frankl
From a recent string of airline mergers to changing fee structures for air travel, change has become the real constant in today’s aviation business. But Blue Grass Airport Executive Director Eric Frankl is no stranger to transition, and he’s looking to position the airport for success within an evolving industry landscape, both regionally and nationally.
Blue Grass Airport serves more than a million passengers annually with service to 15 nonstop destinations. Eric Frankl was named as the airport’s executive director in 2009 after serving in the role of interim director, given the immediate task of getting the airport back on its feet in the aftermath of the Comair crash, followed by a management scandal that resulted in convictions. Frankl recently sat down with Business Lexington Editor-in-Chief Tom Martin to talk about the airport and recent trends in the aviation industry.
TM (Tom Martin): What’s new at Blue Grass Airport?
EF (Eric Frankl): Well, I think what’s new is actually a whole different environment. Obviously, when I came here in 2009, we were trying to rebuild ourselves and reset the organization. That was quickly followed by the World Equestrian Games, and we spent a lot of effort preparing for and hosting that event. And we’re really pleased with how that turned out. So this is, what I would say is, our first normal year, and it’s been great.
TM: We’re still coming out of an economic downturn, which has to influence things. What has changed as a result of that?
EF: The industry has evolved a lot really since 9/11, for obvious reasons. We’ve had a lot of bankruptcies and mergers and changes in the airline industry that, even from mid-2000 on, have been pretty consistent. I think that’s starting to slow down now, and that may be the biggest change for 2012-2013.
TM: One of those mergers was Southwest and AirTran. Earlier this year, you got word that AirTran would be discontinuing its service out of Blue Grass Airport in August. You have said that you hope to develop some new opportunities in the wake of that. Has anything materialized?
EF: Well, yes and no. I mean, we were disappointed with that acquisition for lots of reasons. AirTran was a great project for Lexington and central Kentucky, and we’re a really good fit for that particular airline. We’re not as good a fit for Southwest, so it wasn’t a total shock to us that when Southwest acquired them they wouldn’t stay here in Lexington, and of course, obviously with them being right up the road in Louisville. However, Allegiant Air, which is a great low-fare carrier, has really stepped in, and they’ve taken over both the Fort Lauderdale route and Orlando route, so we didn’t lose any direct destinations. And frankly, Allegiant probably has lower fares anyway.
TM: Continuing with the mergers, Delta and Northwest in 2008 has since resulted in some reduction of services in Cincinnati. Is that good for this market, bad for this market?
EF: It’s hard to say. I think if you’re in this region you want to have options, so Cincinnati certainly provided some great options for people that couldn’t possibly fly out of Lexington. But we probably have gained some service because of it and as they’ve lost two-thirds of their service. They are no longer operating as a hub airport. So we’ve gained in some respects, but I think the region lost overall.
TM: Another merger, United and Continental, merging into one entity, United Continental Holdings Inc. And now the pilots are calling for a strike vote because they have been unable to reach an agreement on a new contract. According to the Airline Pilots Association, a date for a strike vote has not yet been set, but what sort of impact would you anticipate that a strike would have at Blue Grass Airport?
(06/22/2013 Update: American Airlines and the union representing its pilots are close to reaching a deal on a new contract, a significant milestone in the ailing carrier’s seven-month-old bankruptcy, although one that still leaves the door open for a possible merger with US Airways. To read more from The NYTimes.com, click here.)
EF: It’s really hard to say. If there is a slowdown or a sick-out that affects one of their hubs in Chicago or Houston, obviously that could impact Lexington. We have flights connecting through both of those cities. But it’s hard to say. We haven’t had one for a very long time, really, so it’s going to be a little bit of new territory for us, I think. We’re fortunate in Lexington, having access to so many different airlines and going to so many different hubs; hopefully one of those other airlines could pick up the slack, if necessary.
TM: What’s going on in the crew quarters and the cockpit? Passengers boarding a plane want to be assured that they have a very happy crew in that cockpit. Is the mood in the industry in any particular shape that would cause concern?
EF: That’s a great question. ... I don’t think there is any question that this industry has been under a lot of stress, really since 9/11, and perhaps even before that. With mergers and bankruptcies and employee groups and renegotiation with their unions, it has been very stressful in the industry. And with consolidation, we have less aircraft out there, going to less destinations. So there is some stress in the industry, and I think it’s going to affect people differently.
By the same token, people who are working in this industry are really in it because they love it. No one is really going to get rich in this industry, and so a lot of pilots just love being pilots. Certainly, they’ve had some hard times. I don’t think anybody would question that, but I think they love the industry, and that’s what keeps everybody going.
