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EXECUTIVE SUMMARY

Airport Management Study

Lehigh Northampton Airport Authority

February 6, 2009

Prepared for:

County of Lehigh and County of Northampton

In Association With:

Prepared by:

THE LOUIS BERGER GROUP, INC.20 Corporate Woods Blvd Albany, New York 12211

The Louis Berger Group, Inc. Final Report – Airport Management Study Lehigh Northampton Airport Authority

Lehigh & Northampton Counties – February 6, 2009 Executive Summary – Page 1-1

EXECUTIVE SUMMARY

The Lehigh Northampton Airport Authority (LNAA) is responsible for operating and developing

Lehigh Valley International Airport (LVIA), Queen City Airport, and Braden Airpark. LNAA and

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. Yet, the Airport

still contributes over $330 million in annual economic activity to the Lehigh Valley region according

to the last statewide economic impact calculation in 20011. In today’s dollars that impact is even

greater.

Given the Airport’s important role as the catalyst for economic development throughout the Lehigh

Valley Region, Lehigh County and Northampton County, Pennsylvania, retained The Louis Berger

Group, Inc. to assess the performance of LNAA through this Airport Management Study by

evaluating the efficiency and effectiveness of the Authority functions and to provide recommended

actions to maximize the attractiveness and use of the Airport in furtherance of regional economic

development.

Toward that end, the Study utilized a comprehensive process to evaluate LNAA by taking into

account stakeholder perspectives, comparing LVIA to comparable airport facilities, conducting an

evaluation of LNAA’s organization that included the identification of LNAA’s strengths,

weaknesses, opportunities, and threats, and ultimately providing recommendations for the Counties

and the Authority to consider for implementation.

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, the

Lehigh Valley Region, or the Airport). Over 40 individuals were interviewed representing a cross-

section of Airport Employees, Airport Management, Board of Governors, County Administration,

and Regional and Community representatives (stakeholders). In addition, a parallel web-based survey

was distributed to over 90 participants.

1 Economic Impact of Aviation in Pennsylvania, Pennsylvania DOT, June 2001.



As can be expected, when speaking to such a large group of individuals, the Study Team heard the

complete spectrum of views and opinions of LNAA and the Airport, the results of which have

provided the Study Team the context and history to better understand the organization.

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 major domestic and

international hubs, similar to LVIA. The five comparable airports for which comparative data was

collected and evaluated included:

1. General Mitchell International Airport (Milwaukee, WI) – Proximity to Chicago O’Hare

and it is directly operated by Milwaukee County.

2. T. F. Green Airport (Providence, RI) – Proximity to Boston and it is operated by a quasi-

governmental State agency.

3. Orlando Sanford International Airport (Sanford, FL) – Proximity to Orlando

International Airport and it is operated by an Authority outside of Pennsylvania.

4. Harrisburg International Airport (Harrisburg, PA) – Proximity to Philadelphia and

Baltimore, and it is operated by an Authority under the same Pennsylvania legislation as

LNAA.

5. Stewart International Airport (Newburgh, NY) – Proximity to the New York Metropolitan

Area and it is operated by a large airport authority, the Port Authority of New York and

New Jersey.

The information obtained from these comparables provided input to the Study Team on how these

airports are currently being managed and operated. Detailed information from each of these

comparable airports is reported and compared to LNAA in Section 3. While finding an exact

comparable airport is not possible, these comparables provided the Study Team with valuable input

regarding best practices common among their operations.

Organizational Evaluation. An organizational evaluation was performed to review the data and

information collected through the various Study efforts discussed above. Included with this effort

was an analysis conducted with LNAA of the Strengths, Weaknesses, Opportunities and Threats

(SWOT). The SWOT analysis provided significant input to the process identifying numerous areas



that highlight LNAA’s many strengths and opportunities it currently faces. It also identifies areas

that could be improved.

This information as well as information collected on the various governance models of today’s

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. These include

recommendations to enhance the efficiency and effectiveness by: Strengthening the Board member

appointment process; Improving and maximizing the Airport’s Competitiveness; Developing

comprehensive and pragmatic strategic and marketing plans; Streamlining LNAA’s organization; and

Reducing the size of the Board of Governors.

Findings and Recommendations. There is an old adage in the airport industry that says when you

have seen one airport, you have seen one airport. All airports have their own unique characteristics.

Accordingly, this Study recognizes that specific methods from one airport will not be a perfect fit

for another airport. Rather it takes into account all the information obtained throughout the Study

process, evaluates that information, applies the experience of the Study Team, and identifies the

results through findings and recommendations.

The following summarizes the findings and recommendations of this Study. Each recommendation

is aimed at improving the efficiency and effectiveness of LNAA to enable LVIA to realize its full

potential as the Lehigh Valley’s economic engine.

Finding and Recommendation #1 – The Counties should develop a more effective

process to select Board appointees to foster more effective communication between the

Board and the Counties. Enhancing communication between Board members and the

Counties will help both parties better understand the ongoing activities and efforts of the

Lehigh Valley Region.

Finding and Recommendation #2 – LNAA should take steps to position the Airport to

be more competitive. LNAA should consistently work to maintain low operating expenses

while constantly seeking revenue/economic development opportunities as much as possible.



Finding and Recommendation #3 – LNAA should have a comprehensive Strategic Plan

in place. Strategic Plan’s are dynamic in nature and help to focus an organization on

achieving its goals. This Plan will help LNAA develop strategic and tactical goals,

Departmental objectives, and then provide a method to measure performance. Annual and

longer 5-year period goals would be set, as well as target areas for reducing operating

expenses. A properly structured Strategic Plan allows everyone involved to understand the

Organization’s goals and the steps needed to reach them.

Finding and Recommendation #4 – As part of the Strategic Plan, LNAA should develop

a standalone Marketing Plan as the blueprint to aide in the development and implementation

of various initiatives the Authority is pursuing. This multi-faceted Plan should involve

participation from surrounding governmental, corporate, and community organizations. A

Marketing Plan will focus the energies of all participants on the common goal of increasing

the utilization of the Airport. It will also aide in everyone’s understanding of air service

initiatives; help to further refine the marketing message and “brand” for LVIA; and assist

LNAA in obtaining financial assistance for air service incentives.

Finding and Recommendation #5 – LNAA should be reorganized to enable Executive

Management to provide a more strategic marketing focus for the Airport and to enhance

efficiencies in its operation and development. The current Authority organization has

various reporting lines to differing levels of responsibility, all reporting to the Deputy

Executive Director. The organization of LNAA should be streamlined to reduce the number

of Departments reporting to Executive Management. 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. In addition, efficiencies can be realized by having

three Departments reporting to the Executive Director: Administration; Finance; and

Business Development, including a Public Relations position. Two Departments: Operations

and Engineering, would report to the Deputy Executive Director.



