AirportBusiness Blogs

… the aviation sector gets a reprieve. The alphabet groups in Washington breathed a collective sigh of relief with the release of the proposed Obama budget, expecting a renewed user fee battle following the President’s suggestion a year ago that new fees would be in the offing. Even the response of the Air Transport Association, which has led the call for new fees to get business aviation to pay more, was fairly muted in its response. ATA’s primary criticism was regarding the proposed increase in the security fee paid by passengers.

Some selected excerpts from the trade groups …

NBAA president Ed Bolen: "The proposal introduced by the White House today stands in clear contrast to language we saw last year. Our community, which has been so energized and mobilized by the user fee threat, should be heartened by this news.”

NATA president Jim Coyne: “While NATA is pleased with the Obama administration’s choice to omit a user fee proposal in the FY 11 budget, the industry must remain vigilant to ensure that any future user fee proposals are unsuccessful."

AOPA president Craig Fuller: “Today’s budget proposal makes it evident that our voices were heard. Someone in the Obama Administration decided to hit ‘pause’ when they came to the aviation user fee option.”

ATA president James C. May: “While we are pleased that the federal government is supporting significantly increased federal funding for Advanced Information Technology machines and Federal Air Marshals, we are disappointed that they again proposed increasing passenger security fees by an additional $7 billion from 2012 through 2015."

AAAE president Chip Barclay: “Airport executives remain committed to seeing the enactment of an increase in the federal cap on local Passenger Facility Charges to $7.50 with indexing for construction cost inflation along with a permanent extension of relief from the AMT penalty for airport bonds. Taken together, these measures would improve our infrastructure, stimulate the economy, and create good-paying jobs.”

ACI-NA president Greg Principato: "Since NextGen begins and ends at the airport, we are glad to see that the President has included $1.1 billion to help speed the development and implementation of a modernized air traffic control system. Airports look forward to working with the Administration and FAA on providing the ground infrastructure necessary to make NextGen a reality."

One thing that the industry has become united on in recent years is support for the NextGen air traffic control modernization program – from installing the critical infrastructure to calling for government support for equipage of aircraft. For the airport community, top issues that remain include the PFC increase; AMT relief; and continued funding for the Essential Air Service program. A concern in the Obama budget is that it “zeroed out” funding for the Small Community Air Service Development program, which assists airports in attracting new air service – an ongoing critical issue for many communities.

With the user fee debate (temporarily?) behind us, perhaps the legislators on Capitol Hill can finally get to passing long-term FAA/industry reauthorization. But then, that could be just too much to ask.

Thanks for reading. jfi

… much of the discussion centers on economic recovery and pending security regulations for business aviation. Some 100-plus leaders of fixed base operations and others were on hand for the reformulated meeting hosted by the National Air Transportation Association. The Leadership Conference is now being held in tandem with the NBAA Schedulers & Dispatchers Conference, being held at the convention center here the rest of the week.

Richard Aboulafia, VP of analysis for the Teal Group Corporation and a favorite on the prognostication circuit, led off the NATA event saying that “I feel very good about saying the worst is over. We’ve got stabilization. The next step is recovery; then growth.” During the past year, according to Aboulafia, business aviation in North America has seen a 30.5 percent reduction in utilization, with the most notable drops being in the mid-size and smaller corporate aircraft segments.

Aboulafia also says that the used aircraft segment has also made the turn from its downward spiral and “things have stabilized.” Yet, there is still a glut of sorts in the marketplace, which will in turn impact new aircraft deliveries for some time.

He is optimistic, he says, about business aviation long term, and forecasts that some 10,117 new aircraft will be delivered over the next ten years, at a value of some $168.2 billion. That said, Aboulafia sees a sluggish 2010. Looking forward he says the key barometer for business aviation is corporate profits, and he recommends tracking the Bureau of Economic Analysis (www.bea.gov) for those numbers.

On the security front, one of the original leaders of the Transportation Security Administration – Asa Hutchinson – was on hand and expressed concern that the agency has been without a leader for the past year. A central issue regarding that appointment has been the unionization of TSA employees, which he opposes. Comments Hutchinson, “I’m opposed to the unionization of TSA because it’s a security organization.” He fears that TSA could find itself having to negotiate with union bosses to transfer employees or make other moves.

