jimntx
Veteran
I copied this article from a Yahoo bb. I was surprised to see that it was not yet posted here. Enjoy!
American may expand at D/FW
By Trebor Banstetter;Bryon Okada
Star-Telegram Staff Writers
FORT WORTH - After several years of cutbacks, American Airlines has
reached a tentative deal with Dallas/Fort Worth Airport that would
guarantee the airline's growth in North Texas over the next several
years in return for millions of dollars in incentives.
The world's largest airline and one of the world's busiest airports
inked the proposal last month, and airport officials disclosed details
of the deal Wednesday. It calls for American to take over 19 of the 28
gates in Terminal D, which is scheduled to open in summer 2005. The
airline also promises to increase its D/FW departures by 21 percent by
2007.
The deal must be finalized by the boards of the airport and the
airline, which could take several months. But the proposal
demonstrates that American plans to continue its dominance of D/FW
amid its aggressive drive to cut costs and return to profitability. It
shows the airline returning to a sustained growth mode after cutting
back on flights and employees at the airport because of the 9-11
terrorist attacks.
"We think this is good for the airport, and it's good for us,"
American spokesman Tim Wagner said. "It's the result of a lot of long,
hard work between both of us to find a way to make it work."
For the airport, the deal guarantees that it will have a major tenant
in the new $1 billion facility, which was envisioned as an
international terminal long before 9-11 and the economic slowdown
devastated the airline industry.
"We've been looking at creative ways to get American into the
[terminal] while looking for opportunities for D/FW to continue to
grow and expand in the post-9-11 environment," said Kevin Cox, the
airport's chief operating officer. "That's what brought us to this [
agreement] today."
For North Texas consumers, the deal would most likely lead to more
American flights to current destinations and service to new cities.
"We'd probably see more frequency and new routes, some combination of
both," Wagner said. But he stressed that growth plans are in the early
stages.
Plans call for Terminal D to include a mix of international and
domestic flights. It will feature a centralized customs facility to
process international passengers.
As an incentive, D/FW will use part of its rainy-day fund each year to
offset American's share of the costs for expensive projects like
Terminal D and the SkyLink people mover.
Airlines typically pay for airport expansions through fees and leases.
But American, like other major carriers, has been looking for ways to
reduce those costs as it struggles to return to profitability.
American lost $1.2 billion in 2003 and has lost $6.5 billion since 2000.
In the first year alone, D/FW would put up about $30 million to reduce
the airline's costs if passenger predictions are met, Cox said.
The value of the deal would vary in future years, based on American's
passenger levels and traffic, airport officials said.
They said the incentives won't deplete the fund, which is typically
used for future projects. The airport's $77 million rainy-day surplus,
which comes from passenger boarding fees, would increase to nearly
$100 million by 2009, when the deal would expire, airport officials said.
"The economic incentives are so strong for them to live up to this
agreement that it almost ensures compliance," said Max Wells, chairman
of the airport board.
American's growth won't be restricted to the new terminal, Wagner
said. "This will be happening throughout the airport," he said.
The growth projections include flights that American had already
shifted to D/FW when it reduced operations last year at its St. Louis
hub. The flights transferred from St. Louis account for about 8
percent of the 21 percent growth plan, airport officials said.
Wagner said the growth plan won't necessarily put pressure on
American's operating costs, which the carrier has labored mightily to
reduce during the past year.
"We've proven we can be more productive and we can have efficient
growth," he said. "All of our growth going forward is going to be
cost-effective growth."
Wagner said it's too early to know whether the growth would lead to
more jobs at D/FW. American has cut thousands of positions in North
Texas the past three years.
Under the deal, American would also grant the airport flexibility in
managing its gates in the new terminal. If American stops operating a
gate, the airport could allow another carrier to use it.
That's different from most current leases, under which the airline
controls a gate regardless of whether it's used. Such contracts have
hurt some airports since 2001, when major carriers cut flights and
stopped using many gates.
D/FW has been considering changing its gate-lease policy since before
the terrorist attacks, said Tracy Thompson, the airport's vice
president of planning and real estate.
Cox said, "We have the ability to plug and play if we need to."
Benefits of the proposed deal
For consumers: It will probably mean more American Airlines flights to
current destinations and service to new cities.
For the airport: It guarantees a major tenant in the new $1 billion
Terminal D.
