Legislature(2009 - 2010)CAPITOL 106

03/17/2009 05:15 PM House ECON. DEV., TRADE & TOURISM


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05:25:37 PM Start
05:26:28 PM Department of Transportation & Public Facilities Presentation by Linda Close, Ted Stevens International Airport Marketing Manager: Anchorage International Airport as an Economic Engine for Anchorage & Alaska
06:27:33 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Dept. of Transportation and Public TELECONFERENCED
Facilities
Presentation by Linda Close, Ted Stevens
International Airport Marketing Manager:
Anchorage International Airport as an
economic engine for Anchorage & Alaska -
what DOT&PF is doing to increase economic
development and trade activity
                    ALASKA STATE LEGISLATURE                                                                                  
 HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL                                                               
                       TRADE AND TOURISM                                                                                      
                         March 17, 2009                                                                                         
                           5:25 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Jay Ramras, Chair                                                                                                
Representative Nancy Dahlstrom                                                                                                  
Representative Reggie Joule                                                                                                     
Representative Mike Doogan                                                                                                      
Representative Lindsey Holmes                                                                                                   
Representative Chris Tuck                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault                                                                                                    
Representative Kyle Johansen                                                                                                    
Representative Mark Neuman                                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
Department of Transportation &  Public Facilities Presentation by                                                               
Linda   Close,  Ted   Stevens  International   Airport  Marketing                                                               
Manager:   Anchorage International Airport as  an economic engine                                                               
for Anchorage & Alaska                                                                                                          
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to report                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CHRISTINE KLEIN, Deputy Commissioner of Aviation                                                                                
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the presentation                                                               
on the Ted Stevens Anchorage International Airport.                                                                             
                                                                                                                                
LINDA CLOSE, Marketing Director                                                                                                 
Ted Stevens Anchorage International Airport                                                                                     
Department of Transportation & Public Facilities                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Gave a PowerPoint  presentation on economic                                                             
development at the Ted Stevens Anchorage International Airport.                                                                 
                                                                                                                                
KARINA PETERSEN Reporter                                                                                                        
KTVA CBS Channel 11                                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Asked a question during the presentation.                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
5:25:37 PM                                                                                                                    
                                                                                                                                
CHAIR JAY RAMRAS  called the House Special  Committee on Economic                                                             
Development, International Trade and  Tourism meeting to order at                                                               
5:25  p.m.   Present at  the call  to order  were Representatives                                                               
Holmes, Tuck, Doogan, and Ramras.   Representatives Dahlstrom and                                                               
Joule arrived as the meeting was in progress.                                                                                   
                                                                                                                                
^DEPARTMENT  OF TRANSPORTATION  & PUBLIC  FACILITIES PRESENTATION                                                             
BY  LINDA  CLOSE,  TED STEVENS  INTERNATIONAL  AIRPORT  MARKETING                                                             
MANAGER:   ANCHORAGE INTERNATIONAL AIRPORT AS  AN ECONOMIC ENGINE                                                             
FOR ANCHORAGE & ALASKA                                                                                                        
                                                                                                                                
CHAIR RAMRAS announced  that the only order of  business would be                                                               
a  presentation by  the  Marketing Director  of  the Ted  Stevens                                                               
Anchorage International Airport.                                                                                                
                                                                                                                                
5:26:28 PM                                                                                                                    
                                                                                                                                
CHRISTINE KLEIN,  Deputy Commissioner of Aviation,  Office of the                                                               
Commissioner, Department  of Transportation &  Public Facilities,                                                               
informed the  committee the  Alaska International  Airport System                                                               
(AIAS)  includes the  Fairbanks International  Airport; in  fact,                                                               
the  Anchorage  airport would  not  be  as "strong"  without  the                                                               
Fairbanks airport as a diversion airport.                                                                                       
                                                                                                                                
