There has been a lot of controversy over the years about the federal government’s involvement and financial obligation to the airway industry. The construction of runways and taxiways are the largest development cost at hub airports and terminal development is second (Sanchez, 2006). The introduction of the Airport Improvement Plan (AIP) was the start of any significant federal funding for airports and the air industry. There has been an interest in privatization of airports and several attempts. This paper will discuss some of the basic information about the AIP and airport funding.
History
The first federal assistance given to airports or the air industry was the Works Progress Administration (WPA). In the 1930s, almost $150 million dollars was spent as a part of the WPA projects on airports. Airport expenses and funding were considered a local responsibility until World War II. It was during WWII that there was first any significant federal support for airport construction. After the war the federal government continued to aid airports, but at a lower level. The federal government contributed greatly in the 1960s when airports had to be upgraded due to the use of commercial jets (Kirk, 2009).
The Airport and Airway Development Act of 1970 set the basis for the Airport Development aid Program (ADAP) and the Planning Grant Program (PGP). It was put in place to help finance reconstruction due to the congestion problems Kirk, 2009). The act established the Aviation Trust Fund. The Aviation Trust Fund is the major source of federal aid to airports (Kirk, 2009). Due to debating about the possible “defederalization” of airports, Congress did not support the trust fund during 1981-1982.
The Wendell H. ford Aviation...
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congress. Retrieved from http://web.ebscohost.com.ezproxy1.apus.edu/ehost/pdfviewer/pdfviewer?sid=b1defdac-0749-4471-82e5-cb516c6a973c%40sessionmgr113&vid=6&hid=127
Obama budget proposes cuts in airport funding. (2011, Feb 21). Air Safety Week, 25(8).
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Sanchez, H. (2006, Oct 27). Airports plan $41b of improvements, up from two years ago.
Aviation, Retrieved from http://web.ebscohost.com.ezproxy1.apus.edu/ehost/pdfviewer/pdfviewer?sid=b1defdac-0749-4471-82e5-cb516c6a973c%40sessionmgr113&vid=10&hid=127
Young S. & Wells, A. (2011). Airport Planning and Management (6th ed.). New York, New
York: McGraw Hill
The difference between the airport when it was first built is not drastic, but many things have upgraded. Fly.mcw.com said when the
The Albany Airport has been around since 1908 when it was on a field in Loudonville Road. .In 1909 the airport was moved to Westerlo Island which was located in Albany, but at the time was the town of Bethlehem.At the time it was named Quentin Roosevelt Memorial Field, after Teddy Roosevelt’s son Quentin. Quentin was a World War One pilot who was shot down in combat. He fought with france, but was shot down by the germans on July 10, 1918. In honor of Roosevelt’s youngest son the airport was named after him.On 1928 Mayor John Boyd Thacher the second decided to build a modern airport on a Shaker site on 737 Albany-Shaker Road. This is where the airport stays today and on June 1,1928 the Albany Airport was opened for mail going west and on October 1, 1928 the airport was opened for mail and passengers going from Montreal to Albany to Newark and return. Since the airport has first started in 1908 it has had many famous people travel through the airport. Charles A. Lindbergh landed his “Spirit of St.Louis” at Quentin R...
Denver International Airport Construction and Operating Costs. (1997, July 5).University of Colorado Boulder. Retrieved April 28, 2011, from http://www.colorado.edu/libraries/govpubs/dia.htm
"Problems" in the airline industry have not risen due to too much competition within the industry. To the contrary, Washington regulators should turn the industry loose in any more ways that it can. Lowering restrictions to enter the market place, emphasizing private ownership of aviation matters, and encouraging open and free competition within the scope of anti-trust law should be the goals of the Clinton Administration. Instead of heading towards re-regulation, Washington should get out of the airline business for good.
Before we discuss government intervention and its affect on an industry’s competition we must first seek to understand the five forces framework. The theory, discussed in 1979 by Micheal Porter seeks to evaluate the attractiveness of an industry. Throughout this essay I will explore the theory and then relate government action and its well-documented affects on the airline industry.
Airborne should strengthen and continually improve its services domestically, since it gives larger revenues, then strengthen its alliances internationally, so as to serve the demands of the international market. To add on its profitability, Airborne should lease out a portion of the airport facilities to other airlines, so that it could have other source of income to compensate the maintenance costs of the airport.
Airports are extremely expensive in every respect imaginable. From the multi-million dollar runways to the multibillion dollar terminals, airports cost significantly more than most people might think; not to mention the hundreds of employees that demand wages. The aviation industry is notorious for being unstable and completely unpredictable. It is common for airlines to fold under extensive economic pressure, but it is essentially unheard of for airports to go bankrupt. A report by Airports Council International says that airports are making more money than ever before. It is known that airlines make money through airfare tickets, but how do airports make money?
