The Jackson municipal airport has dominated the news lately as the fight for control rages in the legislature. The media focuses on the "horserace" but rarely provides any real information about the airport itself. It is all about who wins, you see. Jackson Jambalaya sat down with Jackson Municipal Airport Authority CEO Carl Newman two weeks ago for an hour-long interview. We covered the finances, Hawkins Field, the pilot shortage, and yes, Southwest's departure for the Jackson market.
Mr. Newman replaced long-time CEO Dirk Vanderleest in January 2015. Mr. Newman said "I'll be honest, Jackson, Mississippi was not on my radar screen. Recruiters had to convince me to apply for the CEO position. After chatting with them for a bit, I decided to throw my hat in. I was the number two person at the Phoenix airport. In Houston I was number two or three depending on how you look at it." Mr. Newman was the general manager of George Bush Intercontinental Airport in Houston. Mr. Newman continued "I saw this as a chance to be a CEO of an airport. I was a finalist for the CEO position at Louis Armstrong International Airport in New Orleans and tried to get the CEO job at the Hartsfield-Jackson Airport in Atlanta." The airport veteran has more than thirty years under his belt.
The balance sheets are strong and the airport is in good financial shape. Operating revenue is 3% ($119,000) above projections while the operating expenses are 16% ($694,000) below the budgeted expenses. The net income is 132% ($712,000) above projections. He said the the huge increase in net income is due to controlling expenses while fuel and utility prices have fallen during the last year.
JMAA has not laid off anyone but is not fully staffed. He said the two airports have traditionally been "understaffed". 109 of the 115 positions at JMAA are staffed but the CEO is trying to staff the vacant positions. However, Mr. Newman said the police department and operations are fully staffed.
Enplanements fell last 10% year and are 20% lower than two years ago but have stabilized in 2016. Southwest served JMAA for most of 2014. Its departure affected traffic. The enplanements for the current fiscal year* are 126,000 and 129,000 at the same time in 2015. The average load factor on a passenger flight is 82%. The load factor is the proportion of the seats that are sold on a flight. The industry standard is 85% The cargo flights are 2% less than budgeted. The cost per enplanement are budgeted at $11.45 but are "coming in at $11.16". Mr. Newman said he would like to get it below $10.00 and "drive it down as far as we can".
Some JJ readers have complained about the gate fees but Mr. Newman said the current rent is 79.17 per square foot. Mr. Newman said "I've been in airports that are much higher than that." He said the main airport has seven gates. He said all gates were taken by the airlines but he recently "got one back from Delta" although Delta still has two gates. He said the return of that gate will make it easier for him to pursue another airline.
There is currently a pilot shortage among regional airline carriers due to increased standards for obtaining a license. The FAA increased the hours required to sit on the right side of the cockpit from 250 to 1,500 flight hours. The new rule means it takes longer and costs more money for those desiring to fly for a commercial airline (This article provides more information on the shortage. ). They are also facing a longer period working at lower wages and are thus choosing not to become pilots. Regional carriers are suffering a shortage of qualified pilots that is expected to grow more severe in 2016 and 2017. The military is trying to retain its pilots so there are not as many military pilots available for hire. Regional carriers have had to reduce some service.
Mr. Newman said Delta would like to increase service to Jackson but does not have the "iron" (aircraft) or pilots to service Jackson. He said the shortage will eventually impact major carriers and cities as well. The shortage also affects Jackson's ability to attract lower-cost carriers as well.
The main topic that comes to mind when discussing the airport is Southwest Airlines. Southwest Airlines withdrew from the Jackson market for a very simple reason. The Jackson service faced declining revenue and rising costs. Mr. Newman said the load factor for Southwest service was only 66%. Southwest had also reduced its service from 9 daily flights in 2009 to 4 daily flights in 2013. Mr. Newman said the load factor was still 66% when Southwest left Jackson despite the decrease in daily flights by Southwest.
Southwest also utilized its own ground crew. United, American, and Delta share the same ground crew at the airport. Such sharing reduces the costs per flight for those airlines. Southwest refused to participate in this arrangement, thus insuring its costs per flight were higher. The expiration of the Wright Amendment in 2014 also meant there was less need for the Jackson market since Southwest could offer non-stop airline service from Love Field to the rest of the country instead of one region of the country. The amendment's expiration changed the business model for Southwest. Mr. Newman said the expiration had a "tremendous impact on us." Southwest also started offering international flights and needed the planes from "under-performing markets."
JMAA hired Intervistas Consulting Group to create a strategic improvement plan. The plan was unveiled last week at a a work session of the Board of Commissioners (Earlier post with video of presentation.). Mr. Newman would not provide any details as he joked it would "not be fair to his board". However, he did respond to a question about concessions and said he wanted to make improvements. He provided the concessions at the Phoenix airport as a model, calling them "first class". He said he was developing the terms for a request for proposals for concession services (Can he write it in a way that will ensure only Two Sisters gets the bid?).
Mr. Newman said JMAA does a good job of focusing on minority participation. He complimented Jack Thomas, Director of Disadvantaged Enterprise, calling him a "great resource". He said $1.2 million procurements or projects went to disadvantaged business entities in Jackson and another $1.3 million to those in other parts of the state. He said there was $10.9 million in contracts in 2015. $5.2 million went to Jackson-based businesses. There is no general goal for minority participation but rather the focus is on each project. Mr. Newman said a great deal of work is specialized work for airports.
There was not much discussion on the Freedom Real Estate development. Mr. Newman said Freedom Real Estate approached the airport.
Hawkins Field is often called a diamond in the rough with a 5,400 foot runway and a control tower. Often forgotten and rarely remembered, Hawkins Field will receive some much-needed attention in 2016. Mr. Newman said JMAA is going to rehabilitate the runways and ramp at the general aviation airport. The interior of the South Terminal will be renovated. A review of Hawkins Field procedure and operations will be conducted. Mr. Newman hired a general manager for Hawkins Field- the first one since 2009. JMAA will apply to the FAA and MDOT for funding the Hawkins Field projects. However, Mr. Newman said "all of the work on the south ramp and runway is coming out of our pockets". However, reimbursement of the projects through federal funding will ease the financial burden. (Earlier post on Hawkins Field and planned improvements).
He said his administration is reviewing the policies for building hangars at Hawkins Field. He agreed that it made no sense for invest in building a hangar, pay an expensive lease, and then turn ownership over to JMAA after ten years. He said another option was for Hawkins Field to build and rent hangers. He said Hawkins Field also needs covered tie-downs as none currently exist.
He recognized that Hawkins Field sold gas at a higher price than surrounding general aviation airports such as John Bell Williams and Bruce Campbell. He said the aircraft are serviced by a truck either on the runway or in the hanger. He said if the truck is staffed, the cost will be higher. He said a self-service truck will lower the price of the fuel. Needless to say, the Newman administration is going to bring change to Hawkins Field.
It is clear Mr. Newman is not just happy to get the job but is intent on improving both airports.
*The fiscal year began on October 1, 2015.
**We can only hope the politicians ignore that number.