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Airport shrugs off losses, looks to future
By Michael Westblade
Fuel prices are up, whispers of recession are in the air and it’s no secret: The airline industry is reeling, and Kansas City International Airport is feeling it, too.
With the loss of some big contracts and with carriers pulling flights, it may seem like dire straits at KCI, but Justin Meyer, manager of air service development for the Kansas City Aviation Department, said the airport has been through rough times before and will likely make it out unscathed.
“It would be pretty naïve to look at what we have now and call it something other than the ups and downs of the industry,” he said. “Twelve months or 24 months from now, we could probably be in a spot to call it something else. There is always going to be air travel in the U.S. and around the world. It’s a critical part of business. People can buy Vespas and take light rail, but you still need to get from A to B and across the ocean faster than on a boat.”
This year, the airport lost three carriers, Express Jet, Air Midwest and Skybus and saw a 20 percent decrease in capacity as well as the end of 22 nonstop flights and a revenue decrease of about 5 percent.
But the figures are misleading, Meyer said.
Though the airport has seen decreases, Meyer said, they are basically back to the same capacity and revenues of 2005 before business spiked in 2007.
“A lot of our decline is based on growth in 2007 that was unsustainable, carriers who couldn’t make it work,” he said. “The good news is that 2008 is going to look a lot like 2005 did. We’re going back to a place we were not too long ago.”
As for rumors about the airport inching toward losing its status as a hub with airlines cutting flights out of KCI, Meyer said that’s not likely to happen, because the airport isn’t dominated by one carrier like some other airports, and if it loses service from one, it still has others to fall back on.
The airport’s three biggest carriers are Southwest Airlines with 32 percent of flights, Midwest Airlines with 12 percent and American Airlines with 11 percent.
In addition to cuts in capacity and revenue, KCI also lost out on a huge tenant in July, a $375 million Bombardier assembly plant that would have brought more than 2,000 jobs to Kansas City.
The loss of Bombardier came as a big surprise, said Joe McBride, spokesman for the Kansas City Aviation Department, but it hasn’t deterred the airport from pushing forward with an aggressive economic development policy.
“By being invested in these large deals, it raises the profile of the city internationally for when similar projects are being contemplated,” he said. “It’s kind of like any sales job. The more deals you’re after, the more chance you have at landing something. If you sit back and don’t act, nothing will happen. We’re being aggressive about economic development.”
Because the airline industry is struggling, McBride said, the airport is looking to develop real estate outside its typical aeronautical pursuits to maintain revenues.
In June, the airport announced its partnership with Trammell Crow Co., a Dallas-based development firm, to develop an 800-acre area of mixed use development on the southeast corner of the airport that would have housed the Bombardier facility.
The airport also recently acquired the old Farmland building off of Interstate 29 for $18 million. Currently, the building is at close to 65 percent capacity.
Yet another economic blow came to the airport later in July when American Airlines announced a maintenance shift effective January 2009 that could mean a loss of almost 600 jobs at its overhaul base at KCI.
It was another surprise, McBride said.
But, McBride said the airport is going to do everything it can to retain the maintenance workers’ jobs by assisting American Airlines with finding third-party work for the overhaul base.
“Times are tough for the airline industry, but we want (American Airlines) to stick it out and work with us to keep the building occupied,” he said.
Staff writer Michael Westblade can be reached at 389-6636 or michaelwestblade@npgco.com.
KCI IN 2008
- Overall capacity falls by about 20 percent.
- Daily departures decrease to 200, down from 270 in 2007.
- Nonstop flights decrease to 50, down from 72 in 2007.
- Revenues down 5 percent from 2007.
- Airport loses three carriers — Express Jet, Air Midwest and Skybus.
- Bombardier declines to build assembly plant that would have brought more than 2,000 jobs to area.
- American Airlines announces shift of maintenance work from Kansas City, meaning a possible loss of almost 600 jobs in 2009.
Source: Kansas City Aviation Department
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With the loss of some big contracts and with carriers pulling flights, it may seem like dire straits at KCI, but Justin Meyer, manager of air service development for the Kansas City Aviation Department, said the airport has been through rough times before and will likely make it out unscathed.
“It would be pretty naïve to look at what we have now and call it something other than the ups and downs of the industry,” he said. “Twelve months or 24 months from now, we could probably be in a spot to call it something else. There is always going to be air travel in the U.S. and around the world. It’s a critical part of business. People can buy Vespas and take light rail, but you still need to get from A to B and across the ocean faster than on a boat.”
This year, the airport lost three carriers, Express Jet, Air Midwest and Skybus and saw a 20 percent decrease in capacity as well as the end of 22 nonstop flights and a revenue decrease of about 5 percent.
But the figures are misleading, Meyer said.
Though the airport has seen decreases, Meyer said, they are basically back to the same capacity and revenues of 2005 before business spiked in 2007.
“A lot of our decline is based on growth in 2007 that was unsustainable, carriers who couldn’t make it work,” he said. “The good news is that 2008 is going to look a lot like 2005 did. We’re going back to a place we were not too long ago.”
As for rumors about the airport inching toward losing its status as a hub with airlines cutting flights out of KCI, Meyer said that’s not likely to happen, because the airport isn’t dominated by one carrier like some other airports, and if it loses service from one, it still has others to fall back on.
The airport’s three biggest carriers are Southwest Airlines with 32 percent of flights, Midwest Airlines with 12 percent and American Airlines with 11 percent.
In addition to cuts in capacity and revenue, KCI also lost out on a huge tenant in July, a $375 million Bombardier assembly plant that would have brought more than 2,000 jobs to Kansas City.
The loss of Bombardier came as a big surprise, said Joe McBride, spokesman for the Kansas City Aviation Department, but it hasn’t deterred the airport from pushing forward with an aggressive economic development policy.
“By being invested in these large deals, it raises the profile of the city internationally for when similar projects are being contemplated,” he said. “It’s kind of like any sales job. The more deals you’re after, the more chance you have at landing something. If you sit back and don’t act, nothing will happen. We’re being aggressive about economic development.”
Because the airline industry is struggling, McBride said, the airport is looking to develop real estate outside its typical aeronautical pursuits to maintain revenues.
In June, the airport announced its partnership with Trammell Crow Co., a Dallas-based development firm, to develop an 800-acre area of mixed use development on the southeast corner of the airport that would have housed the Bombardier facility.
The airport also recently acquired the old Farmland building off of Interstate 29 for $18 million. Currently, the building is at close to 65 percent capacity.
Yet another economic blow came to the airport later in July when American Airlines announced a maintenance shift effective January 2009 that could mean a loss of almost 600 jobs at its overhaul base at KCI.
It was another surprise, McBride said.
But, McBride said the airport is going to do everything it can to retain the maintenance workers’ jobs by assisting American Airlines with finding third-party work for the overhaul base.
“Times are tough for the airline industry, but we want (American Airlines) to stick it out and work with us to keep the building occupied,” he said.
Staff writer Michael Westblade can be reached at 389-6636 or michaelwestblade@npgco.com.
KCI IN 2008
- Overall capacity falls by about 20 percent.
- Daily departures decrease to 200, down from 270 in 2007.
- Nonstop flights decrease to 50, down from 72 in 2007.
- Revenues down 5 percent from 2007.
- Airport loses three carriers — Express Jet, Air Midwest and Skybus.
- Bombardier declines to build assembly plant that would have brought more than 2,000 jobs to area.
- American Airlines announces shift of maintenance work from Kansas City, meaning a possible loss of almost 600 jobs in 2009.
Source: Kansas City Aviation Department