Task Force Pushes Lower Fees for Lambert-St. Louis InternationalAirport

December 29, 2003

Task Force Pushes Lower Fees for Airport 
St. Louis Business Journal, MO 
 
        Business leaders who make up the airport task force are expected to 
recommend that Lambert-St. Louis International Airport lower its per-passenger 
costs to airlines and take a regional approach to governance when it releases 
its report in late January.  
         But the leader of a national aviation think tank believes local job 
growth is the key to growing business at Lambert.
        One of the task force's prime recommendations is that the airport aim 
for a cost per passenger of between $6 and $8. Per-passenger costs include the 
gate fees and landing fees charged to airlines. Lambert's current cost per 
passenger is just over $6 but is expected to rise to more than $8 when the new 
runway is completed and the airport must begin repaying the financing bonds in 
late 2006.
        By comparison, per-passenger costs at San Francisco are about $19, 
Seattle is about $15 and Denver is $17. On the low end, Charlotte, N.C., is 
around $5 and Kansas City about $6, according to Airport Director Leonard 
Griggs.
        Darryl Jenkins, director of the Aviation Institute at George Washington 
University in Washington, D.C., said the business leaders in the task force 
need to look beyond reducing fees.
        "Most of the hesitation among airlines on St. Louis is that you have a 
stagnating economy. That's what your local business leaders need to be looking 
at. It makes more sense to me to put more money in your local economy to create 
jobs and then you don't have to do anything else," Jenkins said.
        St. Louis is not lacking in airport service, even with American's cuts, 
so that should not be a deterrent to companies or jobs locating here, according 
to Jenkins.
        "Your airport is no different than anyone else right now; they're all 
scrambling to get more service," Jenkins said. "Next year, you'll see a whole 
lot of new startup airlines coming up, but none of them are considering St. 
Louis because the economics there are bad. No airline is going to look in your 
direction more favorably until you get some job growth."
        The task force also is expected to contend that the business of the 
airport is a regional concern and must be addressed in a regional manner. A 
recommendation is not expected for any specific regional governance plan, 
although previous task forces have recommended regional governance.
        The task force is currently working on specific implementation plans to 
include in the report before forwarding it to St. Louis Mayor Francis Slay. 
Slay announced the formation of the task force in June and named members of the 
task force in August, after American Airlines announced in July the 
cancellation of almost half its flight schedule at Lambert, which was effective 
Nov. 1.
        The task force, chaired by former May Department Stores Co. Chief 
Executive David Farrell, includes members of the Regional Business Council, 
Civic Progress and the Regional Chamber and Growth Association. The role of the 
task force was to come up with ways to improve business at Lambert, not only in 
the short term, but during the next 20 years.
        Jeff Rainford, Slay's spokesman, said implementation of the 
recommendations will begin soon after the report is issued.
        Griggs said he has not seen the report but is supportive of the task 
force and its recommendations. "I am looking forward to working with the 
business community and the entire region to make Lambert Airport the economic 
engine it can and should be. Hopefully, the task force's report will be a road 
map to help us do that," Griggs said in a statement.
        St. Charles County Executive Joe Ortwerth said he has not seen any 
specific recommendations from the task force but said the county would like 
more say in airport governance.
        "Anything that would result in St. Charles County having a greater 
voice in the decisions made about Lambert's operations and management would be 
welcome," Ortwerth said. St. Charles County now has one representative on the 
17-member St. Louis Airport Commission.
        But Ortwerth balked at the county having any financial ties to the 
airport. "If they're proposing the county government of St. Charles would have 
some financial obligation for the airport, that's not even thinkable. The 
county is in a position to barely provide needed services to our residents. 
We're not in the situation to assume any financial obligation for the airport."
        Mac Scott, a spokesman for St. Louis County Executive Charles Dooley, 
said the county had no comment on any of the task force's recommendations.
        Richard Hrabko, director of aviation for St. Louis County and a member 
of the airport commission, has served on previous airport committees and task 
forces that recommended regional government.
        "It's the conclusion the four or five committees I've served on have 
always come to. But from a political standpoint it's a difficult thing to do 
because certain powers will have to be relinquished," Hrabko said. "Any of the 
committees I've served on go beyond Lambert and would have had the authority to 
govern all regional airports including Spirit, St. Charles County Airport, 
MidAmerica and Parks."
        Per-passenger costs for airlines at Lambert have been maintained as low 
as possible, Hrabko said. "The airport commission has done everything they can 
possibly do to cut costs, but you can only cut so much."
        Ron Kuhlmann, a vice president and airline consultant at Unysis R2A 
Transportation Management Consultants in Hayward, Calif., said airports need to 
look beyond airlines as their customers and concentrate on passengers as their 
primary customers.
        "That can actually shift the revenue stream," Kuhlmann said. "Airports 
have been concentrating on landing fees and parking fees in an age when more 
and more airports look like shopping malls. Passengers are now spending more 
time in the terminals and airports need to shift their focus."
        Adam Pilarski, senior vice president and airline consultant at Avitas 
in Washington, D.C., said airports are catering to airlines in trying to 
control landing fees but he cautions against comparing St. Louis too closely 
with landing fees at other airports.
        "Right now airlines are freaking out about costs because it is 
something they can control. But it's kind of immaterial to compare customer 
fees at Los Angeles to San Francisco to St. Louis to New York. Airlines look at 
specific route performance and if you are cheap compared to L.A. it really 
doesn't matter because with the volume of people flying there they can still 
make money," Pilarski said.
 
 
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