Passenger Use Fees, Not Blank Checks Building Tomorrow’s Airports Around the World

Over the past several months, I have heard a lot of talk from airline and aviation labor leaders about the support other countries contribute to the success of their national airlines.  These arguments are used to buttress the campaign to enact a National “Airline” Policy.  My counter-argument (we are pushing for a National “Aviation” Policy) has been that these nations and their airlines succeed in the global transport network not only because they have policies that encourage a growing role for aviation, but because – and largely because – they have invested in aviation infrastructure.  Anyone who has ever traveled to, or through, Singapore, Hong Kong, Incheon, Doha, Abu Dhabi or Dubai can see that very plainly.  (See related Centerlines Blog from the Dubai presentation at our Customer Service Seminar last week in Florida.)

 “Aviation’s importance as a catalyst for growth is well-understood in the Middle East and particularly in the Gulf region, where airports rise ahead of the demand curve, not behind it.”   IATA's Tony Tyler

“Aviation’s importance as a catalyst for growth is well-understood in the Middle East and particularly in the Gulf region, where airports rise ahead of the demand curve, not behind it.”

– IATA’s Tony Tyler

 

I have pointed this out continually, and have also pointed out that these places – and others – use a passenger user fee similar to the American PFC or Canadian AIF to generate revenue.  It is not some sheikh or government just writing a check and printing money as some might have you believe.

This is done because leaders (government and business) in those places are looking to the future.  They are not building for yesterday’s traffic or yesterday’s customer or yesterday’s economy.  They are building for tomorrow.  They are shaping their future.

While the governmental systems in most of these places are not ones I would want to emulate, I do applaud their vision, and especially applaud their recognition that modern airport infrastructure, airfield and landside, is critical.

Because I run the airport trade association my words are dismissed by some.  But listen to the words of one of the world’s great aviation leaders:  “Aviation’s importance as a catalyst for growth is well-understood in the Middle East and particularly in the Gulf region, where airports rise ahead of the demand curve, not behind it.”

Who said this?  Some airport director?  Some airport association leader?  No, it was Tony Tyler, Director General and CEO of IATA, the International Air Transport Association — the worldwide voice of airlines.  IATA has been a leader in moving toward a modern system to develop airport infrastructure and Tony, in his current role and in his previous role at Cathay Pacific, understands that.

I agree with Tony and with so many airline leaders around the world who see things the same way.  I remain hopeful that we can work with America’s airlines to build a better future for our passengers; one that helps airlines grow profitably into the future and allows communities the ability to prosper in the 21st century economy.

User Fees are Not Wacky Spendthrift Ideas

There has been a lot of attention paid recently around Washington to how to pay for transportation improvements.

The U.S. Chamber of Commerce has been an important player in this and they should be; the business community is heavily invested (if you will) in how well our transportation system works.  Their president, Thomas Donahue, made an important speech earlier this week on a range of economic issues and when he touched on transportation he said that the users should pay.  Makes sense, I think.

capital domeAlso earlier this week Virginia Gov. Bob McDonnell, who has been under heavy pressure to do something to increase investment in the Commonwealth’s transportation infrastructure, announced a plan that would eliminate the gas tax and substitute an increased sales tax.  Reaction is mixed, but I was interested to hear Republicans interviewed say they are reluctant to embrace this because they feel users should pay.

What is interesting about all this is that two of the more noted conservative institutions in the country, the U.S. Chamber and Virginia Republicans (many of them anyway, the governor is a Republican after all) are publicly embracing a user fee approach to finance infrastructure.  And (without passing judgment on the governor’s specific plan as I am not intimately familiar with it) I agree with them.  Indeed, all those places all over the world we like to point to as being ahead of us in investing in infrastructure use some sort of user fee approach.  Whether in the form of a straight fee or a fuel tax or whatever, the principle of user pays makes sense and, if the levels are set correctly, it works.

This has been the crux of our argument on the PFC for years now.  The PFC is not a federal tax, it is not a federal ANYTHING, except a federal limit on the ability of a community to set a user fee to pay for its own aviation infrastructure.  The PFC, as important thinkers like Bob Poole of the Reason Foundation have argued for years, is the best conservative approach to financing airport infrastructure.  It is paid by users, it is not filtered through Washington or a state capital, it is tied to specific projects, stakeholders and the community must be consulted, and it has an expiration date.  If you gave a conservative a blank sheet of paper and asked him or her to draw up a perfect infrastructure financing scheme my bet is it would look just like this.  And such an approach would benefit the airlines too, that is why airlines all over the world have pushed for such a model.

These are not wacky spendthrift ideas.  They are solidly conservative and prudent and right for these economic and political times.

Challenges at the FAA

I just posted a comment in the on-going discussion at National Journal’s transportation blog on NextGen and other high-tech challenges at the FAA. View my comments and other comments, including A4A’s Nicholas Calio, there or read my full-text below:

Congratulations to The Honorable Michael Huerta, sworn in Wednesday as America’s 17th Federal Aviation greg-blog-photoAdministrator!   One of the first challenges that Administrator Huerta will need to deal with is how to allocate limited federal resources to a broad range of NextGen system development and implementation.  Unless the federal funding landscape changes significantly going forward, it will be essential for FAA to effectively prioritize NextGen investments on operational capabilities where benefits are most likely to accrue.  Fortunately, important progress has been made towards this prioritization both through the RTCA’s Task Force 5 and now via the NextGen Advisory Committee. (U.S. airports are fortunate to have extremely capable representation on the NAC with Sue Baer/PANJNY and Kim Day/DEN.)

With respect to “NowGen” investments, NextGen doesn’t address the fact that critical infrastructure at many of our most important airports is approaching or exceeding its design life.  From aging  terminals to aging runways, U.S. airports have basic infrastructure maintenance and improvement needs that still must be met.  Similarly, despite NextGen advancements, legacy air traffic control systems will still need to be maintained and in some cases, upgraded, until such time that NextGen systems are considered reliable replacements for these systems.

Regarding unmanned aerial systems, we believe the watch phase needs to be “do no harm.”  The increasing use of unmanned aircraft systems in domestic airspace has to be managed in a way that ensures aircraft are not adversely impacted either through loss of airspace access, reduced airspace capacity, increased environmental impacts, or reduced margins of safety.  These are extremely tall orders for aircraft that have been typically used in environments where civil aviation considerations have been secondary.  From an airport perspective “doing no harm” involves the development of common sense airspace rules that ensure these drones do not affect manned aircraft operations especially during safety critical landing and takeoff phases of flight as well as reasonable limitations on the airports at which drone operations can be based.