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Final Report

Airport Management Study

Lehigh Northampton Airport Authority

Prepared for:

County of Northampton
Prepared by:
THE

County of Lehigh and

LOUIS BERGER GROUP, INC.

20 Corporate Woods Blvd

Albany, New York 12211


In Association With:

February 6, 2009

The Louis Berger Group, Inc.

Final Report Airport Management Study Lehigh Northampton Airport Authority

TABLE OF CONTENTS
EXECUTIVE SUMMARY................................................................................... See Separate Document SECTION 1 INTRODUCTION ........................................................................................................ 1-1 SECTION 2 STAKEHOLDER SURVEY ....................................................................................... 2-1 2.1 Survey Results...................................................................................................................... 2-1 2.2 Survey Summary................................................................................................................ 2-19 SECTION 3 COMPARABLE AIRPORTS ANALYSIS .............................................................. 3-1 3.1 Comparable Airports Data Collection, Screening and Selection.............................. 3-1 3.2 Comparable Airports Overview........................................................................................ 3-4 3.3 Human Resources ............................................................................................................. 3-25 SECTION 4 AIR SERVICE ANALYSIS ......................................................................................... 4-1 4.1 Analysis of Interview with LVIA...................................................................................... 4-2 4.2 Comparison to Peer Airports ............................................................................................ 4-8 4.3 Summary and Conclusions .............................................................................................. 4-10 SECTION 5 ORGANIZATIONAL ANALYSIS ........................................................................... 5-1 5.1 National Governance Models ........................................................................................... 5-2 5.2 National Organization of Operations Models ................................................................ 5-2 5.3 Governance of Lehigh Northampton Airport Authority ............................................. 5-4 5.4 Organizational Analysis.................................................................................................... 5-10 5.5 LNAA Departmental Analysis ........................................................................................ 5-12 SECTION 6 FINDINGS AND RECOMMENDATIONS ........................................................ 6-1 6.1 SWOT Components........................................................................................................... 6-1 6.2 SWOT Results ..................................................................................................................... 6-2 6.3 Summary............................................................................................................................... 6-5 APPENDICES

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Final Report Airport Management Study Lehigh Northampton Airport Authority

1.0

INTRODUCTION

Lehigh County and Northampton County, Pennsylvania, retained The Louis Berger Group, Inc. in association with Signet Human Resources Management and TranSystems (Study Team) to perform the Airport Management Study of the Lehigh Northampton Airport Authority (LNAA) and Lehigh Valley International Airport (LVIA). The purpose of the study was to evaluate the efficiency and effectiveness of the airport functions to include the current state of air service, policies, revenue goals, planning/engineering, contracts, personnel, operational procedures, property management, and project management and to provide recommended actions to enhance the value of Lehigh Valley International Airport (LVIA) to the Lehigh Valley.
1.1 Study Scope

In order to accomplish the above study objectives, Berger defined a study scope which was submitted to and approved by Lehigh and Northampton Counties. The scope provided for several key study elements, including: a) to identify and gather relevant study information; b) methods for evaluating information concerning LNAAs management and organizational structure; c) the comparison of LNAA to comparable airports; d) the assessment of air service marketing and development initiatives; e) organizational evaluation including a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis; and f) to report on findings and provide recommendations.
1.2 Study Process

The Study was conducted over approximately five (5) months and the process involved the collection of various data and reports, the development and analysis of stakeholders perspectives by conducting surveys and interviews, assessing information from comparable airports, attending Board meetings, on-site observations, and completing exercises to evaluate the overall organization of LNAA. These efforts culminate in the identification of findings and recommendations documented as part of this report.

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Final Report Airport Management Study Lehigh Northampton Airport Authority

Data Collection The Study Team collected over 50 documents regarding LNAA on various subjects. These included: governmental documents such as the Pennsylvania Municipal Authorities Act and LNAA By-Laws; financial, administrative and policy documents including LNAAs current Financial Statement, New Board Member Orientation Presentation, LNAA Policies and Procedures for Union Employees, and Policies and Procedures for Non-Bargaining Unit Employees; and planning, operational and marketing documents such as LVIA Marketing and Advertising Package, Airline Marketing Presentations, and the LVIA Airport Master Plan Update, among others. The primary purpose for gathering and reviewing these documents was to provide the necessary input needed for the Study Team to make accurate observations concerning the overall governance of the Authority. Development of Stakeholder Perspectives The study included an extensive effort to understand the perspectives of various stakeholders (a stakeholder being defined as someone who has an interest in LNAA or the Airport). To do this, multiple methods were used that included in-person and telephone interviews, as well as a survey instrument that is discussed later in the report. The interviews were primarily conducted in Lehigh County offices with members of the Study Team. For logistical reasons, only a few of the participants found it necessary to be interviewed via telephone. Over 40 individuals representing a cross-section of Airport Employees, Airport Management, Board of Governors, County Administration, and Regional and Community representatives (stakeholders) participated in the interview process each of which were approximately 30 minutes in duration or longer. In addition to those people that were interviewed, a parallel survey was conducted. Surveys were conducted with each member of the LNAA Board of Governors, LNAA, appropriate Lehigh and Northampton County officials and a cross section of regional and community representatives. A total of 92 surveys were distributed electronically (web based) of which 48 people responded representing a response rate of approximate 52%. Assessment of Comparable Airports This component of the study effort identified five (5) airports to compare LNAA against and evaluate common and best practices among them. To choose the comparable airports, the Study Team identified airports that were in close proximity to
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major domestic and international hubs, similar to LVIA. Additional criteria included the number of passenger enplanements, existing governance type, multiple airport operator status, and FAA hub classification. From these criteria, the study developed a list of potential comparable airports. After further evaluation, the Study Team in coordination with the Counties chose the following five comparable airports in which comparative data was collected and evaluated: 1. General Mitchell International Airport (Milwaukee, WI) 2. T. F. Green Airport (Providence, RI) 3. Orlando Sanford International Airport (Sanford, FL) 4. Harrisburg International Airport (Harrisburg, PA) 5. Stewart International Airport (Newburgh, NY) Each of these comparable airports were reviewed and compared to LVIA in various categories. In addition, the recent past and present activities regarding LVIAs Air Service Development activities were also assessed and is reported Section 4. A comprehensive review of all air service development marketing efforts was performed. Information was gathered through meetings with airport marketing officials, through the collection of information on incentive plans, recent air service development studies, and on other efforts tailored to market airlines. Organizational Evaluation The Study Team performed an organizational evaluation to review the data and information collected through the various study efforts discussed above. Included with this effort was a SWOT analysis conducted with LNAA. The SWOT analysis was held at LNAA offices and provided key inputs into the overall evaluation. This information as well as information collected on the various governance models of todays airports in the United States and the comparable airports in this study provided key input into the overall development of findings and recommendations for this study. Findings and Recommendations The Airport Management Study provides strategic findings and recommendations for the Counties to consider for implementation in its effort to increase the efficiency and effectiveness of airport operations with regard to the management of the Counties three airports: Lehigh Valley International Airport, Queen City Airport, and Braden Airpark. The essence behind each finding and recommendation identifies areas where the efficiency and effectiveness of LNAA can be enhanced for the betterment of the Lehigh Valley as a whole.
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1.3

Document Outline

This report is divided into multiple sections providing information on each of the efforts completed for this comprehensive review. First, a standalone Executive Summary of the Study undertaking was produced and highlights some of the findings and recommendations made during the study process. The full results of the study can be found in Sections 1 through Section 6 as identified below. Section 1 Introduction. Provides an introduction to the study presenting the studys scope and process. Section 2 Stakeholder Research. Examines the stakeholder input process involving the information gathered as a result of the survey process. Section 3 Comparable Airports Analysis. Identifies the basis on which comparable airports used for the study were selected and assesses LNAA and LVIA in comparison with comparable organizations and airports in the areas of operations, management and organizational structure. Section 4 Air Service. Provides an overview of the air service marketing and development initiatives and of the overall efficiency and effectiveness of LNAAs approach toward air service development LVIA. Section 5 Organizational Analysis. Building on the data and analysis from Sections 2 and 3, provides a descriptive narrative of how LVIA compares in key areas. This section also examines commonly used airport governance models, as well as the organizational and governance structure of the LNAA. Section 6 Findings and Recommendations. Provides a summary of the SWOT analysis and presents the findings made by the Study Team along with strategic recommendations to be considered by the Counties and LNAA for implementation.

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Introduction Page 1-4

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Final Report Airport Management Study Lehigh Northampton Airport Authority

1.4 Key Project Staff The following provide brief biographies of the key project staff that conducted this study. Steven T. Baldwin, Senior Vice President Mr. Baldwin is responsible for Bergers National Aviation Program and the delivery of all domestic aviation services throughout the firms network of offices. He brings with him 27 years of airport and aviation experience to this effort. Prior to Joining Berger in 1996, he served the NYSDOT Aviation Division for 14 years. There he had responsibility for the day-to-day operations of Stewart International Airport in Newburgh, NY and Republic Airport on Long Island. While with the DOT Aviation Division, he also directed the States planning and environmental programs for the State owned and operated airports, in addition to providing staff services to two governor appointed commissions. In addition, Mr. Baldwin served as the Governors congressional liaison to Congress on matters concerning overflight noise, and served two years in the NYS Governors office as a senior advisor assigned to the Governors Office of Regulatory Reform. He is an active commercial instrument rated multi-engine pilot and flight instructor, and holds a Bachelor of Science degree in Airport Management from Florida Institute of Technology and a Masters Degree in Public Administration from the Rockefeller College of the State University of New York. Russell B. Vachon, Senior Aviation Associate Mr. Vachon brings 4o years of transportation/aviation industry experience to this study. Prior to joining The Louis Berger Group, Mr. Vachon was the Director of Aviation for the New York State Department of Transportation where he managed various aviation programs to include: annual grants to 85 eligible airports sponsors totaling an average of $5.5M for planning and development which leveraged an average of $70M annually in FAA Airports Improvements Program funds, ranking NY among the top three states in federal funds administered nationally; 100% State funded grants to 38 airports for $10M; FAA-financed, $0.5M annual aviation system planning program; FAA 5010 inspections of 150 airports annually; specialized technical assistance to airports to address environmental, financial and development needs; the operation of Stewart International and Republican Airports involving the policy and decision-making oversight of 100 employees, coordination of programs with separate, politically appointed, advisory commissions, the administration of both an $8 million annual operating budget, completely underwritten with airport revenues, and a $10 million annual capital budget, as well as all lease negotiation policy decisions. He also represented New York State in national associations: the Airports Council International-North America serving as a member of the Government Affairs Committee, American Association of Airports Executives, The National Association of Aviations Officials, and the New York Airport Managers Association.

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Marc C. Champigny, Management Associate Mr. Champignys experience includes financial, safety, security, operational, and planning services at several airports of varying size and function. Having worked as an Operations Coordinator at Morristown Municipal Airport and in the public sector for the New York State Department of Transportations Aviation Services Bureau, Mr. Champigny brings a comprehensive base of experience and a strong understanding of the airport operators requirements. As an Assistant Director, he has managed projects relating to airport management, financial feasibility, market comparables, business planning and strategy, rate analysis and modeling, master planning, and FAA 5010 safety inspections. As an active Private Pilot, Mr. Champigny also brings unique experience related to aircraft operations. Mr. Champigny holds a Bachelor of Science degree in Aviation Management from Embry-Riddle Aeronautical University and a Masters Business Administration from the College of Saint Rose.

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2.0

STAKEHOLDER SURVEY

To review and evaluate the efficiency and effectiveness of LNAA and the Lehigh Valley International Airport, a 15-point questionnaire was deigned to facilitate dialogue and gather key information from Board of Governors members, Airport Management employees, and NonManagement Airport employees, Regional Executives, Stakeholders and Non-Airport employees. In conjunction with on-site interviews, the Study Team used online survey software to develop and electronically distribute, via email, a comprehensive survey to obtain opinions and perceptions of the Airport. Survey questions focused on the following areas: Survey participants level of understanding of the Airports organizational structure; The level of economic importance of the Airport to the local community and the region; The current state of Airport service and its ability to meet air traveler needs; The Airports relationship with stakeholders and the general public; The effectiveness of Airport Management; and The effectiveness of Airport Authority public outreach and communication initiatives. Throughout the survey development process, the Study Team worked closely with the Counties to ensure survey questions would generate responses that provide the necessary information needed to meet the Studys objective within the Studys scope of work. Typically, large survey invitation lists are associated with lower response rates, thus it was important for the Study Team to obtain the most focused and high-quality representatives to survey as possible. A complete list of proposed survey participants was provided by Lehigh and Northampton Counties. The list included a comprehensive cross-section of participants from Airport employees and Board members, to Stakeholders and Regional Executives. 2.1 Survey Results In order to obtain the most accurate responses in the opinion of the survey taker, the Study Team prefaced the survey with an introduction that assured the confidentiality of participant identity by explaining that survey results would be collected and presented to the Counties in aggregate form. A copy of the survey questions are provided as an Appendix within this report.
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Final Report Airport Management Study Lehigh Northampton Airport Authority

The survey was opened and distributed via email on September 24, 2008 and was closed on October 31, 2008. Participants completed received were survey by the sent wasnt survey reminder emails bi-weekly if a

administrator. Ninety-two invitations (92) were survey sent, of

which 48 completed surveys were received, resulting in a 52% response rate. Metadata compiled by survey systems that use email invitations indicate that the average survey response is 32.5%. As mentioned, a function of the survey software allowed the Study Team to selectively follow up with non responders and improve the response rate. Despite the ambiguity of what response rates mean, the credibility of survey statistics are often linked to response rates. The demographic profile of survey respondents is shown on the following page in Figure 2.1, Results of Survey Question 1. Of the total responses, 56% indicated they were either a Board of Governors member or an Airport Employee, while 44% identified themselves as a Regional Executive, an Airport Stakeholder or a Non-Airport Employee.

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Final Report Airport Management Study Lehigh Northampton Airport Authority

Figure 2.1- Results of Question 1

In regards to Lehigh Valley International Airport, how would you classify yourself?

Regional Executive, Airport Stakeholder or Non-Airport Employee Non-Management Airport Employee 10%

44%

Airport Management Employee

15%

Board of Governors Member

31%

0%

20%

40%

60%

80%

100%

In order to evaluate the efficiency and effectiveness of the Lehigh Valley International Airport from an economic development and Airport management standpoint, the survey questions were designed to assist the Study Team in understanding the respondents general perception of the Airport. Following each question, the respondent was given the option to provide additional comments related to their response. Individual comments were analyzed and reviewed for consistency. Common characteristics were identified among comments, which allowed the Study Team to make observations of the perception and opinions of the current state of the Lehigh Valley International Airport. Question 2 The survey asked the respondents to provide their overall perception of the Airport. Answers to this question are provided in graphical form in Figure 2.2 on the following page. As the chart shows, 90% of all respondents feel that the Airport is a valuable economic asset. Only 10% either believe it is just another mode of transportation or did not have an opinion. None of the respondents believed that the Airport is an unnecessary asset.
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Figure 2.2- Results of Question 2


What is your perception of Lehigh Valley International Airport?

An unnecessary asset 0%

No opinion

2%

Just another mode of transportation

8%

A valuable economic asset 0% 10% 20% 30% 40%

90%

50%

60%

70%

80%

90%

To further analyze the survey responses, specific questions within the survey were cross-tabulated what the respondents answered in question 1, In regards to LVIA, how would you classify yourself? As you can see in the cross-tab analysis in Figure 2.3 on the following page, 100% of the Board of Governors respondents as well as management and non-management Airport employees believe that the Airport is a valuable economic asset while a smaller percentage, (76%) of regional executives, Airport stakeholders, or non-Airport employees believe this to be true. This demonstrates that generally the more removed one is from the development, operation, and/or daily management of the Airport; the more likely they are to view an airport as just another mode of transportation. Overall a small percentage of respondents (8%) perceive the Airport as just another mode of transportation, however, of more significance is the fact that none of the respondents view the Airport as an unnecessary asset. Those who view the Airport as just another mode of transportation identified themselves as Regional Executives, Airport Stakeholders, or Non-Airport Employees.
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Final Report Airport Management Study Lehigh Northampton Airport Authority

Figure 2.3- Cross Tab Analysis of Question 2


What is your perception of Lehigh Valley International Airport?

Regional Executive, Airport Stakeholder or Non-Airport Employee Non-Management Airport Employee

76%

19%

5%

100%

Airport Management Employee

100%

Board of Governors Member 0% A valuable economic asset 20% 40%

100%

60% No opinion

80%

100%

Just another mode of transportation

An unnecessary asset

Question 3 Generally, Airports provide economic growth to communities in the form of jobs, tourism and business links. Question 3 asked the respondent to rate the importance of aviation growth in the city/county from an economic perspective. As Figure 2.4 on the next page indicates, nearly 80% of all respondents believe that aviation growth within the local area is very important. Notably, the cross tabulation chart shown as Figure 2.5 that follows, indicates that 100% of Airport employees who took part in the survey believe that from an economic perspective, aviation growth is very important.

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Final Report Airport Management Study Lehigh Northampton Airport Authority

Figure 2.4- Results of Question 3


From an economic perspective, how would you rate the importance of aviation growth in the city/county?

Not important 0%

Somewhat important

21%

Very important

79%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Figure 2.5- Cross Tab Analysis of Question 3

From an economic perspective, how would you rate the importance of aviation growth in the city/county?

Regional Executive, Airport Stakeholder or Non-Airport Employee Non-Management Airport Employee Airport Management Employee Board of Governors Member 0% 20%

71%

29%

100%

100%

73%

27%

40%

60%

80%

100%

Very important

Somewhat important

Not important

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Final Report Airport Management Study Lehigh Northampton Airport Authority

The next two survey questions related to the Airports organizational/management structure and the effectiveness of the Airport Authority in satisfying its primary mission, which is, To develop and operate facilities to serve the short and long term needs of the travelling public, air cargo shippers, general aviation community and the economic development of Lehigh Valley. Question 4 Figure 2.6 below indicates that more than 54% of all survey respondents fully understand the Airports organizational /management structure. Figure 2.6- Response to Question 4
How well do you understand the airport organizational/management structure?

I do not understand it at all

8%

Somewhat understand it

38%

I fully understand it

54%

0%

10%

20%

30%

40%

50%

60%

A cross tabulation of these results is shown in Figure 2.7. The chart indicates that the 8% of respondents that do not understand the organizational structure were either, Board of Governors members, Regional Executives, Airport Stakeholders, or Non-Management Airport Employees. This cross-tab analysis also demonstrated to the Study Team that the more removed the person is from Airport Management or the day-to-day operation of the Airport, the less likely they are to understand the organizational structure. 40% of Non-Management employees as well as 14% of Airport Management employees do not fully understand the Airports organizational structure.
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Final Report Airport Management Study Lehigh Northampton Airport Authority

Figure 2.7- Cross Tab Analysis of Question 4

How well do you understand the airport organizational/management structure?

Regional Executive, Airport Stakeholder or Non-Airport Employee Non-Management Airport Employee Airport Management Employee Board of Governors Member 0%

33%

52%

14%

60%

40%

86%

14%

67%

27%

7%

20%

40%

60%

80%

100%

I fully understand it

Somewhat understand it

I do not understand it at all

A review of the comments on Question 4 indicated that some respondents feel the management structure is overly complicated in the sense that there exist too many tiers of management. Respondents also stated that there may be opportunities for management to integrate more closely with Non-Management employees. Question 5 Survey question 5 addressed whether or not the Airport Authority is effective in satisfying its core mission. As the figure on the following page shows, over 42% of all respondents believe that the Authority is effective in satisfying the mission, while 10% believe that the Authority is ineffective in satisfying the mission.

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Figure 2.8- Response to Question 5

The primary mission of the Airport Authority is to develop and operate facilities to serve the short and long term needs of the travelling public, air cargo shippers, general aviation community, and the economic devlopment of Lehigh Valley. How well do you feel the Authority satisfies this mission?

I do not have enough involvement or exposure allowing me to respond

2%

The Authority is ineffective in satisfying the mission

10%

The Authority is only somewhat effective in satisfying the mission

46%

The Authority is effective in satisfying the mission

42%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

The cross tabulation analysis shows that the 100% of individuals who believe that the Authority is ineffective in satisfying the mission are either, Regional Executives, Airport Stakeholders or NonAirport Employees. Two percent of the respondents said that they didnt have enough involvement or exposure allowing them to respond.

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Figure 2.9- Cross Tab Analysis of Question 5

The primary mission of the Airport Authority is to develop and operate facilities to serve the short and long term needs of the travelling public, air cargo shippers, general aviation community, and the economic devlopment of Lehigh Valley. How well do you feel the Authority satisfies this mission?

