Burbank Airport Authority Gives Nod to AGI

Abruptly reversing course, the Burbank Airport Board of Commissioners Monday voted 6 to 3 to enter into exclusive negotiations with Airport Group International (AGI), the Lockheed spinoff company that has managed the airport without competitive bidding for 20 years.

The about-face effectively shuts the door on at least one other company that had shown interest in bidding on the management contract after the same commission voted Sept. 2 to seek bids.

“It’s an extraordinarily bad management decision,” said Commissioner Phil Berlin, who favored competition for the contract.

But airport Commissioner William Paparian, who had earlier supported the competitive bid process, said he changed his mind after reflecting that employees of AGI are doing a good job. He had second thoughts on whether a competitive bid process would be worth the effort, he said.

“The quality of services provided here I think are first-rate,” he said. “Competition is a good thing. It breeds success. But sometimes you have to ask yourself, ‘Why do we have to do that?’ ”

Paparian is one of three Pasadena representatives on the panel. Glendale and Burbank also appoint commissioners.

Airport commissioners, including Paparian, voted 5 to 4 in early September to call for bids to manage the airport, arguing that in the 20 years since AGI has held the contract, a movement toward privatizing airports has brought potential new competitors to the forefront.

Airport staff members spent weeks compiling paperwork in preparation for the bidding process, only to have their efforts made null by the commission’s vote.

Paparian’s reversal, along with Burbank Commissioner John Flynn’s, met skepticism from commissioners who favored competitive bidding.

“I question what happened in that interim six to eight weeks” since the first vote, Burbank Commissioner Ingolf Klengler said. “There is definitely something going on here. What it is I don’t know.”

Said Pasadena representative Chris Holden, who also favored competition: “AGI has done a marvelous job, but 20 years is a long time. What’s in the best interest of the Airport Authority should be the first and foremost question.”

But commissioners who opposed competition, such as commission President Joyce Streator, have argued that settling a long-standing controversy over a planned airport expansion should be the commission’s priority now, not reexamining airport management.

One of the companies that had said it wanted to compete for the contract is BAA USA, a subsidiary of British-based BAA Plc., the $2.2-billion-a-year industry leader.

BAA’s David C. Suomi said allowing private competition for airport contracts can result in increased operating efficiency, improved customer service, lower capital costs and better utilization of facilities. But he declined to comment on the airport commission’s reversal.

“There isn’t really a whole lot I could say. But it’s very interesting. I’m sorry I missed it,” he said.

Patrick Cowell, CEO of AGI, could not be reached for comment. But before the vote, he had said it was doubtful the Airport Authority could get a much better deal from another company since any cost-saving would most likely come from shaving profits.

“It’s not a big airport. It doesn’t have a lot of moving parts,” he said then.

AGI oversees maintenance and ground operations at the airport, administering its $16.8-million yearly operating budget. The annual service fee paid to the company by the airport is $415,000, according to airport spokesman Victor Gill.