D/FW finance panel votes in favor of Pappas eateries: Major concessionaires fight new restaurants

Oct. 31--D/FW AIRPORT -- In a boardroom debate Tuesday that lasted more than an hour and pitted several large concessionaires against Dallas/Fort Worth Airport management, the board's finance committee narrowly recommended signing up three new Pappas Bros. restaurants.

The four-person committee recommended 2-1, with one member abstaining, that Thursday the full board approve the controversial lease letting two Pappadeaux seafood restaurants open in vacant American Airlines train stations in the basements of Terminals A and C.

The third proposed restaurant is a Pappasito's Tex-Mex restaurant that would go on the regular concourse level near gate A28.

But in an unusual move, some of the airport's largest concessionaires publicly spoke against the new restaurants at the committee meeting.

"We believe that economic and facility conditions do not warrant the additional concessions in these terminals at this time," said Gilbert Aranza, who owns 15 restaurants and stores at the airport and partially owns 13 of 15 Starbucks Coffee shops there.

He added that any new restaurant concept would be cannibalizing the revenue of concessionaires already at the airport.

John Brancato, whose family owns 16 airport concession shops, said the proposed rent for the Pappadeaux restaurants is not fair because it is too low.

The airport has proposed that the Pappadeaux owners pay a minimum annual rent of $144,000 or up to 10 percent of gross sales, whichever is greater.

Airport staff members said the rent is lower than usual because the locations are risky. Pappadeaux would be the only concessionaires on the airport's lower level.

Several concessionaires and some board members expressed concern that Pappas Bros. and Johnnie King -- a partner in the restaurants -- were allowed to directly negotiate the lease instead of going through a request-for-proposal process that allows others to bid on a new restaurant concept.

The ownership group of the proposed Pappadeaux restaurants would likely have to pay about $2 million to transform the abandoned space into restaurants, Zenola Campbell, vice president of concessions, told board members. But even that cost has not been finalized.

"This is not the slam dunk that it looks like," King said. "This is serious business for us."

EARNINGS REPORTS

Company Ticker Per. Revenue* Yr. ago Net income* Yr. ago Per share Yr. ago

AirTran AAI 3Q $608.6 $486.9 $10.6 -$4.6 $0.11 -$0.05

Earnings reached $10.6 million, beating analysts' estimates, but it trimmed its 2008 growth plans for the second time in a year.

Avon AVP 3Q $2,350 $2,060 $139.1 $86.4 $0.32 $0.19

Profit soared 61 percent as the direct seller of beauty products enjoyed strong revenue growth across all divisions.

Comc'l Metals CMC 4Q $2,280 $2,150 $104.7 $128.7 $0.88 $1.04

Steel shipments declined 15 percent in the quarter, while the company processed and shipped 5 percent less scrap metal.

Goodyear GT 3Q $5,060 $4,900 $668 -$48 $2.75 -$0.27

Helped by the sale of its engineered-products unit, it swung to a big profit from a loss a year ago; shares rose 7.6 percent.

Liz Claiborne LIZ 3Q $1,260 $1,310 $33.1 $95.2 $0.33 $0.93

Profit fell for the eighth quarter in a row on a drop in sales to department stores and a rise in expenses to sell brands and cut jobs.

MGM Mirage MGM 3Q $1,900 $1,800 $183.9 $156.3 $0.62 $0.54

Profit was below expectations as the world's No. 2 casino company said corporate expenses rose because of planning for future projects.

Procter & Gamble PG 1Q $20,200 $18,790 $3,080 $2,700 $0.92 $0.79

Despite a 14 percent profit gain, P&G issued a cautious outlook amid rising commodity costs and U.S. consumer uncertainty.

Qwest Q 3Q $3,430 $3,490 $2,070 $194 $1.08 $0.09

The surge in income resulted from a tax benefit of $2.15 billion. Total access lines fell 7.2 percent; shares skidded to a 52-week low.

Sirius SIRI 3Q $241.8 $167 -$120.1 -$162.9 -$0.08 -$0.12

It added 524,938 net subscribers to reach 7.7 million -- 50 percent higher than a year ago.

Union Drilling UDRL 3Q $76.9 $69.5 $9.3 $9.8 $0.42 $0.45

The company said a fall in net income was because of higher depreciation expenses associated with the addition of new rigs and equipment.

*In millions

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David Wethe, 817-685-3803

dwethe@star-telegram.com

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