Scott Pelley to Keynote Airports Council Annual Conference

Meet our 2020 Annual Conference Keynote

Airports Council International – North America (ACI-NA) this week revealed that Scott Pelley, the award-winning 60 Minutes correspondent and former CBS Evening News anchor and managing editor will deliver the keynote address at the 2020 ACI-NA Annual Conference and Exhibition on September 14.  Set to be held September 12 – 15, 2020, in Grand Rapids Michigan, this year’s conference will bring together more than 2,000 delegates from across the airport industry to exchange ideas and promote innovative solutions to emerging challenges.

After covering some of the most compelling and important national stories of the last 20 years,  Pelley is one of the most recognizable faces in American journalism today. In its first season, The CBS Evening News with Scott Pelley, won a Peabody Award and was the only network evening news broadcast to grow its audience. Taking over for Katie Couric, he gained an additional 821,000 viewers in his first nine months in the anchor chair. Few journalists have made as wide and as deep a mark on broadcast news as Pelley has. He is known for covering everything from breaking national news stories to politics and wars. Since he brought that experience to 60 Minutes in 2004, half of all the major awards won by the broadcast have been for stories reported by Pelley.

Pelley also formerly served as CBS’ chief White House correspondent, where he covered the biggest domestic stories of the 1990’s. As an Emmy Award-winning journalist, he has covered the major events and moving stories that have captured the attention of the American people. He has interviewed world leaders such as President George W. Bush, President Bill Clinton, and Iranian President Mahmoud Ahmadinejad, and his presentations incorporate poignant stories gained from more than 300 60 Minutes features.

During Pelley’s time as chief White House correspondent, he covered the investigation of President Clinton, breaking many original stories in the process. He has also reported on a wide array of domestic and foreign stories from the White House, covering events ranging from child homelessness in Florida to the aftermath of Japan’s natural disaster.

The Washington Times wrote, “The legacy of Edward R. Murrow lives at CBS in the daring, long-range investigations of Scott Pelley.” The Baltimore Sun called Pelley the “single face of the broadcast,” noting that he is trusted with the “biggest interviews and stories.” Allen Neuharth, founder of USA Today, noted that “Pelley threw hardballs” in his 2007 interview with President Bush, and Bob Woodward, writing in The Washington Post said, “Scott Pelley nailed the crucial question” in his interview with former CIA Director, George Tenet. Salon.com said, “He restores a little of our faith in TV news while performing hugely-important, world-bettering reports along the way.”

Pelley has won three George Foster Peabody Awards, a George Polk Award, two Investigative Reporters and Editors Awards, five Edward R. Murrow Awards, the Society of Professional Journalists Excellence in Journalism Award, the Writers Guild of America Award, a Loeb Award, and a duPont-Columbia University Silver Baton, among others.

Pelley received a 1996 Emmy Award for his work on the TWA Flight 800 disaster and a 1994 Emmy Award for his reporting on the Branch Davidian conflict. While his 2007 Darfur report was honored with another. Pelley has been a correspondent on many prestigious news teams who have, in total, won 37 national Emmy Awards.

Members of Congress Announce Framework for Infrastructure Bill That Includes a PFC Increase

Last week, ACI-NA welcomed the news of an infrastructure investment framework – called the “Moving Forward Framework” – which was announced by a group of Members of Congress, led by House Transportation and Infrastructure Chairman Peter DeFazio (D-OR). The start of the new year represents an important opportunity for Members to announce their top policy priorities and we are pleased that improving airport infrastructure across the U.S. is a high priority for so many Members, as well as the American people.

The Moving Forward Framework calls for raising the federal cap on the Passenger Facility Charge (PFC) and indexing it for inflation. If enacted into law, a lift on local PFCs would allow airports to fund necessary infrastructure improvements, including repairing aging facilities and making expansions to accommodate record-breaking passenger traffic.

In his remarks, Chairman DeFazio highlighted how airports are in dire need of infrastructure upgrades and addressed the fact that the very same airlines who are comfortable with increasing baggage fees oppose an updated Passenger Facility Charge because they know it will increase airline competition in many airports. You can watch his remarks here.

Immediately following their announcement, ACI-NA President and CEO Kevin Burke thanked the group, and specifically Chairman DeFazio, for their leadership.

