In this issue:
- U.S. airport privatization upswing
- Modernizing the Pilot Program
- Third-party PreCheck recruitment is back
- How cost-effective is TSA aviation security?
- Slot auctions vs. runway pricing
- Upcoming Conference
- News Notes
- Quotable Quotes
Following the successful long-term P3 lease of the San Juan International, many observers expected a new wave of U.S. airport privatization—but that did not occur. Now, however, there are signs that the expected wave has begun. The little-used FAA Airport Privatization Pilot Program now has three active participants, as follows:
- Airglades International Airport in Hendry County, Florida, announced the release (on October 17th) of an FAA Finding of No Significant Impact (FONSI) and a Record of Decision on this project to convert a general aviation airport into a cargo reliever for Miami International.
- Westchester County, NY received three invited proposals in July for a 40-year lease of its airport in White Plains, New York.
- St. Louis is moving forward with what amounts to an “asset recycling” approach, aiming to cash out Lambert Airport’s asset value and use the net proceeds for other infrastructure investments. In early October, Mayor Lyda Krewson urged the Airport Commission to proceed with detailed study of privatization’s potential, and the city has issued a Request for Proposals for a P3 advisory firm. A tentative schedule calls for submitting a final application to the FAA in May of next year.
Inspired by the example of St. Louis, Nashville Mayor Megan Barry has expressed interest in applying for a slot in the Pilot Program, with the idea of using net lease revenues to help fund a proposed $6 billion transit system.
Why would a local or state government want to privatize its airport(s)? After all, most U.S. airports are run relatively well, and they can finance capital improvements using tax-exempt revenue bonds. One reason, as in Nashville, St. Louis, and Westchester County, is to use the airport’s asset value to either invest in other infrastructure or to shore up ailing public employee pension systems. This general concept is known as “asset recycling.”
Another reason is to improve the overall quality of the airport. The 2017 Skytrax survey of airport quality worldwide gives one indication. Of the 100 top–rated airports in the world, only 14 are in the United States, and the highest-rated of these is Cincinnati, in 26th place, followed by Denver in 28th place. Out of those 100 top-rated airports, 37 are privatized. A second survey, carried out by Airports Council International, aims to identify “the world’s most customer-friendly airports.” It presents the results by airport size group, and for airports handling 5 million or more annual passengers, those finishing in first, second, or third place in any of the size categories include only two U.S. airports—Indianapolis and Jacksonville. Three of the top-scorers in other countries are privatized. Incidentally, among U.S. airports included in the latest J.D. Power & Associates customer-satisfaction ranking of 21 U.S. airports, Lambert St. Louis ranks 17th, suggesting considerable room for improvement. Mayor Krewson acknowledged this in a recent news article, saying that the airport “is not as good as we want it to be.”
If I were asked which U.S. airports would be the most likely candidates for improvement via privatization, I would single out two categories: (a) those operated as departments of city government and (b) those operated by multi-purpose port authorities. These are the airports whose management is likely to be the most micromanaged by elected officials (in the first category) or to be treated as cash cows by port authorities (second category). Here are some examples of politicization I’ve collected over the last several years.
- In Atlanta, a relatively new and highly experienced airport manager was fired after failing to take “direction from senior officials of the City’s Procurement Department” regarding “the award of concession and construction contracts.”
- A former manager of Denver International said “I spent about 10% of my time fighting off various internal and external meddlers or political gadflies and favor seekers,” and “For sure you will be gone when a new mayor is elected.”
- In Los Angeles in 2014, the City Council overruled the Airport Commission’s decision to hire public relations firms not based within the city.
- Miami International has had numerous conflicts over the award of concession contracts for shops and restaurants, with elected officials intervening in decisions made by airport management. And the Miami-Dade Ethics Commission has chastised the airport’s policy of providing VIP treatment for elected officials, including taking them to the head of long security screening lines.