5:27:18 PM                                                                                                                    
                                                                                                                                
LINDA   CLOSE,   Marketing   Director,  Ted   Stevens   Anchorage                                                               
International  Airport,  Department  of Transportation  &  Public                                                               
Facilities,  informed the  committee  the following  presentation                                                               
would  give an  in-depth overview  of  what is  happening at  the                                                               
airport regarding economic development and  trade.  She began the                                                               
PowerPoint presentation with a picture  taken during October that                                                               
showed 40  wide-body aircraft  on the airport  deck during  a 30-                                                               
minute period.   Ms. Close  said the  airport is a  huge economic                                                               
engine for  Anchorage accounting  for one job  in eight  and $850                                                               
million in annual  payroll.  The airport's  total economic impact                                                               
to Anchorage  is $2,363 billion  per year, of which  $1.4 billion                                                               
is  garnered from  fuel  sales.   Another  $80  billion per  year                                                               
supports construction  activities and $30 billion  goes to hotels                                                               
for crew stays.                                                                                                                 
                                                                                                                                
5:30:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOLMES asked whether the  $1.4 billion for fuel is                                                               
money that would go to the refinery and the railroad.                                                                           
                                                                                                                                
MS. CLOSE  explained the $1.4  million is  for fuel sales  to the                                                               
fuel companies.                                                                                                                 
                                                                                                                                
5:31:18 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS  added that  the export  of Jet  A aviation  fuel is                                                               
Alaska's largest  value-added industry.   This is  a tremendously                                                               
large  industry that  is under  a lot  of pressure  at this  time                                                               
because the  price of fuel is  subject to the global  market.  He                                                               
opined  Alaska refineries  have to  sell the  fuel below  cost in                                                               
order  to  service $600  million  in  bonds paid  exclusively  by                                                               
landing fees.  Representative Ramras  theorized that those losses                                                               
are passed  along to  Alaska consumers of  home heating  fuel and                                                               
retail gasoline.                                                                                                                
                                                                                                                                
5:32:13 PM                                                                                                                    
                                                                                                                                
MS. CLOSE displayed a slide  titled "Cargo Carrier Overview" that                                                               
listed  the cargo  carriers  active at  Anchorage  airport.   She                                                               
advised there  were ten  carriers that  initiated service  in the                                                               
last five  years and four  carriers that have been  absorbed into                                                               
other carriers  in the last  five years.   All in all,  there are                                                               
fourteen new cargo  carriers that entered the market  in the last                                                               
five years.   She then  displayed a list  of the number  of cargo                                                               
carriers  by home  country and  noted that  of the  fourteen U.S.                                                               
carriers,  ten are  operating as  contract  carriers for  foreign                                                               
companies.  The next slide  titled "2007 ACI Cargo Traffic Stats"                                                               
identified ANC  as the third  largest cargo airport in  the world                                                               
based on total cargo tonnage (Metric Tons).                                                                                     
                                                                                                                                
5:34:45 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS  recalled that 68  FedEx Corp. pilots were  laid off                                                               
and Flint Hills  shut down one of  its units due to  a 30 percent                                                               
decline  in  freight.    He  asked  whether  other  airports  are                                                               
experiencing the same reduction in freight.                                                                                     
                                                                                                                                
5:35:37 PM                                                                                                                    
                                                                                                                                
MS.  CLOSE agreed  that  there  has been  a  decline "across  the                                                               
board,  some  higher,  some  lower  ... we're  not  quite  at  30                                                               
percent, we  hit 28 percent  for one month.   But year  over year                                                               
we're not that low."                                                                                                            
                                                                                                                                
5:35:54 PM                                                                                                                    
                                                                                                                                
MS.  KLEIN clarified  the FedEx  pilots  were not  laid off,  but                                                               
relocated to other locations.                                                                                                   
                                                                                                                                
5:36:20 PM                                                                                                                    
                                                                                                                                
MS. CLOSE  confirmed that the  68 positions were  transferred out                                                               
of Anchorage; however,  out of those only 17  lived in Anchorage.                                                               
Moreover, FedEx still bases 425 pilots in Anchorage.                                                                            
                                                                                                                                
5:36:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK   recalled  transportation  has   gone  down                                                               
worldwide  for air  freight and  also for  water cargo;  in fact,                                                               
shipping  companies  are having  difficulty  finding  a place  to                                                               
berth their ships.                                                                                                              
                                                                                                                                
5:38:10 PM                                                                                                                    
                                                                                                                                
MS. CLOSE  offered that  ANC charges  very competitive  rates and                                                               
fees.   A graph indicated landing  fees for a 747-400  range from                                                               
$12,799.08 in Toronto to $1,174.53 in the AIAS.                                                                                 
                                                                                                                                