“The House Democrats’ infrastructure framework recognizes the time has finally come to increase the woefully outdated PFC,” said ACI-NA President and CEO Kevin Burke. “A long-overdue adjustment to the Passenger Facility Charge (PFC) will provide the lift America’s airports need to take off into the future. Unlike a $40 bag fee that just pads an airline’s bottom line, a modernized PFC will help our terminally challenged airports make transformative investments in new infrastructure that will improve the passenger experience for millions of travelers. I am particularly thankful for the leadership of Chairman DeFazio, the father of the PFC, for making this one of his top legislative priorities.”

Burke also joined American Association of Airport Executives President and CEO Todd Hauptli and Airport Consultant Council President T.J. Schultz in a joint letter thanking Chairman DeFazio for his leadership on this issue. In the letter they write:

“…we strongly support proposals in the House Democrats’ infrastructure framework that call for raising the federal cap on local PFCs and indexing it for inflation. We are grateful for your leadership. We look forward to working with you and your colleagues to advance legislation that would help airports finance critical projects and repair our nation’s infrastructure.”

Just this month independent research from RAND Corporation confirmed the best way to fix America’s airports is by modernizing the PFC. Further, according to a recent ACI-NA study, U.S. airports face more than $128 billion in infrastructure needs by 2023, with over 56 percent of the needs inside aging terminals. President Trump has repeatedly called for renewed investment in American airports, so we will be listening closely for any references to infrastructure investments in his State of the Union address.

We look forward to working closely with Congress to get this framework over the finish line so that we can finally empower airports to improve their infrastructure and continue to meet the demands of the traveling public.

The Countdown Begins: REAL ID Will Be Required for Air Travel in Exactly One Year

Earlier today, Airports Council International-North America (ACI-NA) President and CEO Kevin Burke teamed up with travel industry leaders and government officials to urge the traveling public to obtain REAL ID compliant identification.

The REAL ID Act, which was passed by Congress in 2005, implements a 9/11 Commission recommendation for the Federal Government to “set standards for the issuance of sources of identification, such as driver’s licenses” as a way to enhance aviation security.

“Ensuring the safety and security of the traveling public is the top priority for airports – and REAL ID is an important component of our efforts,” Burke said. “We are encouraging the public to ensure you have a REAL ID compliant license by October 1st of next year. This will be critical to ensure you are able to travel.”

According to a recent study by the U.S. Travel Association, many Americans may not be aware all Americans will be required to have a REAL ID compliant license in order to board a commercial aircraft beginning on October 1, 2020 – just one year from today.

The purpose of this week’s event held at Reagan National Airport in Washington, DC was to encourage the public to obtain proper identification before the rapidly approaching deadline. It also marks the start of a yearlong educational effort by TSA, airports, airlines, and other stakeholders about the importance of obtaining a REAL ID compliant license.

“We are working hard to ensure the public is aware of this fast approaching deadline,” Burke said. “Despite the ongoing efforts to raise awareness, we remain concerned about the small number of travelers who have obtained a REAL ID compliant licenses”

 

 

Some states and airports are already taking advantage of local opportunities to educate travelers. ACI-NA joined with our airline partners and other associations to send a joint letter to each governor of all 50 states and territories, encouraging them to launch public awareness campaigns to more effectively educate residents about REAL ID requirements.

In lieu of a REAL ID compliant license, air passengers are able to use other federally approved identification for air travel, including U.S. passports or Global Entry, NEXUS or SENTRI identification cards.

Burke was joined by Transportation Security Administration Acting Deputy Administrator Patricia Cogswell, as well as officials from Airlines for America, the American Association of Airport Executives, the American Association of Motor Vehicle Administrators, and the DC, Maryland, and Virginia Department of Motor Vehicles commissioners.

You can learn more about the importance of REAL ID here. And don’t forget to save the date for October 1, 2020. Act now to ensure you have a REAL ID.

LAX CEO: We Need to Bring the Passenger Facility Charge Back to its Original Buying Power

Last week, Los Angeles World Airports Chief Executive Officer Deborah Flint addressed the Washington Aero Club at a lunch event in Washington, D.C. In her speech, Flint described Los Angeles International Airport’s (LAX) current $14 billion investment project and how it will help to relieve congestion and improve the LAX travel experience for passengers.

She also discussed how airports across the country are using technology to improve efficiency and ease long lines.

