Regulation – Jim Gill's Blog

New Program Allows Travelers to Skip Airport Security Lines

September 6, 2019August 30, 2019 by James Gill, posted in Airports, Passengers, Programs, Regulation, Security, Technology, Transportation

One of the top sources of stress at airports is security lines. An unexpectedly slow or long security line can put you at risk of missing your flight, which is why many people arrive at the airport very early. However, this often means spending an hour or more waiting at the terminal for the flight to board. Several different solutions have been offered to make this process quicker and more convenient. One option that has recently gained some traction is Clear. More than 3 million people have become members of Clear, which uses biometric data that enables them to move quickly through security lines. Clear members can use either their fingerprint or iris to prove their identity, which allows them to then move directly to the security bins after showing a valid boarding pass.

The Availability and Cost of a Clear Membership in the United States

Naturally, Clear will only come in handy if the airport that you use has the technology. In the United States, the Clear technology has already been adopted by more than 30 airports, a number that will likely grow in the coming years. Moreover, Clear is working to partner with other organizations besides airports. For example, Yankees Stadium and the Staples Center have already installed Clear booths at the entryway into the events that they host. Clear uses an encrypted code that corresponds to members’ data in order to verify their identity so that no other form of identification is needed at the airport. The biometric data from the Clear station is compared against a computer database in order to identify the traveler. With their identity confirmed, they do not need to show any further physical identification.

Clear is not a free service. Currently, individuals must pay an annual fee of $179 to use the biometric scanners. While the price may be worth it for those who travel often or who simply value their time, the average traveler may find the cost to be a bit exorbitant, particularly if they arrive at the airport and there are no or few security lines, meaning that the service would have little value to them. However, if a security line is unexpectedly long, the service could mean the difference between catching and missing a flight. In addition, there are ways other than paying for a Clear membership to obtain access to the service. A number of airlines have partnered with the company to obtain free or discounted memberships for their frequent flyers, including Delta Air Lines and United Airlines.

Delta Uses Clear to Eliminate Another Step in the Security Process

Delta is taking its partnership with Clear a step further by removing yet another step in the process of boarding a flight. Customers flying on Delta with a linked SkyMiles account do not need to show their boarding pass when moving past security, as this information is linked to the biometric scan. The airline conducted a trial run on the system for several months before it went live. Through these trials, they found that the Clear system could successfully identify travelers and retrieve boarding pass information using their personal identity. The process saves individuals from having to dig into their pockets to find their boarding passes, going to the counter to print their passes, or downloading a mobile pass onto their smartphones.

Currently, only Delta offers boarding pass verification, so members flying on other airlines will still need to show a physical or digital ticket. Since Delta has a stake in Clear, it makes sense that this airline is the first to develop this technology. In the future, travelers should expect to see Clear used at many other steps of airport identify verification, such as when checking their bags or entering a lounge. Using a fingerprint or iris scan will make the entire process safer and faster for customers. Delta has also worked to make Clear technology accessible to its customers. Delta Diamond members have access to Clear at no cost, and any person with a SkyMiles membership receives a reduced-cost membership, which may range from between $79 to $99 annually. This half-price deal may encourage many more people to purchase the service, which could drive its inclusion at new airports across the country.

The Risks Involved with Biometric Identification Services

Travelers considering Clear may worry about security, especially considering the debate over the use of facial recognition technology in airports. Clear makes information security a prime concern and works diligently to ensure that its systems are as safe as possible. After all, even this data could be used in harmful ways if it falls into the wrong hands. So far, no breaches have occurred with Clear, and the data sent remains heavily encrypted. Still, it is worthwhile to note that potential customers recognize the risks involved with biometric identification.

This Is What You Need to Know about Airports and Rideshare Helicopter Services

July 23, 2019July 11, 2019 by James Gill, posted in Airports, Amenities, Infrastructure, Regulation, Technology, Transportation, Vehicles

Around the country, airports are quickly adapting their policies and traffic flows to accommodate the growing popularity of rideshare apps. However, airports may soon need to rethink once again how the services of these companies will integrate into the flow of the airport.

