In this issue:
Only a few days after my last issue reached you, with its lead article decrying the chaos that erupted last year at JFK and LAX over imagined shootings, an actual shooting spree took place in the baggage claim area of Terminal 2 at Fort Lauderdale International Airport (FLL). In response to social-media alarums that led to false reports of shootings in the other terminals, the FAA ordered a ground stop, closing the airport for the afternoon and evening, disrupting thousands of people’s travel plans and playing havoc with airline schedules.
Ironically, the day before the FLL debacle, I’d received a long email from the director of a southeastern airport, chiding me for misrepresenting the situation. He noted that FAA requires airport operators to maintain an Airport Emergency Manual and requires emergency drills. In addition, TSA requires airport operators to have an Airport Security Program, which delineates the roles of all agencies involved in responding to security incidents. Therefore, in effect, he was saying, JFK and LAX were anomalies, and such situations would not catch most airports unawares.
Well, in light of FLL, I beg to differ. The only significant difference at FLL was that there was an actual shooter, with five killed and six injured. But otherwise, the panic and chaos were the same. People in other FLL terminals, learning of the Terminal 2 shooting via social media, insisted that they, too, heard shots, leading to panic and hordes of people fleeing onto the tarmac and out past the TSA checkpoints. Incoming flights were forced to wait on the tarmac for hours, and outgoing flights were prevented from taking off. Nobody seemed to be in charge, despite the provisions of FAA-required Airport Emergency Manual, required drills, and the airport’s TSA Airport Security Program.
Whatever exists in those documents is evidently not adequate to deal with imaginary shootings and the mass panic spread by social media. Outgoing Homeland Security Secretary Jeh Johnson called for airports to establish “Airport Operations Centers” staffed by airport operators and security, local law enforcement, the airlines, plus TSA and CBP “to manage security, incident response, as well as day-to-day airport operations.” It’s not clear what all those people would do the vast majority of the time, and assembling them all in one place immediately after a report of gunfire seems problematic. But some kind of central monitoring and decision-making facility seems wise for coping with serious emergencies. Here are some ideas worth considering.
These changes would help, but there is still the problematic role of social media in spreading rumors and engendering mass panic. Social media is not going away, and therefore must be factored into future planning for security and other emergency situations. The airport community needs to think hard about how best to limit the damage this generally benign technology can cause.
President Donald Trump is given to exaggeration when he disparages U.S. airports as of Third-World caliber. Nevertheless, when Skytrax released its 2016 list of the World’s Top Airports, only 13 U.S. airports made the list; the top 37 were all in other countries. New York’s Kennedy International made the list at #59, but LaGuardia and Newark were nowhere to be seen.
New York Times science columnist John Tierney wrote a searing critique of the five New York airports (including Atlantic City and Stewart) managed by the Port Authority of New York & New Jersey. “Making New York’s Airports Great Again” is one of the best airport articles I’ve ever read. It documents how treating the three major airports as a cash cow for money-losing real estate and seaport projects has left air travelers with three of the least-liked airports in the country. (Read Tierney’s article here.)
Tierney contrasts the century-old Progressive Era model of a centralized public authority with the global trend of airport privatization and public-private partnerships. These commercial entities have figured out that the way to make money is to focus on pleasing passengers (as well as airlines). He also notes with admiration that the British government, which originally privatized the three major London airports as a shared monopoly, corrected its mistake by requiring BAA to divest Gatwick and Stansted, putting all three into competition to attract and keep customers.
He also concluded that “The Port Authority has diverted so much money from the airports and run up such massive debts on its other projects that it can’t afford the bill for LaGuardia’s renovation,” which is being financed partly by Delta and partly by a competitively selected consortium that will build and operate the new central terminal.
