Prep work for the terminal expansion.

The terminal expansion (137,000 square feet) will nearly double the size of the existing building, provide three new gates and allow them to double the number of security lines (from 4 to 8).  The new gates are needed in order for Portland to be able to attract new carriers, so they can continue to provide a variety of schedule and fare options to the 1.8 million passengers who pass through the jetport annually.  The roadway to the terminal is being reconfigured and when complete will provide separate approaches to the terminal for arriving and departing passengers.   Finally, the expansion will give Bradbury the room to install an inline baggage handling system, which was purchased using the $9.2 million in American Recovery and Reinvestment Act funding they received from the Department of Homeland Security.

Work underway on the geothermal heating system for the expanded terminal.

Construction is also underway on a $3 million geothermal project that is estimated to reduce oil consumption at PWM by more than 100,000 gallons per year, which in turn will reduce energy costs by an estimated 80 percent.  The Federal Aviation Administration provided $2.5 million through a Voluntary Airport Low Emissions (VALE) grant for the project.  Once completed, 500 gallons of fluid per minute will circulate through 11 miles of plastic tubing to heat and cool the new terminal addition.  The project is expected to pay for itself within three years through energy savings.

As if there weren’t enough hardhats to be seen at PWM, they are also in the process of completing work on a de-icing fluid recapture facility which will recycle used aircraft deicing fluid.  The funding for this project, $2.138 million, also came from the stimulus bill.

The new de-icing fluid recapture facility will enable the fluid to be recycled.

Bradbury estimates that directly and indirectly the jetport supports more than 11,500 jobs and contributes $860 million to the regional economy.  The expanded terminal, the cost conscious new energy source and the environmentally friendly deicing facility should serve as a reminder to Southern Maine that the Portland International Jetport takes it role as a key economic driver seriously.

Senator Rockefeller (D-WV), Chairman of the Senate Commerce Committee, was unable to attend the conference in person, but he did send a welcome message emphasizing the importance of aviation in West Virginia. Impressive numbers – more than$3 billion in revenues and approximately 50,000 jobs directly or indirectly driven by aviation. He also provided an update on FAA reauthorization, indicating he was “annoyed” at those who are advancing “parochial issues” preventing the bill from moving forward. However, Senator Rockefeller was pleased that the airline safety provisions were enacted as part of the legislation (H.R. 5900) extending FAA reauthorization until September 30.

The conference was well attended with many very informative speakers, including my friends and colleagues Lisa Picionne of NBAA and Henry Ogrodzinski of NASAO.  It was also great to hear from Mike Boyd from Boyd Group International, who encouraged the airports to consider “air service access, airline alliances, regional gateways and global connectivity”, rather than only focusing on air service development.

The entrance to Greenbrier Valley Airport in Lewisburg, WV.

My presentation focused on proposed regulations and advisory circulars affecting airports. I emphasized that there is no cumulative assessment of the growing regulatory burden on the industry, nor understanding of the fact that airport revenues are down. The bottom line is that there is a limited amount of airport and federal money available to pay for new rules and ACI-NA will continue to submit comments protecting the interests of the airport industry. However, it was a pleasure to announce that the problem statement ACI-NA submitted to ACRP on behalf of our Small Airports Committee, “Analysis of Cumulative Cost Associated with Regulatory Compliance and its Impact on Small Airport Viability” was accepted (03-25) as one of the approved 2011 projects.

The conference also provided a wonderful opportunity to catch up with Rick Atkinson, Director of Yeager Airport and to meet Jerry O’Sullivan, Manager of Greenbrier Valley Airport. While I was unable to attend the tour of the Greenbrier Airport conducted as part of the Conference agenda, I did go by on my way home and was impressed at the terminal improvement program (both interior and exterior) that is just about completed. Also the upgrades to the passenger screening checkpoint- in total a $4 million project.

