Airport Execs Meet in Philly

The business of airlines, an onerous ARFF proposal, service opportunities top agenda

PHILADELPHIA — With attendance down 20 percent or more, this year’s annual Conference & Exposition hosted by the American Association of Airport Executives was easily the most subdued meeting of airports in years — call it a sign of the times. Yet, the industry faces many pressing issues, from FAA and system reauthorization to the business of airlines to a proposal requiring increased aircraft rescue and firefighting (ARFF) requirements that airports argue would cost billions with little or no impact on safety. Other issues topping this year’s agenda included a growing interest by some airports to get into providing ground services for airlines as well as new technologies coming to the industry.

Representing the new Obama Administration was John Porcari, U.S. deputy secretary for the Department of Transportation, who expressed support for a “strong” FAA reauthorization bill. On the issue of slot controls at New York’s airports, which DOT has backed away from, he says, “Together we need to figure out how to go forward.”

Adds Porcari, “The other knot we’re untangling right now is NextGen. We have to demonstrate success; we know that NextGen is not moving fast enough.”

Meanwhile, the issue of Federal Aviation Administration and system funding, in limbo for two years, appears to have gained momentum, evidenced by the passage by the U.S. House of H.R. 915, the FAA Reauthorization Act of 2009. The bill would raise the cap on passenger facility charges (PFCs) from $4.50 to $7, for which airports have lobbied hard. It would also fund the Airport Improvement Program with an average of $4 billion annually over four years. The Senate is not expected to act on the bill until after the August recess, say officials.

A major concern for airports in the House bill is a proposal pushed heavily by the firefighters union to impose new requirements on facilities and staffing for ARFF. A recent report from the Airport Cooperative Research Program says implementation of the new standards would cost airports some $4 billion to implement, and $1 billion annually to maintain.

Sam Whitehorn, a consultant who spent some 15 years as a Senate staffer, notably with the Aviation Subcommittee, says the ARFF proposal is the result of pressure from labor unions.
“The dilemma is, labor has a lot of weight right now in the Senate,” says Whitehorn. “You need to know they have an enormous amount of clout.”

Catherine ‘Kate’ M. Lang, FAA’s Acting Associate Administrator for Airports, calls the ARFF proposal “troublesome” for both airports and FAA and adds that there will be “absolute consequences” if the proposal is embraced by the Senate.

U.S. Airlines: a broken model
The challenges facing U.S. air carriers were highlighted by way of keynote presentations by Southwest Airlines CEO Gary Kelly and US Airways CEO Doug Parker.

“This is a broken business,” says Parker. “I’m here to tell you, it will not and cannot continue.”

Parker calls the U.S. airline business a “fragmented industry,” one with too many airport hubs and too much capacity. He says he welcomes the merger of Delta and Northwest, and expects that one answer to the future of the domestic airline business will be more consolidation.

Kelly at Southwest says there are three hot buttons on his priority list: 1) attaining optimum flight paths via the NextGen air traffic management system, now under development; 2) finding viable alternative fuels for use in airliners; and 3) a fleet of more efficient aircraft than are currently in the marketplace.

Says Kelly, “I think the economics have fundamentally changed in the last decade.” He says the airlines’ operating structures have “flipped” due to volatility of the oil market and the cost per departure has “skyrocketed.”

Southwest remains interested in expanding its route structure, says Kelly, but that will likely come at the expense of others — a redirection of resources. The airline also is looking at international opportunities, initially via code share agreements in Canada, Mexico, and the Caribbean.

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