Regional Executive Airport Stakeholder or Non-Airport Employee Non-Management Airport Employee Airport Management Employee Board of Governors Member 0%

14%

62%

24%

80%

20%

86%

14%

47%

47%

7%

20%

40%

60%

80%

100%

The Authority is effective in satisfying the mission The Authority is only somewhat effective in satisfying the mission The Authority is ineffective in satisfying the mission I do not have enough involvement or exposure allowing me to respond

The next few questions in the survey focused on passenger use of the Airport, the specific years that respondents used the Airport for air travel, their frequency of use, typical destination airports and the adequacy of the Airport in meeting their travel needs. Question 6 and 7 Of all respondents, over 90% have used the Airport for business or leisure travel over the last 5 years. Of all respondents who have used the Airport over the last 5 years, the following chart depicts a breakdown of the percentage of those who used the Airport in a specific year. The chart shows a gradual increase in travel from 2005 through 2007. Due to the survey closeout date of October 31, 2008, the 52% of respondents that indicated they travelled in 2008 does not include the months of November and December. Historic industry travel data has shown that due to the holidays of Thanksgiving and Christmas, the months of November and December tend to be busy travel months. Consequently, one can assume that the trend between 2005 and 2007 would continue through 2008 if the respondents considered all 12 calendar months.
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Figure 2.10- Response to Question 7

When did you travel?

2004

68%

2005

64%

2006

73%

2007

80%

2008

52%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Question 8 Figure 2.11 on the following page depicts the frequency of travel among those respondents that have used Lehigh Valley for their air travel needs over the last five years. Nearly 70% of all respondents have used the Airport less than ten times and almost 15% of all respondents have used the Airport over 30 times. While we do not know the exact number of times those who have used the Airport less than 10, it can be said that the nearly 15% who have used the Airport more than thirty times in the last five years, use it an average of at least 6 times a year.

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Figure 2.11- Response to Question 8

How often did you use the airport in the last five years?

More than 30

14%

10-30

18%

Less than 10

68%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Question 9 The survey requested that those respondents who have used the Airport in the last 5 years provide some typical destination airports. The most common destination airports provided by respondents included: Atlanta, GA Chicago, IL Charlotte, NC Cleveland, OH Columbus, OH Denver, CO Las Vegas, NV Los Angeles, CA Orlando, FL Pittsburgh, PA San Francisco, CA

Question 10 The next chart, Figure 2.12 depicts the responses on how well the Lehigh Valley International Airport meets air travelers needs. Thirty three percent of respondents indicated that the Airport meets all of their air travel needs well. Two percent of respondents (one individual) indicated that Lehigh Valley was not used for air travel needs.

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Figure 2.12- Response to Question 10

As an airport user, how well does Lehigh Valley International Airport meet your air travel needs?
I do not use Lehigh Valley for my air travel needs

2%

Does not meet my needs very well Meets some of my needs but the airport needs improvement to satisfy them all Meets all my air travel needs very well

21%

44%

33%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Comments provided in response to this question suggest that respondents feel that Philadelphia and Newark provide cheaper, more direct flights. However, there was consensus among travelers, noting satisfaction with the convenience provided at Lehigh Valley. Regarding the level of service, some indicated through comment that the level of service at Lehigh Valley exceeds that of Philadelphia and Newark. Question 11 Survey question 11 asked the opinion of the state of air service at Lehigh Valley since 2004. As shown in the results of the next question in Figure 2.13, in comparison to previous years, over 50% of respondents feel that since 2004, the state of air service has worsened. Twenty one percent feel that air service has improved while 26% of respondents believe that the state of air service at Lehigh Valley is unchanged in recent years.

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Figure 2.13- Response to Question 11

Since the year 2004, how would you rate the state of the air service at Lehigh Valley?

Air service has worsened

52%

Air service has improved

21%

Unchananged in recent years 0% 10%

26%

20%

30%

40%

50%

60%

70%

80%

90%

100%

When asked what may be some contributing factors to a reduction of the state of service at Lehigh Valley, common responses were. Too few airline options Higher ticket prices than Philadelphia or Newark Too few destination airports Poor economy/industry trends

The two final survey questions addressed the issue of communication and the relationship between the Airport Authority and Airport Stakeholders. First, whether or not they believe that the Authority has established effective communications with the business community and the general public in a manner that is proactive and one which shows dedication to serving the publics interest. Secondly, the respondents were asked whether they believed the relationship between the Authority and Stakeholders is positive enough as to show dedication in promoting good working relationships.

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Question 12 As shown in Figure 2.14, thirty-eight percent of respondents believe that the relationships between the Airport Authority and stakeholders are in fact positive and promote good working relationships. Forty-two percent feel that the relationships are somewhat positive but believe that more effort is needed in this area to more effectively promote good working relationships. Twenty percent believe that the relationships between the Authority and Airport Stakeholders are negative. Figure 2.14- Response to Question 12

In your opinion, are the relationships between the Airport Authority and Stakeholders positive so as to promote good working relationships?

Somewhat, but more effort is needed in this area


20%

42%

No

Yes

38%

0%

20%

40%

60%

80%

100%

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In Figure 2.15, a cross tabulation of respondents, shows that 89% of those who believe the relationships are not positive have classified themselves as either Airport Stakeholders, or NonAirport Employees or Regional Executives. Figure 2.15- Cross Tab Analysis of Question 12

In your opinion, are the working relationships between the Airport Authority and Stakeholders positive so as to promote good working relationships?
Regional Executive, Airport Stakeholder or Non-Airport Employee Non-Management Airport Employee Airport Management Employee Board of Governors Member 0%
Yes No

3 (18%)

8 (89%)

10 (53%)

3 (18%)

2 (11%)

6 (35%)

5 (29%)

1 (11%)

7 (37%)

20%

40%

60%

80%

100%

Somewhat, but moreeffort is needed in this area

Question 13 This question asked: What do you like/dislike about the current state of communications between the Community and/or Region and the Airport Authority? Some of the comments received indicated the perception that the Airport Authority has very little communication with the community or the region, while others highlighted the Authoritys effort to communicate with the community through various news publications, press releases, and public meetings, as well as an airport website and 24 hour call center available to the public. Overall, there were varying opinions that provided insight into the effectiveness of communication between the Airport Authority and the community or the region. This information will be utilized as a context in the organizational analysis.

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Question 14 Regarding communications and the Authoritys establishment of effective communications that are proactive and show dedication to serving the publics interests, 40% of all respondents believe that the Authority has established communications that show dedication to the public. Combined, almost 60% believe that the Authority has been only somewhat effective in establishing such communication or that the Authority has not been effective in doing so. Figure 2.16- Response to Question 14

In your opinion has the Airport Authority established effective communications with the business community/general public in a manner that is proactive and shows dedication to serving the public's interest?

Somewhat, but more effort is needed in this area

29%

No

31%

Yes

40%

0%

20%

40%

60%

80%

100%

Of the 30% of respondents who believe that the Authority has not been effective in establishing effective communication, 80% of those respondents, as shown in Figure 2.17 on the next page, are either Regional Executives, Stakeholders, or Non-Airport Employees. Of those who believe that the Authority has established effective communication, the majority are either Airport Management Employees or Non-Management Airport Employees.

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Figure 2.17- Cross Tab Analysis of Question 14

In your opinion has the Airport Authority established effective communications with the business community/general public in a manner that is proactive and shows dedication to serving the public's interest?

Regional Executive, Airport Stakeholder or Non-Airport Employee

5 (26%)

12 (80%)

4 (29%)

Non-Management Airport Employee

3 (16%)

1 (7% )

1 (7%)

Airport Management Employee

6 (32%)

1 (7%)

Board of Governors Member

5 (26%)

2 (13%)

8 (57%)

0%

20%

40%

60%

80%

100%

Yes

No

Somewhat, but more effort is needed in this area

Question 15 The last question of the survey asked: Given your exposure to the Airport, what improvements are needed at the Airport to improve its efficiency and effectiveness? In general, comments to improve air service included: the need for more destination airports, competitive pricing, and an increase in the choice of airlines. A general suggestion to improve management and organization included possibly reducing the levels of management which may encourage better communication between management, stakeholders, airport employees, and the travelling public.

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2.2 Survey Summary The Airport survey was sent to a list of 92 possible respondents, of which 48 completed surveys were received for a 52% response rate. Ninety percent of respondents believe that the Airport serves as a valuable economic asset. More importantly, 80% of all respondents believe that aviation growth in Lehigh Valley is very important while the remaining 20% believe aviation growth is somewhat important to the area. A review of overall survey comments shows consistency in sentiment. Overall, the improvements needed at the Airport to improve its efficiency and effectiveness include the following: More airlines; Cheaper airfare; More destination airports; More non-stop flights and; Improved communication and public outreach initiatives.

To supplement the survey results, Study Team members met with various stakeholders to conduct interviews. The interviewee was asked to describe their background and their familiarity with the reporting structure at LVIA. In addition, they were also asked to provide their opinion on the general efficiency and effectiveness of the Airport and their Department, challenges faced by the Airport and suggestions for Airport improvement. The Study Team has thoroughly assessed all survey and interview findings and has considered them within the organizational evaluation, findings and recommendations section of this report.

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3.0

COMPARABLE AIRPORTS ANALYSIS

In an effort to better correlate current practices relating to airport management with the Lehigh Northampton Airport Authority (LNAA), an analysis was performed comparing several key aspects of LNAA and Lehigh Valley International Airport (LVIA) with similar airports throughout the Region and the United States. The following sections: (1) describe the approach employed to determine the list of comparable airports; (2) provide an overview of the selected comparable airports in the context of an organizational, management, and operational framework; (3) compare human resources data and practices; and (4) provide an overview of comparable airport trends. 3.1 Comparable Airports Data Collection, Screening and Selection

The screening process to determine comparable airports began with collecting passenger boarding data, also called enplanements, from the Federal Aviation Administration (FAA). Data from 2006 was used as it was the last complete year for which this data set was available at the time this study was commenced. The data set was imported into Excel spreadsheet format and included information for all domestic airports that had scheduled air carrier service. This data included: Rank (based on enplanements); City and State; Three-letter airport code (e.g. ABE); Airport name; Service level; FAA hub classification; 2006 enplanements; 2005 enplanements; and Percentage change in enplanements between 2005 and 2006

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This data was then organized first by each airports 2006 enplanements (passenger boardings), then by service level; and lastly by hub type to remove from the list airports that are not comparable to LVIA. Upon removing the identified non-comparable airports from the data, only airports meeting the following criteria from the remaining data were kept to consider: Proximity to a large hub airports (e.g. Philadelphia International Airport); Serves as a regional airport; Operates a system of airports; and Governance/Management structure (Authority, Board, County, Municipal, etc.).

The data set remaining for further analysis consisted of sixteen (16) airports chosen by the Study Team that met some or all of the above criteria. An airport was not required to meet all criteria, but rather provide examples of different governance structures from similar situated airports. For example, the Study Team considered other airports in Pennsylvania that have an Authority and were formed under the same municipal authorities act as LNAA; others were considered as a result of their County governance model; and others were looked at because of their Authority type governance structure formed outside of Pennsylvania, both large and small scale. The five (5) comparable airports chosen to be included in this analysis are a mix of the criteria discussed above, providing the Study Team with a cross representation of comparable airport information. These airports are identified in Table 3.1. Detailed information obtained from these airports is presented later in this Section of the report.

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Comparable Airports Analysis Page 3-2

U.S. Rank

FAA Loc. ID

City

State

Airport Name

Hub Type

CY 06 Enplanements

CY 05 Enplanements

% Change

Lg. Hub Competitor

Governance Structure

Dist. to Large Hub (mi) 72 Authority 78 73 33 62 110 97 Authority Yes / 2 County Authority Quasi-State Yes / 2 No / 0 Yes / 6 Yes / 3 System of Airports/#

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134 Newark M S M 2,588,992 2,846,002 -9.03% Boston Logan Philadelphia S 577,559 647,468 -10.80% Baltimore Washington Lehigh Valley Newark JF Kennedy N 156,638 199,741 -21.58% LaGuardia Albany 915,135 789,795 15.87% Orlando 3,630,098 3,602,536 16.76% Chicago OHare

Lehigh & Northampton Counties February 6, 2009


S 397,603 419,122 -5.13% Philadelphia

ABE

Allentown

PA

Lehigh Valley International

49

MKE

Milwaukee

WI

92

SFB

Sanford

FL

60

PVD

Providence

RI

General Mitchell International Orlando Sanford International Theodore Francis Green Airport

108

MDT

Harrisburg

PA

Harrisburg International

3.1 Comparable Airports Matrix

92 72 79 Authority 69 98 Yes / 6

Source: Federal Aviation Administration and Yahoo Maps. Note: Hub Type is FAAs Airport Classification: M = Medium Hub; S = Small Hub; N = Non-Hub.

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Comparable Airports Analysis Page 3-3

194

SWF

Newburg

NY

Stewart International

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3.2

Comparable Airports Overview

When making comparisons between airports, it is most useful to balance quantitative metrics, those things capable of being expressed numerically, and qualitative metrics, those things described in terms of quality or character. In an airport environment there are both numerous quantitative and qualitative metrics that can be considered. For this study, a framework was developed for use when contacting representatives of the comparable airports that included questions related to both qualitative and quantitative metrics in three key contexts: Organizational; Management; and Operational.

A copy of this framework is provided in the Appendix. Contact information for key personnel including the Airport Directors and Human Resources Directors from each comparable airport was compiled and is also found in the Appendix. Initial and follow-up telephone interviews with each key person identified were conducted between August 15 and December 1, 2008. All five airports that were contacted were willing to participate and included the following airports: General Mitchell International Airport (Milwaukee, WI); Orlando Sanford Airport (Sanford, FL); Theodore Francis Green Airport (Providence, RI); Harrisburg International Airport (Harrisburg, PA); and Stewart International Airport (Newburgh, NY).

The information garnered from the interviews is presented below within the three contexts of the framework identified previously (organizational, management, and operational). Organizational charts provided by each of the airports contacted are found at the end of this section.

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3.2.1

Organizational Context

The Organizational Context is comprised of those aspects of the airport which directly relate to organizational structure and size, governing body, financing, etc.

Lehigh Valley International Airport


Lehigh Valley International Airport (LVIA) is a FAA-designated regional commercial service airport to the Lehigh Valley area and it is part of a multi-airport system that includes two general aviation airports (Queen City Airport and Braden Airpark). LVIA is owned by both Lehigh and Northampton Counties, and is operated by the Lehigh Northampton Airport Authority (LNAA). The LNAA, which is an autonomous, independent agency, was established under the Pennsylvania Authorities Act and employs approximately 129 staff. Primary financing for Lehigh Valley International comes from a mix of Passenger Facility Charges (PFC), (currently at the maximum allowable $4.50), Authority-Issued Bonds, and user fees. The Authority is directed by a Board of Governors, who is charged with making policy, approving budgets, setting criteria for contracts, and approving any contract or procurement item for more than $15,000. The Board consists of 19 members; 10 members are appointed from Lehigh County and 9 members are appointed from Northampton County and serve 5 year terms with no term limits. The Executive Director of Lehigh Valley International is hired by the Board and is a contract employee. While the terms of the contract may vary, it generally consists of a 4-year term with at least one automatic one-year renewal.

General Mitchell International Airport (Milwaukee, Wisconsin)


General Mitchell International Airport (Milwaukee) serves the commercial air service needs of the greater Milwaukee area in Wisconsin. It is part of a multi-airport system consisting of one commercial and one general aviation airport, Timmerman Airport.

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Milwaukee is owned and operated by Milwaukee County, with an approximate staff of 200 personnel. Financing for CIP projects comes from a mix of user fees and AIP entitlement funds. The Airport is overseen by a 19-member County Board who are elected officials from the community at-large. The Board is responsible for setting policy and budget approval. The Airport Director is an at-will employee of the County who is hired by the Director of Public Works, who then must get approval from the County Executive and then the County Board. The Airport Director must go through a performance review and approval from the County Board every 4 years.

Orlando Sanford International Airport (Sanford, Florida)


Orlando Sanford International Airport (Sanford) serves as a commercial reliever airport to Orlando International Airport, with a high percentage of its passengers coming from the leisure traffic market. It is a single airport that is owned by the City of Sanford financed primarily through AIP entitlement funds and user fees. Orlando Sanford International is operated by the Sanford Airport Authority, which includes a staff of 55 people and a 9-member Board of Directors who are appointed by the Sanford City Commission to 4 year terms with no term limits. The Board is responsible for setting policy, budget approval, and the employment/hiring of the Airport CEO. The CEO is hired directly by the Authority, and is a contract employee of the Authority with a contract term of 3 years.

Theodore Francis Green Airport (Providence, Rhode Island)


Theodore Francis Green Airport (Providence) serves the commercial service needs of the state of Rhode Island, eastern Connecticut and northeastern Massachusetts, and is part of a multi-airport system that includes Providence and five general aviation airports: Block Island State Airport, North Central State Airport, Quonset State Airport, Westerly State Airport, and Newport State Airport/Robert F. Wood Airpark.

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Providence is owned and operated by the Rhode Island Airport Corporation (RIAC), a quasiindependent agency, and is overseen by an Airport Board. RIAC employs 185 full and part time employees. Financing is through AIP and user fees. The Airport Board consists of seven (7) members and is charged with setting policy, budget approval, and the hiring of the CEO. One Board member is appointed by the Mayor of Warwick, and six by the Governor of Rhode Island. The CEO is hired by the Board and is a contract employee of the Board.

Harrisburg International Airport (Harrisburg, Pennsylvania)


Harrisburg International Airport (Harrisburg) serves as a FAA-designated regional commercial service airport as a part of a multi-airport system that includes one commercial service airport and three general aviation airports: Capital City Airport, Franklin County Regional Airport, and Gettysburg Regional Airport, all serving central Pennsylvania. Harrisburg is owned and operated by the Susquehanna Area Regional Airport Authority (SARAA), and is financed through AIP, Airport Revenue Bonds, and user fees. The Airport has 120 full and part-time staff. The SARAA Board consists of 15 members that are appointed by the respective elected officials for the counties of Dauphin, York, and Cumberland, and the townships of Fairview and Lower Swatara. Board members are responsible for setting policy, budget approval, and the hiring of the Executive Director. The Executive Director is an at-will employee of the Board, and is subject to annual performance reviews.

Stewart International Airport (Newburg, New York)


Stewart International Airport (Stewart) serves as one of four commercial service airports owned by the Port Authority of New York and New Jersey (PANYNJ). The system of airports owned by the PANJNY also includes Teterboro Airport, which serves as a general aviation reliever airport. This

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system of airports serves the needs of southern New York, southwestern Connecticut and northern New Jersey (New York Metropolitan Area). Financing for Stewart comes from a mix of AIP, PFC, and user fees. The Airport has a staff of approximately 54 full time staff, which is a mix of PANYNJ staff, private management and consultants. The PANYNJ Board of Commissioners consists of 12 members. Both New York and New Jersey appoint 6 members, which are subject to state Senate approval, with members serving 6year overlapping terms. The Commissioners serve as public officials, are responsible for setting policy and budget approval for all of the transportation services that are covered by the PANYNJ. The General Manager is a direct at-will employee of the PANYNJ. A summary table of the comparable airports organizational comparison can be found in Table 3.2 below and the airports organizational charts can be found on the following pages.

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Table 3.2 Comparable Airports Organizational Context Airports


Lehigh Valley International General Mitchell International Orlando Sanford International Harrisburg International Stewart International MultiAirport 54 Board of Commissioners 12 Appointment by States 6 Years No PFC Investments AIP Entitlement T.F. Green (Providence) MultiAirport

Single or Multi Airport System Number Of Full Time Staff Governing Body Number Of Governing Officials

MultiAirport

MultiAirport

Single Airport

MultiAirport

129

200

55

185

120

Airport Authority

County Board

Airport Authority

Airport Board

Airport Board

19

19

15

organization

Official Selection

Appointment by County Executives

Elected by the Public

Appointment by City Commission

Appointment by Warwick Mayor & RI Governor

Appointment by Counties & Townships

Term Length Term Limits

5 Years

5 Years

4 Years

5 Years

5 Years

No User Fees, PFC, Authority Issued Bonds

No

No

No

No

Primary Financing

User Fees AIP Entitlement

Bonds PFC AIP Entitlement

User Fees AIP Entitlement

User Fees Bonds AIP Entitlement

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Lehigh Valley International Airport


Lehigh Northampton Airport Authority Board of Governors Legal Counsel Executive Director

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Deputy Executive Director

Special Assistant to the Executive Director Administrative Assistant

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Assistant to the Deputy Executive Director Braden Airpark Senior Project Manager
Business Dev. Coord Admin Asst. Planner Engineer Clerk Business Dev. Mgr. Maintenance (25) Police Division Fire Division Comm Center Custodial Supervisor Airline Services Manager ATOstation Mgmt Custodians (18) FBO LineOps Mgr. Clerk Project Engineer Assistant Superintendent of Maintenance

Director of Administration

Director of Finance & Budgets

Airport Planner

Director of Public Safety

Director of Bus. Devlpmt

Superintendent of Maintenance

Director of LVIA Aviation Services

Systems Director

Systems Tech.

