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New OrleansInternational AirportGovernance, Regional Cooperation and Airport Expansion

June 1999

BGRBureau of Governmental ResearchExecutive Summary

FUNDING FOR THIS PROJECT ...was provided by the New Orleans and Jefferson Business Councilsand the New Orleans Regional Chamber of Commerce. BGR greatlyappreciates the financial support of these organizations.

Bureau of Governmental Research225 Baronne Street, Suite 610New Orleans, LA 70112-1704Phone (504) 525-4152FAX (504) [email protected]

BGRBureau of Governmental Research

BGR Board of Directors

Dr. George H. Porter, III, Chairman

Anne M. Milling, Vice-Chairman

Ralph R. Miller, Secretary

Stanley E. Ellington, Jr., Treasurer

Herschel L. Abbott, Jr.

Trudy R. Bennette

Terrel J. Broussard

Patricia C. Denechaud

Linda L. Dennery

Jean C. Felts

Louis M. Freeman

Norma L. Freiberg

David Guidry

Dr. Brenda G. Hatfield

Russell S. Hoadley

Joseph J. Krebs, Jr.

Betty V. Lauricella

Dr. Michael L. Lomax

William L. Marks

Ti A. Martin

Justice Revius O. Ortique, Jr.

Daniel F. Packer

Sharon A. Perlis

R. Hunter Pierson, Jr.

Kay G. Priestly

Dr. Russell J. Protti

Robert D. Reily

Virgil Robinson, Jr.

Dionne M. Rousseau

Leonard Vance Wormser

BGR Review Committee

Ralph R. Miller, Chairman

W. Anderson Baker, III

David Guidry

Anne M. Milling

Sharon A. Perlis

Dr. George H. Porter, III, ex officio

New OrleansInternational AirportGovernance, Regional Cooperation and Airport ExpansionJune 1999

CONTENTS

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Governance Structures . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Strategies Used to Achieve Regional Cooperation

in Other Metropolitan Areas . . . . . . . . . . . . . . . . . . 37

New Orleans Airport: Needs, Plans,and Attempts

to Resolve Regional Issues . . . . . . . . . . . . . . . . . . . 51

New Orleans Airport: Legal and Regulatory Framework . . . . . 65

Application of Strategies to the New Orleans Region . . . . . . . 75

Other Issues in Airport Development . . . . . . . . . . . . . . . . . 83

Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

Appendices

A — Airports and Their Forms of Governance . . . . . . . . . 89

B — Airports with Regional Issues . . . . . . . . . . . . . . . . . 90

C — Airports That Have Changed Form of Governance . . 111

Sources Consulted . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

BGR Project Staff

Mary Anne BartonActing President & CEO (beginning May 1999)

James C. BrandtPresident & CEO (until May 1999)

Janet HowardPrincipal Author

Patricia E. MorrisDirector of Research

Amy T. PeasePublication Designer

Wendy PivaralExecutive Assistant

BGR Preface5

The purpose of this study is to identify stepsthat can be taken to facilitate regional coop-eration with respect to the growth of NewOrleans International Airport (NOIA or theAirport). The Airport, which occupiesapproximately 1,600 acres, has one of thesmallest land masses of any major airport.Owned by the City of New Orleans (City), it is located primarily in the City of Kenner,Jefferson Parish, with a portion of one run-way extending into neighboring St. CharlesParish. The airport’s expansion plans call forthe construction of an additional runway inSt. Charles Parish.

BGR has identified two serious challenges to the airport’s future growth and expan-sion. One challenge is the increasinglyaggressive opposition of local governmentbodies and citizens near the airport to air-field expansion. The other problem is thelack of strong, broad-based support for theAirport and its management. In response to these problems, BGR is recommending anumber of actions, including the transfer ofauthority over the Airport to a regionalauthority and the commencement of directnegotiations between the City of NewOrleans, the City of Kenner, and St. CharlesParish.

Local Government OppositionWhile airports play a vital economic role inthe regions that they serve, they also gener-ate serious environmental problems for theneighboring communities. Where the airportis located within the jurisdiction of the government that owns it and has authorityover it (airport proprietor), that governmentcan mitigate environmental impacts andprotect future airport growth opportunitiesthrough land use, zoning, and similar controls. When necessary, such

governments can obtain land for airportdevelopment by exercising the power of eminent domain.

The situation becomes more difficult whenthe airport proprietor is not the governingbody for the jurisdiction in which the airportis located (host community). In such cases,the airport proprietor usually lacks the abili-ty to impose land use and development con-trols in the airport environs or to acquireproperty for the airport by exercising thepower of eminent domain. The host commu-nity, which normally has control of land useand zoning, has little incentive to protect theairport’s future growth.

BGR found that with few exceptions, air-ports that want to expand onto land outsidethe airport proprietor’s jurisdiction mustreach accommodation with the local govern-ment having jurisdiction over that land.There are two situations in which expansionis possible without local government con-sent: (1) where state law grants the airportpowers that supersede the host communi-ty’s traditional land use powers, and (2)where the host community has ceded tradi-tional land use powers through an intergov-ernmental agreement.

Neither of these exceptions applies to theexisting situation of NOIA. Nor does chang-ing the law to reallocate land use and zon-ing powers appear to be a realistic option.Any such reallocation—whether to the Cityof New Orleans, the State of Louisiana or aregional authority—would raise serious con-stitutional issues and could require anamendment to the State Constitution. Giventhe constitutional issues, BGR believes thatthe conflict over airport expansion should beresolved through direct, good faith negotia-tions between the airport’s proprietor, theCity of Kenner, and St. Charles Parish.

PREFACE

Regional UnityA separate, but related, issue affecting theairport’s development is the lack of strongbroad-based support for the Airport.Important growth issues—such as increas-ing the limited number of flights into NewOrleans, obtaining state and federal funding,and maintaining NOIA’s position as the pre-mier airport in the Gulf Region—can beresolved only through concerted effort bybusinesses and governments in the region.

Among the obstacles to forging a broad-based, public-private alliance to promote theAirport is the fact that the Airport does notenjoy the confidence of many in the busi-ness community and government circles.Criticisms leveled at the Airport by the public include allegations of gross mismanagement and patronage.

Replacing the historic image of the Airportas a mismanaged institution operated forthe benefit of New Orleans’ politicians withthe concept of a well-run economic engineoperated for the benefit of the region as awhole is critical to gaining support for theAirport. BGR believes that there are twoways to accomplish this. One involves transferring control of the airport to a different entity; the other involves the City’staking serious, meaningful steps to investi-gate, disclose and, where necessary, changeits practices.

After considering the alternatives and otheraspects of regional cooperation, BGR isadvocating the transfer of control of the airport to a regional authority. While transferring control might seem like a radical solution to a problem of perception,in the absence of meaningful action by theCity, such change may be the only way toget wider support for the Airport.

There are additional reasons for advocatingthe transfer of control to a broader-based,regional entity. Such a transfer can beexpected to facilitate regional cooperation for Airport expansion in a number of otherways. It would create a broader base for legislative action that might be needed forexpansion. In addition, it would provide abroader base for financing, or obtainingstate or federal government funds to finance,off-site infrastructure improvements andeconomic development projects that mightbe demanded by St. Charles Parish as aquid pro quo for its consent to airportexpansion. It could help to change thedynamics of negotiation from a confronta-tion with an intrusive, “foreign” governmentto a negotiation between participants in a venture.

