Back in the office

I’m off the road and back in the office after another driving trip through the Midwest. Unlike the one I took a month ago, there was far more traffic on the road, and far less talk among people I met about fuel prices. In fact, I am detecting a certain amount of relief in many people, as pump prices are starting to come down noticeably (though still to levels that prompted panic a few months ago). This concerns me a little; as I’ve written before, our history is that we fail to confront the long term energy challenge in this country as soon as per barrel and pump prices start downward.

That relief, though, does not extend to airport directors.

Service cutbacks prompted by high fuel prices remain in force. Airports continue to look for ways to cut budgets in response, and some have begun to lay off employees. Fewer passengers mean less revenue for airports. Airports are also coming to grips with the fact that many of their costs simply do not lend themselves to easy reduction no matter how much (or little) air service they have. Airports still have to secure the perimeter, airports still have to maintain the airfield, and so on. Airports still strive to meet the needs of delayed or stranded customers that were once met by airlines. I will write more on all of this another time.

This has now been noticed by the folks in the financial community. Airport finances are strong, in large part because of shrewd management, and because as public entities, they have maintained solid bond ratings and balanced budgets, resulting in lower costs for their users. The folks at Moody’s Investor’s Service, though, have sounded the alarm bell. They note the negative financial trends in the airport industry: enplanement declines, reduced consumer purchasing power, and the increased potential for airline bankruptcies that could lead to further consolidation and a reduction in competition. While Moody’s expects the large majority of airports to be fine, they note these pressures can increase, and that bond ratings can be affected. This would raise costs not just for airports and their communities, but for airlines and passengers as well.

If you’ve read this blog before you know I believe that long-term thinking and planning is the best way to ensure more stable short-term periods. The airport industry has been notable for its ability to think long term; indeed, the communities that rely on airports demand it. But this is bigger than airports or airlines or anyone else. This country has to avoid the mistakes it made in 1973 (per barrel price quadrupled), 1979 (per barrel price tripled) and 1991 (large spike during and after Persian Gulf War); when it allowed the realization that long term steps were needed to evaporate as soon as the price started edging down. I am already worried that we might be on the same path.

Another President . . . and More on Energy

I’m writing this from Champaign, Illinois. All my in-laws are here so we drove out. On the way we stopped in Indianapolis to see the gravesite of Benjamin Harrison. Harrison is mostly known for beating the 22nd president, Grover Cleveland, and then losing after one term to the 24th president …. Grover Cleveland. According to my friend Al Felzenberg (a noted presidential historian whose new book The Leaders We Deserved….And A Few We Didn’t I highly recommend), Harrison deserves better than to be known as the filler in the Grover Cleveland sandwich.

I’m sitting in a coffee shop in Champaign looking at USA Today’s Business section. One article talks about the impact on trade of the RISING price of oil. The article right below it talks about the impact on stocks of the FALLING price of …… oil!

To me, this perfectly illustrates the danger of so much of the commentary we hear today in the press and the campaigns about the price of energy. It is all about today, and immediate “relief” and, indeed, relief is what many people and communities need. But if it is all about the short term, then we will find ourselves a decade from now — or the next time oil prices spike — lamenting that we didn’t take long-term steps today to address and shape our energy future.

Few sectors have been as hard hit as aviation. Hundreds of communities across North America are working hard to deal with service cutbacks and other changes (Air Canada’s announcement of large job cuts illustrates that this is a cross-border issue). As I’ve already written, my visit to the ACI Africa meeting illustrates that this is a global issue.

Tough times lead to creative thinking….and lots of ideas. Some of those ideas are pretty good, others not so much. ACI-NA is working hard on the analytical work necessary to sort the good from the bad so we can help shape the future of the industry, and of the air transportation system. We are pretty sure the answer isn’t to nationalize all or part of the industry as some propose. We are certain that the answer lies partly in more capacity, in the air and on the ground. We are certain that the answer lies partly in a better strategic, long term, approach by both industry and government — about both aviation AND energy. (Where would we be today if the airline industry had embraced air traffic control reform in the 1990’s, when we had a real opportunity to do something?).

