Airport Policy News #123

Airport Policy News

Airport Policy News #123

In this issue:

The Airline Attack on Airport Privatization

For the past year and a half, the trade association Airlines for Europe (A4E) has been waging a campaign to demonize European airports as monopolies that need stringent new price regulation to protect airline passengers. This campaign took an uglier turn in February, when the International Air Transport Association’s CEO launched an all-out attack on airport privatization.

In speeches at several aviation conferences, IATA CEO Alexandre de Juniac said, “We have yet to see an airport privatization that has, in the long term, delivered on the promised benefits of greater efficiency for airlines and a better experience for our customers.” He went on to say that “our members are very frustrated with the state of privatized airports. By all means invite private sector expertise to bring commercial discipline and a customer service focus to airport management. But our view is that the ownership is best left in public hands.” In March, Lufthansa CEO Carsten Spohr said that the privatization of major airports in Europe was “a big mistake.” In other parts of the world, he said, investors may have a role in the infrastructure, but “they are not trying to optimize returns for pension funds.”

So we have two serious charges: first, that many airports are monopolies that need price regulation; second, that airport privatization has not improved airports. Let’s start with the second of these claims

In a just-published report, I compare a list (from Flight Airline Business) of the world’s 100 largest airport providers with the 2017 Skytrax survey of the world’s best 100 airports, as identified by passengers. Of the 100 largest airport groups, 40 are either fully or partially privatized. Some 25 of the 40 privatized airports (62%) were included in the world’s hundred best airports as judged by passengers. Among the top 100 airports as ranked by passengers were privatized Zürich (#7), London Heathrow (#8), and New Kansai (#9)—all three of which are fully private (i.e., no partial state ownership). Incidentally, only five of the Skytrax top 50 were in the United States. [My report is Annual Privatization Report: Air Transportation, available at https://reason.org/privatization-report/annual-privatization-report-2018-air-transportation/].

Before de Juniac criticizes airport privatization, he would do well to consult with U.S. airlines, who are the newest to experience this change. Carriers serving privatized San Juan International are very pleased with the make-over of its decrepit 1960s-era terminals, as well as the refurbishment of its previously inoperative instrument landing system (ILS). And the major carriers serving both Midway and White Plains/Westchester airports signed off on privatization plans that they judged to be in their best interest.

The idea that privatized airports are not investing seriously in expanding terminal and runway capacity is simply false. Partially privatized Aeroports de Paris is under way on its Connect 2020 plan, investing $5.4 billion in increased terminal capacity to better serve its expanding passenger volume. Partially privatized Frankfurt has added a fourth runway and is under way on two additional passenger terminals, one exclusively for low-cost carriers. Heathrow has finally obtained government permission to add an additional runway, and Gatwick would love to do the same, if only the government would agree. And capacity expansion is going on at privatized airports in Brazil, Chile, Colombia, Peru, and many other countries.

What about the monopoly claims from A4E? They are mostly smoke and mirrors, too. Consulting firm Oxera studied the nature and extent of airport competition, on behalf of Airports Council International-Europe. For smaller airports served primarily by low-cost carriers, those airlines can move their small hubs relatively easily among other airports in a region, which puts competitive pressure on those airports. Oxera also pointed out that Europe’s three largest legacy carriers these days use a multi-hub strategy, which allows them to shift aircraft from one hub to another, which means those large airports must compete. (Ironically, Lufthansa has just announced that it will cease expanding at it largest hub, Frankfurt, in favor of Munich, Vienna, and Zürich—thereby illustrating this very point.)

To bolster its monopoly claims, A4E has put forward three claims that ACI-Europe refuted in March. They are as follows:

  1. Claim: Airline charges at the largest EU airports have doubled over the past decade, while average air fares have decreased by half. ACI replies that charges at those airports increased only 25.4% over this period, and the increase was driven by capacity increases and regulatory requirements (e.g., airport security). And according to Eurostat, airline ticket prices increased by 29% over the same 10 years.
  2. Claim: Lower airport charges would be passed on to consumers by airlines. ACI replies that air fares are driven by airline competition, not airport charges. And it gives an example of a €929 round-trip fare on a monopoly route between Brussels and Strasbourg.
  3. Claim: The regulatory system incentivizes airports to spend exorbitant amounts of money on facilities. ACI replies that the top 21 European airports invested €53 billion over 10 years to achieve a capacity increase of 177 million annual passengers. Actual growth in their passengers was 168 million, pretty much on the mark.

