Tuesday, April 7, 2009

Model airplanes, peak oil, and business diversity development: interview with Metropolitan Nashville Airport Authority President & CEO Raul Regalado

"We will be flying on commercial airlines in 100 years, but they will be much different"

"Nearly 27 percent of supervisors at the Authority are female, and more than 20 percent are non-Caucasian"

Raul Regalado is President & CEO of the Metropolitan Nashville Airport Authority. The Hispanic Nashville Notebook interviewed Regalado about a variety of topics including his background, challenges facing the aviation industry, and the diversity of the Authority's workforce:

Q: Before you moved to Nashville, you had studied in Florida and worked in California, Texas, and Oregon. Was your family from one of those coastal states? Where else have you spent significant time?

What convinced you that Nashville was the right move for you?

A: I’m originally from California. I have also lived in Florida, Alabama, Washington, and Germany. Middle Tennessee offers a good quality of life and a reasonable cost of living. It’s a great place to live.

I have also consulted on airports in Mexico, Costa Rica and Jamaica.

The Airport Authority structure was attractive to me. I found the objectives outlined by the Board of Commissioners to be challenging, yet reasonable and attainable.

Q: In your more than 40 years in aviation, you have amassed quite a record in both flight experience and in airport management. To what do you attribute your passion for aviation?

A: I started flying and building powered model airplanes as a young boy. I also started reading about flying and about some of the early aviation pioneers. Tony LaVier, a test pilot for Lockheed, was my idol. I was fortunate to have had the opportunity to meet him later in my career.

Q: Tell us about the new tax-exempt bond offering made possible by the Obama stimulus package, by which Nashville became the first airport authority in the country to take advantage of the new rules exempting your investors from the federal AMT. Was that driven by your office, and would you have been unable to do certain work at the airport without it?

A: To clarify, the bond offering was “enhanced” by the stimulus bill. These bonds will help reduce the cost of the next phase of our ongoing terminal renovation project, which is part of our board-approved capital plan. We could have proceeded anyway, but it would have been at a higher cost.

Q: The Nashville International Airport just won honors from Airport Revenue News including Best Concessions Management, Airport with the Best Customer Service, and Airport with the Most Unique Services. Was it all due to the recently added local and national-brand eateries, like Tootsie’s and La Hacienda? If there was more to it than that, what else earned you those honors, and what was the genesis of those efforts?

A: Yes our concessions program can be used as a model for a local concessions program. The selection of highly regarded and experienced concessionaires and the placement of top-notch management staff at the airport also contributed to earning these honors.

Q: In 2007, a CMT column suggested renaming the airport the Johnny Cash Nashville International Airport. Did that suggestion ever reach you? What do you think about the general idea of naming the airport after a famous local icon, and in what circumstance would that be appropriate? If it was your pick, whose name would it be?

A: No, the Johnny Cash renaming suggestion never reached me. A number of years ago, a proposal to consider renaming the airport to Music City Airport was submitted to the Board of Commissioners. The board considered it, but felt that it was important to keep the city name in the title. This is Nashville’s airport.

Q: How international is Nashville International Airport? If I recall correctly, the renaming came in 1988 when one flight to Europe was added, and that flight was eventually dropped. How much more “international” is our airport today than in 1988?

A: BNA offers flights to Canada and Mexico. The term “international” really means we have full federal inspection services (FIS) available at the airport for both commercial airline and general aviation passengers. The Airport is a designated port of entry.

Q: Changing gears for a second, do you mind telling us where you were on September 11, 2001 and describing some of the challenges you faced - both on that same day and in the immediate aftermath?

A: I was in Montreal attending the Airports Council International Conference with my counterparts from around the world. The challenges that day included attempting to get back to Nashville and trying to monitor the situation at BNA and communicate with staff until I was able to return. BNA was one of the very first airports to re-open after September 11. I did manage to return within 2 days after 9/11.

After that, the challenge was to recover from the economic effects facing the air transportation industry, which we did.

Aviation continues to be an economically challenged industry and environment because of the continuing security concerns, and other factors, including high fuel costs, which have contributed to this situation. We’ve had to adjust accordingly to remain financially solvent and to maintain a high level of customer service.

Q: Aside from security issues, how different is your job now than the same job before 9/11?

