The Atlanta Journal-Constitution
When the Atlanta airport’s new international terminal was envisioned in the
late 1990s, buoyant forecasts projected tremendous growth.
Vino Wong / vwong@ajc.com
The airport’s new international terminal, named for the first black mayor of Atlanta, will cater to passengers traveling on nonstop international flights.
Phil Skinner pskinner@ajc.com
Workers hang an art piece at the Maynard Holbrook Jackson Jr. International Terminal.
Vino Wong / vwong@ajc.com
The new terminal, with its sweeping roof line, gentle metallic curves and glass facade, will welcome millions of world travelers to Atlanta in the future.
Airport planners emphasized the need for expansion, saying 121 million
passengers would be flooding Hartsfield-Jackson International by 2015, up
from about 68 million at the time. They floated initial cost estimates of a
few hundred million dollars and eventually laid out a plan to open the
complex in 2006.
Fast forward to today and the Maynard H. Jackson Jr. International Terminal’s
actual price tag: Nearly $1.5 billion. The facility, named for the city’s
first black mayor, is set to open May 16, six years later than planned.
It will add 12 international gates — to be known as Concourse F — and create
a new entry-exit point for travelers on the opposite end of the airport from
the main terminal. That will eliminate the current cumbersome baggage claim
setup for Atlanta-bound international travelers, who must recheck their
baggage for the train ride to the distant main terminal after clearing
customs.
The airport’s passenger volume last year was 92.4 million and is now forecast
to be about 101 million in 2015, according to Federal Aviation
Administration figures.
The vastly different landscape demonstrates the tenuous nature of forecasts
of passenger traffic — a key driver for airport development. It highlights
the challenges airport managers face when determining the right time to
build, the right facility to design and the right size to plan.
“You can’t build something today that meets your needs for today,” said
airport general manager Louis Miller, who inherited the project when he
arrived in 2010. “We’re building for the future.”
Just a few years after plans for the terminal first took shape, air travel
took a huge hit from the 2001 terrorist attacks on America. Almost every
major carrier has gone through wrenching bankruptcies and cutbacks,
including Atlanta-based Delta Air Lines, Hartsfield-Jackson’s biggest tenant
and a key player in the terminal project.
Airline mergers, including Delta’s with Northwest and Southwest’s with
AirTran, have shrunk the industry. The economy has suffered from a severe
global recession that continues to dampen consumer and business spending on
travel.
Airport officials say that while the terminal may not be immediately
necessary to handle current passenger volume, it was always envisioned as a
facility to grow into.
Miller said the additional gates will not only provide more capacity for
international flights but also open space for domestic flights. That’s
because domestic gates on other concourses are sometimes used for
international departures.
“At peak hours, we have a need for additional facilities,” Miller said. “But
we’re really looking toward the future.”
Miller expects airlines will want to shift a number of their international
flights to the new concourse F since it’s more convenient to the new
terminal for entry and exit.
Delta said it expects the new concourse to operate near capacity several
times a day. Spokesman Trebor Banstetter said operating flights out of the
new concourse will give its top customers access to the “world-class
facility” and its new Sky Club lounge.
“We want our best customers to be in this facility,” Banstetter said.
The international terminal is indirectly paid for by travelers — most of whom
live outside Atlanta and merely connect at Hartsfield-Jackson — mainly
through passenger facility charges on airline tickets, through fares paid to
airlines that then pay lease and landing fees to the airport and through
payments for concessions and parking.
Those revenue streams are used to back airport bonds that financed
construction.
Airlines’ cost of using Hartsfield-Jackson will climb from about $4.50 per
boarded passenger last year to $6 next year, based on lease payments,
landing fees and other airport costs divided by passengers. That calculation
is why airlines often closely watch construction costs, an issue that came
up during contentious Delta lease negotiations in 2009. On the other hand,
those costs can be offset by more efficient airport operations and expanded
business, which is why airlines often support new facilities or additional
runways.
