Aviation Policy News #167
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Aviation Policy Newsletter

Aviation Policy News #167

The US lags on airport privatization and private investment, the definitive case for passenger facility charges, and more.

In this issue:

US Lags on Airport Privatization

Here is how the major regions of the world stack up on significant private investment in their airport sectors:

Europe 75% of airports
Latin America/Caribbean 66%
Asia-Pacific 47%
Middle East 18%
Africa 11%
North America   1%

Those numbers come from a study by Airports Council International (ACI), released in January 2018 (“Policy Brief: Creating Fertile Grounds for Private Investment in Airports.”)

I discuss this study, and a great deal more, in the new 2019 “Annual Privatization Report: Aviation,” which reviews developments in airports, air traffic control, and airport security and was released today by Reason Foundation. Some of the other news included in the Reason report is a table of the 40 largest private-sector airport companies. The top 15 of these companies account for over 27 percent of the revenue of the world’s 100 largest airport groups, public and private.

What has happened worldwide over the past three decades is the transformation of airports from being almost entirely government departments with very conservative (and often politicized) organizational cultures to increasingly being entrepreneurial companies, able to raise capital (equity and debt) and finance major expansion projects. One key to their success is integrating all aspects of airport design to better enable passengers to shop and purchase other services, leading to a large increase in the share of airport revenues derived from non-aviation sources—a big benefit to airlines.

One of last year’s biggest changes was the growth of a new top-tier global airport company, Vinci Airports (a subsidiary of a major French infrastructure company). It created a beachhead in the United States by acquiring 100 percent of Airports Worldwide, a company whose operations include the long-term concession for the terminals at Orlando Sanford Airport and management contracts at the Burbank and Ontario airports in California. And at the end of 2018, Vinci acquired 50.1 percent of the shares in London Gatwick Airport from Global Infrastructure Partners for $3.7 billion. These moves will likely put Vinci Airports into the top five global airport companies, along with AENA (Portugal), Aeroports de Paris, Heathrow Airport Holdings (UK), and Fraport (Germany).

The report details privatization (sale or lease) and public-private partnership (P3) transactions worldwide, with activity in every region. It also questions the rather bizarre campaign launched several years ago by airline trade association IATA criticizing airport privatization as not actually producing benefits. Countering this claim is a raft of large-scale airport expansion projects worldwide, as well as case studies published by ACI showing increased annual airport growth in the years following privatization, compared with previous years.

In the United States, by contrast, there is still only one airport that has been transformed by a long-term public-private partnership (P3) concession: San Juan International.

Congress last year reformed and renamed the former Airport Privatization Pilot Program, opening it to all US airports and renaming it (more accurately) as the Airport Investment Partnership Program. Three US airport operators hold “slots” in the former pilot program, and two of the three are making progress: St. Louis Lambert International and the planned conversion of the Hendry County Airport in south Florida into air cargo hub Airglades International Airport. The latter project has nearly completed its FAA final review process, with the publication of a Federal Register notice on August 20th, the selection of AvPorts to be the airport operator, and Star America signing on as an equity investor. The third airport, Westchester County, NY, still holds its slot but has not proceeded with the P3 process begun by a prior county administration.

The current hot trend among US airports is P3 development of major facilities on airports, such as new terminals, consolidated parking/rental car centers (CONRACs), and automated people movers (APMs). Among the notable projects are CONRACs at LAX and Newark, the APM at LAX, and new terminal projects at LaGuardia and Denver. All seem to be going well, except the latter, which was abruptly cancelled this month by the Denver city government (see News Notes, this issue). Facility P3s can be a good way to bring private finance and expertise into those projects, but it does not change the overall funding and governance of an airport. What whole-airport privatizations or long-term P3 concessions do is to restructure the airport as an integrated business, serving both providers (airlines and others) and individual air travelers.

The San Juan P3 is a dramatic example of the transformation of what was essentially a basket-case airport. Most US airports are better-run than that, but it will be very interesting to see what kind of transformation will emerge if St. Louis succeeds with a P3 lease of Lambert International.

