100 days with Aerostar
On June 18, Aerostar Airport Holdings will be celebrating the achievements of its first 100 days as administrator of the Luis Muñoz Marín International Airport in Carolina, which includes hundreds of direct and indirect employees who are supporting the facility's $250 million facelift.
During an exclusive interview with CARIBBEAN BUSINESS, Aerostar CEO Agustín Arellano outlined the company's achievements to date, as well as its five-year reconstruction plan for Puerto Rico's main airport.
As part of the transition process, Aerostar offered to retain the Puerto Rico Ports Authority's 156 airport employees. Seventeen of those workers decided to join the new airport administration. Their decision left Aerostar with the need to hire new personnel. Today, Aerostar has hired 142 people, with plans to employ 200 to 220 workers. In addition, the renovation work has supported about 1,500 indirect jobs in areas such as construction, information systems, communications, electricity and plumbing.
Arellano said one reason for the airport's absolute deterioration was a lack of maintenance. It is Aerostar's priority to provide complete upkeep while also implementing an extensive and aggressive reconstruction of the airport, including the newly constructed Terminal A.
"Everything that will take place in the next 60 months is detailed in our lease agreement with the Ports Authority," Arellano explained. "We need to repair what doesn't work on the service level. The airport, with the passage of time and lack of maintenance, has been rapidly deteriorating. One area that immediately affects passengers is the quality of direct services, such as having adequate sanitary facilities and even satisfactory commercial offerings."
With a focus on these basic priorities, Aerostar began its tenure at the airport with an agenda to provide an improved ambiance, effective signage and well-maintained landscaping. All of this is now visibly apparent when you enter the airport. Gone are the gum stains on the floors, cigarette butts everywhere and the parking lot's awful stench.
"We will begin work on the complete reconstruction and reconfiguration of the parking system. The entire parking lot is designed wrong and doesn't allow for a steady fl ow in and out of the lot. We purchased new technology that will be implemented soon," he explained.
The parking structure project also includes the construction of a centralized car-rental plaza on the first level. All car-rental companies will be moved there, which will provide visitors an expedited and convenient rental process, similar to those at most airports.
"When visitors arrive to Puerto Rico, they will collect their bags, cross the street and pick up their vehicle, without having to leave the airport grounds. We already negotiated with most car-rental companies to relocate them to the first fl oor of the parking area. When this is finished, visitors can arrive or leave the airport in their rented vehicle without the current hassles to catch a shuttle bus to leave the airport to find your car," Arellano said.
"We must understand that airports have two distinct and unique values: air and terminal. Air value responds exclusively to the airlines, and terminal value responds only to the demands of travelers. Both are very dynamic and have a tendency to require generational changes, which unfortunately haven't ever taken place in Puerto Rico. We are going to fix that," Arellano noted.
The Aerostar CEO explained that all airports need to adapt to passengers' needs and requirements, as well as those of the airlines, to maintain competitiveness in the global market. This is why we have seen the Dominican Republic steal away many of our international routes. "Why is the Dominican Republic taking on so many flights from Puerto Rico? The answer is simple: They privatized their airport operations 10 years ago, enhancing their offers with better standards," he said.
Working with the government, Aerostar has insisted Puerto Rico needs to expand its marketing strategies worldwide. "Puerto Rico can't continue to sell itself on the 'beach and sand front' as usual. Puerto Rico is so much more than palm trees in the sand, and you have to realize there are dozens of other Caribbean destinations with equally beautiful palm trees in the sand. Puerto Rico has to sell its versatility, history, culture, traditions, services, medical facilities, top education, infrastructure, shopping districts and its many other features that the other Caribbean islands can't offer," Arellano stressed.
This change in marketing will be an important factor if Puerto Rico wants to bring in more visitors. "Working together, we have seen that results come almost by themselves. We already have new routes from Southwest Airlines, new Avianca fl ights, the return of Copa. Interjet [ABC Aerolíneas S.A. de C.V.] from Mexico is coming back to Puerto Rico after a 15-year absence, and JetBlue is adding new routes to Caracas [Venezuela], and Medellín and Bogotá [Colombia], in addition to taking on several routes in the Caribbean left underserved by the departure of American Eagle. There will also be new fl ights from Europe by November, which had been lost to the Dominican Republic," Arellano said.
Aerostar has been able to increase the number of flights by current airlines by committing to the airport's renovation, purchasing new jetway bridges and building new airline counters.
All terminals will be renovated, including the new Terminal A, which was constructed for architectural beauty, but not for airport efficiency. "It is a beautiful building, but its interior design is ineffective and cumbersome. It has a very small security checkpoint with only two machines for the large number of passengers who pass through every day," Arellano said.
Other proposed changes include a new terminal entrance area between Terminals B and C. "Today, when you cross the main bridge from the parking lot to the terminals, you get nowhere. You cross the road and you have to turn left or right to get to a terminal. When our construction ends, you will cross the road and enter directly into the airline counter areas and the security entry point, making everything fl ow more smoothly. At the end of the day, we will have two security checkpoint areas with 24 security lines, compared to the current situation of three entry points with six security lines."
Construction has already begun in the space between Terminals B and C to turn it into a temporary terminal while they overhaul the main one. "When you walk into the airport, we have moved the seating space to more practical areas for more room to navigate. We are building new counters and installing the latest airport technologies to provide the best possible service to all airlines," Arellano said. "Once this stage is finished, we will move all Terminal B operations to this area for a 13-month period while we completely overhaul Terminal B. Once that is finished, we will move Terminal C to the area to overhaul that terminal. Terminal D will be closed and available for future airport expansion."
Aerostar will integrate all baggage-claim areas with a sophisticated mechanized program that guarantees faster, more efficient service. "All services in the airport will be integrated and coordinated, allowing for more efficient changes should a particular flight need to move to another gate," Arellano said.
As for the retail shops and other businesses inside the terminals, he explained, "Aerostar won't be renting out space. We will have joint business ventures with all interested companies, and payment to Aerostar will be based on profit, not square feet. Aerostar will monitor the businesses and ensure they are complying with standards, but there is no room for lax business practices or nonpayment. In the past, there weren't any consequences for establishments that didn't pay their rent. Some of them spent years without paying their bills. When it was time to renovate those contracts, we explained that the rules had changed. The contracts were renegotiated, and some of them declined and were forced to leave.
"We will be open to business proposals for operations in the new commercial areas, but proponents must understand that they will be partners with Aerostar in their venues at the airport and will be constantly and strictly scrutinized," Arellano said.
As of today, the Ports Authority no longer has the responsibility to provide airport maintenance. Aerostar has completely taken over what the company has deemed a very profitable venture, not only for Aerostar, but also for the government and the people of Puerto Rico.