In addition, the formation of a regionalauthority would provide an opportunity toimplement the management structure mostlikely to promote efficiency and growth. Inthat regard, BGR is recommending that seri-ous consideration be given to hiring one ofthe world’s premier airport managementcompanies to run the Airport.

The citizens of New Orleans have much togain and little to lose from transferring theAirport to an entity capable of marshalingsupport from other governments and thebusiness community throughout the area.The indirect economic benefits anticipatedfrom an expanded airport would far out-weigh any economic benefit that the Citycan derive directly from its ownership of the Airport.

This seemingly anomalous result followsbecause the Airport is not, and except inlimited circumstances cannot be convertedinto, a revenue-producing asset for the City.Federal law prohibits the City from usingairport-generated funds for general munici-pal purposes. Furthermore, unless the City

6New Orleans International Airport BGR

should decide in the immediate future toparticipate in the FAA’s pilot privatizationprogram (a matter in which the City hasshown no interest), existing interpretationsof federal regulations would limit the City’srecovery from the sale or lease of NOIAassets to certain unrecouped capital contri-butions and operating expenses. The City’scapital contribution to the Airport as ofDecember 31, 1997 totaled only$2,674,912. By contrast, the state and federal contributions equaled $68,599,445and $125,424,445 respectively.

Given these restrictions on airport revenues,what, if anything, would the City lose byturning over control of the Airport to aregional authority? The only significantpotential loss identified by the personswhom BGR interviewed for this study is theloss of patronage opportunities. We believethat New Orleans has little else to lose fromthe transfer of airport authority.

BGR realizes that the existing administra-tion did not create the patronage systemassociated with the Airport. The practice issaid to go back many decades. The environ-ment in which airports operate has changeddramatically, however, since the industrywas deregulated twenty years ago.Management practices and inefficienciesthat might have been tolerable in the regu-lated environment cannot be continued inthe unregulated one without the City’s andthe region’s eventually paying the price in aloss of competitiveness.

Effecting changes in the governance of NOIAultimately depends on the good will andstatesmanship of New Orleans’ elected offi-cials. Sacrificing a valuable political tool forthe general good is a tall order. We nonethe-less recommend that the Mayor and otherelected leaders act quickly to replace aparochial system with one that can betterserve both New Orleans and the region.

7Preface BGR

IntroductionNew Orleans International Airport, the aircarrier airport serving the New Orleans metropolitan area, is owned by the City ofNew Orleans and operated by the NewOrleans Aviation Board (the Aviation Board).It is located on approximately 1,600 acres,primarily in the City of Kenner in JeffersonParish. A portion of one runway extends intoneighboring St. Charles Parish.

Although the Airport has adequate capacityto meet existing demand, airport manage-ment expects it to reach operational capacityaround 2004. Because the lead timerequired for airport expansion projects tendsto be long, the Federal Aviation Agency’s(FAA) rule of thumb is to begin planning forincreased capacity when existing demandreaches 60 percent of instrument flight rule(IFR) capacity and to commence construc-tion when demand equals approximately 80 percent of IFR capacity. At the presenttime, NOIA is operating at approximately 66 percent of serious delay capacity and 79 percent of “moderate” delay capacity.

The airport’s 1990 Strategic Growth Plancalls for a number of significant improve-ments, including airfield expansion, terminalredevelopment, cargo area expansion, andthe relocation and expansion of general aviation. Airfield expansion plans call for the addition of a new north/south runwayand the conversion of an east/west taxiwayinto a runway.

The Airport has successfully completed anumber of the improvements. Among thecompleted projects are the upgrading of the International Departure and Arrival Areato handle simultaneous international flights;the redevelopment of Concourse D to

provide Delta Air Lines with modern facili-ties; and the completion of a 75,000-square-foot cargo facility.

There are, however, serious challenges tothe future growth and expansion of theAirport in general and to the implementationof the airfield improvements in particular.One problem is the growing, and increasingly more aggressive, opposition oflocal government bodies and citizens in ornear the Airport. The City of Kenner claimsveto power through its zoning laws over anymajor construction project. St. CharlesParish in August 1998 imposed a moratori-um on airport expansion in that parish andis preparing airport zoning controls. Plansrelating to runway construction have beenput temporarily on hold by the AviationBoard because of environmental and safetyconcerns raised by residents of Jeffersonand St. Charles Parishes.

The resistance of the surrounding com-munities is certainly understandable. Based on the information available at thistime, it appears that the construction of the north/south runway will require the displacement of families living in two subdivisions in St. Charles Parish. Other neighborhoods in St. Charles, includingAma and Destrehan, might also be impact-ed. Kenner residents fear that the proposeddevelopment will exacerbate noise in northKenner.

Officials in St. Charles Parish haveexpressed the fear that the new runwaymight force the James Business Park, amajor revenue source for St. Charles, torelocate in Jefferson Parish. They also fearthat the runway might disrupt other businesses in the Airline Highway com-mercial corridor. Any expansion in St.Charles Parish that impacts developed or

9Executive SummaryBGR

EXECUTIVE SUMMARY

developable land has a far greater impactthan the mere acreage numbers might suggest. According to parish officials, only15 percent of the land in the parish isinhabitable.

Although the resistance is understandable,it poses a serious threat to the continuedeconomic viability of the New Orleansregion. While airports act as an importantcatalyst for business development whereverthey are located, airport service plays a particularly critical role in the New Orleansregion, where tourists, conventions, hotels,and restaurants account for one in six jobs.

Local government opposition is not the onlyproblem facing the Airport. Another impedi-ment to the airport’s growth is the lack ofstrong, broad-based support from citizens,businesses, and elected officials in theregion. Important growth issues—such asincreasing the limited number of flights intoNew Orleans, obtaining state and federalfunding, and maintaining NOIA’s position asthe premier airport in the Gulf Region—canbe resolved only through concerted effort bybusinesses and governments in the region.

There are major obstacles, however, to forging the broad-based, public-privatealliance needed to promote the Airport. The Airport does not enjoy the confidence of many in the business community andgovernment circles. The draft operationalaudit report prepared for the Airport byMitchell & Titus, LLP in conjunction withBlack and Veatch and Bruno & Tervalon,CPAs (Operational Audit) identified, andrejected as untrue, a number of serious criticisms leveled at airport management by outsiders, including allegations of grossmismanagement and patronage. As the outside auditors’ report stated, “[a] persis-tent allegation is that the Airport is rife with patronage.”

BGR’s interviews confirmed the auditors’assessment that patronage is perceived as a major factor in airport operations.Replacing the historic image of the Airportas a mismanaged institution operated forthe benefit of New Orleans politicians withthe concept of a well-run economic engineoperated for the benefit of the region as awhole is critical to the airport’s futuregrowth.

Purpose of This StudyThe purpose of this study is to identify stepsthat can be taken to facilitate regional coop-eration with respect to the Airport. Toaddress the issue, BGR examines the situa-tion of NOIA and how other major cities withsimilar geopolitical situations have dealtwith other governments in the developmentof their airports. It then analyzes whetherthe various strategies and approaches usedby these cities can help to solve the prob-lems associated with the expansion of NOIA.

