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twaconnie
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Airport construction projects question

Mon Apr 06, 2020 12:12 pm

Hi everyone. Just wondering there are a lot of major airport construction projects going on LAX,LGA, JFK, ORD, SLC, etc have they come to a stop due to convid-19?.
 
davescj
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Re: Airport construction projects question

Mon Apr 06, 2020 12:15 pm

MEM is also having major construction work done. At least here, nothing has been reported about stopping the work. FWIW, the pax section of MEM will be much smaller than it once was. With the draw down of DL flights, I am sure the terminal will still be rather space generous for some time.
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FlyRow
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Re: Airport construction projects question

Mon Apr 06, 2020 12:38 pm

AMS building continues, with extra safety precausions such as staying 1.5m away from each other.
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blockski
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Re: Airport construction projects question

Mon Apr 06, 2020 1:08 pm

twaconnie wrote:
Hi everyone. Just wondering there are a lot of major airport construction projects going on LAX,LGA, JFK, ORD, SLC, etc have they come to a stop due to convid-19?.


There are two issues - one with health, and one with the economy.

For health, lots of places have declared construction to be an 'essential activity' that can continue. That said, there are likely to be lots of supply disruptions to deal with that will likely disrupt timing. The other thing is that you can't just stop a construction project mid-stream and then pick it up later - if you have a half-built building, you really need to finish it or risk the entire project.

The economic side of things (how these projects are financed) is totally different, and I don't think anyone has a good handle on that yet.
 
GSPSPOT
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Re: Airport construction projects question

Mon Apr 06, 2020 2:00 pm

I recently read a news article from January about the SLC expansion, that it was being grown from the original plans due to greater than expected growth experienced by the airlines (mainly DL) that serve it. Guess not so much any more...
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aemoreira1981
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Re: Airport construction projects question

Mon Apr 06, 2020 2:13 pm

Depends on of it's expansion or replacement. I expect LGA and EWR to continue (the latter until the new T1 building is finished).
 
Lofty
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Re: Airport construction projects question

Mon Apr 06, 2020 2:15 pm

Many may change their plans, for example during the building of LHR T5 the original plan was for T5B and T5C building to reach the ends and a Executive lounge in T5C. When 9/11 happened the plans were changed as they expected a large drop in passenger loads.
 
alasizon
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Re: Airport construction projects question

Mon Apr 06, 2020 3:50 pm

Since most construction projects already have funding set aside (be it grants, bonds or otherwise already obtained money) they will continue as best as practical. It isn't exactly easy to just start and stop large scale infrastructure projects and try to pick up the pieces at a later date. Plus, many projects were still a year or two off from completion and so there is no reason to abandon the project if it is already paid for.
Airport (noun) - A construction site which airplanes tend to frequent
 
superbizzy73
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Re: Airport construction projects question

Mon Apr 06, 2020 4:19 pm

This article was as of March 17th, but at that time the work on the new International Arrivals Facility at KSEA seems to have work continuing on it. Since then, the Washington State governor has issued a "stay home, stay safe" mandate. I know certain construction projects are affected, but I haven't been able to find any current information on the IAF project.

http://seattlebusinessmag.com/aerospace ... rus-crisis
 
ckfred
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Re: Airport construction projects question

Mon Apr 06, 2020 4:23 pm

I can't tell you specifically what is going on at ORD. But, construction is considered essential in Illinois, so construction projects big and small are continuing. I've seen roofing projects in my neighborhood. The addition and new football bleachers are going up at my son's high school. Downtown Chicago projects are continuing. So, I would assume that work is going on at ORD.
 
PSU.DTW.SCE
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Re: Airport construction projects question

Mon Apr 06, 2020 4:53 pm

GSPSPOT wrote:
I recently read a news article from January about the SLC expansion, that it was being grown from the original plans due to greater than expected growth experienced by the airlines (mainly DL) that serve it. Guess not so much any more...

They are already making contingency plans to delay phase 2. Phase 1 is still going to finish and target to open in September. Phase 2 maybe delayed due to demand/economy/financial position.
 
aaway
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Re: Airport construction projects question

Mon Apr 06, 2020 5:51 pm

LAX - The major components of the Midfield Satellite Concourse will be completed. Some of the punchlist items - depending on scope - may be postponed. LAWA / AA / DL hastily scheduled discussions regarding those projects. No clarity thus far, but (my speculation) is that the landside projects will continue, while airside projects are postponed. Work on the APM has slowed. Considering that is a city project, I suspect that is a combination of the city government health edicts and supply chain disruption.

