The Buzz

July 25, 2013

The cost to build a new KCI

Show-Me Institute suggests a new terminal project would cost too much, but math suggests it’s doable.

The Buzz

The facts, faces and hum of local politics with Steve Kraske and Dave Helling

The Show-Me Institute published a new analysis this week of the potential costs for a new single-terminal Kansas City International Airport

.

“An optimistic projection of future income still shows that Kansas City International Airport will lose tens of millions of dollars a year trying to pay down the debt for a proposed new $1.2 billion terminal,” the column says.

Well, maybe. Let’s look at some numbers.

The column suggests the debt service on a $1.5 billion bond issue would be an additional $68 million a year. (That actually seems a bit low. It would have to be a 30-year issue, or $68 million might not be enough.)

For the sake of argument, though, let’s round up annual debt service to $70 million.

More than five million people fly out of KCI each year. Assuming traffic remains steady, that means five million passengers would have to provide an additional $70 million a year to meet the debt service.

My calculator shows that’s $14 per passenger.

And that’s all revenue sources, not just tickets. (Kansas City now collects a $4.50 passenger facility charge, the maximum allowed.)

The $14 isn’t peanuts, of course. But it isn’t

impossible

to see how a combination of higher airline charges, more concession revenue, higher parking fees, cost reductions, and other steps could provide an additional $14 of revenue per passenger per year.

Right now, most airlines charge passengers another $20 just to carry a piece of luggage.

That doesn’t mean building a single terminal airport is a good idea, by the way. That $14 per passenger is money spent on the airport that could not be spent on groceries, or a movie ticket, or a new pair of shoes. Or maybe that $14 could be collected from everyone and spent on other pressing city needs, like roads and bridges.

The

merits

of a new airport remain a subject for examination.

But the

financing

may be easier than opponents suggest.

Here’s

Lynn Horsley’s story

.

Discuss.

Related content

Comments

Videos

Editor's Choice Videos