Recently, Uber announced its newest product, Uber Copter, which will launch by offering helicopter rides between lower Manhattan and John F. Kennedy Airport. The flight last about eight minutes and will cost between $200 and $225 per person each way. This price includes private ground transportation on both ends of the trip to make for a door-to-door experience.

While we are probably far from seeing such services available standard at every airport, Uber Copter could quickly expand to other major cities. This is what you need to know about how airports may need to change to accommodate rideshare helicopter services:

Uber Expands Offerings with Aerial Airport Transportation

Uber first started promoting aerial services a few years ago with Uber Elevate, which made the service sound more like flying cars than helicopters. Indeed, the company is still working on flying-car technology and hoping that customers will settle for Uber Copter in the meantime.

Individuals can book the new service directly on the app, just as with any other ride, to save time and frustration when it comes to getting to JFK. The airport is not directly linked to Manhattan by public transit and may people rely on taxis and rideshare apps to get them to their flights.

However, when traffic gets heavy, such a ride can take two hours or more. A helicopter flight is a much more time-efficient option that may actually grow in popularity quite quickly despite its large price tag. With ground transport, the total travel time should average out to about 30 minutes.

Already, Uber is planning to bring Uber Copter to more cities across the country, and even across the world. However, the company is not planning to do so in the immediate future. Instead, Uber will use this new product to learn more about aerial vehicle operation and how such a service can work efficiently and effectively. This information will help the company ensure feasible expansion.

In the beginning, the service will only be available to Platinum and Diamond members, the two top tiers of the Uber Rewards loyalty program. However, it could open up to more customers shortly. Customers can book Uber Copter on demand or have a flight reserved up to five days in advance.

At first, the helicopters will only run Monday through Friday during the afternoon rush hour when getting to JFK is most daunting. Each helicopter accommodates up to five people. Individuals board with a pass issued directly through Uber.

The Logistics of Uber Copter Between Manhattan and JFK

In Manhattan, helicopters use the heliport near the Staten Island Ferry to land and depart. Passengers are picked up by car to be transported to this location. At Kennedy, Uber has access to the helipad near Terminal 8. Once passengers have landed at JFK, a car picks them up at the tarmac and takes them to the correct terminal or vice versa.

The company HeliFlite, based in Newark, will operate the flights and two pilots will be present on each journey. Passengers will also need to watch a short safety video before taking off so that they know what to do in the case of emergency.

One of the foreseen problems with the service is the lack of space for large bags. Passengers will be limited to a personal bag and a carry-on bag of 40 pounds or less.

Several Competitors Are Entering the Helicopter Taxi Sector

The current quoted price is between $200 and $225. However, the final cost of the flight will largely depend on demand and the price will vary depending on how many people are requesting rides, just as with ground vehicles. While this price may sound high, individuals often pay $200 to get to JFK from Manhattan in an Uber Black car during rush hour. The service is aimed mostly at executives and wealthy travelers.

The price could also start to change as other companies launch similar services. Voom, a company owned by Airbus, has launched similar services in the San Francisco Bay Area. Flights between San Francisco, Palo Alto, Hayward, Oakland, and San Jose airports range in price from about $150 to $300 depending on the distance. Another startup called Skyryse is also aiming to enter the air-taxi business.

Another competitor is Blade, which has small plane and helicopter services in cities across the United States. This past March, the company debuted Blade Airport, which provides helicopter service from Manhattan to Kennedy, Newark Liberty, and La Guardia. At all three airports, Blade already has its own private terminals, which makes it easy for these services to expand.

The question looming over Uber Copter is what will happen to airports if this service becomes more popular. Will airports eventually need to create new areas for helicopters to land, or will space and air traffic prove a limiting factor in the number of flights that can be offered? Furthermore, what kind of charges will airports levy to use their land and airspace? This latter question will become increasingly important as airports struggle to get the income they need to modernize and expand.

Should Airlines Pay a Tax to Guarantee Customer Repatriation? What You Need to Know

June 3, 2019June 3, 2019 by James Gill, posted in Administration, Airports, Passengers, Regulation, Transportation

Modern airports face a number of important challenges, from passenger facility charge (PFC) debates to technological modernization. One of the problems that has become more pronounced in recent months is airline bankruptcies. These have left many passengers stranded and scrambling to figure out ways to get home.