Finding and Recommendation #6 – The LNAA Board of Governors is large for the size

and scope of its Mission. The Study Team believes that reducing the size of the Board of

Governors from 19 to 11 members would increase its effectiveness. Further, each County

should consider designating the County Executive or representative as an Ex-Officio voting

member to be included in the 11 members. This will significantly improve the

communication linkage between the Counties and the Board.

Next Steps. The next step for County decision makers to optimize the efficiency and effectiveness

of LNAA is to review the report in detail and develop an Action Plan that addresses each of the

recommendations contained in this Study. No one recommendation should be considered less or

more important than the other.

THE Louis Berger Group, INC. www.louisberger.com

A Member of the Berger Group

Final Report

Airport Management Study

Lehigh Northampton Airport Authority

February 6, 2009

Prepared for:

County of Lehigh and County of Northampton

In Association With:

Prepared by:

THE LOUIS BERGER GROUP, INC.20 Corporate Woods Blvd Albany, New York 12211


Lehigh & Northampton Counties – February 6, 2009 Table of Contents – Page 1-1

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


Lehigh & Northampton Counties – February 6, 2009 Introduction – Page 1-1

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 LNAA’s 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 stakeholder’s 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.



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 LNAA’s 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



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 LVIA’s 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 today’s 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.



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 study’s

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 LNAA’s 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.



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 Berger’s National Aviation

Program and the delivery of all domestic aviation services throughout the firm’s 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 State’s 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 Governor’s congressional liaison to Congress on matters concerning overflight

noise, and served two years in the NYS Governor’s office as a senior advisor assigned to the Governor’s

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.



Marc C. Champigny, Management Associate – Mr. Champigny’s 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 Transportation’s Aviation Services Bureau, Mr. Champigny brings a comprehensive base of

experience and a strong understanding of the airport operator’s 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.


Lehigh & Northampton Counties – February 6, 2009 Stakeholder Survey – Page 2-1

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 Non-

Management 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 Airport’s 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 Airport’s 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 Study’s objective within the Study’s 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.



The survey was opened and

distributed via email on

September 24, 2008 and was

closed on October 31, 2008.

Participants were sent

reminder emails bi-weekly if a

completed survey wasn’t

received by the survey

administrator.

Ninety-two (92) survey

invitations were 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.



Figure 2.1- Results of Question 1

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 respondent’s 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.

31%

15%

10%

44%

0% 20% 40% 60% 80% 100%

Board of Governors Member

Airport ManagementEmployee

Non-Management AirportEmployee

Regional Executive, AirportStakeholder or Non-Airport

Employee

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




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.

90%

8%

2%

0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

A valuable economicasset

Just another mode oftransportation

No opinion

An unnecessary asset

What is your perception of Lehigh Valley International Airport?



Figure 2.3- Cross Tab Analysis of Question 2

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.

100%

100%

100%

76% 19% 5%

0% 20% 40% 60% 80% 100%

Board of GovernorsMember



Regional Executive,Airport Stakeholder orNon-Airport Employee

What is your perception of Lehigh Valley International Airport?

A valuable economic asset Just another mode of transportation No opinion An unnecessary asset





73% 27%

100%

100%

71% 29%

0% 20% 40% 60% 80% 100%





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

Very important Somewhat important Not important

79%

21%

0%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Very important

Somewhat important

Not important

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



The next two survey questions related to the Airport’s 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

Airport’s organizational /management structure.

Figure 2.6- Response to Question 4

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 Airport’s organizational structure.

54%

38%

8%

0% 10% 20% 30% 40% 50% 60%

I fully understand it

Somewhat understand it

I do not understand it atall

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




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.

67% 27% 7%

86% 14%

60% 40%

33% 52% 14%

0% 20% 40% 60% 80% 100%





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

I fully understand it Somewhat understand it I do not understand it at all




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 Non-

Airport Employees. Two percent of the respondents said that they didn’t have enough involvement

or exposure allowing them to respond.

42%

46%

10%

2%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

The Authority is effective insatisfying the mission

The Authority is onlysomewhat effective insatisfying the mission

The Authority is ineffectivein satisfying the mission

I do not have enoughinvolvement or exposureallowing me to respond

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?




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.

47% 47% 7%

86% 14%

80% 20%

14% 62% 24%

0% 20% 40% 60% 80% 100%




Regional ExecutiveAirport Stakeholder orNon-Airport Employee

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

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?




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.

52%

80%

73%

64%

68%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2008

2007

2006

2005

2004

When did you travel?




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.

68%

18%

14%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Less than 10

10-30

More than 30

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




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.

33%

44%

21%

2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Meets all my air travelneeds very well

Meets some of my needsbut the airport needs

improvement to satisfythem all

Does not meet my needsvery well

I do not use Lehigh Valleyfor my air travel needs

As an airport user, how well does Lehigh Valley International Airport meet your air travel needs?




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 public’s 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.

26%

21%

52%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Unchananged inrecent years

Air service hasimproved

Air service hasworsened

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



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.


38%

20%

42%

0% 20% 40% 60% 80% 100%

Yes

No

Somewhat, but moreeffort is needed in

this area

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

relationships?



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 Non-

Airport Employees or Regional Executives.


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 Authority’s 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.

5 (29%) 1 (11%) 7 (37%)

6 (35%)

3 (18%) 2 (11%)

3 (18%) 8 (89%) 10 (53%)

0% 20% 40% 60% 80% 100%





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

relationships?

Yes No Somewhat, but moreeffort is needed in this area



Question 14

Regarding communications and the Authority’s establishment of effective communications that are

proactive and show dedication to serving the public’s 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.


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.

40%

31%

29%

0% 20% 40% 60% 80% 100%

Yes

No

Somewhat, butmore effort is

needed in this area

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?




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.

5 (26%) 2 (13%) 8 (57%)

6 (32%) 1 (7%)

3 (16%) 1 (7%) 1 (7%)

5 (26%) 12 (80%) 4 (29%)

0% 20% 40% 60% 80% 100%





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?

Yes No Somewhat, but more effort is needed in this area



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.



This page intentionally left blank.

The Louis Berger Group, Inc. Final Report – Airport Management Study Lehigh Valley International Airport

Lehigh & Northampton Counties – February 6, 2009 Comparable Airports Analysis – Page 3-1

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



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.



