This afternoon Greg Principato addressed the Japan International Transport Institute (JITI) at their Airport Seminar 2012, themed: Maximizing the Potential of Multiple Airports in a Region.

While underscoring his point that economic development has been closely tied to transportation which supports travel and trade, Principato addressed the importance of airports as an economic driver in their local communities, international air service and US entry and VISA procedures.

He also seized the opportunity to talk about the infrastructure investment that needs to be made at airports across the United States as demand increases. Greg concluded his speech with this: “We also know there is work to be done at home, e.g.  increasing and improving airport infrastructure in order to accommodate increased demand. We have urged Congress, the President and all the various committees and commissions looking at ways to cut the deficit and promote growth to remove the federal, Nixon-era shackles on airports and give U.S. airports the same freedom our competitors have to invest in their future. But that is a whole other speech.”

JITI’s mission is to conduct comprehensive research of contemporary transportation issues and make recommendations regarding United States and international transportation policies for the public welfare. In addition to Principato’s overview of the situation at US airports, today’s speakers focused on airports in the New York region in the United States, and Tokyo and Osaka in Japan.

The “Christchurch Earthquake Airport Employee Relief Fund” has raised $16,161, which was transferred to Christchurch Airport in the second half of 2011. The money was distributed to its impacted employees.

The “Japan Earthquake Relief Fund” has raised $32,648 and the fund was transferred to Sendai Airport just before Christmas. The funds were distributed to seven airport employees whose homes were swept away in the tsunami. Thank you letters (both in the original Japanese and English translations) from some of the aid recipients are attached.

The former neighborhood of a Sendai airport employee.

“Thank you once again for your generous support and donations,” wrote Patti Chau, Regional Director, ACI Asia-Pacific, who helped coordinate the distribution. “At the commencement of the New Year, I would like to wish you all a happy, healthy and peaceful 2012 and may natural disasters and perils be away from us all in the years to come.”

Since ACI and AAAE first teamed up to provide assistance after Hurricane Katrina; almost $410,000 has been donated by the airport industry for airport employees in the Gulf States, Haiti, New Zealand and Japan.

Monday morning began with three former airline planners who now work as air service development consultants — Jamie Kogutek, Sixel, formerly of AirTran Airways; Mike Lopez, Seabury APG, formerly of Continental Airlines; and Zach Mensen, Intervistas , formerly of Delta Air Lines.  Each of the three had left a carrier in the last 18 months.

As ex-airline employees each shared information that they could not before. Their secrets:

• Keep up with what airlines are doing in terms of strategy
• Know if decisions are made top-down or bottom-up.  At some airlines new routes are ultimately a CEO decision. The new United is using old Continental methods.
• While building relationships is important, you need to follow an airline’s prescribed channels when trying to win a route.
• Deal with the planning team, but do maintain your relationships.
• Airports that survived Southwest’s cuts did so because they had good relationships. It becomes a lot harder to cancel routes or cut capacity when you have good relationships. It is the tie breaker.
• Some carriers appreciate JumpStart meetings with currently-served airports just to check-in, especially in this environment. But others cautioned to know your carrier’s attitude because don’t want to use JumpStart meetings as a relationship building session.
• Don’t bring the mayor.  Do get community decision-makers involved, but not necessarily at those first meetings. Keep the group small.
• Different carriers have different goals for different conferences. Delta tries to meet with each airport at least once a year. A conference meeting could take the place of a headquarters meeting.
• There are competitive reasons for adding routes. Stomp out the competition. Sometime a lot of those decisions come from higher up.
• Market share plays are to make sure your brand is standing at the end of the day. We are now nearing the end of the game with this game ship.
• There will still be a market for 50-seat regional jets. There are certain roles that they will be viable.
• Airport operating costs. It a part in the decision, but it is not a deal breaker.
• Airlines don’t care about total annual passengers. Airlines talk about emplacements, not passengers.
• How does you community relate to places in my network is a key variable. Or, to which Florida markets your community travels. What business in you town has an office in Atlanta or needs to connect in Atlanta?
• Use corporate sales data only if they would be traveling on my airline.
• An airport trying to forecasts my costs is a waste as I know my costs. If you do them, they need to be believable for your credibility.
• More important to use the data before the presentation not during the presentation.
• Find the things sticks out. Tell me something I don’t know.
• If costs are not right, it can have a negative impact on the meeting.
• How forgiving are you for data mistakes — as long as carrier’s name was correct.