5:38:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN asked  whether airports that have  a lot of                                                               
traffic, like Memphis, charge landing  fees more like Anchorage's                                                               
fees.                                                                                                                           
                                                                                                                                
MS. CLOSE disagreed.                                                                                                            
                                                                                                                                
5:39:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN concluded Anchorage  looks good against its                                                               
major competitors.                                                                                                              
                                                                                                                                
MS.  CLOSE said  yes.    She reviewed  the  history of  passenger                                                               
traffic  during  the  last  ten   years.    Passenger  and  cargo                                                               
continues to grow  at ANC and FAI.  The  downturns in the economy                                                               
such as the  Japanese economic crisis and  [the terrorist attacks                                                               
of September  11, 2001] were  followed by rebounds;  however, the                                                               
present  downturn  is  unprecedented  and will  take  a  recovery                                                               
period longer than nine to twelve months, she opined.                                                                           
                                                                                                                                
5:40:39 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS  asked how much  more growth can be  accommodated by                                                               
the airport.                                                                                                                    
                                                                                                                                
5:40:56 PM                                                                                                                    
                                                                                                                                
MS.  KLEIN  said  both  Anchorage  and  Fairbanks  airports  have                                                               
capacity for  growth; in fact,  there is  a great deal  more land                                                               
mass available  than at  most airports.   However, the  timing of                                                               
aircraft schedules can be an issue.                                                                                             
                                                                                                                                
5:41:39 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS  observed [the Alaska International  Airport System]                                                               
has unique  geography, low landing  fees, a  globally competitive                                                               
price for jet aviation fuel, and the capacity to grow.                                                                          
                                                                                                                                
5:42:18 PM                                                                                                                    
                                                                                                                                
MS.  KLEIN said  the master  plan projection  allows for  3 to  5                                                               
percent growth for the next 10 years.                                                                                           
                                                                                                                                
5:42:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN   surmised  the  possible   bottleneck  is                                                               
"getting planes on and off the  ground rather than having a place                                                               
to build a new cargo facility."                                                                                                 
                                                                                                                                
MS. KLEIN indicated yes.                                                                                                        
                                                                                                                                
5:42:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK recalled  discussion  some  years ago  about                                                               
moving the  airport to  Fire Island, and  moving the  air freight                                                               
portion to Port MacKenzie.                                                                                                      
                                                                                                                                
5:43:30 PM                                                                                                                    
                                                                                                                                
MS. KLEIN explained airport planning  looks at a window of thirty                                                               
years;  therefore, master  plans are  highly speculative  because                                                               
the models  are based on  growth rates, assumptions, and  what is                                                               
going on in  the global and the U.S. economies.   She related the                                                               
projected numbers  of the  last master  plan were  very accurate;                                                               
however, the  most recent master  plan was too optimistic  and is                                                               
being reevaluated.                                                                                                              
                                                                                                                                
5:44:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOLMES   advised  the  district   she  represents                                                               
includes  a  lot  of  the airport  support  services  and  nearby                                                               
residential  areas.   Last  year  there  was an  issue  regarding                                                               
expanding the  runway; in fact  that project has been  tabled for                                                               
awhile.   She asked whether  there are anticipated plans  for the                                                               
expansion or movement of the runways.                                                                                           
                                                                                                                                
5:46:03 PM                                                                                                                    
                                                                                                                                
MS. KLEIN confirmed  expansion of the fourth runway  has been put                                                               
off  indefinitely.    She  explained the  airlines  pay  for  the                                                               
infrastructure  and  they  indicated  the AIAS  has  not  done  a                                                               
through assessment  in its  growth projection  and of  the system                                                               
capacity.   The reevaluation  of the master  plan will  include a                                                               
system plan that looks at the  capacity of both the Anchorage and                                                               
Fairbanks airports.   She opined, "This  is not the time,  and we                                                               
still  have  enough  capacity  to be  addressing  our  needs  for                                                               
several years  at a  minimum ... this  capacity [is]  by managing                                                               
the  incoming  and  outgoing  traffic  differently,  there's  new                                                               
technology  and  there are  things  we  can  do on  our  existing                                                               
airfield to actually increase throughput."                                                                                      
                                                                                                                                
