Aviation Policy News: Benefits from airport privatization, the case for digital towers, and more
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Aviation Policy Newsletter

Aviation Policy News: Benefits from airport privatization, the case for digital towers, and more

Plus: A common rate for Europe's air routes, Wisk plans autonomous eVTOL, and more.

In this issue:

New Study Finds Large Benefits from Airport Privatization

Does the type of ownership make a difference to airport performance? One of the much-quoted studies on this subject appeared in the Journal of Urban Economics in 2008, reflecting the early wave of mostly European sales and partial sales of airports. It found positive results on airport productivity, but its sample size was small—only 16 privatized airports out of a 109-airport dataset.

A new study from the National Bureau of Economic Research (NBER Working Paper 30544), reflects a world in which 437 airports have been privatized to date. The authors drew from a dataset of 2,444 airports in 217 countries. Rather than comparing all privatized airports with all the rest, they focused on before-and-after comparisons of the privatized airports. They sought to answer the question of whether the type of privatization leads to differences in airport performance. In particular, to the best of my knowledge, this is the first such study that considers whether different outcomes occur when airports are acquired by infrastructure investment funds, rather than by converting the airport to an airport company. Their most important finding is that “infrastructure funds improve airport performance.”

Here is a summary of seven key changes. The first is adding more air traffic, where the number of passengers per flight increases by 20% compared with non-infra-fund acquisitions. And overall passenger numbers increase by 84% under infra-fund ownership. Second, the fund-owned airports attract new airlines, with the increase in competition leading to better service and lower fares. These airports also increase the number of airline routes, especially international routes.

A surprising finding (to this American policy researcher) is that under infrastructure fund ownership, there are “dramatic declines” in flight cancellations and a large increase in on-time departures. This reflects non-U.S. airports, since even before privatization, they generally had common-use gates, which means greater flexibility for the airport to assign airliners to gates. In privatized airports, this continues to be an airport function, not an airline function.

Since the available performance data included little on the quality of airport retail and related passenger-experience indicators, the NBER researchers relied on the Airport Council International (ACI) World’s annual Air Service Quality (ASQ) awards, which assess passenger satisfaction via annual surveys. They found that transitions to infrastructure fund ownership increase the chance of an airport winning an ASQ award.

On airport finance, the researchers documented that fees charged to airlines increased after privatization of either type. There is also a strong relationship between acquisition by an infrastructure fund and removal of price regulation. Net operating income increases by 108% after infra fund acquisition, but this is due more to higher revenues than to cost-cutting—for example, there is no change in employees per passenger.

Throughout the study, the researchers distinguished between concessions of less than 30 years and those with longer terms, defining the latter (and outright sales) as forms of ownership. Overall, they found that “sales” (including longer-term concession) lead to larger efficiency improvements than shorter-term concessions, suggesting that “ownership rights may lead to better-aligned incentives.”

They also examined the role of airport competition. In general, they found that “improvements are much larger in the presence of a competing airport,” with the stronger relationship occurring under infra fund ownership.

Overall, they found that “privatization consistently improves productivity only with [infra fund] involvement.” They speculate that this may be due to new strategies, equity-based compensation for management, and investing in better passenger services and technology.

This important study is likely to inform plans for long-term airport concessions in the United States and worldwide. Inframation News (Aug. 23) provided an overview of continued investor interest, despite only a handful of transactions from 2020 through 2022. It quoted Macquarie executive John Bruen saying “Once the [aviation] sector has got itself back up there and is robust and . . . at . . . (pre-COVID) volume levels again, then I think you’ll see the transaction activity.” The report also includes a chart showing the eight largest airport infrastructure fund investors. Leading the pack with nine airports is IFM Investors, followed by Macquarie Asset Management with eight.

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A Common Rate for High-Altitude Air Routes in Europe?

Airline flights in Europe often take zigzag routes—not because of air traffic control rules, but because after becoming airborne, pilots often request a route change to avoid airspaces with high rates per kilometer flown. This does lead to minor ATC cost savings for the airlines involved, but at the expense of more fuel burned and more CO2 emissions. Getting airlines to fly the shortest, most-efficient routes has been an ongoing challenge, but could reduce per-flight CO2 emissions by up to 10%.

