AirportBusiness Blogs

I got this story from a friend…

Bryan Townsend, a frequent flyer if there ever was one, says, when it came to getting through security, Birmingham, AL, was a welcome relief, if only because of two older women who checked IDs and tickets. They were, Bryan says, bright, cheerful, efficient, and friendly. He enjoyed and them and actually looked forward to seeing them. That’s rare, these days.

Now, TSA is handling that job, the two ladies are gone, the security checkpoint line is longer, and he wonders. For one thing, he wonders what happened to the two ladies. Bryan is a nice guy, and wonders if they were able to get new jobs at their ages in this market. He says, “I have always believed that people who do a job unusually well will move up in the world, but it surely didn’t work that way in this case.”

I called the Birmingham Airport and talked with a lady who was very polite and friendly. She explained that—as we all know—TSA is taking over checking IDs and tickets, and suggested that I call Mr. John Allen, spokesperson of TSA for the area. I did.

Mr. Allen—another friendly, helpful person, BTW—confirmed that TSA has “assumed responsibility” for checking “travel documents.” Then, as the southern expression puts it, he “’splained” it to me.

TSA has started using black lights and loupes (eyepieces such as jewelers use) to check travel documents. That requires training in techniques and procedures and it is considered that TSA needs to be in charge. (I suggested that they might also do some training in how to treat customers, and he seemed to agree.) To paraphrase the Bible, almost he did persuadeth me. Time marches on, and time will tell.

One good thing, he gave me a website—TSA.gov—that provides links including one for complaints.

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… two airport initiatives are being revisited. At Bob Hope Airport, officials are again exploring how to impose a nighttime curfew from 10 p.m. to 6:59 a.m. At San Jose, another study is to be conducted to explore the impact of closing Reid-Hillview Airport, which has been under attack for two decades. In both cases, we’ve been here before.

Bob Hope Airport, operated by the Burbank-Glendale-Pasadena Airport Authority, says it has spent more than $90 million of its money and federal grants insulating surrounding homes and schools. Homes on some 60 acres surrounding the airport have yet to be insulated, says the airport. The basis for the curfew proposal is a completed Part 161 study. A 45-day public comment period has been opened, and the airport says it plans to submit the final plan to FAA by this summer.

In recent times, Burbank and Naples (FL) have become the poster children for FAR Part 161 noise studies. Part 161 was created as a way for communities to have more control over their local airports; at least, that’s how the communities view it. FAA, on the other hand, actually sees Part 161 as more or less doing the opposite – the long, arduous process by the community generally hits its own roadblocks along the way. Yet, Naples was successful at getting its Stage 2 ban implemented, after years of battle and at the price of a small fortune.

Reid-Hillview is another issue entirely. It’s about an airport that sits four miles southeast of downtown San Jose and is operated by Santa Clara County. This is prime real estate, in a county that is facing a $221 million budget deficit. Consider a quote from the San Jose Mercury News in an editorial: “A study of Reid-Hillview Airport is probably inevitable once a decade, given the annoyance of small planes buzzing around East San Jose and the exploding value of that prime acreage near Eastridge mall.” They’ve studied this before.

In a reflection of our time, the Mercury News argues that the case for Reid-Hillview, home to some 600 aircraft, centers around its role as critical infrastructure when disaster strikes – specifically, earthquakes. In California, it’s not polite to go around shouting ‘earthquake’ unless you have a good reason.

Thanks for reading. jfi

Well, it’s sorta doubtful that Fortune actually set out to agree with me, or even knows it agrees with me, but I’m taking full credit for it. What’s more, I said it before Fortune did. The more I think of it, the more it kinda, sorta, maybe, seems like maybe Fortune got the idea from my blog. (I don’t believe that, but it is fun to think about it.)

A few weeks ago this blog lamented the fact that Social Security and Medicare are our biggest economic problem and none of the major candidates is addressing, or even discussing, this problem.

