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State of the Industry “Opportunity in Collaboration: A Path for North America’s Airports” Remarks by Kevin M. Burke
Welcome to Long Beach for the 2015 Airports Council International – North America (ACI-NA) Annual Conference and Exhibition.
The ACI-NA Annual Conference and Exhibition is the one time every year that airport leaders and the associate community come together to discuss ways to improve operational efficiency through new approaches and best practices. We are thrilled with the exciting and forward-thinking agenda for this year’s conference. We know you will go back to your organizations with valuable intelligence as you make decisions to guide your airports in the years to come.
Last year in Atlanta, I reported to you that I had visited some thirty airports in an effort to learn more about the airport industry and the complex challenges you face each day. Since then, I have traveled to an additional 20 airports. On my visits, I still ask airport directors, “What keeps you up at night?” and the answers are still as varied as they were a year ago.
Running a modern and competitive airport is no easy task, but it is ACI-NA’s mission to help make that job as easy as possible. This morning, I want to share with you some of the ways ACI-NA is supporting our members and what you can expect from your team in Washington and Ottawa in the year to come.
Setting High Standards for Your Association
Our members rightly hold us to a high standard. As such, my priority – and the priority of every member of the ACI-NA team – is delivering exceptional service to you, our members.
Earlier this year, we took a snapshot of our members’ perceptions and understanding about our performance. Efforts like this help us remain effective in our mission. It was also good business sense to ensure we are hitting the high standards you set for us. I am pleased to report that more than 90 percent of our members are very satisfied with the expertise and guidance our team provides the industry.
Our dedicated team works around the clock to stay informed of governmental and aviation industry-wide developments to keep members ahead of the curve in both the United States and Canada. And our members’ understanding of our work grows more and more each day. At the same time, we cannot rest on past successes to ensure member satisfaction. We must continually improve how well we communicate with you and achieve results on your behalf.
There is always opportunity for us to do better and to be more effective. To do that, we must listen to your feedback and input to make sure we remain up to date on the newest challenges you face. The feedback we received during this important member survey provided us with a clear path forward to assist us in continuing to serve our members.
For example, we found during our survey that we can enhance our membership value proposition and better serve airport industry professionals at all levels within an organization by expanding the reach of ACI-NA’s valuable committees and delivering more tools and resources to make everyone’s jobs easier.
Achieving Success through Industry Unity
ACI-NA has long been known as the Voice of Airports® in North America, and I am exceptionally proud of the work we are doing to amplify our voice through collaboration and unity to advance airport priorities. One of my top priorities as your president and CEO is to further grow the strong record of collaboration between our U.S. and Canadian members. Even with unique challenges and opportunities, there is so much airports on both sides of the border can learn from each other.
For example, because there has been considerable conversation in Washington about privatizing air traffic control in the United States, I will be undertaking a fact finding mission in Canada later this year to learn more about the Canadian experience with ATC privatization and the airport perspective. I look forward to reporting the results of my trip and how we can take the lessons learned in Canada to ensure airports are protected as the U.S. policy debate unfolds. It is important for U.S. airports to have a seat at the table during negotiations, and learning more about the Canadian model will be valuable.
In the United States, ACI-NA remains committed to advancing airport priorities with all aviation stakeholder organizations, including the American Association of Airport Executives (AAAE), Airports Consultants Council (ACC), and the U.S. Travel Association (USTA). Last year, I reported to you that all of our organizations were working effectively together, and now we are beginning to see the fruits of our labor.
Just as we have been successful with building a vast and diverse coalition to support our Federal Aviation Administration reauthorization efforts in the United States, I am excited to work with the Canadian Airports Council (CAC) to build a similar coalition in Canada. As you know, airports are more than terminals and runways. They are drivers of significant economic opportunity for communities, workers, and passengers. Hundreds of industries are involved with the running of a modern and competitive airport. Bringing them together and harnessing their influence helps position the airport industry to positively affect the change we need.
ACI-NA is not just a U.S. or Canadian organization. We represent airports and the associate community across all of North America. ACI-NA and the CAC – our Canadian division – are entering a new era of increased collaboration on emerging issues that U.S. and Canadian airports are facing on a global level. Each airport is also part of a global network that grows more competitive each day. ACI-NA continues to leverage our unique relationship with ACI World to strengthen our leadership position around the globe.