Certainly interesting times with more to come.
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Kaphias
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Re: Airport construction projects question

Mon Apr 06, 2020 6:44 pm

superbizzy73 wrote:
This article was as of March 17th, but at that time the work on the new International Arrivals Facility at KSEA seems to have work continuing on it. Since then, the Washington State governor has issued a "stay home, stay safe" mandate. I know certain construction projects are affected, but I haven't been able to find any current information on the IAF project.

http://seattlebusinessmag.com/aerospace ... rus-crisis

The general rule here is that infrastructure and government-funded projects are able to continue, though social distancing must be observed. Jobsites are dealing with this by moving to a swing shift schedule, and/or by reducing the amount of workers in any given area, until appropriate distance can be maintained. We're also seeing issues with the supply chain for many building products, and PPE (masks in particular, obviously) are in short supply. I know many contractors have donated large portions of their mask supplies to local health organizations.
 
ddaly241
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Re: Airport construction projects question

Mon Apr 06, 2020 10:00 pm

Don't forget about EWR, they have a 1 million square ft terminal 1 for 33 gates and is expandable to 45 gates. Plus they have plans for a new air train, a new terminal 2 to replace terminal A, and probably might build a new terminal headhouse by the train station.
 
ddaly241
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Re: Airport construction projects question

Mon Apr 06, 2020 10:02 pm

ddaly241 wrote:
Don't forget about EWR, they have a 1 million square ft terminal 1 for 33 gates and is expandable to 45 gates. Plus they have plans for a new air train, a new terminal 2 to replace terminal A, and probably might build a new terminal headhouse by the train station.


Correction: new terminal 2 to replace terminal B
 
MastaHanky
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Re: Airport construction projects question

Mon Apr 06, 2020 10:22 pm

SLC says the first phase is expected to be completed with no changes. Since it’s only five months from opening, that makes sense.

I imagine everything else is “wait-and-see” for at least the next several months.
 
Scotron12
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Re: Airport construction projects question

Tue Apr 07, 2020 1:33 am

LHR...they should sneak in there, build the 3rd runway while most folk are on lockdown. :D
 
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DL717
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Re: Airport construction projects question

Tue Apr 07, 2020 1:34 am

Best time to build is during an economic downturn.
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MIflyer12
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Re: Airport construction projects question

Tue Apr 07, 2020 1:39 am

alasizon wrote:
Since most construction projects already have funding set aside (be it grants, bonds or otherwise already obtained money) they will continue as best as practical. It isn't exactly easy to just start and stop large scale infrastructure projects and try to pick up the pieces at a later date. Plus, many projects were still a year or two off from completion and so there is no reason to abandon the project if it is already paid for.


Airport bonds are guaranteed by airport revenues, which have cratered. Parking, restaurant/concessions fees -- just gone. Sure, carriers are still paying terminal rent. Fitch Rating Outlook has been revised to Negative from Stable on a whole bunch of big U.S. airport bonds.

DL717 wrote:
Best time to build is during an economic downturn.


Uh huh. With money from whom? You think Congress is going to bump up FAA grant spending with a $3 Trillion federal deficit this year?
 
7673mech
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Re: Airport construction projects question

Tue Apr 07, 2020 1:56 am

SEA construction continues considered essential.
The rest of construction except hospitals in Seattle has come to a stop.
 
twaconnie
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Re: Airport construction projects question

Tue Apr 07, 2020 11:00 am

Scotron12 wrote:
LHR...they should sneak in there, build the 3rd runway while most folk are on lockdown. :D

That's a good one, but people are so glued to there phones they still wouldn't notice anyway. :lol:
 
peterinlisbon
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Re: Airport construction projects question

Tue Apr 07, 2020 11:28 am

Here's a report on the progress made on building ONE new runway at London Heathrow. I don't think 3 months of Covid-19 is going to make much of a difference to the UK's incredible pace:

1990: The Runway Capacity study says expanding Heathrow would "afford the greatest benefits"
2003: Government paper on future of air transport recommends third runway at Heathrow
2007: Heathrow expansion plans published - include third runway and sixth terminal
2010: Conservative-Lib Dem coalition rules out new runways at London airports
2015: Airports Commission recommends third runway at Heathrow
2018: House of Commons votes in favour of runway plans
2019: Public consultation begins

So, 30 years have passed and not a single stone has been laid and no decision has been made. That must be some kind of record.
 
bob75013
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Re: Airport construction projects question

Tue Apr 07, 2020 5:02 pm

I would imagine that DFW will put the new terminal into "hold" status as not much as been done yet.
 
