As executive director of the Maryland Aviation Administration, David L. Blackshear has overseen Baltimore-Washington International Airport’s unprecedented growth over the last few years. He recently discussed the state’s billion dollar plans for the airport and local fallout of the uncertain US Airways/United merger.
The state recently approved $1.8 billion for BWI improvement projects. What will that include?
A whole slew of things. It mostly deals with the terminal side of the airport. Dividing the airport into land side and air side, these are all land side improvements. With the exception of a very small project, we?re not doing anything with the expansion of capacity on the air side. The signature project is an 8,000-car parking garage that will go directly on top of the Maryland Department of Transportation headquarters. This week they are completing the test piles and then we will begin in earnest the first 3,000 spaces of that garage. We?ll have those by Thanksgiving of next year. Also, we?re putting in a new surface parking lot adjacent to the Sheraton Hotel. The objective is to tide us over until we can get those first 3,000 spaces of the parking garage open. The other thing visible to the public is the concourse “A” expansion. There will be a new concourse of about 12 gates for Southwest Airlines. What the public can?t see as part of that $1.8 billion is major improvements to the central utility plant and several other small projects that tie all of that together. One of the big projects I didn?t mention would be adding skybridges across from the existing terminal building to the main parking garage so that people will no longer have to cross the main roadways and risk their lives as they run across those six lanes of traffic.
Is this the biggest project the airport has ever undertaken?
I think so. The only other thing the airport?s done of major magnitude was expand the concourse when Piedmont set up its hub here years ago. That has since been dismantled by US Airways.
This does not include plans for a new runway or terminal building?
No airside at all, no airfield capacity enhancements of any kind. The FAA is finishing up a capacity study to take a look at when we [will] need a parallel runway and the alternatives as to which way you could aim one. We hope to have that finished in the next 60 days, then we?ll be looking in earnest at what we have to do about the airfield. Right now, the crisis has been on the land side, parking and roadways and gate capacity, so we?re staying on the land side for the moment.
Where is that $1.8 billion coming from?
It?s all self-generated money. It comes from the federal side, it comes from both discretionary and entitlement money that passengers have paid into the federal trust fund. They pay a considerable amount of money; an 8 percent ticket tax on every airline ticket is funneled into the transportation trust fund. We get a small fraction of that back and that?s part of the money. We are authorized to collect a passenger facility charge, which until now has been $3 a head, and the federal government has authorized an increase to $4.50. We?re looking at how we might generate those funds. We don?t have any approval to increase the passenger facility charge yet. Then, of course we do all of our own generation of money. The airport is not a taxpayer-supported institution. It is a self-generated business, for all practical purposes. People park here and buy hot dogs and do all those things you do at airports. All of that money is directly deposited and recycled for the development and operation of the airport. It?s basically user-paid.
The airport released a study recently on regional economic impact.
We try to redo those every now and then and every time we do we find new economic activity. [This most recent study revealed] $6.5 billion in annual revenue [created] supporting 85,000 jobs. That was an increase of 10,000 jobs from the time we did it in 1998. This airport is now the fastest growing in North America, and it has surpassed Dulles in total passengers over the last four months.
Do you expect that growth curve to continue?
Yes. The big unknown is the USAir/United merger. If that?s going to go down the tubes — which we certainly have hoped and have done lots of legal work to encourage — then comes the question of what?s going to happen to US Airways. There?s been lots of speculation out there that they?re going to dry up. I don?t subscribe to that. It?s anybody?s guess at the moment. USAir has a tremendous business here. Their MetroJet planes are full all the time, wherever they go. It just depends on what that company does and how they reorganize themselves. Outside of that, everybody?s growing. While we see the greatest growth with Southwest, we don?t see any slouches.
What was your reaction when you heard that the merger might not go through?