In April, the largest private airline in India, Jet Airways, announced its collapse with no warning and immediately canceled all of its domestic and international flights. The suspension was on a temporary basis due to lack of funding to purchase fuel and maintain critical services. Perhaps this announcement should not have come as a surprise considering that the airline announced serious financial issues in 2018.

Creditors did come to the company’s rescue. However, these events have left some people questioning whether airline should pay a tax to guarantee that customers will be able to return home.

The Collapse of WOW Air

The Jet Airways fiasco followed close on the heels of the collapse of WOW Air, a low-cost carrier based in Iceland. This company suddenly ceased operations toward the end of March. The WOW business model attracted a large number of customers, but it ultimately proved unstainable.

In November 2018, the chairman of Icelandair spoked about a finalized deal to purchase WOW. However, the Icelandair shareholders quickly shot the deal down once they realized the scope of the investment necessary to revamp the company.

After that, Indigo Partners also attempted to help WOW out until investors shot down the feasibility of the plan. Because of the quick collapse of WOW, its airplanes were still scattered across the world months after the bankruptcy.

WOW Airlines — Image by Oliver Holzbauer | Flickr

The Collapse of Alitalia

Another airline that has received a lot of attention is Alitalia, an Italian carrier with a long history of poor financial performance. In fact, the issues leading up to the current situation started in 2008 when the Italian government decided to privatize the airline on the eve of a global financial downturn.

Eventually, a purchase was negotiated with the Compagnia Aeronautica Italiana group, which failed to turn around the airline. Poste Italiane, funded by the Italian government, had to step in with a cash injection. Eventually, Middle Eastern airline Etihad purchased 49 percent of Alitalia.

Soon thereafter, Etihad experienced its own financial issues. This led to Alitalia starting the proceedings for bankruptcy again in 2017. The Italian government has kept the airline alive, but it seems like its days are numbered. Already, the company has delayed bankruptcy proceedings twice.

United Kingdom Suggests Repatriation Insurance Tax

Many people believe that something needs to be done to address the issues caused by these types of events. Recently, the United Kingdom took first steps toward action. The government proposed a new Flight Protection Scheme, which would involve an additional 50 pence per passenger per flight.

This additional money would require airlines to purchase an insurance plan that would repatriate passengers should the company ever experience a sudden bankruptcy. The recommendation comes on the heels of an Airline Insolvency Review.

The review showed that about 80 percent of British passengers travel abroad without any sort of insurance or other way to get home should the airline suddenly bankrupt. The situation is likely very similar, if not worse, in other countries around the world.

Naturally, the British aviation sector immediately pushed back against the proposed “tax.” Airlines UK, which represented 13 different carriers, stated that airlines face significant rising costs already. It believes that now is a particularly bad time to invoke further increases in the cost of airline travel.

British Airways also called out the proposal for being unfair and expressed a view that the new tax is a sort of levy to bail out other carriers. Much of this debate actually stretches back to 2017, when the British airline Monarch collapsed and left many UK nationals stranded. This event is what triggered the Airline Insolvency Review, which took two years to complete.

The Options Available to Solve the Repatriation Problem

The proposed Flight Protection Scheme is essentially a pot of cash that would be used to bring people home when their flights were suddenly canceled due to bankruptcy. Airlines would need to buy into this pot through an insurance policy. However, there is more to the recommendations. The government also wants to see a failsafe mechanism that would prevent airlines from stopping flights even when they go bankrupt.

While the details have not been worked out, the government wants to see a policy by which companies would be forced to keep flights going until their passengers could return home. This sort of plan has actually worked in the past. When Air Berlin started to fail, the German government infused it with enough cash to maintain operations for an appropriate amount of time.

Some critics of the plan have pointed out that the issue may not be a real one at all. While the Monarch fold was a disaster, time has passed since then and new precedents have been set. When WOW Air stopped its operations suddenly, 13 other airlines stepped in to offer passengers rescue fairs without any official government order to do so.

A general sense of duty and voluntary industry agreements drove this rescue mission. It seems likely that a similar thing would continue to happen, at least to a point. If airlines continue to fail at an alarming rate, however, the industry could experience fatigue. At that point a repatriation tax might prove useful.