I will be visiting the airport director here in Champaign tomorrow as part of the effort to craft ideas to help smaller communities cope with these changes.

A mentor of mine loved to say “we can shape the future, or be shaped by it.” Today, we are being shaped by an energy — and aviation — future we declined to address long ago.

Postscript to Atlanta trip

Yesterday, I wrote a posting from Hartsfield-Jackson Atlanta Airport. Specifically, I wrote from the boarding area.

My flight (AirTran 176) from ATL to DCA was delayed. Weather in the Atlanta area caused a ground stop. The actual airplane to be used for flight 176 was still in Raleigh, North Carolina, awaiting clearance to leave for Atlanta. Our departure would be delayed.

The gate agent got on the public address system and explained all this to people. She ran through a couple of scenarios, depending on when the plane would leave Raleigh, and told us she’d be back in touch in 15 minutes.

About 10 minutes later, she came back, told us which of the scenarios had played out, and what that meant for our flight. She also explained to people waiting for later flights scheduled to leave from that gate what it would all mean for their flights.

She repeated these announcements every 5-10 minutes from then until we were ready to board almost 90 minutes later. She’d begin by saying “in case you weren’t in the boarding area when the last announcement was made…” It reminded me of Red Barber, the old time baseball broadcaster, who used an egg timer to remind him to tell the audience the score, so they always knew, even those who joined the broadcast late. Until we boarded the plane, this young woman made sure we had all the information we needed. When I boarded, I thanked her for doing that.

The boarding area was quite crowded all this time, but there was no consternation, there were no disturbances. Everyone was calm, all the way through boarding and the flight. People were in a good mood, even. I think this is because we always had up to date information, we never had to guess and hope when our flight would be ready, and so we were prepared and not disappointed.

There has been a lot of attention these past couple of years on passenger service. I am convinced that what most passengers really want is reliable, candid, up to date, information. They hate it when no information is forthcoming. They hate it when people just tell them there is an ATC delay. Most passengers understand that, sometimes, things happen. They just want to be informed.

The young woman at gate C8 in Atlanta yesterday afternoon did that. And her passengers were most grateful.

Thoughts from West Virginia and Atlanta

I’m back from Ghana and have spent much of the time clearing out all the emails that backed up in my blackberry while I saw gone. I got phone and text service but not email. You don’t realize how much you rely on these little machines till they’re gone!

On Monday I attended the West Virginia Aviation Conference. Governor Joe Manchin spoke at lunch and they had me for dinner. Several small commercial service and general aviation airports were represented, as were a number of other aviation professionals.

Air service cuts were Topic A of course. In addition, I talked to several airport leaders about the additional costs they face in meeting energy needs and other imperatives. Still, the mood was largely upbeat.

When I worked in state government in Virginia, we were told by businesses we tried to woo to Virginia that the two things they cared most about were transport links and education. That’s why we invested in the commercial service and general aviation airports in Virginia. Companies want to know they have a way to move their people and products. And the professionals I met in Martinsburg, W.V. last Monday night do a great job providing that service to the citizens of West Virginia.

I am writing this from the airport in Atlanta. I flew down here this morning to participate in an airport economic development and best practices conference organized by the airport, the city of Atlanta and UNITAR which is a United Nations training organization. Delta Airlines and SITA also sponsored.

This meeting featured aviation professionals from across the country. The Atlanta-based counsel-general from Canada also participated. There was a lot of talk about what people are doing to alter capital improvements and other plans in the face of the industry downturn. There was also a lot of discussion about providing security in a way that is passenger-friendly and helps enhance the economic development mission of the airport.

ACI’s World office also co-sponsored this meeting and I was thrilled to represent the ACI family.

By the way, Atlanta Hartsfield-Jackson has some of the best marked and cleanest restrooms of any airport in the world. These kinds of things make a big impression on passengers and it is noticeable.