5:47:35 PM                                                                                                                    
                                                                                                                                
MS.  CLOSE  continued  with  her  presentation  and  pointed  out                                                               
Anchorage's strategic  location is clearly what  drives the cargo                                                               
activity  in Alaska.   The  economic basis  for this  activity is                                                               
determined by  "payload versus range."   The next  slide compared                                                               
the  flight of  a 747  going from  Hong Kong  to Chicago  nonstop                                                               
versus a flight going from Hong  Kong to Chicago with a fuel stop                                                               
in Anchorage.  The stop in  Anchorage for fuel allowed the second                                                               
flight to carry more cargo  and increase the revenue generated by                                                               
the flight by  almost $200,000.  Ms. Close concluded  that all of                                                               
the cargo  carriers traveling through  the Anchorage  airport are                                                               
seeing huge increases in revenue.                                                                                               
                                                                                                                                
5:49:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN asked  whether the aforementioned "numbers"                                                               
are the same for flights continuing after a stop in Fairbanks.                                                                  
                                                                                                                                
MS. CLOSE indicated yes.                                                                                                        
                                                                                                                                
5:50:13 PM                                                                                                                    
                                                                                                                                
CHAIR  RAMRAS  suggested this  presentation  should  be heard  by                                                               
members  of  the  House  and   Senate  Committees  on  Labor  and                                                               
Commerce.                                                                                                                       
                                                                                                                                
5:50:40 PM                                                                                                                    
                                                                                                                                
MS. KLEIN agreed.                                                                                                               
                                                                                                                                
5:51:06 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS asked whether the  stop in Anchorage allows carriers                                                               
to displace fuel for freight.                                                                                                   
                                                                                                                                
5:51:40 PM                                                                                                                    
                                                                                                                                
MS. CLOSE said, "Yes, it's either  one or the other."  In further                                                               
response to  Representative Ramras,  she explained the  weight of                                                               
the cargo is equal to the weight of the displaced fuel.                                                                         
                                                                                                                                
5:51:46 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS asked for information on the price of Jet A fuel.                                                                  
                                                                                                                                
5:52:06 PM                                                                                                                    
                                                                                                                                
MS. CLOSE  offered to find spot  prices and compare the  price of                                                               
fuel at airports that compete  with Anchorage for cargo business.                                                               
She then stated that the  management of the Anchorage airport has                                                               
been  very successful  at coordinating  with federal  agencies to                                                               
obtain regulatory advantages that  help carriers enter the market                                                               
and  that reduce  barriers to  trade.   For example,  the airport                                                               
worked  with  the governor's  office  and  the U.S.  Customs  and                                                               
Border  Protection to  approve Fairbanks  airport landing  rights                                                               
for Japan  Airlines.  Also, because  it is classified as  a first                                                               
point  of  entry, the  Anchorage  airport  has a  program  called                                                               
"progressive  clearance"   to  streamline  the   federal  customs                                                               
process.   Progressive  clearance is  used by  China Airlines  on                                                               
passenger  flights  from  Taipei  and  it  allows  passengers  to                                                               
deplane  and  go  through  document  inspection;  however,  their                                                               
baggage is  cleared later in  New York.   This saves time  as the                                                               
carrier does not  have to download baggage in Anchorage  and is a                                                               
quicker process for the traveler as  well.  In addition, there is                                                               
a waiver called  International-to-International (ITI) that allows                                                               
passengers who  are coming  in from  an international  flight and                                                               
who  are  going  onto  another international  flight  to  transit                                                               
without a U.S. visa.                                                                                                            
                                                                                                                                
