A Showcase of Puerto Rico’s Airports Capital Improvement Projects

Transcript

Joel Piza:On behalf of the family of Puerto Rico Ports Authority, I want to thank the organizers of CAPA and AAD for their warm invitation. I'm sure that during the past 2 days you have invested some time in a wonderful and instructive experience with members of the most fascinating industry in the world, aviation. The fact that we are here today shows that the industry is resilient after billions of dollars in revenue losses as a result of the COVID-19 pandemic and skyrocketing fuel prices as a result of the war in Ukraine. We keep fighting for normalcy and fighting to keep the jobs for the men and women that work in this industry. But more important, I want to thank them for having selected Puerto Rico as the destination for this event for the first time in their history. I hope that You enjoy our wonderful skies, good weather, and the hospitality of our people. Before I talk about our capital improvement program, the airports in Puerto Rico, I want to share with you an interesting story that I think that will help us with introduction regarding the role of the government in this industry. Alan Boyd was the first Secretary of Transportation of the United States. As you know, that department was created in 1966. 1966 under President Johnson. Alan was also a former chairman of the not-existing Civil Aeronautics Board. In the early 1960s, the airline industry transitioned from propeller-driven planes to jets. Thanks God for that. During that time, the International Air Transportation Association met annually to set international airfares, and airlines from the United States with international routes were members of IATA and received immunity for antitrust prosecution as long as they vote as instructed by the Civil Aeronautical Board. Remember, this was before the airline deregulation of 1978. In 1962, the Civil Aeronautical Board instructed the United States air carriers to vote to reduce substantially airfares to reflect the savings and economics of new jets. Instead, IATA voted to increase the rates. Boyd provoked a diplomatic fight with the British and insisted that their fares— received their fares increased. Boyd had almost daily press conferences in London accusing UK to war against their citizens. You know what happened, right? Alan Boyd was summoned to the White House by President Kennedy at that time. And when Boyd arrived, Kennedy told him, and I quote, what the hell do you think you are doing in England? Boyd complied reluctantly, voted according to IATA rules, but history shows that Boyd was right. I'm mentioning this because in the last decade we saw a reduction, a correct reduction in my humble opinion, in financial government regulation in aviation industry. This was the result of a transformation from an infant industry in the early 1900s to become an industry that supports 60.5 million jobs around the world and supports $2.7 trillion that represents 3.6% of the world gross domestic product. However, there's an area where I believe that intervention and role of the government should be robust and should be working hand in hand with the private sector, and it's called infrastructure. The planes fly In through the skies, but economic development travels through infrastructure. Now let's have a tour of some Puerto Rico Port Authority capital projects that showcase that infrastructure is the backbone of the transformation industry. The Puerto Rico Port Authority has under his administration 9 regional airports around the island. 2 of them, the airport of Ponce and Aguadilla, operates under the Part 139 airport certificate. The others mainly focus on general aviation, charter flights, corporate aviation, and recreational activities. Besides those 9 regional airports, we have our main international airport called Luis Muñoz Marín International Airport in the city of San Juan. And Puerto Rico made history in 2012 when we completed the first public-private partnership in the United States for a total concession of a Part 139 holder certificate. Wow. That partnership with Aerostar Airport Holdings has promoted more than $200 million in investments in the last decade, and it's important to highlight the fact that in 2021, we closed the year with 9.7 million passengers, a historic record for that airport. Since 2019, the principles that have guided our capital improvement program have been increasing airfield safety conditions, increasing the level of services to passengers and airlines, and number 3, planning. During this decade, the aviation industry will face some challenges and great opportunities, such as the decarbonization and reduction of aviation emissions with sustainable aviation fuels, the increase of narrow-body point-to-point operations, Innovation of more fuel-efficient narrow-body planes like the Airbus A220 and Boeing MAX models that are 30% more fuel-efficient. The reduction of business travel as a result of the post-pandemic world and new telecommunication technologies, and of course, the digital transformation. As an airport operator, we need to take into consideration those elements for planning purposes and future infrastructure capital investments. In 2017, the PRPA made an assessment and identified critical pavement and taxiway conditions in several of our regional airports. That provokes a capital program to reconstruct, reconstruct some