Our study deals at great length with gover-nance issues. Our focus on these matters islimited, however, to the issue of whetherchanges in structure might facilitate region-al cooperation with respect to the Airport.We are not independently investigatingwhether one form of government is moreeffective or efficient than another. We consider managerial issues only insofar as they impact regional cooperation.

Airport Governance andManagement Structure in GeneralMany of the past proposals and current suggestions for dealing with the airport’sgrowth issues call for changes in the air-port’s governance structure. In this sectionBGR sets forth a brief description of the various forms of airport governance that it encountered in its research and the


advantages and disadvantages attributed toeach. It also looks at two management con-cepts: the nonprofit management structure proposed in the Operational Audit and theincreasing use of for-profit managementcompanies.

CITY-OWNED AIRPORTSMany large airports are run by city or county governments. This form of gover-nance suffers from a number of disadvan-tages that can impede efficiency. Such air-ports are vulnerable to political interference.In addition, their freedom in employmentmatters is constrained by applicable civilservice laws restricting hiring and firing.Their ability to function efficiently can behampered by citywide procurement rules.

Despite the disadvantages associated with this form of government, some very successful airports are operated on thismodel. Examples include Atlanta, Charlotte, and Miami.

STATE-OWNED AIRPORTSState governments are not generally regarded as ideal candidates for running airports because of their bureaucratic tendencies. In addition, the airport’s govern-ment is more distant than it should be fromthe community that the airport serves. Manyof the useful aspects of state control—suchas the ability to exercise the power of emi-nent domain and to otherwise overrideblocking actions by local governments in theinterest of the region as a whole—generallycan be achieved through authorities.

AUTHORITIESAuthorities are special purpose corporateentities, generally created by the state legislature. They can be established for a single purpose, such as the ownership and operation of an airport, or for multiplepurposes.

There are certain advantages often attrib-uted to this form: less red tape, a singlepurpose and focus, greater freedom frompolitics, and the ability to run the airport asa business. Authorities can take financingand development beyond limitations, suchas debt and tax limits, through creativefinancing techniques. They can also improvemanagement by operating independently oftraditional municipal civil service systems,thus allowing for greater salaries and hiring/firing flexibility. They can bypasscumbersome local processes, including certain procurement and decision-makingprocesses. Authorities are often perceived as less subject to local political influence,leading at times to the criticism that theyare unresponsive to citizens’ concerns.

The fact that an airport is owned and oper-ated by an authority will not in and of itselfresult in better management and less politi-cal interference. The success of a givenauthority depends to a large extent on whothe members are, what their true interestsare, and the history and culture of the community.

One of the critical aspects in the success or failure of an authority is the quality ofpeople appointed to the board. Politicallymotivated appointments leave an institutionvulnerable to changes in administration and to the exertion of political influence on decisions of a business nature. Suchappointments can prevent the communityfrom realizing some of the benefits associated with this form of government.

By contrast, the appointment of a boardwith a strong business orientation canincrease the likelihood that the enterprisewill be operated in a businesslike manner.In order to foster a commercial approach,some authorizing statutes stipulate appoint-ment criteria, such as specific businessbackgrounds. Others, such as the statute

11Executive Summary BGR

creating the Port of New Orleans, provide for appointments from persons nominatedby different civic, eleemosynary, and business groups. Ultimately, the effective-ness of such provisions depends on the goodwill of the person making the appointments.

Patronage is another area where the successof an authority depends on the good faith of the players. A switch to an authority caneliminate patronage; it can merely changethe source of patronage; or it can result inthe continuation of an existing patronagescheme, with politicians acting through their appointees.

As the Pennsylvania Economy League statedin a paper recommending the transfer of theHarrisburg International Airport from theState to a regional authority:

Although authorities are not andshould not be represented as automatically leading to a more efficient operation, they are a mechanism whereby government canbring people with business skills inthe community together with profes-sional staff recruited from and paidat a level consistent with a particularindustry. To the extent that anauthority board and staff are com-posed of people with managementabilities, it will serve the enterprisewell.

Authorities can be particularly useful vehicles in the regional context, since theyprovide a framework for participation on asimilar footing, if not in equal proportions,by multiple jurisdictions. A sense of owner-ship and participation by right, as opposedto participation through the largess ofanother, is added to the advantage providedby the more business-oriented framework.

PORT AUTHORITIESPort authorities are structurally similar to other authorities. The only differencebetween a port authority that includes anairport and an airport authority is that theformer serves multiple transportation, andsometimes economic development, purposes.A number of port authorities, including thePort of Portland, the Port of Seattle, the Portof Jacksonville, and the Port Authority ofNew York and New Jersey, own and/or operate airports.

BGR has not identified any advantage to incorporating an airport into a portauthority as opposed to creating a singlepurpose airport authority. Authorities with air and port facilities operate them as separate endeavors, with largely separatestaffs. There do not appear to be greatopportunities for synergy, since the air and port freight sectors tend to have littleoverlap or opportunity for interface, withsmaller, high-cost items going by air andbulk products by water.

AIRPORT PRIVATIZATIONAirport privatization, i.e., the sale or long-term lease of airports to private sector companies, was pioneered in 1987 when the British government sold the formerBritish Airports Authority. Since that time,privatization has become a global trend.

The United States has not participated inthis trend for a number of reasons. A majorobstacle has been the FAA’s interpretation of the revenue diversion rules applicable toairports that receive federal assistance.Under that interpretation, proceeds from the sale or lease of an airport are considered“airport revenues” and, as such, can only beused within the airport system for airportpurposes. Thus, a city that sells an airportcannot use the proceeds for municipalexpenses or improvements.


In October 1996, Congress enacted legislation allowing the sale or lease of up to five US airports to the private sector. The program basically permits the FAA towaive federal laws and regulations (such asthe revenue diversion rule on sale and leaseproceeds) that block privatization, providedthat certain other requirements are met. The response has not been strong. To date,only two airports—Stewart InternationalAirport, a small commercial airport inNewburgh, N.Y., and Brown Field Municipal, a general aviation airport in San Diego—have applied.

Proponents of privatization attribute a number of advantages to the form, includingincreased operating efficiencies, additionalairport operating revenues, and more rapidand less costly development. Despite thelack of interest in the FAA’s pilot programand the many uncertainties surrounding theimpact of privatization on airports and theirconstituencies, some experts expect one ormore major airport privatizations in the U.S.in the next decade.

FOR-PROFIT PRIVATE MANAGEMENT

CONTRACTSPrivate companies provide management services to Burbank-Glendale-PasadenaAirport (Burbank Airport), IndianapolisInternational Airport, Harrisburg Airport,and the Airmall at Pittsburgh InternationalAirport.

The rationale for hiring a management company is twofold: (1) it replaces the nonprofit, noncommercial approach to airport management with market incentivesto improve operating efficiencies, and (2) it enables an airport to draw on the broad-based expertise and strategies of profess-ional managers operating in a worldwidearena. Major companies with substantialairport management experience are active in the US airport management market.

