A Global Perspective

DALLAS — James E. Bennett retired May 8 as president/CEO of the Metropolitan Washington Airports Authority, having successfully filled MWAA’s top post since 2003 following the retirement of James E. Wilding. It’s been a busy 2010 for Bennett — he was subsequently named the CEO of the Abu Dhabi Airports Company as well as chair of the American Association of Airport Executives, which held its annual meeting here in May. During the meeting, he sat with AIRPORT BUSINESS to discuss the issues facing airports in an ever-changing global environment.

During his 32-year aviation career, Bennett has logged time with airports in Phoenix; Shreveport, LA; and Flint, MI; including 14 years at MWAA.
Following are edited excerpts from the interview ...

AIRPORT BUSINESS: At MWAA, you succeeded James Wilding, viewed by many as an elder statesman when he retired and credited with overseeing the transfer of the D.C. airports from federal control, leading to a transformation for both. Can you talk about that experience?

Bennett: Jim Wilding was one of the, if not the, smartest guys I’ve ever known in this business. It was really a unique opportunity to actually work with him for many years, and learn from him. He’s a great teacher and a great leader.

I like to think I was able to continue in the same manner as him. It’s a very complex environment working there.

AB: How would you characterize the global airline industry? It appears to be reinventing itself.

Bennett: The airline business is certainly changing. It has been for some time.

It appears that we’re going to go through a period of speeding some of the changes along. We have the Delta/Northwest merger complete; the United/Continental merger announcement has been made. I think you’ll probably see some additional consolidation within the industry.

I’m one of those airport people who thinks consolidation can be good for the business. And I also think that we need to be looking at our industry, not within just the borders of our country, but also look at our industry as a global industry.

AB: It appears that the U.S. Congress might not want to see the United/Continental merger happen.

Bennett: I understand a lot of people don’t necessarily like to see changes in industries; but I think change is inevitable. And what you need to do is figure out a way to manage that change, not necessarily try to stop that change.

AB: Are you a proponent of more foreign ownership of airlines?

Bennett: I am a proponent of more liberal foreign ownership. I think for U.S. airlines to compete in a very dynamic and global industry, they need to be able to partner with and have investors from around the world. Like any other industry in our country, foreign ownership doesn’t mean that you lose control.

Once again, there are ways to address people’s concerns without just banning foreign ownership.

AB: One would think that in our global environment today, we’d have moved past the foreign ownership issue. Richard Branson certainly has been an ambassador for the concept.

Bennett: Just look at all our other industries — automobiles, pharmaceuticals, steel, gas and oil, all of our other production industries — they don’t have similar restrictions on foreign ownership.

AB: As the airline business evolves, how does that affect the airport business model?

Bennett: That’s an interesting question. The business is going to continue to grow; demand is going to continue to increase. From an airport standpoint, the changes brought on by consolidation sometimes drive facility challenges, where you have to perhaps relocate airlines … so that they can consummate the consolidation.

But in terms of demand at the facility, changes in the industry don’t necessarily impact demand at a particular airport.

It can make it more efficient, actually, and could be a positive for some airports.

AB: In the U.S. new terminals at Raleigh-Durham and Indianapolis suggest a new terminal design is upon us — much more open check-in areas and an array of kiosks. Your thoughts?

Bennett: A lot of airports are headed in that direction. I actually think that it is a more efficient way to manage your facilities, with as much common use as possible. Then the airport can become more efficient and not necessarily have to build as much as you might have otherwise.

It’s long been a model that has been present in the international community. And you’re seeing more and more of it in the U.S. From the airport standpoint it makes a lot of sense.

AB: Do you have particular ideas on the airline/airport lease agreement? Compensatory or risidual, or hybrid? It seems shorter terms are becoming the norm.

Bennett: I think the best model is whatever works the best for an individual airport. One thing that you have to remember is that all airports are a little different; their environments are different. And their needs are different. So, the best lease model is whatever works for that airport to accomplish what it’s trying to get done.

Having said that, I think that your observation is probably correct. The airports have been migrating to shorter term agreements that are more compensatory-focused than residual, or the hybrid residuals or hybrid compensatories.

AB: With airports more and more focused on customer service, what do you think is the airport’s role in the customer experience?

Bennett: Airports are playing more and more of a role in customer service as the industry has changed. I know airports that have very aggressive customer service programs; the airports where I recently worked had an aggressive program.

I know that where I’m going we have an aggressive customer service program. Our goals are very well defined in trying to make sure that we improve that customer service. We want to be some of the best airports in the world.

Customer service and the airport experience can influence some passengers’ decisions as to where they would like to fly out of. It gives you a unique opportunity to make an impression upon the customer. Airports are important gateways to the communities that they serve. The better the experience at the airport, the better the perception of that community.

AB: Please talk a bit about your new position.

Bennett: The Abu Dhabi Airports Company operates five airports in the Emirate of Abu Dhabi as well as the international airport. We’re in the process of developing a very large and new midfield terminal complex at Abu Dhabi International Airport.

Back to your customer service comments, that is designed to vastly improve the customer experience there, and also is designed to work with Etihad, which is based at Abu Dhabi, to meet its needs for airport capacity as it continues to grow as a global airline.

AB: Outside the U.S., airport privatization is viewed quite differently. Do you think it has a signficant role in the future in the U.S. market?

Bennett: I think there are some great opportunities in the U.S. market for privatization. I think the Midway thing will probably come around again.

It goes back to the globalization question; as airports look for ways to finance and make improvements worldwide, you have to approach that kind of like foreign ownership of airlines.

The issue is you’re not losing control; it’s where is the equity and the investment coming from to accomplish the goal of the airport, serving its customers and its communities?

Some people may react to it [foreign ownership], but they can write appropriate controls in the agreement to protect the interests of the community.