With increasing pressure on aviation to become more climate-friendly, Eurocontrol has endorsed an idea I proposed in the May issue of this newsletter: charging the same “unit rate” for all high-altitude flights in Europe. Eurocontrol Think Paper #18, Sept. 6, 2022 is called “One Size Fits All—A Common Unit Rate for Europe?” Current unit rates range from €28.72 to €130.30 per kilometer—a huge range. The report finds that a common unit rate is technically feasible and could save up to 4,400 tons of CO2 on a busy day. It finds that implementation by Eurocontrol (which operates the current Europe-wide billing system) would also be feasible. And it notes that different airlines would be winners and losers—those flying mostly in Europe’s core area would benefit from lower charges but those operating outside the core or to non-European regions would pay more. European airlines have long called for “fixing the fractional [air traffic management] system” and creating “an efficient airspace.”

But the Eurocontrol paper unfortunately proposes to retain the fragmentation of Europe’s air traffic management system. Its report explicitly calls for redistributing the proceeds from the common unit rate to subsidize the high-cost air navigation service providers (ANSP), assuming they would continue to retain their costly, wasteful infrastructure and excess staffing. That is no way to bring about a true Single European Sky.

Figure 5 in the report is a table showing ANSP winners and losers at the assumed common unit rate. The 19 winners—ANSPs with low costs that would receive annual windfalls absent revenue redistribution—are mostly in smaller countries such as Malta, Latvia, Estonia, Bulgaria, Cyprus, etc. The 10 losers are all in affluent western European countries, such as Switzerland, Italy, Germany, Spain, and Netherlands. When their officials cry crocodile tears over not receiving enough unit rate fee income, it’s because they and their national governments are unwilling to consider facility consolidation, labor reforms, and more-extensive cross-border free-route airspace.

Here is a table (reproduced from the May issue of this newsletter) drawn from a 2017 Eurocontrol/FAA report an air traffic management in the U.S. and Europe

 U.S. (CONUS)Eurocontrol AreaDifference
Area (sq. km, millions)10.411.5+10%
En-route centers2062+200%
Approach controls2616-38%
Airports with ATC517406-21%
Average daily flights41,87428,475-32%
ATC staff, total31,64735,130+11%
Of which, controllers12,17017,794+46%

To summarize, with one-third less air traffic, Europe has 200% more en-route centers and 46% more controllers. Ever since the Single European Sky was proposed more than two decades ago, this underlying problem has loomed larger than any other obstacle.

If some European body had the courage and authority to implement a common unit rate similar to the one used in the Eurocontrol report—but without the redistribution of revenue to the wealthy countries with high-cost ANSPs—what would happen? The initial response of governments in high-cost places like France, Germany, and Switzerland, would be to come up with their own subsidies to preserve the status quo of their ANSPs. But how long would their parliaments put up with those subsidies continuing indefinitely? My guess is that pressure from voters and lawmakers would soon arise calling for these subsidies to jet-setters to be phased out. And the way to do that would be to reduce their ANSPs’ cost structure. This could entail faster implementation of virtual centers and other forms of facility consolidation, remote/digital towers, possible cross-border mergers of smaller ANSPs, and some kind of labor reform, including generous early retirement incentives.

I can’t think of any other way to achieve the stated goals of the Single European Sky, leading to a system whose ANSPs are more like the efficient systems of Canada and the United States. If you know of such an alternative, please let me know.

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Wisk Plans Autonomous 4-Seat eVTOL

Start-up electric vertical take-off and landing aircraft (eVTOL) developer Wisk Aero has unveiled its planned production model, Generation 6. It is designed to carry four passengers but no pilot; its flights would be monitored by a “multi-vehicle supervisor” who would handle up to three of these eVTOLs at a time. Articles about the Generation 6 unveiling stressed that Wisk is the first such firm to apply to the Federal Aviation Administration (FAA) for certification of an autonomous passenger-carrying eVTOL.

The company has an illustrious history and some top talent. It began as Kittyhawk Aero, backed by Google co-founder Larry Page. In 2019, Boeing adopted the business to replace its in-house eVTOL project. Access to all of Boeing’s expertise suggests Wisk may have an edge over other leading eVTOL startups. Like a minority of those, Wisk plans to both produce and operate its eVTOLs in commercial service. Wisk has recruited some top-notch talent. Chief technology officer is Jim Tighe, former chief aerodynamicist for Scaled Composites and chief engineer of its SpaceShipTwo.

