Category: Air Cargo

Checked Facts: Airports Are Not Taxpayer Funded

Posted on | by aci_na_wpadmin

Benjamin Franklin said there are only two certainties in life: death and taxes.  If there’s one more thing we can be certain of on April 15, it’s the airlines continuing to spread misinformation about how America’s airports are funded.

It is common misconception that airports are funded with taxpayer dollars.  In reality, infrastructure projects at airports in the United States are funded through three key mechanisms: federal grants through the FAA’s Airport Improvement Program (AIP), the Passenger Facility Charge (PFC) local user fee, and tenant rents and fees.

No matter how many times the airlines repeat it, the PFC is not tax. The PFC is a local user fee that airports rely on to repair aging facilities, improve aviation safety, improve the passenger experience, create more airline competition to lower airfares, and accommodate rising demand.  With nearly $130 billion in infrastructure needs over the next five years, the PFC is the cheapest and most sustainable option available.

Here’s why:  The PFC empowers those who know the most about the local airport needs, infrastructure investments, and safety upgrades to make the best decisions for the airport while balancing the passenger’s interests. The PFC is collected locally and, unlike other aviation-related fees and taxes, stays local. It never gets passed to Washington, D.C. The PFC is the only funding tool that maximizes this kind of critical local control.  The airlines’ erroneous “tax” argument doesn’t hold water.

Today’s modern conservative movement is diverse and often fractious, so it can be hard to find unanimity on almost any issue. But when it comes to support for the PFC, conservative think tanks and advocacy groups speak with a clear voice in support of this quintessential user fee.

The Competitive Enterprise Institute, FreedomWorks, Heritage Foundation, Heritage Action, Reason Foundation, Council for Citizens Against Government Waste, Taxpayer Protection Alliance, and Citizen Outreach are some of the leading anti-tax and free market organizations that agree the PFC is a local user fee.

User fees represent a better way to pay for infrastructure. Under this system, the people who actually use the airport bear the burden of upkeep and modernization. That is the most fair and equitable way to fund it – passengers who don’t use the airport will never be asked to pay for it. Americans certainly deserve to keep as much of their hard-earned money as possible.  How else would they be able to pay all those exorbitant airline bag fees?

BNA Is Ever-Expanding

Posted on | by Scott Elmore

By Douglas E. Kreulen, A.A.E., President and CEO, Metropolitan Nashville Airport Authority

Nashville is on fire – there really is no other way to describe it. Always a great place to live, the city is now receiving an unprecedented level of attention from all across the country and beyond. National Geographic Traveller U.K. included Nashville on its “Cool List,” Business Insider named Nashville as one of the “33 Trips Everyone Should Take in the U.S. in 2018,” Forbes “The 20 Happiest Cities to Work in Right Now” list included Nashville, and the lists and accolades just go on and on. The word is out, and the world is coming here to see for themselves. In fact, according to recent U.S. Census estimates, 94 people are moving to Nashville every single day.

As aviation industry professionals, you know how this type of popularity and growth can put major demands on transportation facilities. The challenge is to anticipate and address those demands so as to best serve the aviation needs of the community.

The story of passenger growth at Nashville International Airport (BNA) has followed an irregular path. Nashville’s current terminal opened in 1987, built to accommodate the hub then-operated by American Airlines. Driven by that hub activity, BNA grew to serve more than 10 million passengers by 1992, though only 15 percent of which were origin and destination travelers. In the next year, however, American began reducing operations at BNA and ultimately “de-hubbed” from our airport, causing a steady decline in overall passenger traffic. As it turned out, the high water mark of 1992 would remain the passenger record at BNA for the next 21 years.

But the city and region continued to prosper, solid and steady, and passenger traffic grew likewise. With the end of the recession in 2009, Nashville boomed and growth surged, along with steep increases in air travel. Since then, we’ve been on a tear. By 2013, BNA finally surpassed that 1992 passenger record, and we would add an additional million passengers or more in each of the following five years, reflecting annual growth rates as high as 11 percent. Most recently, in our Fiscal Year 2018, BNA surpassed 14.9 million passengers, a ten percent increase, with nearly 90 percent origin and destination traffic.

