I’ve just returned from the Florida Airports Council meeting in Naples. This is usually the third largest annual airport conference in the United States and offers a full program touching on the key issues facing airport operators. Florida is a state heavily dependent on aviation; indeed more than 10 percent of the national impact of the airport economic engine, as measured by our Economic Impact Study earlier this year, comes from Florida. This is the second time I have been invited to speak.
As you might imagine, I focused my speech on the need for a new airport financing model. One Florida airport director has told me that a project recently completed at his airport could not be accomplished today given the out-of-date system. He was lucky to have completed his project, but others are not quite as lucky.
Our message must be getting through because I now see things coming from important airline voices designed to counter our arguments. You might think I am happy about this, and perhaps on a certain level I am. But, as I always point out, I am NOT anti-airline and I don’t know any airport directors who are. I truly believe that if we can reform and modernize the system by which we finance airport infrastructure, airlines would benefit financially and in every other way. They may not have as much control at airports as they do now, and the competitive landscape may be more wide open, but they will do better, I am convinced.
There have been calls for a national “airline” policy. I, and others (most recently Chicago Aviation Commissioner Rosemarie Andolino in a well-received speech at Washington’s Aero Club) have called for a national “aviation” policy. One that recognizes that the purpose of air transportation is the movement of people and products to destinations and markets and, by so doing, promotes economic development and activity.
No airline executive I have ever heard believes the current set of federal policies, including various taxes and fees, is very good. They might be surprised to know I agree with them. I saw a piece by the CEO of United Airlines (I fly United a lot, made 1K for 2012 on July 8) a few months ago where he talks about the mish-mash of policies that adds up to a burden on airlines. He might be surprised to know I agree. What we are doing now does not keep us globally competitive, and we need to change. But that need is across the board.
If you go to www.airportsforthefuture.org you will see plenty on this from the airport perspective.
Here’s one from the airline perspective: in the 1997 FAA reauthorization (which did NOT include a PFC increase) included changes in aviation taxes and fees. The legacy airlines, in fact, insisted that the tax section be looked at and “re-balanced” as they felt the previous regime favored the low cost carriers a little too much. And, the re-balancing (reducing the ticket tax and adding the segment fee) had that basic effect. But by opening all that up for discussion, the other changes that were made (mostly the increase in the international arrival/departure fee) means that airlines have paid $11.8 billion MORE than they would have otherwise since that time ($10.6 billion net if you subtract the savings from the other changes mentioned above). Yes, if nothing were done and current law had been maintained, the airlines would have saved a net of $10.6 billion. And have we seen Customs and Border Protection Services, which are supposed to be supported by those fees, improved since then? That answer is an absolute NO. Are the airlines happy about that? No! Are the airports happy about that? No!
No airport operator likes this result. We want to see these kinds of things changed; we want our aviation system: airports, airlines, manufacturers and others, to be globally competitive. The time is ripe for a fresh look at all of this. Calls for a policy focused on only one segment of the industry distract from what this country really needs.
Air Line Pilots Association President Lee Moak said recently at another Aero Club of Washington speech that the industry agrees on 95 percent of the important issues and we should focus there. I agree. And, I believe that if we do that, we can improve the landscape over that 95 percent while finding a way forward on the other 5 percent that can work for all of us – and especially for the travelers and shippers who depend on us.