The City of Philadelphia raised $125 million in a bond sale completed last week, giving it money needed to expand Philadelphia International Airport's D and E terminals and security checkpoint lanes in three other concourses, airport officials said yesterday.
The Terminal D-E expansion project had been envisioned for several years but got renewed interest when Southwest Airlines was planning the start of its Philadelphia service in the spring of 2004. The airport quickly reconfigured the Terminal E security checkpoint to handle more passengers, but officials said that was only a temporary solution.
Plans call for expanding the area inside security to resemble the Terminal B-C complex, with construction of a food court and shops between the D and E concourses, city aviation director Charles J. Isdell said in an interview. Three additional gates will be built at the end of the E concourse, with all the work scheduled for completion by early 2008, he said.
What Isdell called "a giant" 14-lane security checkpoint, with entrances near the top of escalators leading from the D and E ticket counters, will double what is available in the two terminals now.
Isdell said the bond issue for the D-E project received the support of US Airways in exchange for the airport spending some of the proceeds on adding security lanes in Terminals A-East, B and C, where US Airways operates. The airline has veto power over bond issues for capital improvements because, as the airport's dominant carrier, its passengers provide more than 60 percent of the airport's annual operating revenue.
"There was really no upside for US Airways in supporting the D-E project," Isdell said, since the improvements will mostly benefit other airlines. But US Airways agreed because it will help speed up the flow of passengers to its flights, he said.
The A-East checkpoint, used by passengers transferring from US Airways' international flights to domestic ones and by travelers on other carriers, "is a real choke point for us right now," Isdell said.
The airport will spend $251 million on the D-E project and other capital improvements in the next few years.
The city said in a statement that demand was strong for the new issue of 30-year bonds, which have an annual interest cost of 4.72 percent to the city.
The city also said it sold $41 million in another new bond issue in June, and issued a third series of $190 million in bonds that refinanced airport debt from the mid-1990s.
The three major bond-rating agencies - Fitch Ratings, Moody's Investors Service, and Standard & Poor's - each have "A" ratings or their equivalent, the third-highest level available, on Philadelphia airport debt.
In separate reports earlier this year, the agencies said the airport's ratings were based on a healthy regional economy, strong local demand for air travel, and a double-digit increase in passenger traffic since Southwest started service and US Airways matched its low fares last year.
Copyright 2005 Associated Press
Three financial ratings agencies are giving high ratings to Philadelphia International Airport bonds, an affirmation that the facility is financially stable.
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