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Growing User Base for Space-Based ADS-B Surveillance

Since Aireon’s global space-based ADS-B service went operational in March, there has been significant progress in use of this real-time surveillance technology: first on the North Atlantic Tracks between Canada and the UK, next with the addition of India as a major user (in addition to the 11 launch-customer ANSPs), and the inauguration of Aireon’s free emergency location service, Aireon ALERT. In case you have not been keeping track, Aireon’s customer ANSPs are:

  • Nav Canada
  • NATS (UK)
  • ENAV (Italy)
  • IAA (Ireland)
  • Naviair (Denmark)
  • DC-ANSP (Caribbean)
  • ATNS (South Africa)
  • CAA of Singapore
  • Seychelles
  • ISAVIA (Iceland)
  • ASECNA (western Africa)
  • Airports Authority of India

As of this writing, space-based service is operational only by the ANSPs of Canada and the UK.

The first big success is taking place on the North Atlantic, as NATS and Nav Canada are replacing traditional procedural separation (position updates every 10-14 minutes) with ADS-B updates every 8 seconds or less. Controllers on the North Atlantic’s Organized Track System (OTS) are now trialing reduced in-trail separation of as little as 14 nm compared with 40 nm, which would permit more aircraft to gain access to the tracks with the most favorable winds, which means reduced fuel burn and more on-time arrivals. Having essentially real-time data on aircraft position, altitude, speed, etc. also offers real safety benefits, enabling controllers to identify deviations from approved flight plans such as not-uncommon “altitude bursts” that can go undetected for 14 minutes with procedural separation. (I note with interest that Inmarsat, the provider of traditional position-reporting in oceanic airspace using ADS-C, has recently introduced an “enhanced” service offering updates every 192 seconds—24 times longer than Aireon’s once every 8 seconds.)

The Airports Authority of India, Aireon’s 12th ANSP customer, is responsible for the world’s third-largest amount of airspace, comprising its domestic airspace and three oceanic Flight Information Regions (FIRs): Chennai Oceanic, Kolkata Oceanic, and Mumbai Oceanic. Space-based ADS-B service is targeted for operation in those three FIRs by the end of this year, with a goal of reducing separations to 15 nm longitudinal and lateral. While nothing has been said about using space-based ADS-B in India’s domestic airspace, I would not be surprised to see that as a future development.

What about the United States? The FAA controls the largest amount of oceanic airspace: 24 million square miles, comprising Oakland Oceanic, Anchorage Oceanic, Anchorage Arctic, and New York Oceanic, plus the “offshore” areas controlled by Houston Oceanic, Miami Oceanic, and San Juan Oceanic. The former Centers manage oceanic traffic using a flight management system called ATOP, customized from a system developed by Airways New Zealand several decades ago. The offshore oceanic traffic is managed by those Centers’ ERAM systems.

Congress has been adamant that FAA should use space-based ADS-B, appropriating money for this purpose every year since FY 2015 totaling more than $72 million. Congressional expectations were that FAA would be ready to go by the time Aireon launched its North Atlantic service, but the agency is a long way from that point. Last fall at the annual conference of the Air Traffic Control Association, Acting Administrator Dan Elwell announced plans to test space-based ADS-B in Miami Oceanic as a first step, to lay the basis for other flight regions in subsequent years. Doing this in any of the oceanic regions will require some modifications to ERAM and ATOP, respectively, to be able to accept and use data from the Aireon system (and ADS-B in general). ERAM is already capable of dealing with domestic ADS-B inputs from the network on ground stations that became operational in 2015, but ATOP has had no such modifications. Confusing the situation is a recent GAO report based on a years-old business case analysis of space-based ADS-B by an outside contractor that made invalid comparisons, made assumptions about Aireon subscription rates, and ignored significant safety, efficiency, and environmental benefits, to reach a conclusion that enhanced ADS-C was more cost-effective than space-based ADS-B.

In fact, FAA has become more positive about space-based ADS-B, thanks in part to enthusiastic support from the NextGen Advisory Committee (NAC). At the April 23rd meeting of an NAC Subcommittee, FAA’s Kris Burnham presented an update. The briefing noted that FAA thinks space-based ADS-B “may be the next step in the evolution of ADS-B” and is being addressed in “an assessment of technical, operational, and safety issues.” This is beginning with testing in Miami Oceanic over the next one-to-three years, followed by uses of the technology in domestic airspace on a contingency basis, and longer term (five-plus years) considering the main Oceanic FIRs. The near-term plan does include updating ATOP at Anchorage, New York, and Oakland for space-based ADS-B. FAA wants industry involvement in both the near-term and mid-term research and planning, Burnham said. As of that April briefing, the FAA plan called for completion of the final operational assessment and benefits plan for a strategy briefing to the FAA Joint Resources Council in September.

