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Sunday, Jul. 05, 2009

Despite tough times, construction continues at Blue Grass Airport

At Cincinnati/Northern Kentucky International Airport, about $70 million in runway improvements won't be done as soon as planned and lights on non-primary runways and taxiways are being turned off at night, which saves the airport $6,000 a month.

Louisville International Airport put $1.5 million in major projects and purchases, including baggage system upgrades and new terminal seating, on hold in fiscal year 2009.

But drive by Lexington's Blue Grass Airport and you'll see construction crews scurrying to finish a host of projects, from a new runway to a revamped front entrance.

About $60 million is being spent on major projects, mostly construction, at the local airport, which is much smaller than the Kentucky airports to its west and north.

Some of the Blue Grass Airport projects have been on the books for years, and the airport is trying to get them done before the 2010 World Equestrian Games come to Central Kentucky.

But the work at Blue Grass also is being done at a time when the airport's flight and passenger counts are going down.

The number of weekday flights is expected to go from about 39 to 34 this fall; passenger boardings for 2009 are predicted to be 7 percent lower than in 2008. And the airport board adopted a 2010 fiscal budget that reflects a projected 11 percent decrease in overall revenue from commercial airlines, the airport's largest source of regular income.

Much like in mid-2008, when high fuel prices prompted airports across the country to cut back in spending, air travel industry experts say the dramatic decline in the economy has caused airports to do some major belt-tightening this year. Many airports have been watching their pennies for the past several years because of financial problems in the commercial airline industry.

Blue Grass Airport, like many others that are seeing their flight and passenger numbers decline because of the economy, is reining in spending. While tens of millions of dollars are being spent on construction, an approximately $8 million project involving the relocation of Terminal Drive and the creation of 1,393 new parking spots for cars, has been put on hold, said Eric Frankl, the airport's interim executive director. The local airport is also cutting its spending on training and travel, insurance and capital equipment purchases, among other things, in the 2010 fiscal year, which began July 1.

A lot of airports are cutting back on construction — "certainly more than five years ago" — as they see revenues decrease due to a fall in passenger demand, said Sean Broderick, a spokesman for the American Association of Airport Executives.

"They're doing anything they can to mitigate the current challenges, to weather the storm," he said.

But, he added, "You always must prepare for the future." It's a pretty good bet that air travel will increase in the future, he said.

"If you're an airport, you need to be ready for that," he said. "Airlines have the advantage of being able to add or move passengers very quickly. Airports can't."

Dealing with losses

While many airports are cutting or delaying construction projects, many others are plunging ahead with multimillion-dollar improvements.

John Wayne Airport in Orange County, Calif., is working on a $460 million project that includes a new passenger terminal and parking structure. Washington Dulles International Airport has been working on its $1.4 billion AeroTrain passenger transport system for the past several years.

Airports across the country have gotten a boost in recent months as $1.1 billion in federal stimulus money has become available for construction projects.

Blue Grass Airport is using about $2.9 million in federal stimulus money to relocate an electrical vault and for renovation and upgrades at the airport's aircraft rescue fire fighting training center.

Much of the rest of the money for the projects being done at the local airport this year has been secured from other federal government funds, state government and a 2008 bond issue.