This battle is ongoing in Europe, with A4E continuing to argue for the imposition of new regulations on airport charges. The case for such regulation looks very shaky to me.

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Congress Favors Small Airports with Windfall; Short-Changes Large Airports

The FY 2018 Omnibus increased FAA’s budget for the current fiscal year (already more than half over) by $1.593 billion, with nearly all of that increase coming from the mythical “general fund.” The largest increase—$1 billion—was added to the Airport Improvement Program but restricted to small airports. And the just-passed House FAA reauthorization bill would continue that program for five years, at a cost of $5.3 billion.

Since the federal government is running at more than a half-trillion-dollar deficit this year, that 2018 increase must all be obtained by further federal borrowing. Historically, since the Airport Improvement Program (AIP) is for airport capital investment, it has been funded out of the Airport & Airways Trust Fund, whose money comes from aviation user taxes. In recent years, nearly all of air traffic control and airport grants were being funded by those user-tax revenues. The general fund portion of FAA’s budget had been trending downward to an expected 7-8% of the total in draft House and Senate FAA reauthorization bills. But with the Omnibus’s irresponsible increases, the FY 2018 general fund contribution has nearly doubled to 13.1%.

This is a very shaky future for airport funding. The Congressional Budget Office’s latest projections show that—unless there is major budget reform that no one is proposing—the annual federal budget deficit will soon be exceeding $1 trillion per year. Eventually that must lead to cuts in what is termed “discretionary” spending. And we can be sure that money that comes from the general fund will be the most obvious candidate for such spending cuts. The only way to safeguard needed aviation investments is to make sure they are funded either by user taxes or user fees—not general government revenues.

That’s why the airport community is right in its April 27th call for Congress to reconsider increasing the federal ceiling on airport passenger facility charges (PFCs). The most critical airport investment needs are in large hub airports that handle a huge fraction of all passengers—and of projected passenger growth. Since PFCs are local charges, the proceeds of which are used solely to improve the facilities of the airport that levies them, these funds are insulated from whatever budgetary travails will afflict the federal government in coming years.

PFCs are not “federal taxes,” as airline propaganda has long pretended. Fiscal conservatives should be solidly in favor of PFCs, especially if they are offered to large and medium hubs as an alternative to AIP grants. This would decentralize a large fraction of airport funding, promoting local control that directs airport investment to where it is most needed, while reducing what is now an expanding federal spending program. What’s not to like for fiscal conservatives?

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Orlando Backs Off on Outsourcing Screening

On April 18th, the board of the Greater Orlando Aviation Authority voted against applying to join TSA’s Screening Partnership Program, under which it would have been allowed to replace TSA screening with a TSA-selected screening company. Had the change gone forward, Orlando would have been the largest airport by far to join SPP, replacing TSA with private screeners.

The change in plans came about for two reasons. First, powerful members of Congress—Sen. Bill Nelson (D, FL) and Democratic House members Val Demings and Darren Soto—joined with the screeners’ union in lobbying the airport board to change course. Second, TSA implemented a crash program to address the chronic long lines and delays that had led to GOAA’s board seriously considering SPP. Those changes include adding 75 more TSA screeners, delivering some new checkpoint equipment, and authorizing more checkpoint dogs. Combined, these factors led to the board’s April 18th vote.

While these changes may address Orlando’s short-term screening problems, they do not solve two underlying problems. First, under current federal budget constraints, this is a zero-sum game. The resources TSA is adding to Orlando don’t come from the Tooth Fairy; they come from other airports. This is a problem that other airport directors have expressed concerns about. Last fall Charlotte Douglas director Brent Cagle complained about TSA’s practice of reassigning screeners away from high-performing airports to address problems at other airports.

Part of this problem is budgetary. Airports Council International-North America has complained about TSA “robbing Peter to pay Paul” by shuffling screeners around airports. The organization reminds us that Congress has routinely diverted revenues from the screening tax on airline tickets to the government’s general fund—about $1.28 billion was siphoned off last year in that manner. Security tax revenues should be spent on security, period.

But another problem is TSA’s staffing model. The airline business is dynamic, with individual routes added, dropped, or changed in frequency from month to month, all year long. Yet TSA’s staffing model still reallocates screeners only once a year. That just about guarantees that at any given time, some airports will have too many screeners and others will have too few, in comparison with passenger numbers.