The only U.S. airport I know of that was worse than LaGuardia or Newark was San Juan International. As Tierney points out,
“Until four years ago [that airport] had lots in common with LaGuardia. It was run by an unwieldy bureaucracy, the Puerto Rico Ports Authority, which neglected the airport while running up bills on its other unprofitable projects in the island’s ports. The terminal was a confusing jumble of dim corridors, with passengers enduring long waits to get through security or pick up luggage. The stores were tacky and the restaurants greasy spoons, often rented at bargains to politicians’ friends or relatives.”
He goes on to cite specific examples of lack of maintenance and broken toilets. But this problem really caught my eye:
“Some crucial tasks didn’t get done at all, such as maintaining the instrument landing system [ILS] . . . . For years, pilots had to land their planes visually, without positional guidance from radio signals, because the system’s antennae were blocked by trees—and no one in the bureaucracy wanted to take responsibility for cutting them down. Airlines, unsurprisingly, switched operations to other Caribbean hubs, leaving the airport without the revenue to pay bills, much less make capital improvements.”
But the airport situation got so bad that the administration of Gov. Luis Fortuno decided to seek an outside operator under a 40-year lease, a design-build-finance-operate-maintain (DBFOM) public-private partnership. The winning bidder was a consortium of financial firm Aerostar and a company that operates a number of privatized airports in Mexico. They agreed to pay the government $600 million up-front and another $600 million over the course of the lease. They also agreed to limits on airline landing fees, which won the support of the airlines serving the airport.
Here’s how Tierney describes the results, after three years of commercial operation and management:
“The redesigned concourses are sleek and airy and easy to navigate. Passengers get through security faster, thanks to a state-of-the-art system for screening bags. New boarding bridges stand at the gates The duty-free shop now looks like an upscale department store, and revenue from the new stores and restaurants has more than doubled. The renovated facilities and reduced landing fees have attracted more airlines to San Juan, and they have no trouble getting access to gates—now controlled by the airport’s manager, not other airlines.”
Tierney also explains how the new company handled the inoperative ILS. New airport director Augustin Arellano, an engineer with decades of aviation experience, explained that airport officials had been waiting eight years for bureaucrats in Puerto Rico and Washington to decide which agency had the authority to cut down the trees. Augustin’s response: “We went out there and cut down the trees ourselves. I knew we’d have to pay a fine, and we did—they made us plant two trees nearby for each one we cut down. But we couldn’t wait any longer. We had to make sure planes could land safety. Isn’t human life more important than trees?”
Tierney ends his article by citing the recommendation I made in a January study on reinventing the Port Authority of New York & New Jersey for the 21st century, commissioned by the Manhattan Institute. (Read the study here.) I urged that the various profitable PA facilities, including the three major airports, be long-term leased under the kind of public-private partnership that has transformed San Juan International. Using data on recent airport sales and long-term leases worldwide in recent years, I estimated that the three could be worth as much as $35 billion. But to ensure that the airports are refocused on pleasing their customers, I called for them to be leased separately, so they would be free to compete with one another for airlines and passengers, as is the case in London, Los Angeles, Miami, and a number of other major metro areas.
Note: To its credit, in recent weeks the Port Authority has announced a new capital budget devoting additional resources to Kennedy and Newark airports, with LaGuardia-like terminal renovations envisioned under similar public-private partnership arrangements. But the airports would still be operated as a shared monopoly, and would continue to divert airport revenue to the PA’s coffers for non-airport purposes.
The nominal subject of the Department of Homeland Security Inspector General Report OIG-17-14, dated Dec. 30, 2016, was audits of security controls for TSA information technology systems at airports. And most of the report is pretty boring stuff, though alarming in the number of instances of deficiencies at various airports.
But what stood out for me was Inspector General John Roth’s cover memo to then-TSA Administrator Peter Neffenger. It sharply criticized TSA for requiring that bits and pieces of the information in various tables be blacked out—or in security-speak, redacted. Roth laid it on the line: “The redactions are unjustifiable and redact information that had been publicly disclosed in previous Office of Inspector General reports”. He followed this with six examples of airport-specific deficiencies that had been reported in previous audits of individual airports but were all of a sudden supposed to be treated as Sensitive Security Information (SSI).
