- Who’s to blame for summer air travel chaos?
- Global airport privatization shows signs of recovery
- Remote digital towers are going global
- Hydrogen or sustainable aviation fuel?
- Two airport P3s fight forced terminations
- United gets new competition at fortress hub Newark
- News Notes
- Quotable Quotes
Who’s to Blame for Summer Air Travel Chaos?
In reviewing the epidemic of delayed and cancelled flights, luggage not showing up for arriving passengers, and huge crowds overwhelming staff at major European airports, I’m reminded of the fable of the blind men and the elephant. Each felt a different part of the pachyderm and concluded it was something different (a rope, a tree trunk, etc.).
Throughout July we’ve seen charges and counter-charges in both the United States and Europe about who or what is to blame: not enough air traffic controllers, a shortage of pilots, reduced numbers of airport workers (especially security staff), and of course, stormy summer weather. In fact, all of the above have been factors, but the proportions vary between this country and Europe.
Two trends have collided this summer to make things far worse than usual for this busy travel season. One is a much faster-than-expected recovery in people deciding to take plane trips, mostly leisure/vacation travelers. The second is a shortage of aviation workers of all kinds.
The upsurge in leisure travel is generally believed to be a reaction to two years of being cooped up at home due to the COVID-19 pandemic, with huge numbers deciding now is the time to get away. But the shortage of aviation staff is more complex.
One factor is government aid to airlines, aimed at keeping their workforces on board during the great contraction in flying. But many airlines, in an effort to cut costs when their passenger revenues were hitting rock-bottom, offered employees buy-outs, often in the form of early retirements. But most of those accepting such buy-outs were experienced employees, so when air travel resumed, airlines had to scramble to get whoever they could, and many of these people needed to be trained before being able to do real work. And the early-retirement trend was taking place even without airline incentives. Demographers have reported on the Great Resignation that predates the pandemic (see Peggy Noonan, “The ‘Great Resignation’ Started Long Ago,” Wall Street Journal, July 23, 2022). The same problem is facing airports, air traffic control, and airport security providers, all of whom are in short supply, particularly in Europe.
As for the back-and-forth between airlines and the Federal Aviation Administration (FAA) in this country, The Washington Post did us a great service last week by retrieving and publishing data from the Department of Transportation’s (DOT) Bureau of Transportation Statistics on causes of U.S. airline delays through May of this year. Here is the breakdown:
| Airline-caused delays | 41% |
| Late-arriving aircraft | 37% |
| Airspace problems, including bad weather | 17% |
| Extreme weather | 5% |
To his credit, on July 21, United Airlines CEO Scott Kirby apologized to DOT Secretary Pete Buttigieg for having blamed the airline’s delays and cancellations mostly on the air traffic control system.
In Europe, investor-owned London Heathrow has borne the brunt of considerable criticism for recently imposing caps on the number of daily passengers that airlines could schedule as the only way for it to catch up with shortages of airport, airline, and security staff. Less noticed were similar caps being imposed by Amsterdam Schiphol, Brussels International, and London Gatwick, implemented in the same July timeframe—and for the same reasons.
Although Europe has been slower to recover from the pandemic (the latest projections are that travel demand will reach 70% of pre-pandemic travel by the end of this year), that is faster than most European airports had expected. Airlines have tried to increase their schedules accordingly, but with airports’ current staffing levels, it’s more than they can handle.
The relatively good news is that major U.S. carriers are cutting back on their schedules for the rest of the year. That’s to give them—and the rest of the aviation ecosystem—more time to rebuild staffing to cope with what is now close to, or exceeding, 2019 demand levels. That will mean even higher load factors than we’ve experienced in the last few months. So if you have a trip in mind for this fall, book it soon while there are still seats available.
