Boston Airport Officials Push $1.1 Billion in Proposed Projects

Feb. 17, 2006
One of the highest-profile projects whose fate is unclear is a planned $360 million central rental-car facility.

Feb. 16--Logan International Airport officials are pushing off $1.1 billion worth of proposed projects, blaming tough airline industry economics.

Directors of the Massachusetts Port Authority, which runs Logan, approved plans yesterday for more than $4.4 billion in upgrades to the airport during the next five years. At the same time, the board said it has not identified funding for over $1 billion of projects and may delay them indefinitely.

One of the highest-profile projects whose fate is unclear is a planned $360 million central rental-car facility. Aside from about $1.2 million for environmental-review planning, Massport is not committing funds for construction, hoping instead to negotiate a deal this spring under which rental-car companies and their customers bear the cost.

"We need to be conservative in this day and age" in forecasting airport revenues and growth in passengers, said Elizabeth Taylor, Massport's director of finance.

One of Massport's key revenue sources for funding airport upgrades is a fee charged on airlines for each plane that lands based on its loaded weight. Growth in those revenues has come under pressure since the Sept. 11, 2001, terrorist attacks and their aftermath depressed travel demand, for two main reasons:

Airlines are operating slightly fewer flights at Logan and have also made major efforts to operate smaller planes -- in many cases with more than 75 or 80 percent of seats full -- which improve profitability and fuel efficiency but decreases Massport landing-weight revenues.

Logan last year handled more than 27 million passengers -- nearly as many as the record 27.7 million in 2000 -- but on just 409,000 flights, compared to 488,000 in 2000, Massport figures show. Cargo and mail business have also dropped substantially, from more than 1.14 billion pounds in 2000 to 784 million pounds last year, according to Massport data.

Massport spokeswoman Danny Levy said that the authority remains very interested in building the central rental-car facility and is looking into alternatives including private financing.

"That isn't to say it's not going to happen. The feasibility of it continues to be studied," Levy said. "Whether or not this will take place in the short-term future, I can't respond to that right now. The timing remains sketchy."

Several other US airports, including Baltimore/Washington International Thurgood Marshall Airport, Phoenix Sky Harbor Airport, and the Fort Lauderdale, Fla., airport, have opened such facilities in the last few years.

The central facilities offer two main benefits for passengers: One-stop shopping for cars and reduced traffic on airport roadways because the airport can use a single fleet of shuttle buses to take passengers between airport terminals and rental cars instead of each rental-car company running its own fleet.

However, the project would have huge hassles during construction. Logan officials have anticipated that it will take more than a year to build, requiring the airport to relocate offices for rental-car companies Alamo, Avis, Budget, Dollar, Hertz, and National to an off-airport location such as Suffolk Downs racetrack off Route 1A.

Massport's capital plan covers funds for building a sixth runway, called 14/32, finishing the central garage upgrade, repairs to the Massport-operated Tobin Bridge, and seaport projects to increase container ship capacity. It also includes money for beginning construction of a new so-called center-field taxiway between two major runways in 2007, instead of 2008.

Airport officials pushed up the construction because they think it will help reduce a recent spate incidents in which planes came too close to each other. Massport officials hope to get Federal Aviation Administration environmental approvals next month.

But many projects are being left unfunded, including a $12 million project to increase overnight jet parking capacity at Logan, a new State Police barracks to replace its Terminal D operation, expansion of parking at the Terminal B garage, and an $80 million parking structure on the southwest side of the airport.

Taylor, Massport's finance director, said the agency is focusing more of its spending efforts on basic maintenance and upgrades that will only be visible to airlines and pilots.

For example, Massport yesterday approved a $3 million project to replace 26 sets of sliding doors at Logan's Terminal B, home to American Airlines and US Airways. Taylor said he considers this an example of "us moving into a period where there are going to be a lot of smaller maintenance projects."