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HomeMy WebLinkAboutMinutes Airport Board - 01/21/2015 REGULAR MEETING MINUTES � h CORPUS CHRISTI INTERNATIONAL AIRPORT BOARD « 1000 INTERNATIONAL DRIVE m mi9u�rnaNNd„ «��I�fl��l ����RH AVIATION BOARD ROOM CORPUS CHRISTI, TEXAS JANUARY 21ST, 2015, 3:30 P.M. BOARD MEMBERS Don Feferman, Chairman Bill McCord, Vice-Chairman Alex Garcia, Member Dana Gunter, Member Robert Williams, Member Shawn Morgan, Member Kelly Harlan, Member CITY STAFF Fred Segundo, Director of Aviation Mario Tapia, Asst. Director of Aviation Adelle Ives, Management Assistant Kim Bridger, PR & Mkt. Coordinator Gary Williams, Facilities Manager Carl Gross, Operations Manager John Hyland, Chief of Public Safety Victor Gonzalez, Major Projects Manager Louis Lares, Finance &Admin Manager Elizabeth Hundley, Asst. City Attorney I. Call to Order The meeting was called to order at 3:31 p.m. by Chairman Feferman. A quorum was present. II. Approval of the minutes for the November 19th, 2015 Regular Airport Board Meeting Chairman Feferman called for approval of the minutes for the November Board meeting. Board member Garcia moved to approve the minutes as written. The motion was seconded and carried. III. Approval of absences for the November 19th, 2015 Regular Airport Board Meeting Chairman Feferman called for a motion to excuse himself and Board members Gunter and Harlan. Board member Garcia moved to excuse the three members. Vice-Chairman McCord seconded and the motion carried. IV. Public Comment* Wayne Squires expressed his gratitude to the Airport staff and the Board during his time served on the Airport Board. Mr. Squires has resigned from the Airport Board for a position on the Port of Corpus Christi Commission. V. Presentation and Discussion on the State of Aviation at CCIA by Trillion Aviation Director Segundo introduced Mike Bown and Dan Benzon with Trillion Aviation, the Airport's Aviation Consultants. Mr. Benzon gave the members an update on their background and experience in aviation matters. Mr. Bown began his presentation to the members on the state of aviation with a slide show. His presentation would cover an industry update as well as an update on CCIA's air service. He continued by stating that recessionary traffic declines hit smaller airports hard from 2008 to 2012. He also added that there has been little growth over the past three years even though airline profits are up 50% in 2014. He anticipates that their profits will grow even more in 2015. He gave a forecast that in the 1 st quarter of 2015 seat capacity would go up by 1.8% and would go up to 3% in April and May, 2015. He continued by stating that the major airlines (United, Delta, American and Southwest) would see a capacity growth of about 2 to 3%. He also anticipated that the low cost carriers (Allegiant and Spirit)would see a growth of approximately 15% or more in 2015. Mr. Bown continued with his forecast for CCIA by recapping that passenger trends have changed since 2013. He stated that falling fares will contribute to traffic increases. He added that American Airlines addition of new jets and Southwest' pricing both stimulated traffic. CCIA's average airfare are historically below the national average. Per information filed by the airlines to the Department of Transportation for the 2nd quarter of 2014, CCIA's airfares are 6% lower from 2nd quarter of 2013. Traffic wise, CCIA is up 10% from the 2nd quarter 2014 compared to the 2nd quarter of 2013. He continued by adding that CCIA's load factors are an all-time high for the 4th quarter of 2014. As he reviewed the future schedules for 2015, he stated that CCIA would be down for the 1 st quarter but he expected that traffic would increase during April & May partly due American Airlines putting their larger jets back into service. He felt if these jets were in service during April and May, they would possibly continue through serve CCIA through the summer. Mr. Bown then reported on each carrier at CCIA's system averages and the increase between 7% and 15%. He felt that airfare at CCIA is stable considering the struggle seen in previous years. He added that American Airlines service to Dallas-Fort Worth appears solid, although mainline narrow body service will likely be temporary or season. He would expect upgrades to all 76-seat aircraft over time. He also reported Corpus Christi International Airport Board Agenda January 21, 2015 Page 2 of 4 that United's service to Houston's Intercontinental generates strong and profitable results. Over time, this route will also see upgrades to 76-seat jets, although in near-term, these improvements will likely be more limited. He continued by stated that Southwest has experienced significant improvement in both unit revenue production and load factors. This has been a function of both capacity and fare reductions that appear to be worked. Southwest'service is at its most stable in the CCIA market as it has ever been. He continued by reported that he is working with Kim Bridger, the Airport Marketing Manager, in meeting with major airlines over the past 16 months. He briefed the membership on the outcome of each of the airline meetings. He continued by stating that there is a new potential market for Las Vegas, Orlando, Denver, New Orleans and Mexico. In conclusion, Mr. Bown stated that CCIA's air service market is as stable as it has ever been. He added the current service is solid and will likely grow with the increase of seat capacity. He felt that 2015 would be a good year. Discussion was heard on this topic. VI. Discussion and Possible Action on Recommendation to extend the Airlines' Lease Agreements Director Segundo had Dan Benzon with Trillion to give an overview on the lease extension. Mr. Benzon began by stated that the lease agreements were 5 year agreements back in 2009. Because of changes over the years, he explained the favorable benefits of having lease extensions of three years. After these extensions end, the lease would be renegotiated and staff would have a better financial model to reference in the development of the new leases. American Airlines and Southwest Airlines will be extended for three years. Discussion was heard on this topic. Director Segundo requested a motion from the Board to bring this item to council. Board member Garcia moved to recommend to City Council to extend the American Airlines and Southwest Airlines' lease agreements for three years. Board member Williams seconded. The motion passed with Board members Gunter