Global Airport Privatization Shows Signs of Recovery
By Marc Scribner
Having survived the COVID-19 pandemic in 2020, the global trend of private investment in airports—via outright purchase, long-term lease, or public-private partnership (P3) projects at airports—showed signs of a slow recovery in 2021. These activities are documented in Reason Foundation’s 2022 Annual Privatization Report: Aviation, which is now available to readers of this newsletter.
The airport section includes an updated table of reported 2020 revenue of the world’s 38 largest fully or partially investor-owned airport companies, with the five largest in the depths of the pandemic being Aena Aeropuertos, Aeroports de Paris, Fraport, Heathrow Airport Holdings, and Manchester Airports. The uneven recovery of air travel in 2021 has led to an uneven recovery in airport privatization activities, but there were some very positive developments last year.
Perhaps most significant in reaffirming the long-term global interest in airport private investment was the successful buyout of Sydney Airport. The airport, Australia’s largest, was originally privatized in 2002 via a 50-year P3 lease with a 49-year renewal option. The new owner of the lease is a consortium including IFM Investors, three Australian public pension funds, and New York-based Global Infrastructure Partners. The buyout reached financial close in March 2022. The $22.8 billion purchase was approved by 96% of voting shareholders and equates to 23 times the airport’s 2019 earnings before interest, taxation, depreciation, and amortization (EBITDA) and 50 times its pandemic-era 2020 EBITDA.
This sale bodes well for airport privatization. A study published by Reason Foundation in Aug. 2021 used valuations from the sale and lease of airports worldwide in recent decades to estimate the potential market value of 31 large U.S. airports owned by city, county, and state governments. In doing so, it used a high-end valuation based on 20 times EBITDA, which is less than the 23 times EBITDA paid in the March 2022 Sydney Airport transaction.
This should interest private investors as well as government airport owners, which could use lease proceeds to improve their fiscal positions and fund other infrastructure improvements. Even at 20 times EBITDA, the Reason study found that leasing 20 of the 31 airports could be used to cover at least 60% of the jurisdictions’ unfunded public employee pension liabilities, which are a significant long-term drag on state and local government fiscal health in the U.S.
While this is a positive development, whole-airport privatization and P3 leases remain rare in the U.S. In Sept. 2021, the New Haven Board of Elders approved a 43-year lease between Tweed New Haven Airport in Connecticut and its airport management company Avports, in which the company would invest $100 million in capital improvements. Avports had been the contract manager of the airport and if the Environmental Assessment and FAA Airport Investment Partnership Program approvals are successful, it would be the first time in the U.S. that an airport’s contract manager became its financial partner.
Despite the lack of whole-airport privatizations in the U.S., there has been growing use of P3s for individual airport projects. The replacement to New York LaGuardia Airport’s outdated central terminal opened to great fanfare in Dec. 2021. New York JFK Airport’s $9.5 billion Terminal One P3 hit financing problems during the pandemic and stalled, with $7 billion in arranged debt financing lapsing in 2020. A revised agreement was reached with the P3 consortium in Dec. 2021 and the project was restarted. In June 2022, Ferrovial bought 96% of Carlyle’s equity stake, joining Ullico and JLC Infrastructure as equity partners. Construction began on July 8 and all three phases are expected to be completed by 2030.
In addition to the news out of Australia, other global developments provide reason for optimism on airport P3s. The Bahamas issued a request for prequalification in March 2022 for a P3 to finance, redevelop, operate, and maintain six airports, including Grand Bahama International Airport. These projects are estimated to cost $400 million and the Bahamian government hopes to proceed with a request for proposals for shortlisted companies later in 2022.
Building on past success, Brazil continued its aggressive program on airport P3s. It announced in January 2022 another round of concessions for 16 terminals grouped into four packages. The Brazilian government expects to attract $1.6 billion in additional investment.
In Japan, airport P3 interest showed signs of a healthy rebound following a pandemic-era lull. A 30-year concession for the Hiroshima Airport commenced in July 2021. This was followed by the October announcement that the Ishikawa prefecture government was seeking expressions of interest for a potential concession of Komatsu Airport. And in Feb. 2022, Niigata prefecture officials indicated they will make a decision on the potential concession of Niigata airport.