3.1 – Comparable Airports Matrix

U.S. Rank

FAA Loc. ID

City

State

Airport Name

Hub Type

CY 06 Enplanements

CY 05 Enplanements

% Change

Lg. Hub Competitor

Dis

t.

to

Lar

ge

Hu

b

(mi)

Governance Structure

System of Airports/#

134

ABE

A

llent

own

PA

Lehi

gh V

alley

In

tern

atio

nal

S 39

7,60

3 41

9,12

2 -5

.13%

Ph

ilade

lphi

a

New

ark

72 78

Aut

horit

y Y

es /

3

49

MK

E

Milw

auke

e W

I G

ener

al M

itche

ll In

tern

atio

nal

M

3,63

0,09

8 3,

602,

536

16.7

6%

Chic

ago

O’H

are

73

Coun

ty

Yes

/ 2

92

SFB

Sanf

ord

FL

Orla

ndo

Sanf

ord

Inte

rnat

iona

l S

915,

135

789,

795

15.8

7%

Orla

ndo

33

Aut

horit

y N

o /

0

60

PVD

Pr

ovid

ence

RI

Th

eodo

re

Fran

cis G

reen

A

irpor

t M

2,

588,

992

2,84

6,00

2 -9

.03%

Bo

ston

Log

an

62

Qua

si-St

ate

Yes

/ 6

108

MD

T H

arris

burg

PA

H

arris

burg

In

tern

atio

nal

S 57

7,55

9 64

7,46

8 -1

0.80

%

Ph

ilade

lphi

a

Ba

ltim

ore

Was

hing

ton

Lehi

gh V

alley

110 97 92

Aut

horit

y Y

es /

2

194

SWF

New

burg

N

Y

Stew

art

Inte

rnat

iona

l N

15

6,63

8 19

9,74

1 -2

1.58

%

N

ewar

k

JF K

enne

dy

La

Gua

rdia

A

lban

y

72 79 69 98

Aut

horit

y Y

es /

6

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



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.



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.



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.



Providence is owned and operated by the Rhode Island Airport Corporation (RIAC), a quasi-

independent 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



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 6-

year 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.



Table 3.2 – Comparable Airports Organizational Context

Airports

Lehi

gh V

alley

In

tern

atio

nal

Gen

eral

Mitc

hell

Inte

rnat

iona

l

Orla

ndo

Sanf

ord

Inte

rnat

iona

l

T.F.

Gre

en

(Pro

vide

nce)

Har

risbu

rg

Inte

rnat

iona

l

Stew

art

Inte

rnat

iona

l

Single or Multi

Airport System

Multi-Airport

Multi-Airport

Single Airport

Multi- Airport

Multi- Airport

Multi-Airport

Number Of

Full Time Staff

129 200 55 185 120 54

Governing Body

Airport Authority

County Board

Airport Authority

Airport Board

Airport Board

Board of Com-

missioners

Number Of

Governing Officials

19 19 9 7 15 12

Official Selection

Appoint- ment by County

Executives

Elected by the Public

Appoint- ment by City Commission

Appoint- ment by Warwick Mayor &

RI Governor

Appoint- ment by

Counties & Townships

Appoint-ment by States

Term Length 5 Years 5 Years 4 Years 5 Years 5 Years 6 Years

Term Limits No No No No No No

orga

niz

atio

n

Primary Financing

User Fees, PFC,

Authority Issued Bonds

User Fees AIP

Entitlement

Bonds PFC AIP

Entitlement

User Fees AIP

Entitlement

User Fees Bonds AIP

Entitlement

PFC Investments

AIP Entitlement



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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 Administration’s (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.


The original terminal constructed at Lehigh Valley International was built in the 1970’s, 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 30-

day 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.




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



enplaned passenger.


The terminal facility at Orlando Sanford International was originally built in the 1940’s, 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 Airport’s Rate Base to Airlines was not available.




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


enplaned passenger. The Airport’s Rate Base to Airlines was not available.


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



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



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


enplaned passenger. The Airport’s 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)

Annual Enplanements

(rounded)

Operating Expense

($ Million)

Total Expense Per

Enplaned Passenger

Total Expense

Per Employee

Airline Rate Base Per Enplaned Passenger

2007 Lehigh Valley $ 8.3 427,000 $ 15.5 $ 36.401 $ 120,155 $ 14.15

Harrisburg 2.1 643,000 14.0 21.75 116,667 14.65 Milwaukee 110.9 3,751,000 46.2 12.21 231,000 4.61 Providence 41.5 2,500,000 28.8 11.52 155,675 N/A

Sanford 3.8 986,000 7.2 7.30 130,909 N/A Stewart5 42.7 455,000 6.2 39.43 114,814 N/A

Notes: 1. LVIA’s 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. 2. N/A = Not available. 3. None of the comparable airports for this study participated in the most recent Airports Council International –North America (ACI-NA)

Benchmarking Survey. 4. Expense includes all operating expenses. It does not include non-operating expenses such as interest expense, etc. 5. SWF is 2006 data. 2007 was not available.

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).



Table 3.4 – Comparable Airports Management Context

Airports

Lehi

gh V

alley

In

tern

atio

nal

Gen

eral

Mitc

hell

Inte

rnat

iona

l

Orla

ndo

Sanf

ord

Inte

rnat

iona

l

T.F.

Gre

en

(Pro

vide

nce)

Har

risbu

rg

Inte

rnat

iona

l

Stew

art

Inte

rnat

iona

l

Minimum Standards Yes Yes Yes Yes Yes Yes

Procurement Cycle

Less than $10,000 – 2

Days; More than $10,000 – 4

Weeks

Varies 30 Day Average

Cycle

30 Day Average

Cycle

30 Day Average

Cycle

30 Day Average Cycle

Spending Authority

Board Approval

Over $15,000

As Approved

by the Budget Only

Varies

Board Approval

Over $50,000

Executive Director: $50,000 Deputy

Directors: $5,000 - $10,000

As Approved by the

Budget Only

CIP Management

Staff with Consultants As Needed






man

agem

ent

Terminal Facilities

Built: 1970’s

Remodeled: 1996

Built: 1955 Expanded: 1984, 1990,

& 2007

Built: 1940 Remodeled:

2001 New

Garage: 2007

Built: 1961 Remodeled:

1996 Improvemen

ts: 2008

Built: 1970 New

Terminal: 2004

Built: 1970 New Terminal:

1997 Redesign: 1998



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.


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 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.




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.


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 FBO’s 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 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.



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 FAA’s 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.



