Airport Experience® News - Leadership & Culture Issue 2023

2023 DIRECTOR OF THE YEAR MEDIUM AIRPORTS

Nichol says she is seeking innovative approaches across the breadth of her organization. In fact, she says creating a culture of innovation and growth is one of her biggest achievements at Sacramento County Airport System. From forming a regional air alliance with local businesses to support new air service, to introducing new project delivery methods to the county, to changing up concessions leases, Nichol is pushing boundaries. On the concessions front specifically, SMF’s latest request for proposals eliminated the minimum annual guarantee requirement from concessionaires. Nichol says staff analysis over a 10-year period suggested that having a MAG in place only made a difference about 2% of the time. SMF is also looking at incorporating ghost kitchens into its concessions program and is considering out-of-the-box solutions for its landside concessions space. “Pre-security is always a challenge because people want to get past security and get to their gates,” Nichol notes. “We have some wonderful space that we’re hopefully

going to turn into a culinary institute, where people can come and learn how to cook and be in an airport environment, without the need for badging. That would be a way to serve customers who are pre-security and delight them. It also might be a good training ground for people who then move on to working on the secure side.” SMF’s Big Push With the pandemic largely in the rear view mirror and amidst ongoing innovation across a variety of activities, the SMF team is gearing up for a major upheaval in the coming years. In early 2023, the Sacramento County Department of Airports officially launched the SMFoward capital program to accommodate anticipated passenger growth over the next several years. According to the Department of Airports, 2022 saw SMF nearly return to pre-pandemic levels with six consecutive years of year-over-year record-breaking passenger growth through 2019. Forecasts show steady passenger growth averaging 4.3 percent annually through 2041, underscoring the need for expansion. Construction on SMForward will begin in 2024, starting with construction of a ground transportation center and new Terminal A exit road. A pedestrian walkway and a Terminal B parking garage will follow, then, in winter 2024, construction

Right: From a childhood in Ethiopia to directing a prominent medium-hub airport in the U.S., Cindy Nichol has always had a passion for aviation.

is expected to begin on additional gates for Concourse B and a Terminal A expansion. Finally, construction on a new consolidated rental car facility is expected to begin in fall 2025. Nichol says she and her team have identified multiple funding sources to move the project forward. “Terminal B and Concourse B were built a decade ago, and we now have sources of funding that weren’t available then,” she says. “Now there’s supplemental AIP, there’s the bipartisan infrastructure law, which has AIG formula grants, as well as the ATP discretionary grants. The CFC (customer facility charge on rental cars) is new to us and finally TIFIA (Transportation Innovation and Financing and Innovation Act).” On TIFIA funds, “we are going after that hard,” Nichol says. “It’s basically low-interest loans from the federal government. Normally the rate is about the Treasury rate but because we’re in a rural area we get half the Treasury rate. If we were to issue bonds now, it would probably be at 6 or 7%, and TIFIA will probably be in the 2- 3% range.” The Bigger Industry Still, Nichol brings her financial and public policy prowess to bear on various issues facing the larger industry. One key goal recently – still in the works at press time – was a change in how the U.S. government allocates funding. Working with two other medium-hub airport directors (Michael Landguth of Raleigh Durham International Airport and Benjamin Siegel of Southwest Florida International Airport ), as well as other industry colleagues, Nichol pushed for a change to AIP funding parameters. “Medium and large hub airports give up 75% of our AIP formula grants because we collect PFCs,” Nichol says. “We pushed to reduce that - our goal was to reduce it to 60% from 75%.” The House bill under consideration includes the 60% figure. “We’re hoping that will stick and that Senate will pass the Reauthorization [with

Left: With Nichol at the helm, Sacramento International Airport is embarking on a $1.3 billion capital program called SMForward to accommodate anticipated passenger growth over the next several years.

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AX NEWS LEADERSHIP ISSUE 2023