After citing these examples, Roth wrote that “I can only conclude that TSA is abusing its stewardship of the SSI program. None of these redactions will make us safer and simply highlight the inconsistent and arbitrary nature of decisions that TSA makes regarding SSI information. This episode is more evidence that TSA cannot be trusted to administer the program in a reasonable manner.”
Roth’s memo goes on to note that the House Committee on Oversight and Government Reform issued a bipartisan staff report in 2014 “finding that TSA had engaged in a pattern of improperly designating certain information as SSI in order to avoid public release because of agency embarrassment and hostility to Congressional oversight.” He added that in summer 2016, Chairman Katko of the transportation security subcommittee of the House Committee on Homeland Security, stated that this problem (of over-use of SSI designations) “raised the specter that we’ve heard again and again about TSA conveniently using the security classifications to avoid having public discussions about certain things that may be unpleasant for them to discuss in public.”
And that is not the end of the story. Roth also noted that at the request of three House committee and subcommittee chairs, the Inspector General’s office has begun a review of TSA’s management and use of the SSI designation, which they expect to release by summer 2017. I’ll be following this with great interest.
In last year’s effort to reauthorize the Federal Aviation Administration, the Airport Legislative Alliance (a partnership of AAAE and ACI North America) made a strong case for either increasing or eliminating the federal cap on the Passenger Facility Charge (PFC)—the local user fee that an airport can levy for specific improvements to that airport. In the end, Congress punted on that proposal and on the House Transportation & Infrastructure Committee’s proposed reform of the FAA’s Air Traffic Organization. Congress ended up passing an extension of existing law good through Sept. 30, 2017.
Several things have changed since then, which appear to increase the odds for more-substantive change when Congress returns to FAA reauthorization this year. First, we have a new President Trump who has pointed out that U.S. airports, in general, do not measure up to their global counterparts. He and his team have stressed the need for greater investments in sub-par U.S. infrastructure—but not via large-scale increases in federal spending. Granting airports increased ability for self-help investments is consistent with those concerns.
Second, as was already evident last year, the long-term campaign waged by airlines to persuade conservatives in Congress that any increase in the PFC cap would be a “federal tax increase on passengers” has lost most of its credibility. A growing number of conservative and libertarian groups have come to see the PFC as a local user charge (which it is), not a federal tax (which it is not). They also appreciate the opportunity to reduce the size of the tax-funded Airport Improvement Program (AIP) by allowing large and medium airports to replace AIP funding with locally generated revenues.
Third, a liberalized PFC cap has the potential to be that rare phenomenon in 2017—a bipartisan reform. Senate Democrats have included airport infrastructure in their notional plan for a 10-year, $1 trillion infrastructure improvement effort. So far, that plan offers no clues as to where the funding would come from. But on the House side, Rep. Peter DeFazio (D, OR), Ranking Member of the House T&I Committee, included increasing the PFC cap from $4.50 to $8.50 in his Feb. 1, 2017 “Investing in America: Options for an Infrastructure Package.” His news release suggested that the increased revenue would allow larger airports to self-fund, while permitting more AIP funding to be directed to smaller airports.
Finally, in crafting a transformative FAA reauthorization, there is at least the possibility of an airline/airport rapprochement. Airlines are committed to transforming the Air Traffic Organization into a self-supporting nonprofit corporation, governed by aviation stakeholders. But they are fighting against opponents’ portraying this as an attempt by the big airlines to gain control of the ATC system. They need a broader, more-representative set of governing stakeholders, and airports would be a strong and logical addition to the stakeholder group. Thus far, airport groups have been non-committal on ATC reform. A plausible political compromise would be an ATC corporation board seat nominated by airport groups that would join the coalition working for ATC reform—and airlines giving in on a DeFazio-type PFC increase.
