- White House infrastructure plan boosts airport privatization
- An out-of-control subsidy program
- Strengthening airline competition
- Paine Field lands three airlines
- Rethinking airport organization
- Atlanta airport’s monopoly power
- News Notes
- Quotable Quotes
White House Infrastructure Plan Boosts Airport Privatization
The 53-page “Legislative Outline for Rebuilding Infrastructure in America” includes long-overdue liberalization of the FAA Airport Privatization Pilot Program, as well as useful financing reforms. Now that airport privatization is an accepted global phenomenon, the plan calls for removing the limit of only 10 airports and the restriction to only one large hub airport, opening the door to any U.S. airport owner that wishes to recoup its investment in the airport while putting it in the operational hands of a world-class company. In addition, since airlines no longer adamantly oppose privatization (having approved proposed deal structures for long-term P3 leases of Midway, San Juan, and Westchester County airports), the plan would remove the double super-majority airline approval requirement, replacing it with a simple majority vote.
On the financing side, the plan calls for broadening eligibility for tax-exempt private activity bonds (PABs) with consistent rules for a broad array of infrastructure, including airports. It also calls for eliminating the Alternative Minimum Tax on PABs and removing both federal and state volume caps on PABs for public-purpose infrastructure, including ports and airports. It also calls for change-of-use provisions to preserve the tax-exempt status of bonds when a private-sector party buys or leases an infrastructure facility from a government owner. Had these changes been in effect when the San Juan Airport was leased under a long-term P3 agreement, the financing costs would have been lower, since the P3 team could have taken over debt service on the existing tax-exempt bonds, rather than having to issue new taxable debt for the acquisition.
If these changes get enacted by Congress, the United States would be extending an invitation to global airport companies and infrastructure investment funds, rather than confronting them with the obstacle course of the status quo pilot program and tax laws.
There was also a half-page section about possible divestiture of federal assets that “would be better managed by state, local, or private entities.” The list of seven examples included federally owned Reagan and Dulles Airports, leading to a media frenzy implying that the White House didn’t know the airports were already long-term leased to the Metropolitan Washington Airports Authority. Fitch Ratings pointed out that MWAA has $4.5 billion in bonds outstanding, and that the lease from the federal government runs to 2067. So privatizing these airports is unlikely.
Airport privatization, via long-term P3 lease concessions, is already a front-burner issue in some communities, with pending Pilot Program projects at various stages. The highest-profile case is St. Louis Lambert International, which would be the largest airport yet if it goes to completion. The City has selected Moelis & Company, Grow Missouri, and McKenna & Associates as its advisory team, with Moelis as the lead financial advisor, Grow Missouri underwriting the evaluation process, and McKenna assisting in identifying potential bidders. Those advisors must be approved by the Board of Estimate & Apportionment, and there is political opposition to Grow Missouri’s inclusion.
Westchester County had selected the proposal from Macquarie Infrastructure Corporation in November, but the new county administration that took office on January 2nd is reviewing the deal and may seek to modify its terms; it must also be ratified by the county legislature. Also proceeding toward FAA approval is Airglades Airport in Florida.
In parallel with these activities, the Airport Cooperative Research Program (of the Transportation Research Board) is gearing up for a follow-on study to its ACRP Report 66, “Considering and Evaluating Airport Privatization,” released in 2012. The objective of the new project is to expand upon that report to (1) identify lessons learned in US and international airport privatization models and (2) provide airport practitioners and policymakers with guidance on strategies and capabilities necessary to achieving the benefits on successful implementation of privatization. The working title of the project is “Implementing Airport Privatization: Guidance for Airport Decision-Makers.” It is designated as ACRP 03-46. An update from ACRP says that proposals have been received and are being reviewed by the project panel.
An Out-of-Control Subsidy Program
This year marks the 40th anniversary of the Airline Deregulation Act of 1978, which democratized air travel for the large majority of Americans. It also marks the 40th anniversary of the “temporary” program to cushion possible adverse impacts to small airports when airlines were no longer mandated to cross-subsidize money-losing flights to airports with very little traffic.
