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 ST. LOUIS - Your main tenant - the very reason...


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."

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