new article in the Express News today regarding the airport. Mayor calls it like it is. The airport needs a new terminal. Article brings up that cost could be as much as $1 billion. FAA calls SAT a mid-tier airpot...ouch.
https://www.expressnews.com/business...e-15597566.php
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Mayor Ron Nirenberg says San Antonio International Airport needs to think big and build a new terminal, despite the current plunge in passenger traffic stemming from COVID-19 pandemic.
“For San Antonio’s airport to reflect the big city, tier-one status that we aspire to, we’re going to have to upgrade our facilities and our air service delivery in general,” Nirenberg said.
Airport officials and the mayor-appointed Airport System Development Committee are putting together a 20-year master plan that will in part help determine what to do with the airport’s 36-year-old Terminal A, its main departure and arrival area.
Despite recent renovations that cost more than $30 million, the terminal’s narrow passageways are around half the size of more modern terminals, and can’t be widened. There aren’t enough restrooms, and seating areas near gates aren’t spacious, leading to overcrowding.
The plan also could recommend improvements to airport’s smaller Terminal B, which opened 10 years ago. The facility is already considered outdated, given modern airport design.
The final plan, which will need to be approved by the mayor and city council, has been pushed back to summer 2021. City officials had hoped to approve the plan this summer, but they had to put on hold public hearings necessary to finish the plan due to the pandemic.
The plan is in the works as the airline industry weathers an historic downturn. Like other airports across the US, San Antonio International had seen strong passenger growth in recent years until the pandemic stopped most travelers from flying.
More than 10 million passengers passed through the airport in 2019, up 20 percent from five years ago. Though growth projections for the next two decades were more modest, the case for more gates at the airport was clear.
Now, with the passenger count dropping to less than a third of what it was pre-pandemic, the question is how long it will take the facility to return to 2019 levels.
While it may take several years for passenger air traffic to recover, Nirenberg said, the airport still needs a modern terminal.
“From a customer experience standpoint, people know their airports based on their terminal experience, and right now their terminal experience reflects a mid-tier airport — and that’s not what this city aspires to,” he said.
He said better facilities and air service would create business opportunities for existing companies and those considering relocating to San Antonio.
“It’s essentially the welcome station for the city of San Antonio, it raises the bar to attract businesses,” Nirenberg said.
San Antonio International’s limited non-stop destinations, compared with other airports, have been a detriment for the business community. The issue made headlines when telecommunications giant AT&T announced in 2008 that it was moving its corporate headquarters from San Antonio to Dallas, in part because of the lack of direct flights at the airport.
A new terminal wouldn’t guarantee more non-stop offerings at the airport, Nirenberg said, but it raises the bar.
“One of the questions we have to ask ourselves is what elements do we have some degree of control over?” Nirenberg said, “One of them is ensuring that business travelers or visitors or tourists have a first-class experience in our airport.”
Despite San Antonio’s standing as the seventh largest city in the U.S. — though its metropolitan area ranks 24th largest — the Federal Aviation Administration categorizes the airport as a mid-size facility. The latest FAA date, from 2018, shows that 43 other airports had larger passenger departure counts.
How to pay for future upgrades will be at partly in the hands of Aviation Director Jesus Saenz Jr. He took over early this year after serving as chief operating officer at the Houston Airport System.
Nirenberg said the city hired Saenz in part for his experience with airport renovation projects. Houston’s George Bush Intercontinental Airport opened a new domestic terminal in 2017, and is currently building an international facility.
“That’s one of the strengths that Jesus brings to the table,” Nirenberg said. “He’s done it in every way it can be done, and we need that experience because we need a financing plan, and that’s obviously critical.”
A new terminal could cost as much as $1 billion.
Saenz declined a request for an interview.
In a statement, he said the “data driven” master plan “will allow us to make informed, tactical decisions to determine what we can afford and to prioritize future airport expansion or construction projects — while also taking into account changes in the aviation industry as a result of the COVID-19 pandemic.”
In the past, officials funded renovation projects at San Antonio Airport through a combination of bond financing, rents from airport concessions and user fees on passenger air tickets and rental cars. But revenue has dropped in recent months, with fewer passengers using the airport, making it potentially harder to fund new projects.
The airport’s $79.1 million operating budget for the new budget year, starting on Oct. 1, is $33 million smaller than this year’s, because of the fall-off in revenue from airport concession and parking fees. The airport had to use more than $15 million in federal stimulus money to make up for lost revenue and pay for continuing operations this budget year, Saenz told the City Council on Aug. 26.
Repayment of the $388.4 million in bonds for San Antonio International is also tied to the airport revenue and user fees. Two bond rating agencies, Standard & Poor’s Financial Services and Fitch Ratings, have issued negative outlooks on the debt of the airport, but have not lowered the airport’s bond ratings.
A downgrade would increase the interest rate the airport would have to pay to borrowers for future bond sales.
The newest facility at the airport opened in 2018. The consolidated rent-a-car facility was largely funded with a $123 million bond issue.
John Dickson, co-owner of a San Antonio cybersecurity firm and chairman of the Airport System Development Committee, said the pandemic could impact funding options for a new terminal, with financially struggling airlines likely to balk at higher fees.
“We understand the economic status of the airlines right now, and that is part of our planning process,” Dickson said.
Nirenberg said one of the problems at the airport is that the city previously tried to make upgrades on the cheap.
“The calculus for passenger capacity is changing across the world as a result of the pandemic,” he said. “But what remains the same is that we want to have a 21st century experience in the San Antonio airport, and right now our terminals reflect the kind of penny pinching 1980s and 1990s mindset in which they were largely built.”
New airport terminals across the U.S. have spacious seating, inviting terminals featuring art work and sculpture, and restaurants and other amenities built between gates, so traveler can still keep an eye on their flights.
Dickson said even the newer Terminal B is “antiseptic.”
The terminal was built for $120 million, considered a bare-bones price even a decade ago.
Nirenberg said he wants art, sculpture and restaurants in the airport to reflect San Antonio, so travelers get a sense of place.
“There’s no way to retrofit a mid-tier terminal into a top-tier terminal,” he said. “You just can’t do it. We gotta set ourselves a vision we want to have and go for it.”
Randy Diamond covers tourism and the travel industry. To read more from Randy, become a subscriber.
randy.diamond@express-news.net
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