Alas, as pointed out in a new aviation brief from the Eno Center for Transportation, the Essential Air Services (EAS) program was made permanent in 1996—and from that date forward, it has ballooned in cost, growing from $35 million in 1995 to $271 million in 2016. The Eno report, “How Does the Federal Government Subsidize Air Service to Small Communities?” provides details on every small airport served as of 2016, and for each of them lists the distance to the nearest hub (less than 80 miles in some cases), the total passengers that year, and the subsidy per passenger (which ranges from a handful at less than $100 per passenger to as much as $778 in McCook, NE, which is 256 miles from the nearest hub airport).
Eno also points out several things I didn’t know about the EAS program. Although Congress years ago mandated that the maximum subsidy could not exceed $200/passenger for communities less than 210 miles from a medium hub, in 2006 the U.S. DOT stopped enforcing that rule! After some criticism, DOT in 2014 said they would resume enforcing it, but as of FY 2016 there were still 26 airports in violation. Furthermore, notes Eno, although DOT has criteria for considering adding new communities to EAS, none of them include cost. These factors are what lead me to dub EAS as a subsidy program that is out of control.
The FY 2019 budget proposal from OMB proposes a few minor reforms, aiming to reduce the subsidy total a bit. But to help Members of Congress contemplate more serious reforms, Eno provides a pie chart showing now much of the subsidy money goes to airports at various distances from a hub airport. Here are the numbers:
|
Distance |
Number of EAS |
Cost of Subsidies |
|
Less than 100 mi. |
9 |
$19M |
|
101 to 150 mi. |
26 |
$59M |
|
151 to 210 mi. |
20 |
$38M |
|
Over 210 mi. |
52 |
$112M |
|
AK + HI |
46 |
$50M |
Thus, for a reform that retained subsidies only for airports 210 miles or more from a hub airport and for the special cases of Alaska and Hawaii, the subsidy total would be only $162 million rather than $278 million.
That’s important, because subsidies of this kind ought to come from general fund, not from other air travelers. The current EAS program in FY 2017 got $150 million from the general fund and another $104 million from overflight fees paid by airlines for air traffic services provided by the FAA. That user-fee revenue should be used for the capital and operating costs of the ATC system, not for subsidies to small airports. Much of the huge growth in EAS since 1995 has been facilitated by the “free money” from FAA overflight fees. That needs to stop. Congress should weigh EAS subsidies against all the myriad uses of discretionary general revenue, and decide which claims are most worthy of funding.
Stimulating Airline Competition
While some consumer groups’ negative reaction to the emergence of four merged US mega-carriers is excessive, the best hope for retaining the democratization of air travel generated by airline deregulation is to remove existing barriers to robust airline competition. Two recent developments are steps in that direction.
The first is the about-to-be-finalized replacement of legacy long-term airline lease agreements at Chicago O’Hare Airport. Those 35-year leases expire in May, and the city government (ORD’s owner) plans to replace them with modern leases. Legacy leases like those at ORD typically granted anchor tenants (American and United at ORD) exclusive use of large numbers of gates (whether they were fully utilized or not) and also gave them de-facto veto power over capacity expansions that would permit significant entry by new airlines. Those leases did not do much harm in the old days of CAB regulation, when that regulatory agency essentially ran an airline cartel, with very little new entry and with price competition forbidden. But ever since deregulation, those leases have served as significant barriers to entry—and they are gradually being replaced by shorter leases, generally lacking “majority in interest” clauses that give incumbent airlines veto power, and often providing for shared-use gates.
The carrot ORD is offering AA and UA is vastly improved terminals, as part of a total expansion yielding 72% more terminal square footage than at present. The program also includes addition of the final (sixth) runway under the airport’s O’Hare Modernization Program. AA and UA will be getting more gates, as will Delta and its Skyteam partner airlines. But importantly, so will discount carriers Alaska, Frontier, JetBlue, and Spirit. Altogether, ORD will get 35 more gates and two additional on-airport hotels. This adds up to a significant boost for airline competition at ORD.
