Posted on: Friday, November 15, 2002

FAA calls airfields proposal 'drastic'

By Frank Cho
Advertiser Staff Writer

The Federal Aviation Administration said it opposes Gov. Ben Cayetano's plan to close or privatize five smaller local airports in an effort to save the state money.

Cayetano told legislators last month that airport revenue had declined steeply following the Sept. 11 attacks, and that the state was thinking of closing or privatizing five airfields: Dillingham on O'ahu, Port Allen on Kaua'i, 'Upolu and Waimea-Kohala on the Big Island, and Kapalua on Maui.

But in a recent letter to Cayetano, federal aviation officials said the move would save the state less than $2 million annually and called the state's plan of action "drastic."

"We recommend that the state pursue strategies to increase airport revenues, such as implementing the Passenger Facility Charge program that has the potential to raise an additional $11 million per year for the Hawai'i airport system," Ronnie Simpson, the FAA's airport district office manager, said in the letter.

The FAA would have to approve any plan by the state to close or privatize airports that have received federal money and Simpson indicated approval was unlikely in Hawai'i's case.

"An airport closure can only be justified when circumstances clearly demonstrate that an airport no longer serves a public purpose. Such drastic action cannot be justified merely because an airport represents a temporal inconvenience ...," Simpson said.

A Cayetano spokesman said yesterday that the governor had not seen the letter and declined to comment.

Despite the FAA's opposition, state transportation officials said they are still planning public hearings to determine whether the five airports should be closed or privatized.

"We do realize (the opposition) but want to go through with the public discussion," said Dennis Higa, an official with the state airports division. "We are not saying we want to close them, but we are looking at all the various alternatives."

It would take at least a year to complete the regulatory process for closing a state airport. And Gov.-elect Linda Lingle, who takes office Dec. 2, has said she would not support closures because the targeted airfields serve as important transportation lifelines for outlying communities.

The FAA also said the state would likely have to repay federal grants it received for four of those airports going back 20 years — which could cost millions of dollars more and wipe out any savings. The Kapalua airport on Maui was built by Hawaiian Airlines and later acquired by the state.

"We would want a full accounting of all funds," said Tweet Coleman, a spokeswoman for the FAA in Honolulu.

Hawai'i has often diverted money from its airports for other purposes, and the practice has prompted a crackdown on the state by the federal government that resulted in stricter rules.

The FAA said it is calling for an audit of more than $250 million in airport money diverted to the state highways division more than a decade ago before it will reinstitute discretionary airport grants to the state.

The diverted money came from revenue generated by a duty-free retail concession, operated in part at state airports. A federal law tailored for Hawai'i allows such money transfers, but precluded the airport from receiving the discretionary FAA grants until it was accounted for.

"We've been fighting to get that money back, but highways needed money too because their special funds have been raided to pay for shortfalls elsewhere in the state," Higa said.

The money was supposed to be used only on projects that met certain conditions: The road projects had to be within 10 miles of an airport; on a federal highways system; and the road had to be used as a route to an airport.

In June, the highways division transferred nearly $18 million in unused money back to the airports division. Higa said a final accounting of the $250 million will likely be turned over to the FAA by the end of the year.

"This is a very high priority for us. None of us want to have monies that was earned by the airport used for nonairport projects," Higa said.

Reach Frank Cho at 525-8088 or at fcho@honoluluadvertiser.com.