THE DELTA BANKRUPTCY
HEBRON - Cincinnati/Northern Kentucky International Airport will continue with its master plan that could call for a new runway in 20 years or so, airport officials said Thursday, although its major tenant has filed for bankruptcy protection.
"We've gotten it (the plan) very close to completion, and it isn't like we have to do what it says if things change for the worse," airport spokesman Ted Bushelman said.
Delta Air Lines operates its second-largest hub here. The Atlanta-based airline, which filed for bankruptcy Wednesday, accounts for almost 45 percent of airport operating revenue and controls about 93 percent of capacity.
Last week, Delta said it was cutting 26 percent of its total flying at the airport Dec. 1, and experts have said those cuts could deepen long term while the airline and its Erlanger-based regional subsidiary, Comair, restructure.
The plan is done in conjunction with a study on how to deal with increased noise expected when a north-south runway opens in December.
That $3 million noise study was supposed to be completed this year. But several factors, including the pullout of DHL from its hub here in favor of Wilmington, Ohio, have delayed it until early next year.
The master plan tentatively calls for another runway that could be built, either on a north-south or an east-west orientation, if demand climbs as forecast in the next 20 years. In addition, the plan calls for consolidation of all operations into one main terminal and three concourses.
Hamilton County Commissioner Todd Portune criticized the decision to continue.
Portune previously had sought a delay in the planning until ramifications of the bankruptcy could be determined.
"I don't think they are managing the airport effectively," he said. "And if they want to go and finish a master plan based on a set of assumptions that aren't going to pan out because they catered to one airline that is now in bankruptcy, that is exhibit A of that."
Boone County Judge-executive Gary Moore said he doesn't agree with Hamilton County's call to suspend the airport's master plan. Planning now could alleviate problems in the future, he said, especially since either runway orientation would affect the county.
"They may not have to execute it if the numbers aren't there at a particular time," he said. "I'm not saying I support either of those possible runways at this time. I'm saying that the airport should continue to plan. Certainly there are things in the plan I oppose, but that doesn't mean you throw the plan out."
Florence Mayor Diane Whalen, whose city would be directly in line with a new north-south runway, also said the airport should continue its master plan, saying that it can be altered in the future.
"Whether we agree or disagree with the plan, it's still a working document," Whalen said.
The announcement also came even though a major debt rating firm Thursday downgraded its long-term outlook for the airport while keeping the actual debt rating at the third-highest level.
Fitch Ratings moved the airport's outlook from stable to negative but did not actually change the rating of the airport if it were to issue any bonds in the short term.
Fitch rates the local airport an "A," well into investment grade.
But the downgrade in outlook, or a future change in the actual debt grade, could mean higher interest rates or more difficulties in borrowing for the airport.
"This move is just a way to indicate where the actual rating could be headed, given what has happened," said Peter Stettler, a Chicago-based senior director who specializes in airports for Fitch.
Bushelman said the rating service made the same outlook downgrade in the days following the 9/11 attacks but that the airport was able to regain its stable status.
The airport last issued bonds in 2003, when it took out $135 million for the runway that is set to open in December and about $24 million in debt restructuring.
Staff writer Brenna Kelly contributed. E-mail firstname.lastname@example.org
Relations between Hamilton County and the Cincinnati/Northern Kentucky International Airport appeared to thaw Wednesday after a presentation by airport officials to the county commissioners.
Airport and Federal Aviation Administration officials say the $250 million project will be justified during the next few years - and in fact is needed now, even in light of Delta Air Lines...
A study into steps that the airport can take to lessen the impact of aircraft noise, especially at night, will take another 18 months.
Fitch believes that the voluntary filing by Delta for reorganization under Chapter 11 of the U.S. Bankruptcy Code poses only minor immediate risks to most general airport revenue bonds.