Aviation Policy News: Responses to airport lease study, airport security since 9/11, and more
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Aviation Policy Newsletter

Aviation Policy News: Responses to airport lease study, airport security since 9/11, and more

Plus: Airport security since the 9/11 attacks, how climate change policies impact air travel, a better way to deal with in-flight turbulence, and more.

In this issue:

Responses to Reason Airports P3 Lease Study

Last month, Reason Foundation released a study estimating that 31 large and medium hub airports could have a market value of $131 billion, which their city, county, or state government owners could monetize to invest in other infrastructure, pay down debt, and/or reduce their unfunded public employee pension system liabilities.

As I expected, there has been considerable media interest in the study, especially in metro areas where the 31 airports are located. You can read some of the national media coverage at Bond BuyerForbes, and Governing and some of aviation-focused media reporting by Aviation Week (subscription req’d), Aviation International NewsAviation ProsFlyer Talk, and Transportation Today. In addition, the study has been the subject of discussion and debate online and in various aviation and transportation discussion groups so I thought it would be useful to respond here to a number of the concerns expressed.

Several knowledgeable aviation people have criticized the report’s use of a single “high” multiple of earnings before interest, taxation, depreciation, and amortization (EBITDA) as inherently flawed to measure what a particular large or medium hub airport might be worth in a lease deal. That of course is correct; any actual offer would be based on a bidder’s assessment of that specific airport’s operating costs, need for improvements, potential traffic increases, ability to expand capacity, and many other factors. One purpose of the study was to help make airport owners (the city, county, and state governments that own these specific 31 airports) aware that they are sitting on a very valuable asset on which they are currently not getting any direct financial return, due to federal law. The report helps provide the latest on the global move toward investor ownership and global airport company operation of numerous large and medium airports in Europe, the Asia/Pacific region, and Latin America and the Caribbean. The study also explains that, under the 2018 Airport Investment Partnership Program, it is now quite legal to lease their airports long-term via a public-private partnership. While the management staff at these U.S. airports are probably well aware of these trends and developments, some elected officials of these government owners may not be.

Another criticism has been that our EBITDA-multiple estimates of market value understate many airports’ likely value. We had extensive internal debates on the valuation methodology, as well as discussions with the study’s external peer reviewers. We decided to use conservative value estimates, reasoning that it was better to be proved wrong on actual bids higher than we estimated than to be criticized for overly optimistic estimates. In this context, I was pleased to see that the current public-private partnership (P3) company that operates Sydney International Airport (SYD), after rejecting two bids as too low, has now opened negotiations with the team of IFM Investors and Macquarie on a revised $17.4 billion offer for the remaining years of Sydney’s 50-year P3 lease. That is close to our study’s $17.8 billion “high” estimate for Los Angeles International Airport, an airport with twice the annual passengers of SYD.

An airport consultant friend pointed to one of the failed bids for Chicago’s Midway Airport (MDW) a decade ago as having worked out a deal structure with its airlines (mainly Southwest) that could not cover airlines’ share of MDW’s capital and operating costs. That deal structure (a short-term freeze on rates, followed by annual Consumer Price Index-based increases) is basically the same template that won airline approval of P3 leases in San Juan (operational), St. Louis, and Westchester County. What the consultant neglected was the potential not only for cost reductions but also for improved management to produce increases in non-aeronautical revenue (parking, rental cars, retail concessions, etc.). Both Chicago airports in the study rank near the bottom in the fraction of airport revenue that comes from non-aeronautical sources—just 35% at MDW and a pathetic 27% at O’Hare. U.S airports generally perform well below investor-run airports overseas, which often get 60% or more of their revenue from non-aero sources. Of the 31 airports in the Reason study, 14 generate less than 50% of their revenue from non-aero sources.

Several aviation people raised the question of a higher cost of capital since U.S. airports (unlike their overseas counterparts) finance capital projects via tax-exempt debt. Those bonds must be retired in the event of a change of control (such as a long-term P3 lease), as the study noted in subtracting outstanding bonds from the estimated asset value. And yes, all financing done by the P3 company will have to be done at taxable rates, unless and until Congress changes the tax code. The 2018 White House infrastructure plan outline called for allowing a P3 company to take over and continue to pay debt service on existing transportation entity tax-exempt bonds. And Congress many years ago allowed surface transportation P3 companies to issue tax-exempt private activity bonds for improvement projects. In the absence of such a change, the question becomes: Are the benefits of a P3 lease high enough to offset the higher average cost of capital? Part 2 of the study summarizes research demonstrating very real benefits from investor-run airports.