Superintendent Ground Trans. Terminal Srvcs

Properties Manager

H.R. Acct. Generalist

Airline Services Manager

Clerk

Parking Attendants

Supervisor Passenger Services

Land Aqui. Specialist

Accounting Clerk

Passenger Services Coord.

Passenger Services (25) FBO LineOps Mgr.

Line Techs Cour. Hgr asst

Accounting Mgr.

Desk Reps

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QC LineOps Mgr.

Line Techs

General Mitchell International Airport


Milwaukee County

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Executive Director

(Non-Airport)

(Non-Airport)

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2 Student Interns Airport Engineers Airport Planner General Counsel GIS Specialist Deputy Director Ops/Maintenance
Law Enforcement
(Non-Airport)

Manager Marketing/ Public Relations

Administration

2 Airport Interns

Noise Abatement

Deputy Director Finance/Admin

Ground Transport & Parking Manager

. (8)

Accounting Contracts

Secretary

Properties Mngr

Properties Spc

Operations Mngr

Environmental Mngr

Maintenance Mngr

Admin. Asst.

Safety & Training Specialist Operations Staff Maintenance Staff

Comparable Airports Analysis Page 3-11

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Orlando Sanford Airport Authority


City of Sanford Mayor and City Commission Sanford Airport Authority General Counsel Board of Directors President and Chief Executive Officer Incident Commander/Law Enforcement Director of Special Affairs

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Vice President of Operations Construction Management Airport Police & Dispatch Airfield Maintenance Horizontal Finance & Accounting Airport Operations & Safety Vertical Information Technology Airport Security Compliance & Access Control Aircraft Rescue/Firefighting (ARFF Renovation Grant Administration Remodeling

Vice President of Administration

Vice President of Finance/CFO & Airport Chief of Police

Properties

Human Resources

Office Administration

Building Maintenance

Comparable Airports Analysis Page 3-12

Final Report Airport Management Study Lehigh Valley International Airport

Public Information Officer

T.F. Green Airport


Board of Directors

Manager Audit President & CEO Manager of Exec. Support Services

Manager Audit

Chief Auditor & Financial Analyst

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VP Public Affairs & Air Service Marketing Receptionist Admin Asst. TSS Director Human Resources

Sr Admin Asst.

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General Counsel Lawyer Paralegal HR Manager Payroll Manager Planning, Engineering, and Environmental Emerg. Resp. Coordinator Operations and Maintenance VP Env Mgmt Sys Capital Program Manager Proj Mgr. Proj Mgr. CADD Op TSS Airport Planner P/T Airport Planner Chief of Police Captain Lts (4) Inspector Badge Coord TSS Badge Coord Manager Eng. Manager Plng. Mgr Env Prog Envn Proj Mgr Noise Prog Mgr TSS Aeronautics Ins. GA (Landmark) Fire Chief Deputy Captains (4) P/T TSS AVP Buildings Mgr Buildings Snr TSS AVP Ops & Maintenance Mgr Ops Mgr Airfield TSS

Community Relations

Air Service Mktg Analyst

TSS

Sr. VP. Finance and Admin

TSS II

VP Commercial Programs

Corp. Controller

Chief Tech. Officer

AVP Comm. Prog.

Proc. Specialist

Senior IT Analyst

IT Analyst

Mgr Parking/ Ground Trans. Contr. Mgr Adm.

Finance Mgr.

IT Analyst

Accounting

Accounting

IT Analyst

Accounting

Accounting

Grants/Contracts

Proj. Cont. Mgr/DBE Liaison Off.

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Final Report Airport Management Study Lehigh Valley International Airport

Project Acct

Harrisburg International Airport


Susquehanna Area Regional Airport Authority

Executive Director

Administrative Assistant Deputy Executive Director

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Deputy Director of Planning & Engineering Deputy Director, Security Ops, & Public Safety
Information Technology Manager Police Chief Building Maintenance Supervisor Fire Chief Utilities, Water,/ Sewer Manager CXY, FCRA & EGY Manager Manager, Terminal Facilities, Parking, & GT Environmental Program Manager Engineering Administrative Assistant Information Technology Technicians Custodial CXY, FCRA & EGY QA Manager Supply Supervisor Baggage Handling System Traffic Control Officers Airport Operations Specialists Maintenance Dispatch Manager Custodial (Contract) Planning & Design Vehicle Maintenance Supervisor Dispatch Operations Assistant Construction Management Airfield Maintenance Supervisor CXY, FCRA, & EGY Administration

Deputy Director of Finance & Administration

Deputy Director of PR & Marketing

Accounting Manager

H.R. Manager

Marketing & Customer Svc Manager

Part Time Accountant

H.R. Assistant

Property Manager

AR/AP Specialist

Customer Info/ Susquehanna Club

Purchasing Agent

Receptionist

Advertising & Marketing

Comparable Airports Analysis Page 3-14

Final Report Airport Management Study Lehigh Valley International Airport

Techs

Stewart International Airport


The Port Authority Of New York & New Jersey

General Manager

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Executive Business Manager Airport Operations & Security Manager Properties & Business Development Manager Airport Operations & Security Manager Properties & Business Development (As Needed) Airport Airport Operations Services & Security Manager Mx. Services Manager Ops Services Manager Admin/Business Manager Project Manager Sr. an Jr. Operations Supervisors Accounts Payable, Accounts Receivable, Payroll, Properties & Leases Receptionists P/T

Administrative Support Specialist

Plant, Structures, & Redevelopment Manager

Resident Engineer

Program Manager

Construction Inspectors (As Needed)

Project Managers

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Facility Maintenance Staff

Systems Maintenance Staff

Vehicle Maintenance Staff

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3.2.2

Management Context

The Management Context is comprised of those aspects of the airport which directly relate to airport management issues such as executive management spending authority, minimum standards, procurement, capital improvement program, capital projects management, and overall budget. For consistency in reporting, the Study Team utilized the Federal Aviation Administrations (FAA) Compliance Activity Tracking System (CATS), Report 127 for each comparable airport. None of the comparable airports utilized participated in the most recent benchmarking survey completed by the Airports Council International North America.

Lehigh Valley International Airport


The original terminal constructed at Lehigh Valley International was built in the 1970s, with major reconstruction and expansion occurring in 1996 and minor renovations occurring in 2000. Capital Improvement Projects are handled by on-site staff in conjunction with assistance from consultants for larger projects, with smaller projects handled entirely in-house. Lehigh Valley International has a tiered procurement structure, with any procurement item under $10,000 only needing three quotes and taking approximately 1-2 days from quote to purchase. Any item greater than $10,000 must go to bid and items greater than $15,000 requires Board approval. For those items that are required to go through the bid process, the Authority uses an average 30day bid period, with a one-week period following for proposal selection and final approval. Minimum standards are in place at Lehigh Valley International, and are primarily a function of the flight schools. The last update of the minimum standards occurred approximately 10 years ago. As reported by the FAA, LVIA had $8.3 million in unrestricted financial assets in 2007 with operating expenses of $15.5 million equating to an expense ratio of approximately $36.40 per enplaned passenger. As reported by the Airport, their 2007 Rate Base to Airlines was $14.15 per enplaned passenger.

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General Mitchell International Airport (Milwaukee, Wisconsin)


The first airport terminal at Milwaukee was constructed in 1955, with reconstruction, expansion and rehabilitation projects occurring in 1984, 1990, and 2007. Minimum standards were established in 1966, and are amended as needed with no wholesale updates. Other than for emergency purposes, the Airport Director is allowed to spend as-needed, as long as it is approved within the annual budget. Variances need to prior approval. Capital improvements are primarily managed by Milwaukee staff, in conjunction with consultants on an as-needed basis. As reported by the FAA, Milwaukee had $110.9 million in unrestricted financial assets in 2007 with operating expenses of $46.2 million equating to an expense ratio of approximately $12.21 per enplaned passenger. As reported by the Airport, their 2007 Rate Base to Airlines was $4.61 per enplaned passenger.

Orlando Sanford International Airport (Sanford, Florida)


The terminal facility at Orlando Sanford International was originally built in the 1940s, and was renovated in 2001. Minimum standards are in use at the Airport, with the last update occurring in 1996 and more updates anticipated in 2007. The spending authority of the Airport CEO varies, with no set limit on spending before needing Board authorization. The entire procurement process takes an average of 45 days to occur, and the Airport CEO has the authorization to spend the money on the project or item so long as there is money in the Airport budget. Capital Improvement Projects are managed by the Authority staff (primarily planners and engineers), in conjunction with consultants on larger projects. As reported by the FAA, Sanford had $3.8 million in unrestricted financial assets in 2007 with operating expenses of $7.2 million equating to an expense ratio of approximately $7.30 per enplaned passenger. The Airports Rate Base to Airlines was not available.

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Theodore Francis Green Airport (Providence, Rhode Island)


The original terminal was dedicated in 1931, and was completely remodeled in 1996. Minimum standards are in use for certain activities, and it was not known when the last update occurred. Board approval is required for any expenditure $50,000 or greater, and the procurement process takes approximately 30 days. Capital improvements are primarily managed by RIAC staff, in conjunction with consultants on an as-needed basis. As reported by the FAA, Providence had $41.5 million in unrestricted financial assets in 2007 with operating expenses of $28.8 million equating to an expense ratio of approximately $11.52 per enplaned passenger. The Airports Rate Base to Airlines was not available.

Harrisburg International Airport (Harrisburg, Pennsylvania)


In 1968 what was Olmstead Air Force base was decommissioned and Harrisburg International Airport began commercial service utilizing the existing facilities, which were remodeled over the years. However, in 2001 a brand new terminal was constructed. Harrisburg is currently in the process of redeveloping their minimum standards. The Executive Director has a spending limit of up to $50,000, with Deputy Directors allowed between $5,000 and $10,000. Capital improvement projects are primarily managed by airport staff in conjunction with consultants as needed. As reported by the FAA, Harrisburg had $2.1 million in unrestricted financial assets in 2007 with operating expenses of $14.0 million equating to an expense ratio of approximately $21.75 per enplaned passenger. As reported by the Airport, their 2007 Rate Base to Airlines was $14.65 per enplaned passenger.

Stewart International Airport (Newburgh, New York)


The original terminal at Stewart International Airport was constructed shortly after the airport was decommissioned as a military installation in 1970. In 1997 the terminal was reconstructed to the

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existing facility, with a redesign occurring in 1998. There are no spending authority limitations; however expenditures must fall within the approved budget. Capital improvements are managed by a combination of PANYNJ and consultant staff. As reported by the FAA, Stewart had $42.7 million in unrestricted financial assets in 2006 (2007 was not available as a result of the transition of the Airport from a private firm to the PANYNJ) with operating expenses of $6.2 million equating to an expense ratio of approximately $39.43 per enplaned passenger. The Airports Rate Base to Airlines was not available. A summary table of the unrestricted financial assets and the operating expense comparisons can be found below in Table 3.3. A summary table of the comparable airports management comparison can be found in Table 3.4. Table 3.3 Comparable Airports Financial Comparison
Airport Unrestricted Financial Assets ($ Million) $ 8.3 2.1 110.9 41.5 3.8 42.7 Annual Enplanements (rounded) 427,000 643,000 3,751,000 2,500,000 986,000 455,000 Operating Expense ($ Million) Total Expense Per Enplaned Passenger $ 36.401 21.75 12.21 11.52 7.30 39.43 Total Expense Per Employee $ 120,155 116,667 231,000 155,675 130,909 114,814 Airline Rate Base Per Enplaned Passenger $ 14.15 14.65 4.61 N/A N/A N/A

2007
Lehigh Valley Harrisburg Milwaukee Providence Sanford Stewart5
Notes: 1. 2. 3.

$ 15.5 14.0 46.2 28.8 7.2 6.2

4. 5. Sources: 1. Airline Rate Base information provided directly by each airport. 2. Federal Aviation Administration AAS-400 Compliance Activity Tracking System (CATS), Report 127. 3. FAA Calendar Year Enplanements Compiled from Air Carrier Activity Information System (ACAIS).

LVIAs Total Expense per enplaned passenger is higher as a result of providing various revenue generating services that are not provided by the comparable airports with the exception of Stewart. N/A = Not available. None of the comparable airports for this study participated in the most recent Airports Council International North America (ACI-NA) Benchmarking Survey. Expense includes all operating expenses. It does not include non-operating expenses such as interest expense, etc. SWF is 2006 data. 2007 was not available.

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Table 3.4 Comparable Airports Management Context

Airports
Lehigh Valley International General Mitchell International Orlando Sanford International Harrisburg International Stewart International Yes 30 Day Average Cycle As Approved by the Budget Only Staff with Consultants As Needed Built: 1970 New Terminal: 1997 Redesign: 1998 T.F. Green (Providence) Yes

Minimum Standards

Yes Less than $10,000 2 Days; More than $10,000 4 Weeks

Yes

Yes

Yes

Procurement Cycle

Varies

30 Day Average Cycle

30 Day Average Cycle

30 Day Average Cycle

Spending Authority

Board Approval Over $15,000 Staff with Consultants As Needed Built: 1970s Remodeled: 1996

As Approved by the Budget Only Staff with Consultants As Needed Built: 1955 Expanded: 1984, 1990, & 2007

Varies

Board Approval Over $50,000 Staff with Consultants As Needed Built: 1961 Remodeled: 1996 Improvemen ts: 2008

Executive Director: $50,000 Deputy Directors: $5,000 $10,000 Staff with Consultants As Needed Built: 1970 New Terminal: 2004

management

CIP Management

Staff with Consultants As Needed Built: 1940 Remodeled: 2001 New Garage: 2007

Terminal Facilities

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3.2.3

Operational Context

The Operational Context is comprised of those aspects of the airport which relate directly to the Fixed Base Operations (FBO) and airline operations, airside/landside airport operations, contract services, and FAA services, among others.

Lehigh Valley International Airport


Currently, eight airlines operate out of Lehigh Valley International serving 12 destinations. All ticket counter, baggage, and gate areas utilize Common Use Terminal Equipment (CUTE), allowing and airline to enter service at the Airport by simply connecting into the computer systems with limited to no upfront modifications required. As a result, Lehigh Valley International has operating agreements with the airlines for the space they use that are approved by Board resolutions. Fixed Base Operator (FBO) services are all provided by the Authority at LVIA and Queen City Airports, including fueling, aircraft maintenance, as well as ground handling for all airlines. Braden Airpark is operated under contract by Moyer Aviation. No self-fueling is allowed at Lehigh Valley International. The Air Traffic Control Tower is FAA-staffed and provides 24-hour service. There are no contracted services at Lehigh Valley International, all services including parking, janitorial, operations, and security are handled within the Authority organization.

General Mitchell International Airport (Milwaukee, Wisconsin)


General Mitchell International Airport currently has eleven airlines that serve 47 destinations. Ticketing areas are exclusive use, while baggage and gate areas are common use. There is one FBO located at each of the Airports operated by the County. The County handles all operational needs, with the exception of parking services, which are handled by a contract company. The Air Traffic Control Tower (ATCT) is staffed by FAA personnel, and provides service on a 24 hour, 7 day a week basis.

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Orlando Sanford International Airport (Sanford, Florida)


Orlando Sanford International is home to five airlines that serve an average of 35-40 destinations, depending upon the time of year, as their leisure traffic tends to be highly seasonal. The use of ticketing, baggage, and gate areas are common use throughout the terminal for all five airlines. In addition there are two Fixed Base Operators at Orlando Sanford International, both of which are operated under a management contract in place with TBI Management. This management contract covers all of the daily on-site operational and management needs of the Airport Authority, including operations, maintenance, ground handling, janitorial services, and the Fixed Base Operators. The ATCT is staffed by FAA personnel, and provides limited hours of service from 6:30am until 11pm.

Theodore Francis Green Airport (Providence, Rhode Island)


Providence currently has 10 airlines that serve 24 direct destinations. The use of gates and ticket counters are exclusive use, with baggage areas as common use. There are two FBOs located at Airport and a single FBO operator at each of the GA airports. RIAC handles all of the operational needs of the Airport, and operational needs at the GA airports are handled by the FBO. The ATCT is FAA staffed, and provides limited hours of service from 6:00 am to 11:00 pm.

Harrisburg International Airport (Harrisburg, Pennsylvania)


Harrisburg International Airport is currently served by seven airlines that serve 13 direct destinations. Ticket counters and baggage offices are exclusive use, gates are preferred use, and baggage claim is common use. The operational needs at the Airport are primarily handled in-house, with parking and janitorial services contracted out. There is a single FBO at each of the airports. In addition, operations needs at the GA facility are contracted out. The ATCT is FAA staffed, and provides service on a 24 hour, 7 day a week basis.

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Stewart International Airport (Newburgh, New York)


Stewart International Airport currently has four airlines serving five destinations. The operational needs of the Airport are contracted out to a private company. There are two FBOs at the Airport. The ATCT is a contract tower, and provides service on a 24 hour, 7 day a week basis. Stewart recently underwent a transition from a private company under the FAAs Privatization Pilot Program to being operated by the PANYNJ. Many of their operational needs are currently under review for their efficiency and effectiveness. A summary table of the comparable airports operational comparison can be found in Table 3.5 below.

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Table 3.5 Comparable Airports Management Context

Airports
Lehigh Valley International General Mitchell International Orlando Sanford International Harrisburg International Stewart International 2 Private Ownership Full Service 4 5 Ticket Counters & Bag Offices: Exclusive All Other Areas: Common Contract 24 Hour Service Daily Operational Needs T.F. Green (Providence) 2 Private Ownership Full Service 10 24 Ticket Counters & Bag Offices: Exclusive All Other Areas: Common FAA Limited Hours: 6 am 11 pm

No. of FBOs FBO Ownership Services Provided No. of Airlines No. of Destinations

1 Authority Ownership Full Service 8 12

1 Private Ownership Full Service 11 47 Ticket Counters & Bag Offices: Exclusive All Other Areas: Common FAA

2 Private Ownership Full Service 5 35-40

1 Private Ownership Full Service 7 13 Ticket Counters & Bag Offices: Exclusive All Other Areas: Common FAA

operational

Common and Exclusive Use Areas

All Areas: Common

All Areas: Common

ATC Staffing

FAA

FAA Limited Hours: 6:30 am 11 pm

ATC Hours

24 Hour Service

24 Hour Service

24 Hour Service MDT: Parking , Janitorial, Snow Removal CXY: Daily Operational Needs

Contracted Services (1)(2)

ABE & JVU: None N43: Daily Operational Needs

Parking

Daily Operational Needs

None

(1) Daily Operational Needs: Includes operations, parking, janitorial, & maintenance (2) JVU: Queen City Airport N43: Braden Airpark CXY: Capital City Airport

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3.3

Human Resources

This section reviews the general conditions of employment of the Lehigh Northampton Airport Authority (LNAA). Research of the current policies and procedures of LNAA was conducted and obtained through: Telephone calls and exchange of emails to the Deputy Director of Administration at LNAA provided much of the information. Reviews of LNAA printed matter including the LNAA Policies and Procedures for NonBargaining Unit Employees as well as the LNAA Policies and Procedures for Union Employees and the various bargaining agreements currently in place. Additionally, the Airports website was also available for review. Assessment of LNAAs Policies and Procedures Manual for Non Bargaining Employees and other related policies which included employment, hours and compensation, employee benefits, safety, conduct and discipline, employee relations and various pertinent appendices of the manual. Examination of LNAAs organization chart, employee salary schedules, employment application, job vacancy notices, and benefit packages offered to employees. The specific methodology of this survey will be discussed under Section 3.3.2 Compensation and Benefits Survey. Unless otherwise stated, the analysis and recommendations within this report are based upon information obtained during the months of October and November 2008. The assessment was to determine (a) if the human resources practices at LNAA meet generally accepted practices, and (b) if these practices are comparable to those of airports of similar size.

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3.3.1

Human Resources Practices and Policies

The focus of the assessment was to determine: If the LNAAs human resources infrastructure is adequate, If the employment practices meet generally accepted human resources practices, and If these practices are comparable to the practices of airports of similar size.

