As they lose traffic, once bustling US airports have space to rent
The fate of Lambert-St Louis International Airport may be a portent for other airports serving smaller cities around the US. Jane L Levere reports.business Updated: Jul 10, 2012 22:58 IST
The fate of Lambert-St Louis International Airport may be a portent for other airports serving smaller cities around the US.
Once the main hub of Trans World Airlines, the airport offered as many as 475 departures a day. But now, there are just 256 daily departures, leaving half the concourses at the older of its two terminals vacant and the airport scrambling to find new, revenue-generating uses for the space.
Already, airports in Pittsburgh (a former hub for US Airways), Cincinnati (a much-downsized Delta Air Lines hub) and Oakland, California, have lost a significant amount of their business as airlines concentrate more of their flights on bigger-city airports.
As airlines continue to consolidate and cut back on their use of smaller, regional jets, more airports will be in the same difficult position — looking for new uses for unoccupied terminals, hangars and other specialised buildings.
"This is an issue many airports are wrestling with," said Lois S. Kramer, an airport consultant and principal author of a report on reuse of airport buildings commissioned last year by the National Research Council.
Unlike airlines, many of whose assets are movable, "the airport industry is primarily a business of fixed assets, terminals, parking garages, roadways and airfields," said Kramer.
"When an airline vacates a terminal, the airport still has to cover the cost of operating the building," she added.
Airports generate revenue in two ways - through fees paid by airlines and general aviation operators and through income from parking, car rentals, concessions, advertising space sales and rentals of other buildings.
If airlines merge, file for bankruptcy protection or eliminate flights at an airport, both types of revenue may be reduced, said Deborah C McElroy, executive vice-president for policy for Airports Council International-North America. To deal with a drop in revenue, she said, airports have taken steps including "personnel reductions, deferral of nonessential projects and renegotiation of existing debt obligations."