D/FW Revving Up for Oct. 29 Takeoff of Int'l Terminal

The newest economic engine at Dallas/Fort Worth Airport is revving up for an Oct. 29 takeoff, and concessionaires are relieved.

After more than two painful months waiting for customers to walk through the newly built international terminal, shop owners are eager to hear their cash registers ring.

Most of the 63 retail spots were ready for business at the end of July. But their main source of income -- American Airlines and its 12,000-15,000 daily passengers -- has been noticeably absent from the terminal. For the past two months, six other international carriers have been flying from nine of the terminal's 28 gates, bringing in about 4,200 passengers a day. American left the remaining gates dormant while it worked with D/FW officials to fix some of the kinks in the terminal's $1.2 billion automated baggage system.

American announced Tuesday that it will start flying from Terminal D in late October -- 98 days late.

"It's better than Jan. 1," said Jeff Payne, a partner in the new Cousin's Bar-B-Q restaurant, which opened for five days in July but couldn't stay open. It will reopen by the time American is up and running.

"A lot of the damage is done, but this just minimizes it," he said. "I feel a lot better just knowing a date."

Last-minute hiring flurry

The announcement of a move-in date sets in motion a series of events that concessionaires were planning for months, including another round of hiring, staff training, final construction jobs, and applications for certificates of occupancy and alcohol sales.

"We'll have to staff back up," said Gina Puente-Brancato, whose family owns 15 shops at the airport, including five in Terminal D. Three are open now in the south end of the terminal. "We did hire up originally, but then we had to hire down."

Puente-Brancato plans to hire 15 to 20 workers over the next month.

Her husband and her father are also partners in a separate restaurant group that runs the Marché. Sitting at the south end of the terminal, the Marché is a collection of restaurants including Fuddruckers, Railhead Smokehouse, 360 Degree Gourmet Burrito and Einstein Bros. Bagels.

Concessionaires have been grouped into two 40,000-square-foot areas in the terminal: at the north end, where American will operate, and the south, where the other international airlines are.

Generally, concessionaires at the south end have been able to remain open while those at the north end remained closed. But even those in the south end have felt the pinch. Puente-Brancato estimates her family's shops there are generating about 33 percent of expected revenue.

"On any given time in the airport business, you will have the black sheep of the business," Puente-Brancato said. "There's always the strong ones and the weak ones. Unfortunately Terminal D has the weak ones, and we're living through it."

Concessionaires are getting by because the airport made it a point to choose business owners for the new terminal who were well-capitalized and could weather the ups and downs of airline traffic.

"We were looking for people who could bring in good products and had the financial capability to weather the storm," said Jeff Fegan, the airport's chief executive. There's risk associated with operating a shop in the airport. He added: "Just ask concessionaries who had space in Terminal E before and after Delta left."

Secured area an extra cost

Running a business anywhere inside the secured area of an airport means extra expenses such as badges and background checks for employees. That's in addition to the usual training that new hires must go through at any job. Owners were reluctant to lay off their new hires because of rehiring costs.

"Everybody that's out there has a lot of money at stake," said Gilbert Aranza, chief executive of Dallas-based Star Concessions, which will operate three upscale restaurants on the north end: Cantina Laredo, Champps and Cool River Café. "We have managers we've kept on the payroll because the opening date keeps moving."

The dominant strategy among Terminal D concessionaires on the north end has been to keep pricey but talented managers and temporarily let go of most of their hourly staff.

Aranza, an experienced airport concessionaire who also has the sole contract for retail business at Dallas Love Field, said he's spending about $20,000 a month on management salaries for his three restaurants. That's in addition to the restaurants' construction costs, which total $5.3 million.

In addition to security costs, restaurants are also having to deal with post-9-11 regulations.

For Reata Grill, on the terminal's north end, that means redesigning its steak-centric menu to account for the prohibition of steak knives.

As a result, the restaurant pulled all of its steaks from the menu and instead plans to offer a lighter lunch menu.

Airport makes concessions

The airport plans to help concessionaires by waiving a minimum annual rent payment and instead requiring merchants to pay only a percentage of sales revenue for their first year's rent. It also plans to extend contracts to make up for days not open.

Retailers said that's a fair move. While some are rookies in the world of airport retail, most are veterans and have been leaning on their other airport shops lately.

"It's a tough situation right now, but once you weather the storm, it will remedy itself," said Don Mitchell, who owns six yogurt shops in other terminals and will open Blue Bamboo Xpress and Blue Mesa Taco & Tequila Bar in Terminal D's north end. "The upside is really, really great."

Airport officials have long pitched the terminal as an economic engine for the rest of the airport. When all but 11 of the terminal's retail slots were announced in November, airport officials estimated they would account for $86 million in gross sales for their first year in operation. Since then, the airport has filled seven more retail spots in the terminal. Officials were unable to offer a more current projection in September.

The airport does a good job of generating a variety of retail sales, said Pauline Armbrust, publisher of Airport Revenue News. D/FW is an example of how airport executives are trying to rely less on airlines.

"The more they can generate on the non-aviation side, the more they can control their facilities," Armbrust said. "Airports don't want to be hand-tied by bankrupt airlines."

The terminal experience thus far has been a bittersweet one for retailers.

On one hand, they're frustrated by the delay.

"It's very much out of our control," Goldblatt said. "We're at the mercy of the airport and the airlines, as far as customer and airline traffic is concerned. When there are no passengers, there is no revenue and we can't be open."

On the other hand, retailers said they're proud to have been handpicked for a terminal described as the region's new front door to the world.

"We're just real excited about the opportunity to be here," said Derek Missimo, a partner in Mitchell's restaurants. "At the end of the day, it's going to be a phenomenal profit center for everybody."

Fort Worth Star Telegram


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