State of the Industry "Mission Focused Advocacy and Intelligence for a Modern Airport Industry" Remarks by Kevin M. Burke

FOR IMMEDIATE RELEASE

 

 

 

State of the Industry

“Mission Focused Advocacy and Intelligence for a Modern Airport Industry”

Remarks by Kevin M. Burke

President and CEO

Airports Council International – North America

2017 ACI-NA Annual Conference and Exhibition

September 18, 2017 │ Fort Worth, Texas

 

As Prepared for Delivery

 

Good morning!  Welcome to Fort Worth, TX, for the 2017 Airports Council International – North America Annual Conference and Exhibition. 

Thank you, Mayor Price, for being here with us today.  We appreciate your warm welcome to your great city, and for the Texas hospitality we will experience over the next few days.

As the industry’s premier event, our conference provides the airport industry with the opportunity to meet and forge strong partnerships for the betterment of the industry. We are also very proud of our position as the largest “for airports, by airports” event in the world. 

I want to thank our team for producing another world-class event and our supportive Board of Directors, under the leadership of Bill Vanecek.  We will recognize Bill’s leadership as Chair on Tuesday, but please give Bill a round of applause for his service this year.

I also want to extend a very special thanks to Sean Donohue and the great team at Dallas Fort Worth International Airport for their incredible leadership as our conference host.  Please give Sean and his team a round of applause.

What they say is true: Everything is bigger in Texas, including our show floor this year.  With more than 2,000 attendees this year, I am thrilled to announce that our sold-out exhibit hall is the largest in our history with 290 booths. 

This event is made possible because of the strong support of our sponsors and exhibitors who find great value in participating every year. Please be sure to visit the exhibitors during show hours while you’re here in Fort Worth.

In my short time with you this morning, I am going to share some thoughts on your association’s mission-focused work to advance the industry, especially in the areas of infrastructure, passenger facilitation, and industry collaboration.

 

Modernizing Airport Infrastructure

Let’s first talk about modernizing airport infrastructure. 

Over the last year, we have redoubled our efforts to provide assistance to airports as they work to address one of the biggest challenges they face: modernizing airport infrastructure.

While there is no doubt we have begun making significant progress, our progress is because airports are loudly and directly sharing their stories and actual project examples with their elected officials. 

In the United States, Congress is beginning to come around to airport infrastructure needs despite age-old and inaccurate airline rhetoric.  In other words, airports have made great progress.

Airports like Philadelphia, Raleigh-Durham, Tampa, San Diego, Minneapolis-St. Paul, Denver and many more have gone above and beyond educating their elected officials by offering tours, meetings and valuable perspectives to assist in legislative decision-making.

Through that hard work, the Senate Appropriations Committee just delivered two key wins for passengers and airports by modernizing the local Passenger Facility Charge (PFC) user fee and increasing funding for the Airport Improvement Program (AIP).  

This is a very big “first step” in achieving airport priorities, but we have much more work ahead of us.  We must continue to impress upon Capitol Hill that airports have significant infrastructure needs that require additional funding. 

Many of our associate members have also joined our expanding Beyond the Runway Coalition to further amplify our message to ensure that airports remain strong economic engines and job creators in their local communities. 

In his role as chair of our World Business Partners and Associates Board of Directors, Les Cappetta has worked tirelessly to double the size of our coalition this year to more than 80 members.  Let’s give him a round of applause.  We owe a great debt of gratitude to Les as we expand our Beyond the Runway Coalition’s influence in Washington. 

Of course, our commitment to airport infrastructure is not limited to the United States.

In Canada, your team at the Canadian Airports Council has been successful in its work with the Government of Canada to provide National Airport System (NAS) airports the opportunity to apply for funding to support more efficient transportation corridors.

In particular, the National Trade Corridors Fund will provide Canadian airports with less than 600,000 passengers annually the ability to apply for federal funding to improve safety infrastructure at their airports.

Our progress to modernize airport infrastructure on both sides of the border is directly linked to the engagement of our airport and coalition members. Thank you to our airport members in the United States and Canada who have worked so diligently to help us seek long-term, self-sustaining solutions to airport infrastructure needs.

 

Improving Passenger Facilitation

In addition to modernizing airport infrastructure, we have remained fully committed to enhancing passenger facilitation at our member airports.

Last year in Montreal, I spoke about the need for collaboration to develop new tools and resources to keep our members ahead of the curve. You may recall that I touted the success of our Mobile Passport Control app that had reached more than one million downloads.

The app was designed to facilitate fast and efficient entry into the United States while maintaining the highest security standards.

I am pleased to report that Mobile Passport continues to be a success. The app has now expanded to 24 airports and one cruise port and has been downloaded by nearly 2.5 million users. Such simple technology is providing significant relief for limited Customs staffing resources at airports. 

In July 2017 alone, more than 300,000 eligible travelers successfully used Mobile Passport to clear the customs line. We think there is an increased role for technology in solving these challenges.

On the other side of the airport, we also continue to build upon our excellent relationship with TSA and CATSA to provide seamless and expeditious security screening while maintaining the safety and security of the traveling public.

Airports are promoting Trusted Traveler Programs – including TSA PreCheck, Global Entry and NEXUS – to expedite security screening and processing at U.S. and Canadian airports for pre-approved passengers.

To further enhance passenger facilitation, innovation lanes are also being deployed at many U.S. airports to reduce screening times by up to 30 percent.