Despite its apparent advantages, there is a long path to FAA certification awaiting Wisk. The agency has published its Urban Air Mobility Concept of Operations (ConOps) Version 1.0, for piloted eVTOLs. NASA has done more visionary work, recently releasing a UAM ConOps at Maturity Level 4 (medium-density and complexity of operations with collaborative and automated systems). But so far there is no FAA plan for how it would certify automated eVTOLs.

An article in the June 2022 issue of Aerospace Testing International by David Hughes explores some of the other hurdles facing certification of eVTOLs and managing their flight operations in urban airspace. David Silver of the Aerospace Industries Association told Hughes that he does not expect any changes in how US airspace operates within the next three to five years.

For eVTOL operations a serious unmet need is near real-time microweather data for urban and suburban airspace. As I discussed in this newsletter several years ago, the planned vehicles are small and lightweight and subject to being blown around by unexpected wind gusts, which might appear between tall buildings. Don Berchoff of TruWeather told Aviation Week (Oct. 10-23, 2022) that “Anywhere you have buildings, we don’t have weather models today that could tell you what winds are going to do based on the building configurations. This is a total mystery that needs to get solved now because we’re going to be flying in urban areas with lighter aircraft.” TruWeather is getting underway on a $750,000 project to test a network of ground-based weather sensors in Hampton, VA.

Wisk has recently estimated that its target price for Generation 6 passenger flights is $3 per passenger-mile. I have no idea how that price could possibly cover capital and operating costs of this four-passenger vehicle with one-third of a pilot. You can’t assume 100% load factors, nor routinely clear and not-windy flight conditions. Even at an average of 2.5 passengers per trip, a 15-mile trip to the airport would generate $112. And you have to account for trips that cannot be made when planned, due to adverse weather.

These problems will affect all Urban Air Mobility providers, with or without pilots. I continue to admire the engineering that’s going into these vehicles, but I have yet to see a business model that looks plausible.

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Air-to-Rail Substitution in Europe Questioned

Several European governments are contemplating bans on some short-haul flights within Europe, aiming at routes where there is high-speed rail (HSR) service, such as that available in some inter-city corridors in France, Germany, Spain, and Italy. Both Delta and United have dipped a toe into this concept, the former with its year-old Air+Rail service, which is now available in some form to 20 destinations in Europe. And Star Alliance, which includes United and Lufthansa, in July announced a partnership with German rail operator Deutsche Bahn.

The idea is that because short-haul flights produce twice the CO2 emissions per passenger-mile as long-haul flights, they are low-hanging fruit for reducing aviation’s carbon footprint. To be sure, electrified high-speed rail has a significantly lower operational carbon footprint than diesel rail (which accounts for a significant fraction of non-HSR passenger rail in Europe). But a policy of banning short-haul flights would have many costly consequences—for airports (losing significant amounts of revenue), for air travelers (lost time and inconvenient connections to long-haul flights, etc.). Also ignored in flight-ban proposals is the fact that most European HSR stations are in downtown locations, not at airports. A plan that banned short-haul flights would require billions in new spending to build HSR extensions to, and stations at, those unserved airports.

A new study looks into these problems, analyzing various alternative air-rail policies using data on 87 air travel routes in Germany: “The Substitution of Short-Haul Flights with Rail Services in German Air Travel Markets: A Quantitative Analysis,” by Vreni Reiter, Augusto Voltes-Dorta, and Pere Suau-Sanchez.

A key factor addressed in this study is the importance of flights to and from connecting hub airports, for those traveling between points in Germany and to and from other countries. This point has been noted by officials in both France and Germany, so in building their model to assess how air travel would be affected, the researchers tried four different air-to-rail policies based on the share of connecting passengers on each of the routes: 10%, 35%, 60%, and 80%. A 10% threshold would mean that only flight frequencies where 10% or more of their capacity is used for connections would be allowed to operate. By analyzing detailed flight data for a sample month in 2019, they found the number of weekly flights that would be banned under each alternative, ranging from 1,195 weekly flights at 10% to 4,780 using the 80% threshold.
The next step was to assess the costs and benefits of each version of the policy. They estimated CO2 emissions for electric and diesel passenger trains, based on which types operated on which rail lines. The emission savings compared with air travel were valued at Germany’s current “social cost of carbon,” which is €77.13/ton of CO2.

