In this issue:
- Will airports pull the plug on TSA screening?
- Airport privatization booming in Europe
- Bill would end small-airport subsidies
- Lessons from the Brussels bombings
- Protecting airports from drone encounters
- When is a user fee actually a tax increase?
- News Notes
- Quotable Quotes
March was a debacle for TSA, due to excessively long checkpoint screening lines at major airports, and both airlines and airport directors see those lines as a preview of what’s in store for the summer travel season. American reported that over 1,000 passengers missed their flights at ORD in March, due mostly to screening delays, and 650 AA passengers missed their flights at CLT on a single day, Good Friday (March 25). And during spring break week (March 14-20, American tallied 6,800 passengers having missed their flights.
As I reported last issue, the primary cause seems to be that TSA’s screener workforce declined from 47,630 in 2011 to just 41,928 in 2016 at the same time as passenger numbers increased over 11%. The agency had been counting on a much faster growth rate of PreCheck use, but it repeatedly delayed implementing long-planned contracts with third-party companies for large-scale PreCheck recruiting, and was forced to eliminate its “Managed Inclusion” process that had been funneling large numbers of non-members into PreCheck lanes to speed up overall screening.
Major problems have been widely reported at Atlanta, Charlotte, Minneapolis/St. Paul, San Jose, and Seattle in March and April. ATL general manager Miguel Southwell in February gave TSA 60 days to make major improvements in screening times, or he would apply to replace TSA with contract screeners under the agency’s Screening Partnership Program (SPP). By early April, TSA had appeared to head off that threat, by somehow allocating more staff and agreeing to more than double the number of canine units at ATL. Southwell told the Atlanta Journal-Constitution on April 6th that “As long as we continue to see progress,” there would be no need to privatize screening.
Charlotte’s acting director Brent Cagle has been engaged in a war of words with TSA over the extent of delays and missed flights at CLT. Defending itself, TSA held a news event at the airport to tout its new automated, in-line checked-baggage screening system. That system will free up about 60 bag screeners, whom TSA plans to reallocate to other airports. Cagle wants them shifted to passenger screening at CLT. So far, Cagle has made no mention of shifting from TSA to a private contractor via SPP.
It’s a different story at Minneapolis/St. Paul. In late March MSP’s Metropolitan Airports Commission announced that it is looking into joining SPP, so as to get a better match of screening numbers to changing passenger demand. MAC’s Pat Hogen reminded those unfamiliar with SPP that the TSA-certified contractors are subject to all TSA regulations and risk having their contracts cancelled if they do not perform acceptably. In a March 1st letter to TSA Administrator Peter Neffenger, Minnesota Gov. Mark Dayton wrote that TSA has ruined the efficiency of MSP’s checkpoints by changing their configuration.
San Jose in booming Silicon Valley has been especially plagued by long lines and missed flights, according to the San Jose Mercury-News. While chronicling many tales of woe from passengers who missed their flights at SJC, the reporter matter-of-factly noted that nearly SFO “didn’t experience any significant issues during spring break, despite strong volumes.” I looked in vain for any sign that SJC leadership might be looking into applying to participate in SPP, as SFO has done since the beginning of TSA.
Seattle has asked TSA to temporarily suspend its requirement that all screeners be trained at its training center in Georgia, so that the faster process of training new screeners locally could be reinstated for SEA, and at an April 7th hearing, TSA Administrator Neffenger promised Sen. Maria Cantwell (D, WA) that this will be done. The airport has also announced it will be contracting with a private firm to staff non-security positions prior to the checkpoint, in hopes of freeing up more screeners for the screening lanes. But thus far there has been no public mention from SEA officials about considering SPP.
In mid-April the heads of airport organizations AAAE and ACI-NA sent a joint letter to Neffenger with seven suggestions on alleviating long lines, including a “marketing blitz” about passengers joining PreCheck. But if there was ever a time for these organizations to explain the merits of privatized screening to their members, now is the time. They could also explain that at nearly all the major airports in Europe, providing screening is an airport responsibility, not that of the national government. The latter oversees the process, by setting criteria for screening, and the airports are free to do this either with their own security staff or by contracting with government-approved security companies. And airports typically have service agreements with the airlines they serve, including screening wait-time standards. Both airports and airlines take a far more active role in measuring performance, including screening performance, than we see in this country. What a refreshing change that would be, especially for beleaguered airline passengers.