In any case, Hartsfield-Jackson officials no longer cite total passenger
forecasts as the motivation for the terminal, though they say the terminal
will be needed to accommodate an expected 13 million international
passengers in 2015.
International air travel is still slowed by a wobbly world economy and high
fuel costs that have discouraged fare discounting to gin up traffic.
Delta is cutting international flights this year in Atlanta and across its
system, discontinuing its routes from Atlanta to Shanghai; Athens, Greece;
Copenhagen, Denmark; Moscow; Prague; and Tel Aviv, Israel.
In the first two months of the year, the number of international travelers at
Hartsfield-Jackson fell 1.5 percent from a year earlier, including a 5.7
percent drop in international passengers carried by Delta. Delta plans to
operate about 85 international departures a day from Atlanta this summer,
down from about 90 last summer.
To be sure, Hartsfield-Jackson remains the world’s busiest airport and has
recovered after a decline in 2009 to post last year’s record volume. And
building new facilities despite slowdowns in growth is not without
precedent. Work on Hartsfield-Jackson’s Concourse E, for instance, began
when an entire domestic concourse was empty because of Eastern Airlines’
1991 collapse.
Holden Shannon, Delta’s senior vice president of corporate strategy and real
estate, called the new international terminal “a 30- to 40-year asset.”
“This is the right investment,” Shannon said. “It’s very important that we
continue to invest properly in the future.”
Miller acknowledged that by this time, “We’d have thought we’d be
recovered.” He said any long-term major facility project involves risk.
“There’s no guarantees out there,” he said.
Colorado-based aviation consultant Mike Boyd said it’s not unusual for
airline passenger forecasts to change significantly over time.
“The reality is, if we don’t build these things, you’re going to find
yourself way behind the curve,” Boyd said. Atlanta is “still going to grow
… Delta is going to turn Atlanta into what we call a global portal, where
there will be enormous amounts of traffic flows going all over Latin America
and all over Asia.”
Boyd added: “I will bet you this: Five years, we’re going to look back, and
say, ‘How come you didn’t build more?’”
New York-based airline consultant Bill Fife said that with airline shifts,
changes in market forces and fuel price volatility, forecasts have many ups
and downs.
“You know that you’re going to need facilities for 115 or 120 million
[passengers] at some point in time, but it’s now become very difficult to
say that year is going to be 2017 or 2012,” he said.
April 7th, 2012 11:33 am
@ David— Do you recall where a lot of the items he had came from? How about George the first.
April 7th, 2012 11:31 am
I remember gas prices being over $4.00 when George Bush was in office. I love how everybody blames Obama for everything under the sun. I believe he is doing the very best that can be done with the GOP Congress that he has to fight with on every issue. People just have blinders on when it comes to Obama..they see believe whatever Fox news tells them instead of actual facts.
April 7th, 2012 10:40 am
REGARDING:
“Hmm, 1991 we invaded Iraq to save the other Arab states from Saddam Hussein this under King George Bush I.”
Silly me. I thought we drove the invader out of Kuwait then got while the getting was good. Records recovered at that time indicated he was preparing to invade the other Arabian countries (which may not have been all that bad an idea, but definitely makes him the aggressor) and that he had been within a year of producing a nuclear bomb. He stayed in power by using chemical weapons against the Kurds and anyone else who opposed him and had favored a strong biological warfare research and production effort.
Of course, he was probably harmless and should have been allowed to continue to the natural results of his efforts. With any luck we wouldn’t have been killed by anything he released.
David considering rewritten history
and hopes for luck
April 7th, 2012 10:31 am
While I’m not a big fan of Obama I hope some of the “obama haters” will think about the fact that China and India are moving into the car age. The little putt-putt motor bikes and the regular bikes are becoming a thing of the past and these two countries plus others are putting a heavy demand for gas. It’s easy to blame the Obama administration for all of the problems in this county– but look back at what happen during the administration of “George the other”. Huge tax breaks for the higher income people, lack of control on the banks causing the housing problems and so on. If the banks, auto builders and others had not been bailed out where would we be now. The loans are being paid back with interest (a large number have already been paid back) and slowly the economy is getting better. Have we had a full recovery—-NO. But we avoided a depression that would have been worse than what we have.