Our work with these important voices has provided us with a strong foundation to help us overcome the known and unknown challenges ahead.
Identifying the Challenges Ahead
The significant challenges facing a modern and competitive airport industry are not easily solved. But as we remain focused on both the short-term challenges and long-term opportunities, ACI-NA is equipped and prepared to work with our members to seek common sense approaches. In our recent membership satisfaction survey, our members outlined several of the immediate hurdles the industry either will continue to confront or expect to face over the next few years.
First and foremost, air service remains the most pressing concern for airports today. With four airlines controlling more than 85 percent of the U.S. market and three airlines controlling more than 70 percent of the Canadian market, corporate decisions at a handful of airlines can very quickly put pressure on airports of all sizes in both the United States and Canada. For most of our airport members, being connected to international markets represents their biggest air service opportunity. That’s why it is important to maintain and expand liberalization policies – like Open Skies agreements – that ensure market access.
Earlier this year, the ACI-NA Executive Committee directed the Marketing and Communications Committee – the ACI-NA committee chiefly responsible for monitoring and reporting on air service issues – to explore ACI-NA’s ability to support member efforts to recruit and retain air service for the benefit of their local communities and passengers. Based on their analysis, ACI-NA will be implementing several recommendations to better equip airport members in their air service needs, including initiatives to continue advocating for increased competition, reducing burdensome regulatory burdens, and facilitating access to air carriers. We are proud of this year’s inaugural stand-alone JumpStart® Air Service Development Conference. With more than 500 attendees and 26 airlines represented, the conference was a major success for ACI-NA and we look forward to building on that success for next year’s event.
With continued air service pressures, airports in the United States and Canada are also under significant financial pressure. In a system where passengers help generate airport revenues, limited growth – or even negative growth for some airports – in the North American market, airports must make strategic decisions about developing and executing capital improvement programs.
In the United States, airports are having to do more with less. With more than $75 billion in capital improvement needs through 2019, our efforts to modernize the locally set Passenger Facility Charge (PFC) and maintain the Airport Improvement Program (AIP) are crucial to our FAA reauthorization agenda.
Canada’s successful airport model is always under some threat, and as Canada prepares for a new federal government, the CAC remains vigilant to the need to preserve Canadian airports’ financial autonomy. Canadian airports have invested more than $19 billion in infrastructure improvements and expansion projects since 1992 without any taxpayer support. At the same time, Canadian airports have paid more than $4.6 billion in rent to the federal government, far exceeding the government’s investment when Canadian airports were transferred to a new, more sustainable model more than 20 years ago.
As frustrating as long security and border control lines are for passengers and airport operators alike, maintaining the safety and security of the traveling public maintains the top priority for airports. Passengers often look to the airports to resolve these frustrations. That is why ACI-NA continues to advocate for resources and better processes to improve passenger security screening.
Over the last year, I have met with officials in Washington and Ottawa to discuss the need for more collaboration and investment in technology. ACI-NA continues to push for expanded use of automated passport kiosks, as well as our widely successful Mobile Passport Control (MPC) app that is now online at five U.S. airports, and more airports soon, including U.S. pre-clearance operations in Canada.
Complex Regulatory Environment
Airports are highly regulated operations, and those regulations can place unfair or unnecessary burdens on airports. Competitive airports require greater flexibility. In the United States, airports are working to realize greater flexibility in air service incentives and non-aeronautical land use. Over the past year, the Canadian federal government also has attempted to get back, through regulation, control over airport development that it long ago had ceded as part of sensible reforms to modernize the management and ongoing maintenance of Canada’s major air infrastructure.
Political uncertainty has also perpetuated challenges for North American Airports. Canada’s upcoming election and the U.S.’s own near miss of a government shutdown have significantly impacted airport long term planning. Canada’s election, which is just a few weeks away, could have a profound impact on whether Canada’s CTA Review of aviation policy leads to important, much needed reform for Canada’s air sector or sits on a shelf like so many government reports before it. And while the U.S. presidential election is a year away, the campaign is already heading up and will likely impact the FAA reauthorization timeline.
