POSTED ON FEBRUARY 27, 2013:
City in the Sky
"Aerotropolis" model carries potential
One of the city's greatest transportation assets is the Tulsa International Airport. Lately the public has been learning the many challenges the airport is facing. Generally, the challenges are these: there are fewer airlines serving Tulsa today than just a few years ago; the number of daily flights in and out of Tulsa has dropped by at least one third; the costs have increased to operate airlines and airports as well as to travel by air; there are fewer direct flights. All of this means that the future of our airport is, no pun intended, up in the air. What is clear is that the airport of the future cannot be sustained by the operating model of the past.
Adding to TIA's challenges has been the gradual "municipalization" of the airport operations. Before the late 1980s, the airport operated pretty much independently of City Hall bureaucracy and politics. Leaders then viewed the airport more as a business enterprise and not a city department. But in the late 1980s and into the 1990s there was a consistent effort to bring more of the operational and support functions of the airport into City Hall. And with that, the airport was expected to transfer airport funds to the city to pay for these support services. That meant there would be less money to operate and improve the airport but more money to operate city government.
Now, after having operated under this model for almost two decades, both the mayor and airport leaders have recognized that this is not a good model. It is time to return the airport's future to airport professionals.
The existence and operation of the airport was seen as so important to our founding fathers that airport operations are specifically contained in the City Charter. When the voters adopted our city charter they approved this language: "The Tulsa Airport Authority (TAA) shall operate any and all airports as a separate utility and is responsible for the operation, maintenance, development, and improvement of the airports and air navigation facilities of the city."
The trustees of the TAA, which are the mayor and businessmen and women appointed by the mayor and approved by the City Council, are responsible for our airport today and into the future.
Airport services and operations are unlike any other city government service. Airport customers are businesses and citizens which cover a wide region beyond just the city limits of Tulsa. Experts in the aviation industry who have studied TIA operations have concurred that the airport will be in a stronger position to meet its challenges if separated from city government. Because the airport does not depend upon sales tax to operate, there isn't anything provided by City Hall that TIA can't provide for itself.
Removing airport operations from the government is consistent with several best practice principles: (1) it will reduce the size of city government; (2) there will be greater opportunity to apply business principles to the operations; and (3) it will create a true public-private partnership between the community business leaders who serve as trustees and the professional airport staff. Together, they understand that no other city government service is as unique or specialized or federally regulated as airport operations are.
Some of the best run airports in America operate under this public-private authority model. Those include Detroit Metro Wayne County Airport Authority, Dallas Fort Worth Airport Commission, Minneapolis St. Paul Airport Commission, Metro Washington Airport Authority Dulles, and Indianapolis Airport Authority.
With operational independence, there are more opportunities for public-private partnerships at the airport, for private investment at the airport, for lower operational overhead. It's important for travelers to know that because TIA has a limited number of opportunities for non-airline revenue, airport costs are passed on to each of us when we buy a ticket. Recently Tulsa was pegged as the 20th most expensive airport in the nation to fly from. That's right -- 20th most expensive in the nation. This can't be good for business or personal travel or economic development.
Believing that airports of the future can be more than just places where planes take off and land, Congress addressed airports this past summer in the national transportation bill. Our own Senator Jim Inhofe was a leading voice and advocate for creating areas around airports called "aerotropolis." According to the transportation bill, an aerotropolis is a multi-modal or inter-modal transportation network designed to provide connectivity to a defined region of economic significance centered around a major airport.
Airports have evolved as key drivers of business locations in the 21st century much like highways were in the 20th century, railroads were in the 19th century, and seaports were in the 18th century. Seizing upon this congressional direction, the mayor and the TAA are now positioning Tulsa at the forefront of assessing how to develop an aerotropolis near the airport.
Clearly our leaders are recognizing that while there may be little they can do to change the dynamics of airline operations, there is a great deal we can do to redefine and redesign what can and must happen to the airport in the future. It can no longer rely upon revenue from parking lots and rental cars and vending machines and airport shops to help cover the bottom line. Clearly the increased cost on each passenger ticket is telling us that these non-airline revenue sources alone are not enough to keep up with the rising cost. We need to be lowering costs by divorcing airport operations from City Hall and expanding non-airline revenue opportunities beyond the traditional sources by focusing on economic development of the property at the airport.
The aerotropolis model is the future for those airports that are going to succeed. Before long, we could see fewer and fewer airports that can provide the type of travel services we want. Airports in our region like in OKC, northwest Arkansas, and even DFW compete for our travelers. Cutting the ties with City Hall and thinking outside the box with an aerotropolis economic development near the airport is what will keep us flying.
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