Finally, she urged Congress to return the Passenger Facility Charge to its original buying power by updating it to be $8.50. She noted that it’s been two decades since the PFC was updated and that it’s well overdue that we modernize it to keep up with inflation.

Excerpts from her speech are below.  Her full remarks are available here.

Flint on the need to modernize the PFC:

A new level of investment in infrastructure is needed and for airports this can be real by bringing the Passenger Facility Charge to its original buying power.

“It is time. It has been two decades that the PFC has been unchanged even though there have been 26 models of the iPod, which was released the same year. It has been so long that the styles have even come back – parachute pants and tracksuits are back in again.

The ask is to increase the PFC from $4.50 to $8.50 and index it for inflation in the future. That will make a difference for airports of all sizes – large, medium, and small.”

Flint on LAX’s infrastructure projects:

We are making a $14 billion investment in an Automated People Mover train system, roadways, a Consolidated Rent-A-Car facility that will combine the 20 separate facilities that burden our neighborhoods and roadways, a connection to regional rail, and modernizing each terminal.

“And we are beginning the environmental review to improve the airfield, build a new concourse off of Terminal 1, and a new Terminal 9, which requires billions of additional dollars.”

Flint on airports improving efficiency through biometrics:

Back to my 16 year old and her airport expectations. For her, wifi and cellular are like air – as they have become for all of us. Her face is everything.

“I am talking about biometric aircraft boarding gates, self-baggage drop, TSA and CBP screening – all biometrically enabled at LAX today. While privacy and data security must have high bars, the efficiency of biometrics is astounding. We boarded an A380 using biometric facial boarding in 20 minutes.”

Flint on the future of the airport industry:

Airport by airport, working with our partners in airlines and throughout the industry, we need to be excited, energetic and chase the next evolution. We need to push for our airports to be more innovative, sustainable, to be stewards for local communities, to bring the joy and certainty back to air travel, and together get the funding to invest and let our industry shine. At Los Angeles World Airports our vision is Gold Standard Airports … Delivered.  The U.S. deserves that vision for each and every one of our airports.”

Infrastructure Week 2019: 20th Century Airports in a 21st Century World

Today marks the official start to Infrastructure Week 2019, the long-celebrated week each year when the infrastructure community comes together and engages in a broad conversation about the importance of modern infrastructure.  For us, every week is Infrastructure Week (we’re not the first ones to make that joke and we won’t be the last…), but we’re proud to join in and represent airports in such an important dialogue this week.

As part of our participation in Infrastructure Week, ACI-NA will continue to amplify our important message about the need to invest in America’s aging airports.  Beginning today, passengers in airports will have the opportunity to hear directly from ACI-NA on the benefits of an improved and modernized airport system.  Watch by clicking below.

We couldn’t think of a better way to get our message in front of those who stand to benefit the most from the improved passenger experience, increased airline competition and lower airfares, and enhanced safety and security that will come when we meet the nearly $130 billion in infrastructure needs of America’s airports over the next five years.

We are proud to count CNN Airport Network as a valued ACI-NA member and an active participant in our Beyond the Runway Coalition.  CNN Airport Network’s tremendous support for our industry is greatly appreciated as we ramp up our efforts to engage in a broad conversation about the importance of modern airports to local communities.

For the latest on Infrastructure Week, visit the Centerlines NOW blog or following along on social media using #InfrastructureWeek #BuildForTomorrow.

Air Service Development Success

BLENDING SMART TECHNIQUES WITH SEXY APPROACHES

By Nicole Nelson

The new carrier. The new city. The new growth. In the language of air service development, all of the above translate to “the sexy things” associated categorically with success, according to Brian Pratte.

As San Antonio International Airport’s Chief Air Service Development Officer, Pratte is proud to tout the “sexy” trifecta SAT has achieved with the announcement of service via Sun Country Airlines to its Minneapolis-St. Paul hub in May, followed by the commencement of Sun Country service to Portland International Airport in June. SAT is also thrilled with its Valentine’s Day gift of nonstop flights to JFK via American Airlines that began Feb. 14.

Yet as wonderful as these new routes may be, both Pratte and San Antonio’s Aviation Director, Russ Handy, attest that they are perhaps equally, if not more, gratified by the existing routes that continue to grow and thrive in the highly leveraged marketplace.

