State of the Industry “A New Air Service Paradigm” Remarks by ACI-NA, President & CEO, Kevin M. Burke

 

Introduction

Welcome to Denver for the 2016 ACI-NA JumpStart® Air Service Development Conference!

Now in its second year as a standalone conference, this year’s event is our biggest yet.  By the close of JumpStart® on Wednesday, there will have been more than 1,400 one-on-one meetings between airports and airlines.  That’s 300 more meetings than last year.  Hopefully over the next year, there are many new route announcements and inaugural flights because of your productive time here in Denver this week.

A New Air Service Paradigm

North American airports continue to feel the long lasting pressures of airline consolidation. As many of our airport members have experienced, corporate decisions at a handful of airlines can very quickly put pressure on airports of all sizes in both the United States and Canada.  With just four major carriers dominating 85 percent of the U.S. market, three major carriers holding more than 60 percent of the Canadian market, and the emergence of popular and competitive low cost carriers like Denver-based Frontier, there has been a dramatic shift the air service paradigm.  Everyone in this room has a tough job, especially when you consider how constrained airport resources are in the current environment.

In a survey we conducted last year, air service continues to be the top priority for more than 50 percent of ACI-NA’s airport directors.  But airport directors still feel there is opportunity for airports.  A third of our members said their biggest air service opportunity came from new transborder and transoceanic connections.  And as demand for travel increases as the economy strengthens, we only expect international demand to grow, and that is why our team has invested so much energy in recruiting more carriers this year.

Through our work on behalf of the airport industry, there is growing recognition among the U.S. and Canadian carriers about the importance of JumpStart® as a way to begin or continue conversations with North American airports.  We have 31 airlines with us – the most we've ever had – including several Latin American carriers like Copa Airlines, Volaris, and VivaAerobus.   We also have many airlines attending JumpStart® for the first time, such as Elite Airways, OneJet, and PenAir.  I want to especially thank our airline partners who have brought in more network planners to participate in this year’s JumpStart®.

ACI-NA Member Value for Air Service Development

To help our members better understand and overcome air service challenges, ACI-NA has been working closely with our Air Service Working Group, a member-driven task force, to develop more tools and resources to help airports of all sizes be more successful in their mission to connect their communities to the world.

Would the members of the Air Service Working Group stand and be recognized for their important contributions to this year’s JumpStart® Conference?  Thank you for your leadership on behalf of the industry.

Opening Market Access

To assist our members recruit and retain international air service, ACI-NA continues to press policymakers to maintain and expand liberalization policies – like Open Skies agreements – that ensure market access. ACI-NA is also working to better equip airport members in their air service needs, including initiatives to continue advocating for increased competition, reducing regulatory burdens, and facilitating access to carriers.

And while attracting more air service is the top priority for everyone here, ACI-NA is equally invested in 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 airport terminals every day.

Modernizing Infrastructure

When you consider the average airport facility in the United States is more than 40 years old – our host airport is the nation’s newest large hub airport – U.S. airports have significant infrastructure needs to ensure they remain competitive and able to meet capacity demands. According to ACI-NA’s capital needs study, our nation’s airports have more than $75 billion in needed capital improvements over the next five years. That’s more than $15 billion a year.

All of these challenges are directly linked. Without air service, airports cannot continue to serve their passengers. Without modernized facilities, airports can’t add new routes and provide the services passengers demand. Without financing, airports can’t build the facilities they need to foster competition and attract new air service – and that’s where the Passenger Facility Charge (PFC) comes in.

As you know, ACI-NA has been the industry leader in aggressively advocating for a modernized PFC.  The case could not be more clear and simple:  The PFC is a locally generated and locally controlled user fee that has the potential to give airports the ability to be self-sufficient, to allow airports to meet their own infrastructure needs and be more competitive without relying on taxpayer handouts. To make this happen, however, we need to get Washington out of the way.  As the FAA reauthorization debate in Washington continues, the airport industry can count on ACI-NA to be their champions.

Improving the Passenger Experience

ACI-NA is also helping our members overcome obstacles to improve the passenger experience.  For months, ACI-NA warned Congress and the Transportation Security Administration about the need for the additional TSA staff and screening systems necessary to minimize the potential for long lines at security checkpoints at airports across the United States.  We applaud the progress TSA has made to minimize wait times to date. However, as passenger volumes will increase this summer and have exceed capacity at some airports, we continue to work with Congress and TSA on long-term solutions that prevent long lines from forming in the process.

ACI-NA – through the excellent work of the Canadian Airports Council – is working with Parliament and CATSA on similar efforts to reduce long wait times for frustrated passengers.  No one knows airports better than airports, and our leadership on these issues is achieving meaningful results for you and your passengers.

We also continue our work to facilitate an even better international arrivals process for passengers traveling to the United States.  At this time last year, five U.S. airports had adopted ACI-NA’s Mobile Passport app as one of the tools for expedite the customs clearance process.  Today, that number has grown to 13 airports.  We are excited by the rapid adoption MPC is experiencing, and we look forward to more airports adopting this time-saving technology in the year ahead.

Conclusion

The significant issues facing a modern and competitive airport industry are not easily solved.

ACI-NA is working on behalf of our members to seek common sense approaches to turn challenges into opportunities.  Please let us know how we are doing and do not hesitate to call on us if you need assistance.  That’s why we are here.

Before I introduce Kim Day, I would like thank the sponsors who made the 2016 ACI-NA JumpStart® Air Service Development Conference a great success.  Without the strong support of the Boyd Group, Clear Channel Airports, Data Base Products, Diio, Go Providence, the Rhode Island Airport Corporation (TF Green State Airport), McFarland Johnson, OAG, and the Norman Y. Mineta San Jose International Airport, this event would not be possible.

I also want to extend tremendous thanks to Denver International Airport for being a gracious host partner for this year’s JumpStart®.  The city’s location could not be more perfect.  The airport has a strong record of success in recruiting and retaining airlines, so it will be nice for the industry to see that record first hand.

Having the right host partner at the right time is what makes our even successful each year.  Be sure to save the date for JumpStart® 2017, which will be held June 5 – 7, 2017, in Providence, Rhode Island.

I would now like to welcome Kim Day, CEO of Denver International Airport and our host for the week.  Kim began leading the sixth-busiest commercial airport in the United States in 2008.  Since then, she has grown the airport: in both additional destinations and through its expanded master plan.  Prior to Denver, Kim served as executive director of Los Angeles World Airports.

Please join me in giving a warm ACI-NA welcome to Kim Day.