"Bleak Economic Outlook Seen for Miami Airport, Port"

Thursday, February 14, 2002

Bleak Economic Outlook Seen for Miami Airport, Port
Sun-Sentinel, Fort Lauderdale, FL


The chiefs at South Florida's busiest airport and seaport on Wednesday
offered a grim forecast for 2002, with traffic still weak after Sept. 11
and competition rising from other U.S. areas.

Miami International Airport's new director, Angela Gittens, was
especially frank.

She said passenger traffic at MIA would not reach pre-Sept. 11 levels
before 2004, that forecasts for midterm passenger growth were
overoptimistic, and that the airport must scale back its proposed $6
billion expansion to $4.8 billion -- to keep its finances healthy.

The Port of Miami's director, Charles Towsley, also warned that cargo
volumes could shrink this fiscal year -- after two years of record
results -- because of economic weakness in the Americas.

The somber news came at the annual State of the Ports luncheon organized
by the World Trade Center-Miami and attended this year by more than 600
people. The high turnout underscored the vital role played by the
gateways for trade and tourism, Miami-Dade's economic pillars.

In her first State of the Ports speech since taking office last spring,
Gittens clearly spelled out the costs of the Sept. 11 terror attacks and
recession on MIA, as passengers and businesses cut back on travel.

She said the airport lost about $400,000 a day in the first two weeks
after the attacks, trimmed losses to $274,000 a day after about six
weeks and now, loses roughly $182,000 a day. That adds up to losses of
about $30 million since Sept. 11, along with rising costs for security.

To cope, the airport has cut roughly $90 million from its $330 million
operating budget, partly by redeploying staff to other tasks.

It could have been even worse, however, Gittens told the crowd.

MIA, as the gateway to Latin America, saw few of its international
flights trimmed after Sept. 11. In contrast, New York, Los Angeles and
other airports suffered deeper cuts, because they serve regions with
more excess capacity, such as the Middle East, she said.

Those cuts are likely to embolden rivals to seek out new business.

MIA already faces tough competition in the United States, with Fort
Lauderdale-Hollywood International Airport a key rival for domestic
travel and both Atlanta and Houston aggressively targeting the Latin
American market.

Worse yet, "our competition offers lower costs and better facilities,"
said Gittens. Airlines pay about $13 for every passenger they put on a
plane in Miami, compared with about $10 each in Orlando or $5 in Fort
Lauderdale and Atlanta, she said.

Gittens said the weak traffic and tough competition mean MIA can't
afford to spend $6 billion on its planned expansion. The airport should
go ahead with a fourth runway and a new South terminal to handle more
international passengers, but some upgrades of existing terminals and
some proposed new roadways should be scrapped, she said.

Gittens was firm too about MIA not paying for some $300 million in cost
overruns on a $1.3 billion concourse being built for American Airlines.
American has said it should not pay for the overruns, either.

"The county may have to take over the project and reduce the scope,"
said Gittens, noting the need for "prudent business decisions."


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