One on One: Patrick Graham: Among hot issues, outgoing ACI-NA chair sees one airport association as a priority

Inside the Industry

One on One: Patrick Graham

Among hot issues, outgoing ACI-NA chair sees one airport association as a priority

By John Infanger

November/December 2004

HOUSTON — Patrick Graham, 55, is the outgoing chairman of the AirportsCouncil International - North America, which held its annual conventionhere in September. During the show, the director of Savannah/Hilton HeadInternational sat with AIRPORT BUSINESS to discuss the highs and lows duringhis year at the helm. Among the highlights: He’s encouraged about the potential for economic reform for airports; disappointed about a lack of direction from TSA regarding the opt-out program; and, undaunted in his goal of uniting the two airport groups in Washington — ACI-NA and AAAE. Following are edited excerpts from that interview.

AIRPORT BUSINESS: Broad brush, what are some of the highlights and disappointments of yours over the past year?

Patrick Graham Patrick Graham

Graham: Probably the biggest success is maintaining or increasing the level of AIP funding, when every other fund is looking at a downturn. With Congress, our major accomplishment has to be the funding.

A major disappointment is the $250 million level for EDS; it’s a joke, in my opinion. You’ve got eight airports that have LOIs [letters of intent] for in-line systems. The report I read says that by the end of 2005 you’ll have 17 airports that will have in-line systems. That’s just not acceptable.

Congress passed a law that they had to pass to set up security after 9/11. They did it quickly; they did it with some holes. They haven’t plugged in those holes. They did a quick fix, and they had to do a quick fix. But now it’s time to face the issue. It needs to be an in-line solution.

If there’s some commitment by the government that airports would be paid back, most airports would be willing to try to fund that somehow. But if we don’t have a commitment to be paid back, then we have to put it into our rate base. And so you’re going to continue to kill the goose that lays the golden egg, the airlines.

AB: In June, the Transportation Security Administration unveiled the opt-out program for airports (in which airports can be considered for taking over the passenger screening function). That left more questions than answers for many airports, and TSA has yet to come out with more definitive guidance as promised, and the deadline for filing is November 19th. What are your thoughts?
Graham: I don’t think they’ve offered anything to us. That’s the problem. I think they’re just following what the law said but they didn’t really do anything. Until they address the issues of liability and control, why would I ever want it?

I heard that some 100 airports are interested in opt-out. Maybe 100 airports said that if the model was right; we’ve given them the model that we thought was the right model. If I could have control over it and those people worked for me, I’d think about it — and funding was in place. Don’t give it to me and make me pay for it in rates and charges.

As far as I’m concerned it’s a federal responsibility for security.

The only reason the airport directors want the headache is for better control from the customer service standpoint, and if it’s not a federal employee you have more flexibility.

Those items need to be addressed, and TSA’s just given it lip service as far as I’m concerned.

AB: Another top ACI-NA issue has been economic deregulation of airports. Any significant movement on this?
Graham: One of the issues we’ve had some success with is the economic deregulation aspect of what ACI’s trying to do. FAA has the sponsor assurances [rewrite] out for comment; that’s something the FAA never put out for comment before, not since I’ve been around. So you’ve got an opportunity to try and whittle away at some of those sponsor assurances that tie your hands once you get federal dollars.

The PFC [passenger facility charge] process got streamlined a bit this year, and that’s good. My opinion on PFCs is that it’s local money; it shouldn’t even go to Washington. We shouldn’t even have to submit to Washington what we’re doing with that money. Why should they be telling us what we can and cannot do with it? I send up about $22 million in ticket taxes; I get back $3.8 million from Washington. I should be able to do any lawful airport project with that money.

AB: Would you set a limit on PFCs?
Graham: I’d let the local market demand. Look at Canada, where they call it a head tax, which is what it is. They decide in the local community what it’s going to take to put in the necessary improvement at their airport. The passenger pays it directly to the airport and you don’t have the federal bureaucracy involved, or the cost of the federal bureaucracy.
If I need $10, I need $10. If Atlanta needs $30, it needs $30. Airport operators don’t dream up profits.

AB: Other disappointments?
Graham: The major frustration as the ACI-NA chair was the inability to consolidate the ACI-NA and AAAE staff. I think we could have accomplished it; I still think it’s the right thing to do. I think the industry deserves one organization that speaks for airports — not two. We’d be much stronger if we were one organization.

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