Between 2010 and 2016 airport privatization has continued to expand in Europe. According to a new report from Airports Council International-Europe, as of 2016 over 40% of European airports have at least some private shareholders. Even more dramatic, nearly three of every four passenger trips this year will be through one of these airports. And 78% of the remaining fully public-sector airports are corporatized, meaning they are set up as commercial entities under ordinary corporate law, with governments as their sole shareholders. The report is “The Ownership of Europe’s Airports, 2016”; it is available online from www.aci-europe.org. The report includes detailed data for the airports of 45 countries, both EU and non-EU.
The largest impending European privatizations this year are in France, with the French national government selling its 60% stakes in the Nice and Lyon airports. The former is estimated to be worth $1.6 billion, with the latter at about $990 million. Local chambers of commerce own 25% of each airport, with the municipal governments owning the remaining 15%. The national government plans to use the proceeds from the sales to recapitalize state-owned power company Areva. Teams expected to bid for one or both of the airports include Ardian teamed with Changi Airport, Ferrovial teamed with Meridiam, Macquarie, and possibly Allianz, Global Infrastructure Partners, and Industry Funds Management.
Inspiratia Infrastructure reports that several other European countries will be putting airports on the market in 2016. Lithuania aims to start the bidding process in the fourth quarter for the airports of Vilnius, Kaunas, and Palanga. And Bulgaria’s government announced on March 30th that it will award a concession to redevelop and improve the airport of its second largest city, Plovdiv.
There has clearly been a paradigm shift in the conception of airports in Europe during the last 30 years. Airports are now understood to be businesses, even when they are 100% owned by government. Large and medium hubs, in particular, are expected to be self-supporting and even profitable for their shareholders, based on their various aeronautical and non-aeronautical revenue streams. In a number of countries, corporatized and privatized airports are expected to pay ordinary business taxes. And in most of the countries that have embraced airport privatization, foreign ownership is becoming non-controversial, even in countries like France with a historically strong sense of nationhood. This is a far cry from what still appears to be almost an “infant industry” status for airports in the land of free enterprise.
Sen. James Lankford (R, OK) and Rep. Steve Russel (R, OK) have introduced the Free Market Flights Act, which would end the $263 million federal program called Essential Air Service (EAS). The pair cited a recent report from the Congressional Research Service that provides basic information about the program and how it has grown, despite a series of congressional measures to cut it back. “Essential Air Service (EAS)” is CRS Report 44176, dated Sept. 3, 2015.
Ronald Reagan once quipped that there is nothing so permanent as a temporary government program, and EAS can serve as a case study. It was enacted in 1978 as part of the bill that deregulated U.S. airline service. EAS was intended as a temporary transition measure to help small communities adjust to the competitive airline service market brought about by deregulation. But when the 10 years were nearly up in 1988, Congress extended EAS for another 10 years. With a growing constituency lobbying for the program, our lawmakers made EAS permanent in 1996. To somewhat disguise its growing cost to taxpayers, they mandated that the relatively new FAA overflight fees, paid by airlines that use U.S. airspace but do not land or take off here, be dedicated to EAS, and today those revenues cover 38-40% of its $283 million budget.
Taxpayer-friendly members of Congress have managed over the years to tighten eligibility for EAS subsidies, as tabulated by the CRS report:
- 2000: prohibiting EAS subsidies for services to airports located fewer than 70 highway miles from the nearest large or medium hub airport or that required a subsidy greater than $200/passenger (unless the airport is more than 210 miles from such a hub).
- 2011: prohibited EAS subsidies that exceed $1,000 per passenger, regardless of the distance to a hub airport.
- 2012: added a requirement for at least 10 enplanements per day, and prohibited new communities from being added.
Despite these reforms, 159 communities today receive subsidized airline service via EAS. CRS finds that, in constant 2014 dollars, spending on EAS has increased 600% since 1996 and 123% since 2008. Its report also notes that in many cases there is no competing bid for EAS airline service, suggesting the possibility of monopoly pricing. Moreover, subsidy cost is not one of the four major factors DOT is required to consider when evaluating bids to provide such services.
What CRS did not do is to analyze the availability of alternatives to EAS to provide access from small cities like Hagerstown, MD (per-passenger subsidy $580), Greenville, MS ($486), Merced, CA ($646), and Clovis, NM ($830). Unsubsidized scheduled intercity bus service is available in more than 2,800 cities and towns across the country, and for most of the past decade has been the fastest-growing mode of inter-city passenger travel. It seems highly likely that if any of the 159 EAS cities does not have such service, a per-passenger subsidy far more modest than the typical $200-$500 per passenger EAS subsidy could attract such bus service.