This Is What You Need to Know about American Airports and Rideshare Policies

May 16, 2019May 10, 2019 by James Gill, posted in Administration, Airports, Amenities, Infrastructure, Locations, Regulation, Technology, Transportation, Vehicles

Many airports are experimenting with their own advances in transportation technology. However, they are also experiencing significant effects from the advent of new options, including ridesharing services.

Most people probably look as ridesharing services, such as Lyft and Uber, as a good thing. Unfortunately, they may actually contribute to a variety of problems in American airports. Many people have recognized that American airports have not developed at the same rate as international ones. These individuals may not know that this problem is, at least in part, directly linked to rideshare services.

In the United States, the vast majority of people arrive at airports in cars. Historically, they would use their own vehicles and park them on the premises or take taxis. However, rideshare services are cheaper and more convenient. This makes their growing popularity understandable.

A recent study found that prior to 2012, when ridesharing became widely adopted, 80 to 90 percent of journeys to the airport were made in taxis, rentals, and personal vehicles. The remainder of this figure comes from the limited public transportation options in some areas.

How Rideshare Services Cut into the Profits of American Airports

The situation has changed quickly. At San Francisco International, Uber and Lyft accounted for about 4 percent of drop-offs in 2014 and then 29 percent in 2017. During the same time, ridesharing-related business expenditures increased from 8 to 62 percent. Although this may not seem problematic at first, it actually contributes to the current underinvestment in infrastructure in American airports.

Historically, car parking has accounted for a significant portion of airport revenues in the United States. This revenue is now falling due to ridesharing, which ultimately means less money to reinvest in facilities. Furthermore, Uber and Lyft drivers, at least right now, pay less in access charges to pick up airport passengers. This is because they have less liberal access to the curbside than taxis. Diminishing taxi use has also cut into airport profits.

The growth of ridesharing services has certainly affected airports across the globe. However, this effect is especially strong in the United States because of the prevalence of personal vehicles. Additionally, there is resistance to transforming airports into bigger drivers of profit via better shopping and dining options.

American airports derive less than 10 percent of non-aeronautical revenue from retail and concessions. This is not the norm around the world, where major hubs like Changi in Singapore and Hamad in Doha have created luxury attractions for wealthy travelers. In other words, American airports have really relied on ground transport-based income. To maintain this source of income, a number of airports have begun changing their policies to increase income from rideshare providers.

Logan Airport in Massachusetts Begins Charging Rideshare Drivers

An airport that has made a lot of news in recent months is Logan in Boston. Very recently, the Massachusetts Port Authority Board of Directors approved a ground transportation plan that will begin charging a $3.25 drop-off fee for Uber and Lyft drivers starting in October 2019. Both of these company protested this change.

The new charge will help the airport recoup some of the losses it has experienced as a result of rideshare service adoption. The plan also creates an entirely new space at the airport for rideshare pickups at a centralized garage site, at least between the hours of 10 a.m. and 4 a.m. In the early morning, pickups will be allowed curbside. In part, this policy addresses the issue of public transportation, which services the airport but with limited hours.

The new area would include dedicated ride-hailing areas, as well as space for check-in and checking baggage directly without needing to go to a separate space. According to the authority, the idea behind the new space is to reduce the number of rideshare trips without passengers, thereby reducing congestion and greenhouse gas emissions. Estimates show that about 30 percent of empty trips will be prevented.

A representative from Uber has criticized the decision, arguing it will cost the airport significant money to execute while also charging passengers more. Both Uber and Lyft ran radio ads to oppose the change and collected more than 10,000 signatures on petitions. Ultimately, the fee is slightly less than the proposed $5 charge, but passengers will begin paying it soon.

More Changes Likely in the Future for Airport Rideshare Policies

Ideally, the new plan will raise some money for the airport that will facilitate infrastructure investments beyond the new garage area. When consumers see how this extra fee can actually improve their experience significantly in the long run, they may not push back as hard, but these effects will not be seen for years to come.

In line with the airport’s statement that the decision is to reduce congestion and greenhouse gas admissions, passengers on pooled rides, such as Lyft Line and UberPool, will have a reduced fee of $1.50.