It was also great to see Susan Chernenko, who does a fabulous job as Director of the West Virginia DOT Aeronautics Commission. The State Aeronautics Commission held one of their quarterly meetings following the conference and I was fortunate to meet two members of the Commission -  Chairman Eldon Haught and Richard Wachtel. Both gentlemen were well informed about state and national aviation issues and it was a pleasure to talk with them.

I was sorry that I could not stay longer at the conference and hear presentations from Kate Lang, FAA Acting Associate Administrator for Airports, Gael Sullivan, Senior Professional Staff for the Senate Aviation Subcommittee and Sherry Wallace, Roanoke Airport’s Manager of Marketing and Air Service. I am sure they all provided great information for the attendees and helped contribute to the success of what appeared to me to be a very successful conference.

Last week, the Senate adjourned for August recess after the Appropriations Committee approved 9 of the 12 fiscal year (FY) 2011 appropriations bills, including the Transportation, Housing and Urban Development and Department of Homeland Security bills. Only the Defense, Interior, and Legislative Branch appropriations bills have not been approved by the Senate Committee. Unfortunately, the full Senate has not acted on any of these bills.

The House Appropriations Committee has only approved 2 of the 12 appropriations bills, both of which have also been approved by the full House. The House has passed the FY 2011 Military Construction and Veterans Affairs and the Transportation, Housing and Urban Development Appropriations bill.

Key provisions of the Transportation, Housing and Urban Development bill:

• The Federal Aviation Administration is funded at $16.5 billion, which represents a slight increase over the FY 2010 enacted level.

• The Airport Improvement Program was level funded at $3.5 billion, the same amount appropriated for FY 2010.

• $1.16 billion is specifically slated for NextGen.

• The Facilities and Equipment account receives $3 billion, which is $63 million higher than the FY 2010 enacted level.

• The bill continues to include language that would require airports, as a condition of AIP funding, to post air passenger rights signs in non-revenue generating area at the request of the Department of Transportation.

• The bill does not fund the Small Community Air Service Development Program.

It is becoming increasingly unlikely that Congress will be able to complete its work on all of the appropriations bills before the current fiscal year ends on September 30. There is a general consensus that in September, Congress will need to pass a continuing resolution to ensure funding for the federal government. This will leave the funding of the federal government up to the lame duck Congress, after the mid-term elections in November.

When Congress comes back into session next month, all eyes will be on the Senate as there is a long list of bills they have yet to consider.  One of those issues gaining significant attention is the need to extend expiring tax provisions, including the extension of the relief of the Alternative Minimum Tax (AMT) on private activity bonds.  According to Congressional Quarterly Today, Senate Finance Committee Chairman Max Baucus said that he intends to hold a markup on tax legislation while Senate Majority Leader Harry Reid (D-Nev.) has said that he will bring a tax package to the floor in September.

Senator Harry Reid will try to muster the votes needed to pass a tax extenders package.

At the center of the controversy are the expiring tax provisions for individuals making $200,000 and married couples making more than $250,000 from the 2001 and 2003 tax cuts that were signed into law during the Bush Administration.  In remarks made before the Center for American Progress, Treasury Secretary Timothy Geithner said that extending those cuts would “hurt” the economic recovery.  Geithner made it clear that the Obama Administration did not support extending the cuts for the top 2% wage earners even on a temporary basis.  However, Republicans  and some senior Senate Democrats disagree.  Until Reid can get a consensus to garner the 60 votes needed for cloture, the disagreement over the extension of these specific provisions may quell Reid’s plans of bringing a tax package to the floor before the election.

The House has passed two bills that included the AMT exemption of the bonds, but the Senate has not acted on either piece of legislation.  It is widely expected that Congress will pass tax legislation to address many of the expiring tax provisions before the end of the year, but the question of timing remains.  If the Senate fails at passing something in September then a tax extenders package will have to wait for the Lame Duck session expected after the elections.

If the Senate Democratic Leadership sees passing a tax extenders package as important to the November elections and can muster 60 votes, Majority Leader Reid will look to pass something, even if it is a relatively small package that does not address all the expiring issues.  If polls show later this month and in early September that tax legislation is not important to voters, watch for this issue to be punted until after the elections.  Either way, there will likely be a showdown in the Senate over the tax extenders package pitting the Administration and top Senate Democrats against Republicans and several centrist Democrats.