Kudos to Sen. Lankford and Rep. Russell for putting this issue on the agenda. However, on April 22nd, the Senate voted to include $150 million in general-fund support for EAS in the THUD (transportation and housing) appropriations bill. That is $5 million less than last year. The House has not yet addressed EAS funding.
The suicide bombing attack on the airport and subway in Brussels has led to some serious reflection on what does and doesn’t make sense when it comes to transportation security. Some of the initial reactions reflect panic and public relations, more than sober reflection. There were many calls in Europe for expanding the security perimeter of airport terminals to include the entire check-in area, which officials of ACI-Europe quickly pointed out were akin to simply moving the target area to outside that new perimeter (where huge numbers of people would be queued up awaiting screening). As security consultant Douglas Laird told the Wall Street Journal, wherever screening is done, “you still have the queues. If you cause congestion, a whole lot of people crammed together, it’s a target-rich environment, no matter where it is.”
Before looking further into what measures might make sense, let’s first step back and get some perspective on the size of the threat. The National Consortium for the Study of Terrorism and Responses to Terrorism maintains a Global Terrorism Database, covering 1970 to 2014. It reveals that just 5.3% of all terrorism attacks over those 44 years targeted some form of transportation, including airports and aircraft as well as subways and railroads. Of the transportation targets, 6.4% were airports, and another 1.9% were subways. Furthermore, attacks on transportation targets have declined recently, comprising only 3% of all attacks between 2010 and 2014 (down from 5.3% over the entire 44 years). The point of these statistics is that entire developed countries are target-rich environments, so we should be wary of allocating the lion’s share of defensive measures to transportation.
One of the reporters who interviewed me shortly after the Brussels bombings reminded me of a 2004 RAND Corporation study, “Near-Term Options for Improving Security at Los Angeles International Airport,” which is still available on the RAND website, www.rand.org. After identifying 11 major categories of attack, the analysts reviewed potential measures to reduce the vulnerability to each. After estimating the costs and possible effectiveness of each, they separated them into four groups:
- Low-cost options that would greatly reduce vulnerability, which should be acted on immediately;
- High-cost options that would greatly reduce vulnerability, which should be studied for affordable implementation and time-frames;
- Low-cost options that modestly reduce vulnerability, and could be acted upon as part of planned modernization efforts; and,
- Expensive solutions to modest problems, which are not recommended.
For space reasons, I will discuss only the first of these here, but I recommend this report as a model of how such problems should be analyzed and dealt with.
The first low-cost option was “limit the density of people in unsecured areas.” This means eliminating lines at baggage check-in and for curbside check-in. What surprised me is RAND’s conclusion that “the costs of eliminating check-in lines are quite modest.” They note that “the amount of actual work required to check bags, etc. remains the same whether people have waited or not. Substantial reduction of lines can be implemented immediately with small changes to airline and TSA staffing policies.” Specifically, they recommend additional ticket agents and skycaps during peak periods and one additional staffed screening lane in each terminal, staffed during peak periods.
Their second low-cost option was to add permanent vehicle security checkpoints with bomb detection capability. This recommendation is not aimed at car bombs at the terminal curb, on the assumption that large concentrations of people at curbside were already dealt with by the first recommendation. Instead, it is aimed at singling out large trucks that would be diverted before entering the airport itself.
In contrast to this quantitative approach, the Senate on April 7th added five security amendments to its FAA reauthorization bill.
- The first includes an array of measures (and requirements for TSA to produce reports) to beef up access control to secure areas of the airport. This did not include any mandate for 100% employee and contractor screening, which is on RAND’s list of very costly measures. These relatively low-cost measures would probably do some good.
- The second requires TSA to expand PreCheck, including to move forward with its much-delayed program to contract with third-party companies for large scale recruiting and pre-vetting of new members of PreCheck—a much-needed change.
- The third and fourth impose an array of requirements for TSA to work with overseas airport security counterparts at airports from which flights to the United States originate. It’s not clear how much any of this will help.
- And the fifth would double the number of TSA VIPR teams to 60; these roving teams would be authorized to patrol airports in addition to subway and railroad facilities. This one is mostly security theater.
The Senate’s grab-bag of measures was arrived at without any quantitative analysis or weighing of benefits versus costs. That some of its measures would probably be cost-effective is a fortuitous outcome, rather than being the result of serious study. The current House FAA reauthorization bill does not address aviation security, which is not part of FAA’s responsibility. So it is not clear whether any of the Senate’s new measures will survive the eventual conference committee deliberations on FAA reauthorization.
