AirportBusiness Blogs

… may be that the meeting was held at all, considering the state of the industry and what’s happening with meetings these days. Some 80-100 attendees heard that the economy will slog through 2009; the day for finding a replacement for low-lead avgas is upon us; and, communication between TSA and the industry may be on the road to improving; among other issues.

Some highlights …

• Dr. Bernard Weinstein, director for the center for economic development at the University of North Texas, says his worry for the economy today is the potential for commercial real estate defaults, a la the recent bankruptcy filing by a major mall developer. “That shoe is starting to fall,” he says. Dr. Weinstein says the U.S. is in for a “slow slog” back to economic health.
• Mike Chase, president of Chase & Associates, reports that some 2,800 of the 16,545 bizjets in the marketplace today are up for sale – some 17 percent.
• David L. Scheffler, a CPA and president of the Fairfield County (OH) Airport Authority, says his airport has seen little corporate aircraft activity since the Big 3 automakers made their infamous trek to the nation’s capital. “It’s like someone flipped a switch,” he comments.
• In fact, Bill Koch, president/CEO of charter operator Imaginaire and a former NATA chair, says the number one issue facing GA companies today is the perception of business aviation. There is hope, however, according to Andy Cebula, executive VP at AOPA, who reports that recent survey results of “influencers” on the perception of GA show that 68 percent have a favorable impression, and 53 percent see the industry as very important. There’s a “strong view” that GA airports are a positive force for communities, says Cebula.
• Cebula relates that AOPA had expected the environment to be the leading issue in 2009, until the economy tanked. Green regulations remain on the horizon, though, with 100LL a top target. He points out that several companies are currently working on an avgas alternative. Once one enters the market, the questions that will need to be answered concern how aircraft owners may need to modify their powerplants as well as how such a development will impact fixed base operators regarding storage/distribution.
• Then there’s the Transportation Security Administration, which caught the industry’s ire recently with its proposed Large Aircraft Security Program, which is currently undergoing a rethink. Craig Spence, VP of regulatory policy at AOPA, reports that TSA is in the process of collecting self-assessments of some 3,000 GA airports via the Internet. The intent is to get a baseline of data to use for future decisionmaking. His fear: “This will become the new noise.”
• Regarding TSA, a key criticism from industry reps is the ongoing veil of secrecy and lack of communication by the agency on initiatives from the LASP proposal to Security Directive 8-F to the Playbook program. AOPA’s Spence says that “alternatives are desperately needed” for smaller general aviation airports when it comes to security; he also says his association advocates a common form of identity credential industrywide. Lisa Piccione, senior VP at NBAA, calls on TSA to consider different levels of security for different categories of airport, much like FAA regulates Part 91 versus 135 versus 121.
• On the issue of TSA and its communication skills, the audience was introduced to Juan Barnes, recently appointed to be the first GA stakeholder liaison at the agency’s Office of General Aviation. His directive, says Barnes, is to communicate back to TSA the industry’s concerns and issues. At this meeting, he essentially told the attendees nothing – again under the cover of secrecy. One can only hope that the communication flows a bit more freely when he returns to headquarters.

Thanks for reading. jfi

… and recruits actor Harrison Ford to help spread the good word. The theme – General Aviation Serves America – is a step up from the ‘No Plane No Gain’ campaign relaunched by GAMA and NBAA in February in terms of a message that might stick with a non-aviation audience.

The Aircraft Owners & Pilots Association, calling this a “defining moment for general aviation in the United States”, says the mission of the campaign is to promote the benefits of GA to business and communities – particularly to legislators; to offset the negative image which Washington politicos have tagged to business aviation; and, to lobby against new user fees for the industry which the Obama Administration is indicating it will pursue.

Comments AOPA president Craig Fuller, “We have to begin to define who we are and what we do and our value across the country.”

Regarding the ‘No Plane No Gain’ campaign, since its launch NBAA and GAMA have placed television ads in the Washington, D.C. media, had a national story on NPR, and have embraced new media in an effort to get the word out. The campaign has launched a Facebook page, a dedicated YouTube channel, and added a Twitter feed.

On its website (www.noplanenogain.org) is a heading, “Business Aviation serves communities forgotten by airlines,” with associated copy that points out that over 100 cities in the U.S. have experienced a decline in commercial airline service, with 30 communities losing air carrier service entirely. To me, that may be the most important message to be sharing with America. Lobbying Washington is critical, yes; but right now, our industry has a major image problem – to the point that some corporations are curtailing their flight operations for that reason alone.