Airports, like toll roads, are businesses that can and should be operated as businesses, not as tools of elected officials. Privatization, possible in the United States via long-term P3 lease agreements, would significantly de-politicize airports and give them an opportunity to be competitive with the world’s best airports.
The previous article discussed what investors would call the “sell” side of airport P3 transactions. What about the “buy” side? How interested are infrastructure investors in U.S. airports, and why aren’t more deals being done?
A recent article I&PE Real Estate (June 2017) was headlined: “Infrastructure Airports: Not Cleared for Landing.” The subhead captured its message, “Institutional investors would love to invest in U.S. airports, but, so far, it has proved close to impossible.” Author Christopher O’Dea interviewed a number of knowledgeable people to reach this conclusion. Susan Gray, head of S&P Global Ratings’ global infrastructure practice, agreed that private investors would love to invest in U.S. airports, “but the regulatory construct significantly limits their capacity to do that in a way that works for private investors.” Under U.S. law, you can’t take any revenue off the airport (hence, no return on investment), unless you get one of the handful of slots in the FAA’s Airport Privatization Pilot Program. But getting through the cumbersome FAA review and approval process can take years, and imposes a number of hurdles (such as a double super-majority airline approval requirement). As O’Dea comments, “The U.S. situation presents a stark contrast to the situation in most other developed countries, where private operation of airports is common,” and welcomed.
I’ve summed up this contrast by saying that while other countries offer airport investors a welcome mat, U.S. policy presents them with an obstacle course. If we want significant private investment to improve U.S. airports, the Pilot Program definitely needs modernizing. To begin with, it should be open to all U.S. airports, not just 10 of them.
One of the major hurdles to airport investment is the unequal tax treatment of airport bonds. Government airport operators can issue tax-exempt bonds, but that is not permitted for companies that enter into long-term P3 lease agreements. And this hits them both coming and going. When Aerostar Airport Holdings took over San Juan International in 2013, they had to pay off the airport’s existing (tax-exempt) bonds; to do this, they had to issue taxable bonds, at a higher rate of interest. Likewise, any large capital investment that they make in the airport has to be financed at taxable rates. This is a de-facto tax on private investment, basically saying it is not as good as public-sector investment. And this is not just my conclusion; an excellent report on airport privatization from the Congressional Research Service suggests five policy changes that could increase the attractiveness of U.S. airport privatization, and number one is “Offering the same tax treatment to private and public airport infrastructure bonds.” (Airport Privatization: Issues and Options for Congress, Congressional Research Service, 7-5700, August 16, 2017)
Another obvious change would be to reduce or eliminate the ability of airlines to veto a P3 lease agreement. The current law requires that the agreement must be approved by (1) 65% of all the airlines using the airport and (2) airlines representing 65% of the annual landed weight at the airport—a double super-majority requirement. No such obstacle exists in any other developed country. A 2015 report on airport privatization by the Government Accountability Office recommended that this veto power be reduced or eliminated (GAO-15-42). GAO also made a number of streamlining recommendations, such as making it automatic that previous federal grant funds to the airport do not have to be repaid in the event of privatization (which currently requires an FAA waiver).
There are two possible routes to modernize the Pilot Program. The most straightforward would be to add a provision to the FAA reauthorization bill that is still being debated in both houses of Congress. The current authorization was recently extended to March 31, 2018, meaning there are five months available for further debate and amendments. The other path forward would be to include such reform in the promised infrastructure bill being developed by the White House National Economic Council, for introduction after Congress completes its work on tax reform.
Many U.S. airports need both additional investment and better (de-politicized) management. And many city and county governments could benefit by getting out of the airport management business, liberating the capital value of their airport either for other infrastructure upgrades or to strengthen their under-funded pension plans. Many billions of dollars are sitting in pension funds and infrastructure investment funds, whose owners are seeking to invest some of that money in improving U.S. airports. Somewhere in there is the making of many win/win transactions.
