Grounded?

With Airline Industry Struggling, Some Aviation Work is Stalling or Being Halted

By Debra Wood

With the airline industry in turmoil as a result of rising fuel costs and a souring economy, some airports are holding off on new capital projects but proceeding with existing work.

“It’s been like a yo-yo since Sept. 11,” says Dick Marchi, senior adviser for policy and regulatory affairs for the Airports Council International North America, an industry trade organization based in Washington, D.C. “The same thing happened with that recession. Construction projects tended to focus on things that were crucial or safety improvements.”

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Marchi says as the industry recovered, airports have been playing catch-up with heavy construction projects. Now, however, with rising fuel costs, airlines are cutting back schedules, and airports are responding.

A USA Today analysis in August of data from the OAG-Official Airline Guide reports schedule changes at 300 U.S. airports for November. Florida will lose 10.4% of the seats in and out, compared to November 2007, with the biggest losses at Orlando, 14.3%; Tampa, 11.9%; and Jacksonville, 10.8%.

Miami is set to lose only 1.8% of its seats and Fort Lauderdale 8.2%.

Georgia will lose 4.8% of its seats, North Carolina 4.6% and South Carolina 8.3%.

“In the Southeast, traffic is dominated by Atlanta, one of the nation’s strongest hubs,” Marchi says. “They will see some reduction in traffic, as everybody will, but it will not be the disproportionate impact as at smaller hubs.”

Airlines fund new runway projects and a percentage of terminal improvements, Marchi says. He adds that carriers may opt to close concourses to save money, as U.S. Airways did in Pittsburgh when it cut that city as a hub. “Carriers have asked airports to cut costs, and deferring projects is one way to do that,” Marchi says. “If they are in construction, it’s hard to do anything about it.”

That’s the position Miami International Airport is in, with a $2.85 billion, 3.5-million-sq-ft North Terminal in the midst of construction and scheduled for completion in 2011.

“We’re so far into our capital program, there was no way to cut back,” says Max Fajardo, deputy director of the airport, adding that the airport is attempting to cut operational costs to bring down landing fees.

Farther north, the Broward County Aviation Department in Fort Lauderdale and the Greater Orlando Aviation Authority in Orlando have delayed some planned improvements.

Broward deferred construction of Concourse A at Fort Lauderdale-Hollywood International Airport and will reallocate those funds to a Concourse H redevelopment project now in conceptual development.

The county hopes to realign carriers’ gate assignments in the terminal, potentially eliminating some exclusive-use agreements, to make maximize efficiency.

GOAA decided in July to hold off on some capital projects, including renovation of the ticket lobby and permanent improvements to the bus holding area and the cell phone lot.

“We, like many airports, are looking at projects and determining what can be postponed,” says Orlando International Airport spokesperson Carolyn Fennel. “The projects being reviewed are capacity projects.”

Following is a review of the activity at some of the Southeast’s major airports.

Atlanta

Atlanta Hartsfield-Jackson International Airport, the busiest airport in the country, according to Airports Council International North America International data, expects to open the $635.9 million Consolidated Rental Agency Complex and people mover next November. It is part of a $6 billion capital improvement program.

Austin-Prad, a joint venture between Austin Commercial and PRAD Group, both of Atlanta, provided sitework and is building the $266.5 million, 137,000-sq-ft customer service center and the center’s people-mover station, 10 quick-turnaround areas and two four-story parking decks with space for 8,700 cars. Work began in 2005.

Archer Western Contractors/Capital Contracting Co., a joint venture between Archer Western of Atlanta and Capital Contracting Co. of Troy, Mich., is designing and building a 1.5-mi-long automated people mover guideway, a maintenance and storage facility and convention center and passenger terminal people-mover stations.

Sumitomo Corp. of America and Mitsubishi Heavy Industries America, both of New York, will supply the vehicles.

Atlanta Hartsfield-Jackson expected construction-manager-at-risk Holder, Manhattan, Moody and Hunt Joint Venture to officially break ground this fall on the $1.68-billion, 1.2-million-sq-ft, 12-gate, Maynard H. Jackson Jr. International Terminal. Deep foundation work has begun. The joint venture partners include Holder Construction Co. of Atlanta, Manhattan Construction Co. of Atlanta, C.D. Moody Construction of Atlanta and Hunt Construction Group of Scottsdale, Ariz.

The airport announced selection of the Holder-led joint venture in November 2004. At that time the estimated cost was $746 million. Legal issues delayed the project.

The construction partners said the building could not be constructed for that amount as designed by Terminal Design Team, a joint venture group of Leo A. Daly Co. of Omaha, KHAFRA Engineering Consultants of Atlanta, Anthony C. Baker Architects & Planners of New York and Browder and LaGuizamon & Associates of Atlanta. The airport terminated the $34 million design contract in August 2005, citing timing, design and cost issues, and the joint venture partners filed suit, claiming breach of contract by the city. That litigation is still pending.

About a year later, the airport hired Atlanta Gateway Designers, a joint venture between Gresham, Smith & Partners of Atlanta and Duckett Design Group of East Point, Ga., for $8.5 million to provide architectural and engineering services. The City Council gave the airport the go-ahead to move forward with construction in February.

The international terminal is now scheduled for a 2011 completion.