The report also covers recent private-sector activities in air traffic control, with particular attention to the past year’s developments in digital and remote air traffic control towers. Also summarized in the 2022 Annual Privatization Report: Aviation are updates related to contract security screening and trusted traveler programs.
Remote Digital Towers Are Going Global
Last month’s World Air Traffic Management Congress in Madrid showcased the rapid growth of what is now termed the remote digital tower (RDT) paradigm shift. Most of the highlights are in Europe and the Asia-Pacific region. The big picture takeaways are two. First, remote tower centers managing traffic at as many as 15 smaller airports are being implemented. Second, a growing number of major hub airports are seriously considering either replacing or supplementing their traditional control tower with an RDT.
The most dramatic remote tower center (RTC) news comes from Norway, where ANSP Avinor is opening a new RTC in Bodo. With its technology partner Kongsberg, Avinor is initially adding four more smaller airports at Bodo (totaling eight), and plans to increase to 15 airports by the end of 2023. In Germany, DFS and Frequentis are adding a second airport (Erfurt) to be managed from its RTC in Leipzig, and they plan to add a third airport in the near future. In Denmark, the Frequentis DFS team is implementing that country’s first RTC at Billund, which manages approaches as well as tower functions. This site will go live in 2023, after current acceptance testing is completed. The project’s second phase will add smaller airports to be controlled from Billund. Frequentis is also working with DSNA in France to implement that country’s first RTC in Toulouse, with Tours Val De Loire Airport the first smaller airport to be managed from there. Four other airports are planned to be controlled from the RTC in the project’s second phase.
Larger airports are also studying or implementing remote digital towers. One of the first to do so was London City Airport, which has been controlled since Jan. 2021 by a Saab RDT installation at the NATS control center in Swanwick. That project last month was awarded the 2022 Airports Council International-Europe Digital Transformation Award. In Germany, Frequentis DFS is studying the possible replacement of the traditional control tower at the Munich airport with an RDT. If this actually takes place, it would be Europe’s largest RDT thus far.
Canadian RDT company Searidge is making serious strides regarding large airports in the Asia-Pacific region. Its biggest project to date is the new Digital Apron and Tower Management System (DATMS) at Hong Kong International Airport. It recently completed acceptance testing and is ready to support operations in 2022. It consists of the Digital Apron Management System for the airport authority and the Digital Tower Facilities for the ANSP. These systems have 240 camera sensors and 120 working positions. In its second phase, DATMS will be expanded to serve the new second terminal and the new third runway.
Besides Hong Kong, Searidge has delivered an Integrated Digital Tower proof of concept for Shanghai and a Smart Digital Prototype being used to evaluate the feasibility of an RDT to handle high-intensity runway operations at Singapore’s Changi Airport. Searidge also worked with Airservices Australia in 2020 on an Integrated Digital Tower proof of concept for Sydney, but Airservices has not made a decision on replacing or backing up its conventional tower.
In short, remote digital towers are going mainstream via two primary applications. First is remote tower centers serving up to a dozen or more small regional airports with better (and less costly) tower functions than with 20th-century towers. Second, and more recently, large airports are considering replacing or backing up their 20th-century tower with a remote digital tower.
These advances are certified and in operation in more and more countries. When will FAA get serious about this technology transformation?
Hydrogen or Sustainable Aviation Fuels?
In a recent issue of Aviation Week, senior editors interviewed the CEOs of Boeing and Airbus over the environmental challenges facing aviation (Jens Flottau and Tony Osborne, “We Need Both,” Aviation Week, July 11-24, 2022). Let’s begin with a few statements from each.
