ACI-NA Releases A Study On The Collective Economic Impact Of Commercial Airports ...

April 4, 2012
... underscoring the importance of being able to compete in an increasingly globalized economy

The association conducted a similar study in 2001 (Visit www.airportsforthefuture.org to view the 2012 study). Comments assocation president Greg Principato, "In a decade with 9/11, and the worst economic downturn since the depression, you still see growth. Transportation is a driver of economic activity, and economic activity drives transportation.

"This kind of study really hits you where you live; it really tells the story in a vivid way."

Around the world where communities are building and modernizing airport infrastructure, the mechanism that’s used is a passenger-based user fee, which is essentially what the passenger facility charge (PFC) is here in America.

In most of those places, you don’t have a lot of tax money going to the government, says Principato. It’s local user fee payments that stay at the airport and go toward a revenue stream to back bonds, or on a pay-go basis — that helps build and modernize that infrastructure.

Explains Principato, "Here in the U.S., we don’t have that. We have a system where the Federal government is telling the localities that they can’t use that mechanism apart from the one exception up to $4.50 [current PFC cap].

"So by Federal law in the U.S., telling localities that with the exception of the $4.50 PFC, they can’t generate their own resources in the way airports around the world are generating them —it’s really holding U.S. aviation infrastructure back."

The law that does that was passed in ’73 during the Nixon administration, and at the time, the airlines were regulated and it was a very closed market, he relates. "Maybe it made sense then; but now the market is open, and it’s global.

"These global alliances … essentially large global airlines, they have a certain number of airplanes and they have to make a decision on what to do with them. If they think that the efficient and modern facility in Singapore is a better place to put them than Los Angeles, then that’s what they will do.

"It really is a global competition now."

In the late ‘70s, the steel and car industries were on their knees begging Washington for protection from foreign competition, explains Principato. Is that where we are going with the aviation industry, he asks.

When I attended Dublin City University in Dublin, Ireland as part of a global communications program during my last semester of college, one of the first tasks we were given as students was to define globalization. To us, it seemed to be a pervasive word with several potential meanings.

Having covered the aviation industry from the perspective of airports for the past three years, I am confident I have a much better understanding of the concept. Now that the technology exists to communicate with anyone, at anytime, nearly anywhere ... the idea of a global marketplace is more relevant than ever.

Airports must have the ability to compete on the global level, and to do that, our government needs to fully embrace the concept of a global marketplace by giving the airport the freedom to operate as a responsible and intelligent business — and to act as a reflection of the local community by charging what the market will bear to generate resources to build infrastructure, and in turn, take control of their destiny.

Thank you for your interest,

Brad McAllister