A Time for Decisions

AAAE's No. 2 man Spencer Dickerson continues to insist that "security, security, security" remains perched as the top concern for U.S. airports today - from funding to installation to standards.

For airports, as Dickerson indicates, meeting the security requirements of Congress/TSA remains a high priority, not only in terms of financing screening systems but being able to reconfigure their terminals in such a way that facilitates passenger movement. For general and business aviation, meanwhile, concern over dramatic TSA oversight is diminishing, according to NATA president James Coyne, at least at non-commercial airports.

Comments Coyne, "I don't think it's going to be expanded toward general aviation airports in any substantive way. My guess is it will pretty much continue as is."

His perspective was reinforced in late May with the announcement that TSA was preparing guidelines for general aviation aircraft to allow them to access Ronald Reagan National Airport (DCA), which has been closed to GA since 9/11.

For airports, one of the carrots held out by TSA in June 2004 was the opt-out program, which was intended to motivate airports to assume passenger screening activities, either in-house or by way of contracting with private companies. To date, however, only two airports have raised their hands to participate in the opt-out program - Elko, NV, and Sioux Falls, SD.

Comments AAAE's Dickerson, "The appetite from our members for opt-out is very low. The problem is that the members aren't comfortable with the liability issues; they're uncomfortable with the accountability issues; who's responsible; are there going to be funds. Until they get those issues resolved, the appetite will not be high."

Adds ACI-NA's Van Beek, "Opt-out was an opportunity that would have been a way station to dip our toes into it and see if the big-time issues related to it would be taken care of. Opt-out was a narrow program, but TSA may take it further. "

Meanwhile, there is a growing concern in airport circles that in time the federal government will just hand over to airports the responsibility for all passenger and luggage screening. (See TSA sidebar, page 14.)

Airlines and Airports - A Financial Connection

No matter how stressed airports may be regarding funding security or managing day to day operations with reduced revenues, analysts on Wall Street such as Fitch Ratings service continue to remind airports that their financial situation is positive, relative to that of the air carriers. Yet, it is the carriers - bleeding red ink - who are the financial drivers of the system.

According to ACI-NA's Van Beek, the current situation is causing some airports to rethink their long-term economic strategies. "Two things have become apparent," he says. "One is, airlines are funding a lot less than they used to; and second, airports are trying to see their constituency as their communities and not the airlines.

"You can no longer say, what's good for US Airways is good for my community. As they invest in their airports, it forces them to find airport-centric solutions, not airline-centric solutions."

Charles Chambers, vice president of consulting firm InterVISTAS and the current chair of the Airport Consultants Council, agrees that the financial situation of the carriers is causing airports to rethink how they operate. "Airlines are already and will continue to agree to more common-use facilities at airports, despite their ongoing reluctance. Airports and third parties will assume responsibility for these common-use facilities."

The need to find new revenue sources is also leading some airports to consider offering airline services, such as ground handling or refueling, as a way to help ease the economic burden on airlines and/or generate new revenues.

Says AAAE's Dickerson, "My sense is that it has some economies of scale issues, so small airports may be looking at it. If there's a way to keep costs down [to airlines] by doing that, it's something people would explore."

NATA's Coyne, however, says he's concerned about the prospect of airports providing such services, which he maintains should remain with private sector firms. "It's a very hot topic among our members," he says. "It varies in different parts of the country, and it's always been an issue in New England."

Capital Needs, Bonds

Meanwhile, the capacity issues that faced airports in the summer of 2001 are returning. FAA projects that some $39.5 billion in infrastructure will be needed at U.S. airports through 2009. ACI-NA puts the number at closer to $50 billion.

We Recommend