ATLANTA — Kelly Johnson, A.A.E., director at the Northwest Arkansas Regional Airport, was named the incoming chair of the American Association of Airport Executives during its recent annual meeting here.
During the event, she sat with airport business to discuss issues facing the airport industry. Following are edited excerpts ...
ab: First, what’s the news from Northwest Arkansas Regional?
Johnson: We’re really busy. We have an eleven-gate concourse under construction. We are getting ready to open it in late August, early September; 54,000-square feet; eleven loading bridges. We took advantage of the fact that the contractors weren’t real busy and got excellent bids. We’re being able to get this done without needing to build any of the capital costs into the airlines’ rates and charges. So, they’re thrilled with it.
We have a brand new beverage/news/gift program, awarded to Paradies. We have a motel RFP on the street; we have an engineering RFP on the street; and our parking contract is up this winter. It’s a big year for us.
ab: What’s the total cost of your current capital development program?
Johnson: We’re just finishing up a $40 million alternate landing surface project. We’re starting the engineering for the runway reconstruction; that’s a $30-40 million project. The terminal complex is a little over $21 million. The investment in the food/beverage program is about $2.5 million. A pretty good sized program for an airport our size right now.
The FAA lined up for $10 million for the next three years for the runway reconstruction. And the concourse is being done with entitlement funds and airport funds.
ab: What are your thoughts on the ongoing saga of FAA Reauthorization?
Johnson: I never get tired talking about it because it’s really important to everybody. The fact that we’re looking at an Airport Improvement Program at the President’s request of $2.4 billion, basically disengaging the large and medium hub airports, in lieu of giving them a PFC [passenger facility charge] increase — that’s the wrong program. This money comes from a trust fund; it’s not something we’re looking to general funds to pay for. If you don’t use the airport system, you’re not paying for the airport system.
That’s another big point for us: PFCs are local revenue. And the government should step out of the role of dictating to local communities what they need to be doing to facilitate their needs with local revenue. De-federalize as much as we can and put this back at the local level.
ab: There’s also a heightened discussion in D.C. over the possible elimination of the Essential Air Service (EAS) program. Any comment?
Johnson: EAS is really interesting for me. I have pros and cons. I personally think EAS, maybe not in this bill but in the next bill, is in trouble. When you look at the return on a cost/benefit ratio, I think it’s going to get a lot more of a deeper look going forward.
One of the first things you look at from a business perspective is access. If you cut that off there’s a result that may be disproportionate. But there are some airports that could probably graduate from the program.
It probably is time to give it a look.
ab: There are some, including FAA’s Kate Lang, who suggest it’s time to rethink U.S. airports and their role in the system. Would you agree?
Johnson: I think it’s imperative that we rethink everything aviation. I think there may be a point in the not too distant future where we see AIP go away. So we have to start taking a new look at the way we finance our capital projects; we don’t need to depend on handouts from anybody.
Something outside the box is, give the taxes back to the communities where they’re generated and let them deal with their capital. I don’t think we’ll ever get to that point because of the revenue diversion issue. We really do need those revenue protections in place; but conversely, I don’t think we can continue to count on a program, during a massive economic crisis, to be there for us for time immemorial. There will be cuts; some will be painful. We just need, as an industry, to get ahead of this.