September 29, 2008

The View of the Air

By Prestegard, Steve

What is the first thing visitors to the Fox Cities see? If they're coming by air, its probably the Outagamie County Regional Airport in Greenville.

"If you look at air service as an economic generator, one of the top things a company is looking at is air service - they want to know if they can get out of your community quickly and efficiently," says Marty Lenss, the new airport director.

Lenss is running the airport at a time of great challenge to the air industry, to say the least.

"The economic conditions with oil at $100 a barrel are causing fundamental changes in the industry, particularly the commercial end of the industry," he says. "It's tough to be profitable; they tell you they can be profitable at $80 or $90 a barrel, but there's no business model for making a profit at $100 a barrel. The conditions are far worse than they were after 9/11.

"That forces us to reevaluate all lines of the business. Our task is to remain self-sufficient - the airport receives no money from the taxpayers; all operations are funded by user fees. We're looking at how to stabilize the air service sector in the short term. Over the long term, aviation is very cyclical; we will persevere as an industry. We're finding ways to partner with carriers that we never thought of - they say that necessity is the mother of invention. Airports are having to become a little bit more competitive, and that's something they haven't had to do in the past."

That in turn puts pressure on airport operations. "We can't control a lot of it - we don't have control over the Transportation Security Administration - but when we can find the technology to make the screening process less invasive, I think we'll find those tools on the security side," he says. "What it means to me, as a facility, we need to take a look at our amenities."

That also means promoting the airport as a choice for passengers over larger airports in Milwaukee or Chicago. Lenss stresses the "economic importance of the airport for the local community." Choosing a different airport "starts to erode the economic development efforts of the entire community. So it's critical that you look to fly local first, before you default to another airport, and in turn we as a business are trying to do that as well."

While commercial aviation is not doing well, general aviation - flying by airplane owners - is doing better, including business aviation. "Elements of general aviation are doing pretty well these days," says Lenss.

Outagamie County is the fourth largest commercial airport in Wisconsin. The 1,697-acre airport has two main runways, the 8,000- foot-long north-northeast-south-southwest runway, and the 6,500- foot-long west-northwest-east-southeast runway. The longer of the two runways can accommodate any aircraft produced or flown in the world today, Lenss says.

"I think we'll continue to do well because of our business base around the airport - that's really a key component, both in stabilizing and for our future base," says Lenss, who became director at the end of April. "The pressure is certainly on all airports to redefine their business models. I think there's enough traffic between Green Bay and Appleton that we'll have air service. How that'll shake out five years from now, I don't think anybody knows."

The airport has revenue streams that are not directly tied to commercial air service. Gulfstream Aviation's facility on the north end handles finishing of nearly-competed jets and maintenance of other Gulfstreams. Cargo service volume, provided by FedEx and DHL, is up more than 40 percent this year over all of 2007.

The airport's general aviation area is moving to the airport's south end. That also is the site of the underdevelopment 53-acre airport business park, which has taxiway access to the airport, for businesses that "don't have to be aviation-related," says Lenss.

"All the infrastructure is in place to support nested hangars or individual corporate hangars - all the infrastructure to get people in and out of there is all in place."

"We need to diversify our revenue streams," he says. "Diversifying our revenue base allows us to keep our fee environment to carriers very competitive."

To that end, the county hired an airport marketing director, "which is a recognition that the airport has to redefine itself and get aggressive in promoting itself," says Lenss.

The airport has commercial flights from five carriers - United Express (operatedby Mesa Airlines), Northwest (operated by Mesaba Airlines), Delta (operated by Comair), Midwest (operated by Midwest Connect), and, as of Aug. 21, Allegiant, which started service from Appleton to Las Vegas.

Consultants work with the airport in measuring market demographics, and then airport officials meet with existing carriers to expand flights or improve flight times. Incentives the airport can offer include reducing the "up-front cost of an airline or a new city to start," says Lenss.

"We are in the early stages of that process, starting with our existing service," says Lenss.

How the airline industry will get through today's problems isn't clear yet.

"The answer, I think, is still evolving," says Lenss. "The government side hasn't weighed in. Airlines are slashing costs. The manufacturing side hasn't cracked the nut, so to speak, of more efficient engines. The U.S. air industry always seems to rise to the challenge, and I can't see the industry not rise to the challenge."

Lenss is a graduate of the University of North Dakota, which has a well known aviation program. He started in the program for pilot training before switching to airport administration halfway through his stay in college.

Lenss was the director of operations and public safety at Dane County Regional Airport in Madison for six years. Before that, he was the assistant airport director at the Cheyenne Municipal Airport in Wyoming's state capital, during and in the immediate aftermath of the 9/11 terrorist attacks.

"It was like 100 moving pieces at the same time," says Lenss. "And then when it settled down, the whole industry got really shook up. It touches everything you do now - security within the business environment"

While security was being hastily ramped up in late 2001, says Lenss, "There were directives that you couldn't have any vehicles 300 feet from the terminal. Well, in Cheyenne's case, that takes out the terminal parking." Federal authorities then set a requirement that vehicles couldn't get closer than 75 feet from terminals.

Today, though, says Lenss, "it works pretty well. It's a layered approach, which I think is critical for balance" between security and "convenience and speed. We at times struggle with the fact that regional airports aren't the same as your Chicago or your Atlanta or your Detroit."

Security improvements are more expensive at smaller airports. Lenss says the layered approach "is equally effective, but it's scalable to a particular airport.

"It actually gives us a bit of a competitive advantage. You're not going to sit in security at Outagamie for an hour."

Post-9/11 security directives now apply to any building that opens to the airport. "Any development at an airport, one of the first things you talk about is security," says Lenss.

The air industry is challenging even in what's considered good times.

"It's a very, very dynamic industry," says Lenss. The speed things happen is sometimes frustratingly slow, and then sometimes all of a sudden a new market's going to happen, and it's going to happen tomorrow."

Copyright ADD, Inc. Sep 2, 2008

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