ACI-NA Chair Talks Issues

PITTSBURGH — As 55-year old Frank R. Miller, A.A.E. was taking over as chair of Airports Council International-North America during its annual meeting here this fall, his crew back at San Antonio International was putting the final touches on the airport’s new Terminal B. Miller is director of the San Antonio Airport System, which includes historic Stinson Airport, a reliever.

During the conference he sat with airport business to discuss issues facing the industry. Here are edited excerpts ...

airport business: What’s the latest on your capital development program?

Miller: We are in the home stretch on that program. Terminal B is scheduled for first flight, as we refer to it, for November 9. Then we’ll close down the old terminal.
The night before we’ll do the major move of both Continental and American from Terminal 2 to Terminal B.

ab: You’ve been through this before at Pensacola. Did you bring any ‘lessons learned’ with you?

Miller: The lesson really is the coordination. We meet weekly on activation plans, which is leading us up to the point with the airlines when we know they will take up the majority of our attention with the final move. It really is identifying and working back from your opening date to establish the timeframes, who is responsible for what, coordinating with TSA, and providing everyone an update.

ab: And how’s the upgrade of Stinson going?

Miller: We’re pleased with the extension of the runway to 5,000 feet. The Civil Air Patrol relocated their regional headquarters from Waco to Stinson and have entered into a long-term lease with the airport. They will build a hangar there.

We are now planning a master plan RFP for Stinson. As the south part of San Antonio continues to grow, Stinson can become part of that. The Toyota plant for the Tundra and Tacoma trucks is very close to Stinson. How can Stinson help with those operations? We’ll have the ability to take a hard look at Stinson.

ab: Among hot issues for airports is airline mergers, with the latest bringing together Southwest and AirTran. How are the mergers affecting your operations?

Miller: One of the benefits for us with the United/Continental merger is we’ll be seeing the relocation of the United operation into Terminal B, which I think will be a significant advantage for us as we deal with the balancing of the two terminal buildings. If you look at the schedules of the two carriers, they really complement each other. As the merger proceeds, I don’t see a lot of negatives for San Antonio.

We went through the same type of exercise with Delta and Northwest. It was a very seamless transition for us. It may offer us some opportunities to get additional non-stop service.
Southwest, of course, is a major presence in San Antonio. We like to brag that the first Southwest flight was from Dallas to San Antonio. AirTran has been in San Antonio about two years. They and Southwest currently both offer non-stop service to Baltimore or Orlando; but AirTran is offering non-stop service into Atlanta as well.

The real question will be, will Southwest continue to provide some service for us to Atlanta? I think we’re one of the fortunate airports that can say it will be an easy transition for us.
A lot of the smaller cities are left to wonder what is in store for them. That’s a topic of conversation with everybody right now.

ab: Has the bankruptcy issue at Mexicana affected your market?

Miller: Some of the other carriers have offered the same service. Again, San Antonio happens to have that kind of a market where we’re able to weather some of these issues. By circumstance, Delta is offering on a Saturday-only basis non-stop service to Cancun. We’re waiting to see if that will transition into more service into Mexico.

Delta is the first domestic carrier for us offering non-stop service to Mexico. Delta’s been taking a hard, and what we think is a very positive look at San Antonio. We recently began non-stop service to JFK; Cancun starts in February; they increased seat capacity to Atlanta and Salt Lake City.

ab: Is is safe to assume, considering you came from Pensacola, that you had an established relationship with Delta?

Miller: Obviously, that was our number one carrier. I would like to take the credit for that, but I really think it’s Delta looking at a very strong business approach to this part of the country.

It’s a recognition on their part that San Antonio has a very good mix of demographics.

We have a huge military presence, with the Army and the Air Force — sort of the same thing with Pensacola. When you have a large military presence that is doing a lot of schooling and training, that gives you a steady flow of passengers. And San Antonio has a huge convention/conference market. It’s a good mix.

ab: As you look ahead as the ACI-NA chair, what are some top goals that are high on your agenda?

Miller: We had a brief meeting with John Pistole, the TSA Administrator, and what I said to him was, as you move forward ACI-NA wants to work with TSA on a strategy moving forward. I was hearing from him how TSA wants to move forward in the next five to ten years. ACI-NA wants to be a part of that.

We start the thing strategically — how do we address security issues? Then try to put in place those things that can be done and create the base so that as things happen, we can react in a positive way.

ab: That idea of strategic partnering has been almost a theme at this year’s conference.

Miller: I think so. We had the opportunity to speak with Secretary Napolitano this past January. ACI created a security task force; I’ve been chairing that. It was the message back then — let us work with you. How can we improve the experience for the passenger? Are there ways to speed up the process?

ab: Were you surprised that during the most recent debate on FAA reauthorization, access to Reagan National again surfaced as an issue?

Miller: You have to understand that MWAA [Metropolitan Washington Airports Authority] has its own needs. Reagan National is a very finite piece of property. It will be a recurring theme with Reagan — the ability to get more slots. We have made it quite clear that San Antonio would love to have direct non-stop service into Reagan. We have talked with our Congressional people.

The Washington metro area is the top market out of San Antonio.

ab: What does the impasse on FAA reauthorization mean to you as an airport director?

Miller: The impact that it has is uncertainty. How can we plan for multi-year projects when we really don’t know if the program is in place for the next three years, or is it just another continuing resolution? Years ago, we had multi-year reauthorizations. That helped us to plan effectively. We’re basically entering into an agreement, a leap of faith, with the FAA that, yes, we’ll allow you to move forward with your project and there will be money, sometime.

That’s the real issue. It’s causing us to plan betting that the program will be there. I would love to see a five-year reauthorization; know that won’t happen.

We also need to pass a PFC that is at $7.50 rather than the $4.50 we’ve been living with. We’re losing the power of the dollar with the PFC. The PFC is really the opportunity for airports to find a way to fund projects long term. We can leverage the PFC; we can issue bonds; do a multi-year program right up front.

We can help control the airlines’ costs with PFCs, and do an even better job if they recognize that increasing the PFC is not a detriment to them. It can be used to help leverage a lot of projects that don’t go into their rate base.

ab: Again regarding airline mergers, what are your thoughts regarding foreign ownership regulations?

Miller: I do think we need to re-look at cabotage; I think that is a way for us to deal with our airlines continuing to consolidate. Allow a foreign flag carrier to fly point to point in the U.S.; there have to be reciprocal agreements as well. I think at some point foreign ownership and how that can help U.S. carriers has to be considered.

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