TM: American Airlines filed for bankruptcy last year. Any impact here?
EF: It’s too early to tell. American is a great airline and probably the last of all the airlines to go bankrupt. It was probably necessary for them to restructure just like the rest of the airlines, because the rest had an advantage. So it wasn’t a total shock to us. We’re paying close attention to what happens. There is some talk about them merging with US Air. That could be good or bad for Lexington — it’s just way too early. Even if it resolved itself this year, it would take another year to determine what routes are going to be served. It just takes a really long time.
TM: What are some of the leading trends in the airline and airport industries?
EF: Probably the most notable and maybe not particularly the most positive trend is the decoupling of the fares, in terms of all the add-on fees. That is becoming more and more prominent. Certainly a lot of people see that negatively, and some people see that positively. Some people who don’t check bags love it, because in theory they’re getting lower fares and they’re not paying for someone else who is checking bags. Probably the most significant issue going on right now is what happens with those fees: How many are there, how does the system get funded? Because a lot of our funds are related to taxes associated with the airline tickets, and when those tickets are lower and you’re paying fees, you’re not paying taxes on those fees. There’s a lot of consternation in the industry, but we’ll work through it just like we always do. I think the industry is going to be stronger because of it, honestly.
TM: Do you think those baggage fees have actually changed passenger behavior in a big way? Are people traveling lighter?
EF: I don’t think there is any question about it. Initially, once they started charging, more people were carrying on versus checking a bag. There’s cost associated with checking a bag — lost bags, the cost of loading bags and weight and that kind of thing, so I think the consumer made some adjustments. Spirit Airlines and now Allegiant Airlines charge for carry-on bags, and so whether people go back and actually check a bag now because they’re going to have to pay either way, it’s hard to say what the dynamics for the consumer are going to be. It’s hard to say how people are going to react and adjust, but typically the consumers have found a way to save money.
TM: Is there an active pursuit to monetize services that have not been considered potential revenue streams in the past?
EF: No question. I think they’ve been very good at it. I give them credit in that respect. They’re trying to keep the base fare as low as possible, and so if they’re going to charge for bags and for drinks and for where you sit on the airplane, they’re trying to be innovative and make up for those low fares. By the same token, if you really just want a straight low fare and you don’t want any of those add-ons, you can get that, and I think they may have found a good fit for most people.
TM: I think everybody understands why we have to have increasing security, because basically the bad guys are out there trying to figure out how to get through every new iteration of security. Are you aware of anything going on in the airlines so that once you go through that sometimes uncomfortable experience, there’s some-thing on the other side to offset it?
EF: There are a number of initiatives by transportation security, the aviation industry and then the airlines themselves. And I think they are utilizing technology better. We’ve streamlined the process better, we’re starting to pay attention to individuals, not just the objects, and obviously patting down grandmothers and small children doesn’t make any sense, and that’s really being curtailed. So I think it’s going to get more and more efficient to get through the security checkpoint, and I don’t think it’s going to be at the cost of security.
TM: Any innovations going on in airport operations?
EF: I think we’ve been ahead of the curve in that regard. We have our own customer service staff, and a lot of airports didn’t have that, and a lot of airports still don’t have that. That enables us to cater to a lot of the travelers. We have our club, as you know, for the business traveler that we think is really nice. It’s free for them. We have free wireless Internet and the whole nine yards, and I think we led the way in a lot of those areas, and a lot of airports are not catching up to us. We think we have a beautiful facility, and I think most people that come through there are finding it very appealing and efficient to go through.
TM: What other initiatives do you have happening at the airport?
EF: We’re actually starting a history project of the airport. Many people don’t know that the current airport is really the third airport that has existed in Lexington. So we’re starting to compile a lot of history. It’s never been done, and we really want to consolidate a more complete history going back to the early 1920s. We’re going to be starting that process, asking people for input and for their articles and photos and try to develop a good collection of great stories and memorabilia so we can put together a nice history of the airport.
TM: You’ve been here for about three years now — time to get settled into Lexington, get to know the community. Have we grown on you?
EF: Geez, I tell you, I love it here, and particularly this last year. And actually, my wife just moved here. We had to get a kid out of high school; he actually went to the University of Kentucky this last year. So she moved down last summer, and we really love it here. And actually, this last year has been about getting out and exploring a lot more of what Lexington and central Kentucky have to offer, because as you know, my first two years were a little overwhelming. So we are really pleased to enjoy a lot of Kentucky this year.