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Spring 2011

Consulting

A Quarterly Publication of the Airport Consultants Council

ThE FUTURE of AIR CARGO MORE QUESTIONS THAN ANSWERS By Daniel B. Muscatello, Landrum & Brown, Inc.

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ver the past decade, the goods movement industry has experienced dramatic changes. Businesses have become increasingly reliant on speed, e-commerce, and high speed logistics, while outside factors such as terrorism, SARS, military conflicts and a global recession have forced the industry to adjust. The combination of these factors requires airports to re-examine their business goals, market priorities, and physical capacity in order to meet these challenges.

Assuming some level of stabilization in the global economy, the air cargo industry is posed to have a year of interesting developments. Reduced air cargo activity

levels in 2009 dropped many airport tonnage figures to mid-1990 levels, but there was almost universal recovery in 2010. Based on trends in 2010, many of experts are indicating a strong future for air cargo. But there are still tough questions that need to be answered, including what portion of the 2010 recovery was real and what has been permanently lost.

Recovery Dynamics The factors that lead to the recovery in 2010 must be explored to determine whether they will have limited or long-term effects on the future of air cargo. The first issue is how much of the “recovery� was based on accelerated inventory replenishment. There were clear indications that replenishment

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Special Feature: Does Your Airport CLIENT Need High Speed Checked Baggage Screening?

Consultant perspective: Parkers are Prime Airport Customers

Photo review of 32ND Annual ACC Conference & Exposition

was the case in the summer of 2010. This theory is reinforced by the slowdown in recovery over the late fall and early winter, peak shipping season. It will take some time to work out these patterns. Part of the 2010 growth had nothing to do with air but everything to do with the absence of capacity on the sea lanes. It takes a lot longer to bring ocean capacity back on line, and the resultant delays and shipping time constraints pushed what would typically move by ships to aircraft. There are indications that this trend has leveled off with the peak fall season and traditional ocean-borne cargo returning to See Air cargo on page 16


Executive UPdate

Great Moments are Born From Great Opportunity

—Herb Brooks, in his pre-game speech to the United States hockey team playing the Soviet Union in the 1980 Winter Olympics.

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couldn’t resist following the lead of our former chair, by initiating the conversation with a quote. Ron Peckham has always been very inspirational to me, and as an organization, we were very fortunate to be under his leadership for the past year. I truly look forward to serving the organization in the board chair position for 2011, and I can assure you that I will reflect the interests of the entire organization, the interests of vendors, suppliers, contractors, and consultants alike.

As I indicated at the ACC Annual Conference, we are at an inflection point in our development — as we are in the midst of the transformation of our industry. In recent years, the global aviation industry has been through many ups and downs: from skyrocketing fuel prices, to pandemics, to the recent financial crisis. Consolidation in mature markets, higher ticket prices, modernization of airports, policies to reduce emissions and tremendous growth prospects in emerging economies have been just some of the trends taking place in recent years. One can look at these issues in the negative; however, those that will succeed will look to the positives that arise from these events, providing opportunity across the industry. More to the point, I see the issues at hand for the industry as follows: Economic R ecov ery

Terry A. Ruhl, P.E. CH2M HILL ACC 2011 Board of Directors Chair

The economy is stabilizing but the recovery may be protracted. Despite the cautious outlook, aviation officials are forging ahead with projects thanks to a combination of factors: the federal Airport Improvement Program and American Recovery and Reinvestment Act (ARRA) as well as through bond measures. The ACI-NA estimates airports’ capital development needs for 2009 through 2013 to be $94.3 billion. “The stimulus funding was a nice shot in the arm, but without sustainable multiyear funding, it’s difficult for airports to plan effectively and not do stopgap construction programs,” says ACINA’s Chris Oswald. What will that mean for future airport funding? We have been asking the question for years, but if we can finally solve the problem…

Funding

Who would have known that issues like the allocation of slots at Washington Reagan Airport could impact progress in the entire industry and throughout the nation? Seventeen extensions to the reauthorization bill and what has amounted to be a three year delay has significantly stalled progress in the development of aviation capacity and infrastructure. We could be in for additional delays, as attention will continue to move to surface reauthorization. On the other hand, political pressure may force the hand of some legislators, and aviation could be the benefactor. Rep. John Mica, the Florida Republican who has taken over the House Transportation and Infrastructure Committee said in an interview with the Wall Street Journal that his first priority this year will be to pass a long-delayed bill to finance an overhaul of the nation’s aging air-traffic navigation system. Projec t Deliv ery

Design-Build (construction), CM-at-risk, Public-Private-Partnerships and multimodalism will continue to be considered and evolve as airports increasingly serve as socioeconomic centers for communities. At the same time, we must do it all sustainably. Private investment and alternative delivery models for airports have not been affected by the lingering impact of the recession. “There are billions of dollars looking for a place to invest, and airports represent a great investment,” says D.J. Gribbin, managing director for Macquarie. Projects are being delivered in a variety of ways now, and opportunities to delivering projects faster and cheaper will continue to be an emphasis for those in our industry. Ch a nging business l a ndsc a pe

The environment is changing — firms broadening service offerings, new players, M&A, etc. Will the services in our industry change, or just the companies providing them? Surprisingly, the consulting industry has seen revenues grow 50 percent in the past 10 years with profits doubling in the past 15 years, outgrowing GDP by nearly 50 percent over the same time frame. In fact, in the worst year in memory for E&C firms, only nine firms in the industry “lost” money — no See Executive Update on page 19

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Consulting, Spring 2011


Table of contents Spring 2011

Consulting

...delivering excellence in airport development

ACC 2011 Board of Directors

A Quarterly Publication of the Airport Consultants Council

Chair Terry A. Ruhl, P.E.

CH2M HILL

Vice Chair Courtney A. Beamon, P.E.

Delta Airport Consultants, Inc.

Secretary/Treasurer Andy Platz, P.E.

Cover Story

Inside This Issue

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8–9

The Future of Air Cargo By Daniel B. Muscatello, Landrum & Brown, Inc.

Mead & Hunt, Inc.

Immediate Past BOARD Chair Ronald L. Peckham, P.E. C&S Companies

Board of Directors Michael R. Arnold, LEED AP

Executive Update

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Out & About with ACC

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ACC 2011 Committee Leadership

Great Moments are Born From Great Opportunity

ESA Airports

Terry A. Ruhl, CH2M HILL, 2011 ACC Board of Directors Chair

Don Bergin

Blast Deflectors, Inc.

Roddy L. Boggus, NCARB, AIA

12 – 13 ACC 32nd Annual Conference & Exposition 14 – 15 ACC Members • • • •

Parsons Brinckerhoff

Carol Lurie, LEED AP, AICP Vanasse Hangen Brustlin, Inc.

Enrique M. Melendez

Paragon Project Resources, Inc.

A. Bradley Mims

Special Feature 4–5

Federal Advocates, Inc.

Kevin Quan

ESCO-Zodiac Aerospace

Does Your Airport Client Need High Speed Checked Baggage Screening? By Peter Kant, Rapiscan Systems

Marion Kromm White, AIA, NCARB, LEED AP InterVISTAS

ACC Staff Paula P. Hochstetler President

New Members ACC Updates On the Move And the Winner Is…

16 – 17 Cover Story (continued from page one)

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ACC Events

19

Executive Update (continued from page two)

Gensler

Solomon Wong

Member Spotlights This issue highlights ACC Executive Member Swinerton Incorporated and ACC Associate Member Simio LLC.

