Monthly Archives: June 2011

Attack on Airport Ground Transportation Fees

By Channon Hanna

The providers of ground transportation services, including limousine companies, are behind the introduction of legislation which would prohibit airports from charging fees for the use of the airport facility by ground transportation providers.  H.R. 1691, the Prevention of Unreasonable Fees Act, was introduced by Congresswoman Laura Richardson (D-CA) and is co-sponsored by Congressman Allen West (R-FL).

Limo and taxi drivers want to use airport infrastructure and contribute to the wear and tear without having to appropriately pay for such usage. Some airport operators have chosen to charge airport access fees to providers of ground transportation services, such as taxis, limousines, and courtesy shuttles, in order to fund airport infrastructure that supports commercial ground transportation. A survey of ACI-NA’s members found that most airports use these fees to recoup costs the ground transportation providers contribute to the airport infrastructure.  The fees are used for projects such as access road maintenance, curbside security and law enforcement, and hold lot construction and maintenance.  In addition, some airports have invested in waiting facilities for the use of these providers which include restrooms and garage facilities.

There have been a number of court cases involving ground transportation providers suing airports regarding the right to collect access fees.  To date, airports have prevailed and the right to charge these fees has been upheld.  ACI-NA believes airport operators are entitled to fair revenue compensation from those who use our facilities and services.

A copy of the bill can be found here.

Contact ACI-NA’s Channon Hanna for more information.

2011 JumpStart® Sets New Records

By Aneil Patel and Liying Gu

Over 350 airport and airline representatives gathered i Cleveland, OH this week for the ACI-NA Marketing and Communications & JumpStart Air Service Development Program. The ACI-NA JumpStart® Program is the premier airport-to-airline networking program designed to bring airports and airlines together for face-to-face meetings. It has a 14-year track record of success. This year’s event will connect over 50 airline route planners from 26 airlines with more than 1,000 scheduled one-on-one meetings, which is a new record in the history of the JumpStart® program. This number does not take into consideration the side-meetings being conducted throughout the conference that are not on the official meeting schedule. With every legacy carrier from the US, Canada and Mexico, and a number of low cost carriers in attendance, it’s sure to be a busy one and a half days of meetings. This year’s JumpStart® welcomed a number of first-time airline attendees — Minneapolis/St. Paul-based Sun Country; Cleveland-based Streamline Air; and Winnipeg-based Exchange Income Corporation, which represents four Canadian airlines: Bearskin Airlines, Calm Air, Keewatin Airlines, and Perimeter.

JumpStart in Cleveland, June 23, 2011.

JumpStart has steadily increased the number of available meetings slots by 40 percent from 2009 and 10 percent from 2010. The strategy of moving JumpStart from one day to one and a half days, starting on Wednesday afternoon and continuing all day Thursday, has been welcomed by both airports and airlines and has maximized their value of attendance. As a result, airports across all hub sizes have more scheduled meetings this year with an average of 6.4 meetings.

A total of 157 airports, a new record, participated in this year’s program, compared to 150 last year.  Airports in attendance include 10 large hubs, 26 medium hubs, 39 small hubs, 66 non-hubs, and 22 Canadian airports.  Small and non-hub airports see steady increase both in terms of the number of airports in attendance and the number of meetings scheduled. The increased attendance from small and non-hub airports is what differentiates JumpStart from other similar industry events.

In addition to the one-on-one meetings, airports and airlines will be able to take advantage of many networking opportunities such as the JumpStart reception held on June 22, networking breaks, and a post-JumpStart reception at the Cleveland Browns Stadium, hosted by the Cleveland Airport System and the 2012 conference host, Sacramento County Airports.

Give Airports Some Flexibility

ACI-NA President Greg Principato today posted a entry in the National Journal’s Transportation Blog. He renewed his call on Congress to give airports the flexibility to adjust the PFC as the local community sees fit.

Here is his posting:

Airports take very seriously their critical role as an economic engine for their community.  What we need is for the federal government to give control over infrastructure back to the local community by providing airports with the flexibility to collect the revenue necessary to improve their facilities.  U.S. airports are increasingly at a distinct competitive disadvantage when it comes to infrastructure investment compared with facilities in other countries.  The fact is that governments all over the world are working to create conditions for meaningful investment in infrastructure, with airlines working in partnership with the airports because they know that investment in airport infrastructure is critical to their being able to profitably perform in a global economy.  Unfortunately, this is not the case in the United States.

Congress created the Passenger Facility Charge, which is a local fee, paid by passengers who use the airport.  The money raised is plowed back into the system to make critical safety and security improvements at the local airport, thereby not only addressing our infrastructure needs, but also creating local jobs.   Congress has not raised the cap on the PFC user fee, currently at $4.50, in over a decade and the $2 billion it raises a year is dedicated to paying for already completed projects or those currently underway.  Unfortunately, the pending FAA Reauthorization legislation fails to give airports any flexibility when it comes to the PFC.  If Congress would lift the ceiling, thereby allowing airports to work with their local community to set the PFC at a figure that ensures they are able to meet their outstanding airside infrastructure needs as well as to plan for future needs, airports’ need for federal assistance, particularly for those classified as large or medium hubs, would lessen significantly.

