Report touts the benefits of an upgraded KCI
03/11/2014 11:35 AM
03/11/2014 11:35 AM
Kansas City could build a more modern airport without seeing airfares climb dramatically, a consulting firm said Tuesday.
Blessed with a market that flies frequently and no nearby competitor, Kansas City International Airport has more airlines and moves more local passengers than many comparable medium-sized airports, the consultants concluded.
The consultant’s observations come as a vocal majority in the community appear increasingly resistant to changes at KCI. Many residents are devoted to the airport’s easy-in-easy-out design, even as some people argue for a dramatic overhaul that deals with aging infrastructure, consolidates security clearance and provides more gate area amenities.
A makeover could, the Frasca and Associates consulting firm said, crank up airport revenue by making the facility better able to sell more drinks, snacks and meals to travelers.
Over time, that power to entice fliers to spend more at the airport might offset part of the expense of making it a more impressive welcome mat to Kansas City.
Whatever course the city takes, the consultant seemed to dampen earlier concerns from Southwest and other airlines that a too-aggressive remake of the airport might kill air traffic with escalating passenger fees.
“It does have a very strong, distinctive market area it serves,” said Garfield Eaton, a managing director of Frasca and Associates. He said airlines will still want to serve KCI even with some cost increases.
He and Larry Belinsky, another director with the transportation consulting firm, told the Airport Terminal Advisory Group on Tuesday that there’s no direct correlation between higher costs to airlines operating at expensive new airports and increased air fares. They cited the examples of Raleigh-Durham, N.C.; San Jose, Calif.; and Sacramento, Calif. All have new terminals, but their air fares are comparable to Kansas City’s.
“It’s not a huge factor in the pricing,” Belinsky said, noting that fares are determined by national market trends.
The citizens’ task force is studying whether and how to modernize the airport. The consultants’ report showed how KCI ranks with 20 other medium-sized airports on a variety of performance measures.
The consultants said KCI’s three-terminal horseshoe design is “unique.”
And they said they’ve never seen a community so passionate about keeping its existing airport terminals. Eaton said that may be partly due to the fact that Missouri law is unusual and gives Kansas City residents a chance to vote on airport improvement revenue bonds. That’s not the case in many cities and states.
Even though a public vote is required for airport revenue bonds, task force members took pains Tuesday to remind the public that no general tax dollars — earnings, property or sales taxes — would be used in any airport improvements. Airport upgrades would be paid for by the airlines, passengers, tenants and other aviation dollars.
The consultants stopped short of making any recommendation on whether Kansas City should build a new airport terminal. They said they are just providing facts, and it will be up to the task force to decide how to proceed.
They did say that most peer airports generally consist of a single central processing facility with parallel or radiating concourses. They plan to return March 11 with more information on other airport designs.
Many Kansas City residents say KCI should spruce up, not dump, its current terminal configuration. They also worry about the debt on any major new terminal improvements.
But the consultants suggested some terminal improvements could themselves generate more revenue.
The firm looked at 20 airports with between 6 million and 14 million passengers per year, including Austin, Texas; Houston; Dallas; Indianapolis; St. Louis; Raleigh-Durham; and Sacramento. KCI averages between 9.5 million and 10 million passengers per year.
Among the major findings:
• KCI has more passengers per capita and draws from a wider geographic area than many of its peer airports and has a diverse number of carriers and flight choices. The airport’s closest competitors — Omaha, Neb.; Des Moines, Iowa; Oklahoma City; and St. Louis — are three hours or more away. That bodes well for Kansas City capturing future airport and airline business, they said.
• Its airport costs are the third lowest in its peer group and nearly 50 percent lower than the peer group average, at $5.37 per departing passenger. Those rates could increase a few more dollars per passenger without losing the competitive edge in attracting airlines. The costs could possibly generate another $15 million in annual revenue to help pay off airport improvements.
• Airport costs now total just 3 percent of KCI’s average one-way fares, compared with 4.5 percent at other airports. Kansas City’s average one-way gross airfares rank in the middle of the pack, at $194. The consultants said there’s room for costs to grow, to absorb debt service payments, without dramatically increasing airfares. Such airports as Sacramento, Raleigh-Durham and San Jose have had expensive terminal improvement projects without dramatic air fare increases.
• KCI has strong parking, rental car and tenant revenues. But its concession revenues ranked dead last of all peer airports, at 66 cents per departing passenger, compared with an average of $1.58 per passenger. The consultants said if KCI just increased concession business up to the average, that could generate another $5 million in annual revenue for the airport.
The task force expects to hold more public town hall meetings and hear from more stakeholders before issuing a final report in late April.
The KCI Terminal Advisory Group is holding more town hall meetings to gather public input on the future of KCI. All will be from 6 to 7:30 p.m.:
Mohart Center, 3200 Wayne Ave., Kansas City.
Southeast Community Center, 4201 E. 63rd St., Kansas City.
•March 20: Johnson County Community College Polsky Theater, 12345 College Blvd., Overland Park.