Similarly, CATSA has launched CATSA Plus, higher-performance screening lines that allow for improved customer service and passenger flow through enhanced security checkpoints for passengers.  

The work that the airport industry is doing to ensure modern infrastructure and greater efficiency in passenger screening could not be more important, especially as the industry prepares for continued traffic growth in the years ahead. 

 

Traffic Growth Continues in North America

Speaking of traffic growth, our latest North American Annual Traffic Report will be released today. I am pleased to reaffirm that North America represents the busiest market in global aviation by airport operations.

In 2016 alone, North American passenger traffic increased nearly four percent.  How does that four percent translate?  That means 65 million more people traveled through North American airports in 2016 than in 2015.   All good news.

North America has also experienced a resurgence in international air service demand with a six percent increase. Expansion of routes between North America and Asia and Mexico played a key role in this growth.

As you might expect, Hartsfield-Jackson Atlanta International Airport remains North America’s – and the world’s – most traveled airport with more than 104 million passengers passing through the airport in 2016.

Other airports also experienced significant passenger growth, including Los Angeles, Denver, and Seattle. In fact, LAX is now the second most traveled airport in North America.

Just as passenger traffic is important, so is the role of air cargo.  In 2016, air cargo in North America experienced a 2.4 percent increase.  As such, many airports in North America are experiencing record growth in this important but often overlooked industry segment. Today, Memphis and Louisville account for 22 percent of air cargo in the North American Market.

In 2006, Cincinnati ranked 77th in busiest air cargo in North America. Today, it is ranked 10th.   Toronto, the busiest airport in Canada, saw cargo increase by 8.8 percent in 2016 over 2015.

In my view, the resurgence of air cargo is directly attributable to the expansion of e-commerce and innovative leaders like Amazon that are changing the business model to the benefit of airports.

Airports have significant infrastructure needs to accommodate growth in passenger and cargo activity and rehabilitate existing facilities. ACI World predicts that two billion passengers are expected to travel through North American airports by 2018 and three billion by 2035.

Our current airport system was designed for half the traffic volume we have today.  Even as Alaska Airlines’ CEO Brad Tilden said at a recent industry event, “Most airports in the country need new infrastructure, they need to grow.”  We couldn’t agree more.

It is more important now than ever that we continue our efforts to advance airport priorities like modernizing airport infrastructure to ensure a competitive 21st-century airport system.

 

A Mission-Driven Organization

At the core of our mission, ACI-NA exists to provide you – our members – with valuable intelligence to help you arrive at better business decisions. Through our committees, we have been able to translate high-quality work into real results for your industry.

Let me provide you with just a few examples.  Look to the cross-functional taskforce we established a few years ago to help airports address the new issues presented by Transportation Network Companies (TNCs), like Uber and Lyft.

Now that these services have grown more common at airports, the group has asked us to take the work to the next level to help our airport members solve the emerging challenges they are now facing with TNCs and their impact on the airport business model.

These new challenges include revenue management, information technology, capital planning, and development.

A second example can be found in the work of our Finance Committee. 

In one of ACI-NA’s most significant projects this year, our Finance Committee worked with other committees to develop the most comprehensive snapshot of airport infrastructure needs we have ever produced.

Our Infrastructure Needs Study takes the deepest dive yet into the challenges of airport infrastructure, uncovering nearly $100 billion dollars in significant infrastructure needs for U.S. airports over the next five years.

The study has been extremely beneficial for airports in moving the needle in Washington and has helped lawmakers on Capitol Hill understand the real infrastructure needs of airports and the importance of modernizing airport financing.

In Canada, the CAC’s Operations, Safety and Technical Affairs Committee has been working to prepare for a new requirement to have Runway End Safety Areas, which is expected shortly after several years of study and consultation by the government.

Members always tell us that our committees are a valuable resource when it comes to solving industry challenges.  I call our committees the spine of ACI-NA.

So, are our members satisfied?

Earlier this summer, we conducted our biennial Membership Satisfaction Survey. 

I am so pleased to report that 95 percent of our members think we’re doing a great job.  Even though we improved that number by 5 percent since 2015, we can always do more and do better.

One of our biggest take-aways from this year’s survey reinforces the important work we have been doing in the area of air service development. Two years ago, airports told us their top challenge was attracting new air service options or retaining existing service for their communities. 

In response, our team got to work expanding our annual JumpStart® Air Service Development Conference to better foster relationships between airports and airlines.

This year’s event attracted more international carriers than ever before.  We are very excited to be taking this event to Cleveland in 2018.

We learned in our membership satisfaction survey that air service remains the top priority for our members over the next three to five years.  We will continue to help airports meet that challenge.

With the leadership of our Marketing and Communications Committee, I am excited to announce that on Saturday, our Board of Directors approved the establishment of a stand-alone Air Service Committee.

Open to both U.S. and Canadian members, the committee’s goal will be to help airports navigate a post-consolidation, consumer-driven airline industry.  We are excited to add this committee to our comprehensive committee structure.

As I have always said, our organization is stronger when our members remain engaged. If you are not already part of a committee, I encourage you to join one or more.  There is no limit to your involvement with our committees.

So, thank you for your continued participation in your trade association. It’s a pleasure to serve as your President.  I hope your time here in Fort Worth is fruitful.  I look forward to seeing you on the show floor over the next two days.

Thank you.

About ACI-NA

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.