Zero Press Statement June 2005

Because of industry changes, diminishing federal dollars for AIP projects, pressure from NWA and MAC’s own failure to make the relievers more self-sufficient, MAC is reevaluating the relievers.

  • The city needs to "meet and confer" with MAC to discuss changes that could impact the agreement and the community. To "meet and confer" relates directly to resolving differences, which is the exact language used in the Final Agreement in Article 8, page 16. So, the city does not need the council’s permission to "meet and confer" with MAC.

  • The Airport and Airway Trust Fund has diminished to a dangerously low level, which will only allow payouts for ATC, air traffic control and it will suspend AIP, Airport Improvement Program and F&E, Facilities and Equipment activities. The FAA will spend the majority of whatever funds it has on major airports considered to be the largest contributors to the national and global economy, not on General Aviation.


MAC can’t revise the long-term plans for the relievers without involving stakeholders like the city of Eden Prairie.

  • The Reliever Task Force will begin a process to review and revise each reliever’s Long Term Comprehensive Plan, LTCP with the Met Council; they are talking about changes in their distribution of reliever operations and expenditures in the future. They can't do that without involving stakeholders like Eden Prairie. It doesn’t make very good business or planning sense to devise an expansion at one airport and then turn around 2 years later and dismantle/change the entire system the expansion was predicated on: including plans for an expanding MSP beyond the original plans, reducing the operations of other relievers. On this basis alone, the circumstances under which FCM was considered for expansion have changed. The FEIS, Final Environmental Impact Statement is irrelevant.

It’s bad public policy for a state agency to fund reliever airports, which benefit so few Minnesotans, with hidden user fees at MSP from parking and concessions.

  • The economic subsidy at all MAC reliever airports was 7.9 million in 2002 and was budgeted at 9.6 million for 2004. This deficit is illegal under Minn. Stat. Section 473.651 (reasonable and uniform charges with regard to value of and improvements on property) and FAA policy regarding airport rates and charges 61 Fed. Reg. 31994, 32014 (airports must be self-sufficient).
    The reliever airport system has operated under a huge deficit with hidden subsidies the public pays
    at MSP for parking and concessions: In 1999, the deficit was 24% of total expenses—a deficit of
    $5.2 M. In 2000 the deficit was $5.2M, in 2001 the deficit was $7.0M. In 2002 the deficit was $7.9M
    (Exhibit 1 at Appendix 1, NWA 10-09-04).

MAC ignores information presented by business analysts they hired to assess increasing the relievers ability to be self -supporting.

  • MAC is still looking at increasing non-aeronautical revenue despite ABS, Airport Business Solution’s, September, 27 2004 presentation, in which they reported, "Most airports approaching or obtaining self-sufficiency derive a large percentage of their revenues from non-aeronautical sources. ABS said, "There is limited opportunity (to do that) at MAC reliever airports."

Small reliever airports have been financed by the FAA in the past in the expectation that they would draw general aviation aircraft away from major airports. (The FAA no longer recognizes the connection between relievers and congestion or lack of congestion.) To date, they have not done so. Thus, some critics would argue against providing federal subsidies to those airports.

The GAO, General Accounting Office and the CBO, Congressional Budget Office determined years ago that reliever airports do not reduce congestion at major airports and cannot help increase capacity by diverting aircraft to smaller airports. The FAA has also made statements that reliever airports do not relieve congestion at hubs - neither are they the cause of congestion at hubs. NWA had this information in their 2004 Reliever Airport Seminar Report. This is generally well known in the industry, yet MAC continues to pass this misnomer off as their mandate for subsidizing and expanding reliever airports. This mandate has been irrelevant for years. Yet, MAC continues to perpetuate it in order to rationalize reliever operations and subsidies.

Under the Airport Improvement Program (AIP), the Federal Aviation Administration (FAA) provides airports with grants for expanding capacity and improving terminals. Over the past decade, about two-thirds of AIP funding have gone to primary, commercial service airports; about one-quarter has gone to general aviation and reliever airports. Recent trends in aviation have increased the importance of larger airports (as measured by the number of embarking passengers). There is discussion of eliminating or reducing federal funding for smaller airports like Reliever and General Aviation airports.

The numbers aren't there now or in the future; they just don't support an expansion. Relievers have a 25% decrease in operations over the past 5 years.

  • Industry analysts like the Teal Group view projections and growth that would justify an expansion (EP SUN FEB 2005) as "unverifiable." Growth in air taxis, VLJs, very light jets, light sport planes, and fractionals show weak profits, uncertainties related to fuel prices, the economy, market volatility and market downside. The Teal Group refers to fractionals as a "wild card" with "more potential for a downturn than an upturn" and talk of continued growth as "premature" because of "uncertainties about the cost of fuel, interest rates associated with deficits, the long-term strength of the U.S. economy and the health of corporate profits." (Aviation Week & Space Technology, Teal Group Bizjet Market Forecast Cautious, 05/08/2005 08:36:56 PM, By Edward H. Phillips)

MAC said in the Reliever Task Force Report, June 8, 2005, that they still haven’t figured out the "value" of the relievers to MSP in dollar terms.

It is Zero Expansion’s belief that MAC should have an unbiased agency to oversee its budgets and projects. It’s incumbent on MAC to figure out what "value" the relievers have to MSP before they decide to spend $90M+ to expand a reliever airport with ops down, forecasts over projected, and users rejecting any kind of fee hikes to gain sustainability or profitability.