Between Oct. 2008 and Oct. 2009, Alaska Airlines experienced 309 bird strikes. These strikes were reported by flight crews on walk-around, by mechanics or by pilots as in-flight incidents. She reported that even if there is no damage, a fuselage strike can cause a 1 ½ hour delay for inspection, debris removal and required paperwork write up. Engine strike inspections can take 5 hours for borescope inspection and can be much more disruptive if the airplane is at a station not equipped for borescope inspection or engine replacement. Of the 309 strikes, 263 required only clean up and documentation, 16 caused damage (3 of which were noted in flight) and one caused a Rejected Take Off. These strikes cost $1.6 million in delays and inspections, not counting replacement engines or repair costs.

Alaska Airlines hopes to reduce geese traffic with pulsing lights.

Alaska collaborated with Qantas Airlines, who had been experimenting with pulsed landing lights as a possible way of dispersing birds at low altitudes. The technique involves circuitry changes to pulse the outboard wing landing lights from bright to dim approximately 46 times a minute while the airplane is below 18,000 feet. The Qantas experience indicated that the technique resulted in a 30-50% reduction in bird strikes.

The pulsed lights have been evaluated by FAA at the Atlantic City test center and are also being studied by the USDA. Alaska is seeking FAA and airframe manufacturers’ assistance in making the pulsed lights standard on new aircraft, speeding up the Technical Standard Order process for retrofitting existing aircraft and accelerating research on avian vision tied to landing light design.

For further information contact Dick Marchi (rmarchi@aci-na.org).

In an August 4th article on ABC News, author Rick Seaney, CEO of FareCompare.com, wrote about the increasing amount of ancillary fees that airlines have been charging passengers recently and whether or not Congress should look to federally tax these. Ultimately, Seaney argues against more airline taxes, but along the way makes some unfair assumptions on airports and the PFC.

Airports Council International-North America President Greg Principato set the record straight when it comes to the PFC and its intentions by commenting on the story. In his rebuttal, Principato illuminates several aspects about PFCs, including:

• The PFC serves many constructive purposes that benefit passengers
• PFC projects are reviewed and approved by airlines and the FAA before initiation
• The PFC also contributes to ATC projects, such as infrastructure improvements

You can read Greg’s entire comment below or click here for a link directly to the story (It also appeared in the third spot for Daily Clips on 09/04/2010).

“While you bill yourself as “one of the country’s leading experts on airfare”, you have much to learn about airports. Your comment “some airports decide to erect wondrous monuments to the glorification of their cities” unfairly maligns airport directors and the passenger facility charge (PFC).

Did you know PFC user fees were authorized by Congress because airlines, especially those dominating large hubs, would not agree to construction projects that allowed low fare carriers to serve the community? PFCs provided the solution and today there are numerous examples throughout the US where the facilities built with PFCs have ultimately benefited passengers through lower fares. Travelers have proven willing to invest today for lower fares and fewer delays in the future.

Did you know that PFC projects undergo rigorous review, including extensive consultation with airlines, and public notification and comment? 95 percent of all PFC projects are sent to FAA for their review without any airline or public opposition. Airlines support PFC projects at the hubs because it lowers their operating costs but won’t tell you that.

Did you know that PFCs also fund ATC improvements? Government Accountability Office officials have testified before Congress that new runways and other infrastructure improvements are required if a modernized air traffic control system is going to be effective in preventing passenger delays and inconvenience. And those improvements are paid for, in large part, by PFCs.

Did you know that the airlines did receive a bailout after the terrorist attacks of September 11, 2011, but the airports were not compensated for any of the lost revenue?

Apparently not.“

Greg Principato, President
Airports Council International-North America

The House of Representatives recessed last Friday and will not return to town until the week of September 13. With the House out, all eyes in Washington are focused on the Senate. Majority Leader Harry Reid (D-Nev.) has laid out a full agenda for the Senate’s last week of work before they follow the House and adjourn for the rest of the summer.