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New Hope for “Uber for Planes”

Many private pilots were dismayed several years ago when the U.S. Supreme Court declined to hear an appeal from start-up company FlyteNow. The company’s business model was to offer an online version of the airport bulletin boards by which private pilots offered to share planned flights with passengers willing to split the operating costs of the trip. But despite FAA having accepted this practice for decades, when FlyteNow asked FAA’s blessing, the agency decided that flight-sharing apps like that offered by the company (and several other start-ups) made them “common carriers.” That meant that any pilot using the app would have to undergo expensive and time-consuming training to obtain a commercial pilot’s license. FlyteNow took the FAA to court and lost—and the Supreme Court declined to take the case.

But last month Sen. Mike Lee (R, UT) introduced the Aviation Empowerment Act, which would over-rule the FAA and allow the creation and use of digital bulletin boards to connect private pilots with would-be cost-sharing passengers. Lee told Reason reporter Eric Boehm that “Innovation is key to competition and accessibility. Studies and experience [show that] cost-sharing services have proven to be safe and effective in other countries, and it is past time we enact them in our country, as well.”

One of those studies was released last year by Christopher Koopma of the Mercatus Center at George Mason University. He argued that Congress had never clearly defined the term “common carrier,” which left the FAA free to concoct its own definition, which it applied to Flytenow and its competitors. Policy analyst Marc Scribner of the Competitive Enterprise Institute says that Lee’s bill is a good example of what Congress should be doing more of: clarifying in statute how regulatory agencies should approach innovations, rather than leaving it to them to make things up.

The status quo puts the United States far behind Europe in this area. An article from The Daily Mail in London last summer profiled the largest such service in Europe—Wingly. It’s an expansive flight-sharing app that does on a large scale what Flytenow and Airpooler attempted to do in this country. The article listed specific flights available at that time on Wingly, and the cost-sharing charge asked by private pilots:

· London to Jersey $51
· London to Newcastle $58
· Munich to Salzburg $57
· London to Le Touquet (northern France) $82
· Prague to Venice $111
· London to Belgium $144
· Cannes to Majorca $177

Wingly has expanded its offerings to the Caribbean, offering flights such as Anguilla to Guadeloupe ($154) and Guadeloupe to Martinique ($89). Like Uber, the business models of both Flytenow and Wingly offer profiles of pilots and passengers, as well as ratings provided after each trip.

I think it’s outrageous that FAA takes such a narrow-minded view of a beneficial improvement over physical bulletin boards at general aviation airports. I hope both AOPA and AAAE put some serious effort into supporting Lee’s Aviation Empowerment Act. It could be included as an amendment to the pending Senate FAA reauthorization bill, and ought to attract significant bipartisan support.

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Federal Air Marshals to Be Downsized

There seems to be an emerging consensus that the Federal Air Marshals (FAM) program is too large and should be downsized. DHS Acting Inspector General told a Senate roundtable in February that the program’s $803 million budget is disproportionate to the role it plays in aviation security. He based this assessment on a classified study. Politico last month quoted a Republican staffer of the House Homeland Security Committee saying that it’s clear the program has grown bigger than it needs to be. The chairman of that committee, Rep Michael McCaul (R, TX) would like to see more of TSA’s resources applied to placing 3-D scanners at airport screening checkpoints, a sensible reallocation of limited TSA funds.

Adding to the momentum for reform is a recent New York Times investigation that judged the FAM program to be in disarray. According to that story, there are significant alcohol and drug-abuse problems among the FAM workforce, and TSA allegedly now checks that air marshals arriving for flight duty are sober. The story also reported claims of sexual and racial discrimination in the program, which the Government Accountability Office plans to investigate.

That’s all well and good, but probably does not go far enough. Back in 2013 I reported in this newsletter on careful cost-effectiveness analysis of the FAM program by researchers Mark Stewart and John Mueller, co-authors of the 2017 book on aviation security, Are We Safe Enough? In their paper in the journal Risk Analysis they compared FAMs, armed pilots (Federal Flight Deck Officers) and installed secondary barriers to prevent access to the cockpit when pilots take needed restroom breaks. Their analysis assessed how large a threat would be needed to justify the cost of each measure. The results were as follows:

Measure Cost-Effective if Terror Attack Occurs
FAMs More than two per year
FFDOs One every 50 years
Barriers One every 200 years

As I wrote then, secondary barriers are the low-hanging fruit, but FFDOs are a low-cost alternative or supplement. Together, they make FAMs superfluous. The simplest improvement would be to expand the very low-cost FFDO program and scrap FAMs altogether. If that’s too much for Congress to contemplate, scaling FAMs back to a much smaller program that is focused entirely on what TSA/DHS intelligence considers very high-risk flights would be a sensible compromise.