Consultant Perspective 6–7

Parkers are Prime Airport Customers By Owen Curtis, HNTB

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Collision Course: Falling Receipts Threaten the Future of the Federal Aviation Trust Fund By T.J. Schulz, ACC

T.J. Schulz

Executive Vice President

Sharon D. Brown

Director, Programs and Finance

Emily VanderBush

Coordinator, Marketing and Membership

John B. Reynolds

Coordinator, Communications

AirportConsulting Assistant Editor John B. Reynolds

Editor T.J. Schulz

AirportConsulting is published quarterly. The next issue will be distributed in June. For advertising information, contact Emily VanderBush at 703-683-5900. Please send your feedback, comments or suggestions to the editor at: Airport Consultants Council, 908 King Street, Suite 100, Alexandria, VA 22314, or email TJS@ACConline.org. ©2011, ACC www.ACConline.org

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s pe c i a l f e a t u r e By Peter Kant, Rapiscan Systems

Does Your Airport Client Need High Speed Checked Baggage Screening?

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he aviation industry is witnessing a transformation in the design and development of aviation hold baggage screening. This year, in alignment with their checked baggage re-capitalization program, the Transportation Security Administration (TSA) will be testing high speed explosives detection systems (EDS) for checked baggage screening for acquisition and deployment. Airports with growing traffic will need to understand the new possibilities available to them when planning for their checked baggage inspection systems (CBIS). Today, an average TSA-approved in-line medium-speed checked baggage equipment can inspect about 500-600 bags per hour (bph). This currently deployed EDS equipment consists of technologies unable to cost effectively accommodate the expected growth at many airports over the next 10 to 20 years. In fact, maintaining and servicing current systems is becoming cost prohibitive as they near the end of their life-cycle. It is clear that the future holds a transition to faster, more affordable and technically evolved systems in order to keep aviation’s busiest airport systems efficient and secure. In the most recent version of the Planning Guidelines and Design Standards (PGDS v3.0) for Checked Baggage Inspection

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Systems, the TSA used the following statement of requirements and purposes to define high-volume or high speed EDS equipment installed with an in-line CBIS: “The high-volume EDS machines are intended to provide solutions for airports that require fully automated in-line systems designed to handle very high peaks. High-volume EDS machines are estimated to achieve at least a throughput of 900 bph with a low false alarm rate. Also, these machines are expected to have improved image quality and better OSR operator tools (such as high resolution three-dimensional [3D] images of alarmed bags and alarmed objects, as well as density stripping tools). These OSR tools should enable operators to achieve higher clear rates.” Companies have responded to these requirements by engaging the airport industry to understand how to best design the next generation EDS systems for high-volume screening. As of today, there are four companies pursuing full TSA approval for high speed EDS equipment.

Why should airports learn about high speed screening? Airport and their terminal consultants’ involvement in the initial planning and design phase of the checked baggage

inspection system is critical to the success of implementation and achieving the best balance of capital investment and operating cost. Airports do incur costs both in the construction and maintenance of the CBIS, and airports who participate in the planning have realized a better return on investment for their CBIS project. When talking with airports that have undergone the process, there are five key elements for a successful project: »» Understanding of the TSA’s planning and design requirements as outlined in PGDS v3.0. »» Using modeling with different equipment and configurations with variable scenarios in the planning phase. »»Meeting regularly with all stakeholders to provide input into the design. »» Looking beyond the EDS machine alone, keeping in mind potential changes to the entire design as the CBIS affects entire airport operations. »» Budgeting planning time and phases for a successful deployment in a multi-year process.


What should be considered when evaluating high speed EDS equipment? The CBIS is much more than just the EDS. However, when the EDS operates at maximum capacity with less machines, cost savings is increased by decreasing the need for baggage handling system (BHS) components, personnel and maintenance. New EDS technology incorporates TSA requirements but should also go beyond with a design that understands what an airport needs in a successful CBIS. Below are some of the most important features a high speed EDS should have to ensure that the airport will realize their best return on investment. »» EDS systems should accommodate the BHS’ highest volume at maximum speed. The equipment should have configurable speeds that can operate at either .25 m per second or .5 m per second and accommodate current or future BHS configurations. »»An EDS system should have high resolution 3-D imaging for a better automatic detection platform, low false alarm rates and a clearer image with an advanced graphical user interface for operators to resolve alarms efficiently. »» EDS systems should have high reliability and rapid maintainability with built-in diagnostic tools and planned maintenance schedule. Maintenance beyond the initial implementation should be available from an experienced original equipment manufacturer (OEM) for the lifetime of the equipment to allow the airport to have an operational advantage now and in the future.

EDS system should have a reliable, upgradable design using the latest in technology for a future-proof, cost effective CBIS.

What benefits would high speed screening bring to airports? High speed screening will offer airports the ability to grow over the next 10 to 20 years without extensive reconfiguration, while keeping operational costs in check. High speed should provide faster throughput, getting the baggage to the aircraft with more efficiency. Due to a reduced BHS infrastructure, less redundancy and a smaller footprint, high speed should result in lower overall long term maintenance costs. High Speed EDS installation should include the ability to upgrade and should not require major infrastructure changes/ costs, reducing capital expenditure. Finally, a well designed CBIS with high speed offers cost reduction while providing ample room for increased growth and gives the airport a competitive advantage. The best CBIS planning considers all stakeholders concerns and provides the public with the most effective security while keeping costs competitive for the airport. When planning a high speed CBIS all stakeholders must be involved at the beginning to make the most of available equipment and design strategies employed by successful integrations to date. Equipment should meet all stakeholders needs, while going beyond to help provide top security and the best return on investment for now and the future.

To learn more about high speed hold baggage screening systems, visit www.rapiscansystems.com or contact Andrew Goldsmith agoldsmith@rapiscansystems.com 703-812-0322 x 4617 or Peter Modica pmodica@rapiscansystems.com 703-812-0322 x 4627.

»» Design, operational considerations and product reliability contribute to overall operational costs. An

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C o n s u l t a n t P e r s pe c t i v e

By: Owen Curtis, HNTB

Parkers are Prime Airport Customers Four fundamental principles for delivering a high-quality airport parking experience

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n the world of airports, the focus is on aircraft, airlines and airline passengers. But these complex facilities are not just about flying. They are the largest intermodal terminals in North American cities. Among the many other forms of transportation they incorporate, the automobile is dominant. And like aircraft, autos need a place to stop — a parking place. Whether it’s needed for a few minutes, a few hours, or many days, parking enables the intermodal transfer to take place, and it is an integral and profitable aspect of airport operations. Moreover, parking is often the first or last experience for the airport customer, so the quality of parking you deliver can define the customer’s experience of your facility. A lot of emphasis is placed on improving the parking experience through technology, and much good has come of that. Advanced revenue control systems ease the parking customer in and out of the garage or lot. But all the technology in the world will not make for a positive parking experience if we lose sight of certain basic understandings of how airport parking should operate. Foremost is the need to consider parking as an integral aspect of the complete landside system of terminal curb roadways, access and circulation roads and facilities for commercial vehicles and rental cars. Change one aspect of any of these, and you may affect the balance of the system’s operations, customer experience or revenue generation potential. An integrated approach to parking management as part of landside management takes parking to a higher plane. It increases the likelihood of providing a quality experience to our valuable customers and of improving the profitability of our operations.