The Senate will vote on Elena Kagan’s nomination to the Supreme Court this week. The debate will be spread out over the course of several days, and while such high profile nominations normally ensure some fire works, none are expected this time around. Five Republicans have already indicated they will support the Kagan nomination, and at least 24 are on record in opposition, which leaves 12 undecided. One of the undecided, Senator Kit Bond (R-Mo.), has requested a meeting with Kagan prior to the vote. So far only one Democrat, Senator Ben Nelson (Neb.) has indicated he’ll vote no.

The nomination of James R. Clapper Jr. to become the Director of National Intelligence had been planned for Senate consideration this week, but it appears to be in trouble. First, Senator John McCain (R-Ariz.) relented on his hold of the nominee in exchange for the promised delivery of a long-delayed classified report on an intelligence system. Now two members of the Senate Intelligence Committee who supported Clapper’s nomination last week are now threatening to hold it up over threat assessments of detainees at Guantanamo Bay.

Energy is also on the agenda for the week. The Senate is scheduled to debate side-by-side energy plans – the Democratic plan (S 3663) vs. the Republican plan (S 3643). The procedure governing the debate on these bills requires a threshold vote of 60 in order to move either one forward. This is unlikely to happen as the Democrats remain divided on the question of lifting the cap on an oil company’s liability for a spill as well as the whether or not states should share the revenue from offshore energy production. The Republican plan lifts the Administration’s six month moratorium on deep-water drilling, which is, in and of itself, controversial.

There was an effort to move legislation on Monday to extend increased Medicaid payments to states and provide $10 billion for states to pay teachers: both provisions were included in the American Recovery and Reinvestment Act passed in early 2009. Last minute scoring by the Congressional Budget Office showed that the offsets meant to make the package deficit-neutral were insufficient, so the effort was set aside while new offsets are sought. The Senate plans to make another run at this bill as soon as the offsets are found.

The leadership of the Senate Agriculture Committee is working out a deal that would allow the Senate to reauthorize the child nutrition programs. The bill would provide the first increase in meal reimbursements to schools since 1973 and would give the Agriculture Department authority to set nutrition standards for foods sold in vending machines and a la carte lines in schools. While the bill has bipartisan support, a rarity these days, the offset provisions included to make the bill deficit-neutral have sparked some opposition.

Just how much the Senate will get accomplished this week remains to be seen. All that is sure is that whatever items they fail to act upon will be waiting for them when they return in September.

Last Monday, July 26 the National Journal raised the issue of whether or not airline fees should be taxed by the federal government, noting “Airlines made at least $3 billion in service fees last year for things like checking bags and in-flight meals.”

On Thursday, ACI-NA President Greg Principato responded to this issue, saying that while the airlines have the right to charge as many fees as they want, there are consequences in “moving away from a fare-based system and toward a fee-based one that raise at least a few policy questions.” He follows by pointing out the fee’s negative impact on the Airport and Airways Trust Fund, how bag fees can put a strain on throughput at certain checkpoints, and the questionable arguments made by airlines against the PFC.

You can read the full response and the ongoing debate here.

Representing airport interests, ACI-NA President Greg Principato encouraged TSA to continue to coordinate with the industry, particularly airports. In response, Leyh outlined his plan to maintain the strategic partnership with ACI-NA and the collaborative approach of working closely with airports. He also expressed his support for the ACI-NA-initiated In-Depth Security Review to identify duplicative or out-of-date security measures that need to be rescinded and those that are in need of clarification.

TSA advised that subsequent to a previous meeting between ACI-NA, representatives of the Office of Security Technology and the Office of Security Operations, and TSNM to discuss the deployment of Advanced Imaging Technology at airports, a review was conducted to evaluate the process. The review addressed the challenging aspects of the deployment process raised by ACI-NA at the meeting and is expected to result in better coordination with airports.

