Love Field renovation under budget and early, exec says

-- Dec. 16--A half-billion-dollar renovation project at Dallas Love Field is ahead of its original construction schedule and is likely to finish below budget, according to a Southwest Airlines Co. executive. "We have tried to build...


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Dec. 16--A half-billion-dollar renovation project at Dallas Love Field is ahead of its original construction schedule and is likely to finish below budget, according to a Southwest Airlines Co. executive.

"We have tried to build this project for speed," Bob Montgomery, the Dallas-based carrier's vice president for properties, said Tuesday. The carrier is overseeing the $519 million construction project at the city-owned airport, in contrast to most airport projects, which are managed by the owners.

"We think it's been a very, very successful project, and we think we've been able to deliver it at 25 percent less cost than what the public sector would have done," Montgomery told business leaders at the North Dallas Chamber of Commerce's annual aviation breakfast.

Under the old schedule, a new passenger terminal would be mostly completed by the time federal flight restrictions on Love Field end in fall 2014; a baggage handling project would have taken another year or more to finish.

Southwest has changed some of the timing and design to finish essentially all the improvements -- terminal and baggage handling upgrades -- when the Wright amendment is fully repealed.

The federal law prevents planes with more than 56 seats from flying nonstop beyond the states bordering Texas. Once it is repealed, Southwest is expected to launch an aggressive schedule of nonstop flights that Montgomery said "would be coast to coast."

As for the project's costs, "bids have been coming in 20 percent below what we'd expected," in part because of a softer construction market in North Texas, Montgomery said.

He's confident that Southwest will finish the new Love Field at a cost under $519 million. "There's not much more risk in this project -- we've pretty much got it figured out," he said.

The forum demonstrated the different ways that major airport construction projects can take shape. For example, Love Field's improvements are financed by a partnership between the city and Southwest. The airline backs the bonds sold for the project, and revenue from the airport will help pay them off.

At Dallas/Fort Worth International Airport, a $2 billion terminal renovation project is about to start. The financing mix at D/FW is changing slightly, too, as the airport leans more on revenue from passengers to offset its renovations, said Jim Crites, executive vice president of operations.

The airport will pay for the renovations through a combination of new debt offerings, fees paid by travelers and a new focus to double the average amount of concession revenue that each passenger generates at the airport, the world's third-busiest.

A key part of the D/FW renovation will dramatically change how shops and restaurants are positioned in the refurbished terminals; the arc shape of the buildings today hurts sales because passengers can't easily see choices.

Another model is the privately financed airport at Branson, Mo., which uses no federal money. The airport has seasonal service to a variety of larger cities -- though it has lost its flying from D/FW Airport by Sun Country Airlines -- and is edging closer to breaking even, said executive director Jeff Bourk.

"We think we have a very attractive model," he said at the forum. The airport has considerable flying from AirTran Airways Inc., which has been acquired by Southwest, and awaits Southwest's decision on which AirTran routes it will keep as the two carriers integrate.

The airport has considerable flying from AirTran Airways Inc., which awaits final approvals to be acquired by Southwest, and awaits Southwest's decision on which AirTran routes it will keep as the two carriers integrate.

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