Last year FAA reported 764 UAS (drone) sightings near aircraft, and that rate increased to 582 sightings in the five and a half months between Aug. 21, 2015 and Jan. 31, 2016. Those data were analyzed by the Center for the Study of the Drone at Bard College. Of the 582 incidents, 36.2% were classified as “close” encounters, with the UAS coming within 500 feet of a manned aircraft. In a previous analysis, Bard researchers found that a majority of UAS sightings occurred within five miles of an airport.
Based on recent sales trends, in its latest annual Aerospace Forecast the FAA dramatically increased its projection of UAS sales. Whereas last year’s forecast projected there would be 25,000 such craft in operation in U.S. airspace by 2020, the new forecast expects annual sales to be 7 million in 2020, of which 4.3 million would be to hobbyists and 2.7 million to commercial operators.
These kinds of numbers were being anticipated in the UAS industry well before the revised FAA forecast. Back in February, I talked with Pepperdine University professor Greg McNeal, co-founder and executive vice president of a start-up company called AirMap. The company was founded to provide a solution that would enable airports to keep track of nearby drone operations—and to enable their operators to comply with the 2012 federal requirement to notify the airport prior to operating a drone within five miles of any airport.
AirMap’s solution is a system called D-NAS (Digital Notice and Awareness System). Their business model is (1) to make the notification capability available at no charge to drone manufacturers so it can be built into their products as original equipment, and (2) to provide airports (for a fee) an online dashboard that keeps track of notifications from drone operators. The digital notice from each drone includes the GPS location of the flight, its planned duration, the operator’s identity, and the operator’s contact information. On the airport’s dashboard, the flight information is plotted onto a map, as well as provided in a list format, including the contact information.
Your initial reaction might be skepticism, to the effect that this sounds fine in theory, but how could it be put into practice in a way that would be effective? The first part of the answer is that AirMap has won the cooperation of the big three drone producers: DJI, 3D-Robotics, and Yuneec are all including the AirMap notification capability in their products. AirMap has also developed an app to enable operators of other drones to make use of the service. On the airport side, AirMap has been working closely with the American Association of Airport Executives, which represents aviation professionals at 850 U.S. airports. AAAE got the airport equipage effort under way in January with the first 10 airports to apply getting the system for free. Since then, as of the last week of April, it has signed up over 75 airports, including Charlotte, Denver, Houston Intercontinental and Houston Hobby, Los Angeles International, Portland International, and Van Nuys Airport.
AirMap is not presenting D-NAS as the solution to managing all low-altitude drone traffic; rather, it is a solution specific to the need to protect airports from drone intrusions. McNeal told me the company is working with NASA and the other companies that are pursuing the concept of UAS Traffic Management (UTM), on the widely accepted premise that low-altitude UAS is so different from traditional air traffic management that it will not likely become part of the FAA’s air traffic control system. Rather, as Amazon, Google, and other leading companies anticipate, a separate low-altitude system (UTM) will be developed collaboratively and eventually blessed by FAA.
The Administration’s FY 2017 budget proposal for the TSA includes a series of annual increases in the per-person aviation security fee. Currently $5.60 per one-way trip, it would rise to $6.60 in FY 2017, to $7.00 in FY 2018, and $7.25 in FY 2020. But due to planned shifts in where the revenue would go, over the 10-year period through FY 2026, the proposal would generate $6.9 billion for TSA’s budget and $5.4 billion for general fund deficit reduction. The former number, by covering a significant fraction of TSA’s budget, would represent proceeds from a user fee. The latter number, pure and simple, would be a tax increase. (This analysis is from Eno Transportation Weekly, Feb. 11, 2016.)
Unfortunately, that is not how DHS Secretary Jeh Johnson is portraying it in public. In testimony before the Senate Homeland Security Committee on March 8th, Johnson told lawmakers the following:
“Right now I believe aviation security is critical, given the world situation. We need help to pay for that. Those who use the system, as opposed to taxpayers generally, should help a little more in paying for those things. If these are not increased, we’re going to have a real problem finding where to pay for aviation security.”
Users-pay/users-benefit is a sound principle for public functions that benefit specific people, as opposed to all taxpayers, and having airport users pay for TSA services there is appropriate. But trying to sneak in a tax increase disguised as a user fee is indefensible. Congress should reject this request, just as it has in several previous years.
