October 17, 2006

Bob Kraft Example

I have been thinking about Jahn, who keeps saying we need to shop ORH around. My only concern is that we do not have enought time and that MassPort may actually simply make the most sense. Who do you think owns Kennedy, Newark and Laguardia??? Answer: The New York Port Authority.. http://www.panynj.gov/ . Maybe MassPort could do the same with Boston, Hanscom and Worcester and utilize the three airports in a coordinated fasshion to maximize use, purchasing power and the inherent economies of scale.

Does everyone remember, however, when Bob kraft threatened to move the Patriots to Hartford?? Well, maybe we (ORH) should call the authorities that manage TF Green, Bradley and Manchester and explain the benefits of a 2nd reliever airport. Basically this may be a once in a lifetime opportunity to buy an existing airport with all the amenities within an hour's drive..

Why not?? I worked for Bob Kraft and what do we have to lose?

2 comments:

Anonymous said...

Ramdom Ramblings on a rainy Tuesday night:

BIll, I think we should first attack the expnses AND consider private management and if that does not pan out then sell it outright if it still runs significantly in the red. Maybe running a $2M annual deficit is not such a huge price to pay to maintain ownership and I am convinced the $2M can be reduced if we adopted some very basic private sector strategies such as:

1. Downgrade to GA?. Why be comm. air certified if we have no comm. air service and nothing is on the horizon?

2. Outsource functions like security and custodial?

3. Re-fi the debt to a lower rate or a longer maturity. I really dont like the longer maturity idea but....

4. Swissport, helping or hurting us?

5. Can we get any of these grants that Massport reels in at Logan such as TSA and others?
I see $201M total in grants for 03, 04, & 05 at Massport. Arguably, it isnt "state taxpayor funded", but it is a gift of taxpayer dollars from Washington ( I assume).

And let us not forget that once the debt is paid, the ORH cash deficit is reduced significantly if not eliminated? Not sure what year the debt matures in??

Also, if we are running a $2m deficit and $1M or $1.5M or $2M is applied to debt reduction each year...then I would say that we arent doing too bad b/c a good portion of the deficit is going toward building equity via debt reduction. Right now I have no idea how much the debt is reduced each year, but each year a larger portion of the debt is paid down as it near maturity, exactly like our home mortgages. This not an attempt to justify a deficit of any size, but it is a financial consideration.


Let's take a look at what Massport really is. MP is gov't legislated monoploy formed to operate the Port of Boston.

How much marketing does a gov't monoply have to do? Little or none. Why? B/c They have a monoploy. Customers have to use their services if they want to fly from Logan. Does the City or Worc. have to market their water services to the residents? NO.

Do we want to permanently bring a gov't monoploy with no real marketing experience in a competive business environement to ORH when our biggest problem is that we cannot market the place?

Then consider that they have been here for 7 years and been unable to land comm. air service! In their defense, yes 9-11 was clearly a problem. (Rumor has it Allegiant approached us??)
Then also consider that many of the operations people at Massport are political appointees. We need talent that has not been working within a protected monopoly.

Would UPS hire marketing talent from the Post Office monoploy? Look what happened to AT&T monopoly when they had to compete with cell phones or the Baby Bells.

For now ORH has too much potential to hand off to Massport at this time. Extend the the OA for another year and let's attack the expenses and look at private management. Let MP kick in another $2M. If they say no, then GA

Bill Randell said...

Jahn:

Wow... You are good.. Points 1 thru 5 are excellent questions and I would agree, but if they have not been addressed to date why do you think they will be the next 250 day.. Believe me I hope that they will, but I just do not see it..

Debt questions?? I have no idea what the principal is, the rates are.. Is the debt being reduced??

My only exception here is to blame MassPort for the marketing of ORH. It wasn't there job and what was the benefit to them to help ORH on track. Sure it may have reduced their obligations, but would you help a competitor down the street? If MassPort owned ORH they would get service to us no problem.

Jahn, we can extend the agreement and doing your recommendations 1-5 would be great for ORH. My only point is that nobody has done any of your points that past 8 years, I simply do not see it happening under the extension of the current agreement.

Bill