BAA (USA), which manages IndianapolisAirport, Harrisburg Airport, and the Airmallat Pittsburgh Airport, is a subsidiary of BAAplc, the former British Airport Authority.BAA, which has market capitalization of over eight billion dollars, owns and operatesHeathrow, Gatwick, and five other airportsin the United Kingdom. It moves approxi-mately 90 million passengers a year.

Other management companies operating in the United States include Airport GroupInternational (AGI, formerly Lockheed AirTerminal), American Port Services Inc. (formerly Johnson World Controls), andSchiphol USA, a subsidiary of the companythat operates Amsterdam Airport Schiphol.Schiphol USA is part of a consortium thathas been awarded the contract to rebuildand operate as a private enterprise theinternational arrivals building at John F.Kennedy International Airport. Like BAA,many of these companies have wide-ranging,in-depth experience in airport management.

Working with a group that has substantialexperience in other markets, regardless ofits experience in the US, can be an advan-tage. It opens the doors to innovative tech-niques developed elsewhere. For example,the change in the paradigm for US airportretailing precipitated by the PittsburghAirmall had its roots in BAA’s London operations. As privatization grows overseas,it is reasonable to expect more and moremanagement advances to originate there.

NONPROFIT MANAGEMENTThe Operational Audit calls for NOIA to contract out its management to a nonprofitentity. BGR is not aware of any case inwhich this structure has been used for the management of an airport. Nor has it identified any advantage to this mechanismthat is not available through traditional orevolving forms of airport governance.


One of the proposal’s stated goals, improv-ing pay and allowing for more flexible hiringand firing of airport employees, can beachieved in the existing structure by modifying the civil service rules. It can alsobe achieved by transferring the Airport to apublic authority, including one with a boardappointed solely by the City.

Other stated goals, minimizing board interference in airport management andreducing the role of consultants, are notadvanced by the proposed change. TheAviation Board is appointed by, and its role is defined by, the Mayor. A proposalwhich leaves the existing appointmentprocess in place does not effect a systemicchange. Any change in the role of boardmembers remains dependent on the will of the Mayor. Any such change could beimplemented now.

A nonprofit offers no greater business flexibility or performance incentives than an authority. Furthermore, a better non-governmental vehicle is available throughthe use of an experienced professional management company. The latter arrange-ment is far more likely than a nonprofit tosucceed in creating an entrepreneurial management approach, since it introducesmarket incentives, market accountability,and a breadth of experience that is unavailable in the case of a start-up, nonprofit entity.

The use of a nonprofit carries the risk ofmaking it far more difficult for the public to obtain information on airport operations.While the management contract with theCity would be a publicly available document,the extent to which other contracts, arrange-ments, and meetings are open to the publiccould be the subject of endless debate andlitigation. Given the airport’s reluctance toproduce documents that it is clearlyrequired to make available to the public,

the effect would be to place the airport’scontract-letting procedures farther belowradar. While this risk might be tolerable inthe case of relatively small enterprises, itbecomes unacceptable where hundreds ofmillions of dollars are at stake.

The Experienceof Other AirportsTo help formulate strategies for dealing withNOIA’s expansion problems, BGR examinedthe experience of other airports in theUnited States. BGR’s review indicated thatNOIA is not alone in its geopolitical situa-tion. A number of major airports—includingAtlanta, Cincinnati, Dallas/Fort Worth,Denver, and Ontario—are located entirely, or largely, outside the jurisdiction of thesponsoring entity. Others, like Clevelandand Seattle, are located on the perimeter ofthe sponsoring jurisdiction and require thecooperation of other jurisdictions for expan-sion. A third group—the Burbank-Glendale-Pasadena, Minneapolis-St. Paul, New YorkCity area, Portland, and Washington, DC airports—are located within a jurisdictionencompassed in a multi-governmentalarrangement.

Intergovernmental relations with respect toairports are more frequently characterizedby conflict than by cooperation. Commun-ities surrounding airports have become moreaggressive in resisting expansion, assertingcontrol over airport development throughlocal zoning laws. In addition, such commu-nities frequently turn to litigation. Atlanta,Burbank, Cleveland, Dallas/Fort Worth,Minneapolis-St. Paul, New York and Seattleairports have all been involved in litigationwith one or more of the communities surrounding the airport. Most, but not all,disputes arise over noise and come to ahead when an airport proposes expansion.


BGR identified a number of arrangementsthat have facilitated airport expansion and a number of approaches used by airports toease regional tensions. Facilitating factorsinclude the operation of the airport by aregional authority, the existence of strongregional planning groups, and state lawsallocating zoning and eminent domain powers in favor of the airport. Proactiveapproaches by airports include comprehen-sive involvement of local communities in the airport’s master planning process, effective use of noise abatement and mitigation techniques, and representation of local communities in full or advisorycapacities on airport boards. These variousarrangements and approaches are discussed below.

GOVERNANCE STRUCTURE AS A FACTOR

IN REGIONAL COOPERATIONThe airports studied by BGR for theirregional issues operate under different forms of government. The Atlanta,Cincinnati, Cleveland, Denver, Ontario(California), and Seattle airports are ownedand operated by single governmental units,such as cities or counties, or by authoritiesformed by single governmental entities.TheBurbank-Glendale-Pasadena, Dallas/FortWorth, Harrisburg, Minneapolis-St. Paul,New York City, Portland, and Washington,DC airports are owned and/or operated by regional authorities or other regionalentities.

In some cases, the governance structureappears to be a historical accident. In others, the structure was chosen to facilitate cooperative endeavors, such as the acquisition of an existing airport or theconstruction of a new one. BGR did not discover any cases in which the ownershipor control of an airport was transferred toresolve intergovernmental conflicts

arising from the environmental and socialimpacts of an airport on the surroundingcommunity.

The form of government is not necessarilydeterminative of the success of an airport in dealing with its regional issues. Some airports owned by single entities have amicable relations with their host communi-ties. The form of ownership can play a critical role, however, in contentious situations. BGR found one case, that of the Burbank-Glendale-Pasadena Airport,where the existing intergovernmental frame-work has helped the airport on an importantlegal issue.

The creation of a regional structure does not necessarily produce infinite harmony.Relationships that have worked for yearscan become stormy when circumstances or administrations change. One example of such turbulence is the lawsuit promptedby the expansion of the Burbank Airport.Another is the threatened demise of the PortAuthority of New York and New Jersey.

THE USE OF INTERGOVERNMENTAL

AGREEMENTSIntergovernmental agreements have beenused to create airport authorities or othergovernance vehicles, to resolve environmen-tal issues and/or to spell out the terms onwhich airport expansion will be permitted.Such agreements have addressed a widerange of issues, including annexation,expansion, economic development, infra-structure development, noise reduction,compensation, land use, representation,zoning and eminent domain, surface watermanagement, tax sharing, and proceduresfor future dispute resolution.

Some intergovernmental agreements dealingwith airports have been entered into inresponse to litigation. Examples includeagreements between the City of Cleveland


and the Port of Seattle with their respectiveneighboring communities. Others are theresult of voluntary negotiations unrelated to litigation. Denver, for example, enteredinto an agreement with neighboring AdamsCounty to allow the construction of a newairport in that county.