I’ve been highly critical of TSA’s long-running program of having some 3,000 “behavior detection officers” roaming around airports, stopping and interviewing people who exhibit any of a memorized list of suspicious behaviors. I’ve noted a lack of any scientific evidence that such superficial interviewing could reliably detect those who pose a threat to aviation, and have cited reports by the Government Accountability Office that found zero potential terrorists among the thousands of people the BDOs have referred to law-enforcement officers for further questioning.
Now comes further evidence against the program, courtesy of the American Civil Liberties Union. In June 2015, the ACLU filed a lawsuit against TSA under the Freedom of Information Act, seeking release of records and reports about the behavior detection program. ACLU eventually won, obtaining over 12,000 pages from TSA. Last month the organization released a 28-page report on its findings here.
They found that TSA’s own files include many scientific papers questioning the validity of brief interviews for spotting potential terrorists. ACLU’s Hugh Handeyside told USA Today that “There is no indication—at least according to what the TSA has in its own files—that this kind of program can be done in a reliable and scientifically valid way in an airport context.” Further review of the TSA document trove also revealed:
As GAO discovered, during 2011 and 2012 the BDOs referred 8,700 people at 49 airports to law enforcement officers. Of those people, only 365 resulted in arrests, not a single one for anything related to terrorism. And the records on referrals to law enforcement were sloppy and incomplete, according to a review by the DHS Inspector General.
The ACLU report recommends that Congress terminate the behavior detection program, as the Ranking Member of the House Homeland Security Committee, Rep. Bennie Thompson (D, MS) has long recommended. I concur, and point out that shifting those 3,000 BDOs back to normal checkpoint screening duties would go a long way toward resolving the ongoing shortage of screeners.
On January 28, 2017, the FAA reached an agreement with the City of Santa Monica, CA that calls for shutting down the airport (SMO) on December 21, 2028. It also allows the city to begin work immediately on reducing the SMO runway’s length from the current 4,973 ft. to just 3,500 ft. That will make it unusable by most of the business jets that now use the airport.
The City of Santa Monica has been trying for decades to close down the airport (on whose non-aviation property Reason Foundation’s first LA-area offices were located from 1986 through 1991). Many of its voters object to aircraft noise, especially from jets, and worry about crashes. Voters in 2014 approved a ballot measure that retained the City Council’s right to control airport land; it also prohibited new development on airport land without voter approval, except for parks, public recreation, and open space.
The 72-page settlement agreement sets a troubling precedent, and many in aviation are wondering why FAA Administrator Michael Huerta agreed to it. The federal government owned the airport during World War II, when it was the site of the main production facility for Douglas Aircraft. It turned over the airport to the City via a 1948 agreement. That document reserved the authority for the FAA to take over the airport if the City mismanaged or closed it. While FAA has not owned or operated any airports since the divestiture of Washington Dulles and National Airports in 1987, were it to exercise this option per the 1948 transfer agreement, it would have no trouble finding firms interested in operating the airport under management contract or long-time lease. So why give up this legal authority to save the airport, in what Huerta called “a fair resolution for all concerned”?
General aviation groups have been scrutinizing the settlement agreement, to see if there are any grounds for litigation to prevent it from being implemented. They had better act quickly. City Manager Rick Cole has already begun the selection process for a firm to design the shortened runway.
Westchester County Hires Privatization Consultant . Unhappy with the County Executive’s plan for sole-source privatization of the Westchester County Airport, the County Legislature has hired Frasca & Associates to devise and manage a competitive process for the airport’s privatization. The Frasca firm has worked on both previous privatizations that have taken place under the federal Airport Privatization Pilot Program—Stewart International (New York) and San Juan International (Puerto Rico).
Port Authority Seeking Rail Access for LaGuardia and Newark. The Port Authority of New York & New Jersey last month approved a $32.2 billion capital budget that includes long-discussed plans to extend rail transit to LGA and EWR. The PA has issued an RFP for preliminary planning and engineering work for a new Air Train link between the existing subway system and LaGuardia, with two station stops within the revamped LGA and a new AirTrain station at Willets Point. The concept for Newark is to extend the PA’s existing PATH train to that airport.