Airbus CEO Guillaume Faury said the following regarding propulsion:
“We need SAF [Sustainable Aviation Fuels] now. . . . SAF is the short-term solution [and] for long-range aircraft, it is the solution for a long time. . . . But I also believe that to go to net zero for the long term, hydrogen is the solution that we absolutely need to start now. Will it be a big share of the carbon savings by 2050? No. There will initially be one plane, and to be there in 2035 we need to start now. . . . It takes decades. We want to be the first one leading hydrogen Many other companies are also looking at hydrogen, it is not just one crazy company in aerospace.”
And here is Boeing CEO David Calhoun, interviewed on the same topic:
“We’ve developed a tool that lets you look at the world’s [air] traffic every day and start throwing some lenses at it with respect to SAF utilization, airplane type, and what would happen if you accelerate renewal rates of the fleet by 10%, etc. The lion’s share of progress in this half century is going to be SAF and fleet renewal. There’s just no denying the numbers. . . . Hydrogen is going to move the needle about 1% in the 2050 time frame. So why do I mention this tool? Because we cannot make the same mistake that energy [policy] has made, where policymakers get so far ahead of industry capabilities that the music stops. That possibility exists for aviation if we don’t inform the policymakers with very simple tools whether something they [advocate] is doable or not.”
I think Boeing has the better approach to the aviation energy/carbon-footprint future. Airbus’s Faury acknowledged hydrogen’s serious limitations for aircraft propulsion. He pointed out that the energy in 1 kilogram (kg) of aviation kerosene is 12,000 Watt-hours (Wh). Although 1 kg of liquid hydrogen has 33,000 Wh, it requires much heavier, stronger tanks that both reduce payload and take up space in the fuselage. Hydrogen has much higher energy density than today’s batteries, which range from only 200 to 500 Wh per kg. So for large airliners, battery-electric propulsion is a total non-starter, while hydrogen has serious limitations in terms of conventional airliner design, weight and payload penalties, and also the lack of infrastructure to provide hydrogen at many hundreds of airports worldwide.
SAF also presents many problems, including lack of enough feedstock material (biomass, used cooking oil, etc.) to come anywhere near providing enough SAF to power today’s and 2050’s global airliner fleet. Yet based on recent tests, it looks as if SAF can be made compatible with today’s and tomorrow’s gas turbine engines and be provided to airports via conventional pipelines.
The other serious problem with SAF is cost. Thus far, even making allowances for future economies of scale in producing SAF, no one expects it to come close to aviation kerosene on a cost/gallon basis. We therefore see airline lobbying efforts for SAF tax credits, government-funded SAF research, etc.
The problem with tax credits for SAF is that this will disguise the real cost to society of air travel. I’m a very long-time champion of airline route and price deregulation, which has led to the democratization of air travel. But if air travel is to take its place in a world adjusting to climate change, it makes no sense to hide the real cost of traveling by air. We know that the higher the ticket prices, the less demand for air travel there will be, other things equal. A tax credit for SAF means that ordinary taxpayers who may not ever fly will, in effect, be required to subsidize air travel for people whose income, on average, is higher than those who seldom or never fly. And this applies especially to international travel, whose carbon footprint is the most difficult to reduce (compared to short-haul and air-taxi flights where some forms of battery electric do look feasible).
Boeing’s Calhoun makes a good point about the need for the aviation industry to level with policymakers about what is and is not doable to decarbonize aviation by 2050. And as I have written previously in this newsletter, if the cost per ton of reducing international aviation’s carbon footprint turns out to be 10 to 50 times as high as the cost per ton of numerous “low-hanging fruit” opportunities for reduced footprints, a rational society will prioritize implementing all the low-hanging fruit opportunities before putting vast sums into changes that cost enormous sums for modest gains.
Two Airport P3s Fight Forced Termination
Long-term design/build/finance/operate/maintain public-private partnerships (P3s) are a growing trend at U.S. airports, including new or revamped terminals, hotels, and consolidated rental car centers. But this year has seen efforts by two major airports—Austin and Pittsburgh—to arbitrarily terminate long-term P3 agreements, apparently violating the termination provisions in the long-term concession agreements.