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

Table 3.5 – Comparable Airports Management Context

Airports

Lehi

gh V

alley

In

tern

atio

nal

Gen

eral

Mitc

hell

Inte

rnat

iona

l

Orla

ndo

Sanf

ord

Inte

rnat

iona

l

T.F.

Gre

en

(Pro

vide

nce)

Har

risbu

rg

Inte

rnat

iona

l

Stew

art

Inte

rnat

iona

l

No. of FBOs 1 1 2 2 1 2

FBO Ownership

Authority Ownership

Private Ownership

Private Ownership

Private Ownership

Private Ownership

Private Ownership

Services Provided Full Service Full Service Full Service Full Service Full Service Full Service

No. of Airlines 8 11 5 10 7 4

No. of Destinations 12 47 35-40 24 13 5

Common and

Exclusive Use Areas

All Areas: Common

Ticket Counters &

Bag Offices:

Exclusive All Other

Areas: Common

All Areas: Common

Ticket Counters &

Bag Offices:

Exclusive All Other

Areas: Common

Ticket Counters &

Bag Offices:

Exclusive All Other

Areas: Common

Ticket Counters &

Bag Offices:

Exclusive All Other

Areas: Common

ATC Staffing FAA FAA FAA FAA FAA Contract

ATC Hours 24 Hour Service

24 Hour Service

Limited Hours:

6:30 am – 11 pm

Limited Hours: 6 am – 11 pm

24 Hour Service

24 Hour Service

oper

atio

nal

Contracted Services

(1)(2)

ABE & JVU: None N43: Daily Operational

Needs

Parking Daily

Operational Needs

None

MDT: Parking , Janitorial,

Snow Removal

CXY: Daily Operational

Needs

Daily Operational

Needs



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 Non-

Bargaining Unit Employees” as well as the “LNAA Policies and Procedures for Union

Employees” and the various bargaining agreements currently in place. Additionally, the Airport’s

website was also available for review.

Assessment of LNAA’s 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 LNAA’s 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.



3.3.1 Human Resources Practices and Policies

The focus of the assessment was to determine:

If the LNAA’s 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.”



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.



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 (LNAA’s 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 LNAA’s 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. LNAA’s 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 LNAA’s 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.



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

54

77

109

129

184

221

129

0 50 100 150 200 250

Stewart

Sanford

Harrisburg

Lehigh Valley

Providence

Milwaukee

AVERAGE

AIR

PO

RT

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 employer’s 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



LNAA) their average rate was 25.65%. LNAA’s rate was significantly higher, at 37% as reflected in

Figure 3.2.

Figure 3.2 – Annual Fringe Benefit Cost

FRINGE BENEFIT RATE

0.00%

9.25%

20.00%

23.00%

37.00%

39.00%

25.65%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00%

Stewart

Sanford

Harrisburg

Providence

Lehigh Valley

Milwaukee

AVERAGE

AIR

PO

RT

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.

LNAA’s 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.



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

2.3%

3.0%

3.0%

3.5%

3.5%

5.0%

3.6%

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00%

Lehigh Valley

Sanford

Milwaukee

Stewart

Providence

Harrisburg

AVERAGE

AIR

PO

RT

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.



Figure 3.4 – Health Care Plans

Airport PPO 80/20

PPO 90/10

HMO High Ded

PPO POS

70/30

Total Plans Offered

Sanford N/A

Providence 1 1

Harrisburg 1 1

Milwaukee 1 1 2

Lehigh Valley 1 1

Stewart 1 1 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

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

90%

90%

95%

100%

100%

100%

96%

84% 86% 88% 90% 92% 94% 96% 98% 100% 102%

Milwaukee

Stewart

Providence

Harrisburg

Sanford

Lehigh Valley

AVERAGE

AIR

PO

RT

S



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 Lehigh Valley Milwaukee Sanford Providence Harrisburg Stewart

Dental Insurance X X X X X X

Life Insurance X X X X X X

Optional Life X X X X X X

Short Term Dis. X X X X X

Long Term Dis. X X X X X

Vision Insurance 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

Paid Hours 1<5 yrs/service



Paid Hours More than 15 yrs/service

Lehigh Valley 80 120 160 172

Milwaukee 80 120 160 200

Sanford 80 80 120 120

Providence 80 120 144 224

Harrisburg 56 80 120 208

Stewart 120 152 216 216



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 Lehigh Valley

Milwaukee Sanford Providence Harrisburg Stewart

Bereavement 4 days 3 days 1-5 days 3 days 3 days 3 days

Holidays 10 9 11 10 9 11

Jury Duty Yes As needed As needed As needed As needed As needed

Military Yes Yes 17 10 10 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 one-

year 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 Lehigh Valley


401(k)–no match X

401(k)–with match 414(h) X

Pension Plan X X X

Section 125/FSAs X X X X X

Incentive Stock Options X

457 Plan X X X X X

Profit Sharing X

State Retirement System X X (TRANSFERS)



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 Lehigh Valley


Tuition Assistance X X X X X

Career Counseling

Matching Charitable

Contributions

Gym Membership X

Food Services/ subsidized cafeteria

Legal Assistance

Free/ Discounted Uniforms

Milestone rewards (yrs of

service, etc.) X X

Discounted event tickets X

Employee Assistance Plan X X X X X

Parking Allowance / free parking

Smoking Cessation 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.



Figure 3.11 - Compensation

Position Lehigh Valley


Accountant I $38,518 (midpoint) $36,562 $39,197 N/A

Accountant II $49,385 (midpoint) $50,458 N/A $72,854 $55,000 N/A

Airport Attorney N/A $110,755 N/A $160,684 N/A

Airport CFO $83,750 (midpoint) $93,202 $95,773 $160,684 $90,000 N/A

Airport Engineer $78,574 (midpoint) N/A $96,282 $80,000 $100,542

(midpoint) Airport Ops Specialist

$63,991 (midpoint) N/A $54,187 $29,000 N/A

Airport Police Officer (non-supervisory)

$40,997 $39,197 $61,081 $36,000 N/A

Assistant Director of Airports

$97,682 (midpoint) N/A $80,000 $100,542

(midpoint)

Chief – ARFF $69,789 $64,034 $60,006 $89,876 $62,400 N/A

Custodial Worker I $24,710 N/A N/A

Custodial Worker II $39,198 N/A N/A

Director of Airports $148,000 $212,500 $135,000 $167,338 (midpoint)

Driver/Operator II – Air Rescue Firefighter

$34,973 $39,197 $40,775 $41,000 N/A

Deputy Director General Aviation

$64,804 (midpoint) $111,286 N/A $90,000 N/A

Flightline Specialist $47,038 (midpoint) N/A N/A

Flightline Supervisor $47,038 (midpoint) N/A N/A

Fuels Supervisor $47,038 (midpoint) 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.