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Canada Considers Privatizing CATSA

The counterpart of TSA in Canada—the Canadian Air Transport Security Authority—might be converted to a self-supporting nonprofit corporation, similar to the successful and popular air traffic control corporation, Nav Canada.

As in the United States, long lines and wait times at airport screening checkpoints are a growing problem as Canadian air travel has increased by 35% over the last five years. According to a Toronto Star article in March, Transport Canada has been consulting with aviation groups about funding and governance reforms of CATSA, and “the Nav Canada model emerged as a favored choice.” It would be overseen by a board of aviation stakeholders and would be financially self-sufficient from service fees.

CATSA was created following the 9/11 terrorist attacks, and it is currently supported in part by a passenger security tax of C$7 for a domestic flight and nearly C$25 for an international flight. All the proceeds of these taxes flow into the federal government’s coffers, but only a portion of the revenue is allocated to CATSA (similar to one of TSA’s problems). If CATSA were converted to the nonprofit, self-supporting Nav Canada model, it is unclear if the current security tax levels would be sufficient to cover its full cost, which is causing some concerns among air travelers and elected officials. But even if the fees would have to be increased somewhat, the revenue would continue growing in pace with the growth of air travel, so passengers and airports would benefit from shorter lines and better service.

Needless to say, the day after the Star article appeared, the largest union representing screeners—IAM Canadian—issued a news release headlined, “Privatizing CATSA Not the Answer!” But union clout on airport security is far less in Canada than in the United States. That’s because CATSA does not itself employ screeners. Instead, like most European airports, it contracts with vetted screening companies to carry out those functions. IAM Canadian represents only the 3,600 screeners who work for the contractors serving the Toronto and Vancouver airports.

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Aviation Event

Eno Leadership Awards Dinner, May 24, 2018, Renaissance Washington Hotel Downtown, Washington, DC (Robert Poole speaking). Details at: https://www.enotrans.org/events/eno-leadership-awards-dinner

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News Notes

Vinci Airports Enters U.S. Market. France’s Vinci Airports has purchased, from Canadian pension fund OMERS, 100% of the Airports Worldwide group of 12 airport concessions and operating contracts. In the United States, this includes the concession for the terminals at Orlando Sanford Airport and management contracts for Hollywood Burbank and Ontario International. Non-US acquisitions include 100% of Belfast international, 91% of Skvasta Airport in Sweden and nearly 50% stakes in concessions for the two largest airports in Costa Rica. Vinci Airports is now responsible for 45 airports in 11 countries, handling 182 million annual passengers.

Amazon Developing Major Hub at CVG. Prime Air Cargo, Amazon’s new transportation venture, is leasing 930 acres at Cincinnati/Northern Kentucky International Airport. It will construct a 3 million sq. ft. sorting center there, for 24/7 operations. The facility will serve 75 to 100 daily aircraft and 200 to 300 trucks when fully operational. Amazon expects to spend $1.49 billion and add 3,000 jobs at the facility. Prime Air will add much-needed business to the former Delta hub at CVG, downsized from 85% of all flights in 2010 to 43% today.

Possible Third U.S. Remote Tower at Hailey, Idaho. In the recent Omnibus spending bill, Congress authorized FAA to develop two additional remote towers (besides those under development without FAA funding at Leesburg, VA and Loveland, CO). Friedman Memorial Airport in Hailey, ID hopes to land one of them. Its current contract tower is too close to its runway, and FAA insists it be replaced by 2023. After a presentation on remote towers on May 2nd, the airport board approved applying to the FAA to be the first airport to replace a conventional tower with a remote tower.

Legislation Would Prevent Misuse of PreCheck Lanes. Rep. John Katko (R, NY) announced in late April that he will submit legislation to mandate that TSA no longer allow non-PreCheck members to use PreCheck lanes at airports. TSA Administrator David Pekoske has told lawmakers that the agency has plans to do this, but Katko said “I’m not going to give any option to do it. . . . It’s going to be a very bright line.” DHS Secretary Kirstjen Nielsen told the Homeland Security Committee that she will work with TSA to implement the change.

DFS Group Begins Operating Edinburgh Tower. A subsidiary of German air traffic control company DFS has taken over operation of the control tower at Edinburgh, Scotland as of April 1st. It won the contract that was formerly held by British ATC company NATS, via a competitive tender in 2016. Control towers in the U.K. are owned by individual airports, and may be operated either by the airport itself or by a qualified control tower operator.

