US Review

Stormy weather: A quarter of North American airports lost more than 10% of their passenger traffic. (Denver)

Stimulus funding is hot. Environmental projects are many. Privatisation took one step backward and a smart step forward. Traffic is down. Carroll McCormick reports.

Stormy weather: A quarter of North American airports lost more than 10% of their passenger traffic. (Denver)

There is a lot of mileage in staking out the position that the most significant legislation to sweep over the country and over US airports this year is the American Recovery and Reinvestment Act, signed into law February 17.  Of the US$150 billion it made available for new infrastructure, the Federal Aviation Administration (FAA) was tasked with allocating about $1.1 billion for airport improvement projects.
Using the existing US Airport Improvement Program (AIP) funding formula, the FAA had rapidly allocated $1,087,355,810 by the end of May.  It spread the money over 304 airport projects across the Continental US, Hawaii, Guam and Saipan.
Jane Calderwood, VP Government Affairs, Airports Council International-North America (ACI-NA) explains how the FAA was able to act so quickly: “The FAA had $5 billion worth of projects in the pipeline that had already been approved for AIP money.  The design and engineering work had already been done and the projects were just waiting for the money.  “This is why the FAA could move so quickly.  The airports knew what to do.  The other issue was that any project that was funded had to be completed in two years. They wanted to create jobs yesterday.”
Renewable energy is the future at many US airports. (Denver)

Putting the $1.1 billion into one context, it represents about one-third of annual AIP funding.  To understand its significance another way, Calderwood explains: “Some of the airports would have had trouble getting funding for their projects.  It also allowed airports to push forward projects that may not have been done for one, two or three years.  Some of our airport members said there were projects that they had taken off the boards that they were then able to launch under the Recovery Act Funding.”
The Tampa International Airport, for example, reports that it decided to apply most of the $8-million grant it received for its Taxiway B Reconstruction and Bridge project.  The funds allowed Tampa to move this project ahead by as much as three years.
Projects ranged from a modest $50,000 to rehabilitate the terminal building at the Dothan Regional Airport in Alabama, to a half-dozen $15 million projects; for example, two $15 million grants for the construction of two new airports in Alaska: one in Akiachak, the other in Ouzinkie, and the Baltimore-Washington International Airport received $15 million to help reconstruct its C and D aprons.  The John F Kennedy International Airport collected $15 million to rehabilitate its runway 13R/31L.
At a glance, runway, taxiway and apron rehabilitation projects appear to constitute the majority of the grants, in amounts ranging from a few hundred thousand; such as $580,000 for runway 04/22 at Alabama’s Tuscaloosa Municipal Airport, to multi-million dollar projects; like $5 million for an apron refurbishment at Arizona’s Kingman Airport, $1,350,000 to resurface runway 16/35 at California’s Davis Woodland Winters Airport, and a whopping $15 million to relay runway 04/22 at Alaska’s Fort Yukon Airport.
Several grants funded rescue and fire fighting vehicles and buildings; for example Indianapolis International Airport will use $1.3 million to purchase a new aircraft rescue and fire fighting vehicle and the Baton Rouge Metropolitan Airport received $3 million to modify its aircraft rescue and fire fighting building.  Other airports received funds for projects such as new runway lighting, drainage, terminal building improvements, and in the case of the Pierre Regional Airport in South Dakota, $1,346,368 for a new terminal.
“The country is making an important investment in the airport infrastructure,” Calderwood says.  “This also helps prepare us for the Next Generation Air Transport System [the umbrella term for the modernisation of the National Airspace System].”
It is interesting to juxtapose the FAA’s $1.1-billion in infrastructure funding, barely 1% of the $94 billion ACI-NA estimates airports need to spend on infrastructure to 2013, with the $1-billion budget the Department of Homeland Security (DHS) received for security projects from the American Recovery and Reinvestment Act.  In March DHS informed 17 airports that it was considering launching their checked baggage explosive detection system projects from its Recovery funds.
GreenWaste Recovery. Recycling and other environmental initiatives grew in the last 12 months. (San José)

After the Recovery Act, reducing the environmental impact of airport operations is arguably the second-hottest topic of the year.  “That definitely could be true.  The environment is clearly a priority of the Obama administration and Congress,” observes Jessica Steinhilber, Senior Director, Environmental Affairs, ACI-NA.  That said, she adds: “There is a lot being talked about, but it is still a moving target.”
While the government is organising its environmental thoughts, airport-by-airport initiatives to reduce their impact on the environment have been popping up like mushrooms.  Two alternate energy examples offer a taste of the scale on which airports have been acting: this July the Fresno Yosemite International Airport marked its first year of operation of a 9.5-acre (3.85 hectare), 2-megawatt solar installation, the largest in the US at the time of commissioning.  It is supplying 40% of the power required to run the day-to-day needs of the airport, and will save the airport an estimated $13 million in the first 20 years of operation.
This August the Denver International Airport marks the first anniversary of the dedication of its two-megawatt solar power system.  Covering 7.5 ac (3 ha) of land, it is part of the Greenprint Denver sustainability agenda.  This facility will reduce carbon emissions by over 6.3 million pounds (2.86 million kg) a year.
Composting is a growing activity at US airports: This February, for example, Denver announced it was taking part in a pilot program to test the feasibility of composting organic materials.  Concessionaires are also doing their part to recycle and compost.
At the Oakland International Airport, HMS Host participates in the airport-wide food and organic waste-recycling programme.  “Each food vendor separates food waste into specific containers on site.  Our trash-recycling programme includes cardboard and biodegradable items and our plates, utensils and cups are made from corn, sugar and paper – all are compostable and/or recyclable.  Lastly, we have instituted a recycling programme with all of our coffee grounds that are sent to compost or used as fertilizer,” explains Susan Goyette, senior director communications and public relations, HMS Host.
Master concessionaire HMS Host opened scores of retail and F&B locations since last year. (HMS Host)