and Harlan opposed. VII. Presentation and Discussion on the Airport's Republic Parking Survey and Parking Management Agreement Assistant Director, Mario Tapia, gave the board a presentation to review the current parking management company's agreement. He began by stated that the criteria sought from a management company for the parking lot focused on revenues, expenditures and customer service. He began by stating that Republic started in June, 2013. He then presented the Board with revenue figures from 2012 to 2014. The information indicated that there is a revenue increase of $276,718 or 14th with only a 10% increase in enplanements. He continued reported that operating expenditures from FY 11-12 to FY 13-14 indicated an estimated savings of$63,043. He felt that in the future, the savings could possibly reach $100,000. He also covered the customer service aspect of Republic and he reported that they have an extensive training program as well as a "secret shopper" program where the operation and employees are evaluated on a detailed questionnaire. That feedback is then reported back to the Airport as well as using the information to train their employees. Discussion was heard on this topic. VIII. Discussion and Possible Action on Recommendation for passage of an Airport Zoning Commission (AZC) Ordinance Director Segundo began by stating that he had given the Board a formal presentation on this topic but he had not made a request to the Board for a formal recommendation. He briefly reviewed what has transpired since the last formal presentation and asked that the Board consider recommending to City Council the passage of an Airport Zoning Commission Ordinance. Discussion was heard on this topic. Corpus Christi International Airport Board Agenda January 21, 2015 Page 3 of 4 The Board asked that the actual Ordinance be presented to the Board before voting to recommend this item to City Council. Board member Garcia moved to table this item for the February Board meeting. The motion was seconded and carried. IX. Presentation and Discussion on General Aviation Projects by Western LLC Brad Henderson with Western LLC updated the Board on the hangar project at CCIA. Mr. Henderson gave a brief overview of his company's background and experience. He reported that he has had some interest on the project from both individuals and corporations; however, no leases were signed. He felt that the interest in this area is more for t-hangars and, unfortunately, his company does not construct t-hangars. His company's cost for construction per square foot was a factor in getting leases signed for this project. He was not confident that his estimates on the cost of construction as being high enough and that was not taking into consideration that his company is only making 4.85% per square foot. He presented the Board with a breakdown of his cost of construction for the project. He would like to work with CCIA if the opportunity arose and will assist in any way should an opportunity with another contractor shows interest in building t-hangars. Director Segundo felt that if the Board was wanting to pursue getting t-hangars built, the Business Development Sub-committee could look into this. Discussion was heard on this item. X. Discussion of Director's Report a. Airport Monthly Reports i. Financial/GAR/Parking Revenue Reports Louis Lares, Finance and Admin Manager, reported to the Board on Airport finances. He also reported that December, 2014, parking lot revenue was 2.79% above December, 2013 revenues. He continued by reporting that revenues are at $1,984,413 and expenditures are at $1,554,069 with a surplus of$430,344 for the month of December, 2014. Mr. Lares continued by reporting that FY 14-15 receipts in CFC's are at $73,320 with a cumulative total of$4,051,870 since June, 2010. Discussion was heard on this topic. ii. Enplanement Comparison Report He began by stating that enplanements for December, 2014, were at 0.8% above December, 2013, enplanements. iii. Quarterly Fuel Prices Report Director Segundo reviewed the 1 st quarter fuel report for CCIA showing comparison between all local airports. Discussion was heard on this topic. iv. Construction Status Report Assistant Director Tapia reported on the status of on-going construction projects at CCIA including the Runway 13-31 Extension; Runway 18-36 Extension; and International Drive Project. Discussion was heard on this topic. v. FBO Deferred Maintenance Report Gary Williams, Facilities Manager, began by reporting on the timelines on the two FBO lease agreements to the Board. He continued by showing slides with lists of deferred maintenance for each FBO. Discussion was heard on this topic. vi. City Council Action Report There are no items at this time. vii. Airport Board/Staff Communication Elizabeth Hundley, Airport City Attorney, gave the Board members a briefing on the correct manner for members to communicate with each other, Airport Staff and City Staff via text or email. All of these manners of communications are permissible; however, since we are City and Airport staff, there is a need to be cognizant that confidential, privilege and sensitive items may be discussed within emails and texts. She wanted to make sure that the members are aware that all communications are subject to the Public Information Act and are subject to an Open Records Request. These communications, once requested by the general public, is subject to Corpus Christi International Airport Board Agenda January 21, 2015 Page 4 of 4 disclosure. She also covered items that are subject to discovery during litigation which may be disclosed as part of an Open Records Request and will be subject to public review. The fact that these communications can be taken out of context without interpretation and could hinder negotiations. She asked that members keep in mind to be accurate as possible in what they are communicating; to assume that it will be forwarded; to limit the communication to one subject; avoid commenting on potential liability, even in jest; use "reply" versus "reply all"; and, not to put sensitive personal information which could be hacked. Discussion was heard on this topic. XI. Identify items to be placed on next Airport Board Agenda Director Segundo asked that a security briefing be done at the next meeting. XII. Adjournment As there was no further business, Chairman Feferman called for adjournment. Board member Garcia moved to adjourn and Board member Gunter seconded and the meeting adjourned at 5:18 p.m.