A: The down cycles between business recovery and growth periods are much more compressed. Therefore, there is much more focus on the bottom line every day. Our planning horizon has been and continues to be 20 years. Our major strategic partners, the airlines, are focused on a much shorter timeframe.

Q: The airlines have had struggles in spurts for a long time, most recently with the 2008 spike in oil prices and the sharp downturn in the economy in 2009. Are the airlines on the ropes again? When headlines report that only one or two airlines are making money on a regular basis over the course of several years, is there a sustainability problem in the industry?

A: Airlines are still facing a challenging environment, some more so than others. The airline and airport industries have changed in response to those challenges and will continue to do so until we have a stronger and more stable airline industry to face the continuing challenges that will certainly occur in the future.

Q: Speaking of oil prices, what does the theory of "peak oil" mean to you and to others in your industry? Will we be flying on commercial airliners in 100 years, when the oil supply won't last that long by some estimates?

A: I think we’ll have to see changes in technology like we are starting to see in the automotive industry. We will see more fuel-efficient engines,” hybrid aircraft” for taxing efficiencies, more efficient routing of aircraft and approaches, as well and the development of alternative fuels.

Yes, we will be flying on commercial airlines in 100 years, but they will be much different than they are today.

Q: You were recently elected to the Board of Directors of Airports Council International - North America. What interests you the most in the context of that group's mission "to advocate policies and provide services that strengthen the ability of airports to serve their passengers, customers and communities."? Can you tell us about any of your committee assignments and personal goals for your involvement in that group?

A: The ongoing effort to influence the legislative process for the benefit of airports and our passengers and communities is what interests me most. I currently serve on the government affairs committee and as the Board’s liaison to the Legal Committee. This is my third time to serve on the board of directors; previous roles included serving as the Board’s liaison to the Economic Committee and as a member of the Government Affairs committee. I like to serve where I can be most effective.

Q: You serve on the Technical Coordinating Committee of the Nashville Area Metropolitan Planning Organization. Does your role on that committee contemplate long-term travel patters by and through Nashville? What do you see as the future of transportation traffic for our city, and how does your aviation experience influence your opinion?

A: Yes. That planning agency should always have a long-term perspective of the transportation needs for this region.

I see future growth in the counties surrounding Nashville within our air service market area. We have commuters from as far away as Knoxville, Chattanooga and Jackson. A future challenge is to ensure that our customers from surrounding counties have an expectation of a reasonable commute time to and from the airport.

In addition, many are looking at other modes of transportation. We need to continue to encourage the use of other forms of transportation, such as high-speed rail and multi-occupant vehicles, as alternatives to single-passenger automobiles.

Q: You celebrated your 60th birthday in 2005; what are your hopes in the run-up to the next birthday milestone in 2010?

A: I hope the world and national economies will be settled down and headed in the right direction; and that the airport will have completed the identified additional improvements for the safety and convenience of our customers.

Q: Are you thinking you will eventually retire here, or are there more aviation career moves in your future?

A: Yes. Although I may continue to be involved in aviation, it will be from Middle Tennessee. I also plan to become more involved in the community.

Q: What else can you tell us about yourself or about the airport that would be of interest to or relate to the Hispanic members of the Nashville community?

A: The Airport Authority works very hard to ensure it maintains a diverse workforce - that the staff is representative of the composition of the community it serves. Today nearly 25 percent of the Airport Authority team is female, and nearly 22 percent are non-Caucasian. Nearly 27 percent of supervisors at the Authority are female, and more than 20 percent are non-Caucasian.

The Airport Authority is also committed to providing the maximum opportunities for large and small companies to participate in contracting with the Authority’s two airports. Implementation of Small, Minority and Women-owned Business Enterprise (SMWBE) participation levels for procurement projects have been implemented, and have garnered more than $6.5 million in contracted services in fiscal year 2008, nearly double the amount of money the MNAA spent with SMWBEs in 2007. More than 90 SMWBE firms were added to the MNAA register in 2008.

The Office of Business Diversity Development administers the organization’s federally mandated disadvantaged business enterprise (DBE) program and its voluntary local SMWBE program. To learn more about certifying small businesses and contracting opportunities with our airports, please visit us online at http://flynashville.com/business/minority.aspx.

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