With few exceptions, city- or county-ownedairports that want to expand into land outside their jurisdictions must reachaccommodation with the government entitywith jurisdiction over that land. Sometimesthe airport must reach accommodation withother communities which will be environ-mentally impacted, even if the expansiondoes not involve the acquisition or develop-ment of land in those communities. Theterms of the accommodation cannot be dictated by the airport; rather the airportmust engage in serious, direct negotiationwith the parties holding the keys to expansion.

REDISTRIBUTION OF ZONING AUTHORITY

AND THE POWER OF EMINENT DOMAINLand use, zoning, and eminent domain powers are generally vested in municipalitiesand counties, rather than in airport owners.Thus, when an airport owned by one munic-ipal entity is in an expansion mode thatinvolves the territory of another, it has toreach accommodation with the surroundingcommunity in order to effect its program.

There are two situations in which expansionhas been possible without such consent:where the law grants the airport powers thatsupersede the host entity’s traditional localland use powers, and where the host entityhas ceded traditional land use powersthrough an intergovernmental agreement.

Extraordinary powers were given to theDallas/Fort Worth International Airport(DFW) by the Texas legislature after thesmall cities in which the airport is located

tried to block an expansion programthrough their zoning powers. The legislature granted the airport exclusivepowers, including the power of eminentdomain, over territory within its boundariesas they might be expanded. This grant ofpower allowed DFW to condemn city streets.The legislature also prohibited the hostcities from enforcing zoning or other ordi-nances purporting to regulate the use ordevelopment of airport property. While thesolution cannot be characterized as cooperative, it provides a useful and effectivemodel for resolving differences in a way thatallows airport expansion in jurisdictionallycomplex situations.

State-mandated zoning provisions address-ing physical hazards to flight are fairly common. In 1991 Florida went beyond thetraditional boundaries of zoning regulationto address another hazard to airport growth:development around airports. The state legislature amended the Airport Zoning Actto prohibit new residential construction and other incompatible uses within certaindistances from an airport. The FloridaDepartment of Transportation indicated that compliance with this requirement isvery spotty. Furthermore, because most ofthe areas surrounding airports are alreadydeveloped, new land use controls are notvery effective.

MASTER PLANNINGAtlanta is seeking to deal with its expansionproblems by building a consensus throughits master planning process. The City hasgone to great lengths to involve the entiremetropolitan region, including the com-munities surrounding the airport, in the airport planning process. Its approach goesfar beyond the traditional one, whereby an airport develops its plan and holds suchpublic hearings as are required by law.


The Master Plan Coordinating Committee, a 45-member committee with representa-tives from key areas of interest, initiallydeveloped 36 options for dealing with theairport’s expansion. After evaluating theoptions under detailed quantitative andqualitative criteria, the committee reducedthe number of options to four, plus a “no-build” option. A final proposal will bechosen from the remaining alternatives and subjected to a regional review processand public hearings.

METROPOLITAN PLANNING COMMISSIONSA number of the airports studied by BGRare located in areas with strong regionalplanning commissions and/or legal require-ments for regional coordination with respectto airport planning. In Minnesota, for exam-ple, the Metropolitan Council has planningauthority over the seven-county metropoli-tan area for Minneapolis-St. Paul. TheMetropolitan Council’s authority includes,among other things, the power to adopt along-range comprehensive policy plan fortransportation and airports; to review com-prehensive airport plans; to suspend indefi-nitely plans that do not conform to thedevelopment guide; and to approve certainairport capital projects, including runwayconstruction or extension.

In connection with a quest for an alternativeairport site in the metropolitan region, theMetropolitan Council was given authority todraw up criteria and guidelines for land usedevelopment within a three- to five-mileradius of any major, new airport site. Localgovernments were required to adopt controlsin accordance with the council’s criteria andguidelines.

GEOGRAPHIC REPRESENTATION

ON AIRPORT BOARDSThe Cincinnati/Northern KentuckyInternational Airport (Cincinnati Airport),which is owned and operated by the Kenton

County (Kentucky) Airport Board, is locatedin Boone County, Kentucky and has a majorimpact on the City of Cincinnati. The airporthas developed an unusual system for repre-sentation of these constituencies.

The airport has a board with seven votingmembers, all of whom must be Kentuckyresidents and one of whom must be fromBoone County. It also has an advisoryboard. Until recently, the ten advisory members were appointed by the Governor of Kentucky based on the recommendationof the Kenton County Judge Executive.Although representation from Ohio was not legally required, most of the advisorymembers came from the Cincinnati businesscommunity.

In December 1998 the advisory board wasexpanded to eleven members and theappointment process changed. Each of thefollowing now have one appointment to theadvisory board: the Mayor of Cincinnati; theCommissioners of Hamilton County, Ohio;the Governor of Kentucky; the JudgeExecutive of Boone County; and the JudgeExecutive of Campbell County, Kentucky.The Judge Executive of Kenton Countyappoints the other six members.

Members of both the airport board and theadvisory board serve on the board commit-tees. Although the committees do not haveauthority to act on behalf of the board, theyhave substantial power. They originate allboard actions, formulate policy with staff,and make recommendations. All members,voting and advisory, vote in committee.

Los Angeles’ Ontario International Airport(Ontario Airport) also has an advisory panel.The panel was established in 1998 after adispute between the airport and the City ofOntario over a proposed property acquisitionby the airport. Through the panel the city ofOntario provides the Los Angeles board of


airport commissioners with “advice and recommendations” on issues pertaining tothe airport.

NOISE REDUCTIONThe Cincinnati Airport has made good use of noise reduction techniques and programsto reduce tensions within Boone County, itshost community. Between 1991 and 1995the airport spent more on noise reductionthan any other airport in the United States,with expenditures twice those of the nexttwo highest spenders combined. Noisereduction measures have included soundinsulation and home purchase programs in Kentucky and modifications of flight procedures. The airport’s noise reductionplan mollified residents of the communitywith the greatest power to block airportexpansion.

Strategies for the New Orleans RegionFormulating strategies to develop regionalcooperation with respect to the Airportdepends on the nature of the underlyingissues and problems. As noted above, theissues fall into two broad categories: thoserelating to the physical impact of airportexpansion on the surrounding communitiesand those inhibiting the formation of astrong regional public-private alliance topromote the Airport.

The experience of other airports suggeststhree strategies that might be useful in the New Orleans context: a reallocation ofzoning and eminent domain powers, thenegotiation of an intergovernmental agree-ment with Kenner and St. Charles, and theformation of a regional authority.

REALLOCATING EMINENT DOMAIN

AND ZONING POWERSAs noted above, land use, zoning and emi-nent domain powers generally are vested inthe local governmental entity. Thus, whenan airport owned by one municipal entity is in an expansion mode that involves theterritory of another, it has to reach accom-modation with the surrounding communityin order to effect its program.

There are two situations in which expansion has been possible without suchconsent: where the law grants the airportpowers that supersede the host entity’s traditional local land use powers and wherethe host entity has ceded traditional landuse powers through an intergovernmentalagreement.

Existing law clearly vests land use and zoning powers with Kenner and St. Charles,the local government units. It precludes NewOrleans from exercising the power of emi-nent domain for airport expansion. Neitherthe City of Kenner nor St. Charles Parishhas ceded its local powers with respect tothe Airport.