There?s more work ahead. But it certainly was a sigh of relief. You didn?t have to be some genius economist to figure out what it was going to do to us. If you had an airline with a huge hub at Dulles and another huge hub in Philadelphia, the only thing between those two points is the state of Maryland, so it didn?t take long to figure out who was going to be the loser. We would have lost a considerable amount of air service as proposed by United. So it was a great sigh of relief, granted that it?s over. Of course, it?s never over till it?s over.
But those flights are still in jeopardy aren?t they? Even as an independent carrier, US Airways might have to cut back at BWI.
Absolutely, there?s a lot of speculation by the analysts that because USAir?s hub is so close to Philadelphia that they will cut back here at BWI and increase their operations in Philadelphia. The truth of the matter is that the USAir operations in Dulles and National are relatively poor compared to what their future growth could be. I think they will refocus on what their strong points are here as opposed to just picking up and flying away.
What would a loss or severe cutback by US Airways mean to BWI passengers?
Under the terms of the merger, they proposed to virtually eliminate MetroJet in its entirety. That would cost us 30 flights a day and a couple million passengers a year.
What about ticket prices, would they rise with less competition?
That?s what we demonstrated in the legal briefs — that this was truly an antitrust problem. BWI is the only truly competitive airport of the four [in the region;] Philadelphia, no competition; Dulles, no competition; National, virtually no competition. So if you reduce the competition at BWI, you would have a tremendous effect of raising prices across the entire Washington market.
How important has Southwest been? It seems like they?ve been the dynamo that?s driven a lot of your growth.
Southwest has been our largest growth carrier. But, you have to realize that Southwest has been here a long time, and it wasn?t until just a few months ago that Southwest was flying more people out of BWI than was US Airways. US Airways is a comprehensive carrier. It has a significant network of commuter flights that come in here and feed their mainline service. For all practical purposes, it?s sort of like a mini-hub. Southwest doesn?t do any of that. All their feed is either on the ground in cars — what?s caused our parking problem here — or it?s through connects, which they don?t advertise, but they are doing a considerable amount of connecting here. Southwest had only 60-something flights when I got here, and I haven?t been here two years yet and they?re at about 132 flights a day now. They are considerably increasing their business. I think their plan in the future is up in the neighborhood of about 250 flights a day.
Are you worried about the airport being too reliant on one carrier?
No, because until a few months ago, USAir was bigger than Southwest. USAir is still a significant size, and all of our other airlines are continuing to grow at their own rate. We are by no means dependent on Southwest. That is, to my mind, the secret to this airport — the competition. All carriers are benefiting from the Southwest expansion.
What is BWI?s budget?
We?re running on the operating side — which is paying the people, buying the insurance, paying the utility bills and so on — $88 million. And capital budget this year is $172 million. We?ve got about 550 employees that work for the airport directly.
What are your goals for 2001? More international carriers?
The domestic situation is in never-never land for the moment because of the uncertainties of the USAir/United deal. Outside of that, the domestic situation is, on the one hand in very good shape, on the other hand, in terrible shape. The good side is we?ve got a good cross section of airlines, and they are all growing substantially. We don?t have a declining airline in the place. The bad news is that we don?t have a single [extra] gate, not one. Our expansion plans right now only call for a four gate expansion of concourse F, and we have not tried to set the money aside to build even those four gates. The rest of the gates that we?re building are basically for Southwest Airlines. That?s not how we?ll sell them, but based on their growth, we believe they?ll absorb anything we can do out on that one end where they operate. We are very frustrated that we cannot market to the JetBlue?s and AirTran?s and all these other airlines that would add low fare competition. Our interest to develop more domestic carriers is thwarted by the fact that we simply don?t have the physical capacity to handle it.
The International arena is interesting in two regards. International service is critically important to the economy of the state. A single international flight is worth millions and million of dollars of economic activity. Our marketing people continue to search for new international opportunities. We have two or three that are confidential that we are pursuing. We certainly have the ability to accommodate them. Our gate space on the international terminal is not completely absorbed at the moment, and we have the ability to add four more gates at the end of the international terminal if we had the demand. International service is a continuing big-time objective for the airport.
