AARON KARP/WASHINGTON DC
Expanding airport capacity was a hot topic in US aviation circles before 11 September, as airport operators throughout the USA looked for ways to reduce congestion and meet future traffic demands. With the Federal Aviation Administration predicting that 1 billion passengers would be using the US air transport system annually by 2010, billions of dollars worth of construction projects were planned at various major airports. In addition, airport industry lobbyists were calling on Congress to loosen regulations for approving expansion projects and citing the need for even more capacity enhancements than the many projects already planned.
But after the 11 September terror attacks, passenger numbers dropped precipitously at US airports. This in turn caused airport revenues, generated from automobile parking, terminal concessions and aircraft landing fees, to fall off. Overnight, many major US airports went from turning a daily profit to incurring a daily loss. The FAA has revised its 1 billion passengers prediction, now saying that number will not frequent US airports until at least 2013, casting further uncertainty on when or if air travellers will return to US airports in pre-11 September numbers.
Consequently, airport construction projects that once seemed urgently necessary are now viewed as excessive and, in many cases, have been pared back or put on hold. In Miami, an expansion project that had been projected to cost $6 billion has now been reduced to $4.8 billion. "The revised capital improvement programme reflects the realities of the aviation environment since last September," says Miami aviation director Angela Gittens. "These [pared back] projects represent a scope, cost and schedule that are more compatible with the realities of today."
Similarly, Washington Dulles Airport has slashed $1.5 billion from an expansion that had been expected to cost $4.1 billion. A planned terminal reconstruction and the installation of an underground people mover system have been put on hold indefinitely.
The FAA believes passenger traffic in the USA will drop 12% in fiscal year 2002, which began on 1 October, 2001. Los Angeles Airport (LAX) reported traffic drops of as high as 30% in the weeks immediately following the attacks and went from making about $370,000 a day before 11 September to losing around $470,000 a day in the weeks after the hijackings.
LAX handled 12.9 million passengers in the 2002 first quarter, down nearly 20% from the first three months of 2001. Los Angeles World Airports chief financial officer Karen Sisson says post-11 September reductions in landing fees and the sharp decline in parking and concession revenues created "an economic hit that may be likened to a natural disaster".
Airports Council International - North America president David Plavin has testified to Congress that "fewer passengers means significantly reduced revenues for us all. Even more so than airlines, airports have high fixed costs and have little financial leeway to absorb the great increases in operating costs required since the terrorist attacks."
Complicating matters for US airports are the many new security requirements legislated by Congress after the attacks. Security costs being incurred by US airports have quadrupled, according to US government estimates, placing a further strain on funds that previously might have gone towards capacity enhancements.
But FAA head Jane Garvey warns that security should not trump expansion. "It's also important not to lose that sense of urgency to build and expand infrastructure. We're going to hear a lot in Congress about putting resources into security, but we must stay focused on increasing capacity."
Garvey predicts that, while a lull in passenger numbers for the next couple of years is likely, air travellers will return and the pre-11 September concerns over capacity will be rekindled. Aircraft movements are already recovering, even if passenger numbers are not. "Traffic as we see it is virtually back to the same level as last year," says Garvey. While the number of international flights to the USA is still down 5-7%, affecting movements at some busy airports such as Boston, Miami and New York Kennedy and Newark, by "some time this summer", US air traffic levels in general will have recovered to "meet and exceed" 2001 peak-season levels, says the FAA.
Source: Flight International
