The Mood is Not Grim

AUSTIN, TX — At meetings during the past year, comments Greg Principato, Airports Council International-North America president, the mood among airports was grim. During ACI-NA’s 18th Annual Conference & Exhibition here in October, respectable attendance levels and a less downbeat economic atmosphere helped restore some confidence and sense of direction. Says Principato, “The mood, it seems, is not grim. Six months or a year ago, the mood was grim. People still don’t think it’s great out there. But we’re getting our arms around it.” Plenty of issues remain, from system reauthorization to environmental regulations to customer service. One issue that found temporary relief was the alternative minimum tax (AMT), part of the D.C. stimulus package that saw billions in airport bonds sold almost overnight. During the ACI-NA meeting, Principato sat with AIRPORT BUSINESS to discuss airports. Here are excerpts ...

AIRPORT BUSINESS: To begin, should we even bother discussing FAA reauthorization and having industry operate under yet another continuing resolution?

Principato: I think the glass is more than half full; there’s a better than 50/50 chance this will be the last temporary reauthorization we’re going to have. Everybody wants a bill.

It’s disheartening for it to be seven or whatever extensions … and for reasons that aren’t aviation related. It’s explainable by other political forces.

One concern I have is I’m not sure how much the airlines really want a reauthorization bill. I think it’s in their best interests to have one.

AB: It seems what the airlines want is a total restructuring of how we fund the thing.

Principato: I think that’s right. Without making a judgement on their specific views, there are arguments to be made that we do need to look at how we fund the system. Those issues aren’t going to be resolved anytime soon, and we need a reauthorization bill long before those issues will be resolved.

The Obama Administration is probably not going to be ready to put forth its own reauthorization proposal for some time. So let’s bring some certainty; you have to be able to plan.

AB: Do you see any significant differences in dealing with this Congress and the new Administration?

Principato: The Congress has the same groups of folks we’ve been working with. The House has passed a bill twice. The Senate Commerce Committee has reported out a bill twice; the Finance Committee has been occupied by the health care issue.

I’ve been impressed with the Administration’s commitment on the stimulus-related issues. The FAA, Kate Lang, and all those folks just did a marvelous job of getting that stuff out the door. We didn’t have to wait long.

More important was the AMT relief; that’s the underappreciated success story of the stimulus. Last count, it generated $4.5 billion of airport bonds that have been sold that have led to construction and jobs. Remember, the credit market was frozen; even the highest rated airports couldn’t sell bonds.

AB: What do you think of the criticism of FAA’s handling of the stimulus funds?

Principato: I think it’s unfounded. They worked hard to get the money out the door.

AB: What are your thoughts on the new FAA Administrator?

Principato: If you were going to invent who a good Administrator would be, you’d draw up Randy Babbitt. He’s got the experience; he’s dealt with labor, airlines, airports. He’s assembling talented people around him.

AB: What’s the Senate’s problem with increasing the cap on passenger facility charges? The bill it’s considering again doesn’t allow for it, while the House version does.

Principato: I think the main issue right now is that Senators Rockefeller and Dorgan want to pass a bill that has as few as possible really controversial elements. Then let’s get to conference and work with the House on resolving some of these issues. There’s plenty of support in the Senate for PFCs and they understand what it’s done in their communities.

AB: As you know, more and more airports are being called on to take care of the customer experience. What do you think of the changing airline/passenger experience?

Principato: The airports have really stepped into the breach; we’re not going to let our passengers sit there hungry and tired. There’s never been a meeting between airports and airlines to discuss this, but it’s very real. And it’s probably a permanent aspect of air travel now, that the bulk of the customer service needs are going to be undertaken by the airports.

AB: Along the way, it seems the time has come for somebody to standardize the check-in process. Right now with the airlines, it’s all over the board.

Principato: A lot of airports would like to move toward more of a common use approach. The airlines see this as a branding issue. But if you’re starting to get 70-80 percent of your passengers who are never going to go to that ticket counter, maybe that’s not where you’re going to brand yourself.

I think it will become pretty standard in most places.

AB: There’s much talk about the environment and new regulations, from cap and trade to airport runoff. What are your major concerns?

Principato: Our big environmental issue and concern right now is the Environmental Protection Agency has issued a proposed rule on deicing runoff; we don’t think its workable. We’re working very hard to educate them, to educate OMB [Office of Management and Budget], on what would actually work at an airport. It will be a joint industry effort, working with AAAE and the airlines on it.

We’re also keeping an eye on a proposal to change the Clean Water Act. If you ask any group of airport managers, what’s the day to day environmental issue that they deal with, it’s noise.

AB: Which leads to Burbank, which spent millions for a Part 161 study to try and get FAA’s approval to limit Stage 3 operations.

Principato: Burbank certainly has the right to pursue that under Part 161. They’ve got a lot of community pressure there. Last year we wrote a letter to support them.

AB: Anything else on the environment?

Principato: Greenhouse gases are a concern. It’s interesting; Congress got going on that before health care; now it looks like they might not be able to get that done.

On an international level, the airlines, airports, and manufacturing industry really have come together to say, if there’s going to be a regime on greenhouse gases it should be a global regime. It shouldn’t be one region or one country. If there are any revenues generated from it, it should be put back into aviation.

Also, I don’t think the environmental benefits of having a modern air traffic control system have ever been touted enough.

AB: How confident are you in FAA’s ability to get NextGen implemented?

Principato: Two things I think we have today is the industry actually now does want something to happen; the airlines understand why they need it, as does GA [general aviation]. Another part of the problem is all the silos at FAA. It’s not just that the industry didn’t have its act together in the ‘90s; all along as a bureaucratic matter it was very difficult.

And I do think the President genuinely wants NextGen. It’s the one aviation issue I’ve heard about at every level of the Administration.

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