Over the last several years, this newsletter has chronicled TSA’s efforts since 2013 to expand recruitment and vetting of potential members of the PreCheck trusted traveler program. Several different TSA procurement efforts were abandoned, initially due to objections by various privacy groups and later via litigation from TSA’s current monopoly contractor, Morpho Trust. But a recent bill approved by the Senate Commerce Committee (S 1872) would authorize TSA to try again.
Although PreCheck has more than 5 million members as of 2017, many times that number of people likely qualify. But because Morpho’s vetting method requires fingerprints that it submits to the FBI, applicants must appear in person, either at those airports where Morpho has set up a recruiting office, or at off-airport locations which in some cases are at seaports where the Department of Homeland Security sends people for other programs such as Global Entry fingerprinting and interviews.
By contrast, firms that were in competition for TSA’s previous third-party screening recruitment contracts proposed using big data algorithms to separate low-risk from high-risk people. In one procurement, would-be contractors actually used large sets of names provided by TSA, applied their algorithms, and sent the selected “eligible” names to TSA to check against its own databases and watch lists. Company sources at the time told me they were highly confident that their results would be judged acceptable by TSA. But the latest procurement effort (in 2016), was aborted after Morpho objected. First, it filed a bid protest claiming that the specific procurement method TSA used was not legal for that purpose. When that failed, Morpho filed suit, which eventually led to TSA dropping the procurement.
Today we have a new Administration, and with Morpho’s current sole-source contract set to expire in September 2018, TSA has announced plans to open to competition what it calls Universal Enrollment Services (including PreCheck). Specifically, TSA hopes to attract two or more contractors who can “provide innovative enrollment and identity solutions that deliver secure, streamlined, and effective enrollment services.” Politico quotes TSA’s Lisa Farbstein saying that they are looking toward “multiple private sector capabilities.”
With its monopoly at risk, Morpho is lobbying both House and Senate committees, arguing that fingerprints (or other biometrics) are the only sure way to vet candidates for PreCheck. But if algorithms using big data can vet people just as effectively—which is what appeared to be the case during previous third-party procurement efforts—there would be no need to require a biometric that can only be obtained in person. The Senate bill would provide legal authority for TSA to approve non-biometric methods as long as it can certify that they are equally effective.
If that turns out to be the case, it would allow people to apply online, and would permit contractors to market PreCheck to large companies, trade associations, etc., greatly expanding the potential membership in the program. That would be good news for airports and air travelers alike. Accordingly, among supporters of the Senate provision are Airport Council International-North America and travel groups including the Global Business Travel Association and the U.S. Travel Association.
As of now, the corresponding House bill (HR 2825) does not include a provision on expanding PreCheck recruitment and vetting—and Morpho is lobbying hard to keep it that way.
A new report from the Government Accountability Office asks some very pointed questions about TSA’s efforts to protect aviation from terrorist threats. In FY 2015, TSA spent $4.834 billion on passenger prescreening, checkpoint screening, checked baggage screening, canines, behavior detection, and Federal Air Marshals Service (FAMS). The specific questions Congress asked GAO to look into were (1) what information does TSA have on the effectiveness of these efforts, and (2) does TSA use such information to evaluate the cost-effectiveness of these programs. Based on the report, the answers appear to be (1) some, but not enough, and (2) very little. (Actions Needed to Systematically Evaluate Cost and Effectiveness Across Security Countermeasures, GAO-17-794, September 2017)
This report is an unclassified version of a classified report, so in a number of key places where you look for actual data, there is none, since TSA decided that the data are classified. But there are enough specifics to paint a disturbing picture. TSA has developed an analytical tool for analyzing trade-offs among its various programs, but it does not use it to systematically analyze cost and effectiveness trade-offs across all of its countermeasures. For example, it has apparently never compared the cost-effectiveness of armed pilots (Federal Flight Deck Officers) and Federal Air Marshals (FAMs). Overall, TSA does just the opposite: it portrays all of its measures as “layers of security,” ignoring the fact that some of those layers may not be worth what they cost. And as GAO notes in conclusion, “TSA does not have any efforts under way to systematically evaluate the potential cost and effectiveness tradeoffs across the full aviation security spectrum.’