In the Austin case, a new airport management team has decided that the South Terminal developed and operated by Oaktree’s LoneStar Airport Holdings is in the way of its plan to build a new Midfield Concourse. Instead of negotiating the remaining value of Lonestar’s interest in the 40-year concession, the airport has offered to buy out the lease for a mere $1.6 million. When the company rejected that as unfair, being but a small fraction of the $30 million it has invested in the South Terminal, the airport began condemnation proceedings under eminent domain law. Needless to say, Lonestar intends to fight the condemnation.
In Pittsburgh, the airport authority abruptly terminated the 40-year concession (which expires in 2029) under which Airmall operator Fraport Pittsburgh has managed all the retail operations in the airport’s main terminal. An Allegheny County judge rejected the airport authority’s plan to prevent the public from attending a public hearing on the P3 termination. The authority had objected to the public attending the public hearing due to the need to discuss “security-related” information that could jeopardize public safety. The judge rejected the authority’s argument. Fraport contended that these “minor operational issues” (such as tools being left in places accessible to the public) were not material defaults warranting termination.
I have not seen either long-term P3 agreement, but I have several decades of familiarity with such agreements (primarily in the highway and transit field). They are structured as public-private partnerships, with built-in provisions attempting to deal with just about anything that may come up over the 30, 40, or 50-year term of the agreement. The long term generally reflects the significant capital investment and the assumption of various risks by the private partner.
Early termination may come about for two reasons: egregious failure on the part of the private partner (referred to as “termination for cause”) and termination due to major changes in plans on the part of the public partner. In general, termination for cause does not involve compensation; it’s one of the risks a private partner accepts.
Termination for convenience, however, is very different. The long-term agreement should at least lay out the basis for compensation of the private partner before it has had the benefit of generating revenue for the full number of agreed-to years. In one of the first such terminations for convenience of privately financed toll lanes in Orange County, California, the two parties agreed to a third-party assessment of the net present value of the net revenue the private party would have received had the agreement lasted for the full (in that case) 35 years.
Both Austin and Pittsburgh look to me like terminations for convenience, in which the airport is seeking to get out of whatever compensation provisions are in the agreements. Obviously, since I am not an attorney and have not read either long-term agreement, I have no idea what compensation provisions are actually included. If either agreement fails to include a provision spelling out compensation in the event of a termination for convenience, that may end up as a costly lesson for the private partners and a warning to those planning new long-term airport P3s.
United Gets New Competition at Fortress Hub Newark
In a blow to increased airline competition, DOT awarded all 16 peak-hour slots that became available when Southwest moved out to ultra-low-cost carrier Spirit Airlines. United Airlines (UA) has long dominated Newark (EWR), providing about 72% of scheduled airline service there. Southwest had been given the slots as part of a deal when United merged with Continental. The only other significant U.S. airline at EWR is JetBlue, which is still seeking to absorb Spirit via a hostile takeover.
United continues to throw its weight around, in April accusing JetBlue of causing congestion at EWR by not abiding by the “voluntary” limit of 79 operations per hour at the airport. On an earnings call in April, UA CEO Scott Kirby accused FAA of “letting people brazenly break the rules.” JetBlue in May sent comments to FAA, advising it to take United’s comments with a grain of salt and claiming that UA’s real objective at the airport is to restrict slot access and competition, leading to a so-called Level 3 slot regime being imposed, such as applies to LaGuardia and a handful of other highly congested airports. EWR used to be Level 3 but was changed to a less-restrictive Level 2 status in 2016.