Murdoughnut
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Re: Airport construction projects question

Tue Apr 07, 2020 5:05 pm

Depends on how far along the projects were. Our airport has ceased most projects in the design phases. If ground had already been broken, it's more likely to be continued.

A lot of capital projects at U.S. airports were in response to rapid pax growth - if this situation has a silver lining, it's that it's giving airports a chance to catch up on some of the priority projects that they were otherwise behind on due to pax levels growing faster than initially forecast.
 
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DL717
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Re: Airport construction projects question

Thu Apr 23, 2020 2:58 pm

MIflyer12 wrote:
alasizon wrote:
Since most construction projects already have funding set aside (be it grants, bonds or otherwise already obtained money) they will continue as best as practical. It isn't exactly easy to just start and stop large scale infrastructure projects and try to pick up the pieces at a later date. Plus, many projects were still a year or two off from completion and so there is no reason to abandon the project if it is already paid for.


Airport bonds are guaranteed by airport revenues, which have cratered. Parking, restaurant/concessions fees -- just gone. Sure, carriers are still paying terminal rent. Fitch Rating Outlook has been revised to Negative from Stable on a whole bunch of big U.S. airport bonds.

DL717 wrote:
Best time to build is during an economic downturn.


Uh huh. With money from whom? You think Congress is going to bump up FAA grant spending with a $3 Trillion federal deficit this year?


Airports and airlines take a longer view on major projects. Major projects like terminals have a useful life upward of 50 years and the cost savings on a project during a recession can be as much as 15%, significantly reducing long term debt. Thinking projects should be shelved during a downturn is an absurd position that ignores the reality of long term benefits. Airports working on major capital projects like terminals will recover by the time a new project is completed and a downturn will reduce operational impacts that might otherwise slow down a project. This is due to the fact that a given airport is most likely figuring out ways to work around things like existing airport congestion that was driving a given project in the first place. These work arounds cost big money in a major project starting with paying millions to a consultant for figuring out how to deal with constructing around the congestion. A downturn like this allows the opportunity for things like gate closures, closing parts of an airfield or closing parts of congested roadways. These are key drivers of high costs because it takes longer to work around them during high volumes of traffic where such work would need to be completed at night with significantly higher labor costs. If things like concrete or asphalt are involved the cost can jump significantly due to the sequencing of materials delivery in small batches that increase material waste due to the way batching is done.

Grant money on projects is also very small, inconsequential and dedicated to specific project components, usually ongoing maintenance like runways, not terminal projects unless it’s a federally mandated component of a given project. The grant money comes from excise taxes on aviation operations, so the federal deficit is irrelevant given they can’t touch the AATF.
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MIflyer12
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Re: Airport construction projects question

Thu Apr 23, 2020 3:13 pm

DL717 wrote:
Grant money on projects is also very small, inconsequential and dedicated to specific project components, usually ongoing maintenance like runways, not terminal projects unless it’s a federally mandated component of a given project. The grant money comes from excise taxes on aviation operations, so the federal deficit is irrelevant given they can’t touch the AATF.


You write that as if revenue streams to U.S. airports are stable thru COVID-19. They aren't. Planes aren't landing. They aren't getting their cut of full parking nor concessions because passenger numbers are down 90+%. Generally airports organized as locally-owned not-for-profit organizations. They can sell bonds but bonds have to have supporting revenue streams. Unlike the Federal government they have limited ability to tax; they can't print money; unlike the Federal Reserve they can't conjure money. They're expected to be self-supporting, not getting big disbursements of city or county money (and cities and counties are going to be flat on their backs, anyway).
 
TYWoolman
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Re: Airport construction projects question

Thu Apr 23, 2020 4:42 pm

Investor call Delta CEO stated some projects to continue since projects can be managed more efficiently without the concern for mitigating passenger-flow upset.
 