This torrid growth required a response. Today’s passenger numbers are years ahead of the forecast found in our last master plan. It was clear to our Board of Commissioners and executive team that expansion plans needed to be finalized – and accelerated – to accommodate the region’s aviation needs.

So in 2016, after additional passenger analysis and forecasting, research and planning, we launched BNA Vision, our dynamic growth and expansion plan for Nashville International Airport. Upon its completion in 2023, BNA Vision will include a parking and transportation center, a new Concourse D, an expanded central terminal, an airport administration building, a possible hotel and transit connection, and a state-of-the-art International Arrivals Facility, among other features.

This billion-dollar project will be completed in phases, as to limit inconvenience and allow the airport to continue all operations. Current projects under construction include a terminal garage and transportation center; a second garage with an airport administrative office complex on top; Concourse D and ticketing wing expansion; and a terminal apron and taxilane expansion to accommodate the construction of our future International Arrivals Facility.

Our focus is on expanding and renovating BNA, and we’re working at a swift pace to add more than 500,000 square feet to our terminal. But the cranes and construction only tell half the story. Expansion for us also means adding air service to make certain we are taking Nashvillians to as many places as we can in the world while also bringing the world to Nashville.

In May of this year, transatlantic service returned to BNA after a 20-year hiatus. The long sought-after and highly anticipated service to London’s Heathrow Airport via British Airways was largely made possible thanks to the support from our community, business leaders, state and city officials and our Board of Commissioners. This new services truly opens Nashville up to the world with Heathrow serving as a gateway to so much of Europe and Asia. As our airport grows, and as Music City expands its increasingly recognized brand, we anticipate adding more international service to meet local demands and that of travelers worldwide.

And while we bring these dramatic changes to our airport facilities, it is vital that we maintain the sense of place and top-notch customer service our travelers expect. Nashville is truly a unique city – from the extraordinary food scene to the live music day and night for which we’re known. It is important to us that the moment you step foot off that plane you know you’re in Music City. This is top-of-mind with every decision we make during construction – the warm and welcoming vibe, the concession offerings, and especially the music. Our live music in the terminal program recently celebrated its 30th anniversary and touts more than 700 performances a year in six performance areas throughout the terminal, and we plan to add more. Nashville is southern hospitality at its best, and we want to make sure those values remain embodied in our approach to customer service.

So we’ve taken on a big challenge – expand the airport while maintaining that “Nashville feel.” We’re confident we will accomplish our goals thanks to the thousands of our hardworking colleagues and partners from all over Middle Tennessee. These are the people who make the aviation industry go. The people who show up every day, arriving before the sun rises and working until long after it sets, to open our storefronts and music stages, provide passenger safety and make sure our baggage systems are running while tackling so many other tasks necessary to make a modern airport function. Because of their commitment and dedication, we know the best days at BNA are in front of us.

And in this fashion, we’ll provide our world-class city with the world-class airport it deserves.

Crowd listening to a speaker at ACI-NA’s 2017 Annual Conference

Cheers to 70 Years: The Best Is Yet to Come

Posted on | by Scott Elmore

By: Kevin M. Burke, President and CEO, ACI-NA

2018 represents a great milestone for Airports Council International-North America as we celebrate our seventieth anniversary as the Voice of Airports in North America. Anniversaries like this provide a great opportunity to reflect on our past, celebrate our present and look ahead to the future.

As you know, air travel – and the world – has transformed immensely over the last seventy years. And our industry’s evolution along with it hasn’t always been easy or certain. That’s one of the chief reasons ACI-NA exists.

Then in a post-war world with a growing economy, air travel was increasingly accessible to the masses. As we entered the golden age of travel, airports faced many of the same challenges we see today, including burdensome government regulation, infrastructure and investment needs, and airline decision making.