For American Airlines: It may reduce the airline's costs by $30
million in the agreement's first year if passenger projections are met.
American may expand at D/FW
By Trebor Banstetter;Bryon Okada
Star-Telegram Staff Writers
FORT WORTH - After several years of cutbacks, American Airlines has
reached a tentative deal with Dallas/Fort Worth Airport that would
guarantee the airline's growth in North Texas over the next several
years in return for millions of dollars in incentives.
The world's largest airline and one of the world's busiest airports
inked the proposal last month, and airport officials disclosed details
of the deal Wednesday. It calls for American to take over 19 of the 28
gates in Terminal D, which is scheduled to open in summer 2005. The
airline also promises to increase its D/FW departures by 21 percent by
2007.
The deal must be finalized by the boards of the airport and the
airline, which could take several months. But the proposal
demonstrates that American plans to continue its dominance of D/FW
amid its aggressive drive to cut costs and return to profitability. It
shows the airline returning to a sustained growth mode after cutting
back on flights and employees at the airport because of the 9-11
terrorist attacks.
"We think this is good for the airport, and it's good for us,"
American spokesman Tim Wagner said. "It's the result of a lot of long,
hard work between both of us to find a way to make it work."
For the airport, the deal guarantees that it will have a major tenant
in the new $1 billion facility, which was envisioned as an
international terminal long before 9-11 and the economic slowdown
devastated the airline industry.
"We've been looking at creative ways to get American into the
[terminal] while looking for opportunities for D/FW to continue to
grow and expand in the post-9-11 environment," said Kevin Cox, the
airport's chief operating officer. "That's what brought us to this [
agreement] today."
For North Texas consumers, the deal would most likely lead to more
American flights to current destinations and service to new cities.
"We'd probably see more frequency and new routes, some combination of
both," Wagner said. But he stressed that growth plans are in the early
stages.
Plans call for Terminal D to include a mix of international and
domestic flights. It will feature a centralized customs facility to
process international passengers.
As an incentive, D/FW will use part of its rainy-day fund each year to
offset American's share of the costs for expensive projects like
Terminal D and the SkyLink people mover.
Airlines typically pay for airport expansions through fees and leases.
But American, like other major carriers, has been looking for ways to
reduce those costs as it struggles to return to profitability.
American lost $1.2 billion in 2003 and has lost $6.5 billion since 2000.
In the first year alone, D/FW would put up about $30 million to reduce
the airline's costs if passenger predictions are met, Cox said.
The value of the deal would vary in future years, based on American's
passenger levels and traffic, airport officials said.
They said the incentives won't deplete the fund, which is typically
used for future projects. The airport's $77 million rainy-day surplus,
which comes from passenger boarding fees, would increase to nearly
$100 million by 2009, when the deal would expire, airport officials said.
"The economic incentives are so strong for them to live up to this
agreement that it almost ensures compliance," said Max Wells, chairman
of the airport board.
American's growth won't be restricted to the new terminal, Wagner
said. "This will be happening throughout the airport," he said.
The growth projections include flights that American had already
shifted to D/FW when it reduced operations last year at its St. Louis
hub. The flights transferred from St. Louis account for about 8
percent of the 21 percent growth plan, airport officials said.
Wagner said the growth plan won't necessarily put pressure on
American's operating costs, which the carrier has labored mightily to
reduce during the past year.
"We've proven we can be more productive and we can have efficient
growth," he said. "All of our growth going forward is going to be
cost-effective growth."
Wagner said it's too early to know whether the growth would lead to
more jobs at D/FW. American has cut thousands of positions in North
Texas the past three years.
Under the deal, American would also grant the airport flexibility in
managing its gates in the new terminal. If American stops operating a
gate, the airport could allow another carrier to use it.
That's different from most current leases, under which the airline
controls a gate regardless of whether it's used. Such contracts have
hurt some airports since 2001, when major carriers cut flights and
stopped using many gates.
D/FW has been considering changing its gate-lease policy since before
the terrorist attacks, said Tracy Thompson, the airport's vice
president of planning and real estate.
Cox said, "We have the ability to plug and play if we need to."
Benefits of the proposed deal
For consumers: It will probably mean more American Airlines flights to
current destinations and service to new cities.
For the airport: It guarantees a major tenant in the new $1 billion
Terminal D.
For American Airlines: It may reduce the airline's costs by $30
million in the agreement's first year if passenger projections are met.