Now hear this, the March 17, 2008 issue of Fortune has an article titled “The $34 Trillion Problem.” The subtitle is “Medicare is poised to wreak havoc on the economy. And our presidential candidates are avoiding the issue.” Author Geoff Colvin goes on to comment that this problem cannot be solved easily.

Surely he will be glad to know that I agree with him.

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… it becomes apparent that the economy is hitting home. Several thousand fixed base operators, other tenant operations, and aviation technicians converged this week on the Dallas convention center for the annual Aviation Industry Expo, the NATA FBO Leadership Conference, and the introduction of the AMT Society aviation technicians group meeting.

Economically speaking, the industry segment is on pause, mentally.

A few observations …

– The industry-changing consolidation that has occurred among FBOs is expected to slow.

– To paraphrase one industry resource: The economy is in a recession – get over it; tighten up; think creatively. It is change, and change represents opportunity.

– Corporates are shopping. They want price (price – in this market?) What a few FBOs have discovered in this discussion is that when the corporate operator is calling for price, the call may need to be directed upstairs. What type of aircraft? The mission? The service need? While a lot of FBOs have top-notch customer service reps to receive such requests, some newcomers at the front desk might be hesitant. The point is, they’re looking for a deal, they’re under pressure. An economic downturn brings with it new pressures, new demands, and new ways of conducting business. The FBO that is creative has a chance of making a profit, while accommodating a corporate customer.

– If we are indeed in a recession, it has to do more with the weakness of the dollar than anything else. Investing in U.S. interests is not attractive globally at the moment.

– Fuel remains volatile, and the reason the price continues to be so high is the weakness of the U.S. dollar. Jet-A sales have been dropping off for many since the first of the year … avgas remains sluggish.

Overall, FBOs are optimistic. This is a different industry since the last significant economic downturn. The aircraft manufacturers have backlogs up to five years and the corporate world has become imbedded in the bizav arena. The age of the Internet did not eliminate the need for business travel – in fact, it is tying the business world more closely together and creating a need for more face-to-face meetings.

The greatest concern may be the presidential politics discussion. Price controls; windfall profits taxes; putting up trade barriers – these are all becoming part of the discussion. Why anyone would want to return to the economic model of the 1970s is beyond many, but it may be happening. That would not be a good thing for general aviation.

Thanks for reading. jfi

This week USA Today had an article about the problems of the handicapped travelling by airline. It reminded me of a story (doesn’t everything).

Note: The following was written at a time and place that will never be revealed. It could have been at many different regional airports at most any time.

I just took a new look at one of my favorite regional airports and saw things never noticed before.

Today, I am handicapped. I need help. One leg will work fine for a few minutes after I stand up, then it goes into a state of what can only be described as horrific pain, and stays that way until I sit or recline.

I called the airline last night to arrange for a wheelchair at each airport to be used today. That was the friendliest woman. She answered, “No problem, Mr. Hood.” She said at your departure airport just drive up to the terminal door and ask a skycap for a wheelchair. Then one will await you at the other two airports.” Great.

At the first airport there were no skycaps in sight curbside. No real problem, I could hobble inside and find one. But wait—the big sign said any cars left unattended will be towed immediately at owner’s expense. You could sorta tell they were serious, and that “owner’s expense” would look kinda like a day’s interest on the national debt.

I drove into the parking lot. The only vacant spot—this is true—was in the most distant row. Then came the job of towing three pieces of luggage—two heavy pieces and one not so heavy—uphill across the parking lot and into the terminal. I was almost at the point of tears.

Guess what—no skycaps inside the terminal either. I sat for a minute ‘til the pain eased to a level comparable to natural childbirth, then hobbled to the ticket counter, where—oh happy, happy—there were wheelchairs. I sat in one and whimpered while the agent ticketed me. He explained that there are no skycaps, but he would have an airline employee push me to the gate. I tried to kiss him, but he escaped. It was a gruesome experience, and I still had to deal with two more airports. The wheelchair did arrive at the second airport but not at the third.