Because of uncertainties, contradictions andfrequent reversals of cases, it is impossibleto say with certainty whether the zoning andeminent domain powers could be reallocatedin favor of the Airport. Subject to thatcaveat, it appears that the LouisianaLegislature could amend the statutes governing the power of eminent domain to authorize New Orleans or a newly established authority to exercise the powerof eminent domain for the benefit of theAirport.

Whether Kenner or St. Charles Parish couldbe deprived by statute of their power overland use and zoning within their boundariesis open to serious question. One or moreconstitutional provisions, including those


dealing with local home rule entities andvesting zoning power in local governmentunits, could very well preclude this change.Based on the interviews with governmentofficials that BGR conducted for this study,such an amendment is not a realisticoption.

INTERGOVERNMENTAL AGREEMENTSThe experience of other airports shows that,where the zoning power and the power ofeminent domain rest with a governmentother than the airport proprietor, reachingaccord with that government is essential forexpansion. Although New Orleans owns theairport of today, it owns only a part of theairport of tomorrow. To grow NOIA, NewOrleans, or whatever entity controls theAirport in the future, needs to come toterms with the governments that ownand/or control the other essential pieces.

Coming to terms would involve the negotiation of a detailed intergovernmentalagreement addressing all the issues thatneed to be resolved if the Airport is toexpand. These include the scope of airportexpansion, land acquisition, zoning, economic development opportunities, infrastructure improvements, taxation,noise abatement measures, relocation ofaffected residents and businesses, representation and ownership of the Airport, compensatory payments, and mechanisms for future conflict resolution.

There is no obstacle to undertaking suchnegotiations, although there will undoubt-edly be real obstacles, legal and financial, to implementing particular solutions. Thelist of issues that have been put on thetable to date is wide-ranging and includesinfrastructure improvements and compen-sation for loss of tax revenues. Some of theitems on the wish list are not permissibleexpenditures for airports and would have

to be funded from other sources, such asstate funds or the City of New OrleansGeneral Fund.

CREATION OF A REGIONAL

GOVERNANCE STRUCTUREAdvantagesThe creation of a properly constitutedregional authority could contribute signifi-cantly to the airport’s growth in a numberof ways:

1. It could facilitate the formation of abroad-based, public-private alliance to promote the Airport. Important growthissues—such as increasing the limited number of flights into New Orleans, obtaining state and federal funding, andmaintaining NOIA’s position as the premierairport in the Gulf Region—can be resolvedonly through concerted effort by businessesand governments in the region.

As noted above, the obstacles to forging the needed alliance include the fact that the Airport does not enjoy the confidence of many in the business community andgovernment circles. The airport’sOperational Audit identified (and rejected as untrue) a number of serious criticismsleveled at the Airport by outsiders, includingallegations of gross mismanagement andpatronage. BGR’s interviews confirmed the auditor’s assessment that patronage isperceived as a major factor in operations.

Replacing the historic image of the Airportas a mismanaged institution operated forthe benefit of New Orleans politicians withthe concept of a well-run economic engineoperated for the benefit of the region as awhole is critical to gaining support for theAirport. BGR believes that there are twoways to accomplish this change. Oneinvolves transferring control of the Airportto a regional entity; the other involves the

19Executive SummaryBGR

City’s taking serious, meaningful steps toinvestigate, disclose and, where necessary,change its practices.

While transferring control to a regionalauthority might seem like a radical solutionto a perception problem, in the absence ofmeaningful action by the City to investigateand deal with the issues, it may be the onlysolution. Unfortunately, the OperationalAudit indicates that the City is unwilling todeal seriously with the issues that create somuch cynicism with respect to the Airport.For example, the report summarily disposesof criticism of NOIA’s contracting practicesby arguing that patronage is innocuous ifbeneficiaries of the arrangement are wellqualified and do competent work. It thenproposes a governance change that exacer-bates some of the problems bothering thecritics by taking the contracting process farther below radar. At another point, thereport attacks criticism as a cause of management problems. The tone of theOperational Audit does not instill great confidence.

2. A multi-parish regional authority couldhelp to create a broader base of support forlegislative action that might be needed tofacilitate expansion. As discussed above, the outcome of expansion negotiations isseriously impacted by the legal parametersin which the debate takes place, particularlyby what entity holds the trump cards forzoning and eminent domain. A regionalauthority, by involving more jurisdictions,could bring greater pressure to bear on theLouisiana Legislature to make adjustmentsfavorable to expansion.

In particular, the Legislature is more likelyto grant the power of eminent domain to amulti-parish authority than to the City ofNew Orleans. The availability of such powercould be critically important. A portion ofthe land needed for the runway was

subdivided and sold in small parcels, andSt. Charles Parish was granted rights-of-way in the areas marked for streets on the sub-division plat. Without the power of eminentdomain, the Airport will have to negotiatepurchases from many small landowners,any one of whom could block the develop-ment by refusing to sell.

3. Certain issues raised by St. CharlesParish, such as off-site infrastructureimprovements and economic developmentprojects, would require significant invest-ments that cannot be made legally by theAirport. Clearly, the City of New Orleanslacks the means to make such investments.A regional authority would provide a broaderbase for financing, or for soliciting state orfederal funds to finance, off-site infrastruc-ture improvements or economic developmentprojects.

4. Replacing the existing governance structure with a regionally based one wouldprovide the appropriate framework for uni-fied, coordinated planning far into thefuture. Although there are perceived threats,such as the potential expansion of StennisInternational Airport, there is no consensusin southeastern Louisiana as to what formlocal airport development should take. Thereis not even a coordinated effort to developan approach.

To date, planning has consisted of warringefforts by the Louisiana Airport Authority toplace a new, regionally owned airport some-where between Baton Rouge and NewOrleans and by New Orleans to keep onehere under its control. Placing the existingAirport under a properly constituted regionalauthority could help rationalize long-termplanning decisions by eliminating from thedebate over new airport vs. existing site thedistortions that occur when the subtext is achange in control.


5. The formation of a regional authoritycould also help by uniting southeasternLouisiana in the promotion of increased air service for the region. Ultimately, the airport’s growth, and its ability to maintainits service area, will depend on the region’s promotional efforts at the state and federallevels.

BGR recognizes that the State has alreadyestablished one regional body, the LouisianaAirport Authority, to promote air service forthe region. That particular authority is illsuited to promote joint action, however,since it had its genesis in conflict ratherthan cooperation. (Some New Orleans legislators claimed that they were not consulted about its creation.) An effectiveregional authority can be created only withthe consent and active participation of NewOrleans and other skey entities.

6. Transferring the Airport to an entity in which Kenner and St. Charles Parish participated could help overcome psychological hurdles to cooperation andcreate a more responsive framework foraddressing the real environmental issues.Because the regional authority would allowmultiple jurisdictions (including the hostgovernments) to participate in airport gover-nance on a similar basis, it has the potentialto shift the dynamics of negotiation from aconfrontation with an intrusive “foreign”government to a negotiation between participants in a venture. It also can createa better dynamic by redistributing the per-ceived benefits of ownership to all affectedparties, eliminating the dichotomy createdwhen the perceived benefits flow to one government and the negative impacts of the operation to another.