The other change is so far just a proposal. Rep. Dave Brat (R, VA) last month introduced his Free to Fly bill (HR 5000). It would remove the anachronistic provision of US aviation law that limits foreign ownership of any airline flying domestic routes to 25%. In exchange for no restriction on ownership or board members, any such airline would have to set up a U.S. subsidiary and employ only citizens or other legal residents in providing domestic airline service. Advocates of airline deregulation, dating back to then-CAB Chairman Alfred Kahn, have long argued that airline competition would be more robust if non-U.S. airlines could fly domestic routes here. But that 75% U.S. ownership provision has always stymied such service from being offered.
Brat’s bill will likely face strong opposition from major airlines, but it has garnered a long list of supporters, including the Business Travel Coalition, the Club for Growth, FlyersRights.org, FreedomWorks, the National Taxpayers Union, Travelers United, and the U.S. Travel Association.
Paine Field Lands Three Airlines for Fall 2018 Service
Thanks to a public-private partnership between Snohomish County, WA and Propeller Airports, the new passenger terminal that Propeller is building at Paine Field will open this fall with three airlines providing service: Alaska, Southwest, and United. Residents in the northern portion of the Seattle metro area will no longer be dependent on a long drive to SEA-TAC for quality airline service—at least to destinations in the western USA.
Alaska announced in January that it will initially serve eight cities from Paine Field, offering 13 daily flights. Those cities are Las Vegas, Phoenix, Portland, San Jose, San Francisco, Los Angeles, Orange County, and San Diego. United plans six daily flights, serving its hubs in Denver and San Francisco. And Southwest has announced initial plans for five daily departures, to cities yet unnamed.
Paine Field is located in Everett, WA, 38 miles north of SEA-TAC and 74 miles south of Bellingham. It is the site of the Boeing plant that produces 747, 767, 777, and 787 aircraft, and its main runway is 9,100 feet in length. The airport dates to 1936, when it was developed as a military base.
Propeller Airports, based in New York City, has tried twice to bring a competing airport to Delta-dominated Atlanta—once at Briscoe Field in Gwinnett County and later at Paulding Airport in Paulding County. Both of those attempts were defeated, after hard-ball lobbying by Delta and its political allies. In Seattle, Propeller is succeeding, with both political support and enthusiastic airline participation.
Rethinking Airport Organization
The New York Times ran a fascinating article on February 27th, “How Boston’s Airport Bounced Back from the Storm that Crippled JFK.” Reporter Patrick McGeehan explained that the same snowstorm that massively disrupted operations at Kennedy for several days. also hit Boston, with snowfall in excess of one foot at Logan International. Yet Logan reopened the next morning almost back to normal.
Both airports are managed by Port Authorities, which have been found by economic studies to be the least productive form of airport organizations (note: single-purpose airport authorities are much better). But as McGeehan carefully explained, the two airports are managed in very different ways. JFK operates an extremely decentralized system, under which airlines or groups of airlines manage the individual terminals, almost as if each was the airport’s sole terminal. When a major snowstorm or other disaster occurs, it appears to be every terminal for itself—and that’s what happened during the January debacle.
By contrast, Massport (the port authority that runs Logan) practices airport collaborative decision-making, a policy the FAA supposedly encourages and participates in with airports. As McGeehan reported, every morning airline and Logan airport officials meet together to review information about that day’s operations, including the weather but also things like problems with a Jetway or scheduled runway maintenance. Each of Logan’s four terminals has a manager, who reports to Ed Freni, Massport’s aviation director, who leads the daily meeting.
Nothing like that exists at JFK. Each airline-managed terminal was on its own. As Jason Rabinowitz put it in the New York Post (January 16th), “Essentially, each terminal has become its own mini-airport, connected only by taxiways and the shared misery among passengers. There is no central command during irregular operations to contain issues.” Terminal 1, in particular, was overwhelmed by more flights than its 11 gates could handle, leading to planes stuck on the tarmac for up to seven hours. Arrivals at that terminal were than banned for two days, creating even larger backlogs of deferred or cancelled flights. Logan ended up handling a number of incoming flights that were turned away from JFK en-route.
