Internal Airport Documents Obtained by LBREPORT.com Show Move To Begin Process Of Changing LB Airport To Accept Int'l Flights One Council Vote Away, Concealed From Public In Run-Up to 2014 City Elections
|(June 23, 2014, 6:55 a.m.) -- Although LB Airport officials characterize their still secretive discussions with JetBlue as "preliminary" regarding that company's publicly stated desire to have Long Beach Airport allow a federal inspection facility leading to international flights (previous LBREPORT.com coverage here), documents obtained by LBREPORT.com show the process is actually quite far along, potentially one Council vote away from beginning the federal process.
LBREPORT.com has learned that in November 2013, Airport management informed the City Manager, Mayor and City Council in writing that it was prepared to bring the Council a recommendation for voted action that could approve starting the lengthy federal approval process by seeking to have U.S. Customs/Border Protection declare LB Airport a "port of entry" if a user airline were to request it.
City memoranda obtained by LBREPORT.com indicate that although LB Airport has for many years been solely a domestic airport (a matter JetBlue knew when it came to Long Beach in 2001), JetBlue asked the Airport in or about August 2013 to examine the feasibility of basically changing the Airport's operations, to wit: adding international flights.
In response, LB Airport Director Mario Rodriguez (who in April 2014 announced his exit to run Indianapolis Airport) commissioned a financial feasibility study from Frasca & Associates, LLC, conducted within the bounds of LB's Airport ordinance. In October 2013, the Airport received a six page narrative report (plus a seven page data appendix.)
The study focused mainly on estimated Airport revenue [unavailable to fund city services outside the Airport] and discussed costs/benefits for the Airport. It didn't directly address the risk that enabling international flights could pose to LB's Airport ordinance, which currently protects the City from exposure to an uncontrolled number of flights at all hours of the day and night. However, the study's narrative included an implicit warning of what could happen in a plausible [not worst case] scenario in which international operations could exceed available flight slots under the Ordinance [unstated: which could lead to actions seeking to undermine or collapse the Ordinance.]
The study noted that "Given the slot regime at LGB, the development of FIS [a federal inspection facility] at the airport would generate, at most, a limited amount of incremental [emphasis in original] traffic. Rather, significant international activity would likely require some reduction in domestic activity." The study noted that if JetBlue scheduled an average of three international flights per day, and flew the average number of domestic flights it did between 2012 and 2013, and 60% of unused slots were used for international activity, Jet Blue would have to cut its domestic flights during the peak traffic months of June, July and August [to remain within LB's Airport ordinance] because there would be "insufficient unutilized slots to support the international flights." [Source: Frasca & Associates Oct. 2013 financial feasibility study, p. 3.]
JetBlue subsequently emailed LB Airport Director Rodriguez and asked that the report be updated to double the number of international flights assumed in the original report:
[Oct. 23, 2013 JetBlue email] JetBlue has stated affirmatively that we will begin our international operations with a minimum of six daily [emphasis in original] departures and grow from there, during certain peaks, to as many as 8-10 departures per day...I would ask if you could have Frasca update [a paragraph on p. 3 to reflect this]. Further, I'd appreciate it if the Frasca report beginning would be updated to note that while JetBlue holds 32 slots, over each of the trailing twelve months since April, we have averaged only 25 in use per day, leaving us ample room to begin with six to seven international flights while not in any way whatsoever [emphasis in original] impacting domestic operations -- as the memo implies.
The report's text was then changed to reflect six (not three) daily departures and the report's original language was changed to read:
The study was then conveyed to city management, then-Mayor Foster and all incumbent Council members in November 2013. It focused mainly on estimated Airport revenue and discussed costs/benefits for the Airport.
Likewise unstated: the situation would be worse if other international operators (cargo or passenger) in addition to JetBlue sought LGB flight slots, which isn't an issue now because international flights aren't allowed. Currently, the Airport's 41 large aircraft slots are all allocated, with 32 to JetBlue and 9 to other carriers.
Internal accompanying memoranda obtained by LBREPORT.com indicate that then-Airport Manager Rodriguez kept City Manager Pat West, the Mayor and Council fully advised of what was taking place.
[Rodriguez memo text] Benefits from an FIS include enhancements to our route structure, allowing Long Beach passengers to access more non-stop destinations such as Cabo San Lucas, Mexico, a potential increase in economic impact from international travel/tourism accessing southern California through Long Beach, and this amenity can be used by our Fixed Base Operators (FBOs) not only to clear their existing international customers but to increase their market share. Disincentives include not only increasing the Airport's financial exposure but also increasing the exposure to international threats.
Director Rodiguez's memo concluded: "...[T]he process of developing a FIS is arduous, ordinarily taking more than three years to complete and usually beginning with a request to U.S. Customs and Border Protection (CBP) to establish the Airport as a "port of entry." Should a user airline submit a proposal to the City, staff will evaluate and return to the City Council with a recommendation."
These materials weren't disclosed to the public during the run-up to April and June 2014 elections that would choose a new non-voting Mayor and a new policy-setting Council majority. LBREPORT.com learned about the feasibility study and its accompanying memoranda when interim Airport Director Reggie Harrison disclosed their existence during the June 19 meeting of LB's Airport Advisory Commission. In response, LBREPORT.com came to the public speaking podium, requested the documents under the CA Public Records Act and asked some basic journalistic "w's": who [what city reps] were involved in the discussions with JetBlue, when did the discussions take place, and what was said or agreed by city reps in the discussions? Interim Airport Director Harrison referred LBREPORT.com to a pending Public Records Act by us, declined extemporaneously to identify city or Airport reps involved in the discussions and indicated that Airport staff plans to brief the incoming Council majority (Gonzalez, Price, Mungo, Uranga) fairly soon after they take office on July 15.
JetBlue arrived at Long Beach Airport in 2001 under arguably analogous secret circumstances. City officials, without publicly mentioning JetBlue, agendized an item portrayed as simply changing the Airport's rules for allocating available flight slots to allow carriers to hold slots longer before flying them (to encourage carriers to fill vacant slots which the city had no legal obligation to do.) Within hours of the Council approving the item, JetBlue took all the then-available large aircraft flight slots, instantly maxing them out. (Afterward LBREPORT.com learned and reported that city officials had met secretly with JetBlue reps prior to bringing the item to a Council vote.)
City Hall's action, which left the Airport with no available large aircraft flight slots, effectively put the Ordinance at risk, something LB officials had told the public the City wouldn't do. City officials scrambled to arrange public meetings in Bixby Knolls/Cal Hts and Los Altos at which then-Mayor Beverly O'Neill and Council incumbents pledged fidelity to the Airport ordinance. Meanwhile, the City Attorney's office (with skillful lawyering by Bob Shannon, Mike Mais and specially retained aviation counsel Mike Gatzke) brokered a resolution -- with JetBlue's cooperation -- in which JetBlue relinquished a few of its slots.
At the next ballot opportunity in 2004, voters in LB's 4th and 8th Council districts removed two Airport-area incumbents, electing Patrick O'Donnell and Rae Gabelich, the latter a leader in LBHUSH2. Ms. Gabelich and LBHUSH2 argued for "right-sizing" permanent Airport terminal improvements to protect against unsustainable debt, avoid inviting risks to the Airport ordinance and preserve LB Airport's boutique easy-in, easy-out features praised by LB Airport users.
Developing...with further to follow on LBREPORT.com.
Our text above was updated to note that JetBlue sought revision of an October 2013 financial impact study to reflect six international departures per day instead of three per day, and accompanying text in the study was likewise changed. .
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