VOL. 128 | NO. 160 | Friday, August 16, 2013
Airport Elects Brockman President
By Bill Dries
With no debate and a unanimous vote, the Memphis-Shelby County Airport Authority board of commissioners on Thursday, Aug. 15, approved Scott Brockman as the airport’s next president and CEO.
Scott Brockman was approved Thursday as the incoming president of the Memphis-Shelby County Airport Authority, effective July 2014. Brockman and other airport leaders will see Delta dehub Memphis starting next month and the arrival of Southwest Airlines as a carrier at Memphis International Airport a month later.
(Daily News/Andrew J. Breig)
Brockman, chief operating officer for the Airport Authority, will assume the duties in July 2014 when current president and CEO Larry Cox retires.
Airport Authority board Chairman Jack Sammons recommended Brockman for the post. Sammons said he had been “neutral” about him as a successor to Cox until he started working with Brockman on a daily basis seven months ago.
“I talk to him every day and I’m particularly impressed by his intellect and his common sense,” Sammons said. “Scott cares about this airport.”
Sammons also said Brockman shares his “sense of urgency” about how to deal with changes at the airport, including the de-hubbing of Memphis by Delta Air Lines Inc. and public criticism about diminishing flight options and high airfares.
Sammons said despite the public relations problems, the airport as a facility is well run.
“Our strength has not been in communicating and we continue to work on that,” Sammons said. “Not all the news we are delivering these days is good news.”
The latest drop in the number of Delta daily flights and the de-hubbing of Memphis International takes full effect next month. But the airport’s daily flight numbers for July reflected the coming changes, as Delta is already routing more passengers on regional or connecting flights through their flagship hub in Atlanta.
Airport figures for July show 408,950 passengers, down 36 percent from 640,345 the same month a year ago. The 128 scheduled daily flights in July were a 30 percent drop from the 184 scheduled flights a year ago.
The difference in the percentages also reflects Delta’s shift not only to Atlanta but away from smaller 50-seat jets to larger jets for the flights that remain part of its Memphis air service.
Meanwhile, the Airport Authority is preparing for the November start of Memphis service by Southwest Airlines as well as the conversion of AirTran flights to the Southwest brand that began this month.
The board announced revenues for July of $10 million, which were about $1.2 million ahead of expenses and better than expected. Some of that is the result of a continuing “residual use agreement” with Delta that continues through the end of the current fiscal year with negotiations for the next fiscal year scheduled for February.
Although Memphis will no longer be a Delta hub, Delta will continue to have flights at the airport in the range of 60 scheduled a day.
Brockman detailed a “sensitivity study” the airport has done that explores different scenarios for what could happen once the de-hubbing takes full effect. It includes how other airlines, which the airport is aggressively courting, might react.
The other airlines have a tendency to believe that with Delta leaving as a hub carrier, the terminal fees and other costs of using the airport facilities and gates may go much higher.
“While our rates and charges go higher, they don’t go exponentially higher to a point where any of the airlines said we would not be able to handle that. We’ve had those discussions,” Brockman said, noting recent talks with United Airlines executives that came in at a much lower terminal rate than they expected.
“Their expectation recognizing the scenario sometimes is even worse than ours because of our ability to control what we do within our house and still get things done,” he said.
One factor in that is what Sammons refers to as “running two airports across the road from each other” – a reference to the presence of the FedEx Corp.’s World Hub at the airport, the second largest cargo airport in the world.
“Because of that we are able to put a dress on a pig over here,” Sammons said. “We have a rare opportunity. But that doesn’t lessen our obligation to monitor those expenses. We have a smaller passenger flow through here.”
Thanks to FedEx, cargo once again was a bright spot in the airport’s monthly activity reports. Memphis International Airport moved 740.5 million pounds in July – the vast majority of that amount coming from the Memphis-based shipper – up 5.9 percent from the 698.8 million pounds a year ago.
But Brockman warned that FedEx and the money it pays to the airport doesn’t lessen the impact that dropping passenger service has on airport operations as a whole and the cost of operating the airfield for passenger and cargo traffic.
“We still have to do the right thing within the system so that the airfield side of it doesn’t get so expensive that FedEx could not expand here and would have to look somewhere else to expand,” he said.