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Future Cloudy for San Francisco Airport

Declining passenger traffic and a setback in a project to extend its runways leave executives with more questions than answers.

June 10, 2003|Jennifer Oldham | Times Staff Writer

Like so many jets stacked up in the sky waiting for clearance to land, San Francisco International Airport's economic and political woes just keep mounting.

Passenger traffic plunged to an 11-year low in 2002 after the dot-com bust depressed business travel and the Sept. 11 terrorist attacks discouraged leisure fliers. Revenues from shops, restaurants and parking went south. Executives laid off 150 employees.

If that was not enough, United Airlines, which provides half of the facility's flights, filed for bankruptcy and slashed its schedule. Payments for a new international terminal and roadway improvements tie up so much of the airport's budget that it will cost more to borrow for future improvements.

The multiple setbacks have contributed to a decision that clouds not only the airport's present, but its future: Airport Director John Martin has put on hold an ambitious modernization proposal designed to reduce intractable flight delays and restore the airport's flagging stature among the nation's busiest international airports.

Yet declining passenger traffic has helped the airport temporarily shed its reputation for routine delays. There is a consensus, however, that air travel will eventually recover and San Francisco International again will be plagued by the overcrowding and delays that have led some travelers, and even one airline, to turn to other Bay Area airports.

Specifically, the airport director suspended environmental studies looking into the viability of a proposal to extend the airport's runways into San Francisco Bay -- a review that already has taken four years, cost $75 million and is 80% complete.

"Ever since 9/11, we started slowing the program down. After the United bankruptcy we slowed it down further," Martin said. "With the war and SARS we slowed it further, and finally this spring it became clear that the political will just wasn't there."

The runway extension proposal emerged in the late '90s, when the Bay Area's technology sector boosted business travel and El Nino storms caused traffic jams that gave San Francisco's airport the worst on-time record in the nation. On-time performance was so poor that Southwest Airlines dropped its flights to the airport altogether in 2001.

The expansion plan proposed filling from 380 to 900 acres of the South Bay to build new runways.

Airport executives had hoped the project would alleviate flight delays that occur when the airport is forced to shut down one of its parallel runways during bad or foggy weather. Those closures cut arrival capacity in half from 60 flights an hour to 30.

Executives also have had to contend with a recent audit of the airport's books that alleged airport officials mismanaged $75 million spent to study the runway extension plan.

The finding prompted San Francisco Supervisor Aaron Peskin, who requested the report last year, to call airfield development efforts a boondoggle. The city's Board of Supervisors oversees the airport and the city treasury receives a portion of revenues each year.

"This [expansion] project had a lot more to do with studying a political notion than what the impacts of the project would be," Peskin said. "The intellectually dishonest way they went about running the entire effort was going to doom the project to great legal and political vulnerabilities."

The audit, drafted by city budget analyst Harvey M. Rose, raised questions about runaway spending by consultants and found that the Airfield Development Bureau, formed to direct the runway extension project, kept shoddy records and didn't follow city regulations.

Rose, who relied in part on a random sample of invoices, found that consultants billed the bureau for unusually high airfare, lodging, equipment and telephone costs. These included round-trip airfares to Washington for $4,252, a $799 dinner at the Bacchanal restaurant in South San Francisco and a $4,686 phone bill for an airport contractor for one month. Consultants also billed the bureau an average of $16,646 each for three Dell computer workstations with no explanation for the high cost, Rose said.

The airport disputes the audit's findings, saying items chosen by the budget analyst's office are largely "isolated cases."

Rose disagrees.

"That's ridiculous," he said. "We took a sample. If we took another sample, in our judgment, we would come up with similar items."

The report found that the bureau misused public money by attempting to persuade residents and business groups that the best project alternative was extending the runways into the bay. Federal regulatory agencies that allocate funds for airport expansion projects urge airport operators to give each alternative equal consideration.

"Based on the information they reviewed in public meetings, it seemed they were stressing the benefits of the build option and stressing the shortcomings of the other no-build alternatives," said Ken Bruce, a senior manager in the budget analyst's office and the audit's project manager.

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