Airports Remain Cautious: Funding for in-line systems, economic deregulation among top concerns

Managing Airports Today

Airports Remain Cautious

Funding for in-line systems, economic deregulation among top concerns

By John Infanger

November/December 2004

HOUSTON — Airports from across North Americamet here in September for the annual convention of the Airports CouncilInternational-North America. They are still concerned about where moneyis going to come from for in-line baggage screening systems, and continueto lobby for restraints on how they operate financially. At the same time, they are encouraged by moves by FAA to streamline the regulatory process.

Comments ACI-NA president David Plavin on the subject of airports gaining more economic freedom, “We’re making marginal progress. I believe very strongly that with all of the trouble the airlines are in, airports are going to need more flexibility.

“What a couple of airports have done is to say, ‘We’re going to create a capability to handle airlines — baggage handling, ticketing, ground support, fuel services — and we’ll do that for any airline that wants to come in here.’ They won’t have to create a whole station to do it.

“It’s the way the rest of the world does it. I think, from the airlines point of view, it’s not cost-effective to continue to insist that they be the ones who control all those people at all the airports. It doesn’t make sense.”

Plavin reports that ACI-NA is in the midst of an initiative with air carriers to discuss operational issues of concern to both airlines and airports. “It took two or three meetings to come to the conclusion that there were a few items we could agree on, to overcome the initial sense of distrust [by the carriers] of, why are you interested in this?” he explains.

Future meetings, he says, will include ACI-NA staff, airports, airlines, and ground handling companies and will focus on whether or not the group should come up with benchmarks that all players could find of value related to airport operations.

Along those lines, outgoing ACI-NA chairman Patrick Graham concurs that airports will need to take a serious look at taking over services for air carriers, if only because of the economic realities of the changing airline business. “In my opinion,” he explains, “I think that’s where it’s going. For airports my size (Savannah/Hilton Head International Airport), I think that’s where it’s going to end up.

“The airlines are going to get to the point where they just want to fly the planes in and fly them out. Look where they’re going with all of the [ticketing] automation; they just want you to get on the airplane.

“The airline model is not working. I think the government is going to need to let a couple of them go bankrupt so we can redeploy the assets.”

Both Plavin and Graham say they are encouraged by moves by the Federal Aviation Administration to streamline the regulatory process for building new runways, as well as by moves by the agency to ease some of the restrictions as presently required by the grant assurances.

[For more on Patrick Graham’s comments from the show, see “Inside the Industry,” page 34.]

TSA, Security, and The Opt-Out Program
Meanwhile, ACI-NA officials and airports continue to express frustration and dismay regarding the lack of federal funding for implementation of in-line baggage screening systems at airports. To date, only eight letters of intent (LOIs) have been granted by TSA that would reimburse dollars spent by major airports to put in such systems.

Plavin says that while he has concerns about the apparent revolving door at the leadership levels within TSA, he is encouraged at the role Rear Adm. David M. Stone (Ret.) has played in giving the agency clearer direction. Stone is the Assistant Secretary of Homeland Security for TSA. “He seems to come on as someone with an open mind, who’s willing to listen,” comments Plavin.

“When the guys in Pittsburgh came up with the idea of seeing if there’s a way to allow non-rev passengers beyond screening, Stone said let’s see if we can make that happen. And, he seems to be favoring those people who know how to make things happen in a supportive way, to not have an adversarial relationship and to try and work with airports.”

Regarding the opt-out program, which was unveiled by TSA in June as directed by Congress, officials remain concerned that more definitive guidance is still forthcoming from the agency, even though the deadline for airports to express an interest is November 19.

Says Plavin, “I think there’s still an interest on the part of some airports, but it still depends on what the final guidelines will be. The reason TSA is doing opt-out is because the law requires it. In talking with them about it, they’ve kept a pretty open mind. They’re being reasonably responsive to the types of issues people are raising. There’s not a groundswell of interest on the part of airports for opt-out. I know there’s no groundswell of interest within the TSA.

“The role that an airport will play is still not clear. Do I get a chance to sit at the table and only sit at the table? Do I get a chance to tell you what I think and have it count for something? That’s the political level of the issue.