This morning, currently-employed airline planners shared their advice on making JumpStart presentations. Presenting we’re Adam Green, Virgin America; Nicholas Haan, Southwest Airlines; and Mark Kopczak; Spirit Airlines.

• Worst JumpStart mistake:
• Green: One airport failed to provide requested, additional information — that airport was under serious consideration. The airline passed them over.
• Haan:  One airport promised an exciting opportunity but first it wanted us to lobby Congress to get them included into the service to D.C. zone.
• Kopczak: You need to tailor presentation. One airport copied data from one city pair pitch made to a different carrier — they changed the city but not the data. Be confident with your information. We do check them.
• What to include:
• Tells us what we don’t know about your community and how it would fit into our network.
• Spirit likes to see recent retail sales numbers because it’s tickets are impulse buys.
• Does your business community “jive” with the typical profile of a Virgin America passenger.
• Southwest does not read the presentations it takes back from JumpStart but instead adds the information to the files it has on each potential service community.
• All agree don’t give paper presentations to take back but rather give them a flash drive or e-mail it later.
• Know the airline’s strategy and business plan. Make sure the pitch is in line with the airline’s plans.
• Make sure the pitch matches the aircraft the carrier would likely fly on the route. Don’t do a forecast that is barely defensible for a small plane when the carrier usually doesn’t fly that aircraft.
• Don’t pitch a route on the basis if the new route is there then the community will naturally fly it.
• Layout costs upfront. Spirit will ask for it right away. We want to know the rates and charges.
• Be up front.  The airlines don’t like to be surprised with major projects that could impact their costs or their operations.
• Beyond the runway capacity the airlines don’t care about the airport terminal facilities, its concessions and  awards during the initial presentation. At this stage the economics of the community is more important.
• Route selection is not a competition or reality game show in that cities are competing against each other for the next aircraft. Airlines are looking for the best revenue opportunity.
• Incentives:
• Green: They are important to us.  Some airports get it and some do not. Long-term not important to strategy. But in the short-term they are. In a “bake-off” they have made a difference. Stress the partnership with the airport. You cannot make a market out of incentives, but it can make a launch.
• on our five year plan
• Work in part ships with community groups. The airport role, I understand needs to be neutral. Then the community group can take the lead to build relationships. The community are really invested because they want to be on the Southwest network.
• If your presentations mentions a community group, give examples of how it has worked with other carriers. These really good stories of earlier successes push it over the top when decisions are made.

In front of Cinderella’s Castle in Walt Disney World, President Obama on Thursday announced his new initiatives to increase travel and tourism.

During his address, President Obama reminded the audience that the U.S. tourism and travel industry is a substantial component of U.S. gross domestic product and employment, representing 2.7 percent of GDP and 7.5 million jobs in 2010.  The President emphasized that these initiatives are a part of the administration’s comprehensive effort to help spur job creation.

Highlights of the initiatives include:

• Increasing non-immigrant visa processing capacity in China and Brazil by 40 percent in 2012.
  • As a part of this initiative, the Departments of State and Homeland Security announced a pilot program to simplify and speed up the non-immigrant visa process for certain applicants, including the ability to waive interviews for some very low-risk applicants, such as persons applying for visa renewals.

• Ensuring that 80 percent of non-immigrant visa applications are interviewed within three weeks of receipt of application.

• Increasing the efforts to expand the Visa Waiver Program and travel by nationals eligible to participate in program.
  • The Secretary of State has formally requested that the Secretary of Homeland Security consider Taiwan for participation in the program.

• Final Rule on the Global Entry program which will make it permanent and expand the program to four additional airports — Minneapolis, Charlotte, Denver and Phoenix.  This expansion would mean expedited clearance would be available to approximately 97 percent of international travelers. ACI-NA submitted comments to the administration in support of making the Global Entry program permanent.