Next, they estimated the excess travel time due to rail trips being longer than plane trips—taking into account waiting times, getting to airports or train stations, etc. For the least restrictive policy (10% threshold), the carbon savings were €45 million/year and the travel time cost increase was €218 million. And for the 80% threshold, the carbon savings were €227 million/year and the travel time cost increase was €1.05 billion/year. In other words, costs exceed benefits by nearly a factor of five. Note also that the estimate of costs does not include the billions of euros that would be needed to extend existing HSR lines to newly-built airport HSR stations. Nor does it include electrifying all the diesel-powered rail routes and replacing their locomotives with electric ones. Nor does it include the loss of airport revenue, due to banned short-haul flights.

In short, shifting short-haul traffic from air to rail in Europe is not a low-hanging fruit on the road to low carbon footprints. Replacing coal-fired powerplants with nuclear would have vastly greater impact.

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Whither Small Community Air Service?

There is growing concern in the aviation community about the future of airline service to small airports. Major airlines have parked 50-seat regional jets due to both pilot shortages and high fuel consumption. Faye Malarkey Black of the Regional Airline Association told Aviation Daily back in June that “I think the service we provide to the smallest communities has never seen a bigger existential threat than we see today.” Since 2019, 71% of small communities have lost some or all of their air service. Also in June, Bill Swelbar of Swelbar-Zhang Consultancy identified 89 airports vulnerable to losing additional air service that are within 180 miles of a large or medium-hub airport, of which more than half are “highly vulnerable” and served by a single carrier.

One trend that may help is the continued growth of ultra-low-cost carriers (ULCCs), which are filling in for some of the lost smaller-airport service. Recently Swelbar noted startup ULCC Avelo launching service to Kalamazoo, MI, and Breeze providing cross-country (hub-avoiding) routes from eastern airports including Charleston, SC and Richmond, VA. As I was writing this article, I received a news release announcing new Breeze service to Provo, UT, Savannah, GA, and Westchester, NY. According to Swelbar-Zhang, ULCCs now serve 192 cities. And between 2007 and 2021, ULCCs added 46 small and non-hub airports to their networks, while legacy carriers exited 43 such airports. But as Swelbar has pointed out, ULCCs typically operate something like two flights per week on a route, compared with two to three daily departures provided by traditional regional carriers.

Another idea has been proposed by SkyWest CEO Chip Childs, which has announced plans to end service to 29 small cities. It has applied to FAA for permission to launch a charter airline subsidiary, SkyWest Charter. That entity would operate under Part 135 regulations applicable to planes with no more than 30 seats. Most regional carriers operated under Part 135 until the mid-1990s, when FAA transitioned most of them to airline-category Part 121. Pilot qualification requirements are less-stringent for Part 135 carriers, which would help the new charter operation with pilot and copilot recruitment.

Longer term, of course, there is the prospect of Regional Air Mobility (RAM)—new-generation electric and eVTOL aircraft with ranges up to several hundred miles and (one hopes) passenger capacity more like 12 to 30, compared with Urban Air Mobility eVTOLs carrying four passengers. RAM would not be “the” solution for small airports, but it could be one part of a solution.

One other point should also be considered: reforming or ending Essential Air Service (EAS) subsidies. As Swelbar has pointed out, subsidizing service to small airports within 120 miles of medium and large airports is essentially “paying people not to get on the highway and drive to larger airports with superior service.” To be sure, ending or reducing EAS might become politically feasible if Regional Air Mobility can actually offer a cost-effective alternative to driving to those larger airports with far more destinations.

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The Growing Case for Digital Towers

For more than a decade, I have been reporting global progress in replacing physical control towers with what were originally called “remote towers.” That’s because the earliest applications were to provide tower services at small airports based on cameras and other sensors at the small airport and the control room located on the ground somewhere else—potentially several hundred miles away. Today, however, this phenomenon is increasingly referred to as “digital towers,” thanks to a much wider range of use cases.