Principle # 1: Provide True Hourly Parking, and Make it Most Convenient Many airports separate parking into shortterm and long-term facilities. But this doesn’t reflect the nature of the parking market. By lumping the truly short-term parkers in with overnight parkers, airports can end up frustrating a large number of customers. You can tailor your parking products to the market best with three tiers of parking: H o u r ly Pa r k e r s are people who are picking up or dropping off passengers. They tend to be in and out in 45 minutes to two hours. They don’t expect to pay a lot for parking. In fact, if they don’t have access to convenient, low-cost parking, they are more likely to cause congestion at the curb, which adds multiple challenges for traffic and safety management. These parkers can be most profitable, however, because their parking spaces can turn over an average of four to eight times a day. D a i ly Pa r k e r s are chiefly the business people who leave in the morning and return that night or perhaps in the next day or two. They are willing to pay a high daily rate to park conveniently near the terminal — and they do. When lumped in with the true hourly parkers into a “short-term” parking product, they arrive before the hourly parkers, and they take the prime spaces, forcing the hourly parkers to walk farther to the terminal — if the hourly parkers can even find a space. L o n g -t e r m Pa r k e r s are more likely to be leisure travelers, sensitive more to price than to convenience. Remote lots and shuttle bus service are the norm for meeting their needs.

While you may only need to set aside 10 percent of your parking inventory for true

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hourly spaces, hourly parking accounts for the majority of people traveling between parking and the terminal. When you account for their high turnover, and the idea that each auto parked in hourly spaces includes air passengers along with well-wishers or meeter-greeters, you will find that the number of people walking between hourly parking and the terminal can readily represent 70 to 85 percent of all your parking facility pedestrian traffic. So the customer experience for hourly parking affects multiple people, whereas the overnight business parker usually travels alone. In addition, true hourly parking has the highest revenue-generating potential. A typical hourly parker at many large or medium-sized airports pays $2 an hour or $4 per visit. With five turns per day, one hourly space can generate $20. By contrast, a daily space walkable to the terminal at that same airport may generate $10 to $16 a day. The fundamental principle here is to provide the most convenient parking to the greatest number of people who in turn will generate the highest level of revenue per space. By serving the hourly parker well, with enough spaces so that spaces are available even during peak times, we can remove those airport customers’ autos from the curb and lessen the congestion and hassle for everyone. Here are a couple of things to keep in mind if you’re considering a transition from mixed short-term parking to a true hourly and daily configuration: • Be cautious when analyzing a short-term parking situation. If the current configuration makes hourly parking spots near the terminal scarce, potential hourly parkers in the garage won’t be there. Instead, they’ll be found at the curb. That makes it difficult to measure the demand for hourly parking.


Owen Curtis is the national director of Airport Landside Planning and Design in HNTB’s office in Arlington, Va. He can be reached at ocurtis@hntb.com or 703-824-5100.

• Understand that the location, peak-time availability and pricing are all part of the equation, which airports control. That equation can influence customers’ decisions to make effective use of parking services and maximize airport revenues.

Web sites, advertising, etc.) is critical. It’s also helpful to provide a real-time display of available spaces. Lastly, analyze your revenue data to understand the implications of any revenue loss from a grace period.

Principle # 3 : Cell Lots Can Improve Service and May Be Revenue Neutral Another tool to consider in managing your landside system is a free parking area for those waiting to pick up arriving passengers. Passengers often provide their drivers with landing times but fail to consider the delays imposed by taxiing, unloading, baggage claim, etc. This results in the driver having to Principle # 2 : Grace Periods Are A park onsite or circle the curb endlessly. Cell Powerful Landside Management Tool phone lots can facilitate just-in-time passenger Many airport parking operations provide pickup, avoiding onsite parking altogether grace periods as a customer-friendly means and decreasing curb congestion. Airports to solve the issue of parkers getting “caught” and parking operators may see cell phone inside the revenue control area. Set smartly, lots as a lost revenue opportunity. Anecdotal grace periods can also be a tool for curb man- evidence suggests, however, that most people agement, saving major capital investment in who cruise the curbs aren’t planning to park curb roadway expansion. Most drivers will anyway. Getting these drivers off the curb, stop circling the curb if they think they may then, doesn’t represent a revenue loss at all. In be able to park in the garage without paying. fact, it may reduce curb operating costs, and Grace periods may result in some revenue loss it dramatically improves customer satisfaction. for the parking operation, but if they obviate the need for major capital expenditures, they Here are a few best practices for planning cell lots: are a worthy investment. Providing a grace period that enables a quick trip to pick up • Locate the lot within sight of the terminal, or discharge a passenger can have a greater and place it along the inbound roadway. If it’s effect on curb congestion than almost any too far away, drivers will doubt their ability other technique. When Baltimore/Washington to quickly get to the terminal when their Thurgood Marshall International Airport repassenger calls. constructed its terminal curb areas, it added an hour-long grace period at its terminal deck. • Add flight and baggage information display This change kept the curb operating efficiently systems (FIDS/BIDS) that tell drivers when in spite of its decreased capacity. Other airthe plane has landed, when it’s at the gate and ports institute grace periods seasonally, adwhen bags have cleared. This keeps drivers vertising the availability as a means to survive from heading to the curb too early. the onslaught of holiday peak travelers. When adding a grace period — whether permanent • Be sure to check the site’s cell phone reception or temporary — clear information (signing, capabilities. • Plan and budget for strong communications. These kinds of changes can be confusing and will further frustrate parkers if they’re not clearly communicated. When customers can understand the location and pricing differentiation, they will naturally begin selecting the most appropriate deal.

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• Consider adding amenities such as restrooms and revenue-generating concessions. Principle # 4: Rental Car Facilities Should Be Walkable As demand for space near terminals has increased, many airports have moved their rental car centers offsite. This adds another long block of time and some uncertainty to the arriving passenger’s journey. Many communities feel local residents’ needs for near-terminal parking should trump convenience for visitors, who make up the vast majority of car renters. However, visitors are equally important to the taxpayers as they are critical revenue generators for the city. Their satisfaction with the airport’s customer service has a significant effect on overall use and profitability. With creative planning, airports can give both visitors and local residents a convenient connection to ground transportation. Charlotte-Douglas International Airport is an excellent example of an airport that serves residents and visitors alike with high quality facilities. Unlike most other recent consolidated rental car facilities, which require a shuttle bus ride or an automated people mover, the one under design in Charlotte will be a seven-story garage, just a 1.5-minute walk from the terminal. It will have four levels of hourly parking, a valet operation, and a consolidated rental car facility. While this airport is as space-constrained as any, the owner and design team were able to devise a solution that serves the hourly parker, car renter and valet customer quickly, efficiently and profitably, with great convenience. This article originally appeared in The Parking Professional, the official magazine of the International Parking Institute www.parking.org.

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member spotlight

ACC E x e c u t i v e m e m b e r

O

n any give flight over the Western United States, landmark Swinerton projects can be seen for miles below. Passengers making their way through the airport may also find themselves passing by a Swinerton project or two...