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727tiger
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Re: Airport construction projects question

Thu Apr 23, 2020 4:48 pm

MCI new terminal/garage project continues apace
 
afcjets
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Re: Airport construction projects question

Thu Apr 23, 2020 5:18 pm

I am curious if CLT will continue to expand A North. AA will likely emerge smaller if they survive.
 
Vctony
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Re: Airport construction projects question

Thu Apr 23, 2020 5:29 pm

PHX construction on the S1 concourse and the bridge connecting S2 to N2 seems to be continuing. In addition demolition of the now shuttered Terminal 2 has started.
 
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lightsaber
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Re: Airport construction projects question

Thu Apr 23, 2020 6:10 pm

Scotron12 wrote:
LHR...they should sneak in there, build the 3rd runway while most folk are on lockdown. :D

OMG, if you will" Well the plans were available in the local planning office, please stop lying in front of the bulldozer."
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lhrnue
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Re: Airport construction projects question

Thu Apr 23, 2020 6:29 pm

My observations from working in terminal construction and systems:
Government owned airports leaning towards to continue projects, whereas privately owned airport stop projects.
Where projects benefit from reduce traffic e.g. longer night working windows projects have been asked to accelerate. It is well reported that some major airports shut down complete terminals.
Many projects focused on increasing airport capacity are on hold … in particular those where site work hasn't commenced.
I know airports where whole development departments got shut down and some where only the external consultancy contracts were terminated.
 
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DL717
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Re: Airport construction projects question

Fri Apr 24, 2020 4:12 am

MIflyer12 wrote:
DL717 wrote:
Grant money on projects is also very small, inconsequential and dedicated to specific project components, usually ongoing maintenance like runways, not terminal projects unless it’s a federally mandated component of a given project. The grant money comes from excise taxes on aviation operations, so the federal deficit is irrelevant given they can’t touch the AATF.


You write that as if revenue streams to U.S. airports are stable thru COVID-19. They aren't. Planes aren't landing. They aren't getting their cut of full parking nor concessions because passenger numbers are down 90+%. Generally airports organized as locally-owned not-for-profit organizations. They can sell bonds but bonds have to have supporting revenue streams. Unlike the Federal government they have limited ability to tax; they can't print money; unlike the Federal Reserve they can't conjure money. They're expected to be self-supporting, not getting big disbursements of city or county money (and cities and counties are going to be flat on their backs, anyway).


Again, you’re taking a short term view of things. There is plenty of money to be had for the projects. Airports issue bonds, tenants pay the debt service. Saving them half a billion or so on a project makes complete sense as that debt service is significantly reduced over the long term. This is most certainly the best time to build.
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Vctony
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Re: Airport construction projects question

Fri Apr 24, 2020 4:35 am

lhrnue wrote:
My observations from working in terminal construction and systems:
Government owned airports leaning towards to continue projects, whereas privately owned airport stop projects.
Where projects benefit from reduce traffic e.g. longer night working windows projects have been asked to accelerate. It is well reported that some major airports shut down complete terminals.
Many projects focused on increasing airport capacity are on hold … in particular those where site work hasn't commenced.
I know airports where whole development departments got shut down and some where only the external consultancy contracts were terminated.


In the United States most commercial airports are either directly owned, leased, or operated by a government entity (a city, county, state, or the federal government), a regional consortium (made up of multiple cities and/or counties and/or states), or a non profit entity. My understanding is that this allows airports access to some funding from the FAA that otherwise wouldn't be authorized if they were for profit entities (but others here probably know more about it than I do). If the financing for the construction has already been secured, the airports believe the most cost effective solution is to finish the projects.
 
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exFWAOONW
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Re: Airport construction projects question

Sat Apr 25, 2020 4:09 pm

Only in very rare circumstances is it cheaper to wait and build it later. Most, if not all, will continue.
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usflyer msp
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Re: Airport construction projects question

Sat Apr 25, 2020 5:12 pm

US Airports -- If the bonds have already been issued, the big projects will continue as scheduled. If the bonds have not been issued yet or it is an internally funded project, there will probably be at least a one-year delay.
 
eidvm
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Re: Airport construction projects question

Sat Apr 25, 2020 5:29 pm

Construction on DUB's newest runway was temperarily suspended when initial lockdown was implemented but has since resumed as a critical infastructure project, and has been accelerated as works on the area overlapping the crosswind runway have been brought forward by 2 months due to the drop off in traffic and are now also taking place during daylight hours as well which should speed up the project but also allow for social distancing to be maintained over the final few months of the project.

