Thriving Airport is Crucial to Milwaukee Economy: Is Mitchell on Course?

Aviation experts seem hard-pressed to name a thriving metropolis anywhere that lacks a thriving airport. Global trade, it appears, gravitates toward cities served by the greatest possible abundance of airborne connections.

Boomtown Atlanta, home to such international players as Coca-Cola and Home Depot, has Hartsfield, the nation's busiest airport. Chicago, with its international finance markets, has teeming O'Hare. Houston, home to the nation's third-busiest airfield, is headquarters to no fewer than 23 Fortune 500 companies.

Little wonder, then, that a public brawl has erupted over control of Wisconsin's busiest airfield: Milwaukee's Mitchell International Airport. The acrimony between Milwaukee County, which runs the airport, and a consortium of business leaders, who support creation of a regional airport authority, has thrown a spotlight on the burgeoning importance of airports as they become ever more critical to businesses with global aspirations.

"If you haven't got adequate airport capacity, you simply won't attract modern industry," said Kenneth Button, a professor of aviation economics and public policy at George Mason University.

So far, Mitchell has filled that role well, according to some prominent multinational companies that call the Milwaukee region home.

Waukesha-based GE Healthcare Technologies, a globally active division of General Electric Co., sees Mitchell as a business-friendly hub. The company, which authorized over 3,000 flights for its Milwaukee-area operations in the first quarter of 2006, relies on Mitchell for 70% of its executive air travel, mainly for domestic connections, said Ralph Strosin, general manager of GE Healthcare's sourcing and operations. The remaining 30% are largely international connections and fly mainly out of Chicago's O'Hare.

GE Healthcare has increased the number of tickets issued for Mitchell by 25% per year since 2003.

One of the primary reasons that Rockwell Automation Inc. moved its corporate headquarters to Milwaukee in 1999 from California "was frankly the Milwaukee airport and its access," said company spokesman Matthew Gonring.

Rockwell, which operates from Beijing to Berlin, doubled its use of Mitchell in the past three years as the company expanded and the economy picked up steam, he said.

Mitchell competes with Madison's Dane County Regional Airport not so much for passengers but for airline service. The Madison airport, about a fourth the size of Mitchell, is hustling to add direct connections to lure more venture fund investors and biotech executives to the state's capital.

"It's extremely competitive among airports to acquire new non-stop destinations," said Dane airport director Bradley Livingston.

In such an environment, can Mitchell, run by the board of a financially struggling county, keep growing efficiently enough to propel the Milwaukee region's economy forward?

Some political and business leaders are skeptical. Behind the uproar, however, a quiet but steady expansion is evident at the airport.

Construction crews are extending Milwaukee's existing concourses and adding gates under a $208 million expansion. The airport has a long-term plan to build an additional terminal from the ground up, bringing the number of gates to 71 from the current 42.

Still, only two of the airport's existing five runways are long enough to handle large commercial aircraft. Within 10 to 15 years, according to airport projections, the airport will need a major new runway to avoid bottlenecks and delays.

A history of growth

Apart from periodic disruptions such as the Great Depression or the 2001 terrorist attacks, Mitchell has been expanding almost non-stop since 1927, when it opened as a farm-field landing strip. In the first month of operations, Charles Lindbergh piloted his single-engine Spirit of St. Louis into Milwaukee, less than three months after its New York-to-Paris flight.

More recently, Mitchell has grown in ways that favor business travelers as well as corporations seeking sites in the Midwest for expansion or relocation.

MKE, as baggage tags identify the airport, has increased both the number of daily departures (231) and the number of cities with non-stop service (54) in a comeback from the global airline shock that followed the 2001 terrorist attacks.

From 1995 to 2004, the number of departing passengers at Mitchell rose at an annual 2.8% rate, outstripping the 2.1% national average. Last year a record 7.27 million passengers moved through the terminal - when both arrivals and departures are counted - up from 6.1 million two years earlier.

"Milwaukee is on a roll," said C. Barry Bateman, Mitchell's airport director. "The more non-stops you have, the more passengers come, which increases demand."

Mitchell's long-term plan foresees steady increases in passenger traffic at least through 2021.

