Politics Special

Airlines may join forces with KCI to improve airport

Updated: 2014-02-20T04:27:13Z

By LYNN HORSLEY

The Kansas City Star

As the public debate over the future of Kansas City International Airport raged over the past year, at times KCI officials and the airlines looked like adversaries.

The airlines publicly balked at the idea of an expensive new terminal and said they hadn’t been sufficiently consulted. The Aviation Department disputed that and said a new terminal was the best option.

But a proposed lease agreement that the City Council will consider Thursday reveals a breakthrough — aviation officials and the eight airlines serving Kansas City pledge to collaborate over the next two years on plans for airport terminal improvements. The agreement, with council approval, would take effect May 1 and sets the stage for both sides to work together on a project the public can embrace.

“We’re absolutely thrilled,” Aviation Director Mark VanLoh said Wednesday of the proposed agreement with the airlines. “Because after what we’ve all seen and heard, we got agreement from all parties that we’re going to sit down together and get us into the future somehow.”

Council members agreed.

“We wanted a collaborative approach, and we’re excited we reached an agreement on this,” said Councilman Russ Johnson, chair of the council’s Transportation and Infrastructure Committee, which will hear a presentation on the proposed lease Thursday.

Councilman John Sharp, who has expressed skepticism about a new airport terminal, also said the new agreement is a good idea.

“I feel clearly the city dropped the ball in not consulting with the airlines earlier,” Sharp said, adding that the lease approach should address that shortcoming.

“We have to have a mechanism to have their input in a formal and timely manner,” Sharp said.

Officials with Southwest Airlines, the largest carrier at KCI and lead voice for the airlines at the airport, declined to comment Wednesday.

A consultant who worked on the lease on behalf of the eight airlines was in transit Wednesday and not available to comment.

Aviation officials emphasized Wednesday that nothing in the agreement usurps the authority of a citizens task force that will issue recommendations by late April on a path forward for the airport. Instead, the lease agreement sets out a way for the department and the airlines to respond to whatever the task force recommends.

A key section of the lease agreement says the two sides’ goal is to arrive at a terminal development plan by April 30, 2015, but no later than April 30, 2016.

It assumes that keeping the status quo at the airport is not acceptable, but that two viable alternatives would be further fleshed out: major renovation of the existing terminals, or a new terminal within the existing airport grounds.

VanLoh said the airlines took the lead role in drafting provisions about airport improvements, and he was encouraged by that initiative.

“We were pleasantly surprised that they wanted to include this in the lease agreement,” he said. “That means they’re serious about what’s going to happen in Kansas City.”

VanLoh said the airlines collectively have demonstrated their commitment to Kansas City by also agreeing to pay an additional $8.5 million per year over the next two years. Part of that money will be additional rent payments and part will be for ongoing major airport maintenance projects.

The airlines agreed to the increased payments even though Terminal A has closed. So the airlines already are agreeing to absorb more of the airport’s operational costs, said David Long, deputy aviation director of commercial development.

“They understand we’ve been subsidizing the airport, so now we subsidize a little less,” Long said. “They recognize we can’t continue to do that.”

The additional fees will raise airlines’ cost of operating at KCI from $5.15 per departing passenger to $6.75 per departing passenger, but that still remains lower than the national average of about $9 per departing passenger, and it should not increase airfares, he said.

The agreement sets forth a process for aviation officials and the airlines to determine a development alternative, budget, financing options and other details. Among the key points:

• A leadership committee will be appointed, consisting of the aviation deputy directors of finance, engineering and commercial development and an airline representative. For voting purposes, the airline representative will have two votes while the other three members will have one vote each.

• Aviation officials and the airlines will jointly agree upon a target total annual airline payment and will help establish a maximum construction cost.

• The terminal alternatives will be evaluated based on program requirements, financial feasibility, safety and security, customer service, airport and airline efficiency, revenue generation, and environmental sustainability.

Once a plan is agreed to, the two sides would work collaboratively to secure voter approval for the issuance of general airport revenue bonds and on the actual construction process.

As the City Council debates the new lease Thursday, it is also expected to vote on an ordinance that deals with a citizens petition initiative on KCI.

A group gathered more than 3,500 signatures calling for an election to ask voters to stop the city from implementing any plan to demolish or replace any city-owned airport terminal without voter approval.

The council had some concerns about the precise language of the petition, fearing that it would even halt required planning for the city’s airports.

But council members and an attorney for the committee of petitioners said Wednesday they had reached a compromise that allows the city to honor the petitioners’ intent. The ordinance the council will consider Thursday confirms that voters will have a say at an election before any action is taken to demolish, replace or construct a passenger terminal at either KCI or Wheeler Downtown Airport.

The Star’s Kevin Collison contributed to this report.

To reach Lynn Horsley, call 816-226-2058 or send email to lhorsley@kcstar.com.

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