Acceptable policies are in place to handle the selection, management, discipline and termination of employees. Currently there is no dedicated human resource staff to directly oversee the human resources operation at LNAA. The Deputy Executive Director is the chief negotiator for union contracts and has overall responsibility for the Human Resource function and there is a Director of Administration reporting to him, as well as a HR and Accounting generalist who provide staff support. In the event of an increase in the number of Airport employees, a more formal human resources structure may need to be established to meet the needs of the Airport employees. A review of all documents relating to LNAA employment that was provided by staff was completed. The majority of these policies and procedures meet generally acceptable standards. A detailed analysis of the publication, Lehigh-Northampton Airport Authority Policies & Procedures Manual reveals a few items that may need to be addressed in order to comply with acceptable practices, and to reduce potential risk. While these recommended revisions are minor in scope, they are included below for consideration: The Policy Manual Purpose (Section 1.1) should include the following statements: o This Policy and Procedure manual supersedes any Policy and Procedure manuals previously issued and thus any manual previously issued is hereby revoked.

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A page should be included which documents an acknowledgement of receipt of the manual by the new employee. The signed copy can be filed in an appropriate file. The signed document will also indicate understanding of at-will employment.

The Manual should indicate an effective date. This would enable the management team an opportunity to keep track of changes and revisions.

Although there is mention of a Personnel Manager throughout the manual, there is no such position listed on staff. Management staff may wish to use alternative titles for consistency purposes.

There are different dates of enrollment for employee benefits. Given the little or no turnover experienced at the Airport in recent years, this may not create any concern. However, management staff should consider enrolling all new employees in the benefit plans (especially health and welfare) using the same waiting period, i.e., first of the month following employment or other alternative.

Similarly, in Section 4.22, mention is made of a Severance plan which employees may join after one year of service. There is no description in the Benefit section for this particular plan.

Discussions with Airport staff confirmed that there are no difficulties with recruitment and retention of Airport employees. The overall turnover rate for full-time employees at LNAA was reportedly 2% in 2006. Discussions with the staff at LNAA indicated that they did not track turnover in 2007 and 2008 because it is so low. This initial information suggests that there appears to be little difficulty with LNAA recruiting and retaining employees. A more comprehensive industry comparison utilizing information from the airports in the survey will be discussed in the next section.

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3.3.2

Compensation and Benefit Survey

The comparable airports Human Resources departments were contacted to complete a Compensation and Benefits Survey. Surveys were sent via e-mail and were followed up with telephone calls and e-mails. A copy of the survey instrument is included in the Appendix of this report. All five airports identified for this study completed the survey instrument. Key Survey Findings The comparison survey with the five responding airports show that the airports ranged in size from 54 to 221 employees, with the average number of employees equal to the number of employees for LNAA (LNAAs 129 positions compared to the survey sample average of 129 employees). The turnover rate for LNAA was appreciably below others and, in fact has not been tracked over the past two years. The average fringe benefit rate of the survey respondents was approximately 25.65%, substantially lower than the LNAA reported fringe rate of 37%. Further review of the specific fringe benefits offered by the airports indicated that LNAAs practice of employer pay all for employee benefits to be the principal reason for the variance. Other benefits, such as retirement, leave, and miscellaneous benefits were generally comparable to benefits offered by the other responding airports. LNAA reported lower than average salary increase than any of the other responding airports in the survey. LNAAs average increase (non-union staff) was 2.30% compared to an average of 3.45% for three respondents. The wage comparison section of the survey suggests that LNAAs salary ranges are competitive since turnover has been nil and the spread between range minimums and maximums are within the generally accepted guidelines of 80% of midpoint as minimum and 120% of midpoint as maximum.

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3.3.3

Survey Results

Number of Employees At the time of the survey, LNAA had 129 employees. Based on the number of employees on staff, LNAA ranked the fourth smallest of the five airports included in the survey (Figure 3.1). Data obtained on Orlando Sanford was obtained through their website. Figure 3.1 Number of Employees

NUMBER OF EMPLOYEES
AVERAGE Milwaukee AIRPORT Providence Lehigh Valley Harrisburg Sanford Stewart 0 50 54 100 150 200 250 77 109 129 184 129 221

Annual Fringe Benefit Cost Fringe Benefits are non-payroll benefits that employers provide their employees. Not only do fringe benefits include health insurance, but also programs to provide financial security and to improve quality of life. An employers Fringe Benefit Rate is normally calculated by adding the annual costs of all of benefits and presenting that as a percentage rate compared to overall payroll costs. For example, a Fringe Benefit Rate of 25% could be interpreted to mean that for every one hundred dollars ($100) paid to an employee through payroll, the company pays an additional twenty-five dollars ($25) in fringe benefits. Five of the six participating airports responded to the question regarding their Fringe Benefit Rate. Information regarding General Mitchell International Airport was obtained from the Milwaukee County website (staff at this airport is employed by Milwaukee County). Of the five (including
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LNAA) their average rate was 25.65%. LNAAs rate was significantly higher, at 37% as reflected in Figure 3.2. Figure 3.2 Annual Fringe Benefit Cost

FRINGE BENEFIT RATE


AVERAGE Milwaukee AIRPORT Lehigh Valley Providence Harrisburg Sanford Stewart 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 9.25% 23.00% 20.00% 25.65% 39.00% 37.00%

0.00%

Turnover Rates The annual turnover rate of an organization reflects the number of employee separations divided by the average number of employees throughout the year. LNAAs annual turnover rate for 2006 was estimated to be 2%. According to the Deputy Executive Director, turnover was so low, that it has not been tracked in recent years. Turnover for the year 2007 at three other airports ranged from 3.4% (Providence) and 5.0% (Harrisburg) to 18.75% (Sanford). Pay Increases Respondents were asked if pay increases to their employees were based on merit (performance), based solely on cost of living adjustments, or based on a combination of performance and cost of living. LNAA employee pay increases are based on a combination of merit and cost of living increases. One of the airports (Sanford) reported that their pay increases were based solely on cost of living adjustments. The other airports reported that increases were based on a combination of both.
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Figure 3.3 reflects the pay practices of the airports and provides the average annual increase for each airport in 2007. LNAA reported an average pay increase of 2.3%, slightly less than the average of all other respondents. Figure 3.3 Pay Increases

AVERAGE PAY INCREASE


AVERAGE Harrisburg AIRPORT Providence Stewart Milwaukee Sanford Lehigh Valley 0.00% 1.00% 2.00% 2.3% 3.00% 4.00% 5.00% 6.00% 3.0% 3.0% 3.5% 3.5% 3.6% 5.0%

3.3.4

Benefits

Health Care Benefits The Health Care portion of this section asked specific questions regarding the types of health care insurance offered and the amount of premium shared by the employer and the employee for four tiers of coverage (single, employee + child, employee + spouse, full family coverage). As not all respondents answered these questions in there entirety, only the employer cost of single coverage and the number of plans offered could be adequately compared. Figure 3.4 shows the types of health care plans offered by the participating airports. LNAA offers a PPO plan, with a low deductible.

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Figure 3.4 Health Care Plans


Airport Sanford Providence Harrisburg Milwaukee Lehigh Valley Stewart
Definitions: PPO 80/20 Preferred Provider Organization in which the Plan pays 80% of usual and customary services after deductible PPO 90/10 - Preferred Provider Organization in which the Plan pays 90% of usual and customary services after deductible HMO Health Maintenance Organization High Deductible PPO A Preferred Provider Organization with a high deductible (usually $3000 or higher) POS Point of Service Plan

PPO 80/20

PPO 90/10

HMO

High Ded PPO

POS 70/30

Total Plans Offered N/A

1 1 1 1 1 1

1 1 2 1 1

The employer share of single coverage premium is shown in Figure 3.5. Three of the airports report that they provide and pay for 100% of single coverage for their employees. LNAA is the only airport that pays 100% of all benefits regardless of family/employee coverage levels. Figure 3.5 Employer Portion of Single Health Insurance Coverage

EMPLOYER PORTION OF SINGLE HEALTH INSURANCE COVERAGE


AVERAGE Lehigh Valley AIRPORTS Sanford Harrisburg Providence Stewart Milwaukee 84% 86% 88% 90% 90% 90% 92% 94% 96% 98% 100% 102% 95% 96% 100% 100% 100%

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3.3.5

Other Insurance Benefits Offered

Figure 3.6 compares the other types of insurance benefits offered by the airports in addition to the Health Care benefits. LNAA does not offer short-term disability as compared with four of the five respondents. Figure 3.6 Other Insurance Benefits Offered
Type Dental Insurance Life Insurance Optional Life Short Term Dis. Long Term Dis. Vision Insurance X X X Lehigh Valley X X X Milwaukee X X X X Sanford X X X X X X Providence X X X X X Harrisburg X X X X X X Stewart X X X X X X

Leave Benefits LNAA offers its employees paid leave through vacation, sick leave, personal time off, holidays, bereavement and other standard time off programs. In comparison to the other airports that reported this data, LNAA is in line with a standardized form of vacation practices. Three of the five airports provide some form of personal time off program of 3 days off (exceptions: Providence and Sanford). Figure 3.7 Leave Benefits
Airport Lehigh Valley Milwaukee Sanford Providence Harrisburg Stewart Paid Hours 1<5 yrs/service 80 80 80 80 56 120 Paid Hours 5<10 yrs/service 120 120 80 120 80 152 Paid Hours 10<15 yrs/service 160 160 120 144 120 216 Paid Hours More than 15 yrs/service 172 200 120 224 208 216

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Other paid leave benefits provided by LNAA are comparable to the benefits of the other survey respondents. In addition, LNAA provides a parental leave to eligible employees which provide a paid benefit of five days. Figure 3.8 Other Paid Leave Benefits
Type Bereavement Holidays Jury Duty Military Lehigh Valley 4 days 10 Yes Yes Milwaukee 3 days 9 As needed Yes Sanford 1-5 days 11 As needed 17 Providence 3 days 10 As needed 10 Harrisburg 3 days 9 As needed 10 Stewart 3 days 11 As needed As needed

Financial/Retirement Benefits LNAA offers a 457 Deferred Compensation plan and a Defined Benefit Pension plan (with vesting after 5 years). In addition some type of Severance plan is available to employees after a oneyear waiting period is met. The comparison of LNAA with the other airports surveyed is shown in Figure 3.9 below. Figure 3.9 Financial/Retirement Benefits
Type 401(k)no match 401(k)with match Pension Plan Section 125/FSAs Incentive Stock Options 457 Plan Profit Sharing State Retirement System X X X X (TRANSFERS) X X X X X X X X X X X Lehigh Valley Milwaukee X 414(h) X X X Sanford Providence Harrisburg Stewart

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Other Miscellaneous Benefits Other Miscellaneous Benefits provided by the airports in the survey are presented in Figure 3.10. Figure 3.10 Miscellaneous Benefits
Type Tuition Assistance Career Counseling Matching Charitable Contributions Gym Membership Food Services/ subsidized cafeteria Legal Assistance Free/ Discounted Uniforms Milestone rewards (yrs of service, etc.) Discounted event tickets Employee Assistance Plan Parking Allowance / free parking Smoking Cessation X Lehigh Valley X Milwaukee Sanford X Providence X Harrisburg X Stewart X

X X X X X

3.3.6

Compensation

Based on the ability to compare across organizations that have various definitions and duties, the following seventeen positions were selected to be compared in the Compensation section in the survey. Figure 3.11 shows the results of this survey.

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Figure 3.11 - Compensation


Position Accountant I Accountant II Airport Attorney Airport CFO Airport Engineer Airport Ops Specialist Airport Police Officer (nonsupervisory) Assistant Director of Airports Chief ARFF Custodial Worker I Custodial Worker II Director of Airports Driver/Operator II Air Rescue Firefighter Deputy Director General Aviation Flightline Specialist Flightline Supervisor Fuels Supervisor Lehigh Valley $38,518 (midpoint) $49,385 (midpoint) N/A $83,750 (midpoint) $78,574 (midpoint) $63,991 (midpoint) $40,997 $97,682 (midpoint) $69,789 $24,710 $39,198 $148,000 $34,973 $64,804 (midpoint) $47,038 (midpoint) $47,038 (midpoint) $47,038 (midpoint) $111,286 $64,034 Milwaukee $36,562 $50,458 $110,755 $93,202 Sanford $39,197 N/A N/A $95,773 N/A N/A $39,197 N/A $60,006 N/A N/A $212,500 $39,197 N/A N/A N/A N/A $40,775 $135,000 $41,000 $90,000 $89,876 $72,854 $160,684 $160,684 $96,282 $54,187 $61,081 $90,000 $80,000 $29,000 $36,000 $80,000 $62,400 $55,000 Providence Harrisburg Stewart N/A N/A N/A N/A $100,542 (midpoint) N/A N/A $100,542 (midpoint) N/A N/A N/A $167,338 (midpoint) N/A N/A N/A N/A N/A

As indicated in Figure 3.11, midpoint salary information was utilized for Lehigh Valley and Stewart. Since specific salary was not available at the time of this study for many positions, data was provided as a range, from which the midpoint salary data shown was calculated. For LNAA, salaries of union employees (ARFF/Police/Custodial) were derived from the rates given in the union agreements. The salary for the Director of Airports position was taken from LNAA Board meeting information.

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In addition, based upon a review the non-union salary ranges currently in place at LNAA, it appears that the salary program is in a competitive position as compared to the other airports that participated in this survey. Collective Bargaining Structure(s) As indicated by Figure 3.12, four the five reporting airports are located in states having high union representation. The exception to this is SFB, which is in the Southeast region. The data indicates that non-union employees enjoy the same level of salaries and benefits provided to those of the various unions. This is especially true at LNAA/ABE where 37% of the staff is covered by three collective bargaining agreements and the remaining 63% of the non-represented employees is provided the same benefit structure. Figure 3.12 Collective Bargaining Structures
AIRPORT Lehigh Valley Milwaukee Sanford Providence Harrisburg Stewart AVERAGE NONUNION % 63% 19% 100% 22% 90% N/A 41% UNIONIZED% 37% 81% 0% 78% 10% N/A 59% TOTAL STAFF 129 221 77 184 109 54 122

3.3.7

Comparison to Counties

After completion of the comparable airports analysis, the Study Team felt that an examination of the benefits offered by LNAA compared to those benefits that are offered to Lehigh County employees would provide a local perspective to the study. Figure 3.13 below compares the benefits offered by both entities in 9 areas.

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Figure 3.13 Benefits Comparison of LNAA to Lehigh County Entity LNAA Medical Insurance Dental Insurance Prescription Vision Coverage Retirement Deferred Compensation Life Insurance Short Term Disability Long Term Disability 3.4 Summary 100% of Premium Paid by LNAA 100% Paid By LNAA 100 % Paid by LNAA 100% Paid by LNAA Yes Yes Yes No Yes Lehigh County Single - $15/Payroll by Employee Emp/Child - $33.73/Payroll by Employee Emp/Spouse - $35.73/Payroll by Employee Family - $55.82/Payroll by Employee Single - $2.21/Payroll by Employee Emp/Child - $12.71/Payroll by Employee Emp/Spouse - $12.71/Payroll by Employee Family - $24.32/Payroll by Employee $18.97/Payroll by Employee Single - $.30/Payroll by Employee Family - $4.29/Payroll by Employee No Data No Data No Data No Data No Data

While there are various items identified by the Study Team that can improve the efficiency and effectiveness of LNAA, overall the facility compares favorably to the airports chosen for this Study. The information presented in this Section will be utilized throughout the remaining analyses completed as part of this effort and be incorporated into the overall Findings and Recommendations found in Section 6.

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4.0

AIR SERVICE ANALYSIS

As part of this Airport Management Study, a task was developed to assess air service development activities at LVIA. By way of the collection and synthesis of various data, an evaluation was performed of the overall efficiency and effectiveness of the Airports air service development approach. Besides an in-depth interview with the Authoritys Executive Director and the Director of Business Development, the following air service related documents were obtained directly from LVIA: Plane Talk newsletter for Fall 2008 LVIA incentive program 2009 budget worksheet for the LVIA Business Development Department Flight guide for July September 2008 Report from mall kiosk for 8/16/08 9/11/08 LVIA Air Service Assessment (March 2008) Lehigh Northampton Airport Authority New Board Member Orientation 2008 Resolution Establishing Air Transportation Company Rates and Charges and Operating Requirements at Lehigh Valley International Airport Marketing and Business Development 2007 2008: community outreach and business opportunities Airport monthly traffic reports: December 2007 May 2008 Airline communication status report for 2008 Jangle Media recommendation for Allegiant Air service to Fort Lauderdale, Florida Air service presentations: o American Eagle at company headquarters (June 2007) o American Eagle at Network 2008 (March 2008) o AirTran at JumpStart 2008 (June 2008) o JetBlue at JumpStart 2008 (June 2008)

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Due to the sensitive nature of air service development, these data and information will not be published in this document, although they will be referred to for purposes of overall program evaluation. 4.1 Analysis of Interview with LVIA

As a member of the Study Team, TranSystems Corp. conducted an interview with the LNAA Executive Director and LVIAs Director of Business Development (The Director) on October 29, 2008, in the Authoritys conference room. The interview covered budgets, air service and marketing reporting structure, carrier meetings, carrier correspondence, air service consultant use, air service conference attendance, relationships with local organizations and corporations, the Small Community Air Service Development Program, incentive programs, and advertising. The following provides a summary of the information discussed in each of these categories.

Budgets

During the interview, the Business Development Departments budget for 2009 was reviewed as well as the budgeting process. No line items in this budget appeared excessive and costs for items such as professional services (air service consultant), training/seminars and business travel were aligned with what would be expected at a similar-sized airport. LVIA appears to be doing a good job managing its marketing, advertising and air service development costs.

Part of the discussion centered on the kiosk at the Lehigh Valley Mall. It was pointed out that the kiosk costs as much as a billboard. In the Study Teams opinion, the kiosk does a better job of advertising all available air service at LVIA as opposed to one individual service being marketed on a billboard.

Reporting Structure

The Director of Business Development, reports directly to LVIAs Executive Director and has two direct reports, a Coordinator for Business Development and an Events Coordinator, who is essentially the full-time employee responsible for the mall kiosk. This structure is similar to other airports of comparable size in the U.S.

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The Director has responsibility for air service development, marketing, public relations, LVIAs website and the volunteer program. This is typical for airport employees in a similar position at other airports as well. In some cases, a dedicated public relations position is also used.

Airline/Carrier Meetings

LVIA meets with airlines at their headquarters for air service development purposes an average of 3-4 times per year. This is in line with other airports of similar size and air service needs.

The Director attends nearly all airline meetings with occasional attendance by the Executive Director. A consultant accompanies them 75% of the time and always if there is something significant to discuss. LVIA will always bring along the appropriate consultant if certain air service analyses need to be explained to the airline. This shows a prudent use of the Airports business development budget.

LVIA also brings along Board Members to airline meetings when appropriate, and only when there is a specific need for that person to contribute to the meeting. The Airport realizes that its best to keep the travel group small when visiting with airlines.

As expected, given the size of LVIA and its proximity to Newark and Philadelphia, the Airport expends a small percentage of resources (staff time and budget) pursuing cargo service.

The Airport spends roughly 40% of its resources pursuing new service from incumbent carriers, 50% targeting new carriers (i.e. American, Southwest, and other Low Cost Carriers) and 10% discussing new service with scheduled charter carriers.

Carrier Correspondence

The Director keeps in contact with airline planners on a regular basis via e-mail, phone or meetings at headquarters or conferences. News of corporate relocations, corporate expansions and other pertinent articles are sent to airlines in an effort to keep LVIA on the top of mind. Some airports rarely communicate with airlines and thus fall to the bottom of the pile when airlines are evaluating new service.

Upon reviewing the Airports airline communication status report for 2008, the Study Team concludes that LVIA is communicating with the right airlines, not communicating with

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inappropriate airline targets, and is talking to the right people at the airlines being targeted for new or expanded service.

Air Service Consultant Use


LVIA utilizes the services of multiple air service development consultants as opposed to concentrating all efforts with one consultant. The Airport has in the past, selected consultants by asking the target carrier whom they recommend or researching which consulting firm has had recent success with the target carrier. The Study Team recommends an approach that would hire one consultant for the following reasons. o If a consultant is faced with allocating scarce resources amongst various clients, those Airports that are most loyal will get the lions share of that consultants attention. This remains applicable to client business development, identification of target airline opportunities, and ad-hoc data analysis/retrieval. o Any time an airport utilizes a new consultant, that consultant has to spend time analyzing the market, understanding trends and generally spending time learning the client. This could be time and money better spent on pursuing new service and analyzing potential opportunities. So, every time LVIA chooses to utilize a new consultant, the new consultant is compensated for work done by the previous incumbent firm. o The Study Team encourages airports, especially those of LVIAs size, to concentrate their efforts with one consulting firm who can become experts on their market rather than splitting the pie amongst several who have the budget and resources to become merely familiar with the market. This can be accomplished via the Request for Proposal (RFP) or Request for Qualifications (RFQ) process and 1-3 year contracts so the Airport does not feel locked-down with any one consulting firm for an extended period of time. Splitting consulting work amongst multiple firms generally only works successfully for very large airports that may have firms concentrate on different geographical regions of the world or in multiple airport aviation systems where consultant work can be distributed by individual airport.