One other criticism was a reminder that a handful of U.S. airports have a grandfathered exemption from the FAA grant assurance that forbids revenue diversion to non-airport uses. Table 4 in the study shows the annual revenue diverted to the six grandfathered jurisdictions that own airports in the study. Except for the state of Maryland ($155 million per year), the amounts are trivial, ranging from $5.6 million to $26.5 million per year.

I’ll stop here, but welcome hearing other concerns from aviation professionals and airport owners.

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Aviation and Climate Change Policies

I’m increasingly concerned about the kinds of policy ideas being considered, especially in Europe, to restrict the scope of air travel in the name of reducing aviation’s impact on global climate change.

For example, discussions are under way within the European Union about banning short-haul flights, which has been partly implemented thus far by Austria and France. A “moderate” policy from the International Energy Agency (IEA), called its Net Zero Emissions (NZE) plan, would require airline passenger miles to grow by only 3% a year compared with pre-pandemic growth of 6% annually. A French study asserted that it will be common by 2040 for an A320 to have to leave 30 seats unoccupied in the three summer months, due to much higher temperatures in 2040. Aviation Week even published a guest editorial reporting that several studies on the impact of the CO2 emitted by an airliner over its life found that this would lead to 226 deaths by the end of this century. The author, Dan Rutherford, suggested that airliners with emissions this high could (should) be deemed unfit to fly by safety regulators.

When I read assertions of this kind, my first question is: based on which Intergovernmental Panel on Climate Change’s (IPCC) scenario? The IPCC’s periodic reports focus on five climate change scenarios. The one that gets the most attention in the summary for policymakers is called RCP8.5 and is described as the “business as usual scenario.” Yet this scenario, whose underlying assumptions are largely unchanged from the first IPCC report in 1990, assumes a six-fold increase in global coal consumption per capita by the year 2100. That is at odds with the IEA’s conclusion that fossil fuel energy emissions have likely peaked and will be going down between now and the end of the century. The latest IPCC report, dubbed its sixth assessment report (AR6), retains a slightly modified version of RCP8.5 called SSP5-8.5. That unrealistic scenario (because it does not include numerous actual and proposed policy changes) has a best-estimate temperature increase by 2100 of 4.4˚ Celsius (C). By comparison, the mid-range scenario (SSP2-4.5) has a far less-drastic best estimate of 2.7˚ C. That’s still higher than anyone would want, but far less damaging than the SSP5-8.5 scenario.

For some additional aviation context, a webinar presentation by Valerie Masson-Delmotte of France’s Institut Simon Laplace reported that aviation accounts for 3.5% of global anthropic radiative forcing, a far better measure of impact than aviation’s CO2 emissions. As Thierry Dubois reported in Aviation Daily (March 15, 2021), Masson-Delmotte noted that “non-CO2 effects represent two-thirds of that contribution.” Thus, aviation’s CO2 emissions account for only 1.16% of anthropic radiative forcing. The other impacts are due to contrails, water, and nitrous oxide emissions, which are likely easier to reduce than CO2.

It is important for the commercial airline industry to dig into the IPCC models so as to distinguish between hyperbole (based largely on the highly implausible RCP8.5) and the more realistic scenarios. Aviation climate change policies must be based on scenarios that reflect ongoing changes in countries’ energy use, demographics, etc. as well as likely policy changes in coming decades. I can recommend two readings to give aviation policymakers a better grounding in this complex subject. The first is a short paper published in Issues in Science and Technology Policy by Roger Pielke, Jr. and Justin Richie, “How Climate Scenarios Lost Touch with Reality.” The other is a book, Unsettled: What Climate Science Tell Us, What It Doesn’t, and Why It Matters, by Steven E. Koonin. He’s a former professor of theoretical physics at Cal Tech and has held numerous positions with various science institutions. He was Undersecretary for Science in the U.S. Department of Energy during the Obama administration.

