APR 10, 2012 ROTARY IN REVIEW:
Jeff Hamiel

President Doug Bruce called the meeting to order. Past President and soon to be District Governor Joe Kovarik lead members and guests in singing America the Beautiful. In honor of the visiting Group Study Exchange team from Bahia, Brazil, Past President Doug Harford ending his piano accompaniment with a flourish of notes!

Carol Bufton led all in a fitting invocation. Past President Carolyn Brusseau introduced guests.

Volunteers are still needed for shift to pack food for the very worthy Feed My Starving Children Initiative.  Scott House was at his most cordial and enticing best in pointing out how much Rotarians would enjoy this opportunity to serve.  Not to be outdone, John Bradford made the case for Camp RYLA. Help is needed. On Friday and Saturday nights Rotarians and families can over night – indoor plumbing, heat and a soft mattress were promised by John. The cost is $30 a night.  The barbeque will be on Sunday! And, for the first time, there will be a happy hour on Tuesday after the campers leave with the staff. Come for an uncensored view of just what went on!

Past President Nancy McKillips reported on this year’s membership drive. 50 prospects were introduced. Ten will become members; 9 are considering; 15 said not right now but maybe in 6 to 9 months; and 5 said no. Members attending were quite pleased at the report.

Larry Morgan advanced to the podium with props – rubber work gloves on hand and trowel and hand rake in hand. Preparing Cleveland Circle will happen on Saturday May 12 and putting in plants and mulch on Saturday May 19^th will bring forth promises of beauty.  Please bring your trowel on the 19^th!

 Know about their coming projects – happy is as happy gets support.  Drumming on Friday April 13^th at the Macalester Plymouth United Church; the St Paul Art Crawl in Lowertown on April 27, 28 and 29 –drop by Master Framers – the District Conference in River Falls this weekend; a grant for the club received from Thrivant Financial.

Jay Pfaender introduced the speaker Jeff Hamiel, Executive Director of the Metropolitan Airports Commission.  Jeff was/is a pilot with years of active service in the Air Force and in the reserves. He has a PhD from Hamline, a BA from the University of Minnesota and a Masters from Michigan.

Jeff began his presentation with a review of how the 1978 deregulation of the airline industry has shaped current practices. Once government setting of routes and fares was terminated, airlines were on their own to thrive or die. There have been therefore bankruptcies, mergers, acquisitions, new entrants and continuous adjustments with much volatility.  All the old legacy carriers have now been consolidated or merged or otherwise restructured to survive under competition. Under government regulation there was profit for all; with free market competition, there are winners and losers.

He affirmed that the main MSP airport is a bellweather for the state’s economy: if it thrives, the state’s economy is good; if it stagnates or declines that reflects lower economic activity in the state.  The airports – MSP along with 6 reliever airports for small planes and general aviation – make an annual 101/2 billion $ contribution to the State’s economy.

MSP was already a hub before deregulation thanks in part to foresight by former Governor Harold Stassen who saw the airport as a regional center for connecting flights from east to west and to the southeast and south west.

In the new free market, airlines have shifted business models from market share to profitability per flight. They have reduced services to meet real present demand – fewer flights with higher loads per flight. Load factors are now 81% per flight instead of the old 65% only when planes flew with empty seats.  Fuel efficient regional jets have replaced big planes; 50 seat passenger jets are gone along with turboprops.

Fees have become the profit center for airlines – earning them some $1.5 billion a quarter over and above expenses.

Use of MSP has decline some in recent years. Peak passenger throughput was in 2005 and peak landings and takeoffs was in 2004.  Delta accounts for 80% of current usage.  But the MAC has the right to take gates from Delta to give to new entrants.  In recent years traffic demand has justified Alaska, Southwest, Great Lakes and now Spirit to enter our market. MSP has more air service percapita – including non-stop flights - than any other city in the US save Denver. It is used by every major airline save Jet Blue.  It is the 12^th busiest airport in North America and one of the most cost efficient.

The MAC needs $260 million per year for operating expenses. It makes it money the old fashion way – it earns it and does not go to the taxpayers for funding.  It charges for landings, gates, use of concourse, luggage caroussels, concessions, taxi and limosine fees and passenger ticket taxes(residual of what the Feds take).

The MAC may also bond to finance  construction which has run from $100 million to $500 million per year.  Present plans will expand the airport to accommodate up to 50 million passengers a year with37 new gates and parking for 18,000 more cars daily.  The expansions will come in phases to meet actual demand.

Steve Young
Scribe