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Air Service Conference Attendance


LVIA attends the annual JumpStart and Network conferences to meet with airlines regarding service from new carriers and additional capacity from incumbent carriers. This makes sense for an airport of LVIAs size and air service needs/challenges. The Airport correctly acknowledges that it would be inappropriate for it to attend the Global Routes conference and other international focused conferences.

The Director attends air service conference meetings both individually and with a consultant.

Relationships with Local Organizations and Corporations


The Lehigh Valley Economic Development Organization (LVEDC) has participated in airline service development meetings in the past. However, the Greater Lehigh Valley Chamber of Commerce (Chamber) reportedly provides little to no support for air service development efforts. This is surprising as Chamber of Commerce organizations are typically eager to assist with air service development projects, especially those in smaller-sized communities.

The Lehigh Valley Convention and Visitors Bureau (CVB) is also helpful and even assists the Airport with placing reverse marketing in destination cities. As another show of support, the CVB uses Airport collateral for purposes of marketing visitors to the Lehigh Valley.

The Executive Director and the Director are well aware of the various Chamber, economic development and CVB organizations present in the area and both serve on multiple boards or committees.

The Airport has attempted to forge relationships with local companies, but most have contracts to fly from Newark Liberty International and Philadelphia International Airports and are satisfied with these options. The Airport does maintain a list of corporate travel managers and some will provide general information only. Some companies have LVIA as part of their airline contracts and some do not. In todays volatile environment, airlines want to know where local corporations travel, which airlines they have contracts with and, most importantly, would these travel managers change travel purchasing habits with new nonstop service. Some airlines will even go as far as requesting written confirmations or even

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financial guarantees to show that business travelers will use new nonstop service if it is offered. LVIA thus has a hard time delivering local business community travel dollars to prospective airlines, and it is not for a lack of trying.

LVIA has also reached out to the Lehigh Valley Partnership with no success. This could potentially be another entre to the local business community. The Airport reports that the organization has not responded to requests for air service development support.

Small Community Air Service Development Program (SCASDP)


LVIA has submitted grant proposals several times to this U.S. DOT program. Many other small PA airports other than LVIA have been awarded a grant through this program. In 2008, State College PA was a recipient.

Local community support and funding is vital to securing a grant under this program. With the most recent application in 2008, no support was offered to LVIA by local governments and/or corporations and therefore LVIA was not able to submit a competitive grant application.

Incentive Program

LVIA has an innovative incentive program that the airlines reportedly embrace. The program is straightforward and airlines know what is being offered without having to engage in negotiations or back-and-forth discussions with the airlines. Having the plan laid out like this helps an airline understand exactly what it will receive from LVIA in terms of support, whereas other airports are vague regarding their incentives. This also makes it easy in terms of route planning since the airline has all the information up front.

Some may argue that the levels of marketing assistance are on the high side but the Airport has illustrated in the plan how the Airport still generates positive cash flow after providing the marketing assistance for new service.

This incentive program also provides marketing assistance for increases in capacity (seats/frequencies) for existing service. This is a unique offering at LVIA as most airports

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do not offer incentives for increases in capacity. Such an incentive will help LVIA compete for scarce airline capacity.

LVIA places any advertising generated via the incentive program with its own ad agency to take advantage of volume discounts. The Airport controls the media plan, ad placement and creative design but does accept input from the airline. LVIA has in the past allocated the funds directly to the airline to spend at its discretion but now controls all spending since airlines never were able to devote the appropriate resources and market new routes effectively in the area.

LVIA has the capability to provide ground handling for carriers and can provide it at a discount as part of an incentive package. This significantly reduces the cost, risk and effort required for a carrier to start service at LVIA. In fact, Allegiant has no employees at the Airport whatsoever which provides the airline a sustainable low operating cost in the longterm. This is opposed to other incentives which reduce operating costs during the ramp-up period only.

Advertising

The mall kiosk is undoubtedly one of the more unique and innovative marketing ideas the Study Team has come across. Understandably, it was a controversial idea for the Board to embrace for a number of reasons. Given the high utilization of the mall amongst the local population, the ability to generate awareness of nonstop service options even while not staffed and the opportunities to drive direct ($6/reservation flows back to LVIA) and indirect (additional Passenger Facility Charges (PFC), parking revenue, concession revenue, etc.) economic benefits for the Airport, the Study Team believes it is a beneficial part of the Airports overall marketing program. If expansion is indeed possible to other area malls for similar costs, the Study Team would encourage the Airport to do so.

The Airport participates in many community outreach and business development activities which constitute cost effective means of advertising LVIAs presence and service offerings. The Airport often takes advantage of opportunities to partner with airlines to offer free tickets as trade for marketing air service to the community.

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The Airports newly developed newsletter is attractive, well-designed and does an effective job of marketing available service at LVIA. It is distributed to a list of 24,000 passengers as well as airline route planners. This is an effective tool for keeping route planners apprised of developments at LVIA and making sure LVIA is staying on their radar screens.

LVIA is one of the few airports in the U.S. that still publishes a printed flight guide and normally we would encourage an Airport to discontinue such a publication. But, since LVIA is in a constant battle with significant passenger leakage to EWR and PHL, this is another useful tool for marketing available nonstop and connecting service from the Airport.

4.2

Comparison to Peer Airports

Table 4.1 on the following page shows how LVIA and the peer airports responded to queries regarding air service and marketing. The questions related to staffing, budgets, incentives, consultant use, visits to airline headquarters, advertising and marketing. For the purposes of this analysis, the actual airport names have been disguised since air service development is a competitive business and the other airports were advised that names would not be revealed in this report. These peer airports are not the comparable airports reviewed in Chapter 3 of this report. This table should be used for information purposes only as every airport has a different set of competitive circumstances and inappropriate benchmarks can lead to improper conclusions.

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4.1 Air Service Comparison with Peer Airports


Question What department does air service development fall under? Who has responsibility for air service development? What other responsibilities does that person have? LVIA Business Development Director of Business Development Public relations, marketing, community relations, tours, charity events Peer 1 Marketing Deputy Director, Marketing & Public Relations Airport Marketing, public relations, airport info/visitor center, frequent flyer lounge & airport clerical staff 12 (6 Full-Time & 6 Part-Time) $400,000 Yes. In electronic format only. 8-9/yr No. It is sent to frequent flyers, airport board members, Chamber of Commerce, regional businesses and all others who sign up an email address. No. Electronic, online version only. Yes 1 $20,000 - $25,000. Figure is based on need, if more opportunities arise $50,000 or more could be spent. If no opportunities exist in a year it could be less than $20,000 2-3/yr Yes, 60% of the time. Executive Director Jumpstart No. Incentives vary depending on the situation. No type of incentive is off the table. Peer 2 Marketing & PR Marketing & PR Manager Marketing, public relations, special events, media relations, noise & customer service 3 (4th is approved but not filled) $400,000 Yes 6/yr To those that subscribe with their email address Peer 3 Public Affairs & Air Service Marketing VP of Public Affairs & Air Service Marketing Corporate Comm., External Affairs, Media relations, Gov't Affairs, Community Affairs, PR, Advertising, Mktg 3 $396,000 Yes. E-newsletter Every 2-3 months Yes

How many direct reports does that person have? How much does the Airport budget for advertising every year? Does the Airport issue a newsletter? If so, how often is it published? Is it distributed to airline network planners?

2 $500,000 Yes 4/yr Yes

Does the Airport produce a printed timetable? Do you use a consultant for air service development work? If so, how many different consultants do you work with? What is your average annual budget for air service consultants?

Yes Yes 2 $25,000. Budget is revisited mid-year and can be revised upwards if necessary.

No Yes 1 (not including consultant for data only) $60,000

No, electronic (.pdf) Yes 1 $85,000-$100,000

How often do you visit carriers at their headquarters? If so, do consultants travel with you to these meetings? Who else attends them on behalf of the Airport? Which of the annual air service conferences do you attend? Do you have a formal air service incentive program? If so, what do you offer carriers for new service?

3-4/yr Yes, 75% of the time Executive Director, sometimes board members JumpStart & Network Yes $5 per seat marketing funds in year 1, can also waive other fees and discount handling Same No 10-15% of time & resources

1-2/yr Yes No one else JumpStart & Network No, but considering one. Current ULA does not permit.

1/yr for each carrier Yes, on an as-needed basis President/CEO JumpStart & Network Yes Frequency of service and markets served will determine waiver of costs and marketing assistance. Depends on proposed level of service. Not currently, but it is something we are targeting Yes

What do you offer carriers for additional service on existing routes? Do you actively pursue cargo service? Do you actively pursue scheduled charter service?

No set incentive package. Very occasionally, but lately no. No

No No

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4.3

Summary and Conclusions

LVIA is indeed in a unique position geographically positioned between two major air service hubs (as well as international gateway airports) with significant passenger leakage to both. In the Study Teams opinion, the Airports approach to air service development is for the most part appropriate for LVIAs size and competitive position. The Business Development Department is visiting the right air carriers with the appropriate frequency, achieving the right mix of consultant use and inhouse utilization of resources, and the Airport has a good understanding of where to allocate its resources for marketing and advertising purposes. And finally, LVIA is challenged due to the relationships among local corporate, chamber, and government organizations regarding air service development for the Lehigh Valley Region. The Study Team recommends the following areas be pursued to enhance the efficiency and effectiveness of air service development initiatives: 1. Develop a Strategic Marketing Plan 2. Better Integrate Regional Economic Development Initiatives with Overall Airport Marketing and Communications 3. Community Support of Small Community Air Service Development Grant Applications. 4. Work with One Air Service Development Consultant. These air service observations and recommendations are incorporated into the studys overall recommendations in Section 6 of this report.

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5.0

ORGANIZATIONAL ANALYSIS

Throughout their development, airports in the United States have traditionally been operated by municipal or state governments on a non-profit basis. Their operational funding is typically characterized as airside (landing and handling fees, gate rentals, etc.) and landside (revenue derived from concessions, rental cars, and other aviation and non-aviation leases). Typically a portion of capital program funding comes from the Federal Aviation Administration (FAA) in the form of grants, the collection of Passenger Facility Charges (PFCs) on ticketed airport passengers, and through the issuance of tax-exempt revenue bonds which usually rely on monies collected from airline lease agreements as payment to bondholders. However, over the last 20 years, this relatively easy to understand model has become ever more complex. First, many communities have acknowledged that not only do their airports represent a necessary transportation infrastructure, but also that the airport is a major contributor to jobs and positive economic impact to the communities they serve. Second, revenue and funding sources necessary to maintain and improve an airport have become more difficult to understand and manage. The introduction of the Passenger Facility Charge Program in the late 80s by the FAA, and the reliance by airports on Letter of Intent allocations from the FAA in support of large multiyear capital improvement programs are prime examples. Finally, the airline industry has evolved a great deal over recent years. The industry is more competitive than ever before and airlines are not only able, but expected to, enter and exit markets more readily than in the past, making capital improvement and financial planning ever more challenging. As a result of needing to be more responsive to these changes in the industry, many municipalities seek ways to organizationally position their airports to be as responsive to the free marketplace as possible. This often includes assessing and changing their airport governance model, and finding ways to attract highly qualified airport managers that possess the skills necessary to manage todays complex airport operating environment.

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5.1

National Governance Models

Nationally, airports are typically operated in one of three governmental settings. They include: The direct operation by government; The operation by government with policy oversight advice by commissions, advisory boards, or authorities; and Through contract operation.

For discussion purposes, these models are referred to as the Government, Policy Oversight, and Privatization Models, respectively. The Government Model, which tends to lack public policy input on a regular basis, is generally used by municipalities that operate only smaller general aviation facilities. The Policy Oversight Model is by far the most popular model followed by airport owners today and indeed it is the model followed by Lehigh and Northampton Counties. The Privatization Model, which usually involves the outsourcing of day-to-day management and operations of an airport, but whereby the municipality often retains policy control, is only practiced at a few airports nationally and with mixed results. Under the Policy Oversight Model, the challenge for airports is to achieve the right mix of public policy input while maintaining policy control, minimizing bureaucracy and allowing the airport to function as close to a business as possible. Only when these three factors are brought into balance with each other will organizational effectiveness be optimized. 5.2 National Organization of Operations Models

Once an airports governance model is set, it is airport managements role to craft the airport organization in response to that model. Like governance models themselves, organization of a department or office to manage airport operations also comes in many forms. In large part, the specific structure depends on the size and type of airport(s) to be managed. As an airport grows in size, so too does the need to provide greater departmentalization with more specialized tasks. However, it must be recognized that each organization must be tailored to meet the needs of
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operating the specific airport in an efficient, effective, safe and secure manner. Generally speaking, airports and corporations are organized by the following methods1: Simple or Line a simple or line organization is a top-down structure with the airport manager overseeing all employees. This structure is usually seen at general aviation and small commercial service airports. Functional a functional organization structures activities around the types of tasks being conducted at the airport. For example, tasks would be grouped by Department as in the Administration Department, Operations Department, etc. This structure is usually seen at larger airports, while smaller airports sometimes utilize a mix of functional and simple organizations. Divisional a divisional organization has self-contained units that operate independently of each other. This type of structure is usually seen in a municipal environment with the airport being a division within the overall structure of the municipal system. For example, Airport Division, Parks and Recreation Division, Highway Division, etc. Conglomerate a conglomerate organization structures activities around independent business units with their own cost centers. For example, General Electric is organized in a conglomerate manner with numerous independent businesses. This type of organization is not usually seen in the airport environment. Matrix a matrix type organization utilizes a functional type structure that encompasses a project type approach. For example, an operations officer would functionally report to the Operations Department while being a member of the project team for a new terminal with the role of providing operations insight while the terminal project is being designed and built. While this type of structure creates multiple reporting lines, it does provide flexibility to an airport that is growing or redeveloping. Overall, a blend of the functional/matrix type organizational structures is very common at todays airports. This type of structure will be considered for analysis in comparison to the LNAA.

American Association of Airport Executives, Body of Knowledge Module 2, The Management Functions, 2004/2005.

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5.3

Governance of the Lehigh Northampton Airport Authority

The Lehigh Northampton Airport Authority (LNAA) is an autonomous, independent agency, established under the Pennsylvania Municipal Authorities Act2, directed by a Board of Governors. The three main governance areas reviewed in this management study include: LNAA Board of Governors; LNAA Reporting Structure; and LNAA Organization Structure.

The review of these reporting structures was completed to help facilitate and understand the different reporting lines both above and below the LNAA. The effectiveness and efficiency of these reporting lines can play a significant role in the Authoritys ability to execute its mission and objectives efficiently and effectively to promote, develop, and run the day-to-day operations of the Airports. The review of the governance of LNAA was completed through the following tasks. First, the Study Team conducted a survey of Airport management and non-management employees, as well as County Officials, members of the LNAA Administration and Board of Governors, and regional representatives/stakeholders from the Lehigh Valley. Detailed results of the surveys were reported in Section 2 of this report. In addition to the surveys, the Study Team met with members of the Airports management staff as well as other stakeholders and users of the Airports. 5.3.1 LNAA Board of Governors

LNAA is governed by a Board of Governors. The Board consists of nineteen (19) citizens of the United States whose qualifications conform with the requirements for members of Governing Board of Municipal Authorities3; ten (10) appointed by the governing body of Lehigh County and nine (9) by Northampton County. Each member serves for a term of five (5) years. The Board is empowered to exercise all lawful municipal powers, with the exception of the power to tax, and is charged with
2

Pennsylvania Municipal Authorities Act 53 Pa.C.S. 5601-5622. 53 Pa.C.S. 5610

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establishing all Airport policies, and setting set rates and charges. As a political and financial independent body, the Board is not required to officially report to the Counties. The Board elects annually, from its members, a Chairman, Vice Chairman, and a SecretaryTreasurer. The Board selects and employs under a contract an Executive Director. The LNAA Bylaws Article XI, Section 4 describes the duties of the Executive Director as follows: Executive Director shall be the Chief Executive Officer of the Authority. He shall report to the Board and shall hold office at the will and pleasure of the Board or under such employment contracts or other terms the Board may prescribe. He shall have general and active management of the business and affairs of the Authority, subject to the policies of the Board. He shall see that all orders and resolutions of the Board are carried into effect and shall execute all bonds or contracts under the seal of the Authority. He shall have General powers and duties of supervision and management usually vested in the office of president of a corporation. Additionally, the Board appoints an Attorney-at-Law, admitted to practice before the Supreme Court of Pennsylvania, to have charge of the legal affairs and matters of the Authority and shall report to and be directly responsible to the Board.4 5.3.2 Lehigh Northampton Airport Authority Reporting Structure

The airport governance model currently employed by LNAA provides for direct oversight by the Board of Governors with several Ad-Hoc Committees providing guidance on airport initiatives prior to their presentation to the full Board. The following provides a brief overview on each of LNAAs reporting committees: Business and Planning Committee The Business and Planning Committee reviews all business and planning matters, and recommends policy action to the full Board. Finance Committee The Financial Committee reviews the financial reports provided by the Executive Director, annual audits, and any other reports required by State and Federal laws. The committee regularly advises the full Board of the financial status of the Authority
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and provides recommendations with regard to contracts, proposals, financial, and accounting services. Construction and Maintenance Committee The Construction and Maintenance Committee reviews all matters related to construction and maintenance of all Airport facilities. It reviews bids for construction, equipment and capital improvements that exceed the purchasing authority of the Executive Director, and makes recommendations to the full Board. Community Affairs Committee The Community Affair Committee reviews all matters relating to Airport relations with the public, local officials of neighboring communities, and other governmental bodies that interact within the Authority. Personnel and Law Committee The Personnel and Law Committee reviews all labor contracts, litigations, performance of Solicitors and Executive Director, as well as making recommendations to the Board to fill staffing vacancies. The Study Team observed the Construction and Maintenance Committee meeting held on December 11, 2008 and the Board meeting held on December 16, 2008. Figure 5.1 depicts the current Board internal Reporting Structure.

LNAA Bylaws Article XVI.1

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Figure 5.1 Lehigh Northampton Airport Authority Structure

Board of Governors

Finance Committee

Attorney-At-Law

Personnel & Law Committee

Executive Director

Community Affairs Committee

Construction & Maintenance Committee

Business & Planning Committee

Source: Lehigh Northampton Airport Authority and The Study Team

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5.3.3

Lehigh-Northampton Airport Authority Organization

The LNAA is currently organized in a hybrid fashion, employing departmental and line type organizational characteristics. As depicted, LNAA is a relatively multilevel organization having an Executive Director assisted by a Deputy Executive Director that oversees the management of Braden Airpark, seven (7) senior management staff and three (3) other direct reporting positions that include the following: Director of Administration; Director of Engineering and Construction; Director of Finance and Budgets; Director of Public Safety; Director of Business Development; Director of LVIA Aviation Services; Systems Director; Airport Planner; Senior Project Manager; and Superintendent of Maintenance.

Other major areas that fall under the direct reports to the Execute Director include: Special Assistant to the Executive Director Assistant to the Deputy Executive director Braden Airpark (FBO)

The LNAA also has direct control over its own Police Division, which acts independently from other local law enforcement, and as well as over its own Fire Division, which staffs and operates the Airport Rescue and Fire-Fighting stations and equipment. Day-to-day operations at Queen City Airport are managed by a Line Operation Manager who reports to The Director of LVIA Aviation Services. Operations and day-to day activities at Braden Airpark are currently managed by the Moyer Aviation Fixed Based Operator (FBO) under a four (4) year lease. The FBO Manager reports directly to the Deputy Executive Director of Operations at LVIA. Figure 5.2 depicts the current LNAA Organizational Chart.

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Lehigh Valley International Airport


Lehigh Northampton Airport Authority Board of Governors Legal Counsel Executive Director

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Deputy Executive Director Special Assistant to the Executive Director Administrative Assistant

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Assistant to the Deputy Executive Director Braden Airpark Senior Project Manager
Business Dev. Coord Admin Asst. Planner Engineer Clerk Business Dev. Mgr. Maintenance (25) Police Division Fire Division Comm Center Custodial Supervisor Airline Services Manager ATOstation Mgmt Custodians (18) FBO LineOps Mgr. Clerk Project Engineer Assistant Superintendent of Maintenance

Director of Administration

Director of Finance & Budgets

Airport Planner

Director of Public Safety

Director of Bus. Devlpmt

Superintendent of Maintenance

Director of LVIA Aviation Services

Systems Director

Systems Tech.

