in aviation as well (full disclosure, there was a reference to a report last year by a group convened by the University of Virginia’s Miller Center and co-chaired by former Transportation Secretaries Norm Mineta and Sam Skinner and consisting of 80 experts – I was one of the 80).

Regardless of what you think about how we raise and invest funds for transportation in this country, try this little exercise.

First, if you were starting right now with a blank sheet of paper to design a system, ask yourself whether you would design the one we have now.   For both aviation and surface transportation, the answer must be a resounding NO!

You wouldn’t design a system that relied on taxing a product (gasoline) that drivers are working hard to use less of and cars being built are consuming less of.  You also would probably not design a system in which so much of the money flows through Washington.  You’d probably rely more on public-private partnerships, tolling, and other such methods.  Perhaps a vehicle miles traveled system.  But we have the system we have, and there seems a lack of political will to change it.

On the aviation side, we have a federal program that is based on the base fare of a ticket.  Airlines, though, have moved to ancillary fees which are not subject to the ticket tax; a move that seems permanent.  On top of that and making matters much, much,  worse, federal law prohibits airports from raising the funds necessary to build and maintain their own facilities.  This is a law that was passed when Nixon was president and the federal government told airlines where they could fly and how much they could charge.  I repeat, this system was enshrined when RICHARD NIXON WAS PRESIDENT.  It was designed even before that unfortunate moment when leisure suits were fashionable (I owned a really sweet light blue one!)  We still had some troops in Vietnam.  Back when we had wage and price controls (how did THAT work out?!)  I could go on.  You would NEVER design such a system if you were starting today from scratch, and almost every honest airline executive would, in private, tell you the same thing.

Let that sink in:  the system by which we regulate the economic lives of your community’s airport was designed when Richard Nixon was president!!!!!!!  Maybe this is one he delegated to Spiro Agnew?

Second, ask yourself what our global competitors are doing.  I have been convinced since I worked in state government a quarter century ago that we live in a global economy and our competitors are not just across the street but on the other side of the world.  It was just announced today that Dubai is investing almost $8 billion in airport infrastructure.  China is building dozens of new airports and airports all over Asia outshine ours by a considerable degree.  This is critical; as businesses increasingly have the choice to locate anywhere in the world they would like and as the cost and ease of transportation figures more heavily in those decisions, we are stuck in the horse and buggy age while our competitors are owning and building the 21st century.

If you are honest, I doubt you could ask yourself these two questions and come up with a different answer.    We are getting our asses kicked, and we are the ones doing the kicking.  This is a self-inflicted wound and as long as government policy makes methods used to finance airport infrastructure all over the world illegal, we will keep getting our asses kicked.