TIME TO DEREGULATE In a one on one interview, David Plavin calls for unleashing airports

By John F Infanger

In a one on one interview David Plavin calls for unleashing airports

SALT LAKE CITY — In late 2002, some 2,000 representatives of the airport industry met here for the annual convention of the Airports Council International - North America. Their last meeting had been in Montreal on 9/11, and much had changed. ACI-NA president David Plavin, in an interview with AIRPORT BUSINESS, talked about change and, most notably, the need to open up airports to a more deregulated environment.

Plavin is the former director of aviation for the Port Authority of New York & New Jersey, and has headed up ACI-NA since 1996.

AIRPORT BUSINESS: The ACINA incoming chair, Gina Marie Lindsey of Seattle-Tacoma, was talking about one of your favorite topics, the financial reform of airports. Will the association become even more vocal on this issue?

Plavin: Most people, from an airport point of view, are likely to think, let’s don’t bump AIP, let’s do something about a PFC. That’s obviously important and going to continue to be a part of our program. But in the longer term, I don’t think it works.

First of all, we’re in the discretionary budget, even though our money comes out of the Trust Fund. But we now have a situation where the Trust Fund is somewhat diminished by the fact that fares are lower and fewer people are flying.

If you look at what else the Trust Fund funds, it’s almost assuredly the case that Congress is going to say those guys have higher priority. So, we’re going to work our tail off to make sure we don’t get hurt on the AIP side, but that doesn’t mean we’re going to be able to get anything new.

With respect to PFCs, everybody is worried about the airlines. My view is that, not only don’t PFCs do damage to airlines, they help — there are ways for things to be funded without the airlines having to pay for them.

AIP has rules and regulations attached to it; it has priorities attached to it. PFCs have rules and regulations and priorities attached to them. They certainly don’t match the general availability of airport capital funding, which is airports’ own funds.

The whole system would be better off if the first thing you did was eliminate the difference [in projects] that can be funded with those three pots of money. I think you could make more intelligent decisions that way. And I think, frankly, that you’d do things differently.

I had the advantage when I worked for a large airport in that our capital program was so big that we could apply AIP to the things that were simplest to do, and the same thing with a PFC, although we chose to use it for an airport rail connector.

The mix and match philosophy, it seems to me, is one that ought to be the place to start on the overall economic freedom.

AB: As I recall, though, you believe airports need to have even more economic freedom with less oversight.

Plavin: The second issue, which I think in the long term is more important, is that ultimately, given the fragile state of airlines and their cost consciousness and revenue ineptitude, they’re going to have to ask airports to do more without putting it into the rates and charges. I don’t think that’s a bad thing, though some airports might. In fact, all over the world outside North America that’s the norm rather than the exception. Airports do ground handling; they do baggage service; in some cases do lav service and passenger handling, gate hold area maintenance, operate the loading bridges.

I think it makes sense for North American airports to begin to think about going there. In the long term, I think it’s going to be the only way you manage the kind of cost model that airlines are now trying [to achieve], especially at places where there are multiple airlines with no dominant carrier. It would be much easier if the airport could say, ’hey, I’ll manage all this stuff for anybody that wants to come in here.’ Then you only have to pay your share rather than have a whole station.