How could airports solve this problem without spending a fortune on people and equipment? Maybe the airport could have a much-advertised phone number—at the airport—so handicapped folks could call in the event of a problem. Yes it would be trouble, but it would also be greatly appreciated.

Or, we could just wait until some top dog in the handicapped movement reports the entire industry to the guvmint. It’d be our own fault.

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… the letter of March 6 begins. It is signed by 35 industry trade groups, and opens: “As representatives of the aviation community, we are writing to stress the importance of passing a comprehensive, long-term reauthorization of the Federal Aviation Administration.” Good luck.

Scott Weaver, vice president of government affairs for Airports Council International-North America, explains, “The idea behind it was, though all these associations have different issues and priorities, we could all agree that we need a bill this year.” Unfortunately, funding legislation for FAA and the U.S. aviation system remains at an impasse, bottled up primarily over disagreement on what taxes to charge and the ongoing feud between the agency and the controllers union, NATCA, which signed the letter.

A common complaint from Capitol Hill is that aviation groups too often come to Congress with their parochial interests and without a common message. The letter serves to address that concern. Problem is, both AOPA and ATA declined the invitation to be signees to ‘the letter’ … they represent the two opposing sides. When funding aviation, AOPA wants to change little; ATA wants to change everything – and have a hand in the future control of the system. In the middle sits the airport community and the FAA’s airports division; reliable funding streams and infrastructure investment are the desired goals here.

Weaver notes that FAA is now disseminating AIP monies to airports, but is limited to 75 percent of that appropriated, and is only authorized to do so through June. He adds that it’s the smaller commercial airports that are being hardest hit. Some examples from ACI-NA …

– Quad City International Airport - Moline, IL
A $3 million project will be used to replace concrete panels on the primary 10,000-foot air carrier runway. This project is a phased project over a three-year period, so funding is critical to keep the project moving. Without panel replacement, the runway will continue to deteriorate, which could force air carriers to use other, shorter runways and that could affect the number of seats offered on those aircraft.

A second project for $2 million will start the dirt work for a new taxiway/temporary runway. Both projects are being done in conjunction with each other for a four-year construction period with the total AIP cost of just over $27 million. Both projects are anticipated to be on the State of Illinois’ spring bid-letting so they can be started during this upcoming summer construction season. Without AIP funding, both projects will be a no-go.

– Pensacola (FL) Regional Airport
The airport is delaying construction of an $8 million apron expansion project that is part of a $75 million airport capital program. The delay has caused the airport and its construction team to reschedule the timing of the apron work with the expansion of the terminal concourse.

– Fresno (CA) Yosemite International Airport
Officials have been advised not to count on any discretionary funding for FY2008. The airport’s short- and long-term capital improvement program is based on a FAA-approved pavement management program that identifies the timing of when taxiways and runways are required to be rehabilitated and extended. The work is in priority order, so delayed funding delays all projects in subsequent years.

A final comment from ACI-NA’s Weaver: “Things don’t look too sunny right now, but we’re going to keep fighting. Realistically, if anything is going to happen it’s going to happen before summer recess.”

Thanks for reading. jfi

Mergers, acquisitions, consolidation, expansion, American aircraft built in China, Russia, and elsewhere, our military buying Airbus tankers—what is the world coming to?

I’m not sure, but one thing seems evident, big time. All of a sudden (not really, but it seems that way) the entire world seems to be interested in aviation. There was a time when it seems that only aviators were interested in aviation business. Famed pilot Eddie Rickenbacker built Eastern Airlines, pilot Bob Six built Continental. Delta grew out of a cropdusting outfit and pilot Paul Braniff started Braniff. My first job in aviation was with National Aviation Underwriters, which was started by Dave Kratz, an FBO owner and pilot. My next job was with Montgomery (AL) Aviation, built by Bob Hudgens, himself a pilot and FBO owner. Hangar One, the famed chain of Beechcraft FBOs, was owned by Frank Hulse, a pilot who also started Southern Airlines.