Realizing that there was power in the collective, nineteen founding members convened in New York in 1948 to establish a body that would bring airports together in addressing the challenges and issues of an evolving aviation industry.  From there, our journey took off as the Airport Operators Council.

Looking back, this industry has overcome significant hardships and setbacks. From economic ebbs and flows to airline industry deregulation and airline consolidation to the September 11, 2001 attacks, this industry has always had to be nimble and responsive to the challenge of the day.

Your association has had to be nimble too. In the past seventy years, our name has changed from Airport Operators Council to Airport Operators Council International, and now to Airports Council International-North America in an effort to make room for our ever growing U.S. and Canadian membership and global connections.

While the issues of the past may sound familiar today, so much has changed. Today, airports operate more as businesses than they ever have before.  They are becoming cities unto themselves.

The current landscape presents many unique challenges that require solutions. Today’s airports are not your father or grandfather’s airport. We are seeing a change in the way technology affects air transportation across the world.

Meeting the demands of passenger and cargo growth has never been more important. Our airports must have the ability to modernize as they seek to accommodate rapid growth in passenger and cargo traffic. In the United States alone, airports need nearly $100 billion in infrastructure upgrades and maintenance in order to remain competitive with airports across the globe.

Solving today’s challenges are essential in order to lay the foundation for the future. As such, airports around the world are actively working to enhance competition, create efficiencies through technology, and improve the passenger experience.

There used to be more than thirty airlines that no longer exist because of airline consolidation. The future of the airport industry is at stake without an economic climate that fosters airline competition and choice.

Competition has many benefits in our industry, which can be enhanced through more air service routes and more airline choices. In order to ensure communities in North America remain connected to the global marketplace, we are actively working to make certain our industry – airports and airlines – are as competitive as they can be. Our work in this important area will only grow in the years ahead.

Technology will also be a large part of an overall improved and seamless passenger experience. Today, easiness is synonymous with technology. What new technologies can we use to our benefit? Biometrics is speeding up the boarding process for certain flights, and in a just a few years, all flights may be boarded with the scan of a face.

It’s clear that we must focus on enhancing the passenger experience for a successful future. But these challenges are too big for anyone to handle alone. And that’s where your association comes in.

Members always tell me the real value of ACI-NA comes through our ability to advance airport priorities in Washington and Ottawa, provide essential industry intelligence by keeping the pulse of the issues impacting airport operations, and foster industry collaboration by creating a forum to develop and exchange best practices.  The rich history of advocating for policies and services that strengthen airports will continue as we reflect on our accomplishments and look beyond the horizon.

ACI-NA is only as strong as its members and their active engagement. Our team is proud of the members we serve because of the profound and positive impact they have on local communities across North America. Thank you for your leadership.

Today, as we celebrate our seventieth year with a strong membership and transnational – even global with the establishment of ACI World in 1992 – reach, we recognize that there are obstacles still to overcome. We’re not done yet. We’re just getting started.

Here’s to the next seventy years.

Meet the Member: Rep. Jeff Denham

Posted on | by Scott Elmore

ACI-NA President and CEO Kevin M. Burke recently caught up with Rep. Jeff Denham, a member of the House Transportation and Infrastructure Committee, to talk about prospects for an infrastructure bill in Congress.

ACI-NA Celebrates 2018 Infrastructure Week at TPA

Posted on | by Scott Elmore

Infrastructure Week, a week-long celebration of the vast network that supports – and moves – the U.S. economy, is taking place this week. ACI-NA’s Airport Infrastructure Needs Study details that U.S. airports have nearly $100 billion in infrastructure needs through 2021 to accommodate growth in passenger and cargo activity, rehabilitate existing facilities and support aircraft innovation.

For Infrastructure Week 2018, Tampa International Airport hosted ACI-NA and Building America’s Future (BAF) along with members of the Tampa Congressional delegation for an event focused on the need for airport infrastructure investment. This video highlights the lawmakers and industry leaders who called for robust infrastructure investment during the event.

