US airports are buzzing with construction activity. Everything from new runways and major terminal renovations are under way at airports from Chicago to Fort Lauderdale and Los Angeles.
These projects will help airports meet the demands of rising passenger numbers and update outdated facilities, some of which date to an era when the then McDonnell Douglas DC-9 and Boeing 737-200 were popular narrowbodies, that still dot the country.
“If I took [someone] blindfolded into LaGuardia airport in New York, he must think ‘I must be in some third world country,’” said US vice-president Joe Biden during a speech on US infrastructure in April. While some improvements have been made, the airport’s primary Central Terminal Building dates to 1964 with the last major update to the facility completed in 1990. A new $3.6 billion terminal is in development.
Passenger traffic is rising again in the USA, after a decade lost to the multiple shocks of the noughties. The number of people who flew, both domestically and internationally, through US airports reached 826 million in 2013, the highest since 2007, US Department of Transportation (DOT) data shows. That number is likely to climb again in 2014.
“Domestically the [demand] environment remains really quite strong and doing well,” said Scott Kirby, president of American Airlines, in a September investor presentation. A sentiment echoed by executives at other airlines and Wall Street analysts.
With passenger numbers rising and US airlines flush with cash, numerous airport projects are moving forward. These can be clumped in two rough categories – airport- and airline-led works.
BUILDING FOR DEMAND
Many airport-led capital projects are designed to meet rising passenger numbers, often from the growth of one or two airlines. These include terminal and runway projects at Fort Lauderdale-Hollywood International airport and a concourse and international arrivals facility expansion at Seattle-Tacoma International.
Fort Lauderdale includes both demand and airline-led projects. The airport led construction of the recently completed extension and widening of runway 10R/28L to 2,438m (8,000ft) and will oversee the renovation and expansion of terminal 4, which handles international arrivals and hometown carrier Spirit Airlines. Together the projects cost about $1.24 billion.
The South Florida airport has benefitted from the expansion of low-cost and hybrid carriers JetBlue Airways, Southwest Airlines and Spirit. Each see it as a good gateway to the region and jumping off point for destinations in the Caribbean and Latin America.
“The market is large enough to accommodate a few carriers,” said Evan Berg, senior manager for international business management at Southwest, on the Fort Lauderdale market in July. “Both [JetBlue and Southwest] see the opportunity to grow to Latin America and the Caribbean.”
The Dallas-based carrier is overseeing a $150 million expansion of terminal 1 that will add five international-arrivals capable gates for it to use in the facility. The airport is funding the project.
Terminal 1 expansion at Fort Lauderdale-Hollywood
Fort Lauderdale-Hollywood
While passenger numbers at Fort Lauderdale were roughly flat at 23.6 million – international traffic increased 2.8% to 3.7 million – in 2013, traffic has surpassed its previous peak in 2007, airport data shows.
Seattle-Tacoma is an airport with strong growth by its two top carriers – Alaska Airlines and Delta Air Lines. The growth is turning the airport into a major US gateway to Asia-Pacific after lagging Los Angeles, San Francisco and even nearby Vancouver for years but has created congestion in its terminal complex at peak times.
“We have a peaking problem,” says Kazue Ishiwata, senior manager of international air service at the airport operator the Port of Seattle, on its existing international arrivals facility. “It’s literally completely full right now at peak times.”
These sentiments are echoed by Alaska director of network planning Ben Brookman, who says the facilities at the airport are “constrained”. However, the hometown carrier is able to operate its entire schedule, as well as the planned 11% increase in departures next March, with room to spare in its current footprint, he adds.
To address rising international traffic, Seattle-Tacoma is developing plans for a new landside arrivals facility adjacent to concourse A and connected to the existing facility in the South Satellite via a bridge. It is currently budgeted at $344 million and scheduled to open in 2018.
On the domestic side, the airport plans to add six gates to the North Satellite for Alaska as part of a $505 million project dubbed NorthSTAR by the middle of 2020. Ishiwata says that the additional gates will allow them to consolidate the domestic operations of both Alaska and other carriers around the airport.
Seattle-Tacoma North Satellite expansion plans
Seattle-Tacoma
Fort Lauderdale and Seattle-Tacoma are hardly alone. Houston Intercontinental is developing plans for a new international terminal, New Orleans a new terminal to replace its ageing facility that dates to the 1950s and Orlando International a new multimodal transportation centre and future South Terminal complex.
AIRLINE IMPROVEMENTS
Airlines are investing billions in their facilities across the USA. Los Angeles International airport (LAX) is seeing some of the most significant investment with American, Delta, Southwest and United Airlines leading nearly $1.3 billion in works to their respective terminals.
American is contributing funds to a connector between its terminal 4 and the Tom Bradley International Terminal, which itself is in the final phases of a $1.9 billion upgrade by LAX operator Los Angeles World Airports (LAWA). Delta and United are renovating passenger spaces and expanding security checkpoints in terminals 5, and 7 and 8, respectively. While Southwest is updating everything from the ticket lobby, baggage claim and concourse, as well as adding pop-outs to each side of the concourse to increase hold room space in terminal 1.
“I think it’s going to improve our operations and customer service,” said Steve Hubbell, senior manager of airport affairs at Southwest, on the LAX improvements in a January interview. “This does provide us with greater expansion opportunities, especially with the [737]-800 gate capabilities at all the gates.”
New York JFK International is another airport where airlines are taking the lead on terminal projects. Delta is in the second of a likely three-phase, more than $1.2 billion expansion of terminal 4 to accommodate its operations while JetBlue plans to open a new international arrivals facility in terminal 5 this November.
Phase two of Atlanta-based Delta’s investment at JFK will allow it to consolidate the majority of its mainline operations and all of its regional operations into terminal 4 when it opens in early 2015. It follows a major expansion of the terminal funded by Delta that in May 2013.
“The state-of-the-art Terminal 4 facilities have been years in the making,” said Richard Anderson, chief executive of Delta at the opening of the first phase. “It's an exciting time at Delta and JFK Terminal 4 is emblematic of the investments we are making in New York and around the world.”
Other airports seeing significant airline-led investments include Houston Hobby where Southwest is building a new international arrivals facility and Newark Liberty where United is renovating terminal C. Boston, Dallas/Fort Worth and San Francisco have all completed projects for specific airlines this year.
Despite increasing traffic and profitable airlines, airport capital investments are decreasing. US Federal Aviation Administration (FAA) data shows that investment in terminal projects fell by more than a quarter to $3.5 billion from 2010 to 2013.
The Airports Council International North America (ACI-NA) attributes declines in capital investments and needs to the decline in passenger numbers and airline consolidation in its latest airport capital development needs report in 2013.
“The demand for passenger and cargo service will continue to grow resulting in a corresponding increase in airport capital development costs,” it says. It cites FAA expectations that US airports are on-track to handle a billion passengers by 2024 – something many of the country’s major airports are clearly preparing for today.
Source: Cirium Dashboard