Regarding business aviation, Hutchinson says that there is a danger of TSA shifting its strategy and treating bizav like the airlines. It is not the same threat, according to Hutchinson, who comments that TSA should “analyze the risks, first and foremost” before imposing new security requirements on the industry. He does point out that TSA’s original Large Aircraft Security Program proposal was met with such industry opposition that the agency pulled it for a rethink. In all more than 7,000 industry comments were sent to TSA, which got the agency’s attention. “Your voice was heard,” he says.

Thanks for reading. jfi

… one can hope that the focus is on balance – that is, balancing the need for safe transport versus strangling an ailing industry with onerous regulations.

The U.S. Senate today begins four separate hearings into the Christmas Day attempted bombing of a Northwest airliner in Detroit, how intelligence failed to “connect the dots”, and other issues related to aviation security. Those expected to testify include the heads of DHS, the FBI, and the director of the National Counterterrorism Center (NCTC). As The Wall Street Journal reports, the NCTC was created after 9/11 to provide a central clearinghouse for intelligence among the various U.S. agencies. This has become the focal point of the discussion related to the Christmas incident.

For years my favorite word when discussing Congress and Washington was ‘reasonableness’ … getting those that regulate and legislate to be reasonable. Over the past several years that concept has been tossed out the window. ‘Balance’ may be a more reasonable expectation.

The concept of balance occurred to me during a recent visit to the Denton (TX) Airport north of Ft. Worth. The City of Denton has been pushing hard over the past six years to turn its general aviation airport into a dynamo of economic development, and will continue that push over the next five years. Quentin Hix, the Denton airport manager, sees the need for balance and is overseeing the installation of perimeter fencing and other security equipment to make the airport more secure for his tenants.

Explains Hix, “We along with other general aviation airports are faced with the challenge of increased federal regulation. TSA is focusing on security at general aviation airports. That’s going to be a huge challenge to us.

“It’s one of those things where the more you jump up and down and say ‘Hey, here we are’ the more you’re recognized as a place that could become a poster child for new regulations.”

Is the new perimeter security at Denton intended to head TSA off at the pass? Answers Hix, “It’s to try and get ahead of the curve, yes. But it’s more than trying to get ahead of anticipated regulations; security is one of our major missions of service here. Look around this airport and you can see hundreds of millions of dollars of investment. Part of what we feel obligated to provide is security; safety of operations; and unprecedented service to our general aviation users, be they individual pilots or corporate airplanes.”

At Denton and scores of airports across the U.S., officials are seeking to find the balance between protecting assets and people versus stifling commerce. People employed in aviation understand the need for security … but there’s pretty much universal agreement that better leadership from on high is needed.

An aside to today’s Congressional hearings comes in the form of Errol Southers’ announcement that he is withdrawing his nomination to head up TSA. The reason his nomination has been held up for months is because of his apparent support for unionizing TSA employees. So, while all the talk on Capitol Hill is about security, the nation’s safety comes down to a debate about unions. Something wrong here.

Attention Congress: Recognizing that reasonableness is beyond your comprehension, at least give some consideration to balance.

Thanks for reading. jfi

… is the target of a new study being directed by professor James Smith of the American Public University System. Dr. Smith, who is also president of the airport/disaster consulting firm Smith-Woolwine Associates (www.swith-woolwine.com) , on Tuesday addressed a conference call hosted by the Airports Committee of the National Air Transportation Association.

As many in industry know, general aviation airports often play central roles in disaster response. Getting supplies and response personnel to an affected region can frequently be accomplished more directly by accessing a GA facility, rather than by using a larger commercial airport which may be much further away from where the aid is needed.

Mike France, director of regulatory affairs for NATA, says the association “is very pleased to be assisting Dr. Smith in his research into the role of general aviation airports during disasters. This type of research helps to quantify what those of us in the industry have known for a long time, that general aviation airports provide many benefits both economically and logistically to their surrounding communities.