Bateman spoke early this month in his office, where his once-panoramic view of the runways is obscured behind a temporary corrugated-aluminum structure that zigzags across the tarmac and services flights with provisional gates.

Asked if Mitchell is a business-friendly airport, he digs out a table that ranks the nation's 100 biggest airports. Milwaukee, it shows, punches above its weight in terms of what matters most to business travelers. While Milwaukee ranks 50th nationally in passenger volume, it rises to No. 34 when ranked by the number of non-stop cities served and frequency of flights - just narrowly behind Reagan Washington National Airport (No. 30) and Chicago's Midway (No. 31).

Supporters of keeping Mitchell under county control point to its steady growth as a primary reason not to tamper with it.

"Hostile takeover," charged Supervisor James White, the head of the County Board's transportation committee, after state Rep. Jeff Stone (R-Greendale) introduced a bill in Madison last month that would transfer control from the county to a new regional authority. The bill's sponsors acted in secrecy, White and several other infuriated County Board members said, in an attempt to take the airport away from the county without a County Board vote.

But the Metropolitan Milwaukee Association of Commerce, a leading business lobby group, has for two decades championed proposals for a depoliticized airport authority.

Oak Creek-based Midwest Airlines, which controls half the flights at Mitchell, and Minnesota-based Northwest Airlines, the airport's No. 2 carrier, both support a single-purpose airport authority outside county control.

In a post-Sept. 11 era that has presented airlines with unprecedented challenges, nearly every major U.S. carrier continues to post losses. Fuel prices have tripled in the past five years, making cost-effective operation of airports critical. That is even more difficult, business interests contend, when an airport is staffed by county employees who receive health care and pension benefits that soon will equal 70 cents for every dollar they are paid in wages. Those benefits exceed "our company's or most private companies'," said Midwest Vice President Carol Skornicka.

Supporters of a regional authority also argue that about half of the nation's top 100 airports have switched to single-purpose governance structures that are "consistently more efficient and more responsive," Skornicka said.

The International Air Transport Association, a global airline trade group, has argued that airport costs have become a competitive issue everywhere. "The air transport industry can no longer afford archaic airport business models," IATA director general Giovanni Bisignani said in a statement.

Further, MMAC president Tim Sheehy says the county often uses cash flow from the airport to buttress its own budget.

"The citizens of Milwaukee ought to know that the county is on such shaky grounds that it uses the airport for its financing," Sheehy said.

County officials don't dispute that they might need to rely on short-term loans from the airport to cover county operating expenses - which they have done in the past. Separately, the county charges the airport about $10 million a year for legal, accounting and police services that the airport could procure less expensively, Stone and the MMAC argue.

One reason for the county's opposition to Stone's proposal is that giving up control of the airport would worsen the county's finances, said county budget administrator Stephen Agostini.

Poisoning the atmosphere further is the MMAC's distrust about whether the county will authorize construction of an additional runway - a decision that appears inevitable under airport growth projections but that would mean demolition of a residential neighborhood.

"I won't commit myself to a decision until I have to make a decision," county Supervisor Richard Nyklewicz said when asked if he would support a new runway. Nyklewicz, whose district includes the airport, has led the opposition to Stone's legislation.

Stone has shelved the bill for now and said he will start over with it next year.

Meanwhile, Midwest's support for a change of stewardship has erupted as a flashpoint of conflict between county politicians and business leaders.

County Board Chairman Lee Holloway fired off an angry rebuke to Midwest Airlines CEO Tim Hoeksema and in effect attacked the airline's integrity, writing that "Midwest Airlines is not registered as a principal with the Wisconsin Ethics Board." Such a move would be necessary if Midwest itself formally lobbied the Legislature.

The MMAC has argued for months that it backed the legislation; Midwest is a member of the MMAC, which is a registered lobbying group. But in his April 3 letter, Holloway vowed to "continue my efforts to determine whether Midwest Airlines - with no regard for the constituents represented by County Board supervisors - initiated legislation creating a regional airport authority."

Holloway's accusations "can only serve to harm business-government relations and cause corporate decision makers to question their continued operations here," according to Joseph Rice, a County Board supervisor.

In a letter to Holloway, Rice wrote, "At a time when enormous policy issues are facing Milwaukee County, such a letter is counterproductive to the promotion of our economic vitality."

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