S w i n e r t o n I n c o r p o r at e d

Headquarters 260 Townsend Street San Francisco, CA 94107 Tel: 415.421.2980 www.swinerton.com

Prepared by Meggie Doscher, Public Relations Manager

With construction excellence spanning three centuries, Swinerton is one of the country’s largest general contractors and has been committed to the aviation industry for over 40 years. From air traffic control towers to luxury airline lounges and baggage handling systems, they successfully deliver on a full gamut of aviation construction needs through experienced staff, technical knowledge and a thorough understanding of regulatory requirements. Swinerton understands the aviation industry and the importance of delivering projects to meet aggressive schedules, providing uninterrupted services through proactive construction phasing. As a 100 percent employee-owned company, they have the unique ability to view every project from an owner’s perspective and are sensitive to stakeholder goals and the critical nature of opening dates, flight schedules, funding and reporting. To date, Swinerton has completed aviation projects totaling over $4.5 billion using multiple project delivery methods, including traditional bid, negotiated, design-build and CM @ Risk. Swinerton differentiates itself from competitors through project delivery by addressing the sensitivities of working in an operating airport environment, including the need to coordinate and interface with airport management, operations maintenance, law enforcement, security and emergency services; airport tenants, including

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commuter and cargo airlines, and concessions; utility companies and consultants, and other stakeholders. But don’t take their word for it; their client list speaks for itself including Los Angeles World Airports, San Diego Regional Airport, San Francisco International Airport, George H. W. Bush International Airport, Continental Airlines, Delta Airlines, Star Alliance, One World, Qantas Airlines, American Airlines and United Airlines, just to name a few. Swinerton has worked at LAX for 27 consecutive years. In addition to aviation, Swinerton provides commercial construction and construction management services to clients across a wide-range of markets including healthcare, higher education, federal, municipal, data centers and hospitality. From simple changes to broad strategic thinking, their expert teams use innovative solutions that produce improved results — lower costs, higher value and shorter durations. Swinerton leads the industry with innovative technologies, including Virtual Design & Construction and with extensive expertise in Leadership in Energy and Environmental Design (LEED). Additionally, Swinerton is one of America’s most financially stable general contractors — with industry leading bonding capacity and insurance ratings supported by the top sureties in the nation. Founded in 1888, Swinerton is headquartered in San Francisco, California with additional offices located throughout California, in Colorado, Hawaii, Texas, Washington and Oregon. For more information on Swinerton visit their website at www.swinerton.com.


ACC a s s o c i a t e m e m b e r

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he customer experience is a shared responsibility. No single organization is directly responsible for overall customer satisfaction — it takes a cooperative effort from all those involved in groundside, terminal and airside sectors – and their respective consultants. From the time the customer steps out of the cab, checks their bags, grabs a quick lunch, passes through security, rides the escalator and boards the plane, he or she has come into contact with airline, airport authority, government agencies, and various service providers.

While all are responsible for the customer experience, most organizations focus on their individual goals. Since changes made by one partner effects the others, local change without coordination often leads to degradation in the passenger experience. How can these partners work together with their consultants to meet key performance indicators while exceeding customer expectations? For a number of airport consultants, the answer is found within Simio simulation software. By leveraging this technology, they integrate the processes of all those involved into a coherent view of the facility. The resulting simulation provides a way to quantify system performance and test individual ideas giving the airport authority a larger perspective on how those adjustments will affect the entire airport. With Simio, critical snags become glaringly apparent long before the plan is implemented. General purpose by design, Simio’s flexibility allows the rapid creation of reliable, communicative 3D models covering all facets of airport operations, including passenger flow, baggage handling, security, airside operations, parking,

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maintenance and more. These simulations enable stakeholders to work together in creating a cost effective game plan to improved customer service. By focusing investments and testing ideas before implementation, cost savings and cost avoidance associated to a typical simulation project regularly reach 10 to 20 times of the project’s incurred costs. These benefits usually occur within four to six months of the technology’s initial use. What is a good simulation application? Whether the scope is large or small, best results are obtained when the consultant and the authority need to visualize and communicate ideas based on volumes of data and process complexity. Simio facilitates this collaborative effort by tapping into popular information repositories such as Microsoft Excel, Microsoft Access, CSV files, Revit® (BIM) files, CAD drawings and Google Sketch-up. The value gained by using Simio is that airport authorities get a predictive risk analysis fast. The risk analysis covers future months and years factoring in uncertainty, complexity and variation.

member spotlight

S i m i o LL C

504 Beaver Street Sewickley, PA 15143 Tel: (412) 528-1576 Fax: (412 528-1586 Email: dennis_pegden@simio.com Web: www.simio.com

Prepared by C. Dennis Pegden, Ph.D., Chairman & Chief Executive Officer, Simio LLC

Simio Simulation Soft ware: Working Together

In the end then, a best engineering estimate may not be good enough. When the consultant spends the time to build a model for the airport authority, the results are often counterintuitive and quite often, the authority discovers they might require less than what was originally proposed, which results in savings. Or they find the need for more which saves the authority from building something that is inadequate.

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o u t & a b o u t w i t h ACC

Schulz elected to Aero Club board

ACC Executive Vice President T.J. Schulz was elected to a three-year term on the Board of Governors of the Aero Club of Washington. An industry cornerstone since 1909, the Aero Club is dedicated to building public awareness of aviation and aerospace issues and achievements through its famed monthly luncheons, hosting the Wright Memorial Dinner, and promoting its educational programs via the Aero Club of Washington Foundation..

ACC at the 62nd Annual Wright Memorial Dinner ACC spends a day at local food bank

ACC hosted multiple tables at The Aero Club of Washington’s 62nd Annual Wright Memorial Dinner in December. With the theme of “Inspiring a Passion

ACC staff spent a day in December sorting food and other household items at the Capitol Area Food Bank. The staff outing was part of ACC’s Internal Sustainability Program to engage in activities that benefit the local community while building

for Aviation,” the dinner paid tribute to actor Harrison Ford, who has been a long-term aviation advocate. The Wright Brothers Memorial Trophy annually recognizes leaders in aviation for their innovation and commitment.

staff camaraderie and teamwork. The Capitol Area Food Bank, headquartered in Northeast Washington, D.C., annually distributes 23 million pounds of food to more than 383,000 people through their network of partner agencies.

ACC Participates in FAA General Aviation Airports Reclassification Initiative, ASSET

The ACC Planning Committee leadership provided input to ACC staff who participated in the first meeting of the FAA General Aviation Airports National Initiative, also known as the National Airport System Strategic Evaluation Task (ASSET). The purpose of this initiative is to capture the diversity of roles and infrastructure requirements for nonprimary commercial service and general aviation airports. Although it will consider all public-use airports in the system, the focus will be on approximately 2,964 airports currently categorized as “general aviation” (general aviation, relievers and non-primary commercial service) in the federally funded system. The Transportation Research Board (TRB) is facilitating this initiative which is expected to conclude during the fourth quarter of 2011.

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Consulting, Spring 2011

ACC Staff Serves on ACRP Sustainability & Professional Services Panels ACC staff has attended multiple panel meetings in recent months as an ACC Liaison Representative for three ACRP projects: • Project 1-20, Procuring and Managing Professional Services for Airport • Project 2-28, Airport Sustainability Practices: Tools for Evaluating, Measuring, and Implementing • Project 2-30, Enhancing the Airport-Industry SAGA Website The ACC membership’s high level of interest in these projects and the potential implications of the projects on the industry prompted this participation.