Will France Fully Privatize Aeroports de Paris? Aeroports de Paris (ADP) is the world’s third-largest airport company by revenue. It owns and operates the three Paris airports and operates a total of 34 international airports. The French government owns 50.6% of ADP, with 20% owned by other airport companies and the balance by individual and institutional investors. ADP shares have increased in value this spring, based on expectations that the Macron government will sell most or all of the government’s stake, estimated to be worth €8 billion.

Japan to Offer a Bundle of Airports. In the latest step in the country’s ongoing airport privatization program, Japan’s Ministry of Infrastructure announced on May 4th that it will offer a 30 to 35-year concession for a group of seven smaller airports on the Island of Hokkaido. The process is expected to conclude with award of the concession in July 2019, with operations to begin in January 2020.

Hawaii Airport Authority Bill Dies, Again. For the second year in a row, a bill backed by airlines that would create an airport authority has died in the Legislature. Hawaii is one of only three states in which airports are operated and managed by the state Department of Transportation. (The other two are Alaska and Maryland.) Airlines have complained about bureaucracy and slow, convoluted procurement of new facilities and have argued that a self-supporting airport authority is a better model. Many legislators balked at losing direct control over airport decision-making, leaving the status quo in place for at least another year.

Politics Might Kill Mexico City’s New Airport. The $13 billion replacement for the too-small Mexico City International Airport is well along in construction. But depending on who wins July’s presidential election, it is at risk of being cancelled. The current front-runner—leftist Andres Manuel Lopez Obrador—has called for terminating the project if he’s elected, by filing legal challenges on account of alleged corruption. The candidate has proposed supplementing the existing airport with a new small airport north of the city, which airlines and airport supporters argue would be an ineffective solution to the airport’s lack of expansion capacity. Construction of the replacement airport is on track for completion in 2020.

Canada Abandons Airport “Asset Recycling”. After two years of study, including reports from Credit Suisse and Morgan Stanley, Transport Minister Marc Garneau announced in April that the Liberal government is “not moving ahead with [airport] privatization at this time.” The original concept was for the federal government to sell its ownership interest in the major airports, using the proceeds to invest in other needed infrastructure. This concept—asset recycling—has been used extensively in Australia in recent years. Several major airport authorities outspokenly opposed the plan, with only Greater Toronto Airports Authority expressing support.

London Luton Stake Acquired by AMP Capital. In April, airports investor AMP Capital purchased French fund manager Ardian’s 49% stake in London’s Luton Airport, for a sum estimated at close to £1 billion. The airport’s current expansion plan calls for increasing annual passengers to between 36 and 38 million by the late 2030s, from an expected 18 million this year.

Moody’s Concerned Over Chicago O’Hare Expansion. Rating agency Moody’s issued a warning last month about the increased debt level to be assumed by ORD in support of its $8.4 billion terminal expansion project. If, as expected, all of the new cost is bond-financed, that would increase ORD’s debt to close to $15 billion by 2022. And Moody’s calculates that this would lead to a cost per enplaned passenger (CPE) higher than comparable major hubs, potentially reducing its appeal for connecting passengers, which account for about half of all ORD enplanements.

Westchester Airport Privatization in Question. A change in the County Executive at the end of last year has put the airport privatization process on hold. The winning bid, from Macquarie, has lapsed, and new county executive George Latimer is still deciding whether to proceed to use the county’s slot in the FAA Airport Privatization Pilot Program. Options include holding a new bidding process, negotiating an agreement based on Macquarie’s late-2017 offer, or giving up its slot. One stated reason for the delay in moving forward was an election to fill the county legislature seat vacated by Latimer last winter when he became County Executive; that election took place April 24th.

Phoenix Moves Forward with Two P3 Projects. The City of Phoenix last month issued a request for qualifications (RFQ) for two design/build/finance/operate/maintain (DBFOM) projects at Sky Harbor Airport. One is for a new parking structure to replace a 3,000-space parking lot. The other is to DBFOM an upscale on-airport hotel, with meeting facilities, restaurants, and retail. The concessions could be up to 50 years, and bidders may propose to do one or both projects.

JetBlue Selects Fraport for JFK Terminal 5 Retail. In April, anchor tenant JetBlue Airlines announced that it had selected German airport firm Fraport (the world’s fourth largest airport operator, by revenue) to manage all retail operations in JFK Terminal 5. The contract is with Fraport USA, a company formerly known as AirMall that was started by the former British airport firm, BAA plc.

