CREATIVE ($$) PLANNING

CREATIVE ($$) PLANNING

In St. Louis, officials work to guarantee Lambert's future as a hub

By John F. Infanger, Editorial Director

May 2002

Col. (Ret.) Leonard Griggs
Col. (Ret.) Leonard Griggs

ST. LOUIS - Your main tenant - the very reason you're a hub airport - is in bankruptcy, yet you need to expand. So, you come up with a plan to help stabilize the airline, and then look at how the airport can accommodate growth at an affordable price. The plan is made, structured so that if you lose the hub carrier and traffic drops in half, you can still pay the debt. Welcome to St. Louis, where they're breaking ground, and where TWA remains, only now it is called American.

St. Louis is a working man's town, the Gateway to the West, a city known worldwide as a home of aviation, thanks to the McDonnell Douglas and Charles A. Lindbergh. They understand jobs here, and the airport has a current economic impact of some $5 billion, according to officials. That is expected to double once the new runway - the key cog in this airport transmission - adds its turbocharging effect. There was certainly opposition, particularly neighbors, and a need arose for a person of experience to lead the charge, to orchestrate.

On the TSA ...
For this article, Col. Griggs was late for the interview. He was in a meeting with a TSA man, the mere fact of which some would consider a privileged encounter. Griggs offers his view of the new Transpor-tation Security Administration ...

"One can argue whether you want federalization or you don't; but the argument's over. We have a federalized system, which I think eventually will prove itself.

"I think 9/11 proved a point: if you're going to make an airport and a system secure, you've got to go further than the airport itself.

"My direction to my security people is I want us to be the most secure airport in the nation with the best cooperative spirit of working with TSA. It's the only way it's going to work; you can't have the airports going one way and TSA going another."

One could suspect a main reason Col. (Ret.) Leonard Griggs, P.E., was rehired as director at Lambert St. Louis International is he was seen as the man who could get it done. He knew the territory, having served as Lambert's director for ten years before becoming the FAA's Assistant (now Associate) Administrator for Airports. He was now connected to Washington, a connection which he admits can be beneficial, even at a hub airport, which is already a system priority.

Says Griggs, "When I left the FAA (1993), we had an airline that was in bankruptcy and we had an airport expansion program that had gone on the shelf because the economy had been in a recession.

"We did an innovative thing. We decided the best way to do this was the city floated a $75 million bond issue and in essence bought the assets by which TWA was operating, including the gates, all the equipment - the tugs, the typewriters - everything that they operated at Lambert we owned, with the exception of a few jetways that we acquired later.

"It was probably one of the smartest moves we ever made because what it did for us, it not only brought them out of bankruptcy, it not only assured that they pay us a surcharge, we also acquired property rights. This became very, very important when TWA went bankrupt the second time and we were dealing with American Airlines."

Concurrently, Lambert officials were diligently working on creating a new master plan that would clearly outline the future of the Midwestern hub. They hired Leigh Fisher Asso-ciates as the consulting firm, and eventually nine options were drawn out, as well as a do-nothing scenario and building a brand new airport.

imageExplains Griggs, "We needed to be able to handle 632,000 operations and 40 million people by the year 2015. I think it's still a valid finding, irrespective of what happened on 9/11."

The plan decided upon is called W-1W, and its key component is construction of a new, staggered 9,000-foot runway. It also calls for moving the National Guard so that property is available for an additional terminal building, and the purchase of nearly 2,000 homes.

"The new runway will open up this airport to where we can shoot simultaneous, IFR, Cat-3 approaches with independent departures," says Griggs. "We add over 43 percent to our capacity - in some weather conditions, almost 100 percent - and the FAA estimates it will save delay costs over a ten-year period at Lambert alone of $1.9 billion. Nationwide, because of Lambert's location geographically, it would save $5.1 billion. It became, in the FAA's way of thinking, a very cost-effective way of doing business."

FINANCING THE PLAN
imageAs Griggs explains, even though TWA was out of bankruptcy as the expansion plan progressed, a critical element that remained was putting together a funding plan that would not prove too onerous to the hub operation and the other carriers, most notably Southwest, which today operates some 75 flight a day, with the potential for up to 140 a day.

"We tried to present to the TWA board a plan by which minimum money of theirs was involved," says Griggs. "We got a letter of intent [LOI] from the federal government for $140 million. We were, I think, the first airport in the nation that floated an LOI-backed bond. We took PFCs [passenger facility charges] and pledged every dime that we could toward this project.

"We told the airlines that, of a $1.109 billion program, your share of this debt, none of it will go to your bottom line until the year 2005 or 2006. I think we put together a package that was attractive, particularly to Southwest and TWA. When American came in, they thought it was one of the more innovative financial packages they'd seen."

The future of the airport, says Griggs, rests largely on commercial aviation, particularly Southwest and American, which has hubs at Dallas-Ft. Worth and at Chicago, the latter being a mere 300 miles to the north.

Says Griggs, "The characteristic of our flights may change [from TWA's routes], but I think that within five years we'll be the second largest hub with American."

Loading