Despite Mesaba's Woes, Regional Airports Planning for Growth

Mesaba Airlines may have filed for bankruptcy protection, but several regional Minnesota airports that rely on the carrier are either planning for expansion or have projects under way.

Several factors are converging that could make for busy construction seasons at state airports over the next couple of years. Increasing air traffic at several out-state airports, such as Bemidji, St. Cloud and Rochester, has been driven primarily by business growth.

The growth appears to be robust enough to overcome worries about recent short-term reductions in passenger traffic that have occurred because of Eagan-based Mesaba's financial troubles. In September, Mesaba, now operating as a Northwest Airlink affiliate, experienced a 58 percent decline in passengers compared with the same month last year at its 88 locations in the United States and Canada.

A smaller decline occurred at the eight Minnesota regional airports that rely on Mesaba flights. But the decline was enough to force several airport directors to readjust their growth projections for the immediate future.

Growth trumps carrier woes

Bemidji Regional Airport, the fourth busiest commercial hub in the state, has seen a 14 percent loss in passengers this year. Airport Director Harold Van Leeuwen Jr. predicts the trend may set back projected passenger growth by two to three years.

Despite that decline, the airport is completing an expansion and the reconstruction of its secondary runway; and plans are moving ahead to expand the airport's terminal to include a second gate.

"We made the decision to expand the airport to meet our anticipated future growth," Van Leeuwen said. "We're 44 percent undersized for what we need in terms of growth, and the expansion should bring us up to where we need to be for 20 years."

Despite the double whammy of airline bankruptcies and post-9/11 concerns over airline safety, the airport is projected to handle more than 65,000 passengers annually by 2020, more than double the 28,000 passengers this year.

The same is true for St. Cloud Regional Airport, where area business growth is expected to increase airport traffic significantly over the next decade.

Bill Towle, director of the St. Cloud airport, said the Federal Aviation Administration is considering the recommendations of a city-approved master plan that includes an expanded airport terminal, improved runway and new parking ramp.

Bemidji and St. Cloud - in the heart of the state's rapidly growing north-central corridor - are perhaps the Minnesota airports with the greatest need for long-range development. But other modest-sized airports find themselves in similar situations.

For some, expansion has as much to do with playing catch-up as preparing for the future.

Last week, crews at Falls International Airport in International Falls wrapped up construction on a 900-foot extension to the airport's main runway, a project that airport officials had requested for more than four years.

With the notable exception of Minneapolis-St. Paul International Airport, most in-state airports that receive commercial flights get an average of $1 million a year in federal funding, forcing airport authorities to save up for several years to tackle major projects. Funding is also tied to the level of traffic airports receive. And with chronically low passenger volume throughout the country in 2002 and early 2003, some airports' project funds have lagged behind what was needed for continued growth.

"There were a large number of programs that had to be delayed throughout the state" as passenger levels and funding wavered in recent years, Van Leeuwen said.

State funding

Another reason some projects were delayed was the loss of $15 million in state aeronautics funding. The funding was suspended by the Legislature in 2003 to help balance the state budget, but lawmakers inserted a provision ensuring that the money would return on July 1, 2007.

Towle said the state funds have been used primarily in the past to supplement federal grant dollars and don't "make or break" large-scale projects. Much of the money is also routed to smaller non-commercial airports that don't qualify for federal funding.

The funding removal, however, was apparently enough for airports to defer a number of maintenance projects, such as interior remodeling and facilities replacements.

"We all benefit from it, even if the larger airports don't get a large amount of that money," Van Leeuwen said.

A number of those smaller projects are likely to be revived once the state's $15 million contribution returns.

But some airport officials said they aren't yet getting their hopes up.

"We've thought of a whole bunch of things we'd like to do with that money, but we don't want to assume it'll be there, so we're going to wait and see," said Susan Baratono, an administrative assistant at Falls International Airport.

Raymond Rought, director of the Office of Aeronautics within the Minnesota Department of Transportation, said he's hopeful the funds will come through, and he's told regional airports to have their project needs prepared in time to make official requests.

"We've told [airport officials] we anticipate we will have additional state dollars for construction in '08 and '09," Rought said.

Already, small non-commercial airports in communities such as Jackson, Willmar and Fergus Falls are assessing potential terminal expansions, and more municipal airports are drafting new five- and 10-year growth plans.

Van Leeuwen said he expects a number of regional airports to grow in importance in the coming years, as major international airports like O'Hare and Los Angeles International Airport begin to near maximum flight capacity and travel hubs become increasingly decentralized.

The trend is also likely to be fueled by changes at major airlines.

Minneapolis-based Northwest Airlines, for instance, has expressed a desire to focus more on Midwest travel as it seeks to move out of bankruptcy. But in the short run, state airport projects will likely increase as funding becomes available and business growth puts pressure on airports to keep up with demand.

"We certainly want to keep our aviation system top notch," Rought said.

This article previously appeared in Finance and Commerce, Minneapolis, another Dolan Media publication.

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