“This probably doesn’t sound real glamorous, but I’m as proud of the things that you don’t see as much of as I am about the big wins in air service,” Handy explained, noting the gratification that ensues when air carriers decide to not only stay in a route but expand in that route by adding additional seats or larger aircraft. “We’ve had a couple of airline meetings in the recent past where airlines have stressed how well their routes are doing. When you see a bunch of positives, you know that not only did you secure that new route, but you made a good overall decision. We’ll have some losses as well as wins, but I think that is what I’m most proud of.”

STEADY AND SEXY

Campbell-Hill Aviation Group Vice President, Kevin Schorr, applauded airports such as SAT that take a well-rounded approach to route development.

“People instinctively think about marketing and talking about new service, but we also need to keep the existing service in mind,” Schorr said. “Airports need to make sure the public knows what they offer because, in the end, it really comes down to butts in seats, and that is going to determine whether or not you maintain service for the long run or lose it before it has a chance to mature.”

Pratte said that SAT has taken a three-pronged approach to air service development to better serve the tremendous growth the mid-sized airport has experienced in recent years. In 2017, SAT exceeded 9 million passengers for the first time ever, and by 2018, the airport exceeded 10 million passengers.

“There is maintenance and keeping what you’ve got; expansion of what is already there and, of course, the growth,” Pratte said. “We have been able to hit on all three approaches. I think that’s really what’s more beneficial than just one singular victory.”

Three years ago, the city and the airport system made a strategic decision to focus on air service development, both air service new development and retention, Handy explained. “Brian and his team, in an impressive amount of time, developed an air service development plan, a strategic plan with goals and metrics identifying, with data, air service opportunities and how they might go about that, and they tackled it.”

Prior to Pratte’s hire, air service development was relatively flat – growing by roughly one percent per year – despite the fact that the San Antonio community was consistently growing. The numbers have risen very quickly since then due, in part, to the under-told story of up-gauging with added frequencies and added capacity. Pratte and his team developed the plan and have spent up to three-quarters of their time on the road, selling the realities of SAT’s demand potential to airlines. The result was that the airport system exceeded its five-year goal in a little over two years.

COMMUNITY EMBRACE

Once an airport has a stellar route development team in place, one might think the job of air service development is seemingly formulaic. Between meetings at air carrier headquarters and air service speed dating conferences on the road (ACI-NA’s JumpStart® Air Service Development Conference) and periodic conference calls with the airlines from the home airport office, there are seemingly tried and true techniques and strategies.

But truth be told, it is far from a wash, rinse and repeat affair, according to Campbell-Hill’s Schorr. As each airport has its own unique circumstances, the air service development consultant shared that in-depth data dives and community outreach have proven necessary to round out airport-airline mating and relationship rituals.

“What we now have at our disposal are new data and new tools that make us smarter and hence make the airlines smarter about existing opportunities and about how to market new service, as well,” Schorr said, emphasizing the customized approach. “We now have better insights as to who is using the airport or not using the airport, and other choices they are making. Which airlines are they flying, for example? While we have been able to get that kind of information for years, we can now get it sooner and with greater granularity.”

Edmonton International Airport is all about the granularity as it relates to air service development. Realizing the vast importance of data, the airport developed “EIA rewards” a proprietary program that has provided the airport with a steady stream of exclusive passenger data since the program’s inception in 2011.

“When our customers reserve a parking stall or become a rewards member, we have the data on where they fly,” said EIA Vice President of Air Service and Commercial Development, Myron Keehn, noting that EIA owns the data derived from the proprietary rewards program. “We have a lot of data on very frequent customers’ travel and we utilize that as a tool to provide data so we can go to the airlines to have a conversation.”

Used in tandem with industry data, Keehn said this valuable information has contributed to EIA’s acquisition of seat capacity, both on mainline Canadian carriers as well as in the lower-cost entrance market with Air Canada Rouge, Swoop and Flair.

“All three of (the new entry lower-cost airlines) provide service from our market and that has, honestly, helped on all routes,” Keehn said, noting the carriers have ‘thickened’ some routes, and added new routes based upon the steady growth demand. “This has opened opportunities for people to travel somewhere they haven’t gone before, which is really helpful.”

The other thing EIA is prone to do is work very closely with the Edmonton business community – whether it be the tech, health, manufacturing, professional services, finance or beyond.