One last thought on this very important subject concerns policy choices. A thoughtful article in The Economist, “Carbon Abatement: Giving Up Carbs” (Feb. 27, 2021) explains a growing body of thought that since resources are limited, the most sensible approach to deciding on GHG reduction methods is to calculate the bang for the buck for every proposed policy. It leads off with two European examples. A cargo bike program in Berlin would reduce carbon emissions by only seven tonnes per year, which worked out to costing the city €50,000/tonne. By contrast, a project that subsidized low-carbon heating systems cost only €200/tonne. The article includes a chart that compares the cost per ton of a large array of carbon-abatement projects. Electrification of ground transport vehicles is estimated to cost between $800 and $1,000 per ton of CO2 equivalent. In other words, some carbon-abatement proposals possibly should not be implemented, because they are far less productive than others. In his book How to Avoid a Climate Disaster, Bill Gates endorses a version of this idea, to distinguish between poor and productive investments in carbon reduction.

The aviation industry should insist on rigorous cost-per-ton estimates for every proposed aviation carbon-abatement idea. Investing billions on changes that hardly move the needle will do little good for the climate while potentially devastating a vitally important industry.

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A Better Way to Deal with In-Flight Turbulence

A not-yet-released study by the National Transportation Safety Board (NTSB) was previewed in a board meeting presentation and summarized by Sean Broderick in Aviation Week (August 30-September 12, 2021) It turns out that turbulence causes more U.S. air carrier injuries than any other cause. NTSB had not looked into this subject since 1971, when only one-seventh as many people were flying.

One of the key findings in the report is the inadequacies of pilot-generated weather reports (PIREPs). These are created in-flight and transmitted to air traffic control. There are numerous problems with this system. For one thing, there is no standard terminology for the seriousness of the turbulence, and pilots may wait until they are well past turbulent air before generating and sending a PIREP about it. Less than 10% of weather-related notifications to controllers included a PIREP, and controllers have non-standard ways of dealing with PIREPs and may be too overloaded to deal with them right away. Hence, planes that should have been warned about upcoming turbulence may not get the warning.

Automation is the key NTSB recommendation, and it is long overdue. To account for the subjectivity of individual pilots in assessing the severity of turbulence, the agency recommends creating a system that would use technology to measure conditions such as turbulence and send the information to air traffic control, so it can warn following aircraft. Tests of such systems have been done in recent years, and the International Civil Aviation Organization (ICAO) recommends one that uses onboard software to collect real-time data on airspeed and angle of attack and then calculates an eddy dissipation rate, or EDR (comparable to the height of a wave in the ocean). Several commercial systems are available to do this, but they apparently are proprietary.

Global airline organization IATA favors shifting to an open-source EDR developed by the U.S. National Center for Atmospheric Research, with the cooperation of Delta, Southwest, and United. Called Turbulence Aware, it lets airlines create a turbulence reporting system that will automatically report any EDR higher than a pre-set value and report it to the ground (airline dispatchers). But such messages could also be sent automatically to air traffic control so that controllers could warn following aircraft. Boeing already offers the software for this on its new planes, and it is also available for retrofit. Turbulence Aware is currently in use by 15 operators encompassing 1,500 aircraft.

NTSB is also recommending that the Federal Aviation Administration update its guidance on preventing injuries from turbulence. It would be good to see FAA at least encouraging airlines to embrace Turbulence Aware, if not requiring it. Creating PIREPs by hand is a burden on pilots, and using them promptly is a burden on controllers. These burdens could be alleviated by automating turbulence reporting.

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Addressing Small Drone Safety
By Marc Scribner

Integrating small unmanned aircraft systems (UAS weighing less than 55 pounds) into the National Airspace System continues to face challenges nearly a decade after Congress ordered the U.S. Department of Transportation to develop a comprehensive UAS airspace integration plan. A significant challenge has been adequately identifying and mitigating safety hazards that may be introduced by unmanned aircraft operations. The Eno Center for Transportation earlier this month released a white paper (“Guiding the New UAS Industry to Safety Excellence”) authored by aviation industry veteran Ken Dunlap that attempts to address these difficulties and chart a path forward. Dunlap does an admirable job surveying the field and making concrete recommendations to Congress, FAA regulators, and the small UAS industry itself. However, some of his recommendations raise additional questions that should be addressed before acting upon them.

The Eno report focuses broadly on two elements: fostering a safety culture within the UAS industry and using that as a springboard to develop and deploy Safety Management Systems for small UAS operators and manufacturers. (Note that about 60% of registered U.S. small drones are non-commercial.)