MIA

Work is proceeding on the North Terminal at Miami International Airport. Seventeen gates have opened and two more will be ready by year-end. Work undertaken by Parsons-Odebrecht Joint Venture, a partnership between Parsons Corp. of Pasadena, Calif., and Odebrecht USA of Coral Gables, Fla., which has a roughly $1 billion contract, is on schedule, airport deputy director Fajardo says.

In addition, MCM Dragados, a joint venture, is proceeding with its $115 million North Terminal Improvements contract. And MIA is reviewing bids for a regional commuter airplane section of the terminal. Fajardo says he expects that contract to come in between $35 million and $37 million.

POJV continues to work on a South Terminal vertical-movement structure, with elevators and escalators, scheduled for completion in 2009. POJV and Sumitomo are building a $134.9 million, mile-long, rooftop automated people-mover system, which will shuttle up to 9,000 passengers an hour between the north terminal’s four passenger stations. Completion of the people mover is scheduled for 2010.

Orlando International

Hensel Phelps Construction Co. of Orlando recently completed building space for one $32-million, 10-monitor inline baggage-handling facility and expects to finish a second $23 million five-monitor facility in October at Orlando International Airport.

The company also is working on renovating and rehabilitating airsides one and three. The $85 million and $96 million projects, respectively, add vendor spaces and skylights and update mechanical, electrical and security systems. Both are scheduled for completion in 2009.

“These projects were well under way before the decision was made [to stop capital projects], so they were not affected,” says Charlie Barnard, Hensel Phelps operations manager responsible for the Orlando airport projects. “Other work we are looking at has been affected because of the down economy.”

Fort Lauderdale-Hollywood

Work is under way on a $63 million renovation of international Terminal 4 at Fort Lauderdale-Hollywood International Airport. Skanska USA Building in Fort Lauderdale is completing a $35 million upgrade to the Terminal 4 ticket counter and luggage processing space, part of the overall improvements. The project should finish in early 2009.

The Broward County Aviation Department plans to move forward with milling and re-grooving work associated with a $694 million expansion of Runway 9R/27L to 8,000 ft. None of the construction contracts has been let, though.

Panama City

Construction on what will be the first “greenfield” airport of the 21st Century is under way at the $330 million Panama City-Bay County International Airport in Panama City, Fla.

The airport project is part of The St. Joe Co. of Jacksonville’s 75,000-acre master-planned West Bay Sector community. St. Joe donated the 4,000-acre airport site, which is about 5 mi inland from the existing Panama City airport. St. Joe plans to partner with the airport on environmental mitigation.

Initial development of the airport includes 1,200 acres and will feature an 8,400-ft-long concrete runway able to accommodate Boeing 737 aircraft and a 5,000-ft-long general aviation runway.

The airport would like to extend the primary runway to 10,000 ft and is waiting for approval from the Federal Aviation Authority, says Jeff Dealy, program manager with KBR of Houston, the construction and project manager for the airport.

Phoenix Construction of Lynn Haven, Fla., began work in December and is ahead of schedule on its $112.5 million site preparation and airfield pavement contract.

Dealy says he expects paving to begin this fall and for the site-development package to wrap up by December 2009.

The airport was reviewing bids to construct the 106,000-sq-ft terminal building designed by HNTB of Kansas City, Mo. Dealy says the bids came in over budget and value engineering will take place to bring the cost down.

Bids also are in for the air traffic control tower, public safety building, cargo facility, air maintenance center and rental car facility. Overall completion of the airport is slated for May 2010.

Charlotte-Douglas International Airport in North Carolina is proceeding with a third parallel runway and a parking deck. Construction began on the $43-million 9,000-ft-long runway and 25,000-ft taxiway system in April. Hi-Way Paving of Hilliard, Ohio, is doing the paving.

The airport also is proceeding with a $44.9 million, 3,200-car parking deck. Shelco of Charlotte is scheduled to complete the project by fall 2009.

Tampa

Tampa International Airport in Florida is “moving full-speed ahead” with plans for a new north terminal, says Brenda S. Geoghagan, the facility’s director of public information and community relations. However, she adds that the airport is in the first phase of a four-phase project and could pull back, depending what happens with the airlines during the next two to three years.

“The aviation authority has budgeted $106 million for capital improvements next year, 2009, far from the $276 million allocated in fiscal year 2003 but still more than four of the previous 10 years,” Geoghagan says via e-mail.

Included in that amount are baggage claim capacity enhancements, relocation of airport surveillance radar, rehabilitation of runway 19L and two taxiways and conceptual design for the north terminal site.

Hardin Construction Co. of Tampa expected to break ground in October on a 7,500-sq-ft design-build project to house the Information Technology Operations and Data Center at TIA. The approximately $3 million project has a fall 2009 completion date.

Useful sources:

Miami International Airport North Terminal Development Program
http://www.miami-airport.com/html/ntd.html

Fort Lauderdale-Hollywood International Airport – Airport Projects
http://www.broward.org/airport/community_airportexpansion.htm

Atlanta Hartsfield-Jackson International Airport Consolidated Rental Care Facility
http://www.atlanta-airport.com/default.asp?url=http://www.atlanta-airport.com/ecc/construction.htm

Maynard H. Jackson Jr. International Terminal
http://www.hmmhteam.com/contactus.asp

Panama City-Bay County International Airport
http://pcairport.pbsjis.com/