Some of the most important details are contained in Appendix 1 (costs of the individual countermeasures) and Appendix 2 (effectiveness data). GAO reveals a number of problems with these data. For example:
- TSA does not measure the extent to which its Secure Flight prescreening system misses passengers who are actual matches to various watch lists (false negatives).
- TSA data on tests of screeners’ performance in identifying hazardous images on checkpoint X-ray screens are incomplete and unreliable between 2009 and 2015, so no accurate assessment of their competence is possible.
- Covert tests of checkpoint screening performed by local TSA offices showed better performance than covert tests performed either by headquarters people or by outside contractors. And the results of the most recent covert tests are classified.
- The same disparity in covert testing of checked baggage screening was found, and once again, the latest comparative results are classified.
- Data on testing of canines were found by GAO to be not reliable.
More bad news on TSA screening is included in a new report from the DHS Inspector General’s office. It told Congress last month that its covert tests “identified vulnerabilities with TSA’s screener performance, screening equipment, and associated procedures”—but the specifics are all classified, and only a one-paragraph summary has been released.
This kind of poor performance (in contrast with TSA’s self-reported findings) is far different from what one would expect if TSA were solely the aviation security regulator, riding herd at arm’s length on separate entities carrying out screening operations (either airports or screening contractors). Repeated instances of self-tests yielding better results than testing by outsiders illustrate the conflict of interest that is built into the current TSA model.
Moreover, TSA has no measures of effectiveness for two of its countermeasures: Behavior Detection Officers and Federal Air Marshals. I wrote about BDOs last issue, so won’t go over that again. As for FAMs, TSA simply claims that this $800 million per year program deters terrorists, as indicated by the lack of aircraft hijackings since the program was launched. But that ignores the fact that two other countermeasures have the same purpose—and cost far less: the strengthened and locked cockpit doors and the armed pilots program (FFDOs). A study by security experts Mark Stewart (University of Newcastle) and John Mueller (Ohio State University) several years ago demonstrated the far greater cost-effectiveness of those alternatives to FAMs. But TSA has ignored that analysis.
Before leaving this subject, I want to quote a sentence from the study. “One of TSA’s top priorities is to deploy air marshals on flights that have a known or suspected terrorist on board.” Let me get this straight: we pay $4.8 billion a year and allow “known terrorists” to fly on U.S. airlines?
Over the last two decades, flight activity in much of the world has grown a lot faster than airport capacity. At many of the world’s largest hubs, the national government has imposed hourly limits on operations, defined as “slots.” This system works to the advantage of incumbent carriers, and is a barrier to entry to new (and generally lower-cost) carriers.
Every so often, calls arise for some kind of slot auction systems, in which a fraction of slots would (somehow) be taken away from those who hold them and either be administratively allocated to new entrants or auctioned off to the highest bidder. In August, Hawaiian Airlines CEO Mark Dunkerly proposed such an approach, during the CAPA Australia Pacific Aviation Summit. Business jet operators in Hong Kong are protesting the lack of slots at Hong Kong International, and calling for some kind of reallocation. And last year the Chinese government launched a pilot program under which 196 takeoff and landing slot pairs would be made available at Guangzhou Baiyun and Shanghai Pudong airports, with half of them—for domestic service—auctioned off and the other half—for international service—allocated administratively but subsequently able to be sold, rented, or traded.
Major airlines maintain the fiction that incumbent airlines “own” the slots they have historically used. The International Air Transport Association (IATA) urges airports to accept its “Worldwide Scheduling Guidelines,” under which this ownership would be formalized and any slots that became available (e.g., if an airline goes under or withdraws from serving an airport) would be auctioned off. This system is clearly anti-competition, making it very difficult for new entrants to provide service at very popular airports.