Port Authority Board OK’s LaGuardia Airport P3 Deal. On March 24th the board of the Port Authority of New York & New Jersey approved the $4 billion public-private partnership to replace the Central Terminal at LaGuardia Airport. Winning bidder LGA Gateway Partners (including Meridiam, Skanska, and Vantage Airport Group) will design, finance, build, operate, and maintain the new terminal. Commercial close was expected by the end of April.
Thompson Suggests TSA Re-assign BDOs. As a way to beef up screener numbers at airport checkpoints, Rep. Bennie Thompson (D, MS) has proposed to Administrator Peter Neffenger that TSA re-assign its Behavior Detection Officers to regular checkpoint screening duties. Since there is still no evidence that BDOs add any meaningful value to airport security, this re-assignment would add several thousand screeners to help alleviate this summer’s dire shortage. Thompson is the ranking Democrat on the House Homeland Security Committee.
Amazon Leases Cargo Plane Fleet. After a trial period in which Air Transport Services Group operated cargo flights for it, Amazon in March agreed to lease 20 Boeing 767 aircraft from the company, which ATSG will operate for Amazon. The deal also gave Amazon the right to acquire just under 10% of the company, which the company proceeded to do. A long article in the April 4 issue of the Journal of Commerce provided a lot more detail on Amazon’s expanding distribution network.
Ontario Airport Getting Expanded UPS Operation. Troubled Ontario (CA) Airport may not be adding much in the way of airline service, but its cargo business is definitely expanding. Last year UPS completed a 416,000 sq. ft. facility for urgent, next-day packages. This year, it is expanding its existing ground sorting building by 15% to 900,000 sq. ft. and will add 500 more people over the next five years to the 4,500 it already has at the airport. The Inland Valley Daily Bulletin reports that new distribution centers are being built near the airport, to take advantage of its air cargo services.
European Parliament Approves PNR Legislation. Spurred on by the Brussels Airport bombing, the European Parliament in April gave final approval to a long-discussed law that requires airlines to provide passenger name record (PNR) data on all those entering or leaving the European Union by air to police and security agencies. It also allows EU member countries to require similar reporting of PNR data on flights within Europe. The measure was proposed five years ago, but was delayed by debates over privacy concerns.
Governing Reports on U.S. Airport Public-Private Partnerships. In addition to the P3 deal to replace the aging Central Terminal at New York’s LaGuardia Airport, Governing‘s Andrew Deye reported (Feb. 17th) that the Austin City Council authorized negotiations with Highstar Capital to lease 30 acres including the South Terminal at Austin-Bergstrom International Airport. Highstar is part of the P3 company that has leased San Juan International Airport for 40 years, and recently completed a $148 million renovation of terminals, baggage handling, and parking facilities.
Paraguay Concession for a New Airport. Asuncion, the capital of Paraguay, is in line for a new airport, under that country’s new P3 program. It will be developed under a 30-year design-build-finance-operate-maintain concession agreement, arrived at competitively, and is expected to cost $200 million to construct. Six groups, including OHL and Vinci Airports, have purchased the tender documents and are expected to submit bids.
Orlando International Launching $1.8 Billion Expansion. The Greater Orlando Airport Authority voted unanimously in mid-March to proceed with a major expansion of the airport. It will add a south terminal, including airside, landside, parking, and a multimodal transportation center. The vote was triggered by the airport having reached a previously agreed threshold of 38.5 million passengers in 2015, for a set of facilities designed for 24 million. The primary financing will be via bonds backed by passenger facility charges (PFCs). The first phase could open as soon as 2019, according to the Orlando Sentinel.
Infrastructure Investor Awards for 2015. In its March 2016 issue, Infrastructure Investor named as its Latin American PPP Deal of the Year the $13 billion project to develop and operate the new Mexico City International Airport. Winning as Global Developer of the Year was Vinci, whose Vinci Airports won the bidding for Osaka and Kansai Airports and went on to acquire six of the nine airports in the Dominican Republic.
Rand Paul Seeks Expanded FFDO Program. Arguing that the Federal Flight Deck Officer program, which trains airline pilots in armed response to attempted hijacking, does not reach enough pilots, Sen. Rand Paul (R, KY) is seeking legislation to add five training facilities, allow the classroom work to be done online, and allow FFDOs to use the Known Crewmenber check-in system at airports. His attempt to add the measure to the Senate FAA reauthorization bill failed, but he is likely to continue pursuing the matter.