“We take the opportunity to say, ‘Where do you guys need to go?’” Keehn said, noting that the May 18 launch of air service to San Francisco was a community-driven objective with an Air Canada partner. “There is a large tech sector in Edmonton, and they need connectivity from a financing perspective to get to Silicon Valley. The tech communities simply don’t connect, so going through L.A. wasn’t working. They wanted point to point.”

From an airport perspective, Keehn said his team strives to work hard with the airlines in partnership.

“It is a partnership, and we really view it that way,” Keehn said. “We work on both the supply side, working with the airlines to look at where capacity is unserved or underserved, and where they can thicken routes, increase frequency or drive a larger aircraft under the same route itself, and still maintain the same crew cost.”

But that is only part of what EIA does. The other part is the work on the demand side of it.

“My team actually goes out and acts like an airline sales agent,” Keehn said, explaining the airport personnel work with tourist agencies, travel agencies, and trade agencies on both sides of the network route. Keehn again cited the recent Air Canada launch of the nonstop, year-round EIA-SFO route as a prime example.

“We actually had trade missions go down on the business side in advance, and after the route was actually launched, we had a bunch of business-to-business meetings in both cities,” Keehn said. “We actually hosted a group that came up here, and at trade shows as well. So, we drive from a business perspective, a political perspective, and an association perspective – like a Chamber of Commerce or Board of Trade. Then, we do it from a travel and tourism perspective as well.”

Keehn said he believes 2018, by far, was the year EIA has proven to be the most effective at community outreach.

“We were very deliberate, and we spent a lot of time and effort planning and working from both ends,” Keehn said. “I have a team of folks that I like to see often, but I tell them, ‘I really don’t want to see you in the office’ because their business is out of the office.”

DIALING IN THE DATA

Mined data, combined with community education and support, has also played a large role in Ontario International Airport’s rise from a small regional airport under the Los Angeles World Airports system to a vibrant, independent aviation gateway.

In recent years, the Inland Empire airport has marketed its convenience and accessibility in serving one of the fastest-growing population and economic centers in the United States, giving its airline partners more reasons to put more flights in the air. The result has been a double-digit increase in traffic over the past two years.

“I can really get my hands dirty in data,” remarked ONT CEO, Mark Thorpe, who has utilized his vast air service development background to work with reliable sources and consultants to process data and make appropriate industry inferences. “I spend a lot of time myself with it; it is what I enjoy and what I do best.”

Thorpe explained that LAWA acquired Ontario Airport back in the 1960s mainly for diversions. After a long period of growth throughout the early 2000s, the financial crisis hit and service was retrenched to primary airports.

As Thorpe recalled, the LAWA management team focused on building up and adding new facilities at LAX – and they needed to keep all the revenue that they could at that airport.

With that change in management philosophy came a division between the cities of Los Angeles and Ontario, which ultimately resulted in the transfer of the airport with the support of local, state and federal government. As a result, the dynamics changed and the realization took hold that overdependence on one airport wasn’t going to be a good thing for the region in terms of environmental and infrastructural impacts, among others.

“There are a lot of reasons that went into why it was transferred back, but what it means for us now is that we have the only airport in Southern California that can accommodate any significant amount of passenger and cargo traffic growth,” Thorpe said.

ONT had been the most expensive airport in Southern California in terms of airport costs on a per unit basis. But the tables have turned since the transfer to make ONT the least expensive airport in Southern California, in terms of rates and charges. This structure has led to ONT’s ranking as a Top 10 cargo airport in North America with a UPS hub, the Amazon West Regional hub, and the current build out of a FedEx hub facility.

“We’ve already got a lot of cargo traffic growth, but we want an airport that can really accommodate passenger traffic growth,” Thorpe explained.

For this reason, Thorpe has used numeric proof to make a significant case for the resurgent airport in its first stage of redevelopment. For example, Thorpe noted, ONT is more convenient than LAX for 10 million out of 18 million people in Southern California. “We have a huge market to go appeal to and we’re really careful in seeing where we have an advantage of getting to this airport, as opposed to LAX or the other airports on the coast. And that’s where we focus our marketing and our advertising. That’s what we tell airlines about – where our catchment area is.”

Thorpe said the airport is bullish about regaining essential routes that were lost a decade ago to reinstate ONT as a true gateway.

