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Issue link: http://airportbusiness.epubxp.com/i/311874
INDUSTRY INSIDER 16 airportbusiness May 2014 a single voice. Congress took advantage of that and ended up changing the tax laws in a way that cost the airlines around $3 to $4 billion. If the airlines had spoken with a single voice back then, chances are they would not have had the same outcome. The airport community needs to learn from that lesson and I think we have. Airports have been very good about speaking with a single voice in Washington, and I think we're getting even better than we have been in the past. HOW IS AAAE WORKING THROUGH THE ISSUES AIRPORTS HAVE WITH THE AIRLINES? There are more areas of agreement than disagreement with the carriers, but one fundamental point of disagreement manifests itself in the passenger facility charge (PFC) issue. PFCs are the mechanism that airports use to make sure they have enough infrastructure investment. That issue really boils down to one of control. There is a landlord-tenant relationship that exists with airports as the landlords and the airlines as the tenants. This relationship creates tension between airports and airlines that will, frankly, probably always exist. Airlines try to figure out how to increase their profitability, and look at the world in a 90-day quarterly window for their financials. Meanwhile airports must look out into the future, up to 10 years or more, on behalf of their communities. That is a point of contention. Probably the single largest point of contention between airports and airlines at the moment is how to make sure there is adequate infra- structure investment in a time of declining federal resources. HOW IMPORTANT IS THE PROPOSED PFC INCREASE IN THE 2015 FEDERAL BUDGET PROPOSAL? The last time Congress increased the PFC was 14 years ago. Since that time, the purchasing power of the PFC has eroded by half. The likelihood is that federal funding is going to decrease rather than increase over time with sequestration and the pressures on the budget so airports really need a mechanism for self- help. The PFC is an opportunity for airports to ensure they have the necessary resources to build the system, not only for today, but into the future. THE SAME BUDGET PROPOSAL CALLS FOR A REDUCTION IN AIRPORT IMPROVEMENT PROGRAM (AIP) FUNDS. WHAT WILL BE THE IMPACT OF AN AIP REDUCTION? T h e A d m i n i s t r a t i o n h a s p r o p o s e d , for a number of years, a reduction in AIP funding. Congress has made minor modifi- cations to the program but has for the most part rejected the Administration's proposal to reduce AIP funding. As a result, they've kept AIP funding pretty steady. It got up to $3.5 billion, now we're at $3.35 billion. The truth is, however, that if Congress were to enact a PFC increase, you actually could recalibrate the AIP program and reduce it somewhat by aiming more of the remaining dollars at smaller airports, and using the PFC increase to help address the growing needs at larger airports. But don't get me wrong. I'm not looking to decrease the AIP program. Airport needs are very, very high. A PFC increase and full fund- ing of the AIP program is the preferred course of action. WHAT CAN BE DONE TO DECREASE CUSTOMS WAIT TIMES AT U.S. GATEWAY AIRPORTS? The wait time at gateway airports is a very significant issue. There has been double-digit growth in the wait times at key facilities across the country. That has an impact in terms of the first impressions of our foreign visitors and their desire to return to the United States. We have a goal as a country of having 100 million visitors a year by 2021 and if we're going to hit that number we need to invest more in the processing of visitors and returning citizens into the United States. There are two principal ways that we can accomplish this. One is more boots on the ground. That is more Customs and Border Protection (CBP) resources aimed at airports. In this year's budget, there is funding for 2,000 additional CBP officers, which is a huge step forward. The second way is technology. Airports are investing significant amounts of their money in automated passport control systems, kiosks, which primarily help with the return of U.S. citizens to the United States. That WHAT'S ON TODD HAUPTLI'S READING LIST? AAAE President/CEO Todd Hauptli's favorite business book is one authored by Adam Bryant, called "Quick and Nimble: Lessons from Leading CEOs on How to Create a Culture of Innovation." In this book, the author draws on interviews with more than 200 CEOs to offer business leaders wisdom and guidance to help them move an organization faster and rekindle the whatever-it-takes collective spark of a start-up, all with the goal of innovating and thriving in a relentlessly challenging global economy. Bryant analyzes the lessons these leaders share to identify the biggest drivers of corporate culture. "Bryant pulls anecdotes and vignettes from his conver- sations with CEOs and puts them together in a way that's very accessible," says Hauptli. "I found the book very thought provoking and very helpful particularly as I've transitioned into my new role as CEO of AAAE. " Airport Business readers can visit Amazon.com to gain access to "Quick and Nimble's" understanding of the forces shaping corporate culture. airb_14-17_IndustryInsider.indd 16 5/2/14 9:38 AM