Reporter McGeehan quoted Port Authority Aviation Director Huntley Lawrence as admitting that the agency had paid too little attention to passengers, since it turned over the terminals to airline management in the 1960s. “No one ever dreamed that meant we would abdicate control of the customer experience at our airports. But we did.”
In his New York Post op-ed, Rabinowitz quoted long-time aviation consultant Robert W. Mann as saying, “One way or the other, if the airlines will not act in their own interests to mitigate poor outcomes, then the Port Authority, which . . . takes a black eye every time airlines fail to act, must act to host a solution.” But Rabinowitz doesn’t think that’s the answer. As is well known, over its long history of running JFK and LaGuardia on behalf of airport owner New York City, the PA has used the airports as cash cows, taking large sums of money from them to use for building the World Trade Center and its replacement, as well as numerous money-losing “economic development” projects.
Former New York Times reporter John Tierney reviewed some of that history in a powerful article last year (“Making New York’s Airports Great Again,” City Journal, Winter 2017). Citing the transformation of San Juan International thanks to a long-term public-private partnership lease, Tierney suggested a similar solution for the Port Authority airports. In a 2017 study for the Manhattan Institute, I had proposed that approach as a way to insulate the airports’ revenue from diversion and bring about a management approach focused on the airports’ customers. And based on recent airport privatizations worldwide, I estimated the potential market value of JFK at something over $7 billion.
And that is what Rabinowitz recommended in his op-ed. “The time has come for the de Blasio administration to take a look at privatizing the airport—allowing one company to be a unifying force for all of its terminals. . . . New Yorkers should no longer accept the PA’s mind-boggling costs and inept management.”
Atlanta Airport: Out of Electric Power but Not Out of Monopoly Power
By Clifford Winston, Brookings Institution
The power outage that recently shut down operations at Hartsfield-Jackson Atlanta International Airport was the latest in a long history of turbulent events in U.S. airline travel. Some travelers believe the chaos began when the industry was deregulated in the late 1970s, expecting that profit-hungry airlines would do almost anything to fill their planes with passengers, even though some might have to sleep on an airport terminal floor and miss meals when their flights were cancelled.
The truth is that the nation is fortunate that deregulation has generated as many improvements in air travel as it has because deregulation has been compromised from the get-go by policymakers’ failure to allow aviation infrastructure to evolve in conjunction with changes in airline operations in a highly competitive environment. In particular, commercial airports have remained in the public sector, with virtually no incentive to improve their operations in ways that would both increase airline competition and help airlines provide better service to air travelers.
Although the Federal Aviation Administration has identified the Atlanta metropolitan area as needing a second airport, Hartsfield-Jackson has succeeded in keeping its monopoly position to the delight of its stakeholders, which include its hub carrier, Delta Airlines. Delta benefits, of course, from being able to elevate its fares in the absence of competition from airlines that would serve a second airport.
Hartsfield-Jackson continues to behave like the inefficient public monopolist that it is. Consider its approach to backing up its primary underground electrical facility. Effective backup could have prevented the massive and lengthy power outage that shut down airline operations and caused more than 1,000 flights to and from the airport to be cancelled. Instead of working with Georgia Power to locate the backup electrical equipment physically apart from the primary equipment, the airport allowed the utility to locate it in an adjacent room, which rendered the backup equipment useless when a fire broke out in the primary facility. The subsequent power outage lasted much longer than it would have if the backup were working.
In the information technology (IT) world, the Atlanta airport’s approach was analogous to putting critical software and data in adjacent rooms—something that would have been regarded as incompetent in the 1960s. Off-site data protection, including storage of backups, has long been part of IT disaster recovery. Apparently, the airport’s management did not have the incentive to learn a basic lesson from IT that it is a bad idea to put backup infrastructure in the same place as the equipment that it is intended to back up.