“We’re at this first stage where we’re getting back a lot of services that we’ve lost,” Thorpe said, citing as a case in point the April 22 reinstatement of daily Delta service to Hartsfield-Jackson Atlanta International Airport – as well as a red-eye beginning in June from ONT to the world’s busiest airport.

In addition, red-eye flights prevailed with recent additions to include JetBlue’s service to the JFK market and United’s overnight to Houston. Southwest is entering the San Francisco market for the first time via ONT with four daily flights planned this summer, and Frontier has proven to be “a really great partner” offering frequency to a multitude of markets.

Most notably, however, is ONT’s banner offering of transoceanic service with China Airlines flights to Taipei.

“When you think about a flight to Taiwan from Ontario Airport, it was kind of a seven on the Richter Scale,” Thorpe said, noting that the route is historic as the only commercial aviation flight to either Asia or Europe originating from an airport in Southern California beyond LAX. “It was a major occurrence in the aviation world, at least in Southern California.”

“We’re starting to see things really take off and I think we’ll start to see things reach a tipping point where we really can develop this airport into a second major international gateway in the United States,” Thorpe projected.

SLC – Designing for the Future

By Bill Wyatt, Executive Director, Salt Lake City International Airport

I’m often asked why, after a week of retiring from the Port of Portland (PDX), I decided to accept an offer to go back to work as the new executive director of the Salt Lake City International Airport (SLC).

The reason is simple: SLC is building what will be the first new hub airport in the country in the 21st century. We’re not talking a remodel or an expansion, but an entirely new airport. The new airport will secure SLC’s position as a global aviation hub that will serve and grow with the region for decades to come.

As with many airports, SLC is experiencing tremendous passenger growth and operating in facilities that are over-utilized and well past their prime. The history of SLC goes back to 1961, when Terminal 1 first opened. Over the years, we added Terminal 2, additional concourses and an International Terminal. Our newest building is the International Terminal, which was constructed more than 20 years ago.

Our facilities were originally built to accommodate 10 million passengers and, today, SLC is seeing upward of 25 million passengers each year. We have become a thriving hub airport for Delta Air Lines and today are Delta’s fourth largest hub.

Our passengers experience congestion at SLC daily, whether it’s curbside, in the parking garage or when trying to find a seat in gate hold areas and restaurants. Plus, the lack of available gates limit new air service to SLC.

But that will all change the fall of 2020, when the first phase of The New SLC Redevelopment Project opens with a parking garage with double the capacity, one central terminal with 16 security lanes and portions of two new concourses. Once we open the first phase, the process to build the second phase begins with the demolition of current facilities, which allow construction to the east to commence. Come 2025, the entire project will be complete and passengers will travel through an entirely new, modern airport.

The advantage to building a new airport is that you can design for the future. The New SLC will be more efficient and more sustainable. The new concourses are designed in a parallel configuration, which will eliminate aircraft bottlenecks, so airlines can get their planes back in the air faster.

We are also aiming for a LEED Gold Certification from the U.S. Green Building Council and plan to achieve this through a variety of ways, such as converting all airline ground service equipment to electric by 2023. The use of natural light will also help to achieve our energy goals.

Those who have arrived at Salt Lake City may have experienced a phenomenon that is unique to our airport and which we are addressing in the new terminal. Thousands of young men and women travel around the world on missions for the Church of Jesus Christ of Latter-day Saints and depart from our airport. SLC is also the place where friends and families come to greet these missionaries when they return home. It’s not unusual to see large gatherings at the luggage carousels with family and friends holding signs welcoming back their loved ones. This also presents a challenge to passengers attempting to get their luggage. In the new terminal, we will have a Meeter-Greeter Room where those waiting for passengers to arrive – whether they be military personnel, missionaries or a winning sports team – can relax in a comfortable setting.

But beyond the brick and mortar, the new airport has been designed to leave a lasting impression on travelers. Art and other elements will provide a sense of place through the use of sandstone, copper colors and native plants. The design incorporates plenty of windows to provide views of the mountains from many vantage points throughout the airport, including from an outdoor deck from Delta’s Sky Club.

Passengers will be wowed by massive art installations, such as The Canyon, which is being integrated on both walls of the airport terminal. The Canyon evokes the Salt Lake City landscape and spans roughly the size of a football field.