5:55:02 PM                                                                                                                    
                                                                                                                                
MS.  CLOSE explained  the importance  of the  Anchorage airport's                                                               
Cargo  Transfer  Authority.   In  1996,  the U.S.  Department  of                                                               
Transportation awarded  the airport a Cargo  Transfer Flexibility                                                               
that allowed  the carriers  to reconfigure  their loads  while on                                                               
the  ground.    However,  the  authority  limited  carriers  from                                                               
"foreign-foreign" transfers.   The  airport management  pursued a                                                               
regulation change through Congress  that resulted in an expansion                                                               
of the  Cargo Transfer Authority  in 2003.  Foreign  carriers are                                                               
now allowed transferring  of cargo with each other  to complete a                                                               
journey  to the  U. S.   She  displayed a  slide that  showed the                                                               
example of how this change  allowed Northwest Airlines to serve a                                                               
new  market  without  any  further  investment  in  assets.    In                                                               
addition,  China  Airlines can  now  fly  in  from New  York  and                                                               
transfer its  cargo for transport  to Shanghai.  While  the Cargo                                                               
Transfer Authority may  not attract new business  into Alaska, it                                                               
does anchor the current carriers  and creates long-term stability                                                               
for  the airport.   Ms.  Close turned  to the  subject of  market                                                               
opportunities and  pointed out the cargo  carriers coming through                                                               
the Anchorage airport  have access, traffic rights,  and space to                                                               
ship  to  every country  in  Asia;  furthermore, this  access  is                                                               
available  at  rates  that  are  "very,  very  cheap."    As  the                                                               
westbound aircraft  to Asia are  almost empty, she  stressed this                                                               
is a potential market opportunity for Alaska.                                                                                   
                                                                                                                                
6:00:03 PM                                                                                                                    
                                                                                                                                
MS. CLOSE,  responding to  further interest  from Representatives                                                               
Tuck  and  Ramras,  further  explained  that  the  airplanes  are                                                               
returning westbound, to Asia, and are 30-40 percent full.                                                                       
                                                                                                                                
6:00:42 PM                                                                                                                    
                                                                                                                                
CHAIR  RAMRAS suggested  the Alaska  Seafood Marketing  Institute                                                               
(ASMI) and the World Trade Center  - Alaska, should be in contact                                                               
with the carriers.                                                                                                              
                                                                                                                                
6:00:58 PM                                                                                                                    
                                                                                                                                
MS.  CLOSE  advised  the  airport works  closely  with  ASMI  and                                                               
related  her past  experience  shipping seafood.    The issue  is                                                               
opening  up markets  overseas  to sell  the  fish because  Alaska                                                               
seafood must pull  sales from an existing market.   She continued                                                               
to  explain that  driving the  growth  of the  cargo through  the                                                               
Anchorage airport  is the market in  China.  Every country  has a                                                               
bilateral  agreement  with  the  U.S. allowing  the  exchange  of                                                               
cargo; however,  the agreement with  China is unique in  that the                                                               
number of  carriers is  limited to five  and the  frequencies are                                                               
limited.   In addition,  the ANC  has high  levels of  service to                                                               
Viet  Nam,  Singapore,  and  India,  and  each  carrier  has  the                                                               
authority to  pick up cargo and  take it to its  home country, or                                                               
transfer cargo as well.                                                                                                         
                                                                                                                                
REPRESENTATIVE  RAMRAS recalled  Viet Nam,  Singapore, and  India                                                               
were  the  three [destinations]  identified  by  the World  Trade                                                               
Center -  Alaska as potential markets  for Alaska.  He  asked for                                                               
information about the "cargo relationship" with the three.                                                                      
                                                                                                                                
MS. CLOSE explained that all  of the Japanese, Korean, Taiwanese,                                                               
and Chinese  carriers have  traffic rights  and the  authority to                                                               
transfer  cargo  to  Viet  Nam,   Singapore,  and  India,  as  do                                                               
Singapore Airlines, FedEx,  and United Parcel Service  (UPS).  On                                                               
the other hand, if India develops  into a market, the routes will                                                               
fly over  Europe instead traveling  an additional 2,000  miles to                                                               
Anchorage.                                                                                                                      
                                                                                                                                
6:04:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOLMES asked  whether the  unique agreement  with                                                               
China pertains to the entire U.S.                                                                                               
                                                                                                                                
