NEW ORLEANS — A major medium air passenger transport hub, Louis Armstrong International Airport (MSY) is responsible for three-quarters of all passengers in the state of Louisiana.
Newly appointed director of aviation Iftikhar Ahmad (assumed role on May 24) defines MSY as an ‘institution’ in need of rebuilding. In his 100-day report to the New Orleans Aviation Board, the airport operator, Ahmad states that the airport and it’s operation have deteriorated since Hurricane Katrina devastated the region in 2005.
Ahmad says part of Katrina’s impact was the deterioration of human capital within the MSY organization that created a gap in resources that was plugged with consultants and contractors.
Now, Ahmad looks to change the direction of the MSY ‘institution’ by focusing on a three-part strategy involving operations, finance, and infrastructure. Key issues identified for improvement include staffing and customer service, succession planning, third-party contracting, and higher than average enplanement costs.
Ahmad began in airport management in the mid-90s for the Houston Airport System, eventually coordinating some $3 billion in capital program dollars. In 2001 he took a position as vice president for the Metropolitan Nashville Airport Authority. From there he became director at Dayton International in 2006.
“There is quite a bit of potential in this city,” relates Ahmad. “But there have been some inhibitors that have kept enplanements down — to begin with, the effects of Hurricane Katrina.”
The airport generates some $64 million in annual revenue, and manages some $46 million in operating expenses.
According to an economic impact study, MSY contributes more than $2.6 billion worth of impact on tourism and creates more than 12,000 jobs as a result of airport operations, directly and indirectly, says Ahmad.
Regarding the effects of the economic downturn, Ahmad says the airport saw positive growth last year. Annual enplanements were at some four million in ’09. “We are hoping to see a 2.5 percent increase this year; our capacity is up quite a bit,” he relates. “I’m projecting that we will have a record of five million enplanements by 2017.”
MSY has eleven carriers currently; Southwest is the top airline with some 30 percent of the marketshare here, followed by Delta. The airport has announced additional air service recently with United, Air Canada, and WestJet.
The airport currently has 42 gates, 21 of which are occupied. “We have quite a bit of capacity on the gate side; counters are pretty much all taken … but the airport may get a few back due to the merger of Continental and United, and also AirTran and Southwest,” says Ahmad.
The airport is practically a 100 percent O&D (origin and destination) market, he adds. With New Orleans’ tourism-based economy, the airport is looking for low-cost carriers to bring the tourists in. “Tourism-based travel is discretionary,” explains Ahmad. “Discretionary travel tends to be cost dependent and would-be travelers can wait for bargains.
“This makes our type of destination suited for low cost carriers because they offer low fares, and low fares leave airlines with low margins.”
Because low margins are sensitive to airport-related costs, a high cost per enplanement is a threat to good business in New Orleans, says Ahmad.
“We have an issue with that,” he comments. “We were expected to reach a cost per enplaned passenger of above $17 in 2019; in 2014 we were going to be at $16.42 (figures projected by a consultancy). I made a commitment with our airlines — I said we will decrease and start to have a negative slope to our numbers.
“Even though I was supposed to go above $11 next year, I have already announced to the carriers that we will be at something above $9, not $11. That’s to show them that I am very serious about bringing new business into New Orleans.”
The New Orleans Aviation Board has voted to keep fees for airlines stable in hopes of speeding the return of air traffic to the city.
87 days after reopening to commercial airline service, New Orleans has brought back 60 of its previously scheduled 166 daily departures, or 36 percent of its load.
At critical juncture, airport must balance growth, uncertainty