These initiatives by the President are a great start to increasing international visitors to the United States. ACI-NA will continue to work with the administration and Congress to develop strategies which will enhance the security and the efficiency of the international arrivals process and attract international visitors to the United States.

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.

The first session Thursday highlights the current airport insurance market and its emerging trends of domestic liability, property, and professional coverage/employment practices liability.

John Geisen, Senior Vice President, AON Risk Services Central Inc., provided a review of the aerospace insurance market with a focus on airport market capacity and the outlook for 2012. The airport and air traffic control sectors ended 2011 with a 7 percent premium reduction much as they did in the past three years. This continued softening is driven by surplus capacity. Geisen is predicting that 2011 could be the bottom and prices in the sector might start to rise if passenger numbers recover but all evidence suggests a flat 2012.

On the property market, Richard Terlecki, Area Senior Vice President, Arthur J. Gallagher Risk Management Services, delivered some bad news. There were 12 losses that exceeded $1 billion in 2011 with a total of $70 billion catastrophe losses in just the first half which was the second worst in history. On top of the losses, interest rates are at historic low which translates to low investment returns. All this means that insurers are being forced to reassess exposures which would lead to reduced capacity on the property side.

In contrast to the liability market, there is relatively limited underwriting capacity for public officials’ liability, according to Simon P. R. Hodge, Managing Director of Wells Fargo. Finite number of insurance carriers restricts competition with pricing and terms driven by broader Directors & Officers and Errors & Omissions insurance markets. There remain significant opportunities, however, to enhance coverage quality.

Granted that your airport does purchase business interruption coverage, the first thing all three speakers mentioned was read your policy.  As a number one rule of risk managers, never assume; read the fine prints – know the definitions as they may be defined differently in your policy.  Swift mentioned, know your return time objective – understand when you need to have your business back up and running, and build your strategy in accordance to it.  Additionally, know the return point objective – how much data can you afford to lose before the point of no return.

Do you have property insurance that goes with your business interruption coverage?  Well even so, there are many points to consider.  If you have water damage coverage for your property, does that coverage cover mold damages as well – know the exclusions of the coverage and once again read your policy.  For your equipment, are they all covered or just the high value dollar items?  As a risk manager purchasing such coverage, do consider that every small dollar value item not on the balance sheet can add up exponentially.

As mentioned by Gardner, for a business interruption claims, talk to your insurers, your assessors, and peers right away.  Understand the situation that you are in.  Document, document, document as there will be large discussions amongst the risk managers and the Insurers of what the income loss is as a result of business interruption; the documentations will come in handy.  Lastly, if you need help, hire or ask for help.  Include additional professional fee in your business interruption coverage to ensure you can hire help when you need it.  Nothing is worse than to be in a troubled situation where you lack the knowledge or experience, and you have no resources to go to.  The risk managers and all the risk professionals here at the Risk Management Conference are here to help.

“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.

Airports Council International – North America (ACI-NA) today submitted comments in response to the Department of Homeland Security’s (DHS) Request for Public Comments regarding “U.S.-Canada Action Plan for Perimeter Security and Economic Competiveness”. In the filed comments, ACI-NA applauded the plan announced on December 7, 2011 by President Obama and Prime Minister Harper as “a good first step in improving the facilitation and security of trade, air travel, and the associated economic benefits for both countries”.  The comments also stressed the importance of the U.S. and Canadian Governments coordinating with ACI-NA on the aviation components as the Action Plan is refined and implemented.

“ACI-NA has long urged the Department to take a risk-based approach to security by focusing our limited government and industry resources on those people and goods about which the least is known,” said ACI-NA President Greg Principato. “Therefore, we were pleased that the Declaration by President Obama and Prime Minister Harper on February 4, 2011 stated ‘we expect to use a risk management approach’ and that ‘effective risk management should enable us to accelerate legitimate flows of people and goods into the United States and Canada and across our common border, while enhancing the physical security and economic competitiveness of our countries’.”

ACI-NA’s comments also noted the importance of the process outlined in the Action Plan to phase out the requirement for rescreening connecting checked baggage arriving at U.S. gateway airports. “We view this initiative as providing one of the most important aviation improvements in the Action Plan”, said Principato.