6:04:24 PM                                                                                                                    
                                                                                                                                
MS. CLOSE  explained the agreements  are with the U.S.;  in fact,                                                               
the  agreements with  Viet  Nam and  Singapore  are called  "open                                                               
skies"  agreements which  are unlimited,  but the  agreement with                                                               
India is somewhat  limited.  The U.S. air  service agreement with                                                               
China was  signed in 2004  and has had  a positive impact  on ANC                                                               
business.   In 2000,  there were 15  landings per  week operating                                                               
into China;  in 2006, there  were 198  landings per week,  and in                                                               
2007 there were 260 landings per  week.  In fact, the Chinese air                                                               
cargo market  accounted for 35  percent of the air  cargo traffic                                                               
through  ANC  in   2007.    Regarding  the   economic  impact  of                                                               
international  cargo at  ANC, she  said cargo  accounts for  two-                                                               
thirds  of  all  airport  revenue;   furthermore,  the  top  nine                                                               
international carriers  account for  54.76 of the  cargo revenue.                                                               
Ms. Close reiterated the strengths  of the Anchorage airport such                                                               
as;  its location,  its competitive  rates, a  good relationships                                                               
with  carriers, having  the Fairbanks  airport as  an alternative                                                               
airport, and  strong support  from maintenance  providers through                                                               
parts  exchanges  and local  suppliers.    Opportunities for  the                                                               
airport include;  the existing  all-cargo carrier  operation, the                                                               
Cargo Transfer Authority,  an increased use of  freighters, and a                                                               
growing  base of  Chinese carriers.   Furthermore,  she predicted                                                               
the  Chinese agreement  will  be expanded  into  an "open  skies"                                                               
agreement  by   2011  that  will  bring   in  additional  Chinese                                                               
carriers.                                                                                                                       
                                                                                                                                
6:09:03 PM                                                                                                                    
                                                                                                                                
MS. CLOSE addressed  threats to ANC and pointed out  there is not                                                               
a   good  manufacturing   base  in   Alaska  to   provide  export                                                               
opportunities  for  the carriers.    Also,  the weather  and  the                                                               
expense of  deicing aircraft is a  concern.  The third  threat is                                                               
the constant competition from other airports.                                                                                   
                                                                                                                                
6:10:24 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS asked for the cost of deicing.                                                                                     
                                                                                                                                
6:10:43 PM                                                                                                                    
                                                                                                                                
MS.  CLOSE estimated  $800 to  $1,000.   In  further response  to                                                               
Representative  Ramras,   she  reminded  the  committee   of  the                                                               
increased  cargo  capability  of   each  flight  to  balance  any                                                               
additional landing costs at ANC.                                                                                                
She addressed weaknesses  at the airport and noted  a decrease in                                                               
flights  due to  the global  recession.   In addition,  there has                                                               
been an increase in overflights  due to the development of longer                                                               
range aircraft and also due  to lighter loads that allow aircraft                                                               
to avoid the fuel stop.                                                                                                         
                                                                                                                                
6:12:44 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS asked for suggestions for the ideal cargo.                                                                         
                                                                                                                                
6:13:06 PM                                                                                                                    
                                                                                                                                
MS. CLOSE suggested perishables.                                                                                                
                                                                                                                                
6:13:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOULE  asked whether  there is  warehouse capacity                                                               
at  the Anchorage  airport for  the storage  of perishable  items                                                               
such as fresh fish.                                                                                                             
                                                                                                                                
6:13:39 PM                                                                                                                    
                                                                                                                                
MS. CLOSE  said yes,  several of the  carriers have  freezers and                                                               
chillers.   She continued  to relate another  weakness at  ANC is                                                               
the  shortage of  a domestic  air cargo  network as  the shortage                                                               
limits warehouse and distribution opportunities.   A slide of the                                                               
domestic  air cargo  network  showed  thirteen carriers  bringing                                                               
cargo from Asia and only four  carriers taking cargo to the Lower                                                               
48.  This  situation creates a warehouse and  storage problem; in                                                               
fact, in order to transport cargo  to the Lower 48, shippers must                                                               
pay for the flight from its origin in Asia.                                                                                     
                                                                                                                                