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 NONUNION % UNIONIZED% TOTAL STAFF

Lehigh Valley 63% 37% 129

Milwaukee 19% 81% 221

Sanford 100% 0% 77

Providence 22% 78% 184

Harrisburg 90% 10% 109

Stewart N/A N/A 54 AVERAGE 41% 59% 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.



Figure 3.13 – Benefits Comparison of LNAA to Lehigh County

Entity

LNAA Lehigh County

Medical Insurance

100% of Premium Paid by LNAA

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

Dental Insurance

100% Paid By LNAA

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

Prescription 100 % Paid by LNAA $18.97/Payroll by Employee Vision

Coverage 100% Paid by LNAA Single - $.30/Payroll by Employee Family - $4.29/Payroll by Employee

Retirement Yes No Data

Deferred Compensation Yes No Data

Life Insurance Yes No Data

Short Term Disability No No Data

Ben

efit

Typ

e

Long Term Disability Yes No Data

3.4 Summary

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.


Lehigh & Northampton Counties – February 6, 2009 Air Service Analysis – Page 4-1

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 Airport’s air service development

approach. Besides an in-depth interview with the Authority’s 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)



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 LVIA’s Director of Business Development (The Director) on October 29,

2008, in the Authority’s 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 Department’s 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 Team’s 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 LVIA’s 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.



The Director has responsibility for air service development, marketing, public relations, LVIA’s

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 Airport’s

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 it’s

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 Airport’s airline communication status report for 2008, the Study Team

concludes that LVIA is communicating with the right airlines, not communicating with



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 lion’s share of that consultant’s 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 LVIA’s 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.



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 LVIA’s 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 today’s 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



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 entrée 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



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 long-

term. 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

Airport’s 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 LVIA’s 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.



The Airport’s 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.



4.1 – Air Service Comparison with Peer Airports

Question LVIA Peer 1 Peer 2 Peer 3What department does air service development fall under?

Business Development

Marketing Marketing & PR Public Affairs & Air Service Marketing

Who has responsibility for air service development? Director of Business Development

Deputy Director, Marketing & Public

Relations

Marketing & PR Manager

VP of Public Affairs & Air Service

MarketingWhat other responsibilities does that person have? Public relations,

marketing, community relations, tours, charity

events

Airport Marketing, public relations,

airport info/visitor center, frequent flyer

lounge & airport clerical staff

Marketing, public relations, special

events, media relations, noise & customer service

Corporate Comm., External Affairs,

Media relations, Gov't Affairs, Community

Affairs, PR, Advertising, Mktg

How many direct reports does that person have? 2 12 (6 Full-Time & 6 Part-Time)

3 (4th is approved but not filled)

3

How much does the Airport budget for advertising every year?

$500,000 $400,000 $400,000 $396,000

Does the Airport issue a newsletter? Yes Yes. In electronic format only.

Yes Yes. E-newsletter

If so, how often is it published? 4/yr 8-9/yr 6/yr Every 2-3 monthsIs it distributed to airline network planners? Yes No. It is sent to

frequent flyers, airport board members,

Chamber of Commerce, regional

businesses and all others who sign up an

email address.

To those that subscribe with their e-

mail address

Yes

Does the Airport produce a printed timetable? Yes No. Electronic, online version only.

No No, electronic (.pdf)

Do you use a consultant for air service development work?

Yes Yes Yes Yes

If so, how many different consultants do you work with?

2 1 1 (not including consultant for data

only)

1

What is your average annual budget for air service consultants?

$25,000. Budget is revisited mid-year and

can be revised upwards if necessary.

$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

$60,000 $85,000-$100,000

How often do you visit carriers at their headquarters? 3-4/yr 2-3/yr 1-2/yr 1/yr for each carrierIf so, do consultants travel with you to these meetings? Yes, 75% of the time Yes, 60% of the time. Yes Yes, on an as-needed

basisWho else attends them on behalf of the Airport? Executive Director,

sometimes board members

Executive Director No one else President/CEO

Which of the annual air service conferences do you attend?

JumpStart & Network Jumpstart JumpStart & Network JumpStart & Network

Do you have a formal air service incentive program? Yes No. Incentives vary depending on the

situation.

No, but considering one. Current ULA

does not permit.

Yes

If so, what do you offer carriers for new service? $5 per seat marketing funds in year 1, can

also waive other fees and discount handling

No type of incentive is off the table.

Frequency of service and markets served

will determine waiver of costs and marketing

assistance.What do you offer carriers for additional service on existing routes?

Same No set incentive package.

Depends on proposed level of service.

Do you actively pursue cargo service? No Very occasionally, but lately no.

No Not currently, but it is something we are

targetingDo you actively pursue scheduled charter service? 10-15% of time &

resourcesNo No Yes



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

Team’s opinion, the Airport’s approach to air service development is for the most part appropriate

for LVIA’s 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 in-

house 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 study’s overall

recommendations in Section 6 of this report.


Lehigh & Northampton Counties – February 6, 2009 Organizational Analysis – Page 5-1

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 (PFC’s) 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 80’s by the FAA, and

the reliance by airports on “Letter of Intent” allocations from the FAA in support of large multi-

year 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 today’s

complex airport operating environment.



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 airport’s governance model is set, it is airport management’s 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



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 today’s

airports. This type of structure will be considered for analysis in comparison to the LNAA.

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



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 Authority’s 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

Airport’s 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.

3 53 Pa.C.S. §5610



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 Secretary-

Treasurer. 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 LNAA’s

reporting committee’s:

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



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.

4 LNAA Bylaws Article XVI.1



Figure 5.1

Lehigh Northampton Airport Authority Structure

Source: Lehigh Northampton Airport Authority and The Study Team

Board of Governors

Finance Committee

Personnel & Law Committee

Community Affairs Committee

Construction & Maintenance Committee

Business & Planning Committee

Executive Director

Attorney-At-Law



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.



Figure 5.2 – LVIA Organization Chart

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5.4 Organizational Analysis

The Study Team’s 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 Team’s 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 Board’s 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.



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 management’s efforts to accommodate issues with regard to the



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.

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 Team’s observations

of the organization as a whole.

5.5.1 Administration

The Administration Department is responsible for all of the Airport’s 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

Executive Director

Deputy Executive Director

Administration Finance BusinessDevelopment

Engineering Operations



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 Department’s 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 Director’s; 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 LVIA’s 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.