Sources tell me that many airlines are frustrated that any action related to the North Atlantic is relegated to five years or more into the future. Flights from east coast gateways to Europe start out in New York Oceanic airspace and may then enter the North Atlantic tracks operated with reduced separations by Nav Canada and NATS. On their westbound return, if they operated on reduced-space North Atlantic tracks, they would exit far too close together to be compatible with New York Oceanic’s larger separations. That could mean they would have to fly less-efficient routes and be excluded from the benefits they would otherwise receive on the North Atlantic tracks that are entirely in Canadian and US airspace.

Best-equipped, best-served (BEBS) applies to the North Atlantic tracks (you can’t use them if you are not properly equipped), but in FAA airspace, the lowest common denominator rules. In the West Atlantic north-south routes managed by New York Oceanic, why couldn’t there be “fast lanes” for properly equipped airline aircraft and business jets, while non-equipped planes would be managed, as now, via procedural separation? I hope airlines and other stakeholders keep pushing FAA to accelerate its plans to make use of space-based ADS-B. Shouldn’t the world’s largest ANSP keep up with the likes of India and South Africa?

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US and Europe Making Progress on ADS-B Equipage

The latest numbers offer some encouragement that the bulk of the US aviation fleet that flies in airspace requiring ADS-B/Out will be equipped by the January 2020 deadline. FAA has not budged on that deadline (apart from major exceptions for military aircraft). A report presented to the NextGen Advisory Committee (NAC) in late July said that as of July 1, mainline air carriers were 85 percent equipped, with regional carriers at 78 percent. General aviation jet and turboprop aircraft were reported as 65 percent compliant, with lower compliance for helicopters (47 percent) and piston GA (42 percent). And 63 percent of civilian government aircraft are compliant.

The ADS-B/Out mandate requires aircraft that fly in defined (controlled) airspace to have an operational ADS-B transponder linked to a GPS source, and to broadcast their position and other flight information once per second to air traffic control. ADS-B will supplement ground-based radar as a surveillance source. Unequipped aircraft will still show up on radar (where there is radar), but the law prohibits non-equipped planes to fly in that airspace as of January 1, 2020.

So what are we to make of the high likelihood that a large fraction of general aviation (GA) piston planes will not be equipped by that date? In the August 4 JDA Journal, Mike Rioux pointed out that a large portion of that GA fleet fly below 10,000 feet, most of which is not covered by the mandate, and those GA planes that have not equipped tend to be ones that are used much less frequently than those being equipped (and they probably fly mostly in non-covered airspace).

The situation is more complex in Canada, where ADS-B will be required in Class A airspace (18,000 to 60,000 ft.) by Jan. 1, 2021, and in Class B airspace (between 12,500 ft. and 18,000 ft.) by Jan. 1, 2022. A third phase, expected by 2023 or later, will require GA aircraft to equip with ADS-B transponders that can receive signals from above (space-based) and below (ground-based), since large portions of Canadian airspace lack ground-based surveillance. One firm has already announced a wingtip-mounted ADS-B transponder/position light aimed at this market, called skyBeaconX.

Europe’s equipage deadline is June 2020, and its fleet is lagging US operators. Aviation Daily reported on August 13 that EU data show that 70-to-75 percent of registered large aircraft will be in compliance as of the June date. However, the European mandate is based on weight and speed, rather than on airspace, per se. It applies to aircraft weighing more than 5.7 tons maximum takeoff weight and capable of cruising at more than 250 knots. Thus, even if 100 percent of those aircraft comply, the skies where they operate will still have many slower and lighter planes at certain altitudes. This will make ADS-B in Europe only a supplement to radar rather than a system that a pilot with an ADS-B/In display could rely on to show all other traffic. In addition, the European regulation includes a number of exemptions that do not exist in the United States,—including 17 percent of the fleet that will eventually equip but can’t meet the June deadline and another 10 percent that will be retired before they can make much use of ADS-B.