“Safety culture” is defined as “the fundamental attitudes and approach to resolving risks used by an organization, whether an individual or a group of people.” Dunlap acknowledges that instilling a safety culture in the small UAS industry may be more difficult than with legacy aviation industry segments, both because of the novelty of UAS and the fact that many of those working for small UAS startups come from outside of aviation. As he notes, “The tech industry’s famous ‘move fast and break things ethic’ likely does not have any analogs in aviation,” and this mantra and the modus operandi it implies are unlikely to be viewed favorably by regulators and traditional airspace users.

Despite those complications, Dunlap recommends a sensible path forward. He suggests that adherence by actors in small UAS market segments to the emerging body of industry consensus standards can serve as building blocks for developing organizational safety cultures. Among other specific recommendations, he urges Congress to mandate that FAA create new federal UAS safety standards that rely on consensus standards.

However, as Dunlap notes, according to a federal government database (albeit one last updated more than five years ago), FAA currently incorporates just seven consensus standards in its regulations. My review of that same database found that 97% of standards incorporated by reference in FAA regulations are government-unique. This is quite different from the practices of the National Highway Traffic Safety Administration and the Federal Motor Carrier Safety Administration. Unlike FAA, those agencies have a history of relying heavily on industry consensus standards for their minimum safety and performance regulations. This practice long predates the federal-wide policy established during the Clinton administration encouraging the use of industry consensus standards in lieu of government-unique standards (OMB Circular A-119).

This divergence in practice among federal transportation safety regulators suggests something that Dunlap does not mention: perhaps it is FAA culture that needs to evolve first in order to better facilitate regulatory and non-regulatory safety measures administered by FAA. Outdated agency practices are unlikely to support the goal of fostering foundational safety cultures for operators and manufacturers of emerging aviation technologies.

Further, Dunlap does not address a common complaint made by regulated entities of those agencies that do make wide use of consensus standards in rulemaking: antiquated standards are locked in regulation long after those standards have been revised by the standards-developing organizations. If FAA is to incorporate more consensus standards in regulation—and it probably should—it should also develop a periodic “audit and update” process to identify outdated standards in regulation and take steps necessary to conform regulations to updated standards as technology evolves.

In contrast to the sometimes nebulous qualities of a safety culture, a Safety Management System (SMS) offers tangible “repeatable, persistent, transparent, and auditable processes in operations from the field to the boardroom.” Dunlap provides an excellent overview of the history of SMS in the U.S. transportation regulatory context and the necessary elements for an SMS to be successfully implemented.

Of particular relevance is the FAA’s 2015 SMS mandate on Part 121 scheduled air carriers. That effort (which took six years) was required by Congress in response to the 2009 Colgan Air flight 3407 crash in upstate New York that killed all 49 passengers and crew plus one person on the ground. An SMS mandate for FAA-certificated airports may be coming as soon as next month. Building off existing uses, Dunlap recommends different risk-based SMS approaches for the various small UAS industry segments.

Despite Dunlap’s laudable efforts on this front and the conceptual soundness of his recommendations, it is apparent why commercial UAS manufacturers and operators may resist this proposal. The 2015 final rule mandating SMS for Part 121 scheduled air carriers included a less-than-stellar regulatory evaluation that estimated 10-year implementation costs of $135.1 million and benefits ranging from $104.9 million to $241.9 million (in 2010 dollars, using OMB’s required 7% discount rate).

In the face of the SMS rule’s potential negative net benefits, it is no surprise that Part 135 on-demand and charter carriers have opposed a similar SMS mandate. They argue the costs are excessive, the benefits unimpressive, and that an SMS mandate would disrupt existing safety protocols and culture. And if Part 135 operators of commercial passenger turbojet aircraft carrying up to 30 passengers and weighing in excess of 25,000 pounds on takeoff are not subject to federal SMS requirements, should rolling out an SMS mandate on small UAS weighing less than 55 pounds and carrying no people take priority with Congress and FAA?

Notwithstanding these additional questions raised by Dunlap’s recommendations (which should be answered before proceeding with new legislation and regulation), the report is a thoughtful and thorough analysis of a complex web of issues deserving more attention. The UAS industry and aviation policymakers should carefully consider its recommendations as we approach the forthcoming FAA reauthorization due by October 2023.