The market-based alternative is variable runway pricing, adjusted prior to each scheduling season, under which prices would be charged to take off as well as land, and the price for each 10 or 15-minute time block would be high enough to balance demand and capacity. This approach was simulated with actual airline and airport staff taking part in a “strategic game” funded by FAA and carried out at George Mason University in 2004. As applied to LaGuardia Airport, the exercise found that in response to pricing, airlines up-gauged to larger aircraft and total daily passenger throughput increased significantly. (See: http://reason.org/policy-brief/evidence-that-airport-pricing/)
In terms of political feasibility, there are many advantages of runway pricing over slot auctions, as I pointed out in the December 2007 issue of this newsletter. They include:
- Runway pricing would produce immediate congestion relief and better service, whereas all slot auction proposals would be gradually phased in over a decade or two.
- Pricing would be far more effective in opening up room for lower-cost new entrants, hence fostering airline competition.
- Any auction system would have to be imposed by the federal government, and Congress would insist on all sorts of carve-outs for special interests. By contrast, pricing is an airport decision, independent of Congress.
- Under U.S. bilateral agreements, foreign carriers are exempt from slot allocations, but all carriers must pay airport runway charges, as long as they don’t discriminate between foreign and domestic airlines.
- Business jets and charter flights, being non-scheduled, are a poor fit for slot systems, but would gain access under runway pricing.
Alas, although the U.S. DOT changed its airport rates and charges policy to allow market-based (non-weight-based) runway pricing in 2008, no U.S. airport has taken advantage of this alternative. The only two airports I know of that have switched from weight-based charges to a modified time-of-day price structure are privatized Gatwick and Heathrow in London. But pricing remains a good idea, as we will see when a congested U.S. airport finally bites the bullet and implements it.
Building Partnerships: Airport Consultants Council 39th Annual Conference, November 6-8, 2017, Rancho Bernardo Inn, San Diego, CA (Robert Poole speaking). Details at: https://www.acconline.org/ACC/Events/Annual_Conference/ACC/Events/Annual_Conference.asp
New Report Covers Airport Privatization and Public-Private Partnerships. Reason Foundation has just released the Air Transportation chapter of its Annual Privatization Report 2017, an annual volume covering P3s and privatization across numerous economic sectors. The author of this chapter is the editor of this newsletter. Go to: /wp-content/uploads/2017/11/annual_privatization_report_2017_air_transportation.pdf.
Edgemoor/Meridiam Team Wins $1 Billion K.C. Airport Terminal Project. The Kansas City Council’s selection committee picked the design/build/finance proposal of Edgemoor Infrastructure and Meridiam Infrastructure for the project to replace the aging multi-facility terminal at Kansas City International with a state-of-the-art single terminal. Three other pre-qualified teams had submitted proposals. Final details of the financing remain to be negotiated. In addition, replacing the multi-terminal status quo with a single terminal must pass muster with voters at a November 7th election in order for the project to proceed.
Ownership Changes at Italian Airports. The largely privatized airports in Italy underwent several changes in ownership during September and October. First, two infrastructure funds—Deutsche AM and Infravia—acquired a controlling interest (60.7%) in SAVE, which owns four Italian airports (including Venice) and one in Belgium. In October, toll roads company Atlantia began selling its 22.1% interest in SAVE, and a few weeks later purchased an additional 1.3% stake in Aeroporti di Roma, bringing its ownership share to over 99%, with the city government of Rome owning 0.25%.