The new ATC tower is effectively finished as well and now being tested so as to have a second site available to takeover from the current tower in case the current tower needs to be evacuated and deep cleaned.
 
atlflyer
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Re: Airport construction projects question

Sat Apr 25, 2020 5:39 pm

In NYC, LGA and EWR construction will continue. JFK redevelopment on hold until the Port Authority determines how much additional federal funding they will receive, although almost all of the JFK redevelopment is funded with private money. Terminal One Group said they want to continue with development of their new terminal. I haven’t been able to find any updated information on JetBlue’s new T6.
 
airbazar
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Re: Airport construction projects question

Sat Apr 25, 2020 5:57 pm

At BOS all airport construction is proceeding as planned because it's infrastructure and that is considered essential. Same as highway projects, bridge projects, etc.
 
FWAERJ
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Re: Airport construction projects question

Sat Apr 25, 2020 6:20 pm

FWA is moving forward with a terminal ramp rebuild as I speak, and it will be finished ahead of schedule due to fewer planes at the gates.

A move of the museum to the ticketing area will start soon so concession vendors can switch and a new food court will be in its place. MSE will manage the new food court, and it will feature local and national brands. Local brands will include Conjure Coffee as FWA’s new coffee of choice, and Chapman’s Brewing having a bar on the second level. Not sure what the national brands will be, but Chick-fil-A (very popular in Fort Wayne) is rumored to be one.

These two projects will enable Project Gateway to start. Project Gateway will add a new baggage system, boost FWA from 6 to 9 usable gates (5 of which will be mainline capable for A320/737-sized jets, the other 4 will be able to handle up to an A220), expand the TSA checkpoint from 2 to 4 lanes (ideal for when people go to Florida en masse on G4 flights again), and lay the groundwork for future growth such as an international capable gate and FIS. Project Gateway should be done in early 2022.
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MohawkWeekend
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Re: Airport construction projects question

Sat Apr 25, 2020 6:30 pm

On advantage to halting projects is to be able to use some of the proceeds of the bond sale to make payments to the bond holders.If you spend all the money and traffic levels do not come back immediately you will probably default on the bond. My guess is the various airports are hoping for either a rapid return to normalcy or that the Federal govt bails them out. Right now, Pelosi has said no new bailout unless several hundred billion $ are sent to States and local governments. The other side wants to allow States to file bankruptcy. But those dollars are to keep paying for existing workers (many State and local governments are already laying off workers. It's kinda of a game of chicken. This may not end well.
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    ACCS300
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    Re: Airport construction projects question

    Sat Apr 25, 2020 6:49 pm

    All construction projects have been suspended at YVR, most notably Pier D's eight gate expansion set to open in June, new six-storey parkade and new central utilities building.

    https://www.yvr.ca/en/passengers/construction
     
    teachpdx
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    Re: Airport construction projects question

    Sat Apr 25, 2020 9:00 pm

    Heard from a reliable source that the PDX main terminal replacement schedule is actually moving up by up to a year... they are taking advantage of the empty airport to do a lot of the prep work that would normally take longer if fully occupied.
    Up Next: THIS YEAR IS CANCELLED!!!
     
    WidebodyPTV
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    Re: Airport construction projects question

    Sun Apr 26, 2020 9:10 pm

    DL717 wrote:
    MIflyer12 wrote:
    DL717 wrote:
    Grant money on projects is also very small, inconsequential and dedicated to specific project components, usually ongoing maintenance like runways, not terminal projects unless it’s a federally mandated component of a given project. The grant money comes from excise taxes on aviation operations, so the federal deficit is irrelevant given they can’t touch the AATF.


    You write that as if revenue streams to U.S. airports are stable thru COVID-19. They aren't. Planes aren't landing. They aren't getting their cut of full parking nor concessions because passenger numbers are down 90+%. Generally airports organized as locally-owned not-for-profit organizations. They can sell bonds but bonds have to have supporting revenue streams. Unlike the Federal government they have limited ability to tax; they can't print money; unlike the Federal Reserve they can't conjure money. They're expected to be self-supporting, not getting big disbursements of city or county money (and cities and counties are going to be flat on their backs, anyway).