Florida Governor Supports Airglades Airport Plan. Florida Governor Rick Scott on January 30th sent a letter to Customs & Border Protection urging the agency to approve a forthcoming application from the Airglades Airport in Hendry County to be designated a “user fee airport,” under which the airport itself would pay for CPB services. Airglades holds one of the slots in the federal Airport Privatization Pilot Program.
O’Hare Expansion Could Mean Increased Airline Competition. The City of Chicago has a plan to add 25% to the number of gates at ORD, and Chicago Business columnist Joe Cahill suggests the City use this opportunity to permit new entrants. In a February 1st column, he points out the current lease for anchor tenants American and United (which account for 82% of ORD traffic) expires in 2018 after 30 years. The current, old-style lease, permits AA and UA to veto airport expansion projects that threaten their dominance. Cahill urges the City to adopt a newer-type lease agreement without such a clause, and to make the new gates common-use.
Norwegian Adds Service to Under-Used Northeastern Airports. Norwegian Air International, which recently received its foreign air carrier permit from U.S. DOT, has announced it will launch 10 new transatlantic routes using long-range 737 MAX aircraft. Among the first routes will be service from Edinburgh, Scotland to Stewart International in New York, Green Airport near Providence, RI, and Bradley International serving Hartford, CT. Additional service to Stewart and Green will link them to Belfast, Northern Ireland and to Dublin and Shannon, Ireland starting in July.
Will Kansas Build a Rival Airport to KCI?. Plans to replace Kansas City International’s inefficient three-terminal configuration with a single modern terminal have faced local opposition. So Kansas Gov. Sam Brownback has begun discussions about possibly upgrading one of the two Johnson County airports to a full-fledged commercial airport with a state-of-the-art terminal. Whether this is just a bargaining chip or a serious plan remains to be seen. The larger of the two is New Century AirCenter, a former naval air station, with a 7,300 ft. main runway and a 5,000 ft. crosswind runway.
TSA to Reduce PreCheck Access for Non-Members. In a welcome development for PreCheck members, TSA announced on January 30th that it will cut way back on letting Behavior Detection Officers shift passengers who appear to be low-risk from the regular lines to PreCheck, which often slows down the PreCheck lanes due to the new people being unfamiliar with the streamlined procedures in those lanes.
More Airports Adopting Common Use Technology. The February/March issue of Airport Business reports on upgrades taking place at Phoenix and Salt Lake City airports. As part of its Terminal 3 Modernization Program, Phoenix Sky Harbor is adding common-use technology in the ticketing area and at gates. Salt Lake City’s $2.9 billion replacement for its existing terminal is doing likewise. The common-use technology will allow any airline to use any ticket counter and any gate, an important point for longer-term flexibility (and increased airline competition).
Amazon Putting $1.5 Billion Cargo Hub at CVG. Amazon is increasingly moving to take control of package delivery, emulating services offered by Fedex and UPS. In addition to last year’s lease contract for 40 jet freighters, last month it announced a project to build and operate a cargo hub at Cincinnati/Northern Kentucky Airport (CVG). The project will add about 2,000 permanent jobs at the facility. Amazon announced that the “Prime Air hub at CVG will support Amazon’s dedicated fleet of Prime Air cargo planes by loading, unloading, and sorting packages.”
Frankfurt Hahn Airport Sale May Succeed, on Second Try. Owned by the city government of Hahn, Germany, the money-losing Frankfurt Hahn airport serves mostly Ryanair flights. Last year the City proposed selling 82.5% to a Chinese firm, but the deal fell through when the company failed to make an initial payment. But in January, Infrastructure Investor reported that a different Chinese company, HNA Group, teamed with local firm ADC, is expected to bid on the airport.
TSA Says 25 Airlines Now in PreCheck. A news release from TSA in January announced that Spirit Airlines is now participating in the PreCheck program, like just about all other U.S. carriers. Less well-known is the recent addition of selected non-US airlines, including Aeromexico, Air Canada, Aruba Airlines, Avianca, Emirates, Etihad, Lufthansa, Sunwing Airlines, Virgin Atlantic, and WestJet.