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 Proposal’s (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 Airport’s 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



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 Airport’s 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 Airport’s 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 Airport’s 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 Director’s office.

5.5.6 Maintenance

The Maintenance Department includes the Airport’s 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



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 Airport’s 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



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 Airport’s 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 Authority’s 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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Lehigh & Northampton Counties – February 6, 2009 Findings and Recommendations – Page 6-1

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 Authority’s primary advantages?

What does the Authority do well?

What do other people see as the Authority’s strengths?



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

Authority’s 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 LNAA’s SWOT which resulted in the following:



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 Authority’s 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



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. Authority’s 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.



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 Study’s 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



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



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 Plan’s are dynamic in

nature and help to focus an organization on achieving the Plan’s 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:

- LNAA’s 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.



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 Airport’s

convenience, especially in the outlying areas of the catchment area that

compete heavily with Philadelphia and Newark.

- The Airport’s identity. During the Study process, many reported that there are

conflicting messages among Airport users with respect to the Airport’s

recognition or identity. Consideration should be given to developing a

consistent “brand” name for the Airport. Perhaps the FAA’s 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



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 Airport’s 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.



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 Director’s 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

Executive Director

Deputy Executive Director

Administration Finance BusinessDevelopment

Engineering Operations



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 LNAA’s 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 Authority’s budgeting and financial reporting systems.



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.


Lehigh & Northampton Counties – February 6, 2009 Appendix Table of Contents – Page 1

APPENDIX TABLE OF CONTENTS

I. Glossary of Terms

II. Stakeholder Survey Questionnaire

III. Comparable Airports Contact Information

IV. Comparable Airports Discussion Framework

V. Human Resources Survey Questionnaire

VI. Air Service Survey Questionnaire

VII. Comparable Airports 2007 Operating and Finance Data


Lehigh & Northampton Counties – February 6, 2009 Glossary of Terms – Page 1

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 airport’s 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.


Lehigh & Northampton Counties – February 6, 2009 Glossary of Terms – Page 2

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 provider’s 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 FAA-approved 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 Team’s 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

Lehigh Valley International Airport Survey

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Lehigh Valley International Airport Survey

1 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

2 What is your perception of Lehigh Valley International Airport?

A valuable economic asset

Just another mode of transportation

An unnecessary asset

No opinion

3 Comments on question 2

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

Very important Somewhat important

Not important


6 How well do you understand the Airport’s organizational/management structure?

I fully understand it

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Somewhat understand it

I do not understand it at all


8 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


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



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

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 wellMeets 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


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 public’s interest?





20 What do you like/dislike about the current state of communications between the Community and/or Region and the Airport Authority?

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



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




Lehigh & Northampton Counties – February 6, 2009 Comparable Airports Contact Information – Page 1

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 [email protected]

2. Mr. George Speake

Vice President, Maintenance and Operations Sanford Airport Authority 1200 Red Cleveland Blvd. Sanford, Florida 32773 407.585.4006 [email protected]

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 [email protected]

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 [email protected]

5. Ms. Diannae Ehler General Manager Stewart International Airport 1180 First Street New Windsor, NY 12553 845.564.7200 ext. 604 [email protected]


Lehigh & Northampton Counties – February 6, 2009 Comparable Airports Discussion Framework – Page 1

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 FBO’s 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 Human Resources Survey Questionnaire – Page 1

HUMAN RESOURCES SURVEY QUESTIONNAIRE

AIRPORT NAME: CURRENT NUMBER OF FTE'S:

Types of Health Insurance Plans Offered

PPO 80/20 PPO 90/10 HMO HIGH DED. PPO POS 70/30Total Plans Offered

Definitions: PPO 80/20 – Preferred Provider Organization in which the Plan pays 80% of usual and customary services after deductiblePPO 90/10 - Preferred Provider Organization in which the Plan pays 90% of usual and customary services after deductibleHMO – Health Maintenance OrganizationHigh 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/spouseEmployee/child(ren)Family

Other Insurance Benefits Offered

Type Employer Pays All Employee Pays All SharedDental InsuranceLife InsuranceOptional LifeShort Term Dis.Long Term Dis.Vision Insurance

Other

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

Paid Time Off

Paid Hours Paid Hours Paid Hours Paid Hours1<5 yrs/serv 5<10 yrs/serv 10<15 yrs/serv More than 15

yrs/service

VacationSickOther

Other Paid Leave Provided

Type Number of DaysBereavement

HolidaysJury DutyMilitaryOther

Financial/Retirement Benefits


Lehigh & Northampton Counties – February 6, 2009 Air Service Survey Questionnaire – Page 1

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?

Paperwork Reduction Act Statement: The information collected on this form facilitates the submission of operating and financial summary data. Section 111(b) requires the Secretary 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 the amount 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. Responses 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, a collection of information unless it displays a currently valid OMB number. The OMB control number associated with this collection is 2120-0569.

Operating and Financial Summary Airport: LEHIGH VALLEY INTL LocID: ABE Year: 2007 Enplanements:

As of 11/13/2008 03:53:10 PM Date Filed: 06/26/2008

Date Modified: 06/26/2008

Aeronautical Operating Revenue1. Landing Fees $ 2,899,3042. Terminal/International arrival area rental or other charge $ 3,086,1163. Apron charges/tiedowns $ 305,2474. FBO revenue: contract or sponsor-operated $ 922,1815. Cargo and hangar rentals $ 2,540,2616. Aviation fuel tax retained for airport use $ 07. Fuel sales net proffit/loss or fuel flowage fees $ 2,944,6588. Security Reimbursement $ 212,3719. Misc. $ 14,73210. Other $ 0

Total $ 12,924,870

Nonaeronautical Operating Revenue1. Land and non-terminal facilities $ 350,8442. Terminal - food and beverage $ 142,2193. Terminal - retail stores $ 85,2534. Terminal - other $ 184,3145. Rental cars $ 1,688,4566. Parking $ 5,414,9167. Misc. $ 181,1228. Other $ 0

Total $ 8,047,124

Nonoperating Revenue1. Interest income - restricted and non-restricted $ 818,8022. Grant receipts $ 7,004,5083. Passenger Facility Charges $ 1,899,9034. Other $ 46,200

Total $ 9,769,413

Operating Expenses1. Personnel compensation and benefits $ 8,845,6252. Communications and utilities $ 1,562,6513. Supplies and materials $ 633,8124. Repairs and maintenance $ 419,1605. Contractual services $ 1,871,6326. Insurance, claims, and settlements $ 583,7287. Misc. $ 157,8748. Other $ 1,468,239