“It’s very important for members of communities surrounding GA airports to understand the value that their airport can play in a disaster situation”

To accomplish his task, Dr. Smith plans to survey some 500 GA airports by March 1 while also conducting ten site visits to airports. Regarding the latter, he is looking for airport recommendations, using the following criteria …

… an airport that has had a successful or unsuccessful experience with a disaster mission;
… airports that want to get into the disaster response arena and are curious about what it will take; and
… airports that have encountered barriers to developing a disaster response regimen.

During a phone conversation following the NATA meeting, Dr. Smith asked for my thoughts on some airports that might be good for site visits, particularly in the West and Southwest. Thinking first from an infrastructure perspective, my recommendations were Alliance Airport north of Ft. Worth; Double Eagle Airport west of Albuquerque; and, Reid-Hillview Airport in San Jose.

Now he’d like to hear from the folks who are actually operating GA airports or tenant operations. He can be reached at (540) 763-3068 (office); (540) 239-1206 (cell); or jfsmith@swva.net.

Thanks for reading. jfi

… and trade association reps encourage industry firms to provide input on a recent notice of proposed rulemaking (NPRM). On Tuesday, the National Air Transportation Association and the Aircraft Electronics Association co-hosted a free webinar to discuss TSA’s NPRM, which would establish a new Part 1554 titled “Aircraft Repair Station Security” that would require any repair station, foreign or domestic, certificated under 14 CFR Part 145 to carry out a standard security program (SSP). According to NATA, the SSP would be required to describe:

• Access controls for the facility, aircraft, and/or aircraft components;
• Measures for identifying individuals with access to the facility, aircraft, and/or aircraft components;
• Procedures for challenging unauthorized individuals;
• Security awareness training for employees;
• The name of the facility’s designated security coordinator;
• A contingency plan; and 
• The means to verify employee background information.

TSA wants input, they say. According to AEA vice president Ric Peri, TSA “is recognizing” the diversity of the repair station segment. Is the company on-airport or off-airport? Is it a full-service repair station or a specialist in component services, a la an avionics shop? In light of that diversity, NATA vice president Eric Byer cautions against implementing a “one size fits all” approach. He adds that TSA is seeking input from industry on the applicability of the reg on companies located at airports that only handle aircraft under 12,000 pounds – that is, should they be exempt?

Another concern is that the NPRM will allow TSA to petition FAA to revoke/suspend an operating certificate, should it believe a company is a security threat. NATA’s Mike France says the association is pushing for “a layered appeals process”, one in which TSA isn’t the “sole decisionmaker”.

For more information, contact www.nata.aero or www.aea.aero.

Thanks for reading. jfi

… says a friend in response to last week’s attempted terrorist attack on a Northwest airliner at DTW. The conversation was about what an average traveler – in this case, someone who works in the banking industry who flew to Las Vegas recently – thinks about heightened security measures.

She doesn’t know what should be done, nor should she. But she wants to feel secure. Machines that do full body scans? Not a problem for her. The ACLU has a problem, but then they may not be flying that day.

I asked my senior-in-college (who has flown a bit) for his reaction, which was: “I don’t think anybody cares about it anymore, and ultimately it won’t change anything. We’ll ban the shampoo bottles, and then later on we’ll be able to have shampoo bottles.”  He, too, is right.

TSA right now is trying to position itself as the organization that is unpredictable, which gives them an advantage. Possibly right, to some degree. Personally, I don’t buy it. Sorry, I still haven’t gotten over the fact that airline pilots overflew MSP and the U.S. military wasn’t alerted until almost an hour later. (It took the general media a couple of days to figure out that angle.) A month ago, the debate around airport screening was about getting rid of all those all-intrusive body scanning machines; today, the clamor is for more of them – and fast.

There’s another problem here. It’s the U.S. Congress. They passed the Aviation and Transportation Security Act in 2001, and then didn’t fund their directives. Then there’s the TSA, which continually looks like an organization trying to find its true direction. It doesn’t help that Congress and this Administration can’t seem to figure out how to find a new leader for TSA.

It’s about commitment.