Delta Remains at Dallas Love Field. The long-running battle between Delta and Southwest airlines over whether Delta can continue to use a gate at Love Field resulted in another short-term victory for Delta last month, when judges on the Fifth Circuit Court of Appeals voted to uphold a District Court injunction that prevents Southwest from kicking out Delta while the case moves to trial at the District Court level.
Express Train from Paris to Charles de Gaulle Airport Approved. The French parliament in January voted to approve plans for the CDG Express project, which will link the airport with the Gare de L’Est station offering nonstop rides of just 20 minutes. The budget for the project is $1.77 billion, and the schedule calls for it to be open by 2023. One-way fare is projected to be about $25.
UK’s Stansted Airport Arrivals Building. Privatized London Stansted Airport has announced plans for a new $162 million arrivals building to keep pace with its growth as an international airport primarily serving low-cost carriers. Under the plan, the current terminal would be devoted to departures only. The airport currently serves 24 million passengers per year, but projects growth to 43 million a year, the limit of its current single runway.
Flytenow Loses Appeal to Supreme Court. Flight-sharing company Flytenow appealed to the U.S. Supreme Court a lower-court ruling upholding FAA’s denial of its right to offer website-based flight opportunities on general aviation planes. But in January, the Supreme Court declined to accept the case.
“The glaring problem today is that TSA writes the screening procedures, and then monitors itself for compliance. Not exactly a virtuous circle. The current paradigm discourages critical thinking, solving problems with outside-the-box thinking, and calling it like it is when critical functions are reviewed. That’s why news reports indicate TSA failed 95% of the time during Red Team tests in June 2015, plain and simple. Any other excuse you’ve heard is a symptom, not the disease. The virtuous circle of quality control and quality assurance starts with moving screening operations out of TSA.”
—Ken Dunlap, “Towards TSA 2.0, Part 1: Remove Airport Screening Functions,” SecurityDebrief.com, July 12, 2016
”Between them, United and American control 82% of O’Hare traffic. Underlying that enormous market share are exclusive rights to 89% of 168 domestic gates. Only 10 ‘common-use’ gates are open to all carriers. . . . [UA and AA] also wield an effective veto over major projects at O’Hare, which are funded in large part by landing fees collected from airlines. As a result, many such projects require their approval. That means the two can shoot down projects they don’t like. And they don’t like projects that would open up more gates to new competitors. Remember the proposed western terminal? United and American didn’t want it, so it never was built and isn’t likely to happen any time soon. Of course, there’s an element of fairness in giving the companies that would pay for a project some say in whether it goes forward or not. But there’s no fairness in allowing two companies to freeze out competition.”
—Joe Cahill, “This Is Chicago’s Once-In-a-Generation Chance at O’Hare,” Chicago Business, Feb. 1, 2016
“Naturally, [TSA] officials vow it’s been worth it to pump over a billion dollars into an undertaking that includes officers monitoring people who seem ‘off,’ because stopping terrorism requires a variety of different approaches. But the execution doesn’t measure up to the concept. Allegations and anecdotes of racial and ethnic profiling have multiplied, but a lack of records has made investigation impossible. And those who don’t belong to singled-out minority groups have their own reasons to disapprove of weakly accountable secret snoopers with no track record of stopping attacks. There’s got to be a better way. Americans have largely lost patience with wasteful and invasive ineptitude from inside the Beltway, no matter how well-intentioned or initially reasonable on paper. If the TSA doesn’t want Congress to consider shuttering the behavior detection program, it had better find a way to make its operations more transparent, more cost-effective, and more in tune with Americans’ basic expectations around civil liberties and political accountability. Otherwise, the whole agency could find itself on the chopping block.”
—Editorial Board, “TSA’s Behavior Detection Program a Wasteful Flop,” Orange County Register, Feb. 14, 2017