Before to select the proper alternative, three alternatives were analysed and evaluated under four decisions criteria: customer experience, cost, growth rate / market penetration and ease to implementation (See Exhibit 2: Factor Analysis). Between all the alternatives, it was suggested that Southwest Airlines enters to New York City by bidding the slots and gates at the LGA (See Exhibit 3: Alternatives Analysis). This alternative sustains the challenge of changing the customer experience which means adding more flights from and to the East; furthermore, entering to new markets will reinforce “the power of the network” through LGA. At the same time, this decision will allow signing more code-sharing agreements with other airlines flying to international destinations and offer new products and services to LUV customers as loyalty rewards, in-flight internet, onboard duty-free purchases, etc.; as a result of this, it will increase passenger’s insights and experiences by flying with Southwest Airlines. Nevertheless, there is potential risk by selecting this alternative, in the recent years the energy prices has had a huge increase affecting costs, fares and even capacity needed, however Southwest Airlines has been able to hedge fuel for decad...
There is plenty of literature as well as healthy debate which argues the better method of how the airport industry can be best secured – through federalization or through privatization. Statistical evidence and complaint data shows a high failure rate by TSA – a government agency created after 9/11 to safeguard the aviation infrastructure. Like wise, there are cost and performance studies commissioned by TSA which reflect that TSA can handle the job at a lower cost. Specifically, the Director of TSA, former FBI executive John Pistole, testified before Capital Hill that TSA operates with more efficiency than a Federal screening workforce (Screening Partnership Program, 2012).
Airport planning, once carried out utilizing a single future forecast, failed to account for the complexity and uncertainty of the aviation industry. Today, it is widely assumed airport success can only be met through the utilization of a flexible, integrated planning approach that sees forecasts as incorrect.
Bibliography American Statesman, (1999). Airbase to Airport: A model transition [Online]. Available: URL: http://www.austin360.com/news/features/local/0131recycle.html [1999, January 31]. Austin360.com, (1998). Airport¡¦s neighbors hear city¡¦s noisy plans. [Online]. Available: URL: http://www.austin360.com/news/features/local/1015noise.html [1998, October 15]. National Center for Policy Analysis, (1999). Privatization trends. [Online]. Available: URL: http://www.public-policy.org/~ncpa/pd/private/priv.html [1999]. United States General Accounting Office, GAO/NSIAD-96-149 - Report to the Chairman, Subcommittee on National Security, International Affairs, and Criminal Justice, Committee on Government Reform and Oversight, House of Representatives, (1996). August 1996 MILITARY BASES - UPDATE ON THE STATUS OF BASES CLOSED IN 1988, 1991, AND 1993. [Online]. Available: URL: www.gao.gov [1996, August]. SFA Gazette, (1999). Military Base Development [Online]. Available: URL: www.sfa.com.
Significance of the Problem The significance of the problem is the government determining exactly how to and how much to regulate this new privatized system. An example of this is given by Sawicky (2016) where he mentions that the government would have to decide on what the new system can and cannot do (p. 2). Furthermore, Congress would have to determine if the new system has to provide services for every location that wants an airport (Sawicky, 2016, p.
On September 11, 2001, four U.S. commercial jets had been hijacked by nineteen terrorists on the exact same day. More than three thousand people were died (“Airport security”, 2014). The attack happened because of the ineffectiveness of the security at airports. Consequently, the airport security in every country was tightened further. People will have to wait in a long line and will be asked to show their ID cards and passports several times before they can finally reach their gates.
There are several limitations in aviation infrastructure in India for instance parking bays, gates to board passengers, landing slots etc are in short supply. This often leads to massive delays, cancellation and major losses in revenue for many LCCs. For upgraded infrastructure facilities, India’s civil aviation minister Praful Patel said on 15 February 2006 that Indian government defer decision on privatization of International Airport in Delhi and Mumbai. The government aims to set up joint venture to operate these airports and offered 74 per cent stakes. Foreign direct investment (FDI) can hold up to 49 per cent in this transaction, while 25 per cent must be held by private Indian companies. Remaining 26 per cent to be held by Airport Authority of India (AAI) and other government PSUs.
Stakeholders are those groups or individual in society that have a direct interest in the performance and activities of business. The main stakeholders are employees, shareholders, customers, suppliers, financiers and the local community. Stakeholders may not hold any formal authority over the organization, but theorists such as Professor Charles Handy believe that a firm’s best long-term interests are served by paying close attention to the needs of each of these stakeholders. The modern view is that a firm has responsibilities to all its stakeholders i.e. everyone with a legitimate interest in the company. These include shareholders, competitors, government, employees, directors, distributors, customers, sub-contractors, pressure groups and local community. Although a company’s directors owes a legal duty to the shareholders, they also have moral responsibilities to other stakeholder group’s objectives in their entirely. As a firm can’t meet all stakeholders’ objectives in their entirety, they have to compromise. A company should try to serve the needs of these groups or individuals, but whilst some needs are common, other needs conflict. By the development of this second runway, the public and stakeholders are affected in one or other way and it can be positive and negative.