2011 ACC Committee Leadership COMMITTEE

CHAIR

VICE-CHAIR

Engineering

Quintin Watkins Prime Engineering, Incorporated

Nick Ryan Arora Engineers, Inc.

Environmental

Rob Adams Landrum & Brown, Inc.

Skip Johnson The LPA GROUP INC.

Information Technology & Systems

John Powell SITA

Tom Strange The Solution Design Group, Inc.

Planning

Damon Smith Mead & Hunt, Inc.

Marc Champigny The Louis Berger Group, Inc.

Safety & Security

Ann Barry Ross & Baruzzini, Inc.

Cheryl Vauk Productive Solutions

Terminal

Bruce Anderson Landrum & Brown, Inc.

Carl Newth Syska Hennessy Group

Technical

ACC/TSA Security Technology day Tuesday, July 12 2011 A r l ington, VA

Crowne Plaza, Washington national Airport I m m E dI A T E l y P R E C E dI n G T h E ACC/FAA/ T SA SummER WoRkShoP SERIES

Government Affairs Legislative & Regulatory

Todd Knuckey RS&H

Brian Clark C&S Companies

Procurement

Tom Butcher WALKER Parking Consultants

Jim Harris Coffman Associates, Inc.

Project Delivery

Steve Riano Bechtel Corporation

Steve Cornell T.Y. Lin International/H.J. Ross

ACC Institute

Matt Wenham C&S Companies

J.J. Morton Kimley-Horn & Associates

Awards

Pam Keidel-Adams Wilbur Smith Associates

Tom Darmody HOK

Globalization

Mike DeVoy RW Armstrong

Vinnie Khera Harris Miller Miller & Hanson Inc.

ACC/AAAE Airport Planning, Design & Construction Symposium

Don Bergin Blast Deflectors, Inc

Laurie Cullen HNTB

Summer Workshop Series

Mary Ellen Eagan Harris Miller Miller & Hanson Inc.

Monty Wade Applied Pavement Technology, Inc.

ACC Annual Conference

Carol Lurie Vanasse Hangen Brustlin, Inc.

Pat Askew Perkins + Will

Bylaws

Solomon Wong InterVISTAS

Kevin Quan ESCO - Zodiac Aerospace

Marketing/ Membership

Evan Futterman Futterman Consulting, Inc.

Kristin Shaw SITA

Nominating

Terry Ruhl CH2M HILL

Ron Peckham C&S Companies

Strategic Planning & Implementation

Andy Platz Mead & Hunt, Inc.

David Peshkin Applied Pavement Technology, Inc.

Services

Events

Operations

The Airport Consultants Council (ACC), along with the Transportation Security Administration (TSA) Office of Security Technology, will host its third annual Technology Day. TSA will share with industry vital information relating to current and future TSA priorities, updates on security programs, the status of FY11 spend plans, current projects, and details on emerging technologies. This briefing will provide an opportunity for the industry to hear firsthand from TSA officials what’s of most concern: » How do firms go about getting business with the TSA? » What established, recent and potential guidelines and regulations are relevant? » What requirements might/ will impact OEMs/ vendors/designers? » What programs are on-going and planned and how may industry participate in them? » How will current events shape future TSA requirements and priorities? » How does TSA plan to communicate with industry on effects of dynamic events and related changes so that industry can effectively respond?

REGISTER > ACConline.org

special projects Past Board Chair

Ron Peckham C&S Companies

Evan Futterman Futterman Consulting, Inc.

Sustainability

David Full RS&H

Suzanne Geckle CH2M HILL

www.ACConline.org

11


ACC E v e n t s

Photo review

The focus was on the FUTURE at the 32nd Annual ACC Conference & Exposition held November 8 – 10 at the Sawgrass Marriott Resort in Ponte Vedra Beach, Florida.

Airports of the Future Guest speaker Michael Gallis, a national expert on metropolitan development strategy, stressed the need for domestic aviation to stay competitive in the global market.

Passing the Gavel Ron Peckham (left), C&S Companies, 2010 ACC Board of Directors Chair, welcomes incoming chair Terry Ruhl, CH2M HILL

Welcome to JAX Annual Conference Committee Chair Mike Floyd (left), Jacobs, with Steve Grossman, Airport Director for Jacksonville International Airport.

2011 ACC Committee Leadership (see page 11) 12

Consulting, Spring 2011


Aviation Award of Excellence

staying compet i t ive

ACC Aviation Award of Excellence ACC Awards Committee Chair Gloria Bender, TransSolutions, presents the 2010 Aviation Award of Excellence to Ben DeCosta, former Department of Aviation General Manager at Hartsfield-Jackson International Airport, for his cooperation and interaction with industry during extensive development at the world’s largest airport.

in CR I T IC A L T IME S

Board Chair award Ron Peckham, C&S Companies, 2010 ACC Board of Directors Chair, presents the 2010 Board Chair Award to Carol Lurie with Vanasse Hangen Brustlin, Inc. for her commitment to furthering ACC’s to further ACC involvement in airport and corporate sustainability.

F u ll th r ottle i ns i g ht fo r av i at i on leade r s

Business Speed Dating The ‘extreme networking’ of the business speed dating event was once again a highlight of the Annual Conference.

N OV E M B E R 7 – 9, 2011 M i r amonte Reso r t & S pa P al M S p r i n g s , C al i fo r n i a

www.ACConline.org

13


ACC M E MB E RS

New Members EXECUTIVE MEMBERS Alanna Consulting Group Mr. Jason T. Ellmore, RCDD, Principal Consultant P.O. Box 322, Flourtown, PA 19031 Tel: (877) 492-9224, Fax: (877) 942-9226 Email: jellmore@alannaconsulting.com Web: www.alannaconsulting.com Alanna Consulting Group is a transportation business and technology consulting firm staffed exclusively by experienced industry professionals. The Alanna team has worked closely with clients and industry partners to provide advanced solutions to over twenty major transportation hubs. Areas of focus include IT program management, needs analysis and master planning, infrastructure design, and implementation support for a variety of transportation specific systems.

Burrst Mr. Burr Stewart 204 Nw 112th Street, Seattle, WA 98177 Tel: (206) 660-1145 Email: burrst@hotmail.com Web: www.burrstewart.com Burrst provides consulting to the aviation industry in the areas of strategic planning, sustainability and climate change programs. The firm emphasizes highly visual methods of analysis, modeling, facilitation and communications, for everyone’s quick understanding and involvement.

Jviation, Inc. Mr. Travis Vallin, Colorado Aeronautics Director 900 S. Broadway, Suite 350 Denver, CO 80209 Tel: (303) 524-3030, Fax: (303) 524-3031 Email: travis.vallin@jviation.com Web: www.jviation.com Jviation provides comprehensive professional services covering the entire project life cycle from airport development plans to onsite construction administration. Our full range of services support all aspects of airport planning, engineering design, and construction projects, as well as program management, airport management and communications program development needs.

Pueblo Technology Group, Inc. (PTGI) Mr. John Payne, CEO & Principal Consultamt P.O. Box 460939, San Francisco, CA 94146 Tel: (415) 644-8315, Fax: (415) 651-9367 Email: jmp@pueblo.com Web: www.pueblo.com Pueblo Technology Group, Inc. (PTGI) is a management and professional services consulting firm that focuses on improving an airport’s operational excellence through the appropriate application of information technologies.