An expanded concessions program with 29 retail stores was recently announced and includes a mix of local, regional and national brands, including new brands such as Coach, Frye and Mac. The restaurant program announcement is coming soon and is expected to be just as impressive.

And the good news keeps on coming. The $3.6 billion-plus airport is being built without one cent of local tax payer dollars. For years, SLC was the only large-size, hub airport in the country to be debt free. That has since changed, but the foresight of those planning this project allowed the project to begin with savings. It will all pay off in the end. A recent economic impact study showed the project is contributing approximately $5.5 billion to the local economy.

SLC is currently one of the nation’s most cost-effective airports for airline operations and plans to maintain one of the lowest CPEs in the country for a hub operation.

So you can see why my plans to retire have been put on hold – so that I can be part of this remarkable program that will make traveling through SLC truly unforgettable.

Checked Facts: Airports Are Not Taxpayer Funded

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?

Communities Left Behind and Airline Industry Consolidation: The Promise of Airline Deregulation Has Only Partially Been Fulfilled

To commemorate the 40th Anniversary of the enactment of the Airline Deregulation Act of 1978, championed by Dr. Alfred E. Kahn while serving as Chair of the Civil Aeronautics Board (CAB) under President Jimmy Carter, various industry experts were asked by the JDA Journal to comment on “whether the Airline Deregulation Act is meeting Dr. Kahn’s vision.” The following is the contribution by ACI-NA General Counsel Tom Devine.

 

The Airline Deregulation Act of 1978 has certainly provided benefits to consumers in many areas, as airlines and others often point out, but the promise of deregulation has not been fully realized, and many communities have been left behind.

Dr. Kahn assumed we could rely on market forces to supplant government regulation, but industry concentration is now higher than it was prior to deregulation, due to waves of industry consolidation in the past decade.  It is also likely that Dr. Kahn did not anticipate the advent and widespread use of ancillary airline fees (totaling more than $20 billion in 2017) that distort market signals.  Moreover, the paucity of viable new entrants and the dominant carriers’ reaction even to small-scale challenges from other carriers has meant that the market has not always been effective in curbing anti-competitive behavior of dominant airlines.  A distorted or constrained marketplace does not realize the benefits of true competition.

Competition also depends on access by airline competitors to necessary airport facilities, such as runways and terminals.  Preserving and enhancing competition was a key goal of Congress in 1990, when it restored, in a limited form, airports’ right to impose per-passenger fees to raise money for necessary airport capital improvements.  This was critical, because, while dominant hub carriers, for instance, were willing to finance improvements to benefit themselves, they were naturally reluctant to fund facilities that would enable competitors to gain access to the airport.  The PFC statute helped solve this dilemma and enhanced competition by explicitly (1) providing that airline agreements could not govern the imposition or use of PFCS and (2) precluding the leasing of PFC-funded gates on a long-term, exclusive use basis.

Unfortunately, the PFC was initially capped at $3 per passenger in 1990 and has only been raised once, 18 years ago, to $4.50.  The erosion of PFC purchasing power over the years–coupled with the fact that many airports’ PFC capacity is fully committed to pay off projects already constructed–thwarts airports’ ability today to fund the necessary infrastructure to provide for competitive entry.

While the ADA provided some mechanisms for addressing communities and consumers that have been disenfranchised, such as the Essential Air Service program, their effectiveness has proven to be limited.  Reduction in air service is the biggest concern of many of our non-hub, small hub, and medium hub airports throughout the country.  While airports are working diligently to take the self-help steps they can to induce, attract and retain air service, the tools and resources available to them are quite limited.

It is in everyone’s interests — airports, airlines, consumers, communities, businesses and the government, alike — to come up with creative and effective ways to ensure that small and medium-sized communities throughout the country have access to, and connectivity with, the national air transportation system and that there is effective competition throughout the system.  Airports currently produce $1.4 Trillion in economic activity.  Expanding access to the national network of vibrant aviation activity to underserved markets and ensuring true competition throughout the system will allow the economic and social benefits of Deregulation to be realized by all.

A version of this column originally appeared in JDA Journal on October 23, 2018. Read the full article, “40th Anniversary of the Airline Deregulation Act: Retrospectives from 7 Different Perspectives” >>

BNA Is Ever-Expanding

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.