One on One: Greg Principato

WASHINGTON, D.C. — Congress took the month of August off, after both Houses saw committees pass reauthorization bills for FAA and the U.S. aviation system. A few days prior, Airports Council International-North America and the American Association of Airport Executives held their annual Summer Legislative Issues Conference — dominated by funding discussions and a half-day parade of House legislators. Following the
session, ACI-NA President Greg Principato sat with AIRPORT BUSINESS for an interview on reauthorization. Here are edited excerpts ...

AIRPORT BUSINESS: What are your thoughts on the air traffic control modernization discussion that has been central to committees in both Houses?

Principato: I always joke that like with the weather, people talk about it but can’t do anything about it. We’ve been talking about it a long time.
With the [Balliles] commission that I worked on in 1993, that was the first and main recommendation of the commission: to modernize and fix air traffic control and the governance of it. That commission had some ideas; Al Gore’s reinvent government had some similar ideas; Norm Mineta’s commission in 1997 had some ideas.
Whether the specific idea is the right one or not, the fact is we really do need to figure out what modernization means and do it — fairly quickly.

AB: When you listen to the NextGen discussion, it’s not just about air traffic control. It’s environmental issues; it’s capacity on the ground issues; it’s separation in the sky issues.

Principato: I think those other things have not been talked about enough over time. It’s always about who pays. And it’s often about what the structure is; control.

When I went down to Atlanta, [aviation GM] Ben DeCosta took me up to the control tower to look out and see the five parallel runways. It’s pretty efficient. Look at Chicago and the configuration of the runways; when they finish the modernization it will be a much more efficient use of what they have on the ground. In Denver, they can do things in weather they couldn’t do before.

All that’s undervalued.

AB: Regarding infrastructure needs, ACI-NA this spring updated its analysis of investments needed at airports. When you go to Congress to testify, do you think that sticks, particularly in light of the fact that your numbers differ from FAA’s?

Principato: I think it does, but in combination with other stuff. It’s easy enough to explain why FAA’s NPIAS [National Plan of Integrated Airport Systems] numbers are different than our number. They’re measuring a different pot of things. But it isn’t just the number — it’s construction cost inflation; it’s price and service competition. The new runway in Atlanta meant that even in less than ideal weather you can do 30 more arrivals per hour. The system benefits from that, and the small airport community benefits.

We spend a lot of time with folks on the Hill, with FAA, with GAO, going over those studies. We let them poke and prod at it. What comes out is a number that’s rigorous and passes the laugh test. It’s not just something we threw up against the wall.

AB: An interesting approach taken by ACI-NA when you distributed your study to the media was you did it through your airport members, and got them to notify the local media for a teleconference press briefing.

Principato: It’s really a lesson I learned from state government, where 21 years ago in Virginia we passed a huge transportation package and one of the things that was done was the governor went all over the state and stood on unpaved roads in southern Virginia and said, ‘This thing will be paved.’

That makes it real in people’s minds. It had over 80 percent public approval.

The lesson you take from it is use everything at your disposal to tell the story, and make it real for people.

AB: What are your feelings right now on where we are in the reauthorization process?

Principato: I’d hoped we’d be a little further along, legislatively. There are a lot of competing priorities.

We do think that the way the system is funded needs to be looked at closely. We did a Trust Fund analysis that showed that the amount of money in the fund is not going up; it’s steady or going down. We are concerned.

In Congress there’s a willingness to see the need to invest in airport infrastructure, with the AIP [Airport Improvement Program] number up in both Houses. That’s very gratifying.

The Administration and the House are both proposing an increase in the passenger facility charge; [they support] that it really is an efficient way to bring infrastructure online. It’s a pretty stable and predictable source of revenue; you can bond against it; financial markets like it.

I think it’s much more efficient and effective for the airlines, too. We represent air carrier airports; we certainly don’t want to do things that could choke off the recovery of the airline industry.

AB: On PFCs, it looks like some sort of increase may happen. Yet, we’re not going to see an easing of the restrictions of PFCs and FAA’s oversight. When you hear [FAA associate administrator] Kate Lang talk about it, you wonder why are we regulating all this so specifically? When she and Marion Blakey are going up to the Hill and saying this, why isn’t it ringing through to those people?

Principato: I agree with the disappointment that we haven’t gotten further with streamlining. Our view is that the PFC program is 17 years old, it’s a mature program.