Delta Airlines, other airlines, and airline passengers incurred the significant cost of the cancelled flights during the outage. CNN reported that one airline was telling passengers that it would be five days before they could get a flight out. In addition, the cancelled flights caused problems at other airports and generally disrupted air travel across the United States. But did Hartsfield-Jackson have to worry about losing a customer because of this calamity? What other commercial airport in the Atlanta area were airlines and air travelers going to use?
Similar to countless other markets, the way to incentivize airports to improve their operations is to introduce private sector competition. Private airport competition already exists in certain foreign cities, such as London, and it is feasible and desirable in the major metropolitan areas of the United States. Some major cities already have three public airports, such as Reagan National, Dulles, and BWI, in the Washington, D.C. area. Those airports compete to some extent, but why not allow them to explicitly engage in price and non-price competition for airlines and air travelers?
A private airport would have the strong financial incentive to avoid the backup problem that greatly contributed to the power outage at Atlanta. Importantly, if such a problem occurred, airlines and other commercial airports in the metropolitan area could work together to reduce the cost of a major disruption to travelers. In addition, private airport competition would address inefficiencies that have long compromised air travel in the deregulated era, including: (1) the failure to use the price mechanism to reduce travel delays by charging higher landing and takeoff fees during peak travel periods, (2) the lack of available gates for new airline entrants at certain airports, (3) the interminable delays in building new runways, and (4) the slow adoption of technological advances to improve airport security.
Of course, many cities are served by only one airport. Under privatization, those airports would appear to have monopoly power, which would allow them to charge airlines excessive prices for runway and terminal use and give them little incentive to provide high-quality services. But the ability of an airport—even if it is the only airport serving an outlying area—to behave as a monopolist is constrained by its need to be integrated into an airline’s entire network. Thus, if an airport attempted to set monopoly charges, a major airline could simply exclude it from its network or play it off against another airport in an outlying area to reduce charges.
In the case of the Atlanta metropolitan area, I am confident that, in a privatized commercial airport environment, it would have little trouble attracting an entrepreneur to build a second airport to compete with a privatized Hartsfield-Jackson Airport. I am also confident that both airports would require Georgia Power to build a backup electrical system well away from the primary electrical equipment.
Orlando Considering Private Screening. Frustrated by long lines and long waiting times at TSA checkpoints, the board of the Orlando International Airport is considering replacing TSA screening with a private screening contractor, under the agency’s Screening Partnership Program (SPP). But due to several board members being unconvinced, along with a large turnout of TSA screeners at the Feb. 22nd board meeting, the board members voted to wait two months before applying for SPP. In the interim, airport management will review the status quo with TSA to see if it can come up with meaningful improvements.
ACS Consortium Wins LAX People Mover Competition. Los Angeles World Airports has selected the LINXS consortium, headed by ACS and Dragados, for a $1.95 billion design-build-finance-operate-maintain P3 concession to implement an elevated automated people mover (APM) linking the central terminal area with parking facilities, a new rental car center, and a light-rail airport station. The 25-year DBFOM concession will likely be financed initially with short-term bank debt, and long-term with tax-exempt private activity bonds (PABs). Commercial close is expected in April and financial close in June. The APM is scheduled to open in 2023.
TSA Changes the Math on PreCheck. Aviation security consultant Ken Dunlap points out in his Feb. 26th blog that TSA will henceforth measure PreCheck adoption based not on the percentage of total air travelers signing up but rather on the percentage of frequent travelers that do so. Dunlap points that while detailed data exist on total air travelers, “frequent” travelers has no precise definition, which he says introduces “an eye-watering fudge factor” that TSA can exploit. He makes a good case that the better target—for both risk reduction and cost-saving—is the fraction of total air travelers being pre-screened in advance. (http://securitydebrief.com/2018/02/26/tsa-changing-math-precheck)
Denver Terminal P3 Reaches Financial Close. Denver International Airport’s $1.8 billion Great Hall terminal redevelopment project reached financial close on Dec. 21, 2017. The project will greatly expand the current landside terminal, replacing the TSA screening area and adding extensive retail space. The P3 team is headed by Ferrovial Airports, the largest shareholder in London Heathrow Airport. Under the 30-year (after construction) P3 concession, Ferrovial will share revenue from the terminal with the Airport on an 80% airport/20% developer basis. The deal is being financed based on developer equity and a mix of short-term and long-term private activity bonds. Fitch has rated the bonds BBB.