The citizens of New Orleans have much togain and little to lose by transferring theAirport to an entity capable of marshalingsupport from other governments, as well

as the citizens and business communitythroughout the area. The indirect economicbenefits anticipated from airport expansionand growth far exceed the revenues that theCity can derive directly from its ownership of the Airport.

This seemingly anomalous result followsbecause the Airport is not a revenue-pro-ducing asset for the City and, except in limited circumstances, cannot be convertedinto one. The limitations are as follows:

1. Federal law requires that revenues gener-ated by airports be used for airport-relatedpurposes. It prohibits the City from usingsuch funds for general municipal purposes.Thus, in making a transfer, the City wouldnot be giving up any income.

2. Realistically, the City cannot convert theAirport into a revenue-generating asset bychanging its use. While it might be possiblein theory to develop the airport land for residential or commercial use, this could notbe done without constructing a new airportelsewhere. The construction would requiresubstantial local, state, federal and privateinvestment and backing.

3. Furthermore, under existing federal regulations, the City’s recovery from the saleor lease of the Airport or its assets would belimited in most circumstances to unre-couped capital contributions and operatingexpenses made or incurred in the precedingsix years. As of December 31, 1997, the Cityhad a total of $2,674,912 of capital investedin the Airport. In addition, certain types ofinvestments made by the federal governmentwould have to be repaid.

4. An exception from the restriction on saleor lease proceeds is available for up to fiveairports that choose to participate in theFAA’s pilot program for the transfer of airports to private entities. Congress hasauthorized the FAA to grant participating


air carrier airports waivers from laws precluding the retention of lease proceeds.Thus, New Orleans would have an opportunity to realize value through thetransfer of the Airport to a private entity if it acted in the immediate future to participate in the pilot program. To date,New Orleans has shown no interest in this limited opportunity.

5. Laws or interpretations might change inthe future to allow an airport to receive saleor lease proceeds on the transfer of an air-port. New Orleans could preserve its poten-tial to take advantage of any such change by retaining title to and leasing the Airport’sassets to the regional authority on termsthat would provide for payments to NewOrleans under changed circumstances.

Given the above restrictions, what, if anything, would the City lose by turningover control of the Airport to a regionalauthority? In the course of BGR’s interviewsfor this report, many interviewees suggestedthat the opportunity for patronage would belost; they did not identify any other signifi-cant loss. Like them, we believe that NewOrleans has little else to lose from the transfer of airport sponsorship.

In addition to the potential gains citedabove, BGR perceives a number of other reasons for transferring control of the Airport:

1. In 1950, the City of New Orleans had 74percent of the metropolitan area’s popula-tion; it now has only 37 percent of the met-ropolitan region’s population. From 1970 to1990, New Orleans’ eight-parish Metropol-itan Statistical Area (MSA) experienced a 17percent growth in population, with St.Tammany Parish’s population increasing by127 percent and St. Charles’ by 68 percent.Orleans Parish’s population declined by 16percent in that period. Thus, while theAirport was once under the control of the

government elected by a majority of thearea’s population, this vital economic engineis now under the control of a governmentthat represents a decreasing percentage ofthe metropolitan region’s population.

There is a strong policy argument for aligning ownership and control of a publicasset with the area that it serves andimpacts. The case is particularly compellingin the case of airports, where major capitalinvestments are made by government entities other than the sponsor. Federal and state investments dwarf the City’s equity in the Airport, weakening equitableclaims to ownership. As of December 31,1997, the Airport had total contributed capital of $196,698,802. In contrast to theCity’s contribution of $2,674,912, the state contribution equaled $68,599,445, and theFederal portion amounted to $125,424,445.

2. The creation of a properly constitutedregional authority would also carry with itthe advantages attributable to the authorityform of government. These include the creation of a framework that encourages theAirport to operate with a more businesslikefocus. Besides eliminating cumbersome civilservice rules, the change would help to con-trol political interference. The ability of anyone person or group to use the Airport forpolitical purposes would be greatly diluted if board members were appointed by, andanswerable to, different groups.

3. Because the establishment of a regionalauthority would involve a management overhaul, it would provide an opportunity to implement the management structuremost likely to promote efficiency and growth.In that regard, one option worthy of seriousinvestigation is a private management con-tract with one of the world’s premier airportmanagement companies. The use of suchcompanies could eliminate much of thepotential for intergovernmental squabbling


over patronage and jobs. It could also promote efficiencies and service improve-ments through an incentive-based compensation package.

Risks and LimitationsTo some, converting to a regional authorityraises the specter of Kenner and St. Charlesblocking airport expansion through boardcontrol. Such a concern is, of course, a matter that must taken into account indeveloping board composition. Such a possibility is not, however, a necessaryresult of a change in governance.

It is neither necessary nor desirable to givethe airport’s immediate neighbors control ofthe airport board. Indeed, structuring anauthority in that way would defeat the veryreason for a regional authority, by sacrific-ing the interests of the region as a whole tothose of a particular constituency.

Host communities need to be represented as equals at the board level. They are, how-ever, only one of a number of interests thatneed to be represented. A regional boardshould include, in addition to New Orleans,St. Charles Parish, and the City of Kenner,representatives from Jefferson and otherparishes in the metropolitan region and, in view of the state’s interest in and role in airport financing, the state government.

There are different ways of structuring aboard. Although the most common is tobase representation on population, othersshould be considered. For example, it mightbe appropriate to base representation inpart on the distribution of travelers withinthe metropolitan area, recognizing that some areas of the region have a greaterinterest than others in the Airport.

Unfortunately, transferring the Airport to a regional authority (or to any other publicentity) is not likely to ameliorate signifi-cantly the city’s fiscal problems. As noted

above, the FAA’s current stance on revenue diversion raises serious obstacles to thereceipt of compensation by an airport sponsor on the sale or transfer of an airport.In simple terms, the FAA views sales proceeds and lease payments from suchtransfers as airport revenues that must be reinvested by the airport sponsor in airports. With the exception of an amountequal to unreimbursed capital contributionsand operating expenses made or incurredwithin the previous six years, such pay-ments cannot be used for general municipalpurposes.

The FAA leaves the door open for negotiationon a case-by-case basis, indicating that itwill apply the revenue-use requirement flexibly, taking into consideration specialconditions and constraints imposed by achange in ownership. This opening shouldbe pursued in any transfer of the Airport,with a view to obtaining for the City whatever compensation the FAA mightallow. Expectations need to be tempered,however, since recent FAA positions, takenas a whole, suggest that significant capitalinfusion is a dubious possibility.

ImpedimentsBGR has not identified any insurmountablelegal or financial obstacles to converting to a regional authority. The transfer wouldrequire authorizing legislation and the consent of various interested parties, suchas the FAA and airlines. Provision wouldhave to be made for the payment of existingbonds. The biggest hurdle would be politicalresistance from the City of New Orleans,which has made clear that it does not wantto give up control of the Airport.

OTHER ISSUESThere are a number of specific issues thatneed to be addressed to facilitate expansionand growth of the Airport. These include the feasibility of a major new airport, NOIA’s


BGR 24

New Orleans International Airport

communication with the citizens and representatives of the host communities, the airport’s failure to address adequately operational issues that aggravate the hostcommunities, and the community’s cynicalview of airport operations.