Superintendent Ground Trans. Terminal Srvcs

Properties Manager

H.R. Acct. Generalist

Airline Services Manager

Clerk

Figure 5.2 LVIA Organization Chart

Parking Attendants

Supervisor Passenger Services

Land Aqui. Specialist

Accounting Clerk

Passenger Services Coord.

Passenger Services (25) FBO LineOps Mgr.

Line Techs Cour. Hgr asst

Accounting Mgr.

Desk Reps

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QC LineOps Mgr.

Line Techs

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5.4 Organizational Analysis The Study Teams review of these three organizational areas indicates that improvements to the efficiency and effectiveness of them can be made. This includes the Board of Governors and the organizational structure of the LNAA. These two areas are discussed below. 5.4.1 LNAA Board of Governors

As discussed earlier, the LNAA Board of Governors consists of 19 members, ten (10) appointed by Lehigh County and nine (9) appointed by Northampton County. Both Counties are the incorporating municipalities of the Authority. It is the Study Teams observation that the 19 members is high considering the size and responsibility of the Authority and in relation to comparable airports and airport authorities in general across the United States. While a larger Board can provide a diverse set of member backgrounds that can contribute to various agenda items, it can often lead to a mix of engaged, partially engaged, and not engaged Board members, essentially having a smaller active Board within the established Board. Also, the larger the Board, the greater the chance of overlapping backgrounds. In addition, it can lead to trouble obtaining a quorum which is needed to vote on matters. Further, the Study Team was surprised to see no participation by the incorporating counties in an ex-officio manner. While the Authority is not required to report back to the Counties at this time, direct participation on the Board by the Counties will help improve communication and relationships with regional stakeholders. Further, it was observed that much of the Boards work is done at the Committee level, often leaving the regular Board meetings for approving Committee recommendations. This type of structure is not uncommon at airports, but a large Board leaves various members that cannot possibly participate in all of the Committee meetings even if they are all open to the public. Most Board members have schedules that will not allow them to participate in more than 2 to 3 airport related meetings a month, which is already a heavy demand. A smaller Board would increase the efficiency and effectiveness of this committee structure, and by its nature lead to more engaged Board members.
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And lastly, a smaller Board would place less of an annual burden on the incorporating counties in finding and appointing qualified Board members that have the appropriate amount of time available to adequately address and serve the needs of the governing body and organization. 5.4.2 LNAA Organizational Structure

Generally speaking, the Study Team found no major problems with how LNAA is currently operated, but it did identify several areas for improvement. A review of the organizational structure indicates that its current configuration is not leading to the most effective use of staff resources and talent to be fully effective. In addition, the Study Team observed that all operational aspects of the organization appear to be in good order, while there could be some improvement with stakeholder relations that could be related to how the organization is currently structured. General management theory suggests that three to five direct reports is an effective level at the top of an organization. The Executive Director through the Deputy Executive Director currently has seven Director level reports and three other direct reports for a total of ten reports. While the Study Team understands there is a history as to why the structure has evolved to its current shape, this structure is not the most efficient and effective for LNAA and is not clear to those outside of the Authority. For stakeholders outside of the Authority, this can lead to confusion on who is in charge and responsible for what activities. This was reinforced through the findings of the survey and interview process of this effort that indicated many stakeholders were often sent to various Departments before getting the answer they were looking to obtain. While the Study Team did not identify problems with regard to the core competencies of the senior management of LNAA, there is room for improvement in the organizational model. The current structure is complex and out of balance with the needs of an Authority this size. Many of the direct reports have various levels of subordinate staff reports. The Study Team found ambiguity of reporting lines and delegation of responsibilities is a result of several factors not uncommon at Authorities like LNAA. These include the operational nature of the division of responsibilities, and managements efforts to accommodate issues with regard to the
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disparity in salary classifications, staff talents and capabilities, and perhaps concerns regarding the delegation of responsibilities. To address these issues and position the Authority for growth, the general structure shown below may be more conducive to organizational effectiveness.
Executive Director
Deputy Executive Director
Administration Finance
Business Development

Engineering

Operations

5.5 LNAA Departmental Analysis During the stakeholder interviews that were conducted in September and October 2008 direct reports to the Executive Director/Deputy Executive Director were asked about their staffing, duties, perceived efficiency and effectiveness of their respective departments, and the organizational structure as a whole. Generally, most of the information obtained during these interviews indicated that many of the staff feel the organization is efficient and effective. Many of them cross department lines to assist and effectively operate in a matrix type format, as well as some staff having multiple responsibilities that cross departmental lines. Overall, there were no major departmental issues uncovered as they are currently organized, but there is always room for improvement as indicated in the previous section. This section outlines each of the organizations major departmental areas as depicted in the current organizational chart, as well as their general efficiency and effectiveness given the context of the Study Teams observations of the organization as a whole. 5.5.1 Administration

The Administration Department is responsible for all of the Airports properties, land acquisition, noise relocation program, parking and ground transportation programs, terminal services (valet, wheel chairs, etc.), insurance, departmental coordination, special events, risk management, human
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resources (shared with Finance and Budgets), and general support of the other Airport departments. As currently organized, the Department encompasses a broad range of activities with 10.5 FTE and 35 part-time staff. It was reported to the Study Team that the existing structure is effective because of the current staffing. The interview team did ask why some of the Administrative functions (valet, wheel chair, terminal services, etc.) are not handled through third-party contracts. The Department indicated that the Authority provides those services to maintain quality, control, and to keep costs in line. With that said, considering the diverse nature of the Departments activities and inline with what the Study Team sees at comparable airports around the country, LNAA should periodically review this practice to see if it is the most effective. Other airports have successfully contracted out these services, maintained quality through lease provisions while reducing overall cost to the organization. 5.5.2 Finance and Budget

The Finance and Budget Department provides financial support for all other Departments, including assistance with grants and project cost estimates, in addition to the traditional role of budgets, audits, and financial statements. The Department has good working relationships with all other Departments and work together to develop annual budgets. After they are developed with the Departments, they are reviewed with the Executive and Deputy Executive Directors; the Executive Director then takes the full budget proposal to the Finance Committee where it is reviewed and then presented to the full Board for adoption. Currently, the Authority maintains separate cost centers for each of the three airports with LVIA having specific cost centers for various functional areas in line with most airports of LVIAs size. The Department is continually looking to improve the functionality and efficiency of its accounting system and is working with a consultant on a periodic basis to make these improvements as needed. Recent improvements have included the ability to streamline the budget process with more efficient report generation capabilities.

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A recent change in the Department moved an accounting staff member from LVIA Aviation Services over to the Finance Department. This was done to improve the integration of these functions and is reported to be working out well. 5.5.3 Engineering and Construction

The Engineering and Construction Department consists of a single engineer responsible for: all necessary engineering; prioritizing AIP grant applications; the environmental process from design to permitting; development of Request for Proposals (RFP) for construction projects; and is in charge of all construction-related duties from construction management to project closeout. The organization chart shows an Engineering Technician position, but this is currently shown as vacant. The Department is managing 25 active projects. This Department was lead by the current Deputy Executive Director that previously included the Senior Project Manager and Airport Planner positions as shown on the current organization chart. This is not an effective and efficient method of managing the Airports on-going capital programs. Many airports will departmentalize all of these activities including dedicated staff to handle planning, environmental, engineering and project management activities. Further, as discussed later in this section, the Airport Planner has various airport duties some of which are not related to airport planning. Given the anticipated terminal improvement program that the Authority is considering over the next few years, it would be best for LNAA to place these positions back under the leadership of one Director of this Department that would house all Airport Planning, Environmental, Engineering, and Project Management functions. 5.5.4 Public Safety

The Public Safety Department is responsible for the Airports police, fire fighting, and Airport communications center. LVIA has no dedicated operations department; these functions are shared amongst multiple LNAA departments. The Department is also responsible for all badging and fingerprints of new board members. The police and fire departments are direct Airport staff, and are
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not affiliated with the local law enforcement or fire departments. In addition, the police and fire departments are unionized under a collective bargaining agreement. The Department works with local municipalities of all three airports in securing mutual aid agreements for emergency and security response purposes. They also conduct table top emergency planning exercises with these agencies as required by the FAA under the Airports FAR Part 139 Operating Certificate. The lack of a dedicated Airport Operations Department was observed by the Study Team and should be addressed. Otherwise, no major issues were brought to the attention or observed by the Study Team. 5.5.5 Business Development

The Business Development Department is responsible for media relations, community relations, air service development, marketing, the Airport kiosk located at the Lehigh Valley Mall, Airport involvement at community events within a 50 mile radius, and the Airports recently launched newsletter campaign. Many of the functions of this Department were reviewed in Section 4 of this report and are not repeated here. The Study Team observed that this Department may not have enough dedicated resources to effectively accomplish the goals and activities of an airport the size of LVIA. In addition, the Department lacks a dedicated Public Relations staff member that could assist in the overall marketing/branding of the Airport and help to improve the Airports image and relationships with local stakeholder groups. In the past, it has been reported that public relations was shared among staff in the Business Development Department and the Executive Directors office. 5.5.6 Maintenance

The Maintenance Department includes the Airports Maintenance Division as well as the Airport custodians. The maintenance personnel are unionized under a collective bargaining agreement. In general, no issues with maintenance were observed by the Study Team. Most participants in this study complemented the safe operating conditions of the airfield, especially during winter weather
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operations when the airfield is able to stay open while most surrounding airports need to close. In the northeast, this is attractive to both existing and potential tenants and users of the facility. Similar to the terminal services under the Administrative Department, the interview team observed that the custodial services are not handled through third-party contracts. The Authority has again indicated that it provides those services to maintain quality, control, and to keep costs in line. With that said, considering the diverse nature of maintenance activities and inline with what the Study Team sees at comparable airports around the country, LNAA should periodically review this practice to see if it is the most effective. Other airports have successfully contracted out these services, maintained quality through lease provisions, while reducing overall cost. 5.5.7 LVIA Aviation Services

The LVIA Aviation Services Department is responsible for all FBO services, including ground handling for airlines, aircraft deicing and maintenance services, and fueling operations at LVIA. The Department is responsible for the maintenance of the Airports fuel farm, and an AvGas points program offered through a national service provider where participants gain credit for using their branded facilities and can redeem for discounts, merchandise, etc. Additionally, the Aviation Services Department provides management oversight and FBO services for the Queen City Airport. The Department consists of 55 non-union staff, 6 of whom are managers and 8 are maintenance staff that work under the FAR Part 145 Repair Station certificate. LVIA Aviation Services offers comprehensive services to the users of LVIA and Queen City Airport. While there are some airports across the country that utilize this model, it is rare that a Repair Station is included. Most airports do not want to take on the risk management associated with this type of activity. Under this situation, and allowed by the FAA, the LNAA currently maintains their exclusive right to provide these services. And again, the Authority has indicated that they provide these services to maintain quality, control, and to keep costs in line. While the Department does attend national level marketing conferences like the National Business Aviation Association and is linked in to a national fuel program, most airports find that these services are more efficient and competitive for their
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tenants if they are contracted out. Further, with the proper minimum standards in place to allow for competitive and fair conditions, and as market conditions permit, the potential exists for more than one business competing to provide these services at the Airport. The Study Team will again recommend LNAA periodically review this practice to see if it is the most cost effective and efficient choice for the Authority to continue. These services can be competitively requested through an RFP type process and can range in terms from 5 to 30 years dependent on the needs of the Airport and usually the level of capital investment a business would make in the facility to operate. 5.5.8 Non-Departmental Positions

Senior Project Manager The Senior Project Manager position is currently a direct report to the Deputy Executive Director. As indicated, this is a result of maintaining a reporting structure with the Deputy Executive Director, but should be corrected to fall back under the Engineering and Construction Department. This position is responsible for managing large capital improvement projects and is essential with a large scale project in the near future for LVIA. Airport Planner The Airport Planner is responsible for all planning duties including the AIP program and the Airport Master Plan (ALP). Additionally, the Airport Planner provides oversight of Airport Operations with respect to Part 139, which sets forth the standards for safety compliance at commercial service airports in order to maintain the Airports FAA certification. In addition, the Airport Planner is responsible for the noise program at LVIA, including the sound insulation program, land acquisition, noise monitoring, and the handling of noise complaints. As mentioned earlier, this position has various job duties that cross functional lines. The planning duties should be rolled under the Engineering and Construction Department, and Operational duties should fall under the Operations (Public Safety) Department. Systems Director The Systems Director is responsible for all of the Authoritys Information Technology (IT) needs, including computer hardware, software, intranet and internet. As a general rule of thumb, this activity usually falls under the Administrative and Finance Departments at airports. To aide in reducing the number of direct reports and to increase the integration of improving accounting technologies, the Study Team will recommend the Systems Director be folded into the Finance Department.
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6.0

FINDINGS AND RECOMMENDATIONS

Prior to developing final recommendations with regard to the effectiveness and efficiency of the day-to-day management of the LNAA, the Study Team conducted a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) with the key management staff of the Authority. This exercise was performed for two reasons. First, to engage the management staff in what it thinks are the strengths, weakness, opportunities and threats facing the department, and second, to confirm the findings of the Study Team during its previous efforts in terms of identifying management issues including the collection of relevant airport data, survey and stakeholder participation, holding interviews, and performing the comparable airports and operational analysis. A SWOT helps organizations to capitalize on their strengths while identifying potential opportunities. In addition, this process also identifies organizational weaknesses and threats. The various items identified by the participants in a SWOT analysis usually have the consensus of the participants, which for the purposes of this Study, were used to reinforce or support the Findings and Recommendations made in this Study. The following discusses the basic components of a SWOT Analysis and then presents the results of the SWOT conducted for this Study. Following the results of the SWOT, overall findings and recommendations with regard to the management of the LNAA are provided. 6.1 SWOT Components When using SWOT as an analytical tool, Strengths and Weaknesses are considered internal to the organization whereas Opportunities and Threats are usually external to the organization. Strengths (internal) represent competitive advantages, for example:

What are the Authoritys primary advantages? What does the Authority do well? What do other people see as the Authoritys strengths?

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Weaknesses (internal) represent organizational barriers or limitations:


What can be improved? What is done poorly? What should be avoided? What could be done more effectively/efficiently? If you could change one thing, what would it be?

Opportunities (external) represent a favorable situation and should be able to answer:


What good opportunities are open to the Authority? What trends could the Authority take advantage of? How can the Authority turn its strengths into opportunities?

Threats (external) represent potentially damaging external forces, for example:


What obstacles does the Authority face in performing its mission? What weaknesses threaten the success of the Authority? What trends could have negative impact on the organization?

6.2 SWOT Results The SWOT Analysis was held with Authority management staff on November 6, 2008. Most of the Authoritys key management staff participated with the session being facilitated by the Study Team. Also in attendance were representatives of the Board and Lehigh and Northampton Counties. To facilitate the session, SWOT participants were presented a primer on the SWOT Analysis workshop (i.e. What it is? How it works?). Initially, Authority participants were reluctant to participate in the Strengths and Weaknesses portion of the workshop suggesting that they did not want to characterize Strengths and Weaknesses of the Authority because there might be a liability in doing so. The primer helped to alleviate the misconception that the SWOT would discuss detailed information versus higher level, strategic information that the SWOT is intended to identify. After presenting the primer and a discussion on the strategic nature of the SWOT workshop, most participants actively engaged in the identification of LNAAs SWOT which resulted in the following:

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STRENGTHS 1. LVIA Airport Convenience (In and Out, Rental Car, Parking Rates) 2. Efficient Operations Particularly in Winter Weather 3. Queen City Airport FAA 2006 Airport of the Year Award 4. Noise Compatibility Plan, Land Acquisition, and Sound Insulation Programs 5. Municipal Authorities Act 6. Efficient Bid Process and Purchase Power 7. Intergovernmental Agreements and Authoritys Willingness to Work with Surrounding Communities, Established Communication Channels 8. Aviation Summit (Being Organized to Foster Community Integration) 9. Terminal Improvement Program 10. Nineteen (19) Member Board of Governors Provides Diverse Backgrounds and Skill Sets 11. Authority Staff Support of Board and Board Committees 12. Open House for Corporate Tenants 13. FBO Operations and Ground Handling Services Revenue Generators 14. Kiosk in the Lehigh Valley Mall WEAKNESSES 1. Nineteen (19) Member Board Mix of Participation of those Engaged and Not Engaged 2. Inability to Foster Community Integration 3. Regional Identity Related to the Lehigh Valley 4. Need for Terminal Improvements 5. Airport Noise Issues 6. Cattassaqua School District Tax Issues and Community Relations 7. All Hangars are Full OPPORTUNITIES 1. Economic Asset to the Region and Surrounding Communities 2. More Focused Role on Public Relations 3. Significant Passenger Base 4. Corporate and Community Financial Support of Air Service Grants/Initiatives 5. Work with Communities to Develop Common Interests to Use LVIA
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6. New Corporate Entrants to the Lehigh Valley 7. LVEDC Business Retention Interviews 8. Hassel Factor of Using Newark and Philadelphia International Airports 9. Ability to Relieve New York/New Jersey and Philadelphia Metropolitan Areas 10. Global Reach of Close Proximity to International Gateway Airports 11. Corporate Tenants (NBAA Participation, Congestion at Teterboro and Morristown Municipal Airports, Among Others). THREATS (CONSTRAINTS) 1. State Aviation Sales and Use Tax 2. Regulations (FAA, EPA, TSA, Others) 3. FAA and State Aviation Funding Inadequacies 4. Authoritys Inability to Financially Subsidize Air Service (FAA Regulation) 5. State of the Economy and Fuel Prices 6. Airline Consolidation Efforts and Asset Utilization 7. Lack of Regional Identity 8. No Regional Air Service Development Committee 9. Competition with Newark and Philadelphia Airports Airfare Differences 10. Community Options of Newark, Philadelphia, Lehigh Valley Hard to get Involvement from Local Community/Corporations 11. Corporate Travel Contracts and Loss of Corporate Travelers from Region 12. Commercial Flying Conditions Lower Capacity and Full Flights 13. Community Perceptions What Airlines Control vs. What Airports Control 14. Limited Direct/Non-Stop Flights, Most Through Hub Airport 15. Political Pressure to Close Queen City Airport While the areas identified above are not all inclusive, they represent an overall snap-shot of how the Authority perceives its own SWOT given the existing operating environment. As a result of the SWOT analysis the Study Team noted that many of the areas identified by management in the SWOT analysis were consistent with what the Study Team identified through the stakeholder survey and interview process reported in Section 2 of this Study.

