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NBAA Strongly Supports Funding of Minneapolis Reliever Airports
Contact: Cassandra Bosco
Washington, DC, May 15, 2003 – In a May 9 letter to the Metropolitan Airport
Commission (MAC) of Minneapolis, MN, the National Business Aviation Association (NBAA) strongly
supported the need for funding of the MAC's reliever airport system.
In the letter, Pete West, NBAA senior vice president, government & public affairs, noted that the six reliever airports in the MAC system are important destinations for business aircraft operators. "There are currently 134 NBAA Members operating 222 fixed-wing turbine business aircraft with their principal place of business in Minnesota, primarily within the area served by MAC's airport system," said West. "In 2002, Flying Cloud was one of the 50 busiest general aviation airports in the nation."
For these reasons, NBAA has an important interest in the outcome of the MAC's considerations. In addition, the six reliever airports in MAC's system represent one of the best examples of why reliever airports are crucial to the U.S. national air transportation system. The MAC reliever airport system is achieving its intended purpose of reducing user costs and increasing consumer convenience at Minneapolis-St. Paul International Airport (MSP) with a relatively small amount of cross-subsidization.
The six MAC reliever airports account for approximately 60 percent of all operations in the MAC airport system but only about 7 percent of system operating expenses. The MAC's preliminary results for 2002 show that the reliever airports operated at a deficit of $3.7 million before depreciation and $677,000 after depreciation. The higher figure amounts to only 4.5 percent of total net operating revenues for the entire MAC airport system. Therefore, the MAC does get value for that small amount of cross-subsidization.
GCW Consulting, an aviation and infrastructure consulting company, conducted a study dated November 15, 2002, for Northwest Airlines that was one of many documents reviewed by the Reliever Airports Advisory Committee. Though this GCW study examines the revenues and expenses of reliever airports, it fails to consider the value of reliever airports to the users of Minneapolis-St. Paul International Airport. However, to its credit, GCW concedes that comparisons such as those between reliever airports and major hub airports are difficult to draw and that "the typical reliever airport does not generate enough revenue to meet its expenses."
The U.S. Department of Transportation (DOT) recognizes the imputed value of reliever airports by allowing the costs of such airports to be included in the rate base for the nearby air carrier airport:
"This principle may be especially true in the case of a commercial airport/reliever airport system. The reliever airport's function is to draw general aviation traffic away from the commercial service airport. If the airport proprietor had to charge the full cost of the reliever airport to general aviation users, the increased price might cause those users to elect the commercial service airport – increasing congestion and the carriers' costs of operating there."
In addition, DOT Policy Regarding Airport Rates and Charges, 61 Fed. Reg. 31994, 32014 (1996) states:
"The value of the Reliever Airports to MAC was recognized 10 years ago in the Minneapolis-Saint Paul International Airport Capacity Enhancement Plan (December 1993), prepared jointly by the U.S. DOT, the FAA, MAC and the users. One of the recommended, and implemented, alternatives was to continue the enhancement of the MAC reliever airport system, and for good reason:
"Reliever airports can ease capacity restraints by attracting small/slow aircraft away from primary airports, especially where small/slow aircraft constitute a significant portion of operations. The segregation of aircraft operations by size and speed increases effective capacity because required time and distance separations are reduced between planes of similar size and speed...
"Every effort should be made to accommodate these aircraft at enhanced 'reliever airports' with easy access to various locations within the metropolitan area. The reliever airports would need to provide services that are appropriate for the category of users at each airport."
It is clear that there is a significant value in having a major hub airport surrounded by a system of smaller reliever airports that can handle 60 percent of all operations. That is precisely how a system of reliever airports is supposed to work. MAC presently is getting a reliever airport system at a cost that is substantially less than the value of the benefits it produces.
For more information, contact NBAA's West at (202) 783-9260 or [email protected].
NBAA represents the aviation interests of more than 7,300 companies that own or operate general aviation aircraft as an aid to the conduct of their business, or are involved with business aviation. NBAA Member Companies earn annual revenues approaching $5 trillion — a number that is about half the gross domestic product — and employ more than 19 million people worldwide. The NBAA Annual Meeting & Convention is the world's largest display of civil aviation products and services.
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