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Which Cities Could Launch Urban Air Mobility?

There are still many unknowns in the various visions of urban air mobility (UAM)—basically small commuter VTOLs, many of them electric-powered. Cost, capacity, range (if electric), etc., constitute one set of unknowns. Another is regulatory factors, such as low-altitude overflights, noise limits, and FAA certification. And as I wrote recently in this newsletter, still another is UAM traffic management, currently existing as, at best, an array of conceptual plans.

Assuming those factors get worked out, another key question is which of the world’s large urban areas might be hospitable locations for early UAM operations. That’s the question addressed by a new study from NEXA Advisors (a division of NEXA Capital Partners). As NEXA’s Michael Dyment explained to Aviation Daily (Aug. 9, 2019), the study is based on a survey of 74 major metro areas worldwide. One of the key factors identified was existing infrastructure (such as heliports) that could be retrofitted for UAM services. The study identified 4,267 heliports that could be repurposed for UAM, as part of a geocoded database their team developed.

The study identified about 15 metro areas where a critical mass of support appears to exist to begin early UAM operations within the next two years (assuming suitable aircraft are developed and FAA-certified within that time). Among those Dyment named as potential early adopters are Miami, Singapore, and Vancouver. The study estimated that the first services likely to be offered will be airport shuttles, air metro, regional, and emergency services, with commuter services to come later, once economies of scale (and autonomous operation) reduce operating costs, and hence fares. Once autonomy arrives, the study expects an inflection point in growth, starting about a decade from now.

Building on various assumptions, the Nexa study made a 20-year forecast of projected operations and revenues, using an average ticket price of $188 per passenger (clearly not a daily commuter market!) The estimated capital investment in infrastructure for this amount of service is $31.9 billion, with eVTOL sales of $41 billion. The model projected 1.3 billion passenger flights yielding $244 billion in gross revenue among the 74 cities.

This is an ambitious projection, but it is far less sweeping than what some of the popular media have envisioned: millions of commuters bypassing congested freeways by flying over them in automated eVTOLs. The kind of market niches NEXA has laid out strike me as far more realistic, given the likely cost and capabilities of these new air vehicles.

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The Definitive Case For Passenger Facility Charges

With a new bill in Congress to expand airport funding options by enabling higher per-passenger charges, the same old debate is raging in popular and aviation media. On one side, the airlines continue to call the PFC a tax (though they no longer mislabel it as a federal tax), and oppose it by saying it will make flying more expensive and that airports are already sitting on pots of money and don’t need more. Airports point to a large backlog of mostly terminal expansion projects and note that much of their existing PFC revenue stream is committed to debt service on revenue bonds for current or past projects.

Into this debate steps Marc Scribner of the Competitive Enterprise Institute with the best explanation I’ve seen of the case for PFCs. To provide some context, Scribner provides a capsule history of PFCs. In the late 1960s and early 1970s, several airports started charging per-passenger fees to provide them with a revenue source independent of the revenue they derived from airlines. That was important because the major incumbent airlines typically had long-term lease agreements that gave them veto power over uses of that revenue. And that was sometimes used to veto terminal expansions that would allow competing airlines to have enough gates to launch service there.

Airlines litigated against these fees, but lost at the Supreme Court in 1972. So airlines pushed for and got, in 1973, the Anti-Head Tax Act. It was not until the last years of the Reagan administration, after airline deregulation had led to far more actual and potential airline competition, that the US DOT made the case for overturning the Anti-Head Tax Act. The net result, by 1990, was a provision in the FAA reauthorization bill creating an exception to that act, allowing airports to charge a passenger facility charge of up to $3 (with those charging that maximum required to give up 50 percent of their federal AIP grants). Subsequent legislation in 2000 upped the maximum to $4.50 and required those airports charging the maximum to turn back 75 percent of AIP grants. The current bipartisan bill (HR 3791) would remove the cap and require airports charging more than $4.50 to return 100 percent of their AIP funding.

Thus, the genesis of PFCs was to enable airports to separately fund terminal expansions, thereby increasing airline competition to the benefit of passengers. Needless to say, airlines never mention that sensible rationale, but surprisingly, neither do the airports (which is like fighting with one hand tied behind their collective back).

