A delicate process

A delicate process

One authority?s attempt to rewrite the book on its reliever airports

By Gary Schmidt,

November 2000

On the reasons for beginning the process of evaluating the MAC?s reliever airport system ...

?One of the problems that we had was actually the liability of the commercial operators. It isn?t just an illegal operator issue, it?s the problem of someone wants to come in on a shoestring and see if they can make it work. That started us off saying, we need to have some type of minimum standard here or we will continue to have an overabundance of commercial operators, which I think we do on some of our airports.

?People were coming to us and saying, ?I want to start a flight school, but I just want to do it out of a storage hangar, and if it turns out to work well I?ll really invest in the business.? What that did was take students away from commercial operators who had made the investment.

"That in turn led us to start looking at all the policies because, to be quite honest, the pomp and circumstance is really at the International Airport. That is a large focus of the Metropolitan Airports Commission, so for a long time the relievers could be subsidized without a whole lot of money.

?Overall, I think we realized that the rates, which had not changed since the early ?60s, were the problem. Looking at that, we got into the rate structure, and we?re now in the middle of trying to revise the lease policies and rules and regulations.

?We?re trying to progressively bring all of our documents up into the 21st Century. It?s been a battle.?

On reactions of airport tenants to the process ...

?The minimum standards is a real issue with the commercial operators. I think they?re afraid we?re going to try to put people out of business. I think we were very reasonable in what we adopted; in fact, I would call them extremely minimum standards.

?The other side of the coin for us is that most of our airports are fully developed, so these standards were going to apply to existing operators. There weren?t going to be a whole lot of new entrants unless we allowed it, and what we were trying to preclude was somebody coming and saying, ?I want to start in that small hangar over there and you?ve got no rules and regulations to prevent me from doing it without discriminating. It was intended to help existing commercial operators from those shoestring new entrants.

?Then we got into the issue of the rates and charges, and of course everybody was very upset. If we hadn?t raised the rates since the 1960s, why were we doing it now? A lot of the old-timers would say, these airports were never supposed to make money; they?re worth more than that subsidy anyway to the international airport in providing capacity. And they probably are.

?Our goal was we want to cover our operating expenses. The development of the infrastructure will continue to be subsidized by MSP.?

On the difficulty of coming to agreement with commercial operators on rates and charges ...

?The third time is the charm. We tried twice to change the rates and charges. The first time we were into minimum standards and rates and charges at the same time, and there was such a hullabaloo about trying to change the rates that we backed off and said, let?s get the minimum standards done first.

?The second time the commission was not happy with the complaints they were seeing from the tenants, so they directed us to go back. (They said,) ?You need to look at your expenses before you change the rates. The third time we decided this is going to play better if we have somebody from the outside come in that has some experience with other airports. That?s when we hired Airport Business Solutions.

When all was said and done and the minimum standards got adopted and we were able to keep everybody in business or at least attempt to, we got more into a partnership atmosphere. I think that still exists today.