Either way, it’s positive that the trade groups in D.C. are actively campaigning about the image and the value of GA. One has to wonder, however, why the various GA groups aren’t throwing their dollars into one pool and launching one comprehensive campaign with the additional resources such an integrated effort could bring.

(For more on the AOPA initiative, visit www.aopa.org.)

Thanks for reading. jfi

 I, probably like you, figured that fuel cells—when feasible—would be for small cars and maybe very small airplanes, but certainly not in jumbo jets. Could be we were wrong.

The March 2009 issue of Smithsonian’s Air & Space magazine, a publication much respected and admired, included an article titled “Flying Fuel Cells,” in which it was reported that a Super Dimona aircraft was flown using a fuel cell. The Dimona is, of course, a small plane, so how did I leap from there to jumbo jets? The article explained it all.

In the Dimona, the fuel cell ran an electric motor that actually turned the propeller (there was also a battery that helped on takeoff).

But, you might say, jumbo jets don’t even have propellers. Right you are, but Boeing conducted this flight. (The tiny Dimona had “Boeing” painted on the cowl. Talk about something that could cause rumors!) As Boeing points out, a cell that can spin a prop could instead spin a generator that might provide all of the electrical power the jumbo uses.

Currently a small fraction of power from the jet engines and/or an APU is used for generators that run onboard lighting and other systems. Fuel cells would run cleaner and save fuel, which would save weight and thus save even more fuel. The jumbo jet would thus save money and be “greener” as well. That’s a win-win improvement in today’s world. (Just last week cometh from the Wall Street Journal a “News Alert” informing me that the EPA found that “carbon dioxide and other greenhouse gases pose a danger to the public, setting the stage for a battle over regulations that could have a far-reaching impact on the U.S. economy.”)

Ah, and, as mentioned before in this BLOG, P&W is working on a geared turbofan (they have already sold some of these engines for future airliners) that will save even more fuel and also lower carbon dioxide emissions.

But wait! There’s more! Engineers at other companies are improving LEDs so that they can replace the lights in airliner interiors and maybe even the landing lights. That would save more fuel which would mean a lighter takeoff which would save even more fuel.

Ain’t the free market wonderful?

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… challenges remain. That’s the word from a panel brought together this week via a webinar sponsored by Air Cargo World and featuring reps from American Airlines, freight forwarders, and Pfizer Pharmaceuticals.

According to the panel, the “low-hanging fruit” – that is, the first 50 percent screening goal – was achieved on schedule in February. To achieve 100 percent screening of cargo in the belly of U.S. airliners by August 2010, they say, better communication between industry and TSA is needed, along with a more streamlined process for bringing new technology online.

Brandon Fried, executive director of the Airforwarders Association, says that the TSA goal of screening all cargo on narrow-body U.S. air carriers was achieved without “a lot of heartache”. Moving forward, he calls on Congress to provide appropriate funding and encourages TSA to provide more outreach, more communication. “We also urge Congress to identify real risks,” comments Fried, and to provide “risk-based solutions”.

Asa Hutchinson, a former undersecretary at DHS and the current chairman of the Safe Commerce Coalition, points out that a Government Accountability Office (GAO) report suggests that 100 percent screening could actually make the system less secure. GAO cautions that using available resources on screening everything, even those items that may not pose a risk, could reduce the focus on higher risk shipments. Hutchinson also calls on TSA to keep an eye on international partnerships and to work closely with them in achieving U.S. screening goals – not just regulating with a “heavy hand”, which is how the agency is viewed by some.

Dave Brooks, president of American Airlines Cargo, echoes the panel’s sentiment that to be successful, the Certified Cargo Screening Program (CCSP), as it is called, needs to focus on those shipping the goods. Somebody got the message that it’s a supply chain initiative, says Brooks. He also cautions: “If we fail to comply with this law and don’t give CCSP the opportunity to be fully compliant, shame on us.”

According to TSA, more than 100 facilities have been certified as participants in the CCSP with more than 30 new companies being certified each week. Fried at the Airforwarders Association points out that he currently sees more independent screening companies emerging, which TSA sees as an important component of the overall initiative.

On the subject of technology, Chris Connell, president of Commodity Forwarders Inc., challenges TSA to help industry address the issue of skid-level screening and encourages the expedited integration of new technology. “At least there’s a dialog,” he says, “which is half the battle moving forward.” Regarding his company’s investment in the technology to achieve the TSA goal, Connell comments that “we’re not getting enough return on that investment right now.”

The entire webinar is available at www.aircargoworld.com/screening.