The PFC user fee allows airports the flexibility to collect the revenue necessary to improve our facilities, which will increase the efficiency of our air transportation system, reduce delays, and improve safety.  The PFC is set locally and used exclusively for local airport projects.  It  involves no federal spending or taxes, pays no bureaucrats, it is the most effective and efficient means of financing infrastructure in the United States and the federal government so limits its use as to undercut it.

Who better to determine the merits of a project than the local community?  If we truly want to move to a performance based means of determining which projects will be funded, granting communities full control over their PFC would produce the magna cum laude such an approach.

Moving Away From the Old Merry Ways

By Nelson Lam

We once lived in the golden days of cargo aviation where “If you build it, they will come.” However, is that applicable to our current economy?

At the 2011 ACI-NA Air Cargo Conference, ACI-NA was fortunate enough to have Paul J. Martins, Senior Vice President for Sales and Marketing of Towne Air Freight, and John Boyd, Associate Editor of Journal of Commerce, express their thoughts concerning the changing dynamic of alternative transportation modes.

The advancement in technology and supply chain processes has decreased the need for air cargo services.  Luxury items that once drove the air cargo industry have become commodities that are mass produced and no longer require expedited delivery service.  Technological innovation has drastically slowed, resulting in no quantifiable substitute that continues to stimulate the domestic air cargo.

As businesses continue to stress minimizing cost, various alternatives to air cargo transport are being considered.   Advancement in maritime technology continues to improve time-definite services at lower costs, lessening air cargo attractiveness.  Perishable goods that were once considered forbidden territory for maritime shipping have been made permissible due to refrigerated containers.

The growing number of vehicles on highways has made air cargo more enticing. With freeways becoming more congested, packages spend additional time on the ground than in the air.   Infrastructure improvements at local and federal levels are required; however, with the Highway Reauthorization Bill still being discussed by Congress, funding and actions for such improvements continues to be unresolved.

High speed rail was equally a hot topic during the discussion.  Can the United States implement a high speed rail regionally to support intra-northern America freight travel similar to that of Europe?  Both Paul and John agreed that while high speed rail is an attractive idea, the lack of infrastructure funding, lack of progressive development in rail network, and the privatization of the United States railway system simply does not permit the rapid development of such transportation mode.

In an economy where businesses focus more on cash reserve and cutting research and development budgets, we now ask the question, “If you build it, will they come?”  While air cargo will never disappear, it will be challenged by alternate transportation modes as manufacturers adapt to slower delivery modes.

Air Cargo-Economy and Environment

Hiran Perera; Picture courtesy of Emirates SkyCargo

By Aneil Patel

The breakfast keynote speaker at the ACI-NA Air Cargo Conference was Hiran Perera, Senior Vice President Cargo Planning and Freighters of Emirates Airlines. Perera travelled all the way from Dubai and was in Washington D.C. for less than 24 hours to address the air cargo conference attendees.

He briefly highlighted the importance that air freight contributes to the airline industry and the wider global economy. Air freight currently accounts for over 40 percent of global merchandise trade by value and provides estimated annual revenue of almost $55 billion worldwide.

The cargo industry plays a critical role as it is involved from the procurement cycle to the delivery of the finished product. Liberal and open sky policies are great catalysts and can trigger unconstrained growth capability, which is important for any developing economy.

Fuel prices are the number one threat for any airline and are doing the greatest damage to the aviation industry. High fuel prices and increased currency volatility could threaten the longstanding relationship between GDP growth and the increase in air cargo volumes.

In 2009, Emirates took delivery of two Boeing 777’s. Perera explained this was the worst time to receive new aircraft; however, he described them as “recession friendly aircraft.”  This was because Emirates successfully managed to fully utilize both 777’s. With the help of passenger and freighter aircraft, cargo revenue currently contributes for 18 percent of Emirates total airline revenue.

Emirates Airlines is proud to have accomplished their environmental commitments.  In their short history, they have managed to operate the world’s largest fleet of Boeing’s eco-efficient 777’s pioneered by Emirates through use of innovative navigational technology and journey management, and created new routes across the skies to save precious time, fuel and emissions.

In keeping with the environmental commitments, Perera referred to the need to push for e-freight “Vision to Reality. This involves replacing the paper trail associated with the cargo supply chain with electronic messaging. E-freight can eliminate an estimated 7,800 tons of cargo weight allowing increased cargo capacity for the customer and give a massive saving of $4.9 billion dollars worldwide. Eliminating 7,800 tons of paper will allow the Air Cargo Industry to contribute to conserving the environment and reducing the carbon footprint.