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6.3

Summary

Over the course of the past six months, the Study Team conducted various Study elements to gauge the efficiency and effectiveness of the Lehigh Northampton Airport Authority. The main goal of this effort was to identify observations of current policies and practices and provide recommendations to further increase the efficiency and effectiveness of the organization. Below is a listing of the Studys key findings and recommendations. 1. Finding: The Counties should be doing more in the process of selecting Board appointees to provide effective communication between the Board and the Counties. Recommendation: Currently, there is no criteria or measures against which Board candidates are screened and selected. Board appointees are given their orientation by Airport Administration which should continue. The Counties should provide an introductory briefing to new appointees to allow them to understand their mission and role on the Board, as well as to communicate effectively with the Counties. Further, each County should consider funding the continuing education needs of the Board members. This is currently done by Airport Administration and may pose a possible conflict of interest in some cases. 2. Finding: LNAA should position the Airport to be more competitive in the marketplace. Recommendation: LNAA should work to generate appropriate revenue streams and lower operating expenses as much as possible. Based on financial information from the Federal Aviation Administration (FAA), LVIA was the highest among comparable airport operating expenses in 2007. It is important to keep in mind that LVIA is on the higher end of this because they choose to maintain all airport services by the Authority, thus increasing their operating expenses, but also generating the revenue to support those expenses. For example, their FBO operating costs are included in the FAA numbers, while none of the other comparable airports provide FBO services directly. Also, expenses at airports the size of LVIA are a function of economies of scale. (i.e. there is a certain level of fixed costs regardless of the passenger base, as the passenger base grows those fixed costs do not proportionally increase.) Based on available
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information from the comparable airports, LVIA is competitive with regard to their Airline Rate Base at $14.15 per enplaned passenger, while Harrisburg is at $14.65 in 2007. To be competitive in the marketplace, the Study Team recommends that LNAA focus on reviewing revenue/economic development opportunities and minimizing expenses to the extent possible, the following are areas to focus on as a starting point: a. LNAA should maximize economic development opportunities. Currently, it was reported to the Study Team that all aircraft hangars at LVIA and Queen City Airport are full. To the extent practicable, the Authority should continue their capital development program and capitalize on the need for more hangar space. Multiple options could be pursued, including: private hangar development, Authority development, and Authority development with partial capital assistance through grants. All three possibilities should be evaluated. Further, this effort will help to reduce any market share loss of aircraft to other surrounding airports because space was not available at either of the Airports. b. LNAA provides the Fixed Base Operator (FBO) functions at LVIA and Queen City Airports. While the Authority reports that it has unsatisfactorily utilized a contract FBO in the past who did not meet the demands of the Authority, LNAA should reconsider the competitive benefits of contracting out the FBO services for Lehigh Valley International and Queen City Airports. All of the comparable airports reviewed contract out these services. The following are just some of the benefits that can be realized: Integration into a national marketing network of the FBO. Private investment, freeing LNAA funds for other development use. Buffer the perception that the Authority holds a monopoly by the users. Opens the potential/ability to have more than one FBO at LVIA when demand warrants. Utilizing the Request for Proposal (RFP) process, the Authority would demand certain performance measures as it relates to the activities proposed. In addition from a financial

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perspective, this will also allow the Authority to conduct an Apples to Apples analysis and pro-forma comparison of Lehigh Valley Aviation Services with the proposers. 3. Finding: LNAA should have a comprehensive Strategic Plan in place. Recommendation: LNAA should develop a Strategic Plan. Strategic Plans are dynamic in nature and help to focus an organization on achieving the Plans goals set at the onset. The lack of a Plan can often lead an organization to make decisions without the benefit of a long-range perspective. The Plan can also aide in the communication and incorporation of goals from surrounding governmental and community organizations as well as provide a method to measure performance at the end of given period of time. A Strategic Plan for LNAA should consider the following in the development of a Plan, among others: Conduct a Situational Analysis (Economy, Industry, Security, Etc.) Develop Strategic and Tactical Goals (Customer Service, Economic Development, Competition, Community Relations, Etc.) Develop Departmental Objectives (Board, Finance, Air Service, Leasing, Capital Projects, Etc.) Develop a Performance Measurement System

The strategic planning process can help to identify strategies to obtain goals that LNAA may be considering. For example, items that are appropriate to consider in a Strategic Plan are: LNAAs strategic goals for the next year; Five years. Departmental Objectives. Areas to reduce operating expenses. Utilization of third-party contract services.

Depending upon the skill set of staff, the development of these Plans can be done in-house, utilize an outside consultant, or a combination of both.

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4. Finding: As part of the Strategic Plan, LNAA should develop a standalone Marketing Plan. Recommendation: LNAA should develop a standalone Marketing Plan to aide in the development and implementation of various initiatives the Authority is pursuing. This Plan should involve participation from surrounding governmental, corporate, and community organizations. The Plan should identify marketing strategies to achieve desired goals. For example, items to consider in a Marketing Plan are: Formation of a Regional Air Service Development Committee. Possible participants could include: Lehigh and Northampton Counties; the Lehigh Valley Partnership; Lehigh Valley Economic Development Corporation; Lehigh Valley Convention and Visitors Bureau; Chambers of Commerce from the passenger catchment area. The marketing message. Currently, LNAA markets the air service being provided at LVIA. Since the survey indicated most users like the convenience LVIA offers, strong consideration should be given to marketing the Airports convenience, especially in the outlying areas of the catchment area that compete heavily with Philadelphia and Newark. The Airports identity. During the Study process, many reported that there are conflicting messages among Airport users with respect to the Airports recognition or identity. Consideration should be given to developing a consistent brand name for the Airport. Perhaps the FAAs three letter designator of ABE needs to be changed to LVA, LEV, LVI or something else to enforce the regional identity that the Airport needs. In addition, an effort should be made to work with the airlines to announce arrivals as Welcome to the Lehigh Valley as opposed to various messages reported to the Study Team
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such as Welcome to Allentown, Welcome to Allentown, Bethlehem, Easton, Etc. A marketing plan can also help to set the stage for successful air service grants from the Small Community Air Service Development Program. To be successful in obtaining these grants, the application must show as much financial support as possible from the corporate, community and governmental agencies in the Airports service area. A comprehensive marketing plan developed with input from a Regional Air Service Development Committee would provide the understanding and justification for financial support. Depending upon the skill set of staff, the development of these Plans can be done in-house, utilize an outside consultant, or a combination of both. 5. Finding: LNAA should be reorganized to provide a strategic focus for the Airport and enhance efficiencies in its operation and development. Recommendation: The current Authority organization has various reporting lines to differing levels of responsibility, all reporting to the Deputy Executive Director. With 129 employees, 22 are identified as being a supervisor, director, or manager. This translates to a ratio of 1 management position for every 6 employees. Also, both the Executive Director and Deputy Executive Director positions are currently carrying operational responsibilities. Further, the Study Team observed that all of the staff interviewed appear to be qualified and that the current organizational structure seems to have evolved based on the available talent at LNAA and not necessarily the most efficient and effective structure. The organization of LNAA should be streamlined to reduce the number of Departments reporting to Executive Management. A simplified organization as discussed in Section 5 and shown on the next page should be considered.

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Executive Director
Deputy Executive Director
Administration Finance
Business Development

Engineering

Operations

In addition, the Executive Director position should be more focused on policy development and implementation as well as the external management of the LNAA, while the Deputy Executive Director position should focus on the operational needs of the Authority. LNAA should also consider the following organizational improvements: a. Responsibilities for planning, engineering and construction should be under one Department. While the Study Team understands the recent history behind the Engineering and Construction Department being organized as a result of the Deputy Executive Directors previous responsibilities, this Department should be reorganized to contain all related positions and activities. Given airports various environmental regulatory hurdles, an Environmental Planner position should be considered for inclusion in this Department. Since LNAA is moving forward with a Terminal improvement program, expeditious consideration should be given to undertaking this Departmental reorganization. This reorganization should also help to bring focus on the need to develop more aircraft hangars at Authority airports as well as other capital development needs. b. Public relations should be a dedicated function working directly with the Executive Director. While Section 4 found that the Business Development Department is focusing on the right areas with regard to Air Service, the Department is overburdened with public relations/affairs type activities. In addition, the Department has utilized multiple consultants for air service development support. A dedicated public relations position should be created within the Business Development Department reporting directly to the Executive Director. This will further enhance the role of the Executive Director to focus on external Authority activities and
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relationships including more regular outreach to corporations and executives to use LVIA for corporate travel, especially the top 5 to 10 Fortune 500 companies in the Region. Assistance from the County Executives may be needed to reach the right business executives. The recommended restructuring will allow the Department to better focus on Business Development in general, not just air service related development. Consideration should also be given to creating a Properties Representative that will help to aide in the non-air service related business development, marketing and leasing activities. And lastly, the use of one air service development consultant is recommended to help reduce the learning curve effect every time a new firm is utilized, thereby reducing the cost of those services. This can be done through a competitive RFP process and may include the firm that assists in developing LNAAs Marketing Plan. c. A dedicated Operations Department to enhance the operational efficiency and safety of the facilities. Operational activities are currently spread among various LNAA Departments. A focused Operations Department should be considered and could potentially include the following functions: Public Safety (Police, Fire, Communications) Airport Operations (LVIA, Queen City and Braden Airpark) Maintenance Lehigh Valley Aviation Services

d. The functions of the Systems Department would be better served reporting to a Department rather than Executive Management. The Systems Director is currently identified as a direct report to Executive Management. The Systems Director and related direct reports should be integrated into the Finance Department. While this will ease the number of direct reports to Executive Management, it will also aide in the continued effort to upgrade the Authoritys budgeting and financial reporting systems.

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6. Finding: The LNAA Board of Governors is large for the size and scope of its Mission. Recommendation: Consideration should be given to reducing the size of the Board of Governors from 19 to 11 members resulting in: 6 from Lehigh County and 5 from Northampton County. As this is implemented, the goal would be for each County to have one appointment annually with the exception of Lehigh County having two appointments in the fifth year. Further, each County should consider designating the County Executive or representative as an Ex-Officio voting member as one of the 11 Board members. This will aide in the communication between the County and Authority, while not over burdening the Authority.

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APPENDIX TABLE OF CONTENTS

I. II. III. IV. V. VI.

Glossary of Terms Stakeholder Survey Questionnaire Comparable Airports Contact Information Comparable Airports Discussion Framework Human Resources Survey Questionnaire Air Service Survey Questionnaire

VII. Comparable Airports 2007 Operating and Finance Data

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GLOSSARY OF TERMS
ABE - The 3-letter designator for Lehigh Valley International Airport assigned to the airport by the Federal Aviation Administration. AIRPORT IMPROVEMENT PROGRAM (AIP) FAA program that is the primary source of funding for airport projects as grants. This funding is provided at specific levels, with the funding priority based on the airports Capital Improvement Program (CIP) AIRPORT TRAFFIC CONTROL TOWER (ATCT) - A facility providing airport traffic control service to an airport and its associated airspace area. ATC - AIR TRAFFIC CONTROL SERVICE - A service provided for the purpose of promoting the safe, orderly, and expeditious flow of air traffic, including airport, approach, and enroute air traffic control services. ATC is provided by the Federal Aviation Administration. BASED AIRCRAFT - An aircraft permanently stationed at an airport by agreement between the airport owner (management or FBO) and the aircraft owner. CAPITAL IMPROVEMENT PROGRAM (CIP) The Capital Improvement Program provides a schedule of development for the proposed projects identified in an Airport Master Plan. COMMERCIAL AIRPORT An airport designated as having the primary function of providing commercial airline service to the overall community. COMMON USE Those areas within an airport that are utilized by airlines on a first-come, first serve basis. ENPLANEMENT - A revenue passenger boarding an aircraft. EXCLUSIVE USE - Those areas within an airport whose use is limited to a single airline, usually through a contract with the airport owner/operator. FEDERAL AVIATION ADMINISTRATION (FAA) - A branch of the federal government under the Department of Transportation responsible for the regulation and safety of airports and airspace in the United States FIXED BASE OPERATION OR FIXED BASE OPERATOR (FBO) - A sales and/or service facility located at an airport, or the person who operates such a facility. GENERAL AVIATION (GA) - All civil aircraft and aviation activity except that of the certified airlines and military operations. GA includes corporate flying and private flying (recreation or personal). GMIA - General Mitchell International Airport.
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LNAA Lehigh Northampton Airport Authority. LVIA Lehigh Valley International Airport MDT - The 3-letter designator for Harrisburg International Airport assigned to the airport by the Federal Aviation Administration. MINIMUM STANDARDS A set of standards that ensure a safe, efficient and adequate level of operations and services offered to the public. Minimum standards are not required, but are strongly encouraged, by the FAA and are included as a part of the aeronautical service providers lease with the airport owner/operator. MKE - The 3-letter designator for General Mitchell International Airport assigned to the airport by the Federal Aviation Administration. PVD The 3-letter designator for T.F. Green Airport assigned to the airport by the Federal Aviation Administration. PASSENGER FACILITY CHARGE (PFC) Program that allows for the collection of fees for every enplaned passenger at commercial service airports. These funds can be used for FAAapproved projects that enhance safety, security or capacity; reduce noise; or increase air carrier competition. SFD The 3-letter designator for Orlando Sanford Airport assigned to the airport by the Federal Aviation Administration. SWF The 3-letter designator for Stewart International Airport assigned to the airport by the Federal Aviation Administration. SWOT A strategic planning method to evaluate the Strengths, Weaknesses, Opportunities, and Threats of a business and identifying the internal and external factors that are favorable or unfavorable to achieving the business objectives. RELIEVER AIRPORT - An airport designated as having the primary function of relieving congestion at a commercial airport and providing more general aviation access to the overall community.

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Lehigh and Northampton Counties have commissioned a study being done by The Louis Berger Group to evaluate the efficiency and effectiveness of the Lehigh Valley International Airport functions, to promote economic development opportunities and to provide recommendations to improve and/or enhance air service to the region. This survey is one of several tasks in the study and is designed to assist the Team in understanding the current perceptions of airport employees, the community, and various stakeholders. You will note that the survey questions provide an option for additional comments. Additional comments are indeed encouraged as they will help the Team to best understand specific issues and concerns. Your identity in taking this survey will remain confidential. That is, the results of the survey will be compiled in an aggregate form in the Teams report provided to Lehigh and Northampton Counties. Thank you in advance for your participation. The Louis Berger Group, Inc. Donald T. Cunningham, Jr John Stoffa

Lehigh County Executive

Northampton County Executive

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Lehigh Valley International Airport Survey

In regards to the Lehigh Valley International Airport, how would you classify yourself? (Pick one, choose the most appropriate description). Board of Governors Member Airport Management Employee Non-Management Airport Employee Regional Executive, Airport Stakeholder or Non-Airport Employee

What is your perception of Lehigh Valley International Airport? A valuable economic asset Just another mode of transportation An unnecessary asset No opinion

Comments on question 2

From an economic perspective, how would you rate the importance of aviation growth in the city/county? Very important Somewhat important Not important

Comments on question 4

How well do you understand the Airports organizational/management structure? I fully understand it

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1/8/20

Zoomerang
Somewhat understand it I do not understand it at all

Page 2 o

Comments on question 6

The primary mission of the Airport Authority is to develop and operate facilities to serve the short and long term needs of the travelling public, air cargo shippers, general aviation community and the economic development of Lehigh Valley. How well do you feel the Authority satisfies this mission? The Authority is effective in satisfying the mission The Authority is only somewhat effective in satisfying the mission The Authority is ineffective in satisfying the mission I do not have enough involvement or exposure allowing me to respond

Comments on question 8

10 Have you used the Lehigh Valley International Airport for business
and/or leisure travel over the last 5 years? If no, skip to question 18. Yes No

11 When did you travel? Select all that apply.


2008 2007 2006 2005 2004

12 How often have you used the airport in the last five years?
Less than 10 10-30 More than 30

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1/8/20

Zoomerang 13 Please list some of your typical travel destination airports from Lehigh
Valley in the last five years.

Page 3 o

14 As an Airport user, how well does the Lehigh Valley International Airport
meet your air travel needs? Meets all of my air travel needs very well Meets some of my needs but the airport needs improvement to satisfy them all Does not meet my needs very well I do not use Lehigh Valley for my air travel needs

15 Comments on question 14

16 Since the year 2004, how would you rate the state of air service at
Lehigh Valley? Unchanged in recent years Air service has improved Air service has worsened

17 What do you think are some of the factors that have contributed to this?

18 In your opinion, has the Airport Authority established effective


communications with the business community/general public in a manner that is proactive and shows dedication to serving the publics interest? Yes No Somewhat, but more effort is needed in this area

19 Comments on question 18

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1/8/20

Zoomerang 20 What do you like/dislike about the current state of communications


between the Community and/or Region and the Airport Authority?

Page 4 o

21 In your opinion, are the relationships between the Airport Authority and
Stakeholders positive so as to promote good working relationships? Yes No Somewhat, but more effort is needed in this area

22 Comments on question 21

23 Given your exposure to the airport, what improvements are needed at


the airport to improve its efficiency and effectiveness? If none, please state as such.

Survey Page 1

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1/8/20

The Louis Berger Group, Inc.

Final Report Airport Management Study Lehigh Northampton Airport Authority

COMPARABLE AIRPORTS CONTACT INFORMATION


1. Mr. C. Barry Bateman Airport Director General Mitchell International Airport 5300 South Howell Avenue Milwaukee, WI 53207 414.747.5331 bbateman@mitchellairport.com 2. Mr. George Speake Vice President, Maintenance and Operations Sanford Airport Authority 1200 Red Cleveland Blvd. Sanford, Florida 32773 407.585.4006 gspeake@osaa.net 3. Ms. Patty Goldstein Vice President, Public Affairs and Air Service Marketing Rhode Island Airport Corporation 2000 Post Road Warwick, RI 02886 401.737.4000 ext. 272 PGoldstein@pvdairport.com 4. Mr. Scott Miller Vice President, Public Affairs and Air Service Marketing Harrisburg/Susquehanna International Airport One Terminal Drive Middletown, PA 17057 717.948.3900 ext. 4620 ScottM@saraa.org 5. Ms. Diannae Ehler General Manager Stewart International Airport 1180 First Street New Windsor, NY 12553 845.564.7200 ext. 604 dehler@panynj.gov

Lehigh & Northampton Counties February 6, 2009

Comparable Airports Contact Information Page 1

The Louis Berger Group, Inc.

Final Report Airport Management Study Lehigh Northampton Airport Authority

COMPARABLE AIRPORTS DISCUSSION FRAMEWORK


ORGANIZATION

Please describe the organizational structure of the airport/Department. How many staff does the Department/Airport have? Does this include all employees (other agency employees, contract employees, and/or on-site consultants)? Is there a board or commission? How are members selected? How often do they meet? Are they advisory only in nature or do they take formal actions? What types of decisions go before the board or commission? Can we obtain copies of your Organization Charts? Do you report to a city council or other municipal/county/state body or individual? Is that person elected or appointed? How is the Airport Manager hired (selected or appointed)? What is the process? Is the Airport Manager under an employment contract?

MANAGEMENT

What is the primary way that the airport is financed (e.g. bonds, user fees, etc.)? Are there Minimum Standards in place? When were they last revised? What is the procurement process? How long does it routinely take for the entire process? How is capital projects managed? Directly or indirectly? Through the use of Consultants? What about construction phases? When was the terminal built and last expanded? Describe the general consulting process for the project.

OPERATIONS

How many Fixed Base Operators are located at the airport? Are there any FBOs that are run by the airport? What services do they offer? Who performs airline fueling services? How many airlines operate at the airport? How many destinations do they serve? Do you have common or exclusive use agreements with airlines for gates/ticket counters/FIDS? ATC Services: o Are the Air Traffic Control Towers (ATCT) operated by the FAA, or are they operated as a Contract Tower? o ATCT continuous operation or limited hours? Does the airport directly handle day-to-day operational needs (e.g. security, maintenance, operations, cleaning), or are they contracted services? What other services are contracted out? Does the airport operate the parking lots or does it use a parking firm? Do you rely on the delivery of services from other departments or sister government agencies (grounds keeping, for example)? How are those interagency agreements structured?

Lehigh & Northampton Counties February 6, 2009

Comparable Airports Discussion Framework Page 1

The Louis Berger Group, Inc.

Final Report Airport Management Study Lehigh Northampton Airport Authority

HUMAN RESOURCES SURVEY QUESTIONNAIRE


AIRPORT NAME:
CURRENT NUMBER OF FTE'S:

Types of Health Insurance Plans Offered Total Plans Offered

PPO 80/20

PPO 90/10

HMO

HIGH DED. PPO

POS 70/30

Definitions: PPO 80/20 Preferred Provider Organization in which the Plan pays 80% of usual and customary services after deductible PPO 90/10 - Preferred Provider Organization in which the Plan pays 90% of usual and customary services after deductible HMO Health Maintenance Organization High Deductible PPO A Preferred Provider Organization with a high deductible (usually $3000 or higher) POS Point of Service Plan

2008 EMPLOYER (%) contribution of Health Care insurance costs:


Single: Employee/spouse Employee/child(ren) Family

Other Insurance Benefits Offered Type Dental Insurance Life Insurance Optional Life Short Term Dis. Long Term Dis. Vision Insurance Other
Employer Pays All Employee Pays All Shared

2008 TOTAL BENEFIT COST as a Percent (%) of Payroll:


Paid Time Off Paid Hours 1<5 yrs/serv Paid Hours 5<10 yrs/serv Paid Hours 10<15 yrs/serv Paid Hours More than 15 yrs/service

Vacation Sick Other Other Paid Leave Provided


Type Number of Days

Bereavement Holidays Jury Duty Military Other

Financial/Retirement Benefits

Lehigh & Northampton Counties February 6, 2009

Human Resources Survey Questionnaire Page 1

The Louis Berger Group, Inc.