Total $ 15,542,721

Non-Operating Expenses1. Interest expense $ 3,108,6262. Other $ 110,748

Total $ 3,219,374

Depreciation $ 5,692,329

Net $ 6,286,983

Reporting Year Proceeds1. Bond Proceeds $ 02. Proceeds from sale of property $ 03. Other contributed capital $ 04. Other $ 0

Total $ 0

Reporting Year Expenditures for Projects1. Airfield $ 1,726,2502. Terminal $ 1,030,1883. Parking $ 04. Roadways, rail, and transit $ 05. Other $ 4,370,126

Total $ 7,126,564

Reporting Year Debt Payments $ 4,051,092

Indebtedness at End of Year1. Bonds $ 53,169,8532. Loans $ 2,215,2183. Other $ 2,912,501

Total $ 58,297,572

Net Assets $ 150,144,259

Restricted Financial Assets1. Restricted debt service reserve $ 2,909,3282. Restrictions for renewals and replacements $ 1,000,0003. Other restricted financial assets $ 0

Total $ 3,909,328

Unrestricted Financial Assets including cash $ 8,295,463

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Operating and Financial Summary Airport: HARRISBURG INTL LocID: MDT Year: 2007 Enplanements:



Aeronautical Operating Revenue1. Landing Fees $ 3,376,5872. Terminal/International arrival area rental or other charge $ 6,471,4223. Apron charges/tiedowns $ 1,362,2574. FBO revenue: contract or sponsor-operated $ 144,1345. Cargo and hangar rentals $ 358,2076. Aviation fuel tax retained for airport use $ 07. Fuel sales net proffit/loss or fuel flowage fees $ 298,8778. Security Reimbursement $ 17,4679. Misc. $ 010. Other $ 15,000

Total $ 12,043,951

Nonaeronautical Operating Revenue1. Land and non-terminal facilities $ 357,9982. Terminal - food and beverage $ 109,6003. Terminal - retail stores $ 160,9314. Terminal - other $ 150,4235. Rental cars $ 3,532,9786. Parking $ 6,141,4247. Misc. $ 30,0258. Other $ 567,984

Total $ 11,051,363

Nonoperating Revenue1. Interest income - restricted and non-restricted $ 996,6582. Grant receipts $ 11,945,7483. Passenger Facility Charges $ 2,668,8324. Other $ 2,913

Total $ 15,614,151

Operating Expenses1. Personnel compensation and benefits $ 5,835,7732. Communications and utilities $ 1,779,9493. Supplies and materials $ 960,0454. Repairs and maintenance $ 1,254,7375. Contractual services $ 3,343,4056. Insurance, claims, and settlements $ 810,6007. Misc. $ 08. Other $ 0

Total $ 13,984,509

Non-Operating Expenses1. Interest expense $ 11,478,5132. Other $ 1,055,440

Total $ 12,533,953


Net $ 1,841,051

Reporting Year Proceeds1. Bond Proceeds $ 02. Proceeds from sale of property $ 14,4113. Other contributed capital $ 04. Other $ 0

Total $ 14,411

Reporting Year Expenditures for Projects1. Airfield $ 599,0082. Terminal $ 249,2643. Parking $ 27,6694. Roadways, rail, and transit $ 155,2225. Other $ 88,034

Total $ 1,119,197

Reporting Year Debt Payments $ 0

Indebtedness at End of Year1. Bonds $ 181,542,9772. Loans $ 15,123,6883. Other $ 5,939,174

Total $ 202,605,839

Net Assets $ 99,855,327

Restricted Financial Assets1. Restricted debt service reserve $ 9,758,1872. Restrictions for renewals and replacements $ 418,3213. Other restricted financial assets $ 2,841,495

Total $ 13,018,003





Operating and Financial Summary Airport: GENERAL MITCHELL INTL LocID: MKE Year: 2007 Enplanements:



Aeronautical Operating Revenue1. Landing Fees $ 12,431,0532. Terminal/International arrival area rental or other charge $ 3,848,5013. Apron charges/tiedowns $ 1,119,7744. FBO revenue: contract or sponsor-operated $ 430,9255. Cargo and hangar rentals $ 994,1616. Aviation fuel tax retained for airport use $ 07. Fuel sales net proffit/loss or fuel flowage fees $ 398,4638. Security Reimbursement $ 09. Misc. $ 010. Other $ 2,212,432

Total $ 21,435,309

Nonaeronautical Operating Revenue1. Land and non-terminal facilities $ 431,5132. Terminal - food and beverage $ 2,174,8373. Terminal - retail stores $ 1,519,6314. Terminal - other $ 655,4065. Rental cars $ 7,307,3516. Parking $ 26,936,6917. Misc. $ 08. Other $ 1,390,982

Total $ 40,416,411

Nonoperating Revenue1. Interest income - restricted and non-restricted $ 4,153,2862. Grant receipts $ 3,355,8163. Passenger Facility Charges $ 9,450,4364. Other $ 453,437

Total $ 17,412,975

Operating Expenses1. Personnel compensation and benefits $ 18,760,2102. Communications and utilities $ 3,867,9633. Supplies and materials $ 2,399,5354. Repairs and maintenance $ 414,1175. Contractual services $ 10,887,8876. Insurance, claims, and settlements $ 635,4757. Misc. $ 08. Other $ 9,213,637

Total $ 46,178,824


Total $ 8,401,309


Net $ 14,638,897

Reporting Year Proceeds1. Bond Proceeds $ 26,546,7032. Proceeds from sale of property $ 03. Other contributed capital $ 5,3114. Other $ 0

Total $ 26,552,014

Reporting Year Expenditures for Projects1. Airfield $ 2,950,6442. Terminal $ 24,245,9103. Parking $ 04. Roadways, rail, and transit $ 1,641,9895. Other $ 7,264,660

Total $ 36,103,203


Indebtedness at End of Year1. Bonds $ 190,170,1292. Loans $ 03. Other $ 0

Total $ 190,170,129

Net Assets $ 131,267,683

Restricted Financial Assets1. Restricted debt service reserve $ 4,220,3412. Restrictions for renewals and replacements $ 4,769,1013. Other restricted financial assets $ 11,338,604

Total $ 20,328,046





Operating and Financial Summary Airport: THEODORE FRANCIS GREEN LocID: PVD Year: 2007 Enplanements:



