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Controversial airport salary comparisons aren’t ‘apples to apples’

A Detroit newspaper’s investigation last weekend cited the Twin Cities as one of the few places with a greater number of high-paid airport officials than the Motor City. But the data on our airport executives, it turns out, may not be as startling as they seemed at first glance.

The Metropolitan Airports Commission defended its employees’ salaries this week, saying they’re in line with other airports of similar size and structure. Officials here cautioned that comparing airports is a complicated task involving lots of factors not adequately addressed in the article.

The Detroit Free Press surveyed salaries at nine airports and found Detroit Metro Airport in the top tier for pay, with 46 executives making six-figures, even though it’s the 11th-busiest airport in terms of takeoffs and landings.

 

Dallas-Fort Worth and the Minneapolis-St. Paul International Airport were the only airports it surveyed that had a higher number of employees making more than $100,000. Minneapolis-St. Paul, the 13th-busiest airport, pays 49 people with such salaries. By comparison, Atlanta, the nation’s busiest airport, has just seven six-figure executives. MinnPost’s David Brauer noted the curious numbers in Monday’s Daily Glean.

Why would an airport with twice as many flights as MSP have one-seventh the number of six-figure executives? And why would MSP surpass all but one of the surveyed airports in the same category?

MSP airport a different operational model than many
The explanation lies in the airports’ “vastly different operational models and sizes,” said Patrick Hogan, MAC spokesman.

“Articles such as this are troubling because they make implications without taking into account whether their data is really comparable,” Hogan said. In this case, he said, the airports chosen by the Detroit Free Press do not have enough in common to offer fair salary comparisons.

Atlanta’s Hartfield-Jackson International Airport is city-owned and -operated. Its budget, like those of other municipal airports, doesn’t reflect the cost of fire, police and other services handled by other city departments, Hogan said.

Meanwhile, MSP is in the category of hubs run by independent airport authorities, which function self-sufficiently, much like small cities.

“If you really want to do apples to apples, what you need to do is compare authorities to authorities, cities to cities, and then adjust for the cost [of living] index,” said Sean Broderick, spokesman for the American Association of Airport Executives.

Besides Detroit, the closest peers to MSP in terms of traffic on the newspaper’s list were Philadelphia and Salt Lake City, ranked 10th and 15th, respectively. Philadelphia has nine employees making more than $100,000 and Salt Lake City has six, but both airports are also municipally run airports, not independent airport authorities.

Other airports on the list, such as Miami International and Cleveland Hopkins International, have fewer six-figure executives than MSP but also handle fewer takeoffs and landings, Hogan said. Another variable worth noting, he said, is that the MAC oversees not one but seven airports around the region, further complicating comparisons.

Hogan said a larger sampling of airports would show MSP is generally competitive with airport authorities in other major cities and even some medium-sized cities.

The State Legislature created the airports commission in 1943 as a public corporation to promote air transportation in the Twin Cities. It doesn’t get regular funding from state, local or federal taxes. Instead its budget relies on concession revenues, lease agreements, airline and passenger fees, and federal grants and bond sales.

Fifteen commissioners, most of them appointed by the governor, set the pay for the commission’s director. Executive Director Jeff Hamiel’s annual salary of $175,487 is the second-lowest of those the Free Press surveyed. The executive director then oversees compensation decisions for other managers and employees.

Mac says officials’ pay based on comparable regional salaries
The pay is based on studies of comparable positions in the region, as well as pay rates at similar-sized airports, Hogan said. The airport competes with businesses for the most-qualified employees, Hogan said. As a result, incomes tend to skew higher here than in other cities because of Minnesota’s high concentration of Fortune 500 companies, he said.

The experience of the airports commission’s six-figure employees can be measured in decades. Those making more than $120,000 average 23 years of experience with the commission. Employees between $102,000 and $120,000 average 15 years. And the 13 employees just barely over $100,000 average 12 years.

Sen. Scott Dibble, DFL-Minneapolis, who has introduced legislation calling for greater oversight of the commission, said he doesn’t recall specific complaints or discussions about employee salaries before. His main issues concern how board members are appointed, but after reading the Free Press report, he said he may look into the pay issue.

Another critic, Rep. Paul Thissen, DFL-Minneapolis, said the pay issue has “never come up on my radar.” Thissen has disagreed with the commission on noise issues and also argued for greater legislative oversight. But as far as the airport’s operations, he said, “it has a reputation as one of the better-run airports in the country.”

A 2003 report from the state auditor’s office concluded the airports commission operates with limited oversight, but “nevertheless, MAC’s administration of the Minneapolis-St. Paul Airport is generally well regarded, and the airport’s operating costs are relatively low compared with other U.S. airports.”

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