Inspiring “Island” Travel

Posted on | by Scott Elmore

By Doug Newson, CEO, Charlottetown Airport Authority

Operated by the Charlottetown Airport Authority Inc. (CAA), the Charlottetown Airport (YYG) is located in Canada’s smallest province, Prince Edward Island (PEI), or as the locals like to call it, “The Island.” Although small in size – with a population of about 150,000 residents – thanks to the beautiful beaches, world-class golf and delicious culinary products, we are one of Canada’s most popular tourism destinations, attracting more than 1 million visitors each year. Being one of three entry points on to the Island, the airport’s importance to the province, and especially the tourism industry, is significant. So, by connecting Islanders to the world and the world to our Island, YYG is inspiring Island travel – at record levels.

PEI has seen four consecutive years of record tourism growth, which has resulted in record traffic levels for the Charlottetown Airport. In 2017, passenger traffic surpassed the 370,000 mark for the first time. This outdid our previous high by more than 15,000 passengers. In the past 10 years, passenger movements at our airport have increased by 57 percent. Our recent growth has been driven by significant capacity increases from our main airline partner, Air Canada.

In 2016, Air Canada introduced their leisure airline subsidiary, Air Canada Rouge, to our market, bringing Airbus 319 and 321 from Montreal and Toronto for the first time – a great product for our busy summer season as well as the meetings and conventions sector that thrives in the shoulder seasons on PEI. The Air Canada service is complemented by our other main airline partner, WestJet, that operates two 737 aircraft per day to Toronto in the peak summer season.

Over the past two years, CAA has been investing heavily in its airside infrastructure. In 2017, we completed our second year of a three-year, $25 million Runway Improvement Program – the largest infrastructure investment in CAA’s history. Already providing a $115 million economic impact to our province, this investment will drive further economic growth from YYG by creating jobs for Islanders while also improving our infrastructure and operational effectiveness.

The first phase of the program, which took place from 2016-2017, saw the addition of 2,000 feet to our 5,000-foot crosswind runway, 10-28.

The project consisted of earthwork, installation of a drainage culvert, gravel, asphalt, electrical upgrades, and the construction of two RESAs (runway end safety areas). This project progressed very well and produced some impressive numbers: 50,000 truckloads of earth were moved, 50,000 tonnes of gravel was spread, and 8,000 tonnes of asphalt laid. Expanding runway 10-28 gives us two 7,000-foot runways to significantly improve airport operations, flexibility and safety in different wind and weather conditions. It also means there will be no negative impact to Islanders and tourists in summer 2018, when major rehabilitation work is required on our main runway, forcing the closure of this runway for the entire peak tourism season.

As 2018 progresses, we are now into this final phase of the Runway Improvement Program, which consists of the rehabilitation of Runway 03-21 and connecting taxiways Alpha, Bravo and Charlie. Major components of the work are grading and drainage improvements, storm water replacement, electrical replacement and rehabilitation, and reconstruction of the pavement structure. The primary objective of this project is to ensure the continued safe operation of the Charlottetown Airport so that it can continue to capitalize on recent growth trends and drive economic value for our community.

As mentioned, tourism is a significant growth factor for our airport but with our growing numbers we also feel confident in saying we are proud to be the launch pad for Islanders’ adventures all over the world. This past year we thought we would celebrate that by asking Islanders to share their travel adventures and photos with us. The response was overwhelming. Hundreds of people submitted photos that capture the energy, inspiration, wonder and excitement of exploring a new destination. As an ode to our travelers, we’ve created a curated photo display in our departures lounge with a selection of 100 photos from nearly 30 countries that span every continent. We call it Just Go! The installation also features an interactive touch screen component that allows passengers to view more about the travelers and their stories. It’s a celebration of our customers, their travels and the adventures that inspire others to explore the world. They certainly inspire us in our work to help connect Islanders to the world. Our vision here at the Charlottetown Airport is simple.