JetBlue told FAA that one cause of EWR congestion is United’s operating 18 flights per day to Reagan National (DCA) using 50-seat regional jets. FAA-sponsored simulation games in 2005 demonstrated that if congestion were dealt with via variable runway pricing instead of slot limits, airline schedulers would “up-gauge” to larger planes operating less frequently, thereby transporting the same or increased numbers of passengers with fewer landings and takeoffs. For details see the report by researchers George Donohue and Karla Hoffman
Nav Canada Considers European Air Traffic Platform
In a June 22 news release, the Canadian ANSP Nav Canada announced a 12-month evaluation of the iTEC air traffic management system used by seven European ANSPs, including NATS (UK) and six others that together manage two-thirds of Europe’s air traffic. Having a common platform across Europe and the North Atlantic would be an important step towards the long-planned Single European Sky.
American Confirms Order for 50 eVTOLs
Aviation Daily reported (July 18) that American Airlines has confirmed delivery slots and committed to pre-delivery payments for 50 VX4 eVTOLs under development by UK-based Vertical Aerospace. The airline’s 2021 conditional pre-order encompassed 250 aircraft, with an option for another 100. Vertical believes this is the first of its kind for a major airline in the eVTOL industry.
Sweden Considering Major Airport Privatization
A report commissioned by the Swedish government has suggested “partial” privatization of Swedavia, the state-owned company that owns and operates Arlanda (Stockholm) and nine other airports. The report suggests that the airports in Gothenburg and Malmo, in addition to Arlanda, would be good candidates for privatization, though whether via long-term lease or outright sale is not clear; both mechanisms have been used in Europe.
Finland Commissioning World’s Largest Wide Area Multilateration System
Fintraffic ANS, Ltd. on June 20 announced the debut of its long-planned nationwide wide area multilateration (WAM) system, which is operational in the southwestern portion of the country (including Helsinki) and will be operational in the rest of the Finnish Flight Information Region by early 2023. WAM is an alternative to radar for aircraft surveillance. The WAM system provided by Frequentis includes ADS-B coverage for 80% of Finnish airspace. The complete system includes 120 ground stations, from the Baltic Sea to Northern Lapland.
Flughafen Zurich to Develop and Operate New Airport in India
The private operator of Zurich Airport has signed a contract with the government of Uttar Pradesh for a 39-year concession under which it will design, build, finance, operate, and maintain Delhi Noida International Airport, 50 miles south of Delhi. The estimated cost of the initial terminal and runway is $755 million. Zurich Airport also holds concessions for eight airports in Brazil, Chile, Colombia, and Curacao.
India Finalizing List of Airports to Privatize
Inframation News reported (July 21) that India’s Ministry of Civil Aviation is finalizing the list of airports it plans to privatize to further their modernization. The current list consists of 11 airports, and the idea is to offer them in packages consisting of a larger airport paired with one or more smaller ones. Previous airport privatization rounds took place in 2006 and 2019. Global airports operator Fraport has expressed interest in the upcoming auctions, according to a June 28th article in the same publication.
African ANSP Expands Use of Space-Based Data
ASECNA, the ANSP for 17 African countries plus oceanic airspace, has signed up for an additional service from space-based surveillance provider Aireon. Air Traffic Management reported on July 18 that ASECNA now subscribes to AireonFLOW, which extends ADS-B service to cover all flights transiting across ASECNA airspace, from gate to gate. This will enable it to provide better service to its aviation customers.
Vinci Airports to Develop Seven Airports in Cape Verde
Global airport company Vinci Airports has signed a 40-year concession agreement with the government of the Cape Verde archipelago—four international airports on the main island Praia and three airports on Sal, Sao Vicente, and Boa Vista. Vinci will expand and manage the airports under the concession, whose financial close is expected by mid-2023, according to Inframation News (July 18).
Lilium eVTOL Achieves Winged Flight
German eVTOL developer Lilium’s Phoenix 2 demonstration aircraft has successfully made the transition from vertical lift to winged flight, which is essential for its goal of serving the inter-city market of several-hundred-mile trips. AOPA Pilot (August 2022) reports that Lilium says this is the first eVTOL conversion to winged flight. The company has an agreement with NetJets to acquire up to 150 Lilium jets.