Other airports across the country are starting conversations about similar decisions to address both the congestion at the curbside and the loss of revenue due to fewer long-term parkers. In the years to come, it will not be surprising to see some radical changes to policy that are even more forward-thinking than those at Logan.

This Is Why Airport Executives Want to Raise PFCs

May 2, 2019 by James Gill, posted in Administration, Airports, Facilities, Infrastructure, Personnel, Regulation

In March, airport executives appeared before the US House of Representatives Committee on Transportation and Infrastructure to advocate for the ability to increase air traveler fees. Specifically, these individuals want to increase the passenger facility charge (PFC) charge to airplane passengers. Currently, the PFC is capped at $4.50 per individual per leg of a flight.

The fee has not been increased in nearly two decades. This has significantly hindered the ability of American airports to develop as quickly as some of their international counterparts. The executives pushed for nearly doubling the fee with an increase to $8.50, largely because the cap has not been raised in such a long period of time.

Issues Arising from the Current American PFC Policy

The concern with the current PFC policy is that it forces airports to finance projects over very long periods of time. This is because they do not have the capital upfront to pay for them. The effect of financing projects is the increased interest associated with making payments over time.

One executive said that his airport has paid almost as much in interest as the cost of the project itself as a result of financing issues. Even a modest increase in the PFC would empower airports to substantially reduce financing costs. This would enable them to channel these funds directly to improvements that provide a better experience for passengers, which is, after all, the reason for the per-person charge.

Many of the air terminals around the country were built in the 1980s and 1970s, if not the 1960s, and have had few or no updates. As a result, American airports remain behind the times, especially when compared to many of the top facilities around the world. Many of these airports provide passengers with incredible amenities, especially for people on long layovers.

Providing a better travel experience could actually lead more people to fly, especially if they know that there is plenty to do in the airport during their down time. However, lawmakers are reluctant to increase PFCs because they believe that increasing the cost of a ticket will discourage people from traveling by air.

The Argument for Increasing PFCs for Air Passengers

Already, people who fly pay billions of dollars annually to airports in the form of PFCs. At the same time, this amount of travel has resulted in the need for significant infrastructure improvements and investment. The executives argue that lawmakers should be more concerned with these infrastructure issues than with the additional charge put on each passenger’s ticket.

It is true that increasing the PFC will result in more expensive airfare. However, unaddressed infrastructure problems could lead to serious issues down the line. This is especially true when it comes to convenience and even safety.

Not all of the airport executives involved in the debate believe that PFCs should be raised. The CEO of a budget airline acknowledges the significant infrastructure needs that have arisen in the United States. However, this CEO believes there are solutions that do not involve increasing airfares, which have the potential to disproportionately impact the ordinary consumer.

Other executives are skeptical that raising the fees would actually reduce the number of Americans who choose to fly. After all, airlines themselves increase passenger service fees without a substantial impact on flight rates. Last year, several major airlines increased their baggage fees by $5, more than the requested jump in PFC. Notably, passenger boarding rates did not decrease significantly as a result.

Congress Remains Divided When It Comes to Raising PFCs

Lawmakers have listened to the concerns raised by these airport executives. However, they are reluctant to approve an increase in maximum PFCs. These individuals are hesitant to increase any financial burden on the public resulting from financing issues. This is particularly true when there are different avenues to consider, such as private capital.

Ultimately, the committee wants to hear more from other parties involved. Stakeholders include local communities and passengers, and it is important to know how these audiences feel about the fees and the state of American airports. At the same time, executives feel like they have explored all relevant options and they feel an increase in PFCs is the most appropriate way to address infrastructure issues.

The other perspective that is important to consider is that fact that airports generate about $1.4 trillion in the United States by creating 11.5 million jobs. Protecting this source of income and employment should become a priority for the House of Representatives. This is only possible when critical infrastructure issues get addressed.

Passengers pay billions of dollars in PFCs. However, airports need billions more to modernize airports to provide travelers with the experience and amenities they expect. According to a recent study, airports will need more than $128 billion to address critical infrastructure needs in the coming decade. If the overall experience of flying begins to decline in quality, then it is just as likely that people will start flying less frequently. This puts the whole industry at risk.

Category: Regulation