Lest one think that coffee is a small-ticket item, concessionaires at the Seattle-Tacoma International Airport, to name one example, are recycling 12 tons (10.9 tonnes) of coffee grounds a month.
“There are a lot of initiatives going on at the airport level.  A number of them are being initiated because of the environmental impact, and cost savings,” Steinhilber says.
This February the ACI-NA board of directors adopted a list of environmental goals it wants member airports to work toward.  They include having an environmental policy statement by 2010, and an environmental management system in place by 2014 at large airports, 2016 at medium airports and 2019 at small airports.  The list has seven air quality, climate and energy goals.  These include low-emission vehicles and ground support equipment, plus the same standard for its access vehicles and their support infrastructure, energy conservation, pre-conditioned air and power at loading bridges, reduced fee and parking incentives for low-emission passenger vehicles and greenhouse gas emissions inventories.  The list also covers noise, waste management and water quality goals.
“ACI-NA is currently working with its members to develop specific plans for meeting these ambitious goals through such initiatives as increased education and information sharing, identification of funding needs, and support for necessary research,” Steinhilber says.
North American passenger travel was down 3.1% in 2008.  The top 100 airports processed 18,440,958 fewer passengers in 2008 than in 2007.  The top 150 airports processed 10,440,909 fewer passengers, that is, 1,536,461,474 in 2008 versus 1,546,902,383 in 2007, according to ACI-NA.
Looking at the US, the top four passenger ranking airports: Atlanta, Chicago O’Hare, Los Angeles and Dallas-Fort Worth held onto their 2007 ‘league table’ positions.  Atlanta earned a 0.7% gain, passing the 90 million passenger mark.  O’Hare was down 9%, Los Angeles was down 4.7% and Dallas-Fort Worth was down 4.5% compared to 2007.  Denver climbed a spot to fifth place with a 2.5% gain in passengers, bumping New York’s JFK, which gained 0.2%, to sixth position.
Construction began this year on the PHX Sky Train, at the Phoenix Sky Harbour International Airport. Bombardier Transportation will be the system provider. (Phoenix)

Twenty-three US airports processed between 10% and 20% fewer passengers.  Three recorded a 20% or greater loss: Toledo lost 24.2%, Las Vegas lost 35.4% and Naples lost 84.6%.  Only two posted a 10%-20% gain: Columbus, with a 204.5% gain and Palmdale, with an 81.4% gain.
Cargo traffic in 2008 was down 7.6%, to 26,167,826 metric tonnes for the 162 North American airports reported in the ACI-NA tally.  The top five cargo airports were Memphis, Anchorage, Louisville, Miami and Los Angeles, maintaining the same one through five ranking as in 2007.
Notable cargo losers were Dallas-Fort Worth, down 34.9%, St Petersburg, down 35.1%, Baton Rouge, down 36.1%, Fort Wayne, down 84.1%, Daytona Beach, down 31% and Paducah, down 68.1%.  The big winner was Cleveland, which posted a 138.6% gain.  Palm Springs achieved a 35.7% increase, Fort Meyers gained 29%, Washington gained 32% and Fort Smith gained 30.8%.  Only a very few other US airports posted any gains in cargo traffic.
Last September 30, it seemed that the United State’s Federal Airport Privatization Pilot Program had finally graduated its second privatised, and so far only hub-sized airport: The Midway Investment and Development Corporation (MIDCo), made up of Citi Infrastructure Investors, Vancouver Airport Services and John Hancock Life Insurance Company, announced its winning, US$2.5 billion bid to operate the Chicago Midway Airport under a 99-year lease.  This April, however, MIDCo pulled out, reportedly unwilling to put up more of its own money in the credit-deprived recession.
Midway was the first major airport to get this far in the 13-year old pilot programme; the only other airport to be privatised was the Stewart International Airport, but that only lasted until November 2007, when the Port Authority of New York and New Jersey took it over.
“The credit crunch is definitely seen to be one of the reasons for the collapse of the Midway deal.  I would also believe that the pressure on the industry, such as declining traffic and declining revenues, provided some pressures to MIDCo’s models and performance,” says Ken Cushine, Vice President and Principal with Frasca & Associates, LLC, a New York City-based transportation consulting group.
The deal may have been overheated anyway.  “Midway is landlocked.  There is no room for more gates and it will never get a new runway.  One thing a lot of people questioned was how the $2.5B bid would work, given the limited upside potential.  All those factors together made the Midway deal seem very aggressive,” Cushine observes.
In any case, the deal looked to be more about monetisation than privatisation; ie, more about raising cash than a search for expertise to run the airport.  Chicago may restart the bidding process at the appropriate time, but this is not a seller’s market. “Right now bidders can’t afford to pay a lot,” Cushine says.
Several other airports have been making selling noises, but 13 years…?  “The programme was innovative and it is still an option, but I could see where people may conclude that it still has limited appeal,” Cushine concedes.
Meanwhile, this May 11 saw the official opening of the country’s first privately-developed and operated commercial service airport in Branson, Missouri.  Construction on the $155-million project began in July 2007 on a 922 acre (373.4 ha) site.  It has a 7,140 ft (2,176 m) runway, capable of handling aircraft as large as the Boeing 767, four gates and a 50,000 sq ft (4,644m2) terminal.  Sun Country Airlines and AirTran Airways operated its first two commercial flights.