Santa Monica Runway Destruction Continues. The City of Santa Monica continues with phase 1 of its two-phase plan to shut down the Santa Monica Municipal Airport. The first phase, which involves reducing the runway length to 3,500 ft. (from the present 4,973 ft.) had been halted by a temporary restraining order on behalf of a lawsuit filed by several airport tenants. That order was lifted on Oct. 17th, with the judge finding that the city had acted in accordance with law and an agreement it had reached last year with the FAA. The shorter runway will eliminate use of the airport by business jets, while phase 2, several years later, will eliminate the runway altogether, forcing closure and redevelopment of the airport.
Decreasing Airfares Verified by Additional Study. The Eno Center for Transportation last month released a policy brief which summarizes data showing that airline ticket prices continue their long decline that began after the Airline Deregulation Act of 1978, with inflation-adjusted average fares 40% less today than in 1979. Critics pointed out that the report does not include ancillary fees which many passengers pay (e.g., for checked baggage), in addition to the ticket price itself.
Bill Calls for Stronger Aircraft Ownership Disclosure. Partly in response to a report by the DOT Inspector General critical of the way FAA allows private planes to be registered, and a recent Boston Globe investigative report on illicit activity linked to planes registered to foreign trusts, Rep. Stephen Lynch (D, MA) has introduced the Aircraft Ownership Transparency Act of 2017 (HR 3544). The bill would require the “beneficial owner” of an aircraft to be identified as a condition for getting U.S. registration.
PreCheck Added at Airport with Fewer than Three Flights per Day. For reasons known only to itself, TSA has begun offering PreCheck expedited passenger screening at MidAmerica Airport, near Belleville, IL, across the river from St. Louis. The airport’s only scheduled passenger service is provided by Allegiant, which offers a total of 20 flights per week to eight destinations—an average of 2.86 flights per day. I wonder what the TSOs assigned to MidAmerica are going to do with the rest of their time on duty.
Eight Teams Attend Bidders’ Conference for Kingston, Jamaica Airport. A long-term public-private partnership (P3) lease for the aging airport serving Kingston, the capital of Jamaica, drew eight teams to a Bidders’ Conference on Sept. 26th. The chairman of the Development Bank of Jamaica, Paul Scott, told attendees that “This is a great opportunity. If I knew before what I know today, I would be in the audience with you as a potential bidder.” The event included a tour of the airport, Norman Manley International.
CT Checkpoint Scanners Are In Testing on Three Continents. The need for more-accurate screening of carry-on bags is driving security agencies and airports toward replacing two-dimensional X-ray screening at checkpoints with 3-D computed tomography (CT) scanning comparable to what is standard for checked baggage. In current testing—at Tokyo Narita, Amsterdam Schiphol, and several U.S. airports served by American Airlines—are ConneCT machines developed by Analogic. The company says these scanners can screen 400 to 500 bags per hour, compared with TSA’s average of 180-240 bags/hour with current X-ray scanners. Several other companies are also developing such scanners, as detailed by Helan Massy-Berresford in Aviation Week, Sept. 4-17, 2017.
Macquarie Selling Stake in Copenhagen Airports. Global infrastructure investor Macquarie in September announced that it is selling its 27.7% stake in Copenhagen Airports, which owns Copenhagen International and several smaller airports. The other large shareholder is Ontario Teachers’ Pension Plan (30%). Macquarie’s stake is being acquired by Danish pension fund ATP, at an estimated cost of $1.57 billion. The Danish government retains ownership of 39.2% of Copenhagen Airports.
Pittsburgh Plans $1.1 Billion Terminal Makeover. On September 13th, the Allegheny County Airport Authority board voted unanimously to proceed with a major reconstruction of its terminal facilities. The current terminal, designed for a major U.S. Airways hub that no longer exists, uses only 39 of the current 75 gates. The revamp will downsize the airside terminal to 51 gates and build a new land-side terminal adjacent to it, eliminating a tram between the current land-side and airside terminals. The new land-side terminal will include expanded security screening and a new baggage system. The Airport Authority hopes to interest developers in land freed up by replacement of the current land-side facility.