The Feasibility of a New Airport as a Near-Term SolutionBGR is concerned that the concept of a new airport may impede the resolution ofthe airport’s existing problems by enablingpolitical leaders to avoid the environment-ally unpleasant and politically explosiveissues associated with the expansion ofNOIA. The concept persists despite growing evidence that such a new airport is not a realistic option for meeting thearea’s air needs.

BGR notes the following obstacles to theconstruction of a new airport in time toaddress the region’s near- and interme-diate-term needs:

1. The implementation of such a projectwould require concerted and unified effortson the state, national, and local levels. Past discussions suggest that the regionalconsensus that would be necessary toimplement the project is lacking. In theearly 1990s the State of Louisiana, throughthe Louisiana Airport Authority, and theCity of New Orleans conducted rival studieson the development of a new airport.Ultimately, the City of New Orleans aban-doned its own quest for a new site. BothBaton Rouge and New Orleans opposed the concept proposed by the LouisianaAirport Authority. The FAA has indicatedthat additional funds for studying a newairport will not be forthcoming until suchtime as all the local parties are on the same page.

2. Only one major new airport, DenverInternational, has been built in the UnitedStates since DFW opened in 1976. Only one

ex-military base, Bergstrom Air Force Base,is being converted to civilian air carrier use.It will replace Austin’s Robert MuellerMunicipal Airport. Efforts by other cities orstates to develop major new airports havecome to naught.

3. Federal funding allocated to airport infrastructure projects is inadequate tomeet projected demands. The AmericanAssociation of Airport Executives (AAAE), an airport trade group, estimates that capital requirements far exceed availablefunding. According to the AAAE, surveys ofairports have consistently shown a need for10 billion dollars annually for airport devel-opment and capital reconstruction. The federal government has been providingapproximately one-fifth of that amountthrough grants under the AirportImprovement Program.

The FAA indicates that additional capacityis crucial but that, given the high cost ofnew airport construction, construction ofnew airports is not a common capacityenhancement technique. Such constructionfaces formidable financial, environmental,social, and political constraints.

4. The situation of New Orleans, whethermeasured by delays or demand, is far lesscritical than that of many competing entities. In 1996, NOIA ranked 43rd interms of aircraft delay (measured as delaysof 15 minutes or greater per 1,000 opera-tions). New Orleans measured delays of that magnitude for 0.83 operations per1,000. Newark International Airport, by contrast, had delays of that magnitude for65.25 operations per 1,000. Twelve otherairports had delays in the double digits per1,000 operations.

NOIA is not among the 31 airports expectedto have annual aircraft delays exceeding20,000 hours in 2006. The top priority for

a capacity increase in the FAA’s SouthwestRegion is the construction of another parallel runway at DFW.

CommunicationsOne of the recurring themes in interviewswith political leaders representing Kennerand St. Charles was the lack of effectivecommunication between the Airport, on theone hand, and the political leadership andcitizens of impacted communities on theother. Although airport officials claim thatthey routinely apprise Kenner officials ofNOIA development plans, Kenner councilmembers have complained over the yearsthat they are left in the dark. St. CharlesParish officials have also complained thatthey have been left out of expansion talks.Citizens complain that the Airport goesthrough the motions of public input in a pro forma way, without a desire for dialogue.

We recognize that there are certain established lines of communication for disgruntled citizens, such as the noise hotline and the airport’s Noise CompatibilityCommittee. We also recognize that attemptsare being made to encourage dialogueamong political leaders in New Orleans,Kenner, and St. Charles. Examples of suchefforts include the joint council meetingsthat were held over a year ago, the inter-council committee established last fall, andthe Mayor’s summit held in October 1998.While such efforts should be encouraged,the airport’s efforts need to go beyond thesemeasures in at least two ways. First, theAirport should embark upon a concertedpublic relations effort aimed at providingthe host governments and their citizenswith timely, complete and responsive information concerning its plans. Second,instead of seeking to minimize and controlpublic input, it should actively listen andfully respond to community concerns.

NoiseThe Airport needs to take a more active role in addressing operational issues thatconcern and aggravate the community. Anexample is the issue of overflights in thenorth Kenner neighborhoods. Kenner citizens have complained for more than adecade that airplanes deviate from estab-lished flight patterns calling for turns overLake Pontchartrain, making an early turnover north Kenner. Their leaders blame theAirport, claiming that it is the only airportin the United States that does not imposepenalties on airlines for flight pattern deviations. The Airport in turn points to the FAA, saying that only the FAA canimpose such penalties.

Mayor Morial promised in December 1997that the Airport would work with the FAA to correct the matter and that lease negotiations with the Airlines will require a commitment to keep to the flight paths. In October 1998 the Mayor announced thatthe airlines had asked the FAA to takeaction against the Airport for even consider-ing this requirement, arguing that certainprocedural channels must be followed andthat such efforts usually do not result inany change. To date the issue remainsunresolved.

Airport management should be able todetermine, in a time frame shorter than 10years, the extent to which planes are deviat-ing from recommended flight patterns andwhat, if anything, can be done about thedeviations. It should also be able to take thenecessary actions to meet the community’srequest for enforcement or explain why itcannot. Failure to adequately address thiskind of environmental issue over the courseof years is interpreted as an indifference tocommunity concerns. It also impedes thecommunity’s ability to deal with the major,new issues that expansion will present.


Management Issues and RegionalCooperationAs noted above, the airport’s OperationalAudit identified and rejected as untrue anumber of criticisms leveled at the airportmanagement by outsiders, including allega-tions of gross mismanagement and patron-age. BGR’s interviews confirm the auditors’assessment that patronage is perceived as amajor factor in airport operations.

Confronting the allegations of mismanage-ment and patronage honestly, openly, andfully is a critical step in developing regionalcooperation to promote the Airport. BGR isaware that the Airport purports to addressthese issues in its Operational Audit.Unfortunately, the report failed to addresspatronage and other issues impacting financial efficiency in a way that can givethe community comfort that its suspicionsare unfounded.

RecommendationsHaving considered the strategies and experience of other airports and the specificsof the New Orleans situation, BGR recom-mends the following:

1. that a broad-based regional authority,with representatives from Kenner, St.Charles Parish, New Orleans, JeffersonParish, and other parishes in the met-ropolitan region, be formed to sponsorand operate the Airport;

2. that the City of New Orleans retain titleto the airport’s existing land and facili-ties and lease them to the new authori-ty on terms that would allow the Cityto receive compensation for the air-port’s assets should lease or other payments become legally permissible in the future;

3. that serious and immediate consideration be given to hiring one of the world’s premier airport management companies;

4. that the City of New Orleans, Kenner,and St. Charles enter into a detailedintergovernmental agreement address-ing all the issues that need to beresolved if the Airport is to expand in accordance with its plans;

5. that the concept of a major, new airport as a solution to the region’snear- and intermediate-term air needsbe abandoned;

6. that the Airport embark upon a concerted effort to provide the citizensof the local governments with timely,complete, and responsive informationon airport matters of interest or concern to them; and

7. that the Airport take a more active rolein addressing operational issues thatconcern and aggravate the neighboringcommunities.

BGR believes that the establishment of aregional authority is the optimal solution tosoutheastern Louisiana’s airport issues andthat steps should be taken immediately toaccomplish this objective.


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