Stewart Airport Being Renamed and Expanded. The once-privatized Stewart International Airport, now owned by the Port Authority of New York & New Jersey, will henceforth be New York Stewart International Airport. The Port Authority is adding 20,000 sq. ft. to the terminal to accommodate a Customs & Border Protection facility, in view of the addition of trans-Atlantic airline service to the airport by Norwegian Air, whose flights increased 2017 passenger volume by 60% to 440,000. The project budget is $30 million.
Katco Slams TSA on Misuse of PreCheck. Rep. John Katko (R, NY) strongly criticized TSA for continuing its practice of “managed inclusion,” under which air travelers who have not been vetted and accepted as PreCheck members are moved from regular screening lanes into PreCheck lanes when the regular lanes are backed up. TSA has those passengers sniffed by an explosives-detection dog, but Katko points out that this cursory (and not always accurate) inspection is not the same as passing a background check. TSA’s Stacey Fitzmaurice said the agency is trying to “draw down” the number of non-members going through PreCheck lanes.
Vinci Wins Tesla Airport Concession in Serbia. France’s Vinci Airports was the winner of a competition to upgrade and manage the Nikola Tesla Airport serving Belgrade, the capital of Serbia. Under a $1.7 billion deal, Vinci will invest $1.2 billion in expanding and modernizing the terminal and upgrading the runways, while also providing $500 million to the government. The DBFOM concession has a term of 25 years. Vinci operates 35 airports worldwide, including 12 in France, 10 in Portugal, Santiago in Chile, and both Kansai and Osaka in Japan.
Navi Mumbai Airport to Be Developed by GVK. In January a joint venture of GVK Power & Infrastructure and state-owned City & Industrial Development signed a concession agreement to develop a second airport for Mumbai, with an initial capacity of 10 million annual passengers, expandable to 60 million. The DBFOM concession is for 30 years, with a possible 10-year extension. Estimated cost of the airport is $2.4 billion.
Competitive Privatization of Paris Airports? The Chief Commercial Officer of low-cost carrier Ryanair is urging the French government to take a leaf from UK privatization experience. Instead of privatizing Aeroports de Paris as a single entity, he urged that the two main Paris airports be sold separately, enabling them to compete more openly. That change was made belatedly in the U.K. More than 20 years after the Thatcher government privatized the British Airports Authority (BAA) as a unit, a subsequent government required the divestiture of London Gatwick and London Stansted, which now compete with London Heathrow. According to Aviation Daily, the French government is planning to privatize Aeroports de Paris as a single company.
Cross-Border Trade from Phoenix-Mesa Gateway Airport. A new e-commerce hub encompassing 800,000 sq. ft. of air cargo operations space and a million square feet of office space will be built at Phoenix-Mesa Gateway Airport. The business model is that the facility will have Mexican customs officers on site, who will screen all online purchases from Amazon and other e-tailers prior to air shipment to any airport in Mexico. Air freight between the United States and Mexico is currently $390 million per year, but is projected to grow rapidly.
Fraport Sells 10% of Greek Airports P3 Concession. Marguerite Fund, which invests in infrastructure projects on behalf of European development banks, has purchased a 10% stake in the 40-year concession under which Fraport is to upgrade and operate 14 airports in Greece. Fraport has agreed to invest $482 million in the airports by 2021. The acquisition of a portion of the Greek airports concession completes the Fund’s current asset acquisitions.