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Consulting, Spring 2011

Associate Members The Sheward Partnership, LLC Mr. David Scheuermann, Principal 2300 Chestnut Street Philadelphia, PA 19103 Tel: (215) 751-9301, Fax: (215) 751-9302 Email: dns@tsparch.com Web: www.theshewardpartnership.com

GE Ms. Marriaine Hak, Enterprise Programs 1299 Pennsylvania Avenue, NW Washington, DC 20004 Tel: (203) 455-7682 Email: marriaine.hak@ge.com Web: www.ge.com

The Sheward Partnership is a growing, energetic architecture, planning and sustainability consulting firm with a service-oriented attitude. We are dedicated to creating architectural solutions that respond completely to client needs. Our highly qualified team of architects, planners and sustainability experts is experienced with a diverse range of project types. The firm’s three decades of experience has gained us a wealth of knowledge, including a very comprehensive understanding of transportation, education, and healthcare facilities. Conscious of the benefits inherent in sustainable design, The Sheward Partnership is a member of the U.S. Green Building Council and is dedicated to helping clients to realize sustainable goals. The Sheward Partnership prides itself on its experience and its ability to readily meet the needs of clients who have complex projects and demanding schedules.

GE is a diversified infrastructure, finance and media company taking on the world’s toughest challenges. From aircraft engines and power generation to financial services, medical imaging, and television programming, GE operates in more than 100 countries and employs about 300,000 people worldwide. For airports and airlines, GE offers a wide-range of energy efficient products and services, including LED lighting, reciprocating engines for combined-heat and power, water filtration equipment, motors and VFDs, and fuel and carbon services. In 2010, GE was named in Business Week’s list of the world’s 25 most inventive companies.

Skidmore, Owings & Merrill LLP Mr. Derek Moore, Associate 14 Wall Street, New York, NY 10005 Tel: (212) 298-9762, Fax: (212) 298-9500 Email: derek.moore@som.com Web: www.som.com SOM offers consulting, architecture and engineering services through seven established offices in the United States, Europe and Asia. SOM has been involved in the planning, design and management of airport and transportation projects for 40 years. SOM’s current work includes projects at the following airports: John F. Kennedy, Newark, Boston Logan, Washington Dulles, Toronto, San Francisco, San Jose, Ben Gurion, Hong Kong, Singapore and Dublin.

Swinerton Incorporated Mr. George Hershman, V.P., Division Manager 17140 Bernado Center Drive, Ste. 216 San Diego, CA 92128 Tel: (858) 622-4040, Fax: (858) 622-4044 Email: GHershman@swinerton.com Web: www.swinerton.com Swinerton provides experienced Personnel and Development Management services for the airport and transportation industry.

Quantum Secure Inc. Ms. Alyssa Chapman, Aviation Account Executive 100 Century Center Court, Suite 501 San Jose, CA 95112 Tel: (703) 528-1419 Email: achapman@quantumsecure.com Web: www.quantumsecure.com Quantum Secure’s SAFE suite of software products addresses the challenges of operating multiple proprietary physical security systems in airports. SAFE provides a single, fully interoperable and integrated physical security policy platform to manage and streamline security identities, compliance, events and operations across multiple disparate physical security systems.

ACC Updates Between September 2010 and November 2010, ACC released email supplements to this publication. These supplements are also available at www.ACConline.org.

Legislative News LN-11-01 (February 15, 2011)

• Continuing Resolution status; Obama Budget Request; FAA Bill introduced in House

Regulatory News RN 10-02 (December 10, 2010)

• FAA Provides 60-day Extension for Comments on SMS NPRM; ACC Soliciting Comments until February 18, 2011


On the Move Charles “Chuck” Boschen has been

named a Senior Engineering Manager in the Philadelphia office of Parsons Brinckerhoff. An aviation industry specialist, Mr. Boschen has more than 20 years of experience managing complex, high-profile projects. His areas of expertise include strategic planning, negotiations, operational streamlining, and project, construction, and operations management. Previously, Mr. Boschen served as a project director/ project manager, and was responsible for managing major projects including work at the Philadelphia International Airport, Citizens Bank Park, the Episcopal Academy and the Pennsylvania Convention Center. He is a member of the Project Management Institute and holds a PMP certification. Mr. Robert L. Gilbert has joined Landrum & Brown as Vice President. Gilbert most recently served as Deputy Executive Director at the Greater Orlando Aviation Authority. He brings over 35 years of experience in aviation and airport management, including airport master planning, infrastructure development, infrastructure management, community relations, airport tenant relations, security, airport budgeting and financing, federal regulations related to aviation, and small business development. Mr. Mark Isaak, PE , has been named director of sales and strategy (DSS) for the PBS&J Transportation Service. Isaak has extensive transportation engineering experience and is one of the firm’s leading program management professionals. Over the past seven years, Isaak’s focus has included managing the service’s transportation business in the central and western United States, including sales and prepositioning, staff development, and technical production activities. Prior to that, he was project director for PBS&J’s West Florida Program Management Services, where he was responsible for four state and local general engineering consultant contracts. Mr. Todd A. Knuckey, PE has been promoted to serve as National Airfield Service Group Leader in the Aviation Program for RS&H. Knuckey has more www.ACConline.org

than 25 years of experience in planning, surveying, design, construction, construction management, and program management for aviation projects. Mr. Knuckey has served as Project Officer and Project Manager for multidisciplined projects at a number of airports throughout the country. Mr. Alan J. Pramuk, P.E., C.M. , has been named executive vice president of Aviation Services of Gresham, Smith & Partners. Pramuk has been with GS&P for more than 20 years and was most recently a Division Vice President. In addition to working as Principal-inCharge for select airport development programs, Al will lead GS&P’s Aviation marketing and business development activities. Al has 30 years experience in planning, design and consulting, with specialized expertise of airport facility development programs; including passenger terminal facilities, public parking facilities, rental car facilities, passenger screening, in-line baggage screening, cargo facilities, terminal curbside designs, roadways and signage.

And the Winner Is… The Tetra Tech Airports and Aviation Working Group has acquired BPR, based in Quebec. BPR has about 1,600 employees and provides multidisciplinary consulting and engineering support for water, energy, mining, buildings, and infrastructure projects including airports. With earlier acquisitions of EBA Engineering Consultants in August 2010 and Wardrop Engineering in January 2009, Tetra Tech now has about 3,500 associates working throughout Canada, from coast to coast and far into the arctic regions.

Wadell Engineering Corporation, Airport Mr. David Rickerson has joined HNTB

Corporation as director, southeast division aviation planning. Rickerson brings more than 25 years of experience in aviation facility, on-call airport planning, airport master planning, noise compatibility planning and environmental planning experience for clients throughout the U.S. and abroad. Rickerson’s responsibilities include leading HNTB’s growing aviation planning practice in the southeast region and serving as project manager for key aviation planning projects. Before joining HNTB, Rickerson served as the manager of Landrum & Brown’s facility planning practice where he was responsible for the firm’s airport master planning and on-call facility planning services. Mr. Barry J. Schulz, PE, AICP has been named president of the PBS&J Transportation Group. Schulz has worked at PBS&J since 1998 when he was its first employee in Denver and most recently served as the national sales and strategy director.