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Aviation Security: The Legacy of 9/11

In the days following the unprecedented terrorist attack on Sept. 11, 2001, I was dismayed by hasty calls for the federal government to take over all airport security. My friend Viggo Butler (of airport company Lockheed Air Terminal) and I wrote a policy brief arguing that the airport security failure that tragic day was in using unqualified contractors with no performance standards and no real federal oversight. We pointed to successful European airports’ use of security companies with strong performance requirements and national government oversight. Airport security workers were employed directly by the airports. By contrast, the extant U.S. passenger screening was an unfunded mandate imposed on airlines. And with no real performance requirements, airlines carried out this mandate as inexpensively as possible.

In response to that policy brief, that October a conservative think tank invited me to spend a week in DC on this topic, which included brainstorming meetings with White House staffers and discussing emerging legislation with staffers of the House Aviation Subcommittee (which had jurisdiction, since airport screening was an FAA program). At the end of the week, I took part in a news conference on the Capitol steps with House Transportation and Infrastructure Committee Chair Don Young (R-AK) and Aviation Subcommittee Chair John Mica (R-FL). We explained the European performance contracting approach as preferable to creating a whole new federal agency, and the House bill that emerged was based on that approach.

Unfortunately, the Senate bill called for a complete federal takeover, creating the Transportation Security Administration (TSA) as the new provider of all airport security. Not really understood was that this created an entity that was both the aviation safety regulator and the biggest component (in budget and staff) of the safety apparatus to be regulated—i.e., self-regulation. Eventually, the Bush White House caved and the legislation based mostly on the Senate’s federal takeover approach passed. Our only consolation prize at the time was the five-airport pilot program allowing them to test privately contracted screening with strong performance standards. That eventually evolved into TSA’s Screening Partnership Program (SPP), which today has 22 airport participants.

Twenty years after 9/11 we are still stuck with TSA’s built-in contradiction—being both the aviation security regulator and the largest component of airport security. And since aviation security is politically fraught (as is Food and Drug Administration drug-approval policy), it has proved very difficult to change policies that are clearly not cost-effective. Over the past 20 years, this newsletter has reported on research that seriously questions the value of federal air marshals, given both strengthened cockpit doors and the Federal Flight Deck Officer program. It has also cited reports from the Government Accountability Office and the Department of Homeland Security Inspector General’s Office on the continued poor performance of TSA checkpoint screening. The Screening Partnership Program (SPP) is far too centralized; airports should be free to solicit proposals from any TSA-certified screening company and to choose the one that best meets their needs. That would be a proper regulatory/oversight role for TSA. And GAO audits of SPP find that TSA stacks the deck on the cost comparison between TSA and contract screening by failing to include various TSA overhead costs (such as pensions and human resources) that are part of any screening entity’s cost structure.

There has been some progress in airport screening. After a decade of TSA stonewalling, we finally got a genuine trusted traveler program (PreCheck) in 2013. Screening checkpoints at airports are gradually replacing 2-D X-ray scanners with 3-D computed tomography scanners, so far at 140 of the country’s 500 commercial airports. Sean Broderick reports on the DHS Science & Technology Directorate’s “Screening at Speed” project, aiming to make screening “a more self-guided activity,” based on new technology. (Sean Broderick, “Gradual Gains,” Aviation Week, August 30-September 12, 2021)

One can hope that DHS technologists will be free to consider abolishing obsolete and poorly justified policies, such as mandatory shoe removal (for all but PreCheck passengers). As noted in a recent commentary by Reason’s Jacob Sullum, the only two other large countries that do this today are Russia and the Philippines. International practices on liquids in carry-on bags vary widely, according to the same article.

Congress shows little interest in serious reform of TSA, so we are likely to be stuck with its inherently contradictory structure and heavy-handed approaches for a long time.

Note: My detailed assessment of TSA problems appears as Chapter 14 in Protecting Airline Passengers in the Age of Terrorism, Paul Seidenstat and Francis Splane (eds.), Praeger Security International, 2009. My airport security-related work and archive is available here.

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News Notes

Newark Slots Opened to Low-Cost Carriers
FAA has decided to make available 16 vacant slots at Newark Liberty International Airport (EWR) to low-cost carriers. They are former slots held by Southwest Airlines, which departed EWR several years ago. The decision is consistent with the Biden administration’s executive order on competition, which requires each federal agency to take steps to increase competition in the industries it oversees. Southwest got the slots in 2010 as part of the decision to permit United Airlines (the dominant carrier at EWR) to merge with Continental Airlines.