In addition to ongoing dialogue and partnership with ACI-NA, Hofsass, Leyh and Glasgow will be participating in the upcoming Annual Conference and the Public Safety and Security Conference.

For more information, please contact Christopher R. Bidwell, Vice President, Security and Facilitation.

Download the ANN Podcast.

In the interview, Principato also explained that the airlines position on raising the ceiling on the maximum Passenger Facility Charge to $7 just doesn’t make sense. He noted that that the airlines are better off financially when capital improvements to an airport are financed by PFC-back bonds instead of including the costs of the improvement into the airline’s rate base.

During the keynote address at a forum hosted by the U.S. Chamber of Commerce on rebuilding American’s transportation through a national infrastructure bank, Pennsylvania Governor Edward Rendell spoke of the transportation infrastructure needs of our country.

Governor Rendell advocated that “the maintenance of American infrastructure has to be done by the government itself” and suggested investing $400 billion in transportation infrastructure. Often when politicians and experts talk about infrastructure they speak to the need for additional infrastructure, however, Governor Rendell makes an important point about maintaining current infrastructure. Airports rely on the federal Airport Improvement Program (AIP) for funding maintenance projects primarily for airside projects. A large need remains, however, for the funding of maintenance related landside projects.

Many airports turn to funding sources other than AIP for these projects such as Passenger Facility Charges (PFC) and private activity bonds (PAB’s). These are not government programs, but rather funds generated by the airport itself through a user fee in the case of PFC’s and through the sale of bonds. Airports are not asking for a government handout for the maintenance of these facilities, but there is something the federal government — and specifically Congress — can do to help airports with both PFC’s and PAB’s to maintain our infrastructure. Congress can raise the PFC from the current cap of $4.50 to the $7 proposed in the House-passed FAA Reauthorization bill, and it can also pass legislation to provide permanent exemption of interest earned on PAB’s from the Alternative Minimum Tax. If Congress approved both of these proposals it would go a long way in helping airports do our part in maintaining our facilities and thus helping maintain our national infrastructure.

The report goes into great detail about the different fees charged by airlines including those for checked baggage, seat selection, food services, and ticket changes.  According to the report, more than half of the most common airline-imposed fees are not subject to the 7.5 percent federal excise tax.  Therefore, the report was not able to answer the question of the total amount of lost revenue to the trust fund.  They did estimate that if only the baggage fees had been subject to this tax in fiscal year 2009 $186 million would have been added to the trust fund.

Take our survey:

Airlines Fees: To Tax or Not?

View the survey results thus far

Even though the GAO was able to estimate the exact credit to the revenue for the baggage fees for FY 2009, they have not been able to estimate the amount that could possibly go into the trust fund for all of the fees not subject to the 7.5% tax.  The report explains, “As noted earlier, aside from checked baggage, DOT guidance does not require airlines to separately report revenues received from fees for services that have not to date been considered part of the transportation of persons—such as early boarding, seat selection, and standby—and these revenues are also not subject to the 7.5 percent excise tax according to IRS. Thus, we cannot be certain how much additional revenue Treasury might have collected and credited to the Trust Fund if that tax had been applicable to all these fees.”

The House Aviation Subcommittee will further explore the findings in this report as well as hear from airlines and others impacted in the industry at a hearing this afternoon.

There are many views about the proposed merger between United Airlines and Continental Airlines, both pro and con. And, I need to be clear that ACI-NA does not have a position on the merger, as we have members with strong views on both sides.  However, I have to commend United for their willingness to come to the ACI-NA Small Airports Conference in Minneapolis and talk about the merger and air service with the men and women who run small and non-hub airports in the United States and Canada.

Initially, I approached Mark Anderson, United’s vice president – government affairs, about a speaker and he was incredibly helpful in arranging for Kevin Knight, senior vice president – planning, to present the luncheon address at our conference. Kevin’s presentation covered all the ground you would expect, including the economic conditions that led to the proposed merger. He emphasized the importance of small community air service in United’s network operations, citing 14 airports that connect at least 50 percent of their traffic.  Springfield, Ft. Wayne, Lansing, and Saskatoon stand out with connection rates exceeding 85 percent.