Scribner goes on to show that the large majority of AIP money is spent on runways and other airside infrastructure, while the large majority of PFC money is spent on terminals and other landside infrastructure (including interest on the revenue bonds). Both types of investment are important, but more runway capacity without more terminal capacity will not lead to significantly increased service by non-incumbent airlines. Scribner cites a study by economists Steven Morrison and Clifford Winston estimating that annual airfares are $5.72 billion higher (in 2018 dollars) than they would be with adequate gate access to support more low-cost-carrier service at large and medium-hub airports.

One point that Scribner does not address, but that airport advocates have, is the hypocrisy of airlines citing a several-dollar increase in a PFC as reducing demand for air travel—while ignoring the proliferation of airline bag fees, meal charges, etc. that add far more to a typical ticket price—but which don’t seem to have dampened rising air travel demand. That’s a minor omission in an otherwise very well-done report.

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Air Traffic Management Liberalization: A Workshop

As I have noted previously in this newsletter, the relatively new ATM Policy Institute has been putting forth some suggestions for changing the way air traffic control services are provided and paid for, with a focus primarily on Europe (where it is based). One of these is to open more national markets to competition in airport control towers, which is practiced in only a handful of countries. A more-recent concept is competition in managing high-altitude airspace, with pricing as a key element.

I know several of the principals of the ATM Policy Institute and am pleased to tell you that it is holding a conference on these subjects, early next month in London (Sept. 9-10). Major sessions will discuss:

  • Digital disruption and new entrants
  • Economic regulation in a more-liberalized ATM industry
  • ATM pricing: opening the door to competition
  • Changing the narrative on ATM liberalization.

My schedule does not permit me to attend, but yours might enable you to do so. You can get more details and register to attend by going to the institute’s website.

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News Notes

$14 Billion P3 Airport Approved in Philippines
Global company San Miguel has emerged as the sole bidder for a 50-year P3 concession to develop a new airport for Manila, capital of the Philippines. Bulacon Airport will be designed to handle 100 million annual passengers and be equipped with four runways. The $14 billion project includes an 8 km toll road to connect the airport with the North Luzon Expressway. The project began as an unsolicited proposal from San Miguel, and no competing proposals were offered when the project was opened to other bidders.

Mitsubishi Consortium Wins Hokkaido Airports Concession
A consortium of 17 companies has won the offered 30-year concession to upgrade and operate the seven airports on Hokkaido island in Japan. Other members include Japan Airlines, ANA Airlines, the Development Bank of Japan, and Sompo Japan Nipponkoa Insurance. The jewel in the crown is New Chitose Airport, Japan’s fifth-busiest, with 22 million passengers in 2017. Details of the concession have not yet been negotiated, but late-2018 speculation put the value of the deal in the vicinity of $1.3 billion.

Swiss Launch Drone Traffic Information System
Swiss ANSP Skyguide and US company AirMap have unveiled a UAV Flight Information Management System (FIMS). The system is cloud-based; it distributes airspace information and real-time traffic data from Skyguide to drone operators, using a network of UAV service providers. It enables multiple service providers to connect to airspace information. Switzerland has a U-space mobile app which drone operators can use for flight planning and to request permission to fly in controlled airspace near the airports of Geneva and Lugano. The system is not yet nationwide, but Aviation Daily dubs it “a key milestone toward development of the Swiss U-space construct.”

Another FAA Investigation of Atlanta Airport Corruption
Last month saw another FAA notice of investigation sent to the city of Atlanta, as it continues its probe into potentially illegal diversion of airport revenues to pay legal bills in an ongoing corruption case involving the city and the airport. Accompanying the notice was a subpoena for airport invoices from 2016 through mid-2018. Under federal law and standard grant agreements, airports that receive federal AIP grants may not divert any airport revenue off the airport.

CANSO 2019 Award of Excellence for North Atlantic Space-Based ADS-B
The Civil Air Navigation Services Organization announced a new award this year. Open to all CANSO members, it honors significant air traffic control success stories. Out of six worthy finalists, the winner was the project by Aireon, NATS, and Nav Canada to deploy space-based ADS-B across the North Atlantic, providing dramatic improvements in safety and efficiency. Congratulations to the winners and to the other excellent finalists.

