St. Louis Public Radio News
Fri October 23, 2009
What's next for Lambert Airport?
By Rachel Lippmann
St. Louis – Mark Mallen has been a travel agent in St. Louis for 35 years. And his job was much easier back in 1974, when dozens of airlines like Ozark, Braniff, Eastern and TWA operated flights out of Lambert Airport.
"You could fly non-stop to places like Acapulco and Mexico City, and then as the years went on TWA added flights non-stop to London, to Frankfurt, to Paris, to Honolulu, to Maui," Mallen said.
Those days are a distant memory. Lambert served nearly 29 million passengers in 1998, when the third parallel runway was approved. In 2006, when it finally opened, traffic was down by nearly 50 percent.
"If you'd had a crystal ball, you might have been able to look forward," said Ray Mundy, the director of the Center for Transportation Studies at the University of Missouri St. Louis. The new runway, he said, was built based on federal data that showed year-over-year increases in the number of passengers with no signs of stopping.
"Once we started to build it, we had to complete it," he said. "We were halfway across the stream as it goes with probably 75 percent or so of the money spent. It was cheaper to complete it and now find the most appropriate uses for it."
That's a point Lambert officials emphasize. The runway's construction required the sale of nearly $1.1 billion in bonds. Lambert is paying those off with revenue from landing fees and the "passenger facility charges" included in the price of a ticket.
But according to Lambert chief financial officer Susan Kopinski, the money could not be used for debt until the new runway was in use. Halting construction would have left Lambert no way to pay back what was already spent.
Fewer flights mean less revenue from the fees, Kopinski acknowledged. The airport's debt service budget is required to cover 125 percent of the total debt the airport owes.
"You either take it in, or you reduce your costs," she said. "We have a hiring freeze right now, no overtime unless it's for emergencies, I now have to improve any expenditure over $1000."
Kopinski and other officials are focusing on replacing some of the passenger traffic that will be lost when American cuts 46 additional flights next April. As a marketing tool, they will waive some of the fees if an airline starts a new route and maintains it for two years.
In the short term, that reduces the amount of money available to pay down debt. But the longer term is more critical, said Kevin Schorr, the vice president of air services development at Intervistas Consulting Group.
"If you look at what you're going to get from the landed weight, the terminal rent, the concessions revenue, the parking revenue and all those kind of things, it really far outweighs whatever they're going to waive in the short term," he said." And they need to be competitive with what other airports are doing."
The passenger airlines don't find the third parallel runway all that important, Schorr said, but it will play a larger role in efforts to place a hub for Chinese cargo at Lambert. That, in turn, could attract additional passenger flights, said Mike Jones, a senior policy advisor to St. Louis County Executive Charlie Dooley and the chair of the Midwest-China Hub Commission.
"You have all the other logistical activity, and when that happens, you got to have people to come here to do business, etc. So a lot of flights would happen just as a result," he said.
Everyone agrees that Lambert will never see the level of passenger traffic it did as a hub for TWA and then American. But the number of passengers that start and end their trip in St. Louis is down only ten percent. And carriers are starting to pick up American's slack. On Wednesday, Southwest announced new flights to several cities where American is cutting.