Knight also made the case that the merger will result in a more efficient airline that is better able to serve small communities. Currently United serves 112 small airports, with 10 of these added since 2008. Continental serves 73, with a resulting overlap in service at 37 cities.  However, taking advantage of the synergies of a combined network, the merged airline would create 81 unique United destinations and 42 unique Continental destinations for air travelers from small cities.

There were lots of questions following the presentation, including some interesting ones on regional jets and “express carriers” (50 seater-market is not dead, 50 and 70 seat aircraft are important for the success of the merged airline).  Also scope clause (topic of discussion as the two pilot groups move to a single pilots union agreement) and more service to Canada (there may some opportunities).  When asked what airports can do to obtain new or enhanced service, Knight emphasized the importance of the business community in truly supporting the air service.

I give Kevin great credit for not only answering those questions asked in public, but also those asked in private by individual airport directors.  He may not have convinced everyone about the benefits of the merger, but he did gain their respect for coming to the meeting and speaking openly about small community air service.  Job well done!

Court-approved DOT rules would permit airports to adjust landing fees so long delays during peak travel could be avoided.

In rejecting the claims of the Air Transport Association, the United States Court of Appeals for the District of Columbia agreed with Airports Council International-North America (ACI-NA) and the Department of Transportation (DOT), upholding federal regulations that govern airport landing fees. DOT issued the changes in July 2008, in response to airline over scheduling and significant passenger delays and inconvenience.  The amendments permit airport operators to adjust their landing fees as one tool to help encourage airlines to more realistically schedule flights during congested travel times.

ACI-NA President Greg Principato noted that “we are pleased that the opening paragraph of the court’s opinion recognized ACI-NA’s critical role, noting that ‘Airports Council International (ACI), which represents governmental bodies that own and operate major airports in the U.S., including 36 of the 37 airports the DOT deems “currently congested,” has intervened in support of the DOT.’ ”

“ACI-NA led the industry effort for more than two years by filing comments in the DOT rulemaking and intervening in support of the rates and charges amendments in the appeal proceeding. This landmark decision strongly upholds the rights of airport proprietors to manage airfield congestion and help prevent delays by modifying landing fees,” Principato said.

Principato was pleased that the court recognized the reality of air travel and the challenges airports and DOT face when airlines over schedule during peak travel periods. “As the airspace is used ever more intensively, it is unsurprising that the department would update its approach to landing fees in an effort to relieve airport congestion.  So long as it complies with the applicable statues, its creativity should be welcomed on its merits, not spurned for its novelty,” the court concluded.

The court’s decision specifically permits airports to impose a two-part landing fee structure and vary landing fees throughout the day at congested airports. Faced with higher fees, the airlines can shift flights to less traveled hours, change the size of the aircraft flown during peak periods or pay higher fees to fly at the busiest hours.

Here is part of that blog posting:

TSA Administrator John S. Pistole

It is safe to say that there are few more challenging jobs in government than running the Transportation Security Administration (TSA). That is what I told John Pistole when we talked last week and I commend him for reaching out to airports. Over the years, as TSA evolved, the relationship and coordination with industry has improved significantly. Recent events have proven that government and industry must continue to work together to combat the threat of terrorism. Below are some opportunities to further enhance our very positive relationship:

1. Coordinate security initiatives, including new security requirements, with airports. This is critically important as the lion’s share of aviation security is conducted at airports. In so doing, we can increase the chance of success of new efforts. When we have a good level of coordination – such when we collectively responded to the August 2006 explosives plot – it helps prevent further problems down the line. Although the issuance of security directives in that instance was appropriate, it was done with ample industry coordination. However, that has not always been the case and security directives have been used when a rulemaking or another proposed regulatory change would have been more appropriate, and ensured more industry input. These incidents have declined in recent months, which is a good thing and for which I commend TSA.

View the rest of the blog.