AAAE Headliner: Reauthorization

Besides funding, airports focus on security, technology, airline issues at annual event


WASHINGTON, D.C. - For the first time, the American Association of Airport Executives’ annual Conference and Exposition was held here in the nation’s capital, a prescient planning move considering that the U.S. aviation industry is in the midst of what’s considered one of the most important reauthorization battles in the industry’s history. On hand were key D.C. players, including DOT Secretary Mary Peters, albeit briefly, and U.S. Rep. James Oberstar (D-MN), chair of the House Transportation & Infrastructure Committee — the latter expressing confidence that an adequate funding bill would be passed by Congress by the September 30 deadline. Other topics on the airports’ agenda: airline/airport agreements; Registered Traveler; security and technology; and the latest start-up carrier, Skybus.

Oberstar, who opened the annual conference, says he supports an increase in the cap on passenger facility charges (PFCs), a top priority for airports. However, he indicated a more realistic cap may be $6, a $1.50 increase. Airport groups are lobbying for a cap of $7.50, indexed for inflation. The committee chair does not support any further easing of restrictions on PFC eligibility, supported by both FAA and airports.

DOT Secretary Peters, who breezed through for a luncheon address between meetings on the Hill, stressed the importance of having a reauthorization bill in place prior to the new fiscal year that begins October 1. “Extensions mean more delays” and higher costs, she says. Peters also reinforced the need for funding of the next generation air traffic control system.

Skybus airlines: wedded to the internet
Bill Diffenderfer, CEO of the latest start-up carrier, Columbus, OH-based Skybus Airlines, describes the Skybus model as “Ryanair plus Southwest plus technology.” Diffenderfer calls Skybus a 100 percent Internet-based airline and says that passengers who book tickets electronically are looking for price and schedule — everything else is secondary.

Diffenderfer comments that the success of the Skybus website (www.skybus.com), which was in the top one percent for website traffic on the Internet when tickets went on sale, all comes down to promoting $10 fares. When the airline announced that it would guarantee a limited number of seats on each flight at $10, a publicity storm followed and the airline sold 30,000 seats in one day. “You don’t need to be a marketing guru if you have $10 fares,” says Diffenderfer.

Central to the upstart airline’s model, says Diffenderfer, is using airports that can guarantee 25-minute turn times, including taxiing. He stands firm that Skybus “won’t fly with any airport that can’t do 25-minute turns.”

Diffenderfer says there are opportunities for airports to attract start-ups like Skybus, but costs are a key factor. He explains that when one-way airfares get below $100, demand increases dramatically. To be able to offer fares at that level requires low costs at airports, he says.

He credits Elaine Roberts, president and CEO of the Columbus Regional Airport Authority, as a catalyst for Skybus. He relates that her experience with the hubbing and subsequent de-hubbing by America West demonstrated that there was a need in the Central U.S. market, which has a population base of some 6.7 million within a 100-mile radius.

“It was done by a leader of an airport,” he says. “She helped drive us forward.” And, he adds, there are similar opportunities for other airports. “There is a country full of markets that do work,” he says.

As one example, he points to San Augustine, FL, located midway between Jacksonville and Daytona. Load factors on that route are currently at 87 percent, he says.

Skybus currently is operating four Airbus A-319s, with another 80 on order. The intent, says Diffenderfer, is to take the airline public within two years.

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