SAN JOSE; Airport plans $1.5 billion expansion in 2 phases

Mineta San Jose International Airport said Monday it expects to spend $1.5 billion in a two-phase construction project intended to upgrade the Bay Area's third-busiest airfield.

San Jose airport has seen a slow but steady return of air travelers since traffic dropped sharply at the beginning of the decade. The airport handled 10.9 million flyers in 2006, down from its peak of 14 million in 2001, but up from its recent low of 10.4 million in 2003.

The first construction phase begins next month and focuses on building a new north concourse for the airport's terminal B. The project is budgeted at $1 billion and is expected to be finished in 2010.

When the airport records a year with 12.2 million passengers, phase two, budgeted at $500 million, will kick in. That will center on building a new south concourse for terminal B and expanding the terminal's capacity to 40 airline gates from the present 30 gates, spokesman Rich Dressler said.

The airport began expanding on a smaller scale in 2004 when it started construction on a north concourse between terminal A and terminal C.

San Jose began the decade as the Bay Area's second-busiest airport, but it slipped to third behind fast-growing Oakland International Airport after the Sept. 11 terrorist attacks and the dot-com bust, which hit Silicon Valley business travelers especially hard.

Since 2003, passenger traffic has grown by a few hundred thousand -- a modest increase, but enough to convince airport officials that business is coming back.

As San Jose struggled to recover, it pursued low-cost carriers. Presently, just over half of the airport's 185 daily departures are operated by discount carriers such as JetBlue Airways and Southwest Airlines. With 88 daily departures, Southwest has shot ahead of former leader American Airlines to become San Jose's busiest carrier.

American, with 38 daily departures, is now No. 2 at San Jose. The airline cut its flights to Tokyo, Taipei and Paris after Sept. 11.

The change in airline mix resulted in a change in the airport's passenger profile.

"We used to have about 65 percent corporate travelers," Dressler said. "Now, it's about 50-50 between corporate and leisure travelers."

San Jose International is owned and operated by the city of San Jose and named for former San Jose mayor and U.S. Transportation Secretary Norman Mineta. It plans to fund the expansion with bonds and a passenger fee, already added to each ticket, Dressler said.

In addition to reworking passenger terminals, San Jose plans to build a 3,400-space parking garage in the first phase of expansion. The airport will reconfigure airport access roads and short-term parking during construction this summer, Dressler said.

San Jose continues to cultivate airlines, offering a one-year waiver of landing fees and other operational costs for new or existing airlines that add new destinations. Eleven new flights have been added since January, according to Dressler.

San Jose nearly landed MaxJet, a young, all-business class airline that offers service to London early this year. It lost out to high-profile Los Angeles International Airport, Dressler said.

San Jose has polled some 3,000 fliers to see what new destinations they would like from the airport. Tokyo and London came out on top, according to Dressler, who added that SJO still hopes to land MaxJet service to London if the carrier taps a second West Coast airport.



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