    Again, you’re taking a short term view of things. There is plenty of money to be had for the projects. Airports issue bonds, tenants pay the debt service. Saving them half a billion or so on a project makes complete sense as that debt service is significantly reduced over the long term. This is most certainly the best time to build.


    His view is based on fact. While it's true that most construction projects that benefit the public (e.g. reconstruction of freeways, bridges, etc.) are accelerated during recessionary time periods, airport construction projects are generally halted. Investors shy away from these bonds in the short-term, viewing them as risky investments (news links below). Projects at places like LAX, ORD, LGA, etc. -- even funded pieces -- are largely coming to a halt, sans pieces considered essential. Look at SLC -- Phase I will be completed, although its fall opening may be slightly delayed. At SLC, in exchange for favorable leases, DL agreed to cover the airport's shortfalls. As it was, SLC was unlikely to meet its passenger projects (it assumed a 20%-25% immediate increase in enplanements once Phase I opened, fueled by DL increasing transfer traffic), and it's going to be hit hard in the near future. Not only will industry traffic be down significantly this year and next, but long, thin routes that overfly hubs -- and there's a lot of that service in recent years at SLC -- will be the last to recover. So as it is, DL is going to be cutting a large check to the airport. Do you really think DL is going to support the $1B funding for Phase II, even if it was practical?

    bond weakness now:
    https://www.wsj.com/articles/some-muni- ... 1583701450

    bond weakness last recession:
    https://www.reuters.com/article/us-airp ... EM20111130
     
    FSDan
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    Re: Airport construction projects question

    Sun Apr 26, 2020 9:47 pm

    Had AA started work on their LAX T4-T5 project yet, or was it still in the planning phase?

    I'd assume T1.5 and DL's T2-T3 project, plus the MSC (although maybe not the 5-gate MSC domestic expansion) will continue on track since they were all already started.
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    WidebodyPTV
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    Re: Airport construction projects question

    Sun Apr 26, 2020 11:28 pm

    FSDan wrote:
    Had AA started work on their LAX T4-T5 project yet, or was it still in the planning phase?

    I'd assume T1.5 and DL's T2-T3 project, plus the MSC (although maybe not the 5-gate MSC domestic expansion) will continue on track since they were all already started.


    It's my understanding that both AA & DL are working on deferrals, and it's probable large portions of both projects will be delayed indefinitely. Doesn't really matter if they were started or not.
     
    atlflyer
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    Re: Airport construction projects question

    Sun Apr 26, 2020 11:35 pm

    Let’s hope the “temporary” Phase II/MSC South At LAX is canned and they eventually just continue with building out as originally planned when demand returns. LAX isn’t going to be bursting at the seams like it was when they decided on that temporary structure.
     
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    DL717
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    Re: Airport construction projects question

    Mon Apr 27, 2020 12:21 am

    WidebodyPTV wrote:
    DL717 wrote:
    MIflyer12 wrote:

    You write that as if revenue streams to U.S. airports are stable thru COVID-19. They aren't. Planes aren't landing. They aren't getting their cut of full parking nor concessions because passenger numbers are down 90+%. Generally airports organized as locally-owned not-for-profit organizations. They can sell bonds but bonds have to have supporting revenue streams. Unlike the Federal government they have limited ability to tax; they can't print money; unlike the Federal Reserve they can't conjure money. They're expected to be self-supporting, not getting big disbursements of city or county money (and cities and counties are going to be flat on their backs, anyway).


    Again, you’re taking a short term view of things. There is plenty of money to be had for the projects. Airports issue bonds, tenants pay the debt service. Saving them half a billion or so on a project makes complete sense as that debt service is significantly reduced over the long term. This is most certainly the best time to build.


