Still reeling from the blow of having to absorb billions of dollars to pay for new security, North American airports plan to enter 2003 fighting for the basic financial and regulatory reforms they have dreamt about for decades.

Airports Council International-North America (ACI-NA) president David Plavin declares: "It's really time to change the underlying financial model of airports in the United States." Speaking at the council's annual conference, Plavin told reporters: "Airports are told where they can spend their money, how they can raise money and it seems to me that this is a model that doesn't work."

Plavin says Canada sets a model for federal control over airport finances. "The only rule is that airports spend money on airport needs, but they can set rates and charges as they see fit without restrictions," he says.

ACI-NA first vice-chairman Gina Marie Lindsey, who is the Port of Seattle aviation director overseeing the Seattle/Tacoma International Airport, says: "The priority, in my view and that of our leadership, is to give airports additional flexibility both financially and operationally. We need to let airports manage their facilities within the challenges we certainly face. Airports have tended to be squashed between airlines and the federal government and the airport operator doesn't have the authority to run the airport as it sees fit, to impose fees as it sees fit."

Lindsey would also push for making all airport debt-financing tax-free instead of limiting that preferential status to airport projects that are not revenue generators. She characterises the push this way: "Let my people go."

The timing for such fundamental changes would seem to be less than ideal, but this coming year opens a large window: the basic FAA statute has to be renewed as the last rewrite, known as AIR-21, expires.

As the generally pro-business Republicans retake the Senate and increase their control over the House, airports see this as a great advantage of timing. They will make the new bill, tentatively dubbed AIR-3, their main vehicle, says Lindsey.

One goal will be to give airports more control over how they spend their federal funds, with some limited to a specific project for capacity expansion. Plavin explains: "Airports can pay for some things with this pot of money and some things with that pot of money. It's time to get rid of the walls between the pots."

For example, Dallas/Forth Worth International derives about $100 million a year in passenger facility charges (PFC) but is limited in how it can use the money. It cannot use the money on DFW's new international terminal, for instance. If DFW had freedom to decide where to spend the cash, the airport's chief executive Jeff Fegan says: "I would not have to borrow more money."

In recent years, airports have pushed for the right to impose unlimited departure fees or PFCs, but until now Congress has only been willing to raise it from $3 to $4.50 per flight segment for up to four segments. Fearing fierce opposition from the airlines to higher fees, the airports are more likely to lobby to make more projects eligible to be funded by PFCs than to increase their level.

Airports are hoping that by the time the Congress focuses on aviation funding, it will address capacity issues as well as the security concerns. In fact, when Massachusetts Port Authority aviation director and manager of Boston Logan Tom Kinton said he would speak about runways rather than security, he was interrupted by spontaneous applause.

Source: Airline Business