$1.8 Billion Denver Great Hall P3 Being Terminated
In mid-August, Denver International Airport (DEN) announced that it was terminating, for convenience, the 34-year design-build-finance-operate-maintain P3 concession, under which a consortium headed by Ferrovial Airports was to revamp the land-side terminal into a planned Great Hall. After construction was held up due to a finding that the terminal’s concrete flooring could not sustain the weight involved in the planned construction, negotiations on how to resolve the delays and costs involved were unsuccessful. The problems must have been very serious, given that under the terms of the agreement, DEN must pay various reimbursements to the consortium as a condition of ending the concession far earlier than its agreed 34-year duration.

Senate Committee Backs College-Trained Controller Candidates
Last month the Senate Commerce Committee approved a bill, S. 1148 (116), that would require FAA to give “preferential consideration” to air traffic controller applicants who are either veterans or graduates of the FAA-approved Collegiate Training Initiative colleges. The bill would also have the DOT Office of Inspector General review FAA’s pre-employment test for would-be controllers and report to Congress on controller hiring and training.

Port Authority Contracts with Munich Airport to Operate Newark’s New Terminal
Munich Airport International, a division of Munich Airport, will operate and manage the $2.7 billion Terminal One at Newark Liberty Airport. The new terminal, expected to be completed by 2022, will replace the outdated and under-sized Terminal A. The Port Authority hopes that MAI will deliver world-class service in the new terminal, to improve the rather dismal ratings passengers and airlines give Newark’s airport.

LAX and DEN Go Opposite Ways on Parking
The rapid growth of airport travel via Lyft and Uber plus ridership on the relatively new A-Line train from downtown have reduced parking demand at DEN and have led to a decision not to proceed with adding parking capacity. By contrast LAX continues to face more demand for parking than it has capacity. So it has recently broken ground on a four-story parking structure, its first site not adjacent to its terminals. The structure is located so that it will be served by the under-construction Automated People Mover, being developed under a long-term public-private partnership.

NAC Defines Minimum Avionics for NextGen
The NextGen Advisory Committee, representing a broad array of aviation stakeholders, has announced a minimum set of avionics capabilities needed for aircraft to operate in the planned NextGen environment. The four are ADS-B/Out, performance-based navigation (PBN), GPS resiliency, and DataComm. The aim is to reduce and eventually eliminate the mixed equipage that hinders widespread use of emerging NextGen capabilities. The problem is seen as especially acute in the Northeast Corridor region.

Bolivia Using P3 Concession to Modernize Santa Cruz Airport
Bolivia’s 2009 constitution allows DBFOM P3 concessions for infrastructure. The first such project is now under way: a $280 million expansion of ViruViru Airport in Santa Cruz. Six consortiums submitted their qualifications for a 30-year concession back in March, including some of the biggest names in the industry. An announcement of which have made the short list is expected in the near future.

Two P3 Airport Wins by French Companies
The 35-year concession to upgrade and modernize the Sofia Airport in Bulgaria was won last month by a consortium led by Meridiam, Strabag, and Municy Airport. It was selected as the best-qualified among the five teams, and will now negotiate the terms of the deal. Also last month, a consortium led by Eiffage (with Marseille Provence Airport) won the 20-year concession to expand and operate the Lille-Lesquin airport in northwest France.

Oaktree May Sell Part of Austin Airport Concession
The redeveloped south terminal at Austin-Bergstrom International Airport came about via a 40-year P3 concession led by Oaktree Capital Group. As a facility designed to serve ultra-low-cost carriers (ULCCs), it hosts service by Allegiant Air and Frontier Airlines. Last month Oaktree announced that it is exploring the sale of a portion of the concession to other investors. The company was also part of the winning team for the San Juan International Airport P3 concession, though later sold its share of that deal to its partner company.

Gatwick Airport Windfall for Major Pension Fund
Infrastructure Investor reported last month that CalPERS, America’s largest public pension fund (and a pioneer in infrastructure investing), has made a very large gain on its investment nine years ago in London Gatwick Airport. Thanks to last year’s acquisition of the airport by Vinci Airports, its original $155 million investment became worth $1.24 billion.

UK Plans GPS Backup for Its Power Grid
As part of developing a “smart grid,” the UK is outfitting individual electricity facilities with real-time sensors that rely on multiple timing sources, including GPS and Europe’s Galileo and Egnos satellites, but also backed up by signals from the country’s eLoran long-wave radio navigation system. The project, called Enersyn, is backed by the European Space Agency.