“For years, ACI-NA has been working on potential solutions with TSA, DHS and Congress to eliminate this redundant rescreening process because it unnecessarily drains limited TSA and industry resources and inconveniences passengers without providing meaningful security benefits.  Elimination of rescreening of connecting checked baggage will free up some TSA resources, minimize the operational burden on U.S. airports; decrease flight delays; minimize misconnected checked baggage; and improve the passenger travel experience,” he continued.

View ACI-NA’s full comments.

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 American (ACI-NA) and the Canadian Airports Council (CAC) today welcomed the Beyond the Border Action Plan announced by U.S. President Barack Obama and Canadian Prime Minister Stephen Harper as a good step forward in bi-national relations between Canada and the U.S., and good for North American aviation.

“North America’s airports will see tremendous benefit from this new commitment to our Canada-U.S. relationship,” said ACI-NA President Greg Principato. “The border agencies of Canada and the U.S. have a great track record of working together. This accord reinforces this great work.”

Among the welcome measures announced are the planned elimination of baggage security rescreening requirements for Canadian originating bags at U.S. airports by the Transportation Security Administration, expansion of U.S. pre-clearance for cargo from Canada, and the expansion of Nexus benefits to travelers.  Also included was a commitment “to identify and develop solutions to operational impediments to the effectiveness of U.S. Customs and Border Protection’s (CBP) pre-clearance operations at Canadian airports by June 2012.” Improved staffing levels at CBP have been a priority for Canadian airports for several years.

“The U.S. is Canada’s biggest trading partner and Canada’s airports strive to make travel between Canada and the U.S. as easy and hassle free as possible for business and leisure travelers alike,” said Canadian Airports Council Chairman Bill Restall.  “In the historic press conference, U.S. President Barack Obama said he hopes the new accord will lead to more Canadians visiting the U.S.  We also hope it will lead to more Americans visiting Canada, and increased cross border trade for the benefit of both countries.  A key part of that is a considered allocation of staffing resources at both Canadian and U.S. border agencies.”

The U.S. CBP provides customs and border services to travelers departing for the U.S. from eight Canadian airports that have U.S. pre-clearance facilities at which CBP agents process travelers prior to their departure from Canada.  They perform this function in the U.S. for travelers from other Canadian airports, however in recent years CBP staffing levels at many North American airports have not kept pace with the healthy growth in air traffic between the two countries.  In the first six months of 2011 alone, this traffic was up 4.5 percent.

ACI-NA and the CAC have been long-time proponents of initiatives that ease the facilitation of passengers and goods at the Canada-U.S. air border from CBP and the Canada Border Services Agency, including technology-based trusted traveler programs like Nexus and Global Entry.

“Canada and the U.S. enjoy an important longstanding relationship,” said CAC President Daniel-Robert Gooch, “Our airports welcome initiatives that ultimately make the experience of travelling between Canada and the U.S. easier and more hassle free.  We appreciate the Government of Canada’s consultations with industry on these initiatives and that the interests of Canada’s aviation sector have been considered.”

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.

Airports Council International-North America (ACI-NA) President Greg Principato issued the following statement in response to the Federal Aviation Administration (FAA) and U.S. Department of Transportation (DOT) announcement that they will be holding a forum on November 30 to find better ways to manage aircraft diversions.

“I applaud DOT and FAA for convening this forum and we and our member airports look forward to participating.  As I noted in my editorial in the USA Today on November 3, we at ACI-NA believe that this coordination is the key to both avoiding extended tarmac delays in the first place and minimizing their impacts to passengers in cases where they do occur.  We hope that this is the first of several meaningful steps in this direction.”

Principato continued, “At the forum, we look forward to discussing how we can manage diverted flights more effectively starting with how the airlines and FAA make decisions regarding where to divert, long before aircraft are stuck on the ground.  Airports stand ready to assist the FAA and the airlines with information about how many diverted aircraft they can accept, what types of aircraft they can accommodate, what facilities and equipment are available to service these aircraft, and what limitations exist with respect to accommodating international passengers.”