DIA bursting at the seams

At critical juncture, airport must balance growth, uncertainty


That changed late in 2005, when Southwest Airlines announced it would come back to Denver after a 20-year hiatus. The news - coupled with the emergence of United from bankruptcy - set the airport in motion, reviving serious attempts to update the master plan.

"It's very difficult to expand and plan when you don't know how the industry is going to shake out," said Rick Busch, DIA's director of planning. "But United came out of bankruptcy, and demand recovered. When Southwest came in, we said, 'Hey, we gotta get going on this.' "

Southwest transformed the landscape in Denver, making it one of the few cities with three airlines aggressively battling for market share. That led to lower prices, helping draw even more people to the skies. United also added flights and struck a deal to route more passengers through Denver, while Frontier kept growing, as well.

The result: DIA's passenger traffic jumped 9.1 percent last year, tying it for the third-fastest growing airport in the world. The pace has slowed this year. But DIA is expected to come in just shy of that 50-million mark - years ahead of schedule.

Airport crunch

There's no doubt the passenger surge has been good news for the airport, particularly from a financial perspective.

DIA's revenues have soared as the airport gleans more money from food and beverage sales, parking fees and other non-airline sources. It's been able to pay down and refinance its debt, saving millions of dollars a year in interest payments. It's been able to lower the fees and rent it charges airlines, which encourages them to expand. Last year it posted a record profit, bolstering its financial strength.

Airline costs per enplaned passenger - a measure of how much carriers pay to operate at the airport - have plummeted to about $11.16 compared with more than $16 a decade ago.

That decrease was a key reason Southwest returned to Denver.

But the spike in passengers is stressing the airport's infrastructure.

Nearly 15 million more people annually are using the airport than just five years ago. On top of that, DIA is attracting more local passengers than connecting ones - the opposite of how it was structured to operate. More local travelers means more people using access roads, ticket counters and security checkpoints.

Take the parking situation.

The airport is having to open its overflow lot, Mount Elbert, more often than in the past because the Pikes Peak shuttle lot increasingly is hitting its capacity. Airport officials say that Mount Elbert will be operating full time by the end of the year.

An even more pressing issue is gates. DIA is running out of available ones, which could limit expansion by current tenants and deter new airlines from coming to Denver. At its recent budget presentation to Denver City Council, DIA officials said that the gate situation is "more constrained" than they originally thought.

National problem

It's a growing problem at airports across the country. Demand has been rising nationwide, and other major airports are scrambling to expand as well.

Those airports, though, face huge costs and other challenges because they're already jutting up against neighborhoods and other development.

In that respect, DIA is in an enviable position. Once heavily criticized for being in the middle of nowhere, the airport has plenty of room to grow.

"Overcapacity is a front-burner issue right now," said Pauline Armbrust, publisher of industry trade publication Airport Revenue News. "A lot of airports are bursting, and a lot don't have ways to expand because they are limited by land mass and space. DIA doesn't have those concerns."

DIA has centered much of its focus during the past two years on expansion, spending 25 percent more in 2006 on capital improvement than in the previous year.

To reduce congestion and prepare for future demand, the airport has added two more temporary gates on Concourse C and recently launched a large project to add 10 more gates and a regional jet facility.

It has brought in more train cars to ferry passengers between the terminal and the concourses and is building a new parking garage. It constructed a new $42 million wing on Concourse B for United Express flights and is revamping its concessions program.

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