Reporting from Ghana II

Greetings again from Accra, Ghana. Yesterday, the afternoon ended with a very interesting CEO Forum. The discussion included CEO’s from Ghana, Togo, South Africa, Kenya, Nigeria, Morocco and Egypt and was moderated by Jim Cherry, chair of ACI World and the airport CEO in Montréal. Jim is a great leader for the worldwide airport community and for the Montréal airport. He has earned great respect around the globe for his intelligence and commitment.

The CEO of Airport Company of South Africa, Mohnla Hlahla, is someone I have come to know over the past three years and for whom I have also developed great respect and admiration. Her passion for airports and for serving the traveling public of South Africa is evident in every word she speaks.

While I have only recently met the other CEOs on the panel, each of them brings that same commitment and passion to their work. It is interesting to note, by the way, that three of the CEOs are women.

What was most interesting were the topics covered: customer service, airport rates and charges, management of operations and the future of capital programs. This could have been the same exact agenda for a CEO Forum in North America!

Indeed, ACI-NA was holding a summit of airport Chief Financial Officers in Seattle at exactly the same time. I was exchanging text messages with ACI-NA staff in Seattle during our session in Accra. The discussions were almost exactly the same! Many revolved around current industry financial difficulties and the fact that airline problems have forced airports to take on more responsibility, which adds costs that cannot be passed along. Indeed, airport energy costs are going up just as the airlines’ costs are, but they cannot be passed along. Airport directors and financial managers on every continent have to be good managers of their businesses in such times; a fact not well enough appreciated. Indeed, after a 30 year career that has included experience in both federal and state government as well as the private sector, I can say that airport directors, as a group, are the best business people I have ever encountered

It was an interesting experience, sitting here and sending text messages to a colleague seven time zones away about the same topics being discussed by people in places that seem so very different.

Today, after a very impressive official ceremony that included the Minister of Defense, more attention was paid to subjects such as security and safety. Again, the concerns and topics discussed could easily have found their way into an ACI-NA conference. Once again, Kirk Shaffer of the FAA shared his views with the attendees, this time concerning what FAA is doing on Safety Management Systems. Attendees very much appreciate the fact that Kirk is here and has been so freely sharing his views and expertise, as well as that of the FAA.

I leave Ghana tomorrow with great affection for a most friendly people.

Reporting from Ghana

Greetings from Accra, Ghana. I arrived here Sunday for the annual ACI Africa meeting. In addition to speaking at the conference, I am also here to attend the first meeting of all ACI regional directors with the new ACI World Director General, Angela Gittens. We are also holding other ACI World committee meetings here.

After arrival on Sunday (and a very friendly greeting from the airport staff!), a number of us took a tour of Accra. We visited the Kwame Nkrumah memorial park and grave site (he is the first president of Ghana and is a father of post-colonial African independence.). We visited Independence Square, a market and also the national university.

On Monday after my remarks and a series of meetings; we were taken to a local restaurant for some traditional local food, which was excellent. Traveling so much is a great way to learn more about other cultures, break down barriers, and bring the world together.

Yesterday, Kirk Shaffer, Associate Administrator of the Federal Aviation Administration (FAA) for Airports, delivered remarks about many FAA initiatives on safety and environment that were of great interest to attendees. The FAA has made assistance to airports globally on issues such as safety a major priority and Kirk was able to provide some good information to attendees. I very much appreciate the fact that Kirk came here and that the FAA is so active in that area.

After Kirk spoke, the Chairman of ACI Africa, George Muhoho from Kenya stood to close the session. He pointed out that no matter whether your airport is large or small, in the U.S. or Africa; there are still certain issues everyone faces. Safety, security, environment, wildlife management and others. He talked about how important it is for airport professionals all over the world to work together to face these problems. He is right and that is why it is a privilege to work within the only global organization for airports.

The conference exhibition opens today and tonight the Aviation Minister will join us. Tomorrow, the Vice President of Ghana will be here. Many of the session revolve around the issue of safety, a subject taken very seriously here. Kirk will speak again in a panel on Safety Management Systems.

I look forward to these next two days and will report further on what I learn here.