    His view is based on fact. While it's true that most construction projects that benefit the public (e.g. reconstruction of freeways, bridges, etc.) are accelerated during recessionary time periods, airport construction projects are generally halted. Investors shy away from these bonds in the short-term, viewing them as risky investments (news links below). Projects at places like LAX, ORD, LGA, etc. -- even funded pieces -- are largely coming to a halt, sans pieces considered essential. Look at SLC -- Phase I will be completed, although its fall opening may be slightly delayed. At SLC, in exchange for favorable leases, DL agreed to cover the airport's shortfalls. As it was, SLC was unlikely to meet its passenger projects (it assumed a 20%-25% immediate increase in enplanements once Phase I opened, fueled by DL increasing transfer traffic), and it's going to be hit hard in the near future. Not only will industry traffic be down significantly this year and next, but long, thin routes that overfly hubs -- and there's a lot of that service in recent years at SLC -- will be the last to recover. So as it is, DL is going to be cutting a large check to the airport. Do you really think DL is going to support the $1B funding for Phase II, even if it was practical?

    bond weakness now:
    https://www.wsj.com/articles/some-muni- ... 1583701450

    bond weakness last recession:
    https://www.reuters.com/article/us-airp ... EM20111130


    Unless DL completely collapses, yes they will. It will then be ready for them when they fully recover. They know the benefits of building in a recessionary period as anyone else. The airports roll the capital, the CPE will increase in the short term, but the savings will be realized through the useful life of the facility.
    Welcome to Nothingburgers. May I take your order?
     
    WidebodyPTV
    Posts: 265
    Joined: Fri Sep 20, 2019 9:06 pm

    Re: Airport construction projects question

    Mon Apr 27, 2020 1:45 am

    DL717 wrote:
    WidebodyPTV wrote:
    DL717 wrote:

    Again, you’re taking a short term view of things. There is plenty of money to be had for the projects. Airports issue bonds, tenants pay the debt service. Saving them half a billion or so on a project makes complete sense as that debt service is significantly reduced over the long term. This is most certainly the best time to build.


    His view is based on fact. While it's true that most construction projects that benefit the public (e.g. reconstruction of freeways, bridges, etc.) are accelerated during recessionary time periods, airport construction projects are generally halted. Investors shy away from these bonds in the short-term, viewing them as risky investments (news links below). Projects at places like LAX, ORD, LGA, etc. -- even funded pieces -- are largely coming to a halt, sans pieces considered essential. Look at SLC -- Phase I will be completed, although its fall opening may be slightly delayed. At SLC, in exchange for favorable leases, DL agreed to cover the airport's shortfalls. As it was, SLC was unlikely to meet its passenger projects (it assumed a 20%-25% immediate increase in enplanements once Phase I opened, fueled by DL increasing transfer traffic), and it's going to be hit hard in the near future. Not only will industry traffic be down significantly this year and next, but long, thin routes that overfly hubs -- and there's a lot of that service in recent years at SLC -- will be the last to recover. So as it is, DL is going to be cutting a large check to the airport. Do you really think DL is going to support the $1B funding for Phase II, even if it was practical?

    bond weakness now:
    https://www.wsj.com/articles/some-muni- ... 1583701450

    bond weakness last recession:
    https://www.reuters.com/article/us-airp ... EM20111130


    Unless DL completely collapses, yes they will. It will then be ready for them when they fully recover. They know the benefits of building in a recessionary period as anyone else. The airports roll the capital, the CPE will increase in the short term, but the savings will be realized through the useful life of the facility.


    You may think that, but that hasn't been in the case in the past, and it doesn't appear to be the case now. There are reports of various airlines having emergency meetings with various airports, including LAX, ORD, LGA, etc., to discuss current construction projects. These projects generally assume perpetual growth, and fees collected from that growth -- whether its PFC, fees assessed for ground transportation, concession slits, etc. -- help justify the cost. Historically, airlines have been opposed to modernization programs, due to cost, although their opposition has decreased in recent years as the industry generated record profits. Passenger growth will be down significantly over the next several years... the curve has been pushed back. This means airlines will be taking in far less cash but expected to pay a lot more (to make up for the loss of fees collected from passengers). It's not surprising they'd ask for non-essential projects to be delayed or downscale, especially when they're facing cash crunches in the short term.

    The cost to rebuild public works projects like freeways, bridges, etc. doesn't directly depend on the amount of traffic they receive. Ultimately, you can't compare rebuilding a freeway to rebuilding an airport.
     
    atlflyer
    Posts: 723
    Joined: Wed Jan 11, 2006 11:13 am

    Re: Airport construction projects question

    Mon Jun 22, 2020 9:21 am

    Was just browsing for any news on the JFK redevelopment and came across a presentation dated May 12, 2020 for the new terminal one. That’s a good sign that this project will continue.

    https://www.anewjfk.com/wp-content/uplo ... postVR.pdf

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