Planning – Engineering – Management Consultants in the San Francisco Bay Area, was selected by the Border Coast Regional Airport Authority as a prime consultant for airside and landside design of runway safety area projects and new replacement terminal with access and parking. The new facilities will serve United Airline passengers and general aviation users in the southern coast of Oregon and northern coast of California. The runway safety area grading and pavement and lighting rehabilitation will enhance aircraft safety while the new terminal will achieve state of the art amenities necessary for today’s passenger safety, comfort and security. Last year, Wadell Engineering Corporation as prime consultant completed the multi-year Palomar Airport Redevelopment Program involving a new replacement terminal, passenger movement system with bridge, customs facilities, airline and international apron and various RSA improvements. The project won the American Society of Civil Engineers San Diego Section “Outstanding Civil Engineering Project” in the category of Ports and Airports. 15


cover story AIR CARGO continued from page 1

There are possibilities — and in some instances, probabilities — that cargo bound for the U.S. from some countries has not been screened to TSA standards.

its roots. The question is whether additional freight that might have moved by air will be diverted back to ocean transport. Another issue is to what extent air cargo has moved permanently out of the system or has undergone a modal shift as a result of the recession. In either instance, the growth paradigm for air freight changes. It is likely that shippers, in the absence of capacity and in the midst of financial difficulties, will look to modes other than air to reduce costs, thus some activity will be permanently lost.

Security Challenges Security has become perhaps the top issue in air cargo. In August 2010, the U.S. implemented 100 percent belly cargo screening — sort of. The ability and/ or willingness of international trading partners to implement changes to their own security policies presents obstacles. The result is a level of confidence that cargo transported via passenger airplane in the U.S. has been screened. Yet, in reality there are possibilities — and in some instances, probabilities — that cargo bound for the U.S. from foreign countries has not been screened to TSA standards. There are obvious cost issues associated with screening, but on the international scene there is an amalgam of politics, egos, policies, and practices that are problematic. Individual countries have their own security policies in place. Their customs and security agencies have introduced equipment and screening practices that in many instances

16

Consulting, Spring 2011

are not consistent with new U.S. proposed requirements. These agencies are not necessarily open to changes that they might see supporting sales of U.S. based products (as opposed to their own or that of their trading partners). Global change in the aviation industry is typically better facilitated by an international trade group or association like IATA or ICAO. Theoretically, the imposition of 100 percent screening last year has had minimal impact on cargo operations. However, it is important to remember that the rule changes went into effect when volumes were down and there was minimal congestion throughout the system. Since there is a major unknown regarding the amount of cargo that may have shifted to other modes for cost or capacity as the industry returns to “normal” conditions in 2011, it will be extremely difficult to determine a valid starting point for measurement.

Facility and Aircraft Implications Shifts in air cargo movements due to security policies or other factors could make transporting goods by passenger aircraft to the U.S. a challenge. This could have ramifications on the types of aircraft that will service U.S. airports and could subsequently have implications on airport facility requirements. Hartsfield-Jackson Atlanta International Airport is an example of an airport with an aggressive cargo development program as well as strong business and political support.

They recently determined that as global carriers seek to optimize the belly capacity of their wide-body fleets, their infrastructure must be able to accommodate the A-380 in order to attract and capture this growing market segment. This requires substantial capital investment in aeronautical infrastructure and modification of gates to accommodate the aircraft. By implementing these changes, they open their market to carriers flying the new wide-bodies. New screening requirements could shift cargo by freighter or by passenger aircraft to a Canadian or Mexican airport for subsequent trucking. Depending on the cost of screening, these two options could become a reality regardless of the resolution of policy issues. This shift would create accelerated demand for freighter aircraft parking that could be challenging and costly. It would also result in a decrease in forecasted growth, particularly for an airport. A related note to passenger versus freighter shipping is aircraft size. At the beginning of

Several major carriers have in fact completely restructured their business plans to de-emphasize freighters. the decade, there was a strong perception that because of the “right sizing” of aircraft fleets, the use of smaller aircraft on many routes would force the growth of freighters because of diminished belly capacity. In this new decade, many carriers are now planning on the use of wide-body passenger aircraft because of the economies of scale they produce. Several major carriers have in fact completely restructured their business plans to de-emphasize freighters. The A-380 provides substantial belly capacity for cargo, which also impacts how airports need to respond. Cargo moving in an A-380 will be restricted to those airports that have implemented aeronautical infrastructure modifications that can accommodate that size aircraft.


Economic Trends There are also some macro-trends that should be tracked. The first is commercial repatriation. Prior to the recession, there was increasing interest to return manufacturing operations that had been exported to India and Asia to their original points of origin in Europe and North America. The reasons vary slightly from country to country, but by and large can be best described by the Chinese example. In the past ten years the Chinese middle class has grown from thirty million to three hundred million. The result is an enormous purchasing component that is now consuming many of the products manufactured for export. This consumption has resulted in some dramatic increases in manufacturing capacity and labor costs.

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This year air cargo operations will begin to answer some questions regarding its future. But for this to happen airports and their partners have to focus their attention appropriately and think about how to best track trends that could impact them individually. The bottom line, which is where these trends will land, is too important to ignore.

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The second trend is decentralized manufacturing and distribution patterns. This trend is directly related to cost factors and customer service. The higher cost of logistics is forcing many large manufacturers to decentralize their domestic distribution in order to be competitive. Decentralization places a greater reliance on one- or two-day trucking as opposed to placing the freight on a flight and paying five to ten times the cost to truck. This trend is reinforced by a more pragmatic approach to just-in-time manufacturing. Businesses, when they can, now accelerate manufacturing to allow products to move out of their warehouses days earlier and onto trains, trucks, and ships rather than aircraft to meet time-definite delivery dates.

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ACC E v e n t s

Upcoming Events… ACC Institute Events TIMEFRAME

COURSE TITLE

LOCATION

Techniques for Airfield Pavement Maintenance, Repair & Rehabilitation

Salt Lake City, UT

April 3 – 4, 2011

ACC / FAA Airports GIS Workshop

Kansas City, MO

June 8 – 9, 2011

ACC / ACI-NA / AGC Airport Project Delivery Systems Summit

San Jose, CA

March 7 – 8, 2011

ACC Events July 12, 2011

ACC / TSA Security Technology Day

Arlington, VA

July 13 – 14, 2011

ACC / FAA / TSA Summer Workshop Series

Arlington, VA

November 7 – 9, 2011

ACC 33rd Annual Conference & Exposition

Palm Springs, CA

More courses are anticipated. Stay tuned to www.ACConline.org for updates.

For more information email T.J. Schulz, ACC: TJS@ACConline.org.

