Why the Many Should Not Pay for the Benefit of the Few
By Andrea Fischer Newman, senior vice president, government affairs, Northwest Airlines, Inc.
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Imagine a building project that could cost about $80 million. It’s a project that would benefit relatively few people. And to top if off, most of the people who would reap any benefit won’t contribute anything at all toward the cost of paying for this $80 million project
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This bit of imagination is in fact an actual proposition. The project is the planned expansion of Eden Prairie’s Flying Cloud Airport, a plan proposed and supported by the Metropolitan Airports Commission (MAC).
Numerous parties (including Northwest Airlines) have already spoken out against the project’s fulfillment. These individuals and groups have cited a number of cold, hard facts in their arguments against the expansion, including: actual airport operations that are significantly lower than those forecasted by the MAC; Federal Aviation Administration (FAA) forecasts for future airport operations that are significantly lower than those forecasted by the MAC (including total forecasted airport operations for 2020 that are lower than those recorded by Flying Cloud in 1976); and, a downtown St. Paul airport that has a runway capable of supporting corporate jets and is much closer to the central business centers, large hotels, and major attractions of the Twin Cities. However, the most illustrative fact is that the MAC forecasted-number of aircraft based at Flying Cloud that would benefit from a proposed lengthening of the runway would be only 20 aircraft per year.

There is yet another reason why Flying Cloud should not be expanded and it is one that is not widely known and should be discussed before $80 million is spent. Spending $80 million to benefit 20 private jet aircraft is simply a bad decision.
Airports such as Flying Cloud serve primarily operators of private airplanes and regional charter airlines. Despite the idea some may have that regional charter airlines are small "Mom and Pop" businesses, many in fact have very large operations. In fact, according to an article by Michael Verdon in the current (October) issue of Worth, "in the last 20 years, many of the smarter regionals {charter airlines} have come to dominate sections of the country, almost like small fiefdoms." Verdon also wrote that "tempting as it is to view regional and national operators as an unevenly matched David and Goliath, regionals have evolved into sizable, competitive operators, with squeaky-clean safety records, formal pilot training standards and modern fleets to rival the nationals, except in the number of aircraft and the geographic spread of bases."
At Flying Cloud Airport, the dominant regional charter operator is Elliott Aviation, which also operates in Des Moines, Iowa, Moline, Ill., and Omaha, Neb. But despite their dominance at Flying Cloud and their support of the planned expansion, Elliott Aviation testified on Sept. 27 at the MAC’s reliever airport hearing that they "cannot afford a rate increase" (increase in the rates they pay to operate their aircraft at airports like Flying Cloud).

Elliott Aviation’s assertion is interesting for many reasons, including the fact that the airports they use in Des Moines, Moline, and Omaha are not relievers to a large U.S. hub international airport as is the case with Flying Cloud. As well, fees paid by carriers such as Elliott to use Flying Cloud do not even cover the airport’s operating costs. The fact is that Flying Cloud and other area reliever airports are subsidized by profits the MAC realizes from parking and concessions at Minneapolis/St. Paul International Airport. And the MAC plans to use these profits, generated by everyday "Mom and Pop" passengers to subsidize an expansion that will benefit only an elite few.
Subsidizing those who can afford to fly private airplanes in a time when the global airline industry remains in a very difficult economic state is more than unfair. It is just not right to the thousands of Minnesotans who work for or benefit from the state’s commercial airlines.


The Expansion of Flying Cloud Airport
By Andrea Fischer Newman, senior vice president, government affairs, Northwest Airlines, Inc.

The mission of the Metropolitan Airports Commission (MAC) is to serve the community by ensuring airport user safety and providing efficient services and facilities for air travelers.

The expansion of Flying Cloud is not consistent with this mission. This conclusion is supported by an honest and full evaluation of the facts.

• The forecasts used by the MAC to justify the need for expanding Flying Cloud have proven to be outdated and overstated. General aviation activity has declined substantially in the decade since the MAC’s projections were completed.
  

For example, the MAC’s forecasts projected Flying Cloud would serve 237,000 operations in 2003 whereas 155,837 operations occurred at the airport in 2003, an overstatement of 50 percent.

The MAC’s forecasts also are dramatically different from those recently made by the Federal Aviation Administration (FAA). Assuming the expansion plan is implemented, the FAA projects annual activity in 2010 to total 168,999 operations compared to the MAC’s forecast of 302,982, a difference of nearly 90 percent. As well, the FAA is forecasting total operations in 2020 to be well below the activity the airport had in 1976.

• The MAC argues that expanding Flying Cloud is necessary to divert general aviation aircraft and congestion from Minneapolis/St. Paul International Airport. If this were true, Northwest Airlines would be the strongest supporter of the expansion plan. However, it is not true.
  
  

The MAC’s ambitious forecast estimates that in 2010, 19 flights per day would be diverted from Minneapolis/St. Paul International to Flying Cloud. A total of 19 may not sound like much, but more importantly, the figure of 19 is one that is likely overstated.

The MAC already provides operators a choice. Its downtown St. Paul airport has the runway length necessary to support corporate jets. Ultimately, it is up to the general aviation operator to choose which airport they use. Today, many operators choose to use Minneapolis/St. Paul International at non-peak times and to link to commercial air services. Those operators will not choose to operate at Flying Cloud. The MAC’s own consultant acknowledges that "Minneapolis/St. Paul arguably serves a different market."

Moreover, according to the MAC’s own forecasts, the net increase in the number of aircraft based at Flying Cloud that would benefit from a lengthened runway is estimated to be a total of 20.

• How will the MAC fund this $80 million expansion?
  

In reality, users and benefactors of Flying Cloud will pay nothing towards the $80 million cost.

Transient aircraft are aircraft that come from another airport or city and use the MAC’s reliever airports. These transient aircraft do not have to pay any fee for using Flying Cloud or any other MAC reliever airport.

Furthermore, current total rents and fees paid by all users of the MAC’s reliever airports do not even cover operating costs. The reliever airports are subsidized by profits the MAC makes from parking and concession purchases at Minneapolis/St. Paul and this is how the MAC intends to pay for the Flying Cloud expansion.

If the MAC plan is implemented, they will use $80 million of profits generated by passengers to subsidize an elite few who can afford to operate private airplanes while exacerbating the challenges the industry faces in properly serving its customers. The funds generated could be more effectively used to build a better airport and a better airline ticket fee structure.

• Is the City of Eden Prairie benefiting from the Flying Cloud expansion?

Initially, Eden Prairie was not supportive of expanding Flying Cloud. The city had many concerns, including the environmental impacts of additional aircraft noise. However, in exchange for not opposing the expansion, city leaders did a good job negotiating a settlement agreement with the MAC that provided certain benefits to the city, including additional park lands.

Eden Prairie residents may be concerned that if Flying Cloud’s expansion were stopped, the city’s agreement with the MAC would be in jeopardy. However, there is no reason why Eden Prairie couldn’t continue to realize those benefits and more if the expansion is stopped.

In the end, an up-to-date, even-handed and complete analysis of this $80 million project would confirm that the benefits plainly do not justify either the costs or the environmental and financial impacts to Eden Prairie and its residents. Spending $80 million to benefit 20 private aircraft operators is bad public and private policy.