London Heathrow Airport (LHR) is a good example. Its air traffic control is provided by the U.K.’s ANSP—NATS. LHR replaced its old tower with a new one in 2007, at a cost of £50 million. They are not ready to scrap it. Instead, they are enhancing its performance by installing 18 cameras on the tower, and another set of cameras on the two LHR runways. Data from those cameras is sent to a new digital lab on one floor of the tower, with large display screens like those in a remote tower centers now operational in Germany, Norway, and Sweden. The lab was created and is operated by Searidge Technologies, a company owned jointly by NATS and Nav Canada.

One of the earliest applications developed by the digital lab was a solution to an operating condition called “Tower in Cloud.” When this low-visibility weather condition occurs, controllers atop the 87-meter (285 ft.) tower cannot see the entire arrival runway. The traditional practice in such conditions is to slow down the arriving traffic, from 48 arrivals per hour to just 40. This was due to the lag time in controllers getting information from surface radar about where each plane is on the runway and when it has exited. The solution involved two improvements: first, install cameras at each exit on the arrival runway, to be followed by cameras at the “hold line” of the departure runway.

Assisting with this new runway surveillance system is a network-based artificial intelligence system called Aimee. It monitors every runway exit simultaneously and tells the controller precisely when the tail of the aircraft clears the runway. This enables an increase in the safe aircraft arrival rate during Tower in Cloud conditions (and could do the same thing for Seattle’s tower). Both LHR runways are fully equipped with the cameras, because arrivals go to one runway in the morning and to the other in the afternoon.

Another advantage of the digital facility in the tower is night-time visibility. There is considerable glare from lighted buildings, lighted parking areas, and general light pollution from the large metro area. Moreover, far away from those buildings the runways and taxiways are largely in the dark. The cameras can see better in the dark than human eyes looking out the window.

LHR is in the approval process for building its long-needed £2.5 billion third runway. It will not be visible from the existing tower cab, and LHR and NATS have no desire to build a new tower to serve that runway. So their plan is to control traffic on the new runway digitally.

This sensible approach could be adapted to solve a current problem at Chicago O’Hare (ORD). Its relatively new set of east-west runways have led to increased aircraft noise east and west of the airport during the night. To address this problem, the O’Hare Noise Compatibility Commission in August approved an “overnight runway rotation” plan aimed at evenly distributing the noise around the region. Given the wide north-south expanse of the new runway configuration, ORD added two additional control towers to serve the northernmost and southernmost runways. But those towers are closed at night (presumably for budgetary reasons). Hence, no landings or take-offs occur on those two at night—and hence, only four of the six east-west runways are left to “rotate” the nightly noise exposure. Outfitting those two runways with Heathrow-type cameras, etc. would enable them to be controlled from ORD’s main tower. But fat chance of FAA considering such a 21st-century solution.

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News Notes

User Fees for New Airspace Users
American Airlines CEO Robert Isom told attendees at last month’s U.S. Travel Association conference that new users of the airspace—such as drones, eVTOLs, and space launch companies—should start paying for their use of the air traffic control system. In a sign of potential opposition, drone organization AUVSI argued against pending proposals in some state legislatures for user taxes on those who use low-level avigation easements—in effect, toll lanes for drones.

Ligado Network Will Jam Iridium Receivers, Study Finds
In a report requested by Congress, the National Academies of Science, Engineering, and Medicine found that while “most” commercial GPS receivers will not be jammed by Ligado’s 5G wireless network, it will interfere with Iridium’s mobile satellite services used by the Pentagon (and also by Aireon, which provides space-based ADS-B services to airlines and ANSPs). Specifically, the report found that “Iridium terminals will experience harmful interference on their downlink caused by Ligado user terminals operating in the UL1 band while those Iridium terminals are within a significant range of a Ligado emitter—up to 732 meters.”

Virgin Islands Seeks Airports P3
The Virgin Islands Port Authority (VIPA) plans to issue a request for qualifications (RFQ) for teams that may be interested in a long-term DBFOM concession to upgrade and manage the terminals at its two commercial airports, on St. Croix and St. Thomas. A request for proposals (RFP) may be issued by the end of the year, according to an article in Inframation News (September 22nd). Similar P3s have modernized Jamaica’s airport terminals in Kingston and Montego Bay.