Aeronautical Operating Revenue1. Landing Fees $ 12,503,3752. Terminal/International arrival area rental or other charge $ 7,887,7103. Apron charges/tiedowns $ 1,006,5714. FBO revenue: contract or sponsor-operated $ 05. Cargo and hangar rentals $ 06. Aviation fuel tax retained for airport use $ 07. Fuel sales net proffit/loss or fuel flowage fees $ 982,6058. Security Reimbursement $ 09. Misc. $ 454,11610. Other $ 24,380

Total $ 22,858,757

Nonaeronautical Operating Revenue1. Land and non-terminal facilities $ 1,453,9082. Terminal - food and beverage $ 1,036,1383. Terminal - retail stores $ 687,0964. Terminal - other $ 731,0055. Rental cars $ 6,539,9476. Parking $ 11,335,5097. Misc. $ 502,7458. Other $ 1,055,430

Total $ 23,341,778

Nonoperating Revenue1. Interest income - restricted and non-restricted $ 6,583,5082. Grant receipts $ 25,497,6723. Passenger Facility Charges $ 10,039,8364. Other $ 5,968,826

Total $ 48,089,842

Operating Expenses1. Personnel compensation and benefits $ 17,287,5702. Communications and utilities $ 2,414,7763. Supplies and materials $ 981,1384. Repairs and maintenance $ 669,2845. Contractual services $ 5,267,9226. Insurance, claims, and settlements $ 809,3447. Misc. $ 172,6828. Other $ 1,197,975

Total $ 28,800,691


Total $ 32,747,325


Net $ 17,017,246

Reporting Year Proceeds1. Bond Proceeds $ 02. Proceeds from sale of property $ 112,5863. Other contributed capital $ 18,8214. Other $ 0

Total $ 131,407

Reporting Year Expenditures for Projects1. Airfield $ 14,613,0072. Terminal $ 55,397,6563. Parking $ 1,062,1254. Roadways, rail, and transit $ 1,378,0105. Other $ 18,748,228

Total $ 91,199,026


Indebtedness at End of Year1. Bonds $ 321,526,0332. Loans $ 774,6543. Other $ 2,698,983

Total $ 324,999,670

Net Assets $ 188,318,614

Restricted Financial Assets1. Restricted debt service reserve $ 25,347,5012. Restrictions for renewals and replacements $ 5,519,2223. Other restricted financial assets $ 131,926,663

Total $ 162,793,386





Operating and Financial Summary Airport: ORLANDO SANFORD LocID: SFB Year: 2007 Enplanements:



Aeronautical Operating Revenue1. Landing Fees $ 903,9282. Terminal/International arrival area rental or other charge $ 662,4233. Apron charges/tiedowns $ 109,8684. FBO revenue: contract or sponsor-operated $ 1,806,8935. Cargo and hangar rentals $ 293,2116. Aviation fuel tax retained for airport use $ 07. Fuel sales net proffit/loss or fuel flowage fees $ 309,8278. Security Reimbursement $ 09. Misc. $ 010. Other $ 59,721

Total $ 4,145,871

Nonaeronautical Operating Revenue1. Land and non-terminal facilities $ 2,290,5492. Terminal - food and beverage $ 03. Terminal - retail stores $ 04. Terminal - other $ 05. Rental cars $ 347,1706. Parking $ 47,8297. Misc. $ 158,7758. Other $ 508,034

Total $ 3,352,357

Nonoperating Revenue1. Interest income - restricted and non-restricted $ 135,5192. Grant receipts $ 03. Passenger Facility Charges $ 1,503,5424. Other $ 0

Total $ 1,639,061

Operating Expenses1. Personnel compensation and benefits $ 4,094,7002. Communications and utilities $ 404,0573. Supplies and materials $ 300,2634. Repairs and maintenance $ 474,4285. Contractual services $ 1,023,4286. Insurance, claims, and settlements $ 356,7497. Misc. $ 08. Other $ 546,640

Total $ 7,200,265

Non-Operating Expenses1. Interest expense $ 432,8022. Other $ 0

Total $ 432,802


Net $( 4,096,883)


Total $ 0

Reporting Year Expenditures for Projects1. Airfield $ 16,081,7912. Terminal $ 03. Parking $ 2,183,9974. Roadways, rail, and transit $ 2,683,0515. Other $ 11,654

Total $ 20,960,493


Indebtedness at End of Year1. Bonds $ 02. Loans $ 16,413,8713. Other $ 0

Total $ 16,413,871

Net Assets $ 0

Restricted Financial Assets1. Restricted debt service reserve $ 02. Restrictions for renewals and replacements $ 03. Other restricted financial assets $ 58,788

Total $ 58,788





Operating and Financial Summary Airport: STEWART INT'L LocID: SWF Year: 2007 Enplanements:



Aeronautical Operating Revenue1. Landing Fees $ 822. Terminal/International arrival area rental or other charge $ 1613. Apron charges/tiedowns $ 04. FBO revenue: contract or sponsor-operated $ 05. Cargo and hangar rentals $ 1516. Aviation fuel tax retained for airport use $ 07. Fuel sales net proffit/loss or fuel flowage fees $ 1578. Security Reimbursement $ 09. Misc. $ 010. Other $ 0

Total $ 551

Nonaeronautical Operating Revenue1. Land and non-terminal facilities $ 02. Terminal - food and beverage $ 03. Terminal - retail stores $ 04. Terminal - other $ 05. Rental cars $ 2706. Parking $ 6547. Misc. $ 3478. Other $ 0

Total $ 1,271

Nonoperating Revenue1. Interest income - restricted and non-restricted $ 22. Grant receipts $ 03. Passenger Facility Charges $ 3564. Other $ 0

Total $ 358

Operating Expenses1. Personnel compensation and benefits $ 1922. Communications and utilities $ 13. Supplies and materials $ 1,0774. Repairs and maintenance $ 05. Contractual services $ 06. Insurance, claims, and settlements $ 157. Misc. $ 1,3198. Other $ 27

Total $ 2,631

Non-Operating Expenses1. Interest expense $ 02. Other $ 0

Total $ 0

Depreciation $ 0

Net $( 451)


Total $ 497

Reporting Year Expenditures for Projects1. Airfield $ 02. Terminal $ 03. Parking $ 04. Roadways, rail, and transit $ 05. Other $ 0

Total $ 0


Indebtedness at End of Year1. Bonds $ 02. Loans $ 03. Other $ 0

Total $ 0

Net Assets $ 0

Restricted Financial Assets1. Restricted debt service reserve $ 02. Restrictions for renewals and replacements $ 03. Other restricted financial assets $ 0

Total $ 0

Unrestricted Financial Assets including cash $ 0



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