Airbus, Boeing, and ICAO Urge Integrated Airspace Management
At an August conference of the Electric Aircraft Technologies Symposium, the International Civil Aviation Organization (ICAO) announced a project with aviation stakeholders to develop “a global vision for integrated air traffic management that meets the needs of all existing and emerging airspace users.” According to Aviation Daily (Aug. 31, 2021), both Airbus and Boeing have been advocating such an effort. Both companies portrayed Unmanned Traffic Management (UTM) as the key enabler or common foundation for this broader rethinking, with Boeing’s speaker saying that UTM is foundational for that vision. Both companies would like to see a global action plan for UTM, which could then be the basis for expanding those concepts to the rest of the airspace.

Gatwick Under Way on Second Runway Plan
Last month, London Gatwick Airport (LGW) formally began the process under which it plans to upgrade its parallel taxiway to a complete second runway. On August 25 it announced the launch of a public consultation process for the conversion. The project would require moving the taxiway’s centerline 12 meters (39 feet) to the north, to comply with current dual-runway separation standards. Due to its 8,413 ft. length, the second runway would be limited to 737 and A320 aircraft types, and the plan calls for using the new runway only for departures. This is expected to add capacity for 12 million additional passengers. LGW hopes to obtain planning permission by 2024, with construction completed by 2029.

India Launches Airport P3 Lease Program
Last month, India’s government announced plans to open 25 airports to long-term public-private partnership (P3) leases over the next four years. The airports would remain owned by the Airports Authority of India, with six to be leased in 2022, eight in fiscal 2023, six more in 2024, and the remaining five in 2025. The largest of these airports is at Chennai, which served 22 million passengers in 2019. The airport P3 program is part of a larger National Monetization Plan aiming to raise a total of $81 billion over four years; four percent of that would come from the airport leases ($3.24 billion).

Parking Structures as eVTOL Vertiports
Two electric vertical takeoff and landing aircraft (eVTOL) startup companies have signed deals with parking garage owner/operator Reef, which operates over 4,800 parking garages. Joby Aviation announced a deal in June, and Archer announced its own deal with Reef in August. Archer is targeting vertiport locations in its two planned launch areas, Los Angeles and Miami, and in an August 18th investor briefing, the company said it has identified locations for its first five vertiports. The parking structure idea is based on the size of their top decks and a minimal need for additional construction. Also, on September 12, Archer announced that it had reached an initial milestone toward FAA certification, a G-1 Issue Paper. Both Joby and Lilium have also reached that milestone or its European equivalent.

Joby and NASA Measuring eVTOL Noise Footprint
Early this month, Joby became the first eVTOL company to take part in NASA’s Advanced Air Mobility effort. It conducted a two-week test of its full-scale electric prototype aircraft, with a focus on measuring its acoustic footprint. The testing, near Santa Cruz, CA, involves NASA’s mobile acoustics facility, which uses more than 50 ground-based microphones in a grid array. The aim was to generate “noise hemispheres” that measure the intensity and character of the sounds, for comparison with helicopters. Noise is a critically important aspect of potential community acceptance of eVTOLs.

Biden Administration’s SAF “Grand Challenge”
On Sept. 9, the Biden administration announced a series of actions and programs aimed at increasing the production of sustainable aviation fuel (SAF) to three billion gallons a year by 2030. The primary agencies involved are Agriculture (USDA), Energy (DOE), and Transportation (DOT). Current levels of SAF are only 4.5 million gallons per year. This new Grand Challenge is in addition to the current administration proposal for a blenders’ tax credit of $1.50/gallon of SAF that yields a 50% lifecycle greenhouse gas reduction and $2/gallon for SAF yielding 100% reduction.

Puerto Rico Agencies Nearing Regional Airports P3 Decision
Inframation News (August 25) reported that the Puerto Rico Ports Authority and the Public-Private Partnership Authority are nearing completion of their assessment of long-term P3 leases of the nine regional airports that need upgrading. The P3 Authority has had great success with its 40-year P3 lease of San Juan International, which included a large up-front payment and annual lease payments plus revenue-sharing. The regional airports are far smaller, so the study is looking at what kind of financial arrangements would accomplish the public-sector goals while still being viable for one or more private partners.

