Jerry Costello Made a Difference

I just arrived in San Diego for the ACI-NA annual conference and will have more to write about that over the next week. But I wanted to take this opportunity to acknowledge a friend of airports, aviation and travelers everywhere:  Congressman Jerry Costello.

In 2008, U.S. Rep. Jerry Costello (D-IL), chairman of the U.S. House of Representatives aviation sub-committee, received ACI-NA's Commissioners Congressional Leadership Award for his support of the aviation industry'.

Congressman Costello served as chair of the House Aviation Subcommittee over the period from 2007-2010 when we were all working to get a reauthorization bill signed into law.  Congressman Costello managed to get a bill, a good bill, passed through the House TWICE.  Each bill, with bipartisan support, included key provisions that would have benefited local communities planning to build needed airport infrastructure.  The legislation Congressman Costello crafted would have addressed a number of key issues, most especially loosening the federal shackles on airports and permitting the imposition of a $7 dollar PFC.  This passed, it is important to remember, with bipartisan support, with members of both parties speaking in its favor on the House floor

Congressman Costello is a throwback, I guess.  He cares about results, learned the issues and worked hard across the aisle to achieve them.  The results he got would have been good for airports and travelers everywhere, but unfortunately, the bill never got to the President’s desk.  He has continued to work hard for airports and for travelers as a member of the minority, and for that we are appreciative.  He is also a good guy, I Always enjoy talking to him about an Italian restaurant in his home area that he and I both like.

Congressman Costello announced last week he is retiring from Congress.   This is good news for his family, and I know his grandchildren are happy.  We will miss him when he leaves Congress.  He has made a difference. That is the highest compliment any public servant can be given and he has earned it in a big way!  Thanks!

International Visitors – A Stimulus That Works!

Over the past several days and weeks, I have heard a great deal of talk about how difficult it can be for foreign visitors to come to the United States.  Visas are often difficult to get.  Understaffed Customs and Border Protection facilities mean long waits and result in some people deciding to go elsewhere.  I have seen it when international airport meetings are scheduled in the United States; many airport executives from around the world do not really want to come here because it can be difficult.

One article I saw recently spoke about how much international visitors spend when they are here.  A vacationer from Japan or China spends several times what a domestic U.S. vacationer will spend, for example.  The implication of the article – we need to do a better job of importing SHOPPERS.  Every dollar they spend goes to the plus side of the trade balance ledger.  The spending of an international visitor is an EXPORT, essentially.

Foreign carriers at JFK.

I have had several discussions with our members about this; it is a growing issue.  The large international gateways are frustrated because staffing and resource constraints mean longer wait times.  Smaller markets that have the ability to attract international service are often frustrated because CBP will not staff their facilities so they lose the service.  The difficulty in getting a visa means it is harder to attract service from countries such as China, India and Brazil – rapidly growing countries with HUGE middle class populations.  Strong allies like Poland can’t get into the visa waiver program.  A lot of this does not make any sense.

We have more than 100 open skies agreements with countries all over the world.  Open skies, to most people, means that any flight that can sustain itself economically can operate between the two countries.  And with today’s aircraft equipment and airport facilities, it means many more cities can serve as international gateways, in a sense.  That is the theory…

….BUT in reality, the skies are only as open as U.S. Customs and Border Protection (CBP) says they are.  If they do not have the staff, or if they decide they are unable to staff a flight for whatever reason, the skies become closed.  Totally.  This is not right, we are shooting ourselves in the foot.

And, by the way, I recently saw a study conducted at one airport, a smaller one, that showed the amount paid by travelers in government fees alone (this is not counting any impact from their shopping or buying) dwarfs the amount it costs to staff the extra flight.  If this were a business, that would be called a profit.

There is plenty of blame to go around for this.  I have mentioned U.S. CBP, but they have to operate with the resource constraints Congress places upon them – especially difficult in the current environment.  And one of the negative side effects of the current environment is that arguments like the one I made in the previous paragraphs are too often assumed, out of hand, to be mere rationales for more spending.  Even when you can demonstrate what would be called in the private sector a “business case.”  I do think Customs and Border Protection can be more imaginative in the way they do things, and I am starting to see evidence that CBP Commissioner Alan Bersin is moving in that direction.   But they have a ways to go.

And the State Department can and should be more imaginative in the ways it deals with requests for visas.  Making people in places like Brazil and India travel thousands of miles and pay huge sums of money for an in person interview does not seem to make sense when there are other ways to do this.

These issues too often fly under the radar.  But the facts speak for themselves and they speak loud and clear.  International visitors are a huge economic benefit to the United States economy.  No one has ever even tried to argue the opposite.  This seems to be something everyone agrees is good, but then no one can figure out how to make it work.  ACI-NA will be spending a lot of time in the coming weeks and months working on this.

We Agree with ATA on Some Things

I’ve been out of town most of the past two weeks, visiting the ACI Latin America/Caribbean conference in Montego Bay, Jamaica; participating in an event at DePaul Law School in Chicago with the smartest person I’ve ever met, former Virginia Governor Jerry Baliles (also had a chance to meet Rosie Andolino, Chicago’s innovative aviation commissioner); and speaking at the Western Regional Airport Property Managers meeting in Portland (and meeting with Steve Schreiber and his great team at PDX).

Sometimes when you travel a lot you miss some things back home. In this case, I missed an interesting and important speech given by my colleague and counterpart at the Air Transport Association, Nick Calio.

Much of the speech was about what you would expect from the ATA president. But there were two things I want to comment on.

First of all, Nick came out strongly in opposition to the administration’s proposal to levy a new FEDERAL fee/tax/whatever to pay for aviation infrastructure. I suppose this is not news in itself, but you might be surprised to hear that I share his concern about this idea. We have been pushing for the federal government to get out of airport financial affairs; this proposal doubles down on an approach that continues to tether airports to Washington. We want more freedom, not less!  So, I must say I agree with Nick and do not think this is the best way forward.

"We are not ready to sing around the campfire. But we have more in common than we may sometimes want to acknowledge and we ought to continue to communicate with each other to try to find a way forward."

Which brings me to my second observation about his speech. As did President Obama, Nick pointed to places around the world, like China and Dubai and Abu Dhabi, that are making major investments in airport infrastructure. Just so. We are falling behind and need to do something.

What was not mentioned, though, was that these places use passenger user fees (what we call Passenger Facility Charges) to finance this development. Now I presume Nick does not favor Chinese or UAE-style government involvement in aviation. Absent that, the ONLY way to make those investments is to give airports the ability to generate their own resources, as happens in those places.

So. It seems we may agree on not wanting the federal government to collect even more money and be any further involved in our affairs. I continue to think that airports and airlines have much more in common than we may sometimes want to admit. I will continue to call airlines on their inconsistency — wanting the federal government out of THEIR way while wanting the federal government to mess in airports’ financial lives, especially to protect airlines against competition. I will continue to say that the ATA call for a National AIRLINE policy betrays a view that the purpose of aviation is happy airlines. These are important differences.

We are not ready to sing around the campfire. But we have more in common than we may sometimes want to acknowledge and we ought to continue to communicate with each other to try to find a way forward. Especially when the presidents of ATA and ACI-NA agree that we should not impose this new FEDERAL tax and also that certain airports that happen to use a PFC-approach are worthy of emulation.