That was normal back then. The industry was owned and managed by people who loved aviation, and sometimes good at business. As the industry matured, the industry went for business education, as evidenced by the growing importance of aviation colleges such as Embry-Riddle, Parks college, and other schools that combined aviation, education, and business (I used to teach aviation management for Southern Illinois University, Carbondale). In my time, the sons of both Bob Hudgens and Frank Hulse earned MBAs at Harvard. Banks and other financial institutions learned that aircraft finance was good business (most of the time).

Then capital moved into aviation. Investors bought in at every level. These people were often interested in profits, not flying, and read P&L statements instead of POHs. They often made the industry more efficient and more business oriented. They also sometimes bombed out totally.

Today we may be seeing the end results of all that industry maturation. Everyone is now interested in aviation at every level. Manufacturing, retailing, services—you name it—somebody is studying it. I can’t help but think this is a good thing.

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… it’s not a tidal wave yet, but the movement of airports into the ground handling business has some momentum. Why they do it, how, and the associated risks were topics of discussion in San Antonio last week as the Aviation Ground Services Association, an affiliate of the American Association of Airport Executives, hosted its first annual Ground Handling Initiatives Workshop. Some 40 attendees shared their experiences, which reveal that there isn’t one core reason airports consider the move. It may be about opportunity, as at Savannah; it may be about filling a need and maintaining air service, as at Moline and Daytona Beach; or, it may be about guaranteeing a level of service for passengers, as at Chattanooga.

A few high-speed, low-pass notes from San Antonio …

- Bruce Carter, director of aviation at the Quad Cities International Airport in Moline, IL set up an independent LLC to provide airline refueling when the previous provider pulled out of the market and the local FBO, Elliott Aviation, declined to enter the business. Carter says his LLC pumped 5.3 million gallons in 2007; he’s established a list of airline employees who can fill in part time, when necessary; and he’s exploring getting into baggage handling.

- Bob Uhrich, director of air service development at Savannah/Hilton Head International Airport, previously worked setting up ground handling operations for charters into Europe where, he points out, the “airports did everything.” Uhrich and SAV director Patrick Graham saw airline services as an opportunity; they trained their staff and then let it be known that they were “on the prowl” for such business. The launch customer is AirTran, which is being charged on a per-turn basis. They’re pursuing more business, possibly even refueling.

- Knoxville is setting up an LLC to offer ground handling to airlines.

- Binghamton, NY is getting into ground handling.

- Daytona International just got into ground handling, a situation in which AirTran threatened to drop service when its own handler pulled out of the market and the carrier couldn’t agree on terms with the remaining provider. So the airport got into the business, and has since added USAir.

- Mike Landguth relates that Chattanooga recently got into airline services because “we decided to control the passenger experience.” The airport staff also had explored new opportunities and ranked them, deciding ground handling might be a business to explore. American Eagle was the launch customer.

- Jerry Ruth of insurance provider ACE USA-Aerospace relates that the insurer had refused to get into airline handling insurance until Mobile and subsequently other airport customers requested quotes for it. (Globally, ramp damage is about $5 billion annually, he says.) He explains that some states afford public entities such as airports sovereign immunity, which can significantly reduce liability exposure. Also, he cautions that if an airport provides refueling it will need environmental liability coverage.

- Ed Jacob, regional director of customer services for American Eagle in Chicago, has been a key advisor for AGSA from the outset. With the (expected) divestiture of American Eagle from parent AMR/American, he says the regional carrier is “very interested” in pursuing ground handling opportunities for other airlines, and suggests that there may be an opportunity to partner with airports, with the latter providing equipment maintenance and GSE procurement.

Thanks for reading. jfi