6:15:59 PM                                                                                                                    
                                                                                                                                
MS. CLOSE recapped fiscal year 2008.   The year was "off a little                                                               
bit,"  until after  October when  there were  major decreases  in                                                               
cargo  operations.     Passenger  traffic  was   holding  steady,                                                               
although  cargo landings  decreased 5.4  percent.   The airport's                                                               
largest  ground handler  for  international  landings reported  a                                                               
small increase in  landings during March.  Several  items of good                                                               
news for  the airport  are that Nippon  Cargo Airlines  is moving                                                               
from  New  York  to  Anchorage;  Cathay  Pacific  has  added  new                                                               
freighters,  two new  stations,  and six  additional flights  per                                                               
week through  Anchorage; either Evergreen  International Airlines                                                               
or  Kalitta Air  will be  a new  carrier for  China beginning  in                                                               
April, 2009;  and UPS has opened  a new hub in  Shanghai and will                                                               
be  increasing  its  flights  by  eight  per  week.    Ms.  Close                                                               
concluded that,  although carriers  are being cautious,  there is                                                               
some expansion of services.                                                                                                     
                                                                                                                                
6:19:24 PM                                                                                                                    
                                                                                                                                
MS. KLEIN expressed  her appreciation to Ms. Close  for her long-                                                               
term  contribution  to  the  cargo  and  international  marketing                                                               
function of  the airport.   She pointed  out that  her department                                                               
takes  the  AIAS  position  very  seriously  and  monitors  daily                                                               
changes  in the  cargo  economy.   It  is  important balance  the                                                               
additional costs of  operation in a northern climate  and to keep                                                               
the rates and fees competitive.                                                                                                 
                                                                                                                                
6:21:00 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS  asked what Fairbanks  can do to  attract additional                                                               
landings.                                                                                                                       
                                                                                                                                
6:21:19 PM                                                                                                                    
                                                                                                                                
MS. KLEIN stated there was concern  by carriers about the FAI and                                                               
its  support facilities;  however, there  are increasing  options                                                               
for support  staff, the  terminal has  been remodeled,  and cargo                                                               
ramp facilities at  the airport have been expanded.   In fact, in                                                               
February there were several FedEx  diversions that went well.  In                                                               
response  to Representative  Ramras, Ms.  Klein said  the landing                                                               
fees in  Fairbanks are the  same as in Anchorage,  although there                                                               
is an incentive for Fairbanks landings.                                                                                         
                                                                                                                                
6:23:21 PM                                                                                                                    
                                                                                                                                
CHAIR   RAMRAS   reiterated    his   recommendation   that   this                                                               
presentation  should  be  available   to  other  members  of  the                                                               
legislature.                                                                                                                    
                                                                                                                                
6:24:24 PM                                                                                                                    
                                                                                                                                
KARINA PETERSEN  Reporter, KTVA CBS Channel  11, called attention                                                               
to the Prince  George Airport Runway Extension  Project and asked                                                               
whether the Department of Transportation  & Public Facilities has                                                               
concerns  about  possible  competition  from  the  Prince  George                                                               
airport for ANC cargo business.                                                                                                 
                                                                                                                                
6:25:07 PM                                                                                                                    
                                                                                                                                
MS.  KLEIN responded  that the  department takes  all competition                                                               
seriously; however, Prince  George is a small  community, and the                                                               
airport has  one runway with  no taxiway.   She opined  the cargo                                                               
business at ANC  requires a more developed  ground support system                                                               
and service  providers than they can  provide at this time.   She                                                               
acknowledged the Prince George Airport  could become a competitor                                                               
in the future for Vancouver International Airport.                                                                              
                                                                                                                                
6:26:11 PM                                                                                                                    
                                                                                                                                
MS PETERSEN  agreed "It would  be hard for Prince  George airport                                                               
to catch up ..."                                                                                                                
                                                                                                                                
6:26:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK asked  about the  air traffic  from Asia  to                                                               
Canada.                                                                                                                         
                                                                                                                                
6:27:05 PM                                                                                                                    
                                                                                                                                
MS. CLOSE noted that Cathay Pacific Airways and Air Canada stop                                                                 
in Anchorage before going on to Canada, with the exception of                                                                   
flights going to Vancouver.                                                                                                     
                                                                                                                                
6:27:33 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Special Committee on Economic Development, International Trade                                                                  
and Tourism meeting was adjourned at 6:27 p.m.                                                                                  

Document Name Date/Time Subjects
Aviation presentation to EDT 3 17 09.pdf HEDT 3/17/2009 5:15:00 PM