Norwegian Seeks Additional Gatwick Slots. Long-distance low-cost carrier Norwegian in December acquired 28 weekly slots at London Gatwick Airport, to facilitate a planned expansion of trans-Atlantic service with the 787s it has on order. But CEO Bjorn Kjos told a London briefing in February that it needs additional Gatwick slots to fulfill its current service plans. The fast-growing airline is already the third-largest airline at Gatwick, with 4.6 million annual passengers. It plans to launch flights this year to Argentina, Austin, and Chicago.
Meridiam and ADP Purchase Majority of Jordan Airport Concession. French financial company Meridiam and Aeroports de Paris have paid $267 to acquire a majority interest in the 25-year concession for Jordan’s Queen Alia International Airport. The concession was agreed to in 2007, and the original consortium invested $850 million in airport improvements. The airport is growing at about 10% per year.
World’s Most Valuable Airport Company: Airports of Thailand. Bloomberg reported in January that based on stock market valuation, the world’s most valuable airport company is Airports of Thailand, with a market capitalization of $31 billion. The previous most-valuable company was recently privatized Aena, SA, which operates all the large airports in Spain.
Orlando Starts Construction of $2.1 Billion South Terminal. The long-planned South Terminal at Orlando International got under way in January. Development on the site already includes a new parking structure, multi-modal ground transportation terminal, and a people-mover connection to the existing North Terminal. The South Terminal will open with just 16 gates, but plans call for it to expand as needed to as many as 120 gates. That first phase is scheduled to open in 2020.
Gary Airport Refurbishing Runway, Adding Customs. Gary/Chicago International Airport is repaving (with concrete replacing asphalt) its main runway and is well along on construction of a new Customs & Border Protection facility at the airport. The latter will permit international air travelers who depart from Gary to come back to Gary, rather than to a City of Chicago airport that has such facilities.
Cross Border Xpress Wins Air Transport World Award. The innovative air terminal on the U.S. side of the border with Tijuana’s airport is the recipient of the 2018 Passenger Experience Achievement award presented by Air Transport World in February. Winner of the Value Airline of the Year award was Norwegian Air, which launched 20 trans-Atlantic routes in 2017.
“Our overall judgement (readers are invited to visit our travel blog, Gulliver, to dispute it) is that, adjusted for national income per head, several busy American airports would be contenders for worst in the world. Washington Dulles has the worst-designed ground transport: travelers must enter and leave a mobile pod by the same door, so everyone crowds round in hopes of getting off first, thus blocking it. JFK is the main gateway to the world’s capital of consumerism, yet scarcely any retail therapy is available to treat travellers’ boredom. But Miami is surely worst of all. The queues at passport control take nearly as long to navigate as Leif Erikson took to cross the Atlantic in a longboat.”
—”The Departure Gates of Hell,” The Economist, January 6, 2018
“In a 2013 paper by Jia Yan of Washington State University and Tae Hoon Oum of the University of British Columbia, economic indicators of underperformance at U.S. airports identified the effects of corruption in the misallocation of resources, personnel decisions, and more. The transfer of airports from municipal governments to quasi-autonomous airport authorities did little to prevent malfeasance, but the authors concluded that airport privatization might help: ‘Private airports are better insulated from political influences and give managers stronger incentives to exploit efficient inputs allocation. Also, internal organization of private airports is expected to function better than airport authorities especially in highly corrupt environments.'”
—Kevin D. Williamson, “Take Back the Skies: Five Ideas to Improve Air Travel,” National Review, Feb. 19, 2018
“[Control tower competition] facilitates things like the introduction of remote technology, and that in turn means that air traffic management can be digitized. That is good, in this world of big data, but scary if you are an ANSP [air navigation service provider], in this world of big-data players such as Google. Scary for ANSPs is not necessarily bad. They have been sitting smugly behind their monopoly for a long time. For the airports, for the airlines, for the passengers, it opens the door. It is what happens next that is exciting. If control tower service is liberalized, the airport becomes the customer. The ANSP becomes the supplier—or, more accurately, becomes one of the potential suppliers. That changes the balance of power and the balance of bargaining position.”
—Andrew Charlton, “Reforming ATM One Airport at a Time,” Aviation Intelligence Reporter, November 2017