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Lambert director hopes investments make airport ready for takeoff

This article first appeared in the St. Louis Beacon: September 15, 2008 - Just eight years ago, more than 15.3 million passengers boarded flights at Lambert St. Louis International Airport, nudged by a booming U.S. economy and a pre-terrorist attack enthusiasm for flying that filled gates to near capacity, crowded bars and gift shops and kept everyone from ticket agents to shoeshine men scrambling to keep up with the business.

Today, the falloff has been dramatic and precipitous. 

The airport's own statistics show boardings last year stood at about 7.7 million, a nice bump from three years earlier, but just half of its 2000 peak. Taking another hit with American Airline's decision to drop St. Louis as one of its major hubs, Lambert has sunk from the nation's 15th busiest airport to 33rd. No airport in the country has fallen so quickly so fast.

"People can continue to beat up the airport because the traffic went down by a half," said Richard Hrabko, who became Lambert's director last year. "OK, it did. That's too bad. We wish it hadn't, but it did. It is what it is.

"And now we start new."

Under Hrabko, the airport is embarking on a series of ambitious projects, including a major facelift that will transform much of the public face of the 52-year-old main terminal. Even more significant in the long run, perhaps, is an effort to induce China to make Lambert a cargo hub for some 20 states in the middle of the country -- an effort that St. Louis Regional Commerce and Growth Association President and Chief Executive Officer Richard Fleming this week called potentially "transformational" for the area's economy.

Hrabko's face lights up as he considers the possibility of an agreement with the Chinese on a Lambert Midwestern hub.

"Just imagine a trail of 747s coming in and out of here, hauling freight from China," he said. "We have the capacity to do it. No question. And we think we have much better capacity than any place else in the U.S., including Chicago, which is really the main competition."

Originally the site of a balloon launch field, Lambert can trace its modern history to the construction of its main terminal in 1956. Hrabko calls the terminal a "vintage building that was built largely as a regional airport for Ozark Airlines."

Later, he said, the airport "exploded into this major hub" for Trans World Airlines, creating the necessity to "add on and refine and change" quickly.

"It is an interesting building, both historically and architecturally (the domed design was copied by both John F. Kennedy Airport in New York and the Charles De Gaulle Airport in Paris) and we want to maintain that as much as we can, but we want to make it more efficient and friendlier to passengers."

Initially, the airport announced a grand $105 million makeover of the terminal and airport concourses. Recently, officials decided it best to move "in pieces" on the project, working first on a $16.9 million plan to improve the 36-foot dome ceilings on the ticketing floor, upgrade restaurants and bars in the area, improve signs and install a new in-bound baggage handling system.

The airport's total operating revenue for 2007 was $125.7 million.  The money comes from concessions, parking fees, passenger facility charges, money paid by air carriers and income from cargo operations.  Most of the money for the makeover is coming from passenger facility charges, or fees paid by passengers.

Beyond the upgrades, he said, is a push to incorporate a "whole attitude change" with an "airport-wide approach to customer service."

Hrabko said the airport itself can do very little to attract new passengers.

"All we can do is provide a safe, efficient environment for the carriers to operate in."

Already, the airport has begun customer service training for airport workers and made some small changes to help travelers feel more comfortable. The airport recently purchased about six dozen rocking chairs for the building and has begun live music programs in the ticketing area.

Even with the worsening economy and Sept. 11 terrorist attacks in 2001, nothing hit the airport harder than American's abandonment of Lambert as a major hub in 2003.

Between 2003 and 2004, passenger boardings dropped nearly 3.5 million, from 10.2 million to 6.7 million.

"It was very difficult," Hrabko said of the American pullback. "The airport had to pull back its horns in a hurry." He said more than 100 airport positions were eliminated, from about 700 to about 600.

"The problem with that," he said, "is that you can cut back to a certain point, but you still have the same amount of infrastructure to maintain. The safety things, the crash and rescue requirements, the security ... all of those things go on, whether you have 15 million enplanements a year or 6 million enplanements."

Even with the sharp cuts in passenger boardings from 2000 to 2007, financial records show the airport has actually seen a jump in the costs of contractual services (which includes everything from housekeeping to security to snow removal) from $14.7 million to $39.5 million. The increase in security since 9/11 is a factor; the rule about checking all liquids added $1 million to the security budget alone.

Hrabko said it is probably unfair for people to compare Lambert's enplanement (passenger boarding) figures in 2000 with 2007. A large portion of that 2000 number was artificially inflated, he said, by travelers who were simply changing planes in St. Louis en route to another destination.