Honduras Replacing Tegucigalpa Airport. Considered by many pilots as the world’s most dangerous commercial airport (due to nearby mountains, a steep approach, and a short runway), Tegucigalpa Airport, serving Honduras’s capital city of the same name, will be replaced via a P3 concession. The new Palmerola International Airport will be built on the territory of a military base and will have an 8,000 ft. runway (vs. 7,000 ft. for the existing airport). A consortium of Inversiones EMCO and Munich Airport will design, build, finance, operate, and maintain the new airport under a 30-year concession.
Dubai Airports Implementing a PFC to Pay for Expansion. The government has announced that as of July 1st all passengers using airports in Dubai will pay a passenger facility fee of $9.45, the proceeds of which will be used to improve and expand the country’s airports. Excluded from the PFC will be children under 2 years, airline crewmembers, and transit passengers whose departing flight number is the same as their arriving flight number.
Brussels Airport Investor Not Deterred by Bombing. Infrastructure Investor reported in April that Canadian pension fund Ontario Teachers’ Pension Plan, a major shareholder in Brussels International Airport, will continue to invest in airports as part of its infrastructure portfolio. OTPP also owns stakes in Copenhagen Airport, the UK’s Birmingham and Bristol Airports, and most recently London City Airport.
Towering Achievement or Towering Anachronism? The cover story of the January 2016 issue of Airport Business was about the $70 million new control tower that opened last year at San Francisco International Airport (SFO). The tag-line on the story predicted that it would “change the way air traffic control towers look and are built forever.” Let me suggest a contrary view: now that remote tower technology is proving itself in Europe, the SFO tower could be one of the last times that $70 million is spent to house people and equipment that would be more secure underground, aided by real-time sensing equipment that can see through the fog that plagues SFO and many other airports.
“One of the things that concerns me, I hope unnecessarily, is that the newfound financial well-being of the airlines invites government intrusion. I already see bills being offered telling us how to provide customer service. I see bills being offered to increase our taxes and fees enormously. I hope we don’t succumb to that. The people—not just of the United States but of the world—should be alive to the fact that the new regime has permitted them to fly in enormous quantities for the first time.”
—Herb Kelleher, in Seth Miller, “Herb Kelleher’s Take on U.S. Aviation: Hands Off!” Airwaysnews.com, March 15, 2016
“Proposals like [seat size regulation] clearly show either lack of understanding of, or disregard for, fundamental commercial reality. The hourly operating cost of a Boeing 737 would be about the same if it had 140 seats vs. 150. So under the proposed legislation [for increased seat pitch], in time tickets would cost more. . . . And if we’ve learned anything about how most consumers buy air fares in competitive markets, we know that price drives choice. A little history lesson: in the late 1990s, . . . my former employer, American Airlines, voluntarily removed seats throughout the entire economy-class cabin on every one of their roughly 700 aircraft. In order to make the reconfiguration revenue-neutral, we began charging just a bit more per ticket. The marketplace responded clearly: they loved the legroom, but were not willing to pay the roughly 3% more per ticket (9 bucks on a $300 fare). So after spending a lot of money on the planes and on promotion, American put the seats back on. Like United before them, they subsequently created cabins with two legroom versions, and giving consumers the option of paying more for more room has worked well.”
—Rob Britton, “Guest Op-Ed: Airline Seat Size Issue Overblown,” Eno Transportation Weekly, March 11, 2016
“There exists a bipartisan recognition that adjusting the PFC cap is long overdue. After all, addressing the issue of airport infrastructure and airline competition are about as meaningful measures as lawmakers could hope to address in FAA renewal. The Senate was intent on advancing a balanced, bipartisan bill. As is the case in Washington, however, it’s harder to do something good than to keep something good from happening. Travelers will now have to wait until at least the 20th anniversary of the last PFC adjustment in order to reap the benefits of updated airports and restored airline competition.”
—Jonathan Grella, U.S Travel Association, Politico Pro, March 8, 2016
“Where there is evidence that an airport has market power, this does not necessarily mean that its charges are too high or that there is a need for heavy-handed regulation. This applies even with a profit-motivated privatized airport. It is not market power that is the issue; it is the abuse of the market power. . . . It may be in an airport’s commercial interests to set aeronautical charges at a level that makes it more attractive to airlines to increase the number of passengers using its facilities. Setting prescriptive pricing guidelines could stifle innovative pricing to the detriment of airlines, airports, and ultimately passengers. Privatized airports, with their commercial focus, should be encouraged to challenge the traditional airport business model, not buckle under it.”
—”The Privatization of Airports Is Not a Reason for Airlines to Panic . . . Yet,” Aviation Advocacy Blog, March 17, 2016