JetBlue Selects Team for JFK Terminal Expansion. In a project expected to cost between $2 billion and $3 billion, JetBlue has begun the process for a major terminal expansion project that would add 12 larger gates to the 29 narrow-body gates it already operates in Terminal 5. From 10 bids, JetBlue announced the selection of Vantage Airport Group and RXR Realty to lead the project. The airline is still in discussions with its landlord, the Port Authority of New York & New Jersey, on many details of the project.

Airline Buying 25% Stake in Moscow Airport. Qatar Airways has signed a memorandum of understanding with Moscow Vnukovo Airport to purchase a 25% interest in the facility. The deal was reported in Aviation Daily’s April 6th issue. Vnukovo is currently owned 50% by Russian private investors and 25% by the Russian government. It is the smallest of the three commercial airports serving Moscow, with 18 million annual passengers.

Trieste Airport Up for Sale. The Italian regional government that owns the Trieste Airport announced last month that it plans to sell a 45% stake to investors. The airport is currently 100% owned by the regional government of Friuli Venezia Giulia. The deadline for bids is June 6th. Trieste is located near the Slovenian border, and served 780,000 passengers in 2017.

FAA Contract Tower Moratorium Ends. Thanks in part to an unexpected budget increase from the recent Omnibus spending bill, the FAA has begun evaluating requests from small airports for contract control towers. At least eight applications for a contract tower have been on hold at FAA for the past six years, due to budget constraints. One of the newly hopeful cities is Boulder City, NV, which says its proposed tower has received the third-highest cost-benefit score in FAA’s review process. How soon FAA decisions will be made, and what it will be able to spend, remain unclear.

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Quotable Quotes

“Initially IATA cautiously welcomed privatization. That was the least they could do, given that airlines had the benefit of privatization before the airports. That was then. Now, de Juniac maintains, airlines realize that if airports operate commercially, the airlines risk looking like nothing more than tenants, instead of the Lord of the Manor. The only airport capital expenditure incumbent airlines will approve is for a moat. . . . To be fair to IATA, that is nothing new. The Australians, the Canadians, and the Europeans, to name but a few, have already made that clear. At the risk of mixing metaphors, that train has left the station. States cannot justify tying up their funds building infrastructure for airlines, many of whom are foreign. They have better things to do with their money, like schools and hospitals. It does not help that the airlines are so ungracious when it comes to constantly demanding still more, inevitably at someone else’s expense.” —Andrew Charlton, “You Say Privatization; I Say Privatisation. IATA Calls the Whole Thing Off,” Aviation Intelligence Reporter, March 2018

“In examining terrorism and counterterrorism, ‘how safe are we?’ is the right question to begin with. If it is determined in response to that question . . . that we actually are quite safe, we can move on to the next one. It was aptly posed by risk analyst Howard Kunreuther in 2002: ‘How much should we be willing to pay for a small reduction in probabilities that are already extremely low?’ That is, although we may want to maintain these agreeably low probabilities, are any gains in security that might be afforded by spending on additional security measures worth the funds expended? Are we safe enough already? Related, is it possible that we are spending too much to achieve this degree of safety?” —Mark G. Stewart and John Mueller, Are We Safe Enough? Measuring and Assessing Aviation Security, Elsevier, 2017, p. 16

“Current capital needs at large and medium hub airports, which carry 88% of all domestic traffic, are relatively low on a per-passenger basis. $3.04 per passenger for five years would cover all unmet capital needs at those airports for the next five years. Federal grants through the Airport Improvement Program will not adequately address the capacity needs of most fliers. This revenue source is vitally important to small airports, but not significant to the largest. New funding from the federal government to address capacity needs cannot be a one-size-fits-all solution. Making a real difference in capacity means investing billions in just a few major airports.” —Aviation Working Group, “Should the Federal Government Invest Heavily in Expanding American Airports to Relieve Congestion?” Eno Center for Transportation, January 2018

“If we really want to boost competition within the United States—the overwhelming majority of flights Americans take are domestic—then we need ‘cabotage,’ the right of foreign carriers to operate flights in the United States. While it may not be the case that Singapore Airlines is eager to provide daily service between Milwaukee and Albuquerque, it is possible that foreign carriers would have an interest in long-haul routes such as JFK-LAX or MIA-SFO, if only as a way to get paid to move airliners between major hubs. The domestic airline industry has seen years of consolidation and reduced competition. Time to let the Swiss, the Brits, and the Emiratis get into the market.” —Kevin D. Williamson, “Take Back the Skies,” National Review Online, Feb. 19, 2018

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Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation.