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AIRPORT PROFILES Last modified on January 4, 2016

Old school

Minneapolis-St Paul International Airport’s Jeff Hamiel talks to Joe Bates about his airport’s growth and development under his leadership and reflects on some industry highlights ahead of his upcoming retirement.

The tall, imposing figure of Jeff Hamiel was one of the first airport bosses I encountered upon joining Airport World 15 years ago and with his affable manner, sense of humour and calm demeanour it was almost impossible not to strike up a rapport with him.

Clearly, the Metropolitan Airports Commission feels the same way, because he has been their executive director/CEO for the last 30 years and will have clocked up an amazing 39 years at Minneapolis-St Paul International Airport (MSP) when he retires next year.

And, as you would expect from someone in his position, the former US Air Force pilot knows exactly when he will be going, as his chosen date to leave his office at MSP for the last time is Monday, May 16, 2016.

The date is significant to him because he actually joined the airport as its first noise programme manager, following his stint in the military, on Monday, May 16, 1977.

“I will leave 39 years to the day since I joined the airport. They just couldn’t get rid of me until now,” jokes Hamiel, who was familiar with MSP even before he joined it due to his role as the US Air Force’s local community liaison officer.

“Why not go on until 40 years? Well, quite frankly it feels like the right time. I will be 69 years old when I retire and I think it will be nice to go and do a few other things while my wife and I are still fit and healthy.

“It is also the right time for someone else to come in and take over and oversee the next phase of the airport’s development programme. We have just finished a $3.2 billion expansion project and are now preparing for a $2.5 billion expansion programme between now and 2030, so I think it is time for a leadership change to make sure the new person can come in and be on the ground floor for the project.” 

Hamiel believes that whoever takes over will be able to rely on a “solid management team with a passion for the business”, all of which he notes he has been lucky enough to handpick over the years.

He actually restructured the Metropolitan Airports Commission (MAC) about three years ago in anticipation of his retirement, creating what he calls a stronger organisation that is better equipped for the change in leadership.

His successor will also inherit a very different airport to the one Hamiel joined in 1977 when Northwest was the biggest airline in town and just 8.5 million passengers passed through its facilities.

Today, around 35 million passengers per annum use MSP, which is now a Delta Air Lines hub and the 16th busiest airport in the US for passenger traffic.

 

Infrastructure development

MAC updates the airport’s master plan every five years and, under the umbrella of its $3.2 billion 2010 plan, MSP got a fourth runway (Runway 17/35) on the west side of the airport site, a new 10-gate Terminal 2, an expanded Terminal 1 and two new concourses.

In addition the plan also delivered new roadways; additional 16,000 car parking spaces; 12 extra airbridges on Concourse C; new car rental facilities; a transit centre; and two stations to accommodate an airport pit-stop of the light-rail system operating between Minneapolis and the Mall of America.

The extra car parking facilities mean that MSP has space for 23,000 vehicles making it one of the biggest parking venues in the US generating around $88 million in annual revenues. 

Next on the agenda is the $2.5 billon 2015 plan, which based on traffic projections to the year 2035 calls for a complete redevelopment of Terminal 1 and expansion of Terminal 2 to add more gates, passenger processing facilities and kerbside space. 

MSP’s roadways will also be realigned and a new airport hotel added in the phased development programme.

Work has actually started on the first part of the project, the addition of four gates in Terminal 2, and could be completed at the end of 2016, equipping the complex with a total of 14 airbridges.

Further gates are planned for T2 in future development phases, although Hamiel is quick to point out that they will only be added when demand dictates that they are necessary.

“All new infrastructure is triggered by legitimate growth and demand as we are not in the build it and they will come mode at all. Once we see demonstrated long-term demand for additional facilities, we will build them,” he says.

 

Concessions programme

MSP is well known for its successful concessions programme, regularly winning ACI-NA’s award for the best concessions programme in North America and bringing in revenues of around $175 million per annum.

However after 10 years of accolades the airport has decided to revamp things and earlier this year awarded new contracts for half of its concessions programme and announced plans to put the remainder out to tender in 2017.

As a result of the move, in August 2015, Dufry; Hudson News; Aero Service Group, Delaware North-Angel Food-Hell’s Kitchen MSP; Midfield Concession Enterprises; SSP America; Caribou MSP Airport; Delaware North-CBR; Pacific Gateway Concessions; and MSP Innovations were between them awarded contracts to operate a total of 50 F&B, retail and news and gift outlets at MSP for the next 8 to 10 years.

The remaining two-thirds of the F&B programme will be up for grabs in two years time and when both are up and operational, Hamiel believes that MSP’s shops and F&B outlets can generate upwards of $210 million per annum in sales and nearer to $250 million towards the end of the concession.

“We are totally overhauling our concessions programme because I believe that although we have been hugely successful it was based on the needs of passengers in the past and not the future,” he explains.

“What do the millennials who are just coming into the business world want from airport retail and F&B? We need to work out the formula for what they want and be prepared to provide it to them as they mature and become regular travellers.”

Mall-Horizontal

 

Airlines

Hub carrier Delta Air Lines today accounts for around 74% of the traffic at MSP followed by American, Southwest and Sun Country.

Traffic is currently growing by about 2% per annum, which Hamiel describes as “stable but long-term growth” that will see MSP hit the 50 million passengers per annum mark by around 2030.

He attributes the upturn in traffic to the recovery of the US economy that has seen the airlines begin to expand their route networks again and business travel being back on the agenda for many.

The latter is particularly important for MSP, reveals Hamiel, as Minnesota is home to 17 Fortune 500 companies that include the UnitedHealth Group, 3M, General Mills and Target.

“People say that my projection to reach 50 million passengers by 2030 to 2035 is an exaggeration, but the reality is that the figure is based on annual growth of 2% per annum and we have been growing by about this level for the last 70 years,” he notes.

 

Career highlights

Hamiel is honest enough to admit that apart from the chance to return to his hometown, another reason behind his original decision to join MSP was that it potentially offered him the chance to move to one of its hub carriers – North Central Airlines or Northwest Airlines – a few years down the line.

His love of MSP, however, soon meant that he gave up the notion of becoming a commercial pilot, although he did continue to fly for 21 more years as a reserve in the US Air Force piloting giant Lockheed C-130 Hercules turboprops.

“I had the best of both worlds as I never really left the cockpit yet ran one of the busiest airports in the country,” recalls Hamiel, who went from new hire employee to executive director at MAC within seven years.

Hamiel says that “never in his wildest dreams” did he expect to stay at MSP for so long, but adds that when he got to really know the airport and became totally absorbed in its challenges and opportunities, leaving for pastures new never entered his head.

“I found airport management to be challenging, interesting and demanding in a continually changing environment that accommodated my skill set,” he says. 

 

Biggest industry wide changes 

With such a long career in aviation, Hamiel is ideally placed to reflect on some of the events that have shaped and sometimes shocked the industry over the last 38 years.

He has certainly seen his fair share of airline bankruptcies, that have included former hub carrier Northwest, and like the rest of us remembers the terror attacks of 9/11 all too well, but he lists US airline de-regulation in 1978 as one of the most significant developments.

“It changed the landscape and introduced a free and competitive environment by allowing airlines to fly to any markets and charge the fare of their choice,” recalls Hamiel.

Hamiel points out that MSP hit the national headlines in the US in 1985 when only a few months after being appointed executive director he led its efforts to loan $315 million to home based carrier Northwest Airlines in order to help it grow.

The loan was highly controversial at the time as no other airport had done such a thing before and none have since, but Hamiel insists that it was the right call to make at the time. 

“We wanted to give Northwest the power to expand and grow in an uncertain market after de-regulation and so ensure its status as a long-term survivor with its headquarters in the region and 12,000 to 13,000 staff on its books from across our communities,” says an unrepentant Hamiel.

“It worked well in terms of them repaying the loan and complying with our conditions to keep their HQ in Minneapolis-St Paul and maintaining its air service levels and workforce at MSP.”

It didn’t, unfortunately, stop Northwest’s eventual bankruptcy in 2005 or its eventual takeover by Delta in early 2010, but it helped earn MSP and the Twin Cities another 20 plus years of service.

Ironically the airline’s bankruptcy in 2005, which it took 20 months to recover from before emerging from Chapter 11 in 2007, coincided with what remains the busiest year in MSP’s history when a record 37.8 million passengers used the gateway.

Other significant events that have had a major impact on aviation, according to Hamiel, have included airline consolidation and the economic downturn of 2008-2009.

 

Customer service

Hamiel states that providing good customer service to passengers is a priority and that MSP is good at it, although he accepts that the airport can always to better.

He says that he wants MSP to be the number one airport for customer service in North America, and to achieve this it needs all staff to be fully engaged and on board with the programme.

Indeed, such is his determination to make this happen that he has told his staff that whenever they are walking through the terminals they should stop and help out any passengers that look confused or in need of help.

What would he say to the suggestion that this kind of behaviour was old school as people, in general, just don’t seem to do this kind of thing anymore? 

“You know what, treating your customers with high quality and care and helping facilitate their needs is never going to be old school,” assures Hamiel.

And he’s right you know. Jeff Hamiel you are going to be sorely missed when you do finally call it a day.

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