Bulgaria Tries Again to Privatize Sofia Airport. The Bulgarian government, whose previous proposal for a concession to modernize the Sofia Airport was judged financially unattractive to potential bidders, has contracted with the International Finance Corporation (IFC) to advise it on the process and potential deal structure. IFC has noted that its scope might extend to one or more other airports, in addition to Sofia.
Saudi Arabia to Privatize 27 Airports. The civil aviation authority of Saudi Arabia has announced a contract with KPMG to advise it on the sale of a minority stake in Riyadh Airport, the country’s second-largest airport. Goldman Sachs was selected in June as financial manager for the transaction, which is intended to be the next in a program that will encompass all 27 Saudi airports. Earlier in 2017, the government awarded P3 concessions for Taf, Hail, and Abdulaziz Airports; Munich Airport and TAV Airports Holding won the initial concessions.
TRB Releases Report on Social Media and Airport Emergencies. The Transportation Research Board’s Airport Cooperative Research Program has released a 100-page report, “Uses of Social Media to Inform Operational Response and Recovery During an Airport Emergency.” It includes six case studies—but none of these cases includes the panic and chaos spread by social media in recent incidents at JFK, LAX, and FLL. Still, the report may assist airports in developing social media emergency management plans. The report is available at http://nap.edu/24871.
“The mayor’s office heard a presentation from experts on the concept of a public-private partnership to operate airports in a way that would generate revenue for public services. We are monitoring the process in St. Louis to determine whether it is feasible for a city the size of Nashville. If Metro could generate hundreds of millions of dollars to pay for needs such as transit, while maintaining a high-quality airport that meets the needs of our growing city, we have a responsibility to the taxpayers of Davidson County to do our due diligence and explore the possibility.”
—Sean Braisted (spokesman for Mayor Megan Barry), Joey Garrison and Nate Rau, “Mayor Barry Looks at Privatizing Nashville Airport to Generate Transit Funds,” The Tennessean, June 26, 2017
“[At Atlanta’s Hartsfield-Jackson], you have the mayor who makes the decisions. So you know, it all depends on the relationship between that one person and [the airport general manager]. The big issue, of course, is contracts. . . . Money and politics have a very strong relationship. . . . The airport could be successful from a financial point of view, from a customer service point of view, from a safety and security point of view, from its economic benefits to the community, and there still may be turnover [in management] because you have these other issues in play.”
—Angela Gittens, “Ex-Atlanta Airport Chief: ‘All Kinds of Issues’ Make Job Tough,'” Kelly Yamanouchi, Atlanta Journal-Constitution, May 31, 2016
“The market opportunity here is tremendous, but people have said the market opportunity is tremendous for a long period of time. So it’s really about when that can become a reality. It’s something that is moving along now, and we want to be a bigger participant in it. What’s less attractive is investing in only one part of the airport, because you don’t have the ability to master plan. The ability to master plan an entire airport and look at its needs over a very long term, not simply through the length of a political cycle, allows you to provide a much better facility.”
—Julio Garcia, IFM Investors, Jordan Stutts, “I Think It’s Important Infra Doesn’t Become Overly Politicized,” Infrastructure Investor, Sept. 27, 2017
“IATA doubled down on its quirky definition of ‘smarter’ regulation by asking not only for a free ride from the suppliers, but an inside track against competitors. It is not called a legacy industry for nothing. That every year IATA again has to plead that the IATA Worldwide Slot Guidelines be adopted should tell you all you need to know about the falsity of its title. Perhaps the fact that it is a naked attempt to distort the market, whilst allowing incumbents to benefit from windfall gains, is so blindingly obvious that even protectionist-minded governments can see through it. There have even been calls to break up slot monopolies at airports (a la BAA and AT&T) in such irresponsible, anti-business rags as the Financial Times. Could the tide be turning?”
—Andrew Charlton, “The IATA AGM—Zigging Not Zagging; Canning Not Cunning,” Aviation Intelligence Reporter, July 2017