What We Must Do to Remain Competitive

I’ve given several speeches lately saying that U.S. airport infrastructure and travel facilitation policies are out of date and need to be changed.  A couple of things today tell me I am right.

First is a story about a meeting at  New York University featuring many of the nation’s top hotel operators.  Their message regarding airport infrastructure and travel facilitation issues is simple:  lead, follow, or get out of the way.  Our airport investment lags what goes on in much of the rest of the world, and our procedures for getting visas and for getting through immigration and customs once one lands are outdated and too cumbersome (though the administration has made important strides on the visa part of that equation lately).  I have pressed this argument that there is a competition going on in the world of travel and we are setting ourselves up to lose.  Our airlines and our government do not get this.  But it is true, and now it is not just the airport association guy saying it.

Secondly, I was invited to a meeting earlier today with the U.S. Senate Democratic Steering Group.  There were 17 Democratic senators in attendance, from all over the country.  Much of the discussion was about the highway program, and it was spirited (the highway bill expires at the end of the month).  But I also had a chance to talk about the challenges placed by government policies and restrictions on airport infrastructure, and I believe the message resonated.  But it is one thing to convince 17 people, no matter how powerful.  It is another to actually move national policy; and that is why ACI-NA has embarked on a multi-year campaign to bring the message to the four corners of America.  From the economic impact study to the work we are doing to make facilitation policies and procedures more modern (and generate more resources), our goal is to substantially broaden the audience for our message.

These two things – the NYU conference and the meeting with the senators – show we have a long way to go, but they also show the tremendous stakes involved.

Fresh from MarComm in Sacramento

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Sacramento

I just returned from our Marketing and Communications conference in Sacramento, California.  The airport there just opened a brand new terminal (for which Gregg Saretsky, CEO of WestJet Airlines and our keynote speaker, congratulated the airport — both for improving the infrastructure and for bringing it in well under what some thought it might cost).

I really like this meeting.  A lot of airport directors come to the meeting, as do a number of airline executives, mostly on the air service and route development side.  I always find the atmosphere at the meeting to be a good one.

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JumpStart meetings in progress

On the policy side though I am often baffled.  If you’ve read my speech in Denver you will know that I see the airline industry acting today much the same way the steel and auto industries did in the 60′s and 70′s not terribly interested in new investment in the future and overly certain of the future,only to be reduced to relying on protectionism in the late 70′s and 80′s.  I do not want to see that future for airlines or for aviation in general.

And now, I see the airlines are making a new argument.  They’ve been talking about the need for a “national airline policy”. Not “aviation” but “airline”. But they are now saying that airlines can indeed be profitable, can be good capitalists, if only the government will give them certain things.

This reminds me of what our agricultural sector was saying in the 70′s and 80′s.  I remember meeting with an agricultural group when I worked on the Hill.  They came in and said that they were indeed good capitalists, good business people, if the government would give them a good price they could be successful.  It made me shake my head then and  I thought about that when I read the airlines’ latest argument.  And it doesn’t make me feel good.  Like steel and autos, agriculture was reduced to protectionism and special favor seeking.  Like steel and autos, they finally figured out it would take more than that, figured out the past could not be preserved and started to invest in the future.  And the results have showed.

Airlines like to say that China and other competitors have “airline” policies.  NO.  What they do have is “aviation” policies.  They invest in infrastructure, in the future.  That is their advantage.  I wish the airlines better understood that.  (By the way, they also invest in airline manufacturing in some of those countries, wonder if there will be complaints later about that).

I WANT the airlines to succeed financially.  There are some ways in which government policy can be improved.  But to argue against doing the kind of investment in airport infrastructure that is occurring in the regions they seem to envy makes no sense.  To begin to argue for protectionist measures is not encouraging.  To argue that they can make money if only the government will give them tax breaks, loan guarantees or cash, is also not encouraging.

Let me say again, I want airlines to succeed and I do think there are legitimate points to be made.  NextGen progress has been too slow (partly due to airline indifference or opposition in the past, but that’s another subject).  I want to work with them on this, on fighting the EU ETS and other matters (and indeed we do work together on many things).  I just wish we could extend that to financial issues, and the arguments they make did not bring back such bad memories of failed arguments and proposals from the era of leisure suits and eight tracks.

U.S. Airports, Airlines Need to Further Invest in Infrastructure

I’ve been back from Singapore for a week.  Two things stick out.  One, it is a bit harder to recover from these trips now than even just a couple of years ago.  Two, when I said in Denver at Airport Cities that our competitors were moving forward building new, more modern and efficient infrastructure, and we were being left behind; well, I was even more right than I knew at the time.

So many people came up to me at the ACI Asia-Pacific meeting who had either read or heard the Denver speech, or heard me ask a question of one of the speakers that made the same points.  They confirmed that this is what is happening.  If we do not think that these airport leaders around the world do not have global aspirations, we are deluding ourselves.  And I can’t say they are unhappy that policies in the United States hold us back while they move forward.  On the way over I read Zbigniew Brzezinski’s book “Strategic Vision.”  He makes the same point in that book.

U.S. carriers tend to think that if it is new and shiny then it is too expensive and they shouldn’t pay for it.  I think they are, usually, shortsighted in this; I think their interests are better served by newer and more efficient infrastructure.  But at least I understand it, on a basic level.  What I do not understand is the U.S. Government, both executive and legislative branch, not really understanding this.  Henry Kissinger is fond of saying the role of a statesman is to represent the future to the present.  This is not being done right now in the United States on aviation infrastructure.

It has been a sad couple of weeks in aviation.  Andy Steinberg, who served as FAA general counsel and U.S. D.O.T. Assistant Secretary, died on May 20 at the young age of 53.  Andy oversaw the critically important negotiations that led to an open skies agreement with the European Union, a rare example in the past few years where a statesman did represent the future to the present.  He also worked for American Airlines when, in 1993, they won a landmark predatory pricing case.  That case was decided during the deliberations of the Baliles Commission; I recall it was one we had our eye closely on.  That case had a major impact on the business of aviation.  Andy was also the one who recruited me to join the board of the International Aviation Club a few years ago.  Jeff Shane, for whom I have the utmost regard says that Andy was “one of the greatest aviation lawyers of his generation.”  Andy Steinberg, R.I.P.

Ernie Boston was a member of the Pasco, Washington, airport commission for 17 years.  He was an active and constant presence in the ACI-NA Commissioners Committee; always sitting in the front, asking questions and greeting other attendees.  He was a sweet man, a real gentleman.  He cared a great deal about his airport and about the industry.  His background was in real estate and he long ago saw the potential of this for the business health of the airport.  Ernie was very active in all manner of civic and economic development activities in his town; he knew that the airport is an economic engine and was determined to make the best of it.  Ernie was a great guy and I will miss him.  Ernie Boston, R.I.P.

When I was a senior at Notre Dame, our school had one of the great sports years in NCAA history to that time.  The football team won a national championship (the QB was Joe Montana) and the basketball team went to the Final 4 (the soccer team I played on went 16-1-1 but no one talks much about that J).  A key presence on that basketball team was a freshman named Orlando Woolridge.  That guy could move and he could jump.  There were other perhaps better known names on that team (Bill Laimbeer and Kelly Tripuka for instance) but he was key to the success of that team, and a lot of fun to watch.  He went on to a nice NBA career, averaging 16 points per game and coached in the WNBA  He died over the weekend of a heart ailment and I was very sad to hear about it.  Orlando Woolridge, for helping make senior year so memorable, R.I.P.