We blogged earlier this week about a CBS 11 report on the travel habits of D/FW Airport executives. Now, the airport has issued a detailed response to the story, slamming it as "very inaccurate, distorted and misleading."
The D/FW response can be found here (or just keep reading this post for the full statement), and here's a link to the original Channel 11 report.The station also has a report on a pricey trip taken by Fort Worth Mayor Mike Moncrief (who is also a D/FW board member) to Dubai.
UPDATE, 5:33 P.M.
Here's a statement from Dallas Mayor Tom Leppert (who also sits on the D/FW board) on the issue:
“We always want to keep a careful eye on expenses. The reporter raised some serious questions concerning spending, and it’s up to the Board to do its due diligence and check out the facts. If we discover that policies may need changing or tightening, then we should do it.”
And here's a response from airport spokesman Ken Capps to Leppert's response:
"The mayor, the DFW Board of Directors and the management team are in full agreement when it comes to keeping tight control of airport expenses. To date, DFW Airport has reduced expenses by $9 million dollars for 2008 while simultaneously bringing new air service to North Texas valued at $125 million in positive economic impact this year. We will continue to update the board of directors with the facts regarding expenses and travel and correct the misinformation being aired by Channel 11."
It does look like Channel 11 erred in reporting that airport execs paid for first-class tickets on domestic trips. D/FW provided us with spreadsheets of all domestic ticket purchases since January 2007, and they all appear to be coach fares. Apparently some of them were upgraded to first class using frequent flier miles, which is allowed under the airport's travel policy and wouldn't have cost D/FW anything extra.
UPDATE, 5:56 P.M.
And yet another response, this one from Fort Worth Mayor Mike Moncrief:
“It’s important that we have clear answers to the questions that have been raised. I agree with Mayor Leppert that this issue certainly deserves to be thoroughly reviewed by the DFW Airport Board to ensure the travel and expense policies are appropriate.
Moncrief also addresses the Channel 11 story about his first-class ticket to Dubai on D/FW business:
“Regarding first class air travel, it has been my long standing policy to reimburse organizations for any first class seat upgrades when traveling on behalf of the city. I am certainly mindful of the importance of saving taxpayer dollars, and I have always done this on city business trips. This was my first trade mission trip with DFW International Airport, and this reimbursement was administratively overlooked in this case. It is, however, being addressed immediately.”
Here's the statement from D/FW:
DFW International Airport Responds to Inaccurate and Misleading Reporting
DFW International Airport, TX (September 23, 2008) - DFW International Airport has been the subject of a very inaccurate, distorted and misleading report on the part of a local television station, which is apparently interested solely in painting a demeaning and unflattering portrait of the Airport’s executive team and Board members rather than presenting the facts fairly and in their proper context
DFW’s owner cities and its Board of Directors have tasked the Airport’s management team and its Air Service Development team with bringing in new airline service by traveling to all parts of the globe, for the ultimate benefit of the North Texas economy. DFW staff members achieve these goals while adhering to DFW policies on travel.
Over the years, the Airport has succeeded in growing its business profile to staggering proportions, and it is now unquestionably recognized as the major driver for the North Texas economy.
None of the cases raised in the report violated DFW policy in any way. And none of the travel or activities in DFW’s marketing budget, or in any of DFW’s day-today expenses, are funded by taxpayers or by federal, state or local tax dollars. DFW daily expenses such as travel and salaries are completely funded by the Airport’s own revenues.
The remainder of this document directly quotes some of the most glaring myths, half-truths or misleading statements presented in the broadcast report and answers with the facts.
MYTH: FACT:
1 …top executives at DFW International Airport are spending hundreds of thousands of your dollars to fly first class around the world, stay at some of the fanciest hotels, and dine on fine food.
Fact: DFW operates as a business that collects revenues, like any retail store or service provider. Any revenues collected by the Airport belong to the Airport and pay for the operation of the Airport. No tax dollars are used for any DFW operating expenses including travel.
2 If you drive, park, or fly from DFW, or pay federal income taxes, in the end, your money pays to run DFW International Airport.
Fact: No tax dollars are used for any DFW operating expenses including travel.
3 Since 2007, we’ve found some executives and board members living the lives of star athletes and celebrities…
Fact: DFW’s leadership and board members travel as part of the Airport’s mission to bring new flights, trade, business, and tourism to North Texas. These trips provide substantial economic benefit far outweighing the cost.
According to the latest Texas Department of Transportation study, DFW now brings an annual economic impact of $16 billion dollars and nearly 305,000 jobs to the local economy, making the Airport the undisputed economic engine of North Texas.
4 …when Fegan flies, it’s usually first class.
Fact: Mr. Fegan flew all of his domestic trips in 2007 and 2008 on purchased coach fares. Mr. Fegan, on occasion, upgrades with mileage and/or points. Documentation of this was provided to the reporter prior to the story airing.
On Mr. Fegan’s international travel tickets, he purchases business class fares, not first class fares, as dictated by the Airport’s official travel policy. The only first class are purchased on behalf of Mr. Fegan was one trip to Abu Dhabi, Dubai – within the Airport’s travel policy.
5 …he flies to Austin first class
Fact: The Austin trip in question was purchased as a coach class fare, and a last-minute fully refundable ticket, thus more expensive than an advance fare. Mr. Fegan was upgraded to first class via free upgrade. The full fare coach price to Austin can be as high as $1125 according to DFW’s corporate travel agent.
6 New York City? First class.
Fact: The New York City trip was purchased as a coach class fare, also fully refundable, upgraded free with points.
A full coach fare to LaGuardia can cost as much as $2333 according to DFW’s corporate travel agent.
7 [Interviewer question:] “I don’t know of any other quasi-public agency or state agency for that matter that allows first or business class travel, period. Why should you be any different?”
Fact: Prior to the story airing, the reporter was provided with four airport authority organizations and seven airports that follow travel policies similar to DFW’s policy. Airports with similar travel policies to DFW include LaGuardia, JFK, Newark, Boston Logan, Reagan National, Washington Dulles and Seattle-Tacoma, among others.
8 So why does he need to sit up front? Because he’s tall.
Fact: Mr. Fegan and DFW’s managers are permitted to travel business class in accordance with DFW’s travel policy, which states employees can fly business class for flights more than five hours in length and first class for flights more than nine hours. Mr. Fegan is tall, but he and DFW’s leadership may upgrade on longer international flights as permitted by DFW policy.
9 You paid $4000 for his three-night stay, averaging about $1300 bucks a night.
Fact: No taxpayer dollars are used to pay for DFW operating expenses including travel. DFW used the hotel for a series of business meetings during its announcement of the new British Airways service to London Heathrow. As a professional courtesy, this particular hotel upgraded Mr. Fegan from a standard room to the executive suite at its own discretion, and without being requested by DFW.
10 And one of those nights you paid for he wasn’t in his suite…
Fact: No taxpayer dollars are used to pay for DFW operating expenses including travel.
11 …he was 35-thousand feet over the Atlantic in his first class seat, making you pay for his empty room so he could check in early when he landed.
Fact: No taxpayer dollars are used to pay for DFW operating expenses including travel.
12 [Michael Q. Sullivan/Texans for Fiscal Responsiblity soundbite:] “If this were a for-profit company, shareholders would be calling for their heads.”
Fact: Mr. Sullivan apparently does not know that DFW does not utilize tax dollars for its operations. In fact, numerous public companies have their own jet or fleet of aircraft for executives to travel, and numerous private and public firms also have travel policies similar to DFW.
13 Joe Lopano, the executive VP of marketing, spent $147,000 of your money traveling around the world in first or business class.
Fact: No taxpayer dollars are used to pay for DFW operating expenses including travel. Mr. Lopano’s travels are solely for the business development goals of the Airport and in adherence with DFW policies.
14 In those 18 months, records show only one of Lopano’s 24 trips resulted in new international passenger service to DFW Airport.
Fact: In fact, the reporter was provided information prior to the airing of his story that showed DFW has earned new service in the past 18 months not only to Amsterdam, but also London Heathrow, Panama City, Turks and Caicos, San Salvador, Mazatlán and Tampico. DFW has also won new or added cargo service to Osaka, Mexico City and Brussels within that time frame. It takes years of business relationship development for an airline to invest a $250-million airplane in your city.
15 Not all airports. Miami, Denver and Los Angeles all require executives to choose economy class or the most reasonable fare, although DFW says there are many airports that allow first class travel.
Fact: Miami, Denver and Los Angeles all have different organizational structures than DFW. Comparing those airports to DFW is an apples-to-oranges comparison.
16 Still, travelers and business people we talked to were outraged. [man in terminal/sound bite:] “Those guys should all lose their jobs.” [woman in terminal/sound bite:] “It seems a little excessive.”
Fact: DFW has returned millions of dollars to the airlines every year since 2000 and is recognized as one of the top managed airports in the world. It has also been named as the best customer service airport in North America two years in a row by Airports Council International survey of international passengers. Also, DFW brings an annual economic impact of $16 billion dollars and nearly 305,000 jobs to the local economy according to the latest Texas Department of Transportation study, making the Airport the undisputed economic engine of North Texas. In the private sector, this is the kind of performance usually rewarded with sizable incentive compensation.
17 At a conference in Stockholm, you paid 250-dollars for executive to play golf.
Fact: No taxpayer dollars are used to pay for DFW operating expenses including travel.
18 Nine dollar beers at the hotel mini-bar every night, and dinner at a pricey Swedish restaurant. We translated the receipt into English and discovered they ate mushroom soup at $15 a cup, $175 worth of the finest Italian wine, and $45-a-plate for halibut.
Fact: DFW is unashamed about its efforts in bringing new airline service and business to North Texas. These dinners, meetings and outings are standard business development activities – in accordance with DFW policy - to court international airline decision makers. You can not close a $180-million dollar air service development deal over a cheeseburger and fries. By the way, Stockholm is the sixth most expensive city in the world according to UBS “Prices and Earnings 2008” survey.
19 Our investigation found more than a dozen first class trips under five hours, including a trip Fegan took to Austin.
Fact: In 2007 and 2008, not one DFW executive vice president purchased a first class fare for domestic travel. Any and all first class seats were obtained via typical free upgrades using miles or points. This information was provided to the reporter in advance of the story airing.
20 [Robin Lovin/SMU professor sound bite:] "It’s really not responsible to have a set of travel policies that are so out of line with good practice in business and in other public agencies."
Fact: DFW does not take a penny of public taxes for operating expenses. DFW’s policies are consistent with other similarly structured airports and with thousands of private and publicly traded businesses.
21 We did get KLM, which recently started daily service to Amsterdam but has already cut back its schedule.
Fact: KLM reduced its service to 6-flights a week as a result of the international fuel crisis. The airline has stated it expects to return to 7-flights a week service to DFW next year. The fact remains, even at 6 flights a week, the KLM flight will continue to bring $140 million in economic impact every year to North Texas.
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