“The second level is, can the airports do it their own way? Do they have to set up a corporation, which is not an option in all states? The other part of the question is, What do airports get for it? “

Congestion Solutions
In a session titled Bullish on Airports — Future Congestion, Challenges, and Needs, George Donohue, professor, air transportation technology and policy, George Mason University, addressed congestion issues. He says while congestion is a problem, adding additional runways at airports is not necessarily the solution.

“We all know new runways are important, but there is usually diminishing return beyond three to four parallel runways.” To deal with airports that have high density demand, Donohue suggests implementing a “slottery” or weight-based landing fees, which may encourage use of small aircraft.

Kent Fisher, VP marketing for future Boeing commercial airplanes, says the company anticipates 5 percent passenger growth and 6 percent cargo growth, globally. Fisher says if airlines did not have to compete for passengers, they would choose to fly larger aircraft, with fewer flights.

Congestion is one of the reasons, says Fisher, that Airbus claims its new A380 will be successful. “We don’t think so,” he says. “If you add 500-seat aircraft at O’Hare, you won’t solve congestion.” According to Donohue, O’Hare, on average, experiences 26 flight cancellations each day.

Click image for larger view charts

Paul Bollinger, president of the Air Traffic Control Association, says “new technology can provide additional capacity at airports. It may not be the silver bullet, but it’s a piece of the answer.” By 2012, says Bollinger, airport delays will have a $170 billion impact on the economy.

While FAA has made some headway in deploying technological solutions for congestion, such as ASDE-X (an airport surface surveillance system), Bollinger points out that Sacramento International Airport is still waiting for its system, while cutbacks have caused the failure and/or delay of technology installations at other airports, including Seattle-Tacoma International Airport, Los Angeles International Airport, and Orlando International Airport.

“Airports are expected to fund air traffic control improvements which should be a function of FAA,” says Bollinger. It’s time we “fund and manage the national aviation system as a system.”

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Associate editor Jodi Richards contributed to this report.

ACI-NA Cargo Facilities/Security Survey: ’One Size Fits All’ Won’tWork

Airports Council International-North Americarecently released the results of a comprehensive 2003-2004 Air Cargo Facilities and Security Survey, which analyzed future cargo growth and security needs at U.S. and Canadian airports. Two overriding conclusions: Significant cargo growth is anticipated at North American airports and much more input is needed from federal agencies regarding how to handle security. The “one size fits all” approach used for passenger screening will prove inadequate for cargo.

States the report, “The Transportation Security Administration and the Canadian Air Transportation Security Authority must fully account for the myriad of differences among airports and fully engage airport operators from the outset of cargo security planning efforts. A ‘one size fits all’ security program ... would be inappropriate and, more gravely, ineffective in addressing cargo security concerns at North American airports.”

ACI-NA cautions that until new federal cargo security regimens are definitively specified, new cargo improvements cannot be initiated with any level of confidence, no matter how much they may be needed. At the same time, it will be difficult for airport operators to adequately project how much it will cost to implement new security procedures until more definition is provided.

Adds the report, “An effective cargo security program must account not only for cargo screening, but also the shippers, logistics employees, and their equipment. Among the greatest potential challenges could be the screening of cargo trucks and their drivers/occupants. Only 14 of 89 (16 percent) respondents presently have separate marshalling areas dedicated for over-the-road commercial truck screening. Only 29 percent have any systems in place for monitoring the arrival/departure of commercial trucks.

• Likely Location for Potential Truck Inspection Stations On-AirportOff-AirportLarge Gateways:92%8% Medium Gateways: 41%59% Small Gateways:79%21% Canadian Gateways:90%10% Total:73%27% Some of the results from the ACI-NA survey indicate that a majority of airports surveyed could handle on-airport screening of trucks if required prior to arrival at the cargo complex. However, if additional screening is required at the cargo complex, a majority of airports would require additional inspection facilities. • Likelihood for Additional Cargo Screening and/or Physical Inspections Use Existing FacilitiesRequire Additional FacilitiesLarge Gateways:42% 58% Medium Gateways: 68%32% Small Gateways:29% 71% Canadian Gateways:50%50% Total: