When I received the breaking news last week that former Appropriations Chairman Jerry Lewis (R-Calif.) had announced his retirement, the two sentence update reminded readers that Lewis had been redistricted into a more liberal leaning seat. Lewis isn’t alone by any means.  For many people who are avid watchers of the House floor, it is going to be hard to imagine a heated debate without Rep. Barney Frank (D-Mass.), who probably knows the House rules as well as the House parliamentarians.  Frank announced late last year that he was retiring after a major change in Massachusetts to his congressional district.

The list is long of those who will end their congressional careers this December. Many will definitely fall casualty to redistricting while others have just decided that it’s time to do something else.  Either way, I think it’s only the beginning of what could be a much longer list as primary and general election filing deadlines in most states draw near.

“I’m waiting for courage
Cause I’m stuck
Limbo limbo limbo
Cause I’m stuck in limbo limbo
And I ain’t trying to be stuck no more!”

(JoJo “Limbo“)

It is time once again for a lesson in Washington math:

22 extensions + 14 day FAA Shutdown + 9 years since the last FAA bill became law + 6 extensions covering 2011 alone + 5 years without an authorization + 2 month average extension in 2011 divided by  the 6 days the House is in session in January + the 7 days Senate is in session for 7 days in January = Limbo

Limbo, according to the dictionary, means “a state of oblivion; a state in which somebody or something is neglected or is simply left in oblivion”. This neatly sums up the current state of affairs involving the Federal Aviation Administration reauthorization bill.

And, this state of affairs has got to end. ACI-NA President Greg Principato called on Congress in August at the end of the FAA shutdown and again last week to end the FAA’s stay in purgatory by passing a two-year extension of the FAA reauthorization upon their return to Washington later this month. Congress has more than enough practice passing FAA extensions – they accounted for 6 percent of the federal legislation signed into law last year!  Congress should pass a long term extension and study up on some other legislative issue.  I’m sure the highway folks are feeling a bit unloved and unwanted given that Congress has practically ignored them.  After all, eight extensions is a second date compared to 22 which is as good as being engaged.

Congress gives up nothing by passing a two-year extension. Any arguments members of congress make about the need to “keep the pressure on” simply don’t hold water. If the ups and downs and teetering on the edge of the first 22 extensions didn’t exert enough pressure; if shutting down the federal agency responsible for aviation safety for 14 days while allowing $300 million to slip into the pockets of the airlines instead of being added to the Aviation Trust Fund didn’t exert enough pressure, than a mere two years certainly isn’t going to matter.

Two years, however, gives airports stability and the ability to plan without having any impact on Congress’ ability to pass a final bill.  Although if we take history into account, it could be that two years is not long enough.

When Congress returns to Washington later this month – the House will be in session for a total of 6 days, the Senate for 7 – the first item of business should be to pass a two-year extension of the operating authority for the Federal Aviation Administration (FAA).

Airports have been forced to deal with 23 extensions in the last five years, including 6 covering 2011 alone.  The last 6 extensions, which averaged just over 2 months in length, have left the FAA and the airports filling out and approving multiple forms for the same projects. This is no way to run the safest aviation system in the world.  Uncertainty in basic airport funding, such as 22 days of Airport Improvement Program (AIP) grants (such as that provided by P.L. 112-21) severely limits the ability to move forward on needed safety and security projects.  It also impedes airport efforts to meet the 2015 Runway Safety Area deadline mandated by Congress.

The unprecedented 14-day shutdown of the FAA in July only exacerbated the situation.  The flying public, and the Aviation Trust Fund, which lost nearly $300 million during the shutdown, literally cannot afford a repeat performance.  Congress cannot and must not leave the aviation community in limbo any longer.

A two-year extension of FAA’s operating authority does not in any way hinder congressional efforts to complete negotiations on the pending FAA reauthorization bill.  It simply provides certainty for planning, programming, project execution and job creation, something much needed after five years of living extension to extension, until such time as the House and Senate reach agreement on a final bill.

By Jane Calderwood

Its days before Christmas
The Senate is gone
But the House continues
To keep hanging on

They’ve funded the government
Extended the extensions
And passed the majority of bills
Under suspension

They’ve named post offices
And talked and talked about jobs
And we long ago lost count
Of all the bombs they have lobbed

They shut down the FAA and
Failed to cut spending
And their complaints about each other
Seem never ending

So please dash away, dash away, dash away all
Go home and be quiet, we all need a rest
We’ll see you in January
When you return to fix this mess

The funny thing is that the 112th Congress appeared to get off to a promising start with both the House and Senate passing FAA reauthorization legislation in the first months of the year. Few of us imagined we’d be stuck living through another Ground Hog Day scenario when it came to getting this bill done. Yet here we are in mid-December still without an FAA conference report.  Maybe 2011 was meant to test one of my mother’s favorite phrases “patience is a virtue” (though I’ve come to the sad conclusion that on this issue, mum was wrong ).  If that’s not bad enough, Congress continues to tease us with rumors that they have reached agreement on the reauthorization only to admit that the National Mediation Board (i.e. the Fed-Ex/UPS of 2011) language is holding things up.

In some ways the lack of a final FAA bill is simply the status quo after 22 extensions. In fact, it’s become a bit of a running joke inside the beltway. The folks who pen Politico’s Morning Transportation have been running a daily tally on the plight of the FAA reauthorization.  In Monday’s column the tally showed that there were 51 days remaining before the 22nd FAA extension expires and notes that 1,526 days have passed since the last FAA bill expired.

And don’t even get me started on the 14 day shutdown of the entire FAA in late July.  I’ve watched Congress do a lot of dumb things in my 26 years in this town (okay, I helped with a few of them, but in my defense, I was young and didn’t know any better). But who would have guessed (or bet $10,000) Congress would shut down the agency charged with aviation safety?  And if it hadn’t been for Transportation Secretary Ray LaHood’s shutting down construction on all the FAA tower projects, I’m convinced the shutdown would have lasted through August. I took the opportunity this past week to thank the secretary personally for his quick thinking and for taking a very loud, public stance in support of the agency.

So while I do understand that time is precious and should never be wished away, 2011 has been a frustrating, ulcer causing year with more stops and starts than a city bus route. So I am counting the days to 2012, not because I think Congress will suddenly come to their senses (though that is at the top of my list to Santa), but because I’m more than ready to see 2011 in the rear view mirror. After all, one can always hope for the future.

Airports Council International-North America (ACI-NA), which represents the owners and operators of airports throughout the United States, today commended the Department of Transportation and Federal Aviation Administration for convening today’s Flight Diversion Planning Forum.

Many of the suggestions developed by ACI-NA member airports factored prominently in the Forum’s discussion.  Airports made clear they must be empowered and more actively involved in the diversion planning process to ensure that passenger needs are to be met during irregular operations and tarmac delays. The need for better coordination and real-time information from airlines as early as possible in the diversion process was also stressed by airports.

“Improving the exchange of information and more integrated airline-airport contingency planning are important first steps and we look forward to working with airlines, DOT, FAA, Customs and Border Protection and other federal agencies to improve the system,” said Debby McElroy, ACI-NA Executive Vice President, Policy and External Affairs.

Sen. Scott Brown's press conference.

Brown announced at the press conference that he introduced the House bill in the Senate yesterday (S.1762) which would repeal the provision requiring federal, state and local governments spending more than $100 million per year on purchases of goods and service to withhold three percent from all payments to contractors and vendors and remit those funds to the IRS. The funds would then be applied towards the contactors’ and vendors’ federal income tax liabilities. ACI-NA and airports across the country believe that if implemented the provision would increase airport construction costs while preventing job creation local communities.

Brown called on Senate Majority Leader Harry Reid (D-Nev.) to bring his bill to the floor as soon as possible saying that it would help prevent the loss of jobs across the country. Brown explained that the regulation is bad policy noting it was, “really ridiculous to waste money on a Washington mandate that would cost more money to implement than it would bring in revenue.”

In the written statement that Brown released in conjunction with the introduction of S. 1762, he stated, “Last week’s House vote was a rare showing of overwhelming bipartisanship, and now it’s time to take this jobs bill across the finish line.  I again call on my colleagues in the Senate to avoid any partisan gimmicks and quickly pass the House version of my 3 percent withholding repeal.  If the Senate is willing to unite behind this noncontroversial bill, it will be an important victory for America’s job creators, and proof that Congress can pass jobs legislation when all parties negotiate in good faith.”

ACI-NA shares Brown’s sentiment and continues to urge the Senate’s quick consideration of S. 1762 so the bill can be sent to President Obama for his signature as soon as possible.

Last week in North Carolina, President Obama visited Asheville Regional Airport and called for more investment in U.S. airports. These are welcome words for business leaders in Asheville, and for those of us who have watched American airports lag in the global race to attract more business and jobs for our communities.

Solutions to our nation’s infrastructure needs often come down to two: federal action and funding.  For airports it’s somewhat different in that the U.S. government actually stands in the way of airports and local communities who want and need to finance infrastructure.

The airports of this country are held back because the federal government regulates the financial lives of airports through a Nixon-era legislative framework that pre-dates airline deregulation and has long since lost its relevance.

The largest source of funding for improvements to local airports still comes from fees directly charged at those local airports. You pay these fees, in the form of a passenger facility charge, every time you buy an airline ticket. Yet, the federal government still controls how those fees are collected and what they can be spent on.

America’s airports are not requesting a bailout or any special favors. We are simply asking for outdated, ineffective policies to be removed and for local communities to be given greater say over their own future.

As President Obama said Monday in Asheville, “There’s no reason why we should sit here and watch the best highways and the newest airports being built in China. We should be building them right here in the United States of America. Right here in North Carolina.”

We agree with the President. The federal government needs to free local airports to generate their own resources in their own communities. This will empower local leaders to plan and build aviation facilities with money that stays in the community, and is not sent to Washington.

We offer this postscript to the president’s speech: It’s time to set our airports free. Give us same tools in use all over the world and watch what we can do.

Day discussed how important recent airspace redesign efforts and surface management implementation has been to Denver operations.  Stall and Roberts emphasized the opportunities that airports have to develop NextGen solutions in collaboration with the FAA and airlines.  ACI-NA continues to be very active in NextGen development and will be planning future sessions and encourages ACI-NA members and World Business Partners to join the NextGen Working Group.  Contact ACI-NA’s Chris Oswald for more information.

Many FBOs are eager to provide additional financial investments at airports, but believe there is a need for longer term leases. At the same time, airports must ensure their customers and community receive proper services in an environment that facilitates competition and fair market pricing.  Moderator Dave Edwards, CEO, Greenville/Spartanburg International Airport, posed many questions to the panel members.

Is federal legislation needed for airports and FBOs to have a good working relationship?

• Federal legislation is not necessary because the airport, local community and FBO can make good decisions with open and transparent discussions.  Bruce Frallic, Gulfport/Biloxi International Airport
• Legislation isn’t needed, as his company currently maintains good working relationships with all their airport managers. There is a correct approach is for airports and FBOs to agree on best practices and work together. FBO panelist Jeff Ross, Ross Aviation.
  
• It would benefit the industry to create standard practices and guidelines for which FBOs could work with airports. Jim Hopkins, Landmark Aviation.
• There is no need for legislation as it would create almost a permanent right for FBOs to operate at an airport. The local ability to issue RFPs and compete for leases is crucial. Janet Schafer, Houston Airports System
• There is already a system in place to resolve issues through FAA grant assurances and the ability to establish leases up to a maximum of 50 years. There is already a fairly set of rules with 130 specific state statutory provisions addressing airport lease terms.  If Congress were to tinker with lease terms it would be yet another example of the federal government intruding into airport proprietor rights. Dan Reimer, attorney, Kaplan Kirsch & Rockwell.

What are two ways for airports and FBOs to be more successful?

• Frallic: The need for open collaboration that ultimately leads to an agreement.
• Ross: Airport need to reach out with constructive criticism so FBOs can deliver the best product possible.
• Schafer: The need to increase non-airline revenue and the possibility to explore revenue sharing with FBOs.
• Reimer: The industry could benefit from more collaboration and also reiterated that best practices should be voluntary.

With the United States, Canada and the European Union driving aviation security policy, there is an opportunity to preserve limited resources. Doing so necessitates increased collaboration and coordination between governments, and the need to develop mutually recognized security standards and screening technologies. As an example, the European Commission sets aviation security standards but many European Union countries impose additional measures, creating an uneven patchwork that perplexes even the most seasoned traveler. In many cases, passengers and baggage must be re-screened when crossing international borders.

In Europe, airports – not the government(s) – provide almost all the aviation security operational costs. Indeed, 29 percent of airports operating costs and 41 percent of airports staff are security related. With security costs increasing exponentially, there is even more need for a coordinated approach to aviation security.

As aviation traffic continues to grow, we need a risk-based aviation security system that uses available data to more effectively balance customer service and detection. Information is available at multiple points that can be readily utilized to help focus limited security resources on those about which the least is known. Following the roll out of TSA’s Risk-Based Security initiatives, the European Commission has accepted the idea of risk-based security and has embarked on an industry-government working group to develop a model. Similarly, in Canada aviation regulators have embarked upon a risk-based program to streamline the security process for travelers enrolled in the Nexus program.

In needing to plan for the future aviation security system that harnesses the risk-based strategy, the International Civil Aviation Organization has established a Next Generation Screening Checkpoint Technical Advisory Group. ACI, in partnership with other aviation organizations, and regulatory authorities is participating on the advisory group to design a future system capable of maintaining the appropriate level of detection while increasing efficiency and reasonable costs, so that it is sustainable in the long term.

During the “Are You Exposed” session this afternoon, Dom Nessi, Deputy Executive Director/Chief Information Officer of Los Angeles World Airports, provided compelling – and often frightening- information about how vulnerable today’s IT systems can be.  Airports are vulnerable to attacks to our network or wireless network, baggage systems and websites. Nessi noted the particular risk posed by the widespread use of USB sticks, where 10 percent are infected with a virus. I actually felt a bit vindicated when he also emphasized that smartphones aren’t so smart when it comes to malware, with the rapid roll out of new technology being too quick for current security standards, resulting in more and more breaches.

Nessi also covered an entirely new challenge for airports as they receive service from “eEnabled aircraft”, such as the Boeing 787 and Airbus 380. Emphasizing that “this is going to be a major new frontier”, he talked about the impact that an airport network being hacked could have on such sophisticated aircraft. I found it fascinating and a bit comforting that airlines operating the A380 keep a “sealed CD” so they can reload the necessary software inflight in the event of a catastrophic failure.

Michael Kalt, an attorney with San Diego based Wilson Turner Kosmo, addressed the exposure businesses face with the ever changing and expanding world of social media. When the question was posed “Can you disciple an employee because of comments made using social media?”, the answer was a definitive maybe. That is because so much depends on the individual circumstances, what is in your company policy and the applicable state as well as evolving federal law. The best defense is to stay informed and ensure your policy is up to date and reasonable. You can’t just say no, given the important role social media plays in most people’s lives.  (But not mine…)

The session was very educational in providing valuable information about cutting edge challenges airports face. Also, I learned a new term so I can better communicate with both the cool tech kids and the informed HR directors – “dooced”.   Never heard it?  Well, the Urban Dictionary defines “dooced” as to lose one’s job because of one’s website.  I can’t wait to use it the next time I play Scrabble- which I still play the old fashioned way; not on a computer!

As part of a recently announced re-alignment at TSA, the Office of Security Capabilities was expanded to include the Office of Security Technology and key elements of other offices that directly support the operation, maintenance and strategic utilization of technology to enhance security.

Of importance to airports, almost half of the Explosive Detection Systems deployed at airports to screen checked baggage in the years after September 11, will reach the end of their useful life by 2013, and two-thirds of those systems within the next five years. To address the need for replacement or “recapitalization” of EDS systems, TSA is developing a strategic plan that will prioritize the recapitalization of systems based upon their operational reliability. Those with the lowest reliability will be at the top of the list. Another aspect of replacing EDS systems is optimization, making enhancements to improve efficiency, which may involve modification of the baggage handling system and replacing systems with other high-speed units. Although TSA will typically cover the cost of recapitalization programs, airports may incur a percentage of the costs for optimization projects.

With the recent procurement of 300 Advanced Imaging Technology units, which have the Automated Target Recognition software preloaded, deployment to airports is expected to begin later this year and continue into 2012. With ATR, a stick-figure image of the individual being screened is displayed on a screen mounted on the side of the unit, making separate rooms for image operators unnecessary.

Also at security checkpoints, TSA has started to deploy Advanced Technology 2 X-ray systems. These systems include separate viewing stations for alarm resolution, which should help to increase throughput.

ACI-NA and the Public Safety & Security Committee continues to works closely with the Office of Security Capabilities to ensure technology deployment is coordinated with airports.

This meeting was the first step in the process ACI-NA is using to develop a long term, sustainable policy for funding U.S airport infrastructure.  We are committed to a process that ensures that all ACI-NA airport members have an opportunity to have their say- and more airports will have that opportunity next month. Additional facilitated discussions are scheduled for Atlanta and St. Louis in early November. ACI-NA is also working with Fleishman-Hillard, a recognized national expert in public relations, and Public Opinion Strategies, one of the country’s most respected polling firms, for additional research on the public’s perception and knowledge about airports.

We also know it is critical to increase the public’s appreciation of the critical role airports play in the U.S. aviation system, such that any discussion of transportation and the economy includes airports and their contributions to economic development in their communities and to the nation’s recovery.  U.S. trade and commerce is airport-centric, and the failure of airports to keep pace with infrastructure requirements will end up negatively impacting the nation’s economy. A big job but we are excited and looking forward to the challenge!

According to Smelkinson, equity market continues to exhibit high volatility and U.S. Treasury continues to be safe heaven not withstanding ratings downgrade of U.S. credit rating. Opinions differ as to whether the U.S. economy is heading for “double dip” or “soft landing.” Since 2008, corporate, household and bank balance sheets have grown stronger.

The municipal bond market sees reduction in new issue money by 34 percent to date this year. New money issuance represents 50 percent as opposed to last year’s 64 percent. Interest rate remains low at last year’s comparable level. Tax-exempt bond markets have been extremely volatile. Cheapness of municipal bond has led some issuers to use taxable rather than tax-exempt bonds as lower cost alternatives. Outflows from municipal bond funds have moderated and funds across all segments see inflow. Tax-exempt credit spreads have remained constant over the last year. Tax-exempt yield curve has flattened in the long-end of the curve. Medium term funds are now the focus and see significant inflow as investors look for higher yields.

Jason Simmons updated the audience on the airport bond market. Issuance spiked in 2010 driven by low interest rates and the AMT holiday and 2011 has seen issuance fall to the lowest level in several years. 2010 issuance was spread among the three most common rating categories, i.e. Aa3, A1, and A2, while issuance in 2011 was primarily in A1 category. 2010 issuance was primarily new money as many airports issued debt to take advantage of the low interest rate environment and the AMT holiday. 2011 issuance has been dominated by refunding activity with new money issuance comprised primarily of $1 billion for Chicago O’Hare. 2010 issuance was primarily not subject to AMT due to the AMT holiday whereas 2011 issuance has mostly been AMT, with the majority of the Non-AMT issued by Chicago O’Hare.