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Monthly Archives: April 2011

Brazil To Hand Over Airports To Private Sector

“We want to combine the urgency of the works with public and private investments,” Mr. Palocci said.

via WSJ.com.

Remember one of the problems we’ve isolated, in government “politics trumps solutions.” When the government brings in the private sector to help expedite projects it is because it’s the only solution they can find to that problem.

Emirates Airlines Has Big Ambitions

“Emirates’ strategy is aggressive,” says Pierre-Henri Gourgeon, the chief executive of Air France, who complains that Emirates is siphoning off passengers from Europe’s traditional hubs. “Europe is at the center of the global aviation world. It’s the result of aviation history.”

via Emirates Airlines Has Big Ambitions – NYTimes.com.

Great article on the wild success and growth of Emirates Airlines.  The European carriers sound a little off their game… seeking their government’s involvement to help fight off Emirates.  If the market is telling you what airline they want to fly, and it isn’t yours, getting the government to intervene isn’t a very fair way to win back market share.  See what your competitors are doing right and do it better.  Serve the customer… the traveling public.

Photo



Matching pair of SD70ACe’s shot at Crawford Hill, Nebraska by Charles Biel.

Check out Charles’ site when you get a chance. He curates an impressive archive of ATSF, BN, and BNSF motive power images. My personal favorites come from his yearly “party favor” collection… images from this collection frequently adorn my desktop.

Photo

My photo taken from the skybridge while boarding a flight to leave Beijing, China.

Problems vs. Symptoms

As an engineer, I want to fix the transportation system in the United States. Many people want to fix the US transportation system actually. However, many people mis-identify symptoms as problems.

For example, many would say that the lack of high-speed rail in the US is a problem. However, it is merely a symptom of much larger problems within the transportation system.

Here’s a list of problems in the US transportation system.

  1. Disparate Funding Structures
  2. True Costs are Hidden
  3. Politics Trumps Solutions

This will be a running list. I’ll add to it and repost as I identify additional problems. I’ll pick one of these problems from time-to-time and expound.

Flat Fee for Electric Cars?

How can lawmakers create a new system to maintain the transportation infrastructure that “makes more sense than what we have today?” Rep. Chris Reykdal asked.

via Wash. considers annual flat fee for electric cars.

Now here is a politician asking a smart question.  The question itself shows that this guy understands the unbalanced funding problem our transportation system has.  A flat fee for electric cars will only exacerbate that problem.

Photo

I’d like to features some transportation photos from time to time… trains, planes, OR autos. I’ll use photos of my own, reader submissions, and some favorites from some other folks (attribution will be given).
Also RS3, NYC #8255
During high school I worked on the Midland Railway and had the privilege of throttle time with the RS3 in the foreground. Of all the locomotives at Midland, this one really gave a sense of all the horsepower running under the long hood. My photo from a return visit in 2003 I believe.

US Airport Privatization

Now, I’m not a lawyer, but I got the gist of this post. A couple disappointing things I caught here:

  1. The FAA can bar the closure of a “federally obligated” airport. I’ve heard commentary on this elsewhere and it basically boils down to a bureaucratic method to ensure federal grants aren’t being claimed by airports that then get closed. Accepting FAA money essentially locks a proprietor into perpetual operations of their airport regardless of solvency. A non-viable general aviation airport will keep seeking federal funds because it needs the money. It sounds like a horribly inefficient vicious circle of propping up a failed airport.
  2. The pilot privatization program permits a “reasonable rate of return.” Who determines what is reasonable? Are we trying to keep airports on the federal government doles? Why not exorbitant rates of return so that they can self-fund? Shouldn’t that be the goal?
  3. Looking at the application process its clear that you will need special grant writers and lawyers to help you navigate this process if you want to privatize. This appears to be an application process written by lawyers for lawyers. Airport operators, engineers, and finance folks should be the ones creating these processes to favor the airports who want to apply.

 

Chicago Midway is one of the pilot program applicants. I’m curious to see where that leads.

Indianapolis tried to transfer operations at Indianapolis International Airport to a private operator, BAA. Now, BAA knows a thing or two about operating airports. They should… they operate London Heathrow among many others. Yet they couldn’t make IND work. It seemed, from my limited observation, that the airport authority wouldn’t let BAA truly operate privately but placed too many government-sector restrictions on their business. I can’t help but think that FAA is similarly half-committed to their pilot privatization program.

According to my limited understanding, in New Zealand every airport has to support itself. Many smaller airports in New Zealand operate their airfield at a loss (sound familiar) but fund everything by developing their other land for commercial use.

Why not let private operators/owners come in, take over the airport, and do what they must to ensure continued operations and service? Why can’t solvency and self-sufficiency be the goal?

Incidentally, I recommend the blog I’ve linked to, Aviation and Airport Development News. It has good information from time to time.

*Followup – Note that while many airports in New Zealand are required to be self-supporting, with no governmental money whatsoever, smaller General Aviation airports do rely on local taxes (or “rates” as the Kiwi’s call them).  A good example of a small, self-supported airport in New Zealand is Wellington International.

Funding Structure

I stated there was funding structure problem in my previous linked post. A little elaboration:
- Interstate Highways are primarily funded through taxes on gasoline
- Roads are primarily funded through local government taxes
- Airports are a hodgepodge of federal funds, local funds, and airline ticket fees
- Railroads are largely privately funded (with government grants occasionally subsidizing choice projects)

We are so hot-to-trot to increase fuel efficiency (a good thing!) in this country that we are ignoring the problem of decreased funding for highways and roads. I’m all for weening off the foreign oil teat, but there are unintended consequences.

The funding problem also creates a barrier to shipping goods efficiently. Railroads can’t compete with trucking companies on LTL (Less-than-TruckLoad) shipments due to funding inequality. Trucking company’s benefit from an infrastructure that is funded by a giant pool of taxes whereas railroads pay for their own infrastructure and then pay property taxes on top of that.

Not all LTL shipments can efficiently be moved to rail but it sure seems that intermodal rail shipping could do a lot more to relieve the highways if funding were more balanced. Large LTL shippers like UPS are heavy users of intermodal rail shipping.

Mind you, I’m not arguing for the federal government to start funding more rail projects. However, I do think that a balanced funding structure would greatly aid transportation efficiency in the States.