Forging a Path Forward
With so many complex challenges facing the industry, we at ACI-NA ask ourselves the same question every day: How can we assist our members in their dual mission of ensuring the safe and secure movement of passengers and goods while providing an excellent customer experience?
We are at our best – both as an organization and an industry – when we collaborate around issues to provide solutions. A year ago, airports struggled to understand the impact that passenger demand for ride-booking apps like Uber and Lyft was having on airport operations. We heard our members and moved to establish a cross-functional task force that provided airports with sound and practical guidance on how to work with these companies to compliment an airport’s ground transportation model. Today, airports now have a deeper understanding of ride-booking companies, with dozens of airports successfully implementing agreements to allow Uber and Lyft options at the airport.
Just as we continue to see with the success of our Mobile Passport Control app, there is a clear role for technology in enhancing airport operational efficiency. With the rapid proliferation of ground transportation options, it is increasingly difficult for airports to manage all of the commercial vehicles operating on airport property. As an outgrowth of our ride-booking task force, ACI-NA has partnered with Planning Technology, Inc., to develop CurbPING, a new ground transportation tracking application that will assist members in the enforcement of local airport ground transportation rules while providing greater accountability in collecting ground transportation revenue. Our new geo-fencing technology will begin through a pilot program later this year.
We have also established a similar cross-committee task force to examine the impact of drones on the airport industry. On one hand, airports see a clear need for the adoption of drone technology to enhance safety and security. On the other hand, drones – both on property and off property – pose significant operational and safety challenges for airports.
ACI-NA has also created a task force on concessions procurement and contracting issues, which is designed to address concerns raised by ACI-NA World Business Partners/Associates. The task force will include representatives from our Business Diversity, Commercial Management, Finance, Legal, and Risk Management Committees, including World Business Partners and Associates. It will carefully consider a variety of issues and will develop options for airports to consider that will be mutually beneficial to airport proprietors and their commercial partners, the concessionaires.
ACI-NA’s leadership on emerging issues, like drones, evolving changes in ground transportation, and concessions management, is equipping the industry with essential intelligence and innovative solutions, all based on collaboration. But without a clear industry roadmap and complete inventory of the challenges ahead, ACI-NA cannot effectively serve our members and position them for success. Over the next several months, ACI-NA will engage with members to identify the high level challenges the industry expects to encounter over the next decade. Our new “Challenge 2025” initiative will incorporate feedback from every corner of the airport industry into an actionable plan that will drive ACI-NA’s priorities.
This roadmap will provide ACI-NA with key insights on how to best serve our members in the years to come by ensuring your trade association is in full alignment with the needs and goals of the industry.
Our industry is on the verge of great change and great opportunity. The world grows more competitive each day, and airports are both drivers of and active participants in the competitive global marketplace.
ACI-NA is continually increasing our efforts to provide ACI-NA members with first-rate, forward-thinking advocacy and valuable intelligence to bring about solutions for you, your communities, and the passengers who travel through your terminals every day. Our effectiveness in Washington and Ottawa, and our ability to deliver quality information, has helped position North American airports to stay ahead of tomorrow’s challenges.
The immense challenges looming beyond the horizon require us to maintain a global vision. This is where your association can be most impactful, and we are ready for the challenge. While we are proud of our reputation as being the go-to industry resource and an influential voice, your participation in ACI-NA is what drives our success. Working tougher, we can ensure a competitive and progressive airport industry that serves to benefit your communities and your passengers.
Airports Council International-North America (ACI-NA) represents local, regional, and state governing bodies that own and operate commercial airports in the United States and Canada. ACI-NA member airports enplane more than 95 percent of the domestic and virtually all the international airline passenger and cargo traffic in North America. Approximately 380 aviation-related businesses are also members of ACI-NA, providing goods and services to airports. Collectively, U.S. airports employ more than 1.3 million people and account for $1.2 trillion in economic activity—or seven percent of the total U.S. workforce and eight percent of GDP. Canadian airports support 405,000 jobs and contribute C$35 billion to Canada’s GDP. Learn more at www.aci-na.org.