runways and taxiways with more than $40 million in investment, thanks to the combination of FAA funds and PRPA funds. Also, PRPA assessed the visual guidance and electrical system as part of our comprehensive plan, and we updated airfield lighting, visual guidance signs, and control systems. Now I want to introduce you to one of the most important infrastructure projects for Puerto Rico during this decade, and it's the construction of the new runway in Aguadilla Airport. Aguadilla Airport has the longest runway in the Caribbean with 7,700 feet. That airport were a former naval base, and at the current time is a critical piece of the supply chain of the manufacturing sector in the west part of our island. That airport generates over 1,400 direct jobs, 6,000 indirect jobs, and produce $1.5 billion on annual activity contribution for the Puerto Rican economy. As a result of lack of capital expenditures, if we haven't taken any action in 5 years, we will have to close that airport. That was completely unacceptable. After receiving funds from the FAA and funds from the government of Puerto Rico, we have been working tirelessly On a $135 million project for the reconstruction— for the construction of a new runway. We recently finished the procurement process for the design, and now we are finishing the selection process of the construction company. The construction should start at the beginning of 2023. Also, we are right now in the design phase for the reconstruction of a runway On our main executive airport in Puerto Rico, Isla Grande Airport, and the runway of Mercedita International Airport in the city of Ponce. In that airport, 2 domestic carriers, JetBlue and Spirit Airlines, have daily operations. Besides investments in the pavements, taxiways, and electrical and navigation tools, we have an aggressive and comprehensive plan to expand and enhance our passengers' terminals. We increased the size of the holding area in the airport of Ponce. That capital improvement was instrumental for Spirit Airlines' decision to operate from that city. Also, we have improved the passenger terminal in other airports like Isla Grande and Vieques. Now I want to share with you one of the most important projects for us. and is the expansion of the passenger terminal in Aguadilla Airport besides the construction of the new runway. We are growing so fast with 4 airlines and new routes in that airport, and we don't have too much space. Also, we need to provide adequate office space for federal agencies like TSA, CBP, and the Department of Agriculture. Having finished the design, in the coming weeks we are going to issue the procurement process for the selection of the construction company. Thank you, Joel. In two years, we hope to have a renovated boarding room to provide quality services to the airlines and other visitors in that airport. This project is paramount for us because, as you know, the low-cost carriers are increasing use capacity after COVID-19 pandemic, and those are the airlines that must operate in Ponce and Aguadilla. The global low-cost carriers capacity increased 27. From 27.5% of total operation in 2011 to 35% in 2020. We need to plan and invest in capital projects under this new reality. We keep improving the infrastructure, water supply in the airport in Ceiba, which was a former naval base and has the second runway in the Caribbean. And we are putting a lot of resources to present a grant proposal to the federal government after the enactment of the Bipartisan Infrastructure Law as a proposal to establish storage facilities, warehouses, and cold temperature capabilities in the airport of Aguadilla to help the manufacturing and pharmaceutical industry in that region. Furthermore, in the coming weeks, we are going to begin the licensing process with the FAA to get a spaceport license for the airport of Ceiba Which I believe is the industry that has the potential to create more than $1 trillion in economic activity in 2040. As an executive director of Puerto Rico Port Authority, I need to underscore the fact that in the winter season of this year, new— we are going to have 11 cruise ships doing homeport operations in Puerto Rico. New vessels like the Resilient Lady or Virgin Virgin and the new ship from Dreamsculpture brand will be departing from the Port of San Juan. That represents thousands of passengers arriving to an airport. To conclude, so you can grab some lunch and go and return home, I want to leave you with this history very quickly. When I was taking aviation classes a few years ago, my professor asked me about the 4 forces that are in motion when a plane is flying. I quickly mentioned lift, weight, drag, thrust, and my professor told me, very good. But he mentioned that I forgot the most important force. I was shocked because my book only mentioned 4. He told me, you forgot the 5th and the most important force to keep a plane in the air, and it's called money. Infrastructure is also the art to find and allocate money in a wise way, anticipating trends and innovation. In the Puerto Rico Ports Authority, we are changing the culture and allocating money not only to think for the next 4 years but also for the next decades. With partners like you, the Puerto Rico Ports Authority will keep improving to be continued the gateway to the world from Puerto Rico. Thank you. Thank you, Joel.

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