San Jose Gets Two Proposals for Airport Connector P3
The San Jose Department of Transportation has received two unsolicited proposals for its project to link a downtown rail transit station with Mineta San Jose International Airport (SJC). One is from TCE Financial and the other is from Plenary Americas and Glydways. The agency plans to hold an industry day in mid-to-late October and to issue a request for proposals early in 2022. Some 23 companies responded to the request for information in 2019, but the project was put on hold due to the COVID-19 pandemic.

San Diego Moving Forward on $3 Billion Terminal Expansion
The California Coastal Commission has given its approval for a $3 billion project to replace Terminal 1 at San Diego International Airport (SAN). The new terminal will have 30 gates, compared with the 19 in the crowded existing terminal. The project will also include roadway improvements and a new parking garage. The Coastal Commission is requiring an on-airport transit station, a free shuttle from the Old Town neighborhood, and reduced greenhouse gas emissions.

Courageous NATCA Leaders Stepping Down
On Aug. 31, the top leaders of the National Air Traffic Controllers Association—President Paul Rinaldi and Exec. Vice President Trish Gilbert—announced their retirements from those positions after 12 years. When I first met with them, following a period of government shutdown in 2013, we had a laugh that the world would see our emerging alliance on air traffic control reform as strange bedfellows. That was because a predecessor NATCA leader had been very opposed to any form of air traffic control reform and had attacked Reason Foundation’s proposals on the subject. But Paul and Trish had learned first-hand that a politically funded and politically micromanaged air traffic control system was very suboptimal. After gaining detailed knowledge of ATC corporations Nav Canada and the UK’s NATS, they brought NATCA on board as the sole federal government union supporting air traffic control corporatization. We fought a good fight between 2013 and 2018 but were defeated by a coalition of other government unions, bizjet organization NBAA, and general aviation organization AOPA. Thanks, Paul and Trish, for fighting the good fight.

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Quotable Quotes

“The lessons from the [Robert] Poole research, the Indy concession, the San Juan success, and the St. Louis initiative might be summarized as follows. The public body needs to retain a role to protect important public values. The public needs to have a role in advancing a city’s tourism and economic development. Clarity regarding job protection needs to be addressed. And a compelling use of the proceeds—for example, one that compensates for historical inequitable infrastructure investment in urban neighborhoods—needs to be clear. If a city could put a billion dollars into its neglected neighborhoods and infrastructure without any drag on taxes or debt, then the effort of working through the complexities of unlocking the value of an asset like an airport would seem to be well worth it.”
—Stephen Goldsmith, “Why Big-City Airports Are Prime Candidates for ‘Asset Recycling,’” Governing, Sept. 15, 2021

“[T]he industry is only just beginning to tap into the full potential of digital tower technology. The idea that a digital tower is solely about replicating exactly what a controller can already see in a remote location is being increasingly challenged. With the right technology and specifically software, digital towers can be scalable and flexible in what they deliver for airports—from the smallest airfield to the world’s biggest hubs.”
—Andy Taylor (NATS), “Leading the Digital Tower Transformation,” Air Traffic Technology International 2022, September 2021

“20 years after the first comprehensive official warnings about GPS vulnerability, America has still failed to act. In fact, rather than moving forward, in some areas we have regressed. . . . GPS alternative projects within the Department of Defense are still in the science-project stage. The Government Accountability Office reports those efforts don’t have the support of senior leadership and often die on the vine. And despite nearly a dozen studies, a law requiring establishing a national alternative for GPS timing, and public promises by two administrations to create a backup system, nothing has been done. Worse, a national alternative system used by some telecom and other industries was terminated in 2010 against the recommendation of nearly every engineer and technologist in government. . . . Some analysts have opined that GPS is the highest-priority target for those who would do America harm, from lone-wolf hackers to hostile nations. And many think it is time to ‘get the bullseye off GPS’ with complementary and backup systems and restore America’s place in the world as PNT leader. Failing to do so will leave the cockpit doors open to nearly everyone, and the nation vulnerable to another devastating attack.”
—Dana A. Goward, “GPS Lessons from Before 9/11 Still Endanger the U.S.,” Resilient Navigation and Timing Foundation, Sept. 17, 2021

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