World War II started for the U.S. on December 7, 1941. It ended four years later. World War I, or the “War to end all wars”, lasted from 1914 to 1918.  Not the same wars … though much more dedicated was the response. Thing about those wars was, most of the country was pretty much on board with who was the evil party and what was the objective. Problem today is, half our country doesn’t believe we’re in a war … that, and the fact that we have a U.S. President who seems to prefer to posture more as a high school counselor than a wartime President.

President Obama says he wants to convene a group to discuss/analyze what might be done. Great idea. However, check the history of aviation study groups in Washington and their lists of recommendations and you’ll find that little is often done.

Like my friend said, they need to do something.

Thanks for reading. jfi

… it must be time for the air carriers and airports to hold a confab. Among all the ink given to the DOT’s decision to fine airlines for stranding passengers on airport ramps for more than three hours, there has been little discussion of the impact on airports.

Personally, as someone who hates sitting on airport ramps, I applaud the DOT decision. There are critics of the decision, most notably the Air Transport Association, which warns of “unintended consequences” such as more delays or cancellations. ATA rightly expresses a concern about flight and duty time issues. Yet, forcing passengers to be held captive in a fuselage is not only unreasonable, it’s bad customer service. And lest we forget, it is the customers who give the airlines their reason for being.

Which leads to the role of airports, which have in essence been taking on more and more of the responsibility of the customer service ‘experience’ for years. The American Association of Airport Executives and Fordham University have even teamed up to provide customer service training for airports nationwide – an idea whose time has come.

This will have an impact on airports, and it seems appropriate that airlines and airports get together in a forum to discuss how to better meet the needs of customers stuck at airports, and how the two groups can better coordinate these activities. DOT has forced the airlines’ hand and taken away the luxury of being in denial; airlines and airports now need to discuss how best to meet the needs of their customers.

Happy holidays … and thanks for reading. jfi

… and scratching one’s head over airline add-on fees. On Monday, USA Today’s lead front page story touted “FAA low priorities get $3.5 billion in grants”. It was another in a series of installments of late by the newspaper to challenge how FAA disseminates grants for airport infrastructure.

If there is a commonality among these recent articles it is that the newspaper appears to swallow the party line of the Air Transport Association, whether it’s on where FAA directs Airport Improvement Program monies to the group’s opposition to an increase in the passenger facility charge (PFC) cap, now at $4.50.

In Monday’s article, USA Today charges that FAA has directed some $3.5 billion since 1998 to “low priority” airports which “do little to improve the most pressing needs in the nation’s aviation system.” In the article Kate Lang, the FAA’s top airport official, defends the spending, noting “they’re all good projects.” Former DOT Inspector General Ken Mead is quoted as saying that FAA should revise its rating system and that the process should be transparent. He may be right, and reevaluating processes in place at any government agency is never a bad idea.

Yet, USA Today needs to send one of its experienced aviation writers out to a number of business aviation airports around the nation and see what benefits they bring to local communities and commerce. Commercial air carrier airports aren’t the only cogs in the U.S. air transportation system. It could be helpful to USA Today readers if the newspaper shared some of the benefits of non-airline airports.

On the subject of fees, the latest stats from the DOT’s Bureau of Transportation Statistics show that U.S. carriers in the third quarter charged passengers at least $2 billion in fees to transport baggage, change reservations, or carry pets, up 36 percent over the prior year. Now, these revenues are certainly helping the airlines in their effort to turn a profit, which is a good thing. And of course, in the case of baggage fees, these are new sources of revenue that have emerged only in recent years.

The rub lies in the fact that whenever airports propose increasing the PFC cap, it is ATA which raises the biggest fuss. ATA president James May continually campaigns against the PFC increase, charging that a raise in the fee will turn customers away, further frustrating the airlines’ ability to be profitable.

Twice this week I paid United Airlines $20 to handle my bag. Didn’t think twice about it … I recognize it’s the cost of doing business in the new airline world. With a PFC of $7.50, my ticket at most would have had another $6 tacked onto the fare. Let’s see — $6 versus $20 … whose fees are discouraging the passengers?

