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Airline Travel Slows Down, but Airport Expansions Speed Up

May 27, 2003|Stephanie Simon | Times Staff Writer

ST. LOUIS — Business travel within the United States has dropped nearly 9% over the last two years. Trips to this country by overseas visitors have plunged 26%. Major airlines have laid off thousands of employees, canceled hundreds of daily flights -- and warned of more fundamental restructuring ahead.

Yet bulldozers continue to carve out a new runway here at Lambert Field, as the airport presses ahead with a $1.1-billion initiative to boost capacity.

Major expansions are also underway at airports in Atlanta, Oakland, Orlando, Fla., and Philadelphia. The tiny Wilkes-Barre/Scranton International Airport in northeastern Pennsylvania is doubling the size of its terminal and adding four gates, for a total of six.

In Los Angeles, Mayor James K. Hahn has directed LAX to focus on improving security rather than expanding capacity. And in Detroit, Northwest Airlines has canceled plans to add 25 gates "due to the drop in passenger demand," said spokeswoman Mary Stanik.

Elsewhere, however, it's full speed ahead, as airport authorities prepare for the crush of passengers expected to materialize over the next decade -- assuming that terrorism fears ease and the economy improves.

"We think air travel will rebound. We're going to make this airport as efficient, attractive and user-friendly as possible, and time will take care of the rest," said Leonard L. Griggs Jr., director of Lambert Field.

That attitude strikes some critics as overly optimistic.

Smaller, "secondary" airports such as Oakland's might well see a surge in traffic because of the popularity of such discount carriers as Southwest and JetBlue. But expanding big-city airports "might not be the best allocation of taxpayer dollars," said Sean Egan, an airline analyst for Egan-Jones Ratings Co. in suburban Philadelphia. Many of the major construction projects were planned years ago, "in a completely different economy," and don't take into account the new structure of the airline industry, he said.

"You know how generals are sometimes accused of fighting the last war? Airport planners could be accused of doing the same thing," Egan said.

In St. Louis, the major player is American Airlines, which has used Lambert Field as a hub since acquiring TWA in early 2001. Over those two years, American's parent company, AMR Corp., has lost more than $5 billion. The airline is now perilously near bankruptcy -- even though it dismissed nearly all the flight attendants who used to work for TWA.

"Given the state of the airline economy and the way things are changing out at Lambert, I don't think there's a need for [expansion] anymore," said John Krekeler, the lone opponent of the project on the 17-member Airport Commission.

American and Southwest have endorsed the project, which will let Lambert handle 40% more flights. Still, American spokesman Tim Wagner said it was a good thing that airlines won't be billed for their $300-million share of the construction costs until the runway opens in early 2006. "That gives the airlines a chance to get back on their feet," he said.

At Southwest -- which has cut daily flights out of Lambert by 13% compared with a year ago -- spokeswoman Whitney Eichinger said the new runway will be welcome, but she added, "Because of the decline in St. Louis traffic, the need isn't as apparent now."

Federal statistics indicate that the numbers of takeoffs and landings at Lambert have been declining since 1997 -- long before anxieties about terrorism, war and the infectious disease SARS undercut air travel nationwide. Griggs, however, said he's convinced that its middle-of-the-country location will make St. Louis an indispensable hub for the 21st century.

To make room for the new runway, the city had to raze more than 2,000 homes and businesses in the town of Bridgeton, adjacent to the airport. "It's really sad to see the devastation of the community," said resident Sara Barwinski, whose house was demolished. "It's just a moonscape now. Or really, a mudscape."

But Griggs said the project was well worth its cost, because the expansion will significantly reduce on-the-ground delays, especially in bad weather. It's projected to save the airlines nearly $2 billion in operating costs over its first decade of use.

"This runway is probably one of the most important airport construction projects in the nation," he said.

There's plenty of competition for that bragging right.

Despite the slowdown in air travel, airports across the country launched $1.7 billion in new construction last year and continued with $10.6 billion in ongoing projects, according to Airports Council International of North America, a trade group. Nearly $770 million in scheduled work was delayed -- mainly because of the poor economy, but also because of environmental concerns and court challenges.

The trade group predicts that airports will cancel more capital projects in the years ahead. But it also forecasts a steady increase in construction.

"When you're expanding airports, you have to plan long-term," said Ray Neidl, an airline analyst for Blaylock & Partners in New York. "And long-term, air travel is still expected to grow."

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