Final Report Airport Management Study Lehigh Northampton Airport Authority

AIR SERVICE SURVEY QUESTIONNAIRE


1. What department does air service development fall under? 2. Who has responsibility for air service development? 3. What other responsibilities does that person have? 4. How many direct reports does that person have? 5. How much does the Airport budget for advertising every year? 6. Does the Airport issue a newsletter? 7. If so, how often is it published? 8. Is it distributed to airline network planners? 9. Does the Airport produce a printed timetable? 10. Do you use a consultant for air service development work? 11. If so, how many different consultants do you work with? 12. What is your average annual budget for air service consultants? 13. How often do you visit carriers at their headquarters? 14. If so, do consultants travel with you to these meetings? 15. Who else attends them on behalf of the Airport? 16. Which of the annual air service conferences do you attend? 17. Do you have a formal air service incentive program? 18. If so, what do you offer carriers for new service? 19. What do you offer carriers for additional service on existing routes? 20. Do you actively pursue cargo service? 21. Do you actively pursue scheduled charter service? 22. What percentage of your passengers leak to other airports? 23. What does your Airport do to try and mitigate leakage?
Lehigh & Northampton Counties February 6, 2009 Air Service Survey Questionnaire Page 1

A: AAS-400: CATS: Report 127


Operating and Financial Summary
Airport: LEHIGH VALLEY INTL LocID: ABE Year: 2007 As of 11/13/2008 03:53:10 PM Date Filed: 06/26/2008 Date Modified: 06/26/2008
$ 2,899,304 $ 305,247 $ 922,181 $ 2,540,261 $0 $ 2,944,658 $ 212,371 $ 14,732 $0 $ 12,924,870 1. Interest expense 2. Other

Page 1 of
Enplanements:

ronautical Operating Revenue


erminal/International arrival area rental or other charge $ 3,086,116 BO revenue: contract or sponsor-operated

Non-Operating Expenses
$ 3,108,626 $ 110,748 $ 3,219,374 $ 5,692,329 $ 6,286,983

anding Fees

Apron charges/tiedowns

Total Depreciation Net Reporting Year Proceeds


1. Bond Proceeds 2. Proceeds from sale of property 3. Other contributed capital 4. Other

Cargo and hangar rentals uel sales net proffit/loss or fuel flowage fees

Aviation fuel tax retained for airport use

Security Reimbursement

Misc.

Other

$0 $0 $0 $0 $0

tal

naeronautical Operating Revenue


$ 350,844 $ 142,219 $ 85,253 $ 184,314 $ 1,688,456 $ 5,414,916 $ 181,122 $0 $ 8,047,124 erminal - food and beverage erminal - retail stores erminal - other

and and non-terminal facilities

Total Reporting Year Expenditures for Projects


1. Airfield 2. Terminal 3. Parking 4. Roadways, rail, and transit 5. Other

Rental cars

$ 1,726,250 $ 1,030,188 $0 $0 $ 4,370,126 $ 7,126,564 $ 4,051,092

Parking

Misc.

Other

tal

Total Reporting Year Debt Payments Indebtedness at End of Year


1. Bonds 2. Loans 3. Other

noperating Revenue
$ 818,802 $ 7,004,508 $ 1,899,903 $ 46,200 $ 9,769,413

nterest income - restricted and non-restricted

Grant receipts

Passenger Facility Charges

Other

$ 53,169,853 $ 2,215,218 $ 2,912,501 $ 58,297,572 $ 150,144,259

tal

erating Expenses
$ 8,845,625 $ 1,562,651 $ 633,812 $ 419,160 $ 1,871,632 $ 583,728 $ 157,874 $ 1,468,239 $ 15,542,721

Total Net Assets Restricted Financial Assets


1. Restricted debt service reserve 2. Restrictions for renewals and replacements 3. Other restricted financial assets

Personnel compensation and benefits

Communications and utilities

Supplies and materials

Repairs and maintenance

Contractual services

$ 2,909,328 $ 1,000,000 $0 $ 3,909,328 $ 8,295,463

nsurance, claims, and settlements

Misc.

Other

Total Unrestricted Financial Assets including cash

tal

erwork Reduction Act Statement: The information collected on this form facilitates the submission of operating and financial summary data. Section 111(b) requires the

etary of Transporation to issue a simplied format for reporting data applicable to Airports to assist in public understanding of airport finances and to provide information concerning mount of revenue surplus, the amount of concession-generated revenue, and other information required by the Secretary. The burden for each response is estimated to be 5 hours onses are required to obtain a benefit. No assurance of confidentiality is given. Please note that an agency may not conduct or sponsor, and a person is not required to respond to ection of information unless it displays a currently valid OMB number. The OMB control number associated with this collection is 2120-0569.

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2/19/200

A: AAS-400: CATS: Report 127


Operating and Financial Summary
Airport: HARRISBURG INTL LocID: MDT Year: 2007 As of 11/13/2008 04:00:27 PM Date Filed: 04/29/2008 Date Modified: 04/29/2008
$ 3,376,587 $ 1,362,257 $ 144,134 $ 358,207 $0 $ 298,877 $ 17,467 $0 $ 15,000 $ 12,043,951 1. Interest expense 2. Other

Page 1 of
Enplanements:

ronautical Operating Revenue


erminal/International arrival area rental or other charge $ 6,471,422 BO revenue: contract or sponsor-operated

Non-Operating Expenses
$ 11,478,513 $ 1,055,440 $ 12,533,953 $ 10,349,952 $ 1,841,051

anding Fees

Apron charges/tiedowns

Total Depreciation Net Reporting Year Proceeds


1. Bond Proceeds 2. Proceeds from sale of property 3. Other contributed capital 4. Other

Cargo and hangar rentals uel sales net proffit/loss or fuel flowage fees

Aviation fuel tax retained for airport use

Security Reimbursement

Misc.

Other

$0 $ 14,411 $0 $0 $ 14,411

tal

naeronautical Operating Revenue


$ 357,998 $ 109,600 $ 160,931 $ 150,423 $ 3,532,978 $ 6,141,424 $ 30,025 $ 567,984 $ 11,051,363 erminal - food and beverage erminal - retail stores erminal - other

and and non-terminal facilities

Total Reporting Year Expenditures for Projects


1. Airfield 2. Terminal 3. Parking 4. Roadways, rail, and transit 5. Other

Rental cars

$ 599,008 $ 249,264 $ 27,669 $ 155,222 $ 88,034 $ 1,119,197 $0

Parking

Misc.

Other

tal

Total Reporting Year Debt Payments Indebtedness at End of Year


1. Bonds 2. Loans 3. Other

noperating Revenue
$ 996,658 $ 11,945,748 $ 2,668,832 $ 2,913 $ 15,614,151

nterest income - restricted and non-restricted

Grant receipts

Passenger Facility Charges

Other

$ 181,542,977 $ 15,123,688 $ 5,939,174 $ 202,605,839 $ 99,855,327

tal

erating Expenses
$ 5,835,773 $ 1,779,949 $ 960,045 $ 1,254,737 $ 3,343,405 $ 810,600 $0 $0 $ 13,984,509

Total Net Assets Restricted Financial Assets


1. Restricted debt service reserve 2. Restrictions for renewals and replacements 3. Other restricted financial assets

Personnel compensation and benefits

Communications and utilities

Supplies and materials

Repairs and maintenance

Contractual services

$ 9,758,187 $ 418,321 $ 2,841,495 $ 13,018,003 $ 2,131,580

nsurance, claims, and settlements

Misc.

Other

Total Unrestricted Financial Assets including cash

tal

erwork Reduction Act Statement: The information collected on this form facilitates the submission of operating and financial summary data. Section 111(b) requires the

etary of Transporation to issue a simplied format for reporting data applicable to Airports to assist in public understanding of airport finances and to provide information concerning mount of revenue surplus, the amount of concession-generated revenue, and other information required by the Secretary. The burden for each response is estimated to be 5 hours onses are required to obtain a benefit. No assurance of confidentiality is given. Please note that an agency may not conduct or sponsor, and a person is not required to respond to ection of information unless it displays a currently valid OMB number. The OMB control number associated with this collection is 2120-0569.

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2/19/200

A: AAS-400: CATS: Report 127


Operating and Financial Summary
Airport: GENERAL MITCHELL INTL LocID: MKE Year: 2007 As of 11/13/2008 03:57:12 PM Date Filed: 05/28/2008 Date Modified: 05/28/2008
$ 12,431,053 $ 1,119,774 $ 430,925 $ 994,161 $0 $ 398,463 $0 $0 $ 2,212,432 $ 21,435,309 1. Interest expense 2. Other

Page 1 of
Enplanements:

ronautical Operating Revenue


erminal/International arrival area rental or other charge $ 3,848,501 BO revenue: contract or sponsor-operated

Non-Operating Expenses
$ 7,202,899 $ 1,198,410 $ 8,401,309 $ 10,045,665 $ 14,638,897

anding Fees

Apron charges/tiedowns

Total Depreciation Net Reporting Year Proceeds


1. Bond Proceeds 2. Proceeds from sale of property 3. Other contributed capital 4. Other

Cargo and hangar rentals uel sales net proffit/loss or fuel flowage fees

Aviation fuel tax retained for airport use

Security Reimbursement

Misc.

Other

$ 26,546,703 $0 $ 5,311 $0 $ 26,552,014

tal

naeronautical Operating Revenue


$ 431,513 $ 2,174,837 $ 1,519,631 $ 655,406 $ 7,307,351 $ 26,936,691 $0 $ 1,390,982 $ 40,416,411 erminal - food and beverage erminal - retail stores erminal - other

and and non-terminal facilities

Total Reporting Year Expenditures for Projects


1. Airfield 2. Terminal 3. Parking 4. Roadways, rail, and transit 5. Other

Rental cars

$ 2,950,644 $ 24,245,910 $0 $ 1,641,989 $ 7,264,660 $ 36,103,203 $ 8,622,922

Parking

Misc.

Other

tal

Total Reporting Year Debt Payments Indebtedness at End of Year


1. Bonds 2. Loans 3. Other

noperating Revenue
$ 4,153,286 $ 3,355,816 $ 9,450,436 $ 453,437 $ 17,412,975

nterest income - restricted and non-restricted

Grant receipts

Passenger Facility Charges

Other

$ 190,170,129 $0 $0 $ 190,170,129 $ 131,267,683

tal

erating Expenses
$ 18,760,210 $ 3,867,963 $ 2,399,535 $ 414,117 $ 10,887,887 $ 635,475 $0 $ 9,213,637 $ 46,178,824

Total Net Assets Restricted Financial Assets


1. Restricted debt service reserve 2. Restrictions for renewals and replacements 3. Other restricted financial assets

Personnel compensation and benefits

Communications and utilities

Supplies and materials

Repairs and maintenance

Contractual services

$ 4,220,341 $ 4,769,101 $ 11,338,604 $ 20,328,046

nsurance, claims, and settlements

Misc.

Other

Total

tal

Unrestricted Financial Assets including cash $ 110,939,637

erwork Reduction Act Statement: The information collected on this form facilitates the submission of operating and financial summary data. Section 111(b) requires the

etary of Transporation to issue a simplied format for reporting data applicable to Airports to assist in public understanding of airport finances and to provide information concerning mount of revenue surplus, the amount of concession-generated revenue, and other information required by the Secretary. The burden for each response is estimated to be 5 hours onses are required to obtain a benefit. No assurance of confidentiality is given. Please note that an agency may not conduct or sponsor, and a person is not required to respond to ection of information unless it displays a currently valid OMB number. The OMB control number associated with this collection is 2120-0569.

://V:\project\JQ%202478%20-%20LVIA%20Airport%20Management%20Study\Comparable%20Air...

2/19/200

A: AAS-400: CATS: Report 127


Operating and Financial Summary
Airport: THEODORE FRANCIS GREEN LocID: PVD Year: 2007 As of 11/13/2008 04:11:23 PM Date Filed: 09/27/2007 Date Modified: 09/27/2007
$ 12,503,375 $ 1,006,571 $0 $0 $0 $ 982,605 $0 $ 454,116 $ 24,380 $ 22,858,757 1. Interest expense 2. Other

Page 1 of
Enplanements:

ronautical Operating Revenue


erminal/International arrival area rental or other charge $ 7,887,710 BO revenue: contract or sponsor-operated

Non-Operating Expenses
$ 11,705,103 $ 21,042,222 $ 32,747,325 $ 15,725,115 $ 17,017,246

anding Fees

Apron charges/tiedowns

Total Depreciation Net Reporting Year Proceeds


1. Bond Proceeds 2. Proceeds from sale of property 3. Other contributed capital 4. Other

Cargo and hangar rentals uel sales net proffit/loss or fuel flowage fees

Aviation fuel tax retained for airport use

Security Reimbursement

Misc.

Other

$0 $ 112,586 $ 18,821 $0 $ 131,407

tal

naeronautical Operating Revenue


$ 1,453,908 $ 1,036,138 $ 687,096 $ 731,005 $ 6,539,947 $ 11,335,509 $ 502,745 $ 1,055,430 $ 23,341,778 erminal - food and beverage erminal - retail stores erminal - other

and and non-terminal facilities

Total Reporting Year Expenditures for Projects


1. Airfield 2. Terminal 3. Parking 4. Roadways, rail, and transit 5. Other

Rental cars

$ 14,613,007 $ 55,397,656 $ 1,062,125 $ 1,378,010 $ 18,748,228 $ 91,199,026 $ 8,486,698

Parking

Misc.

Other

tal

Total Reporting Year Debt Payments Indebtedness at End of Year


1. Bonds 2. Loans 3. Other

noperating Revenue
$ 6,583,508 $ 25,497,672 $ 10,039,836 $ 5,968,826 $ 48,089,842

nterest income - restricted and non-restricted

Grant receipts

Passenger Facility Charges

Other

$ 321,526,033 $ 774,654 $ 2,698,983 $ 324,999,670 $ 188,318,614

tal

erating Expenses
$ 17,287,570 $ 2,414,776 $ 981,138 $ 669,284 $ 5,267,922 $ 809,344 $ 172,682 $ 1,197,975 $ 28,800,691

Total Net Assets Restricted Financial Assets


1. Restricted debt service reserve 2. Restrictions for renewals and replacements 3. Other restricted financial assets

Personnel compensation and benefits

Communications and utilities

Supplies and materials

Repairs and maintenance

Contractual services

$ 25,347,501 $ 5,519,222 $ 131,926,663 $ 162,793,386

nsurance, claims, and settlements

Misc.

Other

Total

tal

Unrestricted Financial Assets including cash $ 41,512,580

erwork Reduction Act Statement: The information collected on this form facilitates the submission of operating and financial summary data. Section 111(b) requires the

etary of Transporation to issue a simplied format for reporting data applicable to Airports to assist in public understanding of airport finances and to provide information concerning mount of revenue surplus, the amount of concession-generated revenue, and other information required by the Secretary. The burden for each response is estimated to be 5 hours onses are required to obtain a benefit. No assurance of confidentiality is given. Please note that an agency may not conduct or sponsor, and a person is not required to respond to ection of information unless it displays a currently valid OMB number. The OMB control number associated with this collection is 2120-0569.

://V:\project\JQ%202478%20-%20LVIA%20Airport%20Management%20Study\Comparable%20Air...

2/19/200

A: AAS-400: CATS: Report 127


Operating and Financial Summary
Airport: ORLANDO SANFORD LocID: SFB Year: 2007 As of 11/13/2008 04:04:30 PM Date Filed: 01/17/2008 Date Modified: 01/17/2008
$ 903,928 $ 662,423 $ 109,868 $ 1,806,893 $ 293,211 $0 $ 309,827 $0 $0 $ 59,721 $ 4,145,871 1. Interest expense 2. Other

Page 1 of
Enplanements:

ronautical Operating Revenue


erminal/International arrival area rental or other charge BO revenue: contract or sponsor-operated

Non-Operating Expenses
$ 432,802 $0 $ 432,802 $ 5,601,105 $( 4,096,883)

anding Fees

Apron charges/tiedowns

Total Depreciation Net Reporting Year Proceeds


1. Bond Proceeds 2. Proceeds from sale of property 3. Other contributed capital 4. Other

Cargo and hangar rentals uel sales net proffit/loss or fuel flowage fees

Aviation fuel tax retained for airport use

Security Reimbursement

Misc.

Other

$0 $0 $0 $0 $0

tal

naeronautical Operating Revenue


$ 2,290,549 $0 $0 $0 $ 347,170 $ 47,829 $ 158,775 $ 508,034 $ 3,352,357 erminal - food and beverage erminal - retail stores erminal - other

and and non-terminal facilities

Total Reporting Year Expenditures for Projects


1. Airfield 2. Terminal 3. Parking 4. Roadways, rail, and transit 5. Other

Rental cars

$ 16,081,791 $0 $ 2,183,997 $ 2,683,051 $ 11,654 $ 20,960,493 $0

Parking

Misc.

Other

tal

Total Reporting Year Debt Payments Indebtedness at End of Year


1. Bonds 2. Loans 3. Other

noperating Revenue
$ 135,519 $0 $ 1,503,542 $0 $ 1,639,061

nterest income - restricted and non-restricted

Grant receipts

Passenger Facility Charges

Other

$0 $ 16,413,871 $0 $ 16,413,871 $0

tal

erating Expenses
$ 4,094,700 $ 404,057 $ 300,263 $ 474,428 $ 1,023,428 $ 356,749 $0 $ 546,640 $ 7,200,265

Total Net Assets Restricted Financial Assets


1. Restricted debt service reserve 2. Restrictions for renewals and replacements 3. Other restricted financial assets

Personnel compensation and benefits

Communications and utilities

Supplies and materials

Repairs and maintenance

Contractual services

$0 $0 $ 58,788 $ 58,788

nsurance, claims, and settlements

Misc.

Other

Total

tal

Unrestricted Financial Assets including cash $ 3,847,316

erwork Reduction Act Statement: The information collected on this form facilitates the submission of operating and financial summary data. Section 111(b) requires the

etary of Transporation to issue a simplied format for reporting data applicable to Airports to assist in public understanding of airport finances and to provide information concerning mount of revenue surplus, the amount of concession-generated revenue, and other information required by the Secretary. The burden for each response is estimated to be 5 hours onses are required to obtain a benefit. No assurance of confidentiality is given. Please note that an agency may not conduct or sponsor, and a person is not required to respond to ection of information unless it displays a currently valid OMB number. The OMB control number associated with this collection is 2120-0569.

://V:\project\JQ%202478%20-%20LVIA%20Airport%20Management%20Study\Comparable%20Air...

2/19/200

A: AAS-400: CATS: Report 127


Operating and Financial Summary
Airport: STEWART INT'L LocID: SWF Year: 2007 As of 11/13/2008 04:07:54 PM Date Filed: 04/29/2008 Date Modified: 04/29/2008
$ 82 $ 161 $0 $0 $ 151 $0 $ 157 $0 $0 $0 $ 551 1. Interest expense 2. Other

Page 1 of
Enplanements:

ronautical Operating Revenue


erminal/International arrival area rental or other charge BO revenue: contract or sponsor-operated

Non-Operating Expenses
$0 $0 $0 $0 $( 451)

anding Fees

Apron charges/tiedowns

Total Depreciation Net Reporting Year Proceeds


1. Bond Proceeds 2. Proceeds from sale of property 3. Other contributed capital 4. Other

Cargo and hangar rentals uel sales net proffit/loss or fuel flowage fees

Aviation fuel tax retained for airport use

Security Reimbursement

Misc.

Other

$0 $0 $0 $ 497 $ 497

tal

naeronautical Operating Revenue


$0 $0 $0 $0 $ 270 $ 654 $ 347 $0 $ 1,271 erminal - food and beverage erminal - retail stores erminal - other

and and non-terminal facilities

Total Reporting Year Expenditures for Projects


1. Airfield 2. Terminal 3. Parking 4. Roadways, rail, and transit 5. Other

Rental cars

$0 $0 $0 $0 $0 $0 $0

Parking

Misc.

Other

tal

Total Reporting Year Debt Payments Indebtedness at End of Year


1. Bonds 2. Loans 3. Other

noperating Revenue
$2 $0 $ 356 $0 $ 358

nterest income - restricted and non-restricted

Grant receipts

Passenger Facility Charges

Other

$0 $0 $0 $0 $0

tal

erating Expenses
$ 192 $1 $ 1,077 $0 $0 $ 15 $ 1,319 $ 27 $ 2,631

Total Net Assets Restricted Financial Assets


1. Restricted debt service reserve 2. Restrictions for renewals and replacements 3. Other restricted financial assets

Personnel compensation and benefits

Communications and utilities

Supplies and materials

Repairs and maintenance

Contractual services

$0 $0 $0 $0 $0

nsurance, claims, and settlements

Misc.

Other

Total Unrestricted Financial Assets including cash

tal

erwork Reduction Act Statement: The information collected on this form facilitates the submission of operating and financial summary data. Section 111(b) requires the

etary of Transporation to issue a simplied format for reporting data applicable to Airports to assist in public understanding of airport finances and to provide information concerning mount of revenue surplus, the amount of concession-generated revenue, and other information required by the Secretary. The burden for each response is estimated to be 5 hours onses are required to obtain a benefit. No assurance of confidentiality is given. Please note that an agency may not conduct or sponsor, and a person is not required to respond to ection of information unless it displays a currently valid OMB number. The OMB control number associated with this collection is 2120-0569.

://V:\project\JQ%202478%20-%20LVIA%20Airport%20Management%20Study\Comparable%20Air...

2/19/200

THE

Louis Berger Group, INC.


www.louisberger.com

A Member of the Berger Group