We want to provide an exceptional passenger experience, with genuine Island hospitality. As we look to the future, we will never lose sight of this vision and continue to invest in our airport to meet the needs of our residents, visitors and those coming to our Island for business. New programs and services to enhance the passenger experience are on the horizon, as we understand the importance of maintaining and improving our services and facilities to inspire “Island” travel.

Global Trends in E-Commerce

Posted on | by Scott Elmore

By Ricondo & Associates Inc.

The increasing use of electronic commerce (e-commerce) has changed the landscape of global retailing and is affecting activity at airports. The development of e-commerce includes retailing in airport terminals, but is more significantly related to an airport’s interaction with the business, logistics, and cargo networks that can provide competitive advantages to companies in, for example, assembly, sortation, regulation, speed, assurance, and cost of delivery. The widely anticipated growth of e-commerce worldwide presents significant opportunities for airport owners to recognize trends, support the e-commerce business network to the benefit of their tenants and their own financial results, and contribute to regional economic development.

OVERLAYING DEVELOPMENTS

Several overlaying developments contribute to the growth of e-commerce:

  1. Increasing concentration of the world’s population in urban areas with global connectivity, which increases the importance of the world’s airports in moving passengers and goods around the world.
  2. Increasing self-owned, single-person businesses, also frequently referred to as the “gig economy” or “on demand economy.”
  3. Technological advancements to enable globalized commerce.

LEADING E-COMMERCE MARKETS

There are varying estimates of e-commerce sales by country, but, in most cases, China is shown as the leader because of its very large population base and rapid adoption of technology.

E-COMMERCE GROWTH IN UNITED STATES

The United States is the second largest online market in the world (following China). Many U.S. retailers are investing in international operations, and many international e-retailers are investing in the U.S. market.

Online sales still represent a relatively small share of total retail sales in the United States (about 8 percent in 2016), but the online share has been increasingly rapidly. This illustrates the potential for significant future growth in e-commerce in the context of the very large overall U.S. retail market.

LOGISTICS AND DELIVERY ARE KEY TO E-COMMERCE

E-commerce, in most cases, replaces the experience of shopping at a brick-and-mortar store, and requires the delivery of goods to the purchaser. According to the U.S. National Retail Federation, about 60 percent of online sales in 2015 included free shipping.

Free shipping is a competitive advantage, but also a cost. Combined with increased demand for speed of delivery (2-day, 1-day, or same-day), shipping to individuals is a major logistical challenge central to the business offering.

National postal services have become more relevant with the rise of e-commerce because of their networks of local couriers and ability to deliver to individual residences. Delivery is more complex with cross-border trade—myriad issues exist, such as multiple operators, customs clearance, customer payment, taxes, and currency exchange challenges.

One area of interest for e-commerce is the potential for drones to deliver packages, and thereby solve one of the more costly and complex elements of e-commerce fulfillment. The potential for drones is particularly important for airport owners to consider because, if there is an alternative delivery method, questions arise regarding investment in airport facilities for more traditional air cargo and the potential airport role in supporting the use of drones for e-commerce delivery.

OPPORTUNITIES FOR AIRPORTS

Airport owners have multiple opportunities to participate in the growing e-commerce business.

Strategies need to be developed in accordance with the local setting—geographic location, economic fundamentals, and airport infrastructure. With the continued globalization of economic activity, and the associated increase in cross-border e-commerce, airports with established international gateway operations and networks of logistics businesses familiar with the intricacies of international trade will be well-positioned.

The Miami-Dade Aviation Department, operator of a system of airports in Miami-Dade County, Florida, has invested in strategic planning to leverage the combined (1) rapid growth in e-commerce, and (2) Miami’s unique position as an international center of commerce and air cargo for Latin America. A multifaceted approach to analysis and planning includes evaluating cargo infrastructure needs and the potential use of various airports in the system, and coordinating with stakeholders on-airport and in the community.

Recently, the Miami-Dade Aviation Department conducted a workshop with airlines, integrators, logistics providers, community economic development leaders, and others to discuss challenges, opportunities, and collaboration strategies related to e-commerce.