He noted that between 2004 and 2007 (the four years after the American cuts), boardings climbed from 6.7 million to 7.7 million. Service cuts resulting from increasing fuel prices almost surely will mean a reduction in the 7.7 million figure for 2008.

Fleming points to intense work being done in both St. Louis and China to try to determine the feasibility of the project.

Fleming believes St. Louis and Lambert are ideally positioned to help relieve massive congestion at U.S. ocean ports, and cargo flights into Lambert may be more economically advantageous than shipping cross country by truck due to increasing fuel prices.

While Chicago remains strongly in the running for a Chinese cargo hub, Fleming says that St. Louis has an advantage from the standpoint of weather, geography and less competition from passenger flights.

Less than two weeks ago, Fleming said, China said that investors were ready to commit money to detailed studies to determine just how such a hub would work and what materials would be available for "backflow," shipments from St. Louis back to China.

Fleming called it "far from a done deal" but said the project "continues to generate very strong enthusiasm from both sides."

He said Lambert also has "several thousand acres" on which to build distribution facilities and other supporting infrastructure for a cargo hub.

"If this deal comes together the way we would like, it would change everything, not just for the St. Louis area but for the broader Midwest."

If the plan is approved, Fleming says Lambert could be ready to begin welcoming planes from China by 2009 or 2010. There is no set deadline for when the Chinese would make their decision. The feasibility study is expected to be completed in another month.

Fleming called the city-owned airport and the St. Louis region "inextricably connected."

"The airport is an economic engine for both the business community and for the community as a whole," he said.

"Obviously, the industry overall -- here, in the U. S. and around the world -- is going through a very challenging time. I'm hopeful and confident that when the aviation industry stabilizes, St. Louis will have the kind of capacity to serve enhanced air service in this region."

Like other airports, Fleming recognizes that Lambert has fallen on hard times in recent years, but he says that when compared with cities of similar size, St. Louis remains "quite well served by air service."

The RCGA's Susan Strauder, vice president for infrastructure and public policy, said the $1 billion W1W runway, considered a boondoggle by some in light of the drop in passengers, offers increased opportunities for the airport for expanded service.

She noted that before the American's flight cuts, St. Louis had non-stop service to about 97 markets. The current number, she said, is about 74.

"We still maintain very good non-stop service to the very large hubs in Chicago, Atlanta and Dallas, all top destinations for business travel, which also allow for one-stop travel to virtually everywhere."

Kitty Ratcliffe, president of the St. Louis Convention & Visitors Commission, said despite the cuts in service through St. Louis, the area remains well positioned to compete for convention business with other mid-sized cities like Indianapolis, Kansas City, Memphis, San Antonio, Milwaukee and Louisville.

"We may not be doing phenomenally well, but we are not doing as badly as some of the others," she said. "Things are manageable."

She said she is very pleased to see the reception of Hrabko and other airport officials for cleaning up and modernizing the airport. She also said she likes the idea of giving Lambert more of a St. Louis and Missouri flavor for visitors.

Ratcliffe said Hrabko championed the RCGA's plea to move its tourism and visitors center to the baggage claim area, making it more accessible to travelers.

Hrabko says St. Louis is not alone in feeling the pinch in its pocketbook because of a loss of passengers. "We took our large hit before everybody else," he said, "but the day ain't over yet.

"There's more to come, it appears. Who knows when that's going to happen? Cincinnati (a Delta hub) took a 25 percent reduction just in the past few months. They're down from 400 flights a day to 300."

The price of fuel and the state of the overall economy, he says, remain the biggest unknowns.

Already, travelers are seeing fewer flights, higher ticket prices and an "a la carte" menu that includes charges for bags and reduced food service.

"If oil goes up to $150 a barrel, then all bets are off" in terms of how difficult airline flight could become, Hrabko said. "It's all got to settle down and settle out at some point. There's no stability, not only in our industry, but in the country as a whole."

Hrabko said the new runway "obviously was something that we wouldn't build today.  But we have it, and it gives us a tremendous capability that we didn't have before.

"I see it as a glass half full. We are very poised for the future."

As for the possibility of another major carrier coming to Lambert in the future, Hrabko remains optimistic but realistic. "We are trying all the time. But everybody else is out there beating the bushes too."

Lambert also remains financially solid, despite its long-term obligations to pay off the runway project. "We are fine, financially," he said. "We have all our bonds covered; we have adequate reserves for emergencies.

"I'd rather be in better shape, but I think we are in very good shape."

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