I’m disappointed that there isn’t more recognition by the airline industry. I hope to work over the next three to four years — whenever the next reauthorization bill comes — to talk the PFC, that it really is a more effective, efficient way to bring projects online, instead of just going to the rate base.

AB: At a session at this year’s AAAE convention, the airlines seemed to feel that airports have been saving up their money and that there’s really a lot of infrastructure money sitting there in the system right now waiting to be spent. What’s your view on that?

Principato: I don’t think there’s any kind of mountain of cash on an industry-wide basis.

When PFCs are approved they’re project-based, so you can’t just charge a PFC for the heck of it. In many cases they’re pledged out for years; so [at the current $4.50 cap], they effectively have a PFC of zero for anything new.

Think about what you’re buying — you’re buying construction. It’s probably pretty hard to start a project with no money in the bank.

Some of my frustration is the accusation, if you can call it that, by the airline industry that the airports are doing well because they have good bond ratings. Well, they’re part of state and local governments; they’re required to run efficiently. The fact that you have a high bond rating and you are run efficiently helps keep costs down for the airlines, and for the passengers. I don’t really understand why they accuse airports of being too strong. A lot of airports have to make a lot of tough decisions. Security requirements have caused some airports to have to cut staff; airline service cutbacks in the bad times were difficult for a lot of airports.

Ask the Pittsburgh airport director [Kent George] about the challenges he faced when US Air pulled its hub out. It hasn’t been easy for anybody. The fact that airports have managed these changes overall in a responsible, constructive way doesn’t seem to me to be an indictment. It should be something that’s looked at favorably.

AB: What do you think of the pilot program being proposed for PFCs by the Senate, in which participating airports could set their own cap?

Principato: It’s not a substitute for increasing the PFC. If the final bill increases the PFC and there’s a program like that, then sure. I’m in favor of looking at anything that might make sense.

AB: How confident are you about the 30th of September [when current reauthorization expires]?

Principato: I don’t bet, but if I did I’d be looking more at December 31st.

AB: Do you think the Administration is serious about vetoing a bunch of bills, or is it more posturing?

Principato: They’ve been pretty strong, certainly on the NATCA provision. At the end of the day, we all want a bill signed and to move forward.

AB: Are you surprised by the level of AIP being proposed in both Houses?

Principato: No. Congress has certainly shown a lot of interest in the program. A federal grant program that’s used for infrastructure back home is usually going to be pretty popular. And airports have shown how responsible they are in the use of the money and what it’s gone for.

AB: With the airlines these days, it’s getting harder and harder to get a seat. Concerns?

Principato: There really isn’t an answer for it, unless the market, the passengers, start telling the airlines they need more capacity. It seems like they’ve almost gotten to the point where they can figure out almost to the seat the demand.

I don’t think any of us wants the government to get back into the business of telling the airlines how many seats they have to fly.

You can’t blame everything on the government, or on business aviation. There are going to be cancellations, even if we have a NextGen system everybody thinks is great; even if the new PFC enabled airports to build everything they want and need. Delays, weather, duty time problems, are all going to happen.

AB: Anything else on your plate related to this topic?

Principato: A couple of things. We’re already working on the next reauthorization. We feel like we need to do a better job of educating people on how airports do their business, how projects are financed.

Security is a huge issue — employee screening; the future of the whole security regime. We’re going to be taking a look at what the security regime should look like five years from now.

Environment — there’s no amount of talking about the relatively low environmental impact of the aviation industry that’s going to stop people from shining a light on the industry. So, we need to be in front of it and shape the future better.

Congestion management is an important issue, to the large airports and to the smaller communities who want to ensure they have access.

AB: What about the topic of 100 percent employee screening?

Principato: We’ve worked closely with Boeing and others on the studies that they’ve done. ACI was really pushing for the airlines to be involved. They have people moving back and forth all day. It really involves everybody’s operations; everybody who works at the airport.

If you just put a magnetometer in one place, the person knows that every day they’re going to go through that magnetometer. If they know that they’re going to go through that magnetometer at that place, and they have nefarious intent, that’s pretty easy to beat. If you’re using behavior recognition, and you’re making use of technology, and you do random screening — it’s a little tougher to beat the system.

AB: Are you optimistic that we’re finally going to get some money for EDS implementation?

Principato: I’m very pleased; we still have a way to go. It really is a more efficient way. Then you have other resources that you can refocus.
Moving from a labor-intensive approach to a technology-intensive approach for security is the way to go. If the system is inefficient, then it’s going to be less secure.