Ferrovial and AECOM Seek Florida Vertiport Sites
Ferrovial Vertiports and AECOM will work together to identify sites for a planned vertiport network in Florida. The agreed-upon due-diligence protocols will consider airspace, soil conditions, weather patterns, utility sources, intermodal connections, potential eVTOL service volume, current and potential types of eVTOLs, and community priorities regarding noise, safety, and sustainability. Ferrovial is working with German eVTOL developer Lilium, whose eVTOL is targeted mainly at inter-city travel.

FAA Issues Interim Vertiport Design Guidance
On Sept. 26, FAA issued preliminary vertiport design standards, cautioning that, as of now, the agency does not have enough validated eVTOL performance data, so this guidance is a general outline. The agency hopes to issue an Advisory Circular with more specifics in 2024-25, according to Aviation Daily’s report on Oct. 4. The newsletter pointed out that the current FAA engineering brief is not closely aligned with the current European standard, according to Rex Alexander of helicopter consultancy Five-Alpha.

Vietnam Planning $1.7 Billion P3 Airport
Consistent with its national government’s plans to improve airport capacity, the province of Kon Tum in the Central Highlands is planning development of a major airport with a capacity for between 3 million and 5 million annual passengers. Construction is planned to begin in 2023, assuming the selection of a qualified P3 team.

Japan’s Kagoshima Considers Airport Privatization
In March 2022 the Kagoshima prefecture released its vision for the future of its commercial airport, saying that it would consider a P3 concession to finance improvements and operate the expanded airport. Last month it announced that it is gathering information about Japan’s recent experience with airport P3 concessions. The vision for the airport calls for 7.3 million annual passengers by 2030, compared with 5.6 million before the pandemic. The Inframation News article cites existing airport concessions in Japan and says the national government “would like all the country’s 97 airports to be privatized.”

More Electric Taxiing News
Germany’s Düsseldorf Airport has agreed to work with WheelTug on a feasibility study of the company’s FASTGate (Fast And Safe Turn) system. WheelTug installs motorizing capabilities on commercial airliners, enabling planes to taxi in and out without needing a conventional tug or using the plane’s engines. A recent feasibility study at Mumbai International Airport identified potential annual savings of tens of millions of dollars. Competitor Safran has redesigned its powered wheel system to operate one wheel on each of the two main landing gear assemblies and reduced its weight. These systems are more feasible for short/medium-range aircraft (A320, B737 families) which involve many takeoffs and landings per day.

Greece Studying Privatization of Kalamata Airport
The national Hellenic Corporation of Assets and Participations (HCAP) last month released a request for qualifications for the privatization on Kalamata International Airport in southern Greece. HCAP envisions a 40-year P3 concession that includes modernization and expansion plus operation of the airport. In addition to serving 340,000 annual passengers, Kalamata is also a base for the Hellenic Air Force.

Puerto Rico Decides Not to Privatize Regional Airports
Inframation News reported (Sept. 19) that the Puerto Rico Ports Authority has dropped plans to hire a private company to operate, manage, and improve its nine regional airports. The newsletter cited two sources, which said that the decision came about partly due to local political opposition and also to the dire financial condition of the airports.

IFM Increases Bid for Vienna Airport Stake
Australia’s IFM Global Infrastructure Fund on Sept. 16 increased its bid for 10% of the shares in Vienna Airport. The city of Vienna, the province of Lower Austria, and the Employee Foundation together own 50% of the shares. Back in June, IFM Investors made a nearly €3 billion offer to take full control of the airport, but that bid was rejected.

Macquarie Buys Major Share of Latin American Airport Companies
Australian infrastructure giant Macquarie has closed a deal to acquire 50% stakes in airport companies Odinsa and Corporacion Quiport. Odinsa is the developer/operator of El Dorado International Airport in Bogota, Colombia. And Corporacion Quiport is the developer/operator of Sucre International Airport in Quito, the capital of Ecuador, serving 5 million annual passengers.