Time for ATA to get on board with the PFC increase; after all, it is the airlines which are the greatest beneficiaries of the airport improvements that they provide. And it’s time for USA Today to get a handle on the bigger picture of aviation infrastructure funding.

Thanks for reading. jfi

… in an upcoming webinar, tackling a topic which is frequently misunderstood by many. Mike France, recently promoted to director of regulatory affairs for the National Air Transportation Association, will conduct the free webinar. According to NATA, “The FAA recommends that all federally obligated airports create, implement, and maintain comprehensive minimum standards for aeronautical service providers to ensure compliance with federal grant assurances.”

Explains France, “We want to give a basic overview of the Airport Improvement Program, the grant assurances, and minimum standards. It will cover basic information for airport sponsors and tenants, and anyone interested in learning more on what should and should not be contained in minimum standards.”

An interesting thing with minimum standards is that the intent of the document is often misunderstood by tenants, an assessment with which France agrees. The concept is to provide a level playing field, and to protect those tenants who have already made a significant investment on an airfield. “Absolutely it is often misunderstood by tenants,” comments France.

“Minimum standards are a tool to help airports meet their grant assurances. The webinar will look at how to properly construct a minimum standards document to protect the airport and current tenants, and those interested in developing in the future. The development of minimum standards needs to have proper input from all the stakeholders and be enforced over time. Enforcement is the key issue, whether they are published by the airport or codified by a city. That enforcement provides benefits to the current tenants and to their airports.”

The webinar will be conducted December 16; visit www.nata.aero for information or contact France directly at mfrance@nata.aero.

Thanks for reading. jfi

… while the Obama Administration seeks to curtail lobbying. The word from Congressional Quarterly Today is that proposed health care legislation continues to have the Senate so absorbed that it can’t address long-term aviation funding. Of course, there is also a dark cloud hanging overhead, the one that suggests that the Obama Administration will propose new ways to fund the system down the road — which, in turn, suggests we won’t see “long-term” reauthorization anytime soon.

Comments one aviation trade association VP, “It’s a foregone conclusion on another extension.” According to Congressional Quarterly Today, “A senior Democratic Senate aide agreed that a three-month extension was likely. He said that would give senators enough time to gear up next year and that they are pressing for the full reauthorization to be first out of the gate in 2010.”

Don’t bet on it. Perhaps the end game for all of this is to have the feds take over aviation completely … have them own Cessna, Hawker Beechcraft, United Airlines, etc. Hey, the feds think they can run the automotive industry and health care … why not aviation?

Which leads to point number two. A recent Washington Post article suggests that “hundreds, if not thousands, of lobbyists are likely to be ejected from federal advisory panels as part of a little-noticed initiative by the Obama administration to curb K Street’s influence in Washington, according to White House officials and lobbying experts. The new policy — issued with little fanfare this fall by the White House ethics counsel — may turn out to be the most far-reaching lobbying rule change so far from President Obama, who also has sought to restrict the ability of lobbyists to get jobs in his administration and to negotiate over stimulus contracts.”

“The initiative is aimed at a system of advisory committees so vast that federal officials don’t have exact numbers for its size; the most recent estimates tally nearly 1,000 panels with total membership exceeding 60,000 people.”

In the aviation biz, aviation rulemaking advisory committees are an integral part of setting policy and safety standards, as it should be. I contacted several aviation/airport trade associations on this proposal and nobody seems to have a clue what this new policy will mean to the industry. That’s not a good thing.

Consider this from the Post article: “Under the policy, which is being phased in over the coming months, none of the more than 13,000 lobbyists in Washington would be able to hold seats on the committees, which advise agencies on trade rules, troop levels, environmental regulations, consumer protections, and thousands of other government policies. ‘It’s taken me years to learn what the General Agreement on Tariffs and Trade is," said Robert Vastine, a lobbyist for the Coalition of Service Industries who also serves as chairman of a trade advisory board. ‘It’s a whole different and specialized world. It is not easily obtained knowledge, and they are crippling themselves terribly by ruling out all registered lobbyists.’”

Crippling themselves, and industry. What’s happening in Washington is getting ugly.

Thanks for reading. jfi