As a business, the Burbank Airport has taken a hit from all sides and is heading into the new year with many questions pertaining to operating costs, legal battles with city officials, and when and if it will ever get its new terminal built. If that isn’t enough, the new airport security measure signed into law last week will force Burbank, along with all other airports, to comply with new guidelines for safety that pose even more questions and threaten to affect the bottom line even further. Long before the attacks of Sept. 11, businesses across the board were beginning to feel the sting of a softened economy following the demise of the dot.com industry, and Burbank Airport was no exception. The ongoing game of chicken with the city of Burbank over plans to put in the new terminal forced the airport to, at least publicly, give up on hopes of building on land set aside for the project and consider a smaller piece of property nearby. Then came the attacks and airport closures, which resulted in heavy losses in revenues by way of downed flights and drops in passengers. The airport has since been spending roughly $160,000 a month to pay for extra security and police personnel as required by the federal government in the wake of the attacks, and there is little indication those expenditures will go away any time soon. In early October, the voters of Burbank passed Measure A, which essentially bars the city from giving the airport the green light to make any terminal improvements without first getting a flight cap and night time curfew. City officials have said publicly that they don’t like the measure, but must abide by law and implement it. So they have turned to the courts for help. The city filed a lawsuit naming the airport as defendant with the goal of getting clarification on the scope of the measure. Now, new federal guidelines call for putting the nation’s 28,000 airport security screeners to work for Uncle Sam, and there are clear indications that that is just the tip of the iceberg. Airport spokesman Victor Gill said it’s too soon to say what the airport’s share of the costs for making that facility’s roughly 110 security screeners federal employees will be. But the airport’s nine-member governing board is working under the assumption that it will be forced to pick up a portion of the tab, he said. “From a conservative planning point, you sort of have to plan that it’s your money until you hear otherwise,” said Gill. Furthermore, the airport will likely have to install new explosive detection equipment, now required under the Bush’s measure. Burbank may also need to pay for facility upgrades to accommodate what some predict will be an increase in security screeners at most airports and any demands they may bring to the table, such as new storage, locker and training facilities. The airport has now put its terminal plans on hold and sold the property it had been targeting as an alternate location in order to generate badly needed revenue. It has reduced its revenue forecasts for 2002 by as much as $4.7 million and cancelled plans to build a $10 million, double-decker, long term parking structure. Any future facility improvements that may be required under the security measure will, likely be hamstrung by the terms of Measure A, if not indefinitely, surely well into the first quarter, when airports are supposed to show evidence that they’ve begun to implement the new guidelines. “It’s a mess,” said Airport Authority President Chris Holden. “I think what (the Authority) is now trying to do is regroup. I guess just about everything that could make you reevaluate your businesses plan has occurred, and none of us could have predicted it.” On the one hand, the new measure and the events that have devastated the airline industry could work in Burbank’s favor. Increased security at LAX could result in increased passenger overflow to Burbank, which would also boost revenues. “The way this shakes out may be good for Burbank in one perverse way,” said James Gattuso, vice president for policy with Competitive Enterprises, a Washington D.C. think tank. “If the system is slowed down to some degree because of increased security at the larger airports it may drive traffic to the smaller airports. So what’s bad for the nation as a whole is good for Burbank.” Increased passenger levels at Burbank would also bolster the airport’s case for building a larger terminal and increasing the number of gates, which could prompt more involvement from the Federal Aviation Administration. “I think in terms of if there were an increase, certainly we would have a situation where the need to have a relocated terminal would only be enhanced,” said Holden. “But that’s more of a capacity issue, so we don’t know right now just exactly how much Burbank sits on the federal radar screen.” On the other hand, said Gattuso, making a federal agency out of a privately run business hasn’t always gone over so well with the public. And he’s not sure the switch wouldn’t exacerbate an already tenuous relationship between the airport and residents of Burbank. “My concern is simply a common sense one,” said Gattuso. “It’s difficult to find examples where making a federal employee out of a private one makes them a better one. There are exceptions for everything, but we do know from experience (that they) don’t have the same degree of accountability. It’s very difficult to do that with the federal government.” Gill said the airport hasn’t taken a position on whether federalizing the screeners is a plus or negative for overall operations. It is simply being viewed as a way to bring back passengers. “I think the authority hasn’t debated the merits of the proposals,” said Gill. “But no matter what happens, we are going to end up with better trained screening personnel, and definitely more attention paid to the activity, and that’s a plus for everybody.” In addition, said Gattuso, there is an indication that the government will see a need to significantly increase the number of screeners now in place at each facility across the country. Passengers will help fund the program by paying $2.50 each time they board a plane and up to $5 per trip. But that won’t be enough to cover all the costs, particularly if the government decides 28,000 screeners isn’t enough, he said. “I would be very surprised if the numbers (of screeners) didn’t go up dramatically and those fees won’t cover everything, so I wouldn’t be surprised either if we were to see tax increases,” said Gattuso On the Measure A issue, Holden said he’d like to see the city re-write the terms of the law and throw it back to the voters for another round of approval, rather than add another layer of uncertainty to an already murky and costly debate. Gill agreed that putting it before the courts will do more harm than good. “Right now, we do not want to be a defendant,” said Gill. “We are not in a position to debate the merits of the case.” The city had debated whether to pull the lawsuit on Measure A, but instead is now considering bringing in its authors to help clarify their original intent. However, Burbank City Manager Robert “Bud” Ovrom said he’s simply hoping the courts will recognize the measure for what it is and throw it out alltogether. “I’ve said publicly from the beginning that (Measure A) would never hold up,” he said. Ovrom added that the city was hoping to “get some kind of clarification on the measure” by the first of the year. “We are caught in a tough spot,” said Ovrom. “The council will have to carefully weigh which airport projects it can implement, and which ones are blocked by the measure.
AIRPORT—Burbank Airport Facing Tough Economic Times