Good Reading on LaGuardia’s New P3 Terminal
The Team that Fixed LaGuardia,” by Ben Cohen in the Sept. 17 issue of the Wall Street Journal, tells the story of how a small team of LGA leaders, led by Frank Scremin of Vantage Airport Management, built the gleaming new Terminal B at LaGuardia airport. Their Operational Readiness and Transition (ORAT) team not only managed to keep construction on track while keeping key elements of the terminal in operation during construction but also tested and fine-tuned all its systems before the re-opening this year.

San Antonio Plans to Privatize Car Parking
Before year-end, San Antonio International Airport plans to issue a request for proposals (RFP) to upgrade and optimize its parking garages, which increasingly have to turn away would-be customers. They have in mind one of several privatization/P3 options, including a long-term concession. The airport already has a 30-year DBFOM concession with American Corporate Airport Partners that built a corporate hangar complex that the airport continues to lease to various tenants.

$7.4 Billion Invested in Advanced Aerial Mobility Thus Far
Aviation Daily (Oct. 13) reported that recent investments by United Airlines in Embraer spinoff Eve Holding and by several investors in Japan’s SkyDrive brought the reported total raised by eVTOL startups to $7.4 billion. In first place among startups is Joby Aviation ($1.8 billion) with Lilium next ($938 million).

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Quotable Quotes

“Our results suggest that [airport] privatizations, especially by PE [private equity] funds, do well both for their investors and for the general public. They increases the fees they charge airlines but despite these higher fees, also increase the number of passengers flying through them. They appear to accomplish this by providing better service, offering passengers nonstop flights to more places, lower cancellation rates, and better amenities inside the airports. Our results suggest that PE ownership increases productivity more than non-PE private without significantly different effects on prices (fees), suggesting overall benefits relative to non-PE ownership.”
—Sabrina T. Howell, Yeejin Jang, Hyeik Kim, and Michael S. Weisbach, “All Clear for Takeoff: Evidence from Airports on the Effects of Infrastructure Privatization,” National Bureau of Economic Research, NBER Working Paper 30544, Sept. 2022

“Today aircraft [in Europe] do not fly their most-efficient routes for various reasons. If we were to have every flight operate in the most optimal way, the perfect flight would have about a 10% emissions reduction between the reality we see today and the perfect flight. The perfect flight is something we will probably never obtain, but definitely between 0 and 10% there is a lot to be gained by having better flight efficiency, including by improving air traffic management.”
—Filip Cornelis, in Helen Massy-Beresford, “European Commission Urges Single European Sky Progress,” Aviation Daily, June 23, 2022

“I don’t believe anything is going to change between now and three years in how airspace operates. There is a path to certify a piloted vehicle but not a path to certify an autonomous vehicle. The goal of some of our members is to have fully autonomous vehicles but no one, including AIA, expects to have to happen in the next three to five years. We do intend to understand what we need to do to certify from an autonomous standpoint.”
—David Silver, Aerospace Industries Association, in David Hughes, “Highways in the Sky,” Aerospace Testing International, June 2020

“The [eVTOL] challenge is at the moment we’re looking at four-seaters with a pilot. It’s hard to see how you could ever make money out of that. Also, the question is will they ever be able to land airside? Do they have to land outside the airport if they’re bringing people to the airport? The concept that they’re going to pick up passengers at the top of a skyscraper in London or Sao Paulo? No way. The owners of those skyscrapers will never let random people into their building to go up to the top floor. . . . At some point you’ll get something that may work. A four-seater I don’t see, particularly without a pilot on board, and I don’t see it getting certified without a pilot on board.”
—Aengus Kelly, CEO of AerCap, in Helen Massey-Beresford, “CEO of World’s Largest Lessor Skeptical of eVTOL Air Taxis,” Aviation Daily, Oct. 14, 2022

“NATS doesn’t see building physical towers as something that is going to continue. I am not suggesting that someone who already has a physical control tower has to throw that tower away. We can enhance it with digital control tower capability. However, if that tower comes to the end of its life, a 100 percent digital tower facility will be a perfect replacement, and it will give the airport far more than a physical tower can provide.”
—Andy Taylor, NATS Chief Solutions Officer, in David Hughes, “Digital Tower Technology Goes Big with NATS at Heathrow,” The Journal of Air Traffic Control, Spring 2019

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