April 7th, 2012 10:29 am
The main reason for building the Keystone XL is not to decrease the gasoline prices in the US, but to get the Canadian oil to refineries near the Gulf Coast so the gasoline can be put on the open market and sold and shipped to China and Japan. The Republican controlled Congress has repeatedly refused to drop the $40 Billion dollars the oil companies get in subsidies and the multi-billion dollar tax breaks given to the oil companies. Every Republican Congressman has signed the pledge to Grover Norquist to not raise taxes on any corporation. When we elect our political representatives, they choose to pledge to a group, and a man most have never heard of before they take the oath of office pledging to uphold the Constitution. The consumer has been getting gouged at the pump since the 1970’s and we, as Americans, don’t seem to get it. We choose not to develop and buy more efficient vehicles, develop efficient public transportation, or use alternative fuels. Every president has had to deal with this for more than 40 years.
I wonder what the outcry would be if the government took over the gasoline supply and nationalized the oil reserves, forbade any export of gasoline, and set a maximum price for petroeum products. I think the oil companies would object rather strenously to this, and most Americans would see this as a strong infringement on the rights of c.orporations. After all, “Corporations are People.”
The strategic Oil Reserve hould not be tapped. It is there for STRATEGIC purposes. Tapping this, and at the same time,having much of our gasoline production presold on the open market, puts us in a much more vulnerable position if something happens in the Strait of Hormuz, or even a shutdown in refineries in this country.
April 7th, 2012 8:53 am
Hows those European gas prices workin for ya Mr.Obama?
April 7th, 2012 8:22 am
Gasoline is still under priced. It needs at least another 75 cents per gallon to make wall street and obama happy. As for me, makes my royalty check bigger. So raise it up, up, and away!
April 7th, 2012 8:06 am
“I hope everyone that voted for Obama is enjoying the change! Vote for him again and none of us will be able to afford anything. And did he benefit you????”
Hmm, 1991 we invaded Iraq to save the other Arab states from Saddam Hussein this under King George Bush I.
2003 we invade Iraq again to liberate the Iraqi people from Saddam Hussein this under King George Bush II. Halliburton Corp, whose former CEO happens to be vice-president Cheney, makes billions off the war. In the meantime over 4000 US soldiers lose their lives. In the meantime the initiative in Afghanistan is lost.
For people whose “bacon’ we saved, I don’t see the Arab states giving us a break at the pump. Of course the oil companies are making windfall profits and still getting subsidies in the form of tax breaks from the US government.
No matter if a Democratic or Republican administration, the deck is stacked against the middle and working classes. Both parties do what is in the best interest of the people with the money to throw around.
It is the middle and working class in this country that has made and still makes this country great!
OI don’t forget, this country is a gasoline exporter now!!!
April 7th, 2012 7:41 am
Presumably, no one would call President George W. Bush unfriendly to the oil industry. Yet the price of gasoline rose steadily during most of his administration. In February 2001, just after Mr. Bush took office, the average price of regular gasoline was $1.45 a gallon. By June 2008, that price had risen to $4.05. Still think presidents and oil-friendly policies can determine oil prices? Sure, let them drill more and make huge profits. Bet you still will have high gas prices if their profit sheets aren’t good enough for them.
April 7th, 2012 7:10 am
I hope everyone that voted for Obama is enjoying the change! Vote for him again and none of us will be able to afford anything. And did he benefit you????
April 7th, 2012 7:07 am
So people will stop driving as much, use alternate transpertation, car pool. If it hurts the ecoonomy maybe Obama will be out of office…
April 7th, 2012 5:50 am
Gas is $3.59 a gallon in Cantonment and Molino.
April 7th, 2012 5:39 am
save your money and do something fun at home. turn off the tv…turn off the video games. start a hobby. play games. dig out the muscial instruments, start a band. have folks over. life doesnt begin and end with going places in the dad gum car for fun. not anymore.