Thanks for reading. jfi

… amidst a financing environment which can be described as cautious at best. Surprisingly, it’s been well attended, which likely reflects the role these folks play in keeping these complex facilities financially sound. The Airport Economics & Finance Conference is hosted by Airports Council International-North America.

The ‘sense’ that one gets is that attendees are here to get a grasp on the reality of the economic climate – the state of shock from the turn of events over the past year has turned to an attitude of, what do we need to do as we move forward? As with most things these days, it’s all about the economics. For airports, it’s also about becoming more and more focused on reducing costs; finding new efficiencies; rethinking capital development programs; and the like. A few of the highlights …

Like many, the industry segment has been hard hit by the paralysis that has occurred within the banking community over the past six months. David Spirakis, managing director for public finance with Bank of America, a leading airport financing player, says there is much uncertainty about which companies will still be players in the airport arena once the dust settles from the economic fallout. There is no longer a “huge oversupply” of banks interested in backing municipal bonds; in fact, the role of banks has been substantially diminished and Spirakis expects that only the top (and diversified) banks will remain in the fray.

David Wyss, a chief economist at Standard & Poor’s, predicts that the current downward spiral of the stock market is coming to an end. However, he explains that historically long bull market cycles are followed by long-term bear markets, and he suggests that we may be headed into such a situation today. He says his “best guess” is that the economy will slowly come out of the recession within six months, with the caveat that a longer recession is a definite possibility.

William Swelbar, a research engineer at the Massachusetts Institute of Technology, says of the U.S. airline industry, “We have too many seats at too high a cost” for the airlines. Barriers to new entrants are being erected, he says – unstable oil prices; the credit markets; and, a decreased demand which is expected to continue. Swelbar says that the time is here for the airlines to rethink their business model. “The credit issue is going to force the change,” he comments. Efforts in the past year by carriers to cut capacity and increase unit revenues were working, he adds, until recently – evidenced by new fare wars being waged.

The complete conference report will be featured in the upcoming issue of AIRPORT BUSINESS magazine.

Thanks for reading. jfi

My first airline ride was in 1964. I rode several genav airplanes before that, and even jumped out of a few, but never before had I ridden an airline. Since then the airlines have taken me from coast to coast, border to border, from Hawaii to Alaska and a few foreign countries.

In my mind, I had seen it all. Wrong.

Recently wife Gail and I got up early in Boston, drove to Hartford, and flew back home to TN. At six that morning—before we had even left the motel in Boston—Delta called with a recorded message. Our 10 a.m. flight from Hartford was canceled and we had been rebooked on a 1 p.m. flight. No big surprise there, it messed up our schedule, but, hey, stuff happens, you know?

The big surprise came at Hartford.

We got the new booking all straightened out, then learned from the schedule board that our original flight was scheduled to leave on time, at 10 a.m. We asked the man at the counter and he was—shall we say—far less than interested, much less helpful.

We got to the gate of the new flight very early, and guess what—our original flight was leaving right on time at the very next gate. We tried to get on, but no dice. It was full.

We gave up, went back to the new gate and unloaded on the gate agent, Tim Williams. Now Tim was a class act. He went far out of his way to bend over backward and make up for the mess. He almost made us happy.

The next day I called Delta’s media department and got a super-nice lady. I wrote her name down but cannot now find it. I apologize.

She found the truth and relayed it. Delta had indeed called us to announce that the flight was canceled. Then they found a substitute airplane, so the flight was back on. Unfortunately, Delta failed to recontact us with that info. By the time I hung up, this lady almost had me in a good mood again.

Still, we got home very late that day through no fault of our own. And to paraphrase Brother Dave Gardner, that, dear hearts, is the reason that we, and thousands like us, now drive far more often than we used to.

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… the outlook is cautious,  predicting a 9 percent drop in U.S. traffic, according to FAA.

The real story here is the economics. This was a very subdued conference … one that had perhaps one-half the usual attendance. The overriding message was all about the economy.

Basically, the prognosticators say that the economy will rebound by the end of this year. The price of oil can be expected to stabilize, and in time get to the $70/barrel price level, or beyond.

On the airline side, a leading Wall Street analyst suggests that in the current economic climate, various air carriers could be forced into bankruptcy … or maybe not. It’s a real possibility, but he’s not predicting it. Bottom line: It’s a wild card.

Perhaps the most interesting thing about attending this conference was reading the Washington Post. They’ve moved their business coverage into the main section of the newspaper. One of the major weaknesses about  major newspapers in the U.S. (from this perspective) has been their coverage of business. Apparently, the business of business has become a major story. It’s probably a good thing.

Thanks for reading.jfi