Airport director reins in a high-flying plan
In a way you could say that the local airport is getting its feet back on the ground after spending too many years with its head in the clouds. And that impression isn’t simply the result of the new airport director’s crackdown on spending by board members and staff.
The feeling that common sense has touched down at the airport also arises from the latest capital improvements plan. In past iterations, Louis Armstrong New Orleans International Airport plans have touted a host of high-flying additions ranging from a new concourse to a new runway. A blueprint floated in 2009 aimed to equip the airport for future traffic growth at a cost of more than $750 million.
Today, while New Orleans plans to pour considerable capital into the airport, the dollars are less jaw-dropping. The cost of upgrades that include repurposing an existing concourse and expanding two others in time to handle the traffic onslaught of the 2013 Super Bowl may total a mere $250 million.
Aviation Director Iftikhar Ahmad says what has brought airport planners back to Earth is soaring costs. “The cost being transferred to the airlines was going to rise significantly in coming years,” he says, and scaring off airlines with higher fees wasn’t in his game plan.
Ahmad, an engineer whose airport career took him to Houston, Nashville and Dayton, Ohio, before he signed on with New Orleans International last May, says his near-term goal is to create a better business environment at the airport in order to both handle rising traffic and encourage airlines to expand service here. “We have to create the conditions for business to grow,” he says.
To do that, Ahmad is implementing a series of cost-cutting and revenue-enhancing measures that he says will enable the development of a much-improved airport in just a few years.
A key part of upcoming improvements, for which the New Orleans Aviation Board recently authorized design work, will take Concourse A completely out of flight service and turn it into office space. Moving airport management and operations staff out of their current quarters on the second floor of the main terminal will free up that space for rental to new and existing tenants. With rents running upward of $60 per square foot, the revenue potential from the office relocation is important, Ahmad says.
Similarly, new surface parking that will surround the relocated offices will open about 200 spaces in the parking garage to paying customers and will release a parking area west of the terminal for use by the companies that will occupy a consolidated rental car facility soon to be built on the airport campus.
In the new plan, Concourse B will become “flex” space, available as needed to serve charter flights or commercial flights that might be added to accommodate large local events.
Meanwhile, the expansion of Concourses C and D, served by a central security screening area and larger concession area, will make 26 gates available for regularly scheduled flights – more than enough to handle near-term traffic growth. Figures for 2010 show that passenger enplanements at New Orleans International reached 85 percent of ’04, or pre-Hurricane Katrina, volume. Ahmad says current traffic volume will keep 18 gates busy for the time being.
In the upgraded airport, checked-baggage screening by the Transportation Security Administration will move off the main terminal floor and behind the ticketing counters. Passengers will experience more and better concession choices and restrooms, and they’ll see improvements to the terminal’s exterior facade and signage.
From the airlines’ point of view, not only will they get larger and better operations space for ticketing and baggage personnel, but outside the terminal they will also enjoy taxiway and lighting improvements and new aircraft loading bridges.
The change of greatest interest to the airlines, though, is a benchmark figure known as “cost per enplanement.” The figure is an aggregation of landing fees and rental costs an airport charges to airlines, divided by the total number of passengers who board planes. Currently at $9.89, New Orleans International’s cost per enplanement is well above the average $6.42 for peer “origin and destination” airports nationwide. But Ahmad says the rate is far better than the $12-plus level the airport would have reached this year under the previous capital plan.
Ahmad had to grapple with these figures during his first several months on the job – a time when he also struggled to rein in runaway credit card spending by some personnel and as the airport’s governing board dithered over the idea of privatizing airport operations. During the same period, a federal court convicted former Aviation Director Sean Hunter in the cover-up of an insurance fraud.
As Ahmad tightened spending controls and implemented new contracting policies, the Aviation Board finally decided to pull the plug on the privatization idea. That action freed both board and management to move full-steam ahead with short-term financial and construction planning.
Ahmad says the city and the Aviation Board will continue looking far into the future and planning for the time when a third runway and more airline gates will be necessary. But in the meantime, his sights are set on February 2013. That is when thousands of “extra” passengers will stream through the airport as New Orleans hosts Super Bowl XLVII. That, says Ahmad, is when his “mid-term” improvements plan will end and longer-range goals will take center stage.
“It’s our job to bring more people here,” he says. But with prices rising on everything from labor to fuel, balancing costs against revenue will only get tougher. That means it could be a while before mention of a third runway, or even a new concourse, seeps back into airport plans.