10th Annual Aviation Summit Advancing Aviation Through Global Partnerships: The Next 10 Years

Allow your message to TAKE-OFF with ACC

Wednesday, April 27, 2011 U.S. Chamber of Commerce Washington, D.C. Register today: http://ncf.uschamber.com/aviation2011 Advertise in AirportConsulting CONTACT John Reynolds, ACC Coordinator of Communications: JohnR@ACConline.org, ph: 703-683-5900

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Consulting, Spring 2011

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e x e c u t i v e Up d a t e

Executive Update continued from page 2

other industry can say that, according to recent summaries provided by Zofnass. At the same time, the consulting industry has seen over 600 acquisitions in the past 5 years. Companies are broadening their service offerings and changing their geographic footprint rapidly. Globaliz ation

It is real. You can choose to ignore it, but it may be a shortsighted decision. The Asia Pacific region has overtaken North America as the largest aviation market in the world — the International Air Transport Association (IATA) said 647 million people traveled within the Asia Pacific region last year, higher than North America’s 638 million travelers. We have found airport owners and operators are consultants, and vice versa. In addition, they are very mobile. Internationally, Brazil is sponsoring the first airport concession in Rio Grande do Notre state, and negotiations for additional deals are underway at airports in Rio de Janeiro and Sao Paulo. A 2011 public offering by Seoul Incheon International Airport could serve as a trend setter that could result in IPOs by authorities in Saudi Arabia, Iran, India, China and Greece. However, with foreign opportunities come more competition and the “survival of the fittest” mentality on a global scale. It is estimated that nearly half of the E&C companies are doing work internationally, up from seven percent nearly 15 years ago, according to Zofnass. Through all of this, my take, and my emphasis for 2011, is that the organization

www.ACConline.org

must broaden its outlook on the industry so we are prepared for — not surprised by — whatever could happen. This was the emphasis of the special assignment Ron Peckham tasked me with in 2010, which he summarized in the last issue of Airport Consulting magazine. My term as chair will follow the recommendations outlined in this industry assessment. As an industry, we are being tested by requests for monetary concessions, requests for furloughs and even competition from non-profit organizations. Is the line of distinction we have set for our own businesses and our own organizations, really a shade of gray? Do we fight what is transpiring in front of us, or do we simply better prepare our member firms for it? I believe we can be stronger and more successful as a group than we can be individually. I realize that every business in our industry needs to develop a competitive advantage or they will fail, and everybody views business opportunities and issues differently. That will not change. Let’s compete and work together fairly, and be open and collaborative when we are not competing. As we develop our organization and the industry as a whole (more importantly), we need to depend on others and allow others to depend on us. We require collaboration between the ACC and our other partners, including airports, FAA, TSA, and other airport professional organizations to protect, build and grow the industry. Through broadening the membership of ACC and exploring opportunities more than we have in the past, while deepening our interface with the existing membership by protecting their business interests, we

can gain ground over time, especially in the political arena. What are we talking about by ‘broadening membership’? • Re-evaluating committee offerings, service areas and educational opportunities to meet the needs of associates, suppliers, new member organizations and executives. • Extending a broader reach to a more robust group of constituents beyond consulting organizations through the committee structure. »» Recruiting and looking at our brand through a detailed evaluation and implementation of membership needs and requisite ACC service areas and resources through the ACC Marketing & Membership Committee. »»Adding focus on the impact globalization will have on our markets, and the competitive landscape through the Globalization Committee. »» Looking at the breadth and depth of services we provide through the Project Delivery Committee. Thank you for your time and interest in ACC. Join committees, participate in our key conferences and more than anything, coordinate and communicate. I look forward to working with you over the coming year!

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GAO

after all By T.J. Schulz, ACC

For Relea se on De Expected live Thursday at 10:00 a.m ry . ES , Februa ry 3, 201 T 1

Collision Course: Falling Receipts Threaten the Future of the Federal Aviation Trust Fund

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he airport development industry has faced challenging times over the past decade. The events of 9/11 and the recent global economic recession have resulted in fundamental shifts in air travel and air carrier service, which has had profound impacts on how airports are approaching their capital development programs. These events have also had another negative impact that could seriously threaten the viability of the federal-aid aviation program in the future.

general fund revenue to help pay for the increased FAA spending.

Background

The GAO states that the industry faces consequences unless changes are made. “If the uncommitted balance is nearly depleted and actual Trust Fund revenues continue to fall below forecasted levels, there is a risk of over committing available resources from the Trust Fund—meaning revenues could be insufficient to cover all of the obligations that FAA has the authority to incur,” the report states. The FAA told GAO that if such a situation occurs, the agency may delay obligations for capital programs in order to continue operations such as air traffic control and safety inspections.

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Finally, some believe that with the shortfall in Trust Fund revenues, Congress may look for other ways to impose higher fees for travelers. GAO-11 -358T

Meanwhile, keep in mind that the uncommitted balance of the Trust Fund has been depleted to Recommendations only $299 million. The GAO cites the fact that The GAO offers specific recommendations for since 2000, Congress has set FAA appropriations Congress and the FAA to consider to help alleviate levels based on estimates of expected tax revenue the issue: in that fiscal year. “These revenue forecasts can »» Appropriate less than 100 percent of the be uncertain because it is difficult to anticipate, forecasted revenues to ensure sufficient a year in advance, events that may significantly coverage of obligations; affect the demand for air travel or fuel usage, the In February, the Governmental Accounting Office fares that passengers pay, and other variables (GAO) released a startling report on the status that affect Trust Fund revenues,” the report »» Target minimum balances in the Trust Fund of the federal Airport and Airway Trust Fund. states. In fact, GAO found that in 9 of 11 years, and base appropriations on maintaining that The report found that the uncommitted balance the forecasted revenues have exceeded actual level; of revenues in the Trust Fund dropped from a revenues by over $9 billion in that period. high of $7.3 billion in 2001 to only $299 million »» Increase the Treasury’s general fund comin 2009. More importantly, the GAO questioned The future looks uncertain as well. In January mitment; and whether current tax revenue into the Trust Fund 2011 the Congressional Budget Office forecast will be able to meet future demands. How did $25 billion less in Trust Fund revenues over the »» Increase revenues into the Trust Fund by this happen? And what must be done to restore next six years than had been forecasted in 2007. taxing option airline service fees, such as the viability of the federal-aid aviation program? baggage fees. Possible Ramifications

The Airport and Airways Trust Fund was established by Congress in 1970 and is the primary source of revenue that funds a majority of FAA programs. Revenues from the Trust Fund are derived from a variety of tax revenue sources, including a passenger ticket tax, a flight segment tax, fuel and gasoline taxes, and other sources. The Trust Fund supports the Airport Improvement Program (AIP), FAA’s Facilities and Equipment (F&E) account, including technological improvements to the air traffic control system, the Essential Air Service (EAS) program, and research and development. In addition, the Trust Fund has helped fund a sizable portion of FAA’s GAO also reported that the FAA’s efforts to Operations account. In 2010 Trust Fund revenues further develop NextGen could be impacted. Since supported 66 percent of FAA’s $15.5 billion in NextGen will substantially increase air traffic overall expenditures. capacity, success will partially be dependent on how well airports can handle the increased While revenue into the Trust Fund over the entire number of flights. As such, the FAA’s plan to decade increased only 12 percent, Congress has build and expand runways at the nation’s 35 increased FAA expenditures by about 60 percent busiest airports will require additional Trust between 2000 and 2010. As a result, Congress Fund resources. has approved using more of the U.S. Treasury’s 20

Consulting, Spring 2011

Congress may very well take steps to enhance revenue into the Trust Fund. At press time the Senate is considering an FAA reauthorization bill (S. 223) that would raise taxes on jet fuel for general aviation from 21.9 cents to 35.9 cents per gallon. Fractional aircraft would also be subject to commercial aviation taxes, including an ad valorem tax of 7.5 percent, a $3.70 segment tax, and a 4.3 cents per gallon fuel tax. The bill also contains a provision that would require that not more than 90 percent of the expected Trust Fund revenues are appropriated each year in order to protect against overly-optimistic revenue projections. Potential revenue enhancements in the House reauthorization proposal are not known at press time, although the political climate in the chamber is heavily against increases in taxes or fees.


Spring 2011 Airport Consulting