Gulf Shores Airport Signs Terminal P3 Agreement
The Alabama Gulf Shore Airport Authority this month signed a concession agreement with a team led by Vinci Airports. Under the agreement, Vinci will build a temporary and then a permanent terminal at the airport, and its partner TBI Airport Management will operate them. Gulf Shores is an hour south of Mobile and an hour west of Pensacola, Florida.
New Drone Scorecard Rates States
Brent Skorup of the Mercatus Center at George Mason University on June 27 released a new edition of his state-by-state assessment of readiness for “drone highways.” Six factors are used in the ranking, with the greatest emphasis on the existence of an airspace lease law and an avigation easement law. Go here.
IFM Investors Seeking 10% of Vienna Airport Shares
On July 6, IFM Investors announced its offer for 10% of the shares in partially-privatized Vienna Airport. It had previously acquired 40% of the shares, and its new offer is priced at 25.5% more than the then-current share price. Only 50% of the shares are in private hands, with 20% held by the City of Vienna, another 20% by the Province of Lower Austria, and 10% by the Employee Foundation, none of whom are seen as likely to sell any of their shares.
CLEAR Adds Greenville-Spartanburg; Now Serves 44 Airports
On June 27, CLEAR announced that it has signed with its first airport in the Carolinas. Greenville-Spartanburg International becomes the 44th airport offering the company’s service, which allows pre-vetted members to bypass the lines at security checkpoints after verifying their identity biometrically.
“AAM operations are expected to start modestly, with limited service on existing helicopter shuttle routes and flights between existing, smaller airports close to cities. By the beginning of the 2030s, it should be clear whether this new aviation market actually exists and can be scaled to a volume of vehicles and operations never before seen in this industry. While significant technical and certification progress is being made on the vehicle side, the goal of scaling AAM by the early 2030s still requires much progress across a broad front. This includes building out the required vertiport and charging infrastructure, automating airspace management and operations, as well as driving down production and operating costs sufficiently to make the service affordable.”
—Guy Norris, Jens Flottau, Graham Warwick, and Sean Broderick, “The Next Ten Years,” Aviation Week, July 14-24, 2022
“In June, [FAA] announced that winged eVTOLs that meet the FAA’s definition of ‘powered lift’ could not be certified or operate as ‘airplanes’ within the existing Part 23 framework. This means certification for winged eVTOL aircraft has to be done through Title 14 of the US Code of Federal Regulations (CFR), Section 21.17(b). . . . The FAA decision blindsided the American eVTOL industry. The industry feels aggrieved that it was reached without any industry dialogue. The FAA has denied it had suddenly abandoned its previous position and [said] that any change will be gradual. It will not cause any delays to the certification process—but many eVTOL manufacturers are concerned that there are now uncertainties in the US certification process where there used to be clarity. This could [also] hinder their plans to sell eVTOLs to the Asia market.”
—Andrew Charlton, “UAM: One Small Step (Back) for the USA; One Giant Leap for Asia,” Aviation Intelligence Reporter, July 2022
“Airports still typically charge landing fees by the weight of the aircraft. I gave a talk at FAA in March 1978 in which I pointed out what a ridiculous system that is. Supposed we charged for oil paintings by the pound? You’d have more than congestion; you’d have riots at the art dealers with Van Gogh paintings for sale. We don’t have any hesitation in other markets about letting prices rise to ration such scarce goods and equate demand and supply. . . . I urge you to consider the elementary proposition I’ve reminded you of, and demand the opportunity to charge what it is proper to charge when demand exceeds supply. . . . [It] is absolutely ridiculous that the value of the slots that ration scarce supplies should be appropriated by the airlines. Those rents should be appropriated by the suppliers of that scarce capacity, just as they are in any other competitive industry, and used to expand supply.”
—Alfred E. Kahn, Keynote Address to Airports Council International 8th Regional Conference and Exhibition, Oct. 15, 1999
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