Bosnia Gaining Full Control of Its Airspace
On Dec. 5, Bosnia and Herzegovina will take full control of its airspace for the first time. The relatively new Bosnia & Herzegovina Air Navigation Services Agency (BHANSA) gained control of lower airspace at year-end 2014, but upper airspace is still managed by the area control centers of Belgrade and Zagreb. But in December BHANSA will take over the upper airspace, as well.

Investors Acquire Trieste Airport
A consortium consisting of Italy’s F2i and France’s Ardian has acquired a 55 percent interest in Trieste Airport in northern Italy. The balance continues to be owned by the regional government. The owners will now proceed with a $33 million expansion plan over the next four years.

Sydney Airport Seeks Operational Flexibility
Capacity-constrained Sydney Airport, Australia’s largest, is limited by law to no more than 20 flights every 15 minutes. The airport explains that this constrains its ability to cope with disruptions and is seeking to have the cap changed to a single daily maximum. A second airport for Sydney is in the early stages of construction and, when completed, will enable the metro area to accommodate continued air travel growth.

LAX Selected as Most Innovative US Large Hub Airport
The American Association of Airport Executives has selected Los Angeles International as the recipient of its 2019 award as the country’s most innovative large-hub airport. Among LAX innovations is its Shop and Dine digital marketplace, under which passengers can purchase items or meals online prior to going to the airport and pick them up once arriving in the terminal. LAX has also created information-sharing regarding parking, traffic, shuttles, and the impacts of ongoing construction.

Dan Elwell is 2019 Glen A. Gilbert Memorial Award Winner
Congratulations to FAA’s Deputy Administrator, Dan Elwell, who has been selected by the Air Traffic Control Association to receive the 2019 Glen Gilbert Award. It will be presented at ATCA’s Glen A. Gilbert Memorial Banquet in Washington, DC on October 22nd.The award is named for the first controller hired by the federal government back in the 1930s. It is presented annually to an individual who has made a major contribution to air traffic control.

New Aviation Research from TRB
Transportation Research Record 2672, the latest edition of the academic journal of the Transportation Research Board, is devoted to recent aviation research, including airline mergers, pricing policies, traffic methods, and electrically heated concrete paving. Details are on the TRB website, TRB.org.

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Quotable Quotes

“Being able to reduce separation standards and offer greater flexibility on routes, speeds, and levels means 62 percent of traffic [on the North Atlantic tracks] now doesn’t need to use the Organized Track System [OTS] at all, compared with 50 percent in 2015. That’s a trend we will see accelerate as we continue to unlock all the service improvements available to us through Aireon and our deployment of our new standards. Over the coming years, we estimate that 90 percent of airspace users [in the North Atlantic] will be assigned their requested trajectories, something that will support the progressive reduction and eventual removal of the OTS.”
—Andy Smith, NATS, in “Aireon Real-time Surveillance Consigning OTS to History,” Air Traffic Management.net, June 17, 2019

“The really critical factor [for electric aircraft] is the energy density of modern batteries, about 1 megajoule/kilogram (mj/kg) versus the energy density of, say, Jet A fuel, about 43 mj/kg. This is a huge differential, even if only a fraction of the Jet A energy is recovered as work. Moreover, fuel is burned off during flight, reducing the work required to drive the aircraft.”
—Thomas R. Brogan, “Energy Density Bump-UP,” Aviation Week, Sept. 17-30, 2018

“[T]he [EU] Commission looked at excessive profitability, excessive airport charges, and regulatory till. On the excessive profitability, ‘It is not possible to draw any firm conclusions whether any EU airports may be earning excessive profits. . . .’ On excess charges, ‘. . . it is not possible to draw any firm conclusions about whether any airports are charging excessive airport charges . . . .’ On regulatory till, ‘The evaluation concludes that the use of a hybrid or dual till does not provide sufficient evidence that an airport is misusing significant market power.’ So, do we need the [Airport Charges] Directive at all? Australia and New Zealand manage to get along without such interventionist meddling.”
—Andrew Charlton, “The Airport Charges Directive—What the Press Releases Do Not Say,” Aviation Intelligence Reporter, August 2019

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