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Is the DFW Airport Board Playing Fair When It Comes to Valet Parking?

The CEO of FreedomPark Airport Valet Services, Ken Kundmueller, has sent around an e-mail accusing the DFW Airport board of not playing fair. You can read his full email after the jump. The short version: the DFW-branded company that runs the airport’s valet service is losing money. So the airport has waived the minimum annual guarantee that PCI agreed to in its contract. Too, the airport has raised valet parking fees and imposed operating restrictions on the free-enterprise providers like Kundmueller.

I think I’m going to dress up in a shirt and tie, grab a piece of cardboard and make a sign that reads, “Will work for bailout.” Stand on a street corner, and hope that some federal government official drives by and drops a couple billion in my cup. Be sure to wave when you see me standing there. I’ll invite you to the party when I get the first billion.

Speaking of bailouts, who among us couldn’t use one right now. Everyone I talk to these days is sucking wind and hoping to be able to ride out the storm. The lucky ones get bailouts because they’re too important to allow to fail. The rest of us have to make it on our own.

So let’s talk bailouts at D/FW Airport.

In June the D/FW Airport Board approved a financial bailout for the California parking company (PCI) that operates the D/FW branded valet parking (you know, the guys that say “There’s Only One”). The Board waived the minimum annual guarantee that PCI agreed to in the contract, and the percentage fee PCI pays to the airport was reduced by 33.3%.

Here’s the part you’re not going to like.

This past week the D/FW Airport Board approved a 25% increase in the fees that you, as a FreedomPark customer, have to pay for the right to chose FreedomPark as your valet service. That’s right. The airport’s DFW branded valet company’s fees went down 33%, yours went up 25%. I guess they need your money to pay for all the big banners, and carpeted parking slots, and $10 per day valet parking coupons (which we are restricted from having).

The truth is, this has been brewing for some time. I’ve been holding off notifying you to see how the airport was going to respond to the financial results of their in-house valet project.

What are those results? PCI, the airport’s valet contractor from California, lost $2.1M on $2.4M in revenues its first year in business. That’s a loss of 87% on revenue. D/FW Airport also may have lost approximately $1.1M on the valet project based on information we have obtained through the Texas Public Information Act (information even the Airport Board has not been shown).

Instead of acknowledging the failure of this project, and allowing the successful off-airport valet companies like FreedomPark to take up the slack, D/FW Airport has responded by placing operating restrictions on the free-enterprise providers, and by using their regulatory authority to increase the financial and operating disparity between their government-supported operation and the independent valet companies. If you want a more detailed explanation of the systematic steps the airport is taking to eliminate competition in this market, click on this link. <http://www.freedomparkdfw.com/industryfactsheet.aspx>

But the bottom line is that they are increasing your fees to pay for their failed project. I personally believe that in order for their valet project to succeed they will ultimately need to eliminate all other valet options and establish a monopoly in the airport valet service industry at D/FW Airport. I believe that if the airport’s Parking Business Unit is able to regulate the industry without any public accountability, then their valet motto will become a reality: “There’s Only One.” In fact that is exactly what one of their marketing memos states as a goal: “To build a fence around parking business from going to off-airport.” (June 9, 2008)

James, that will be a sad day, not only for you and for me. It will be a sad day for private enterprise in North Texas. The message to free enterprise will be: If you innovate for the benefit of the North Texas traveler, take risk, invest capital, develop a market, work hard to serve that market, and are successful in your efforts, DFW Airport will use its regulatory authority to usurp your innovation and seize control of that market. What country are we in?

I’ve appealed to the airport staff, with no results. So it’s up to you.

If you want to insure that you always have a choice of service providers in a fair market, you are going to need to let the Airport Board and staff know how you feel. You are their customer. They exist to serve you. If you reside in the city limits of Dallas or Fort Worth you might also want to contact your city council member or mayor.

You can email the D/FW Airport Board and staff, or call them. The email addresses and phone numbers are listed below. Better yet, take a few minutes to defend our free enterprise system and your right to chose, and come to the next D/FW Airport Board meeting. You can contact the Board secretary, Donna Schnell, at dschnell@dfwairport.com to register as a speaker. You’ll have 3 minutes to talk. The next meeting is at 8:30 AM on Thursday, September 3, at the DFW Airport administrative offices. I will be there.

Thanks for your support, and for being a FreedomPark customer.

Ken Kundmueller CEO, FreedomPark Airport Valet Services