"Denver's airport faces rocky future"

Monday, December 9, 2002

Denver's airport faces rocky future 
By Valerie Richardson 
THE WASHINGTON (DC) TIMES 


  DENVER - Airports across the nation are bracing for the hit from
United Airlines' looming bankruptcy filing, but nowhere is the blow
likely to land as hard as in Colorado. Top Stories 

  United Airlines, with its parent company, UAL Corp., dominates the
Denver skies like no other. Sixty-four percent of the airport's
passenger traffic comes from United and its United Express regional
carriers.

  With the 7-year-old airport still paying off a $3.8 billion senior
debt load, last week's rejected loan guarantee for United could put the
distinctive white-peaked, tented airport in some mile-high financial
trouble.

  Colorado Gov. Bill Owens, a Republican, says United is "critical" to
the state's economy but he is confident the airline will weather its
financial crisis.

  "I obviously believe United will keep flying," Mr. Owens told the
Rocky Mountain News. "It will keep flying; it will keep employing
thousands of Coloradans."

  Still, with the state reeling from the economic effects of the
summer's wildfires, the drought and the telecommunications collapse, the
United bankruptcy could hardly come at a worse time.

  Chuck Cannon, Denver International Airport spokesman, said the airport
had planned for a "worst-case scenario" that would result in a 30
percent reduction in connecting passenger traffic.

  Even with such a forecast, Mr. Cannon said, the airport could continue
to cover its debt load. He said that origination and destination traffic
is unlikely to decrease dramatically.

  "We think that if United files Chapter 11 and reorganizes their
operation, there won't be a significant impact," he said. "People will
still keep coming to Denver. They may just have to do it on other
airlines."

  Mr. Cannon predicts that Denver will continue to operate as a major
airline hub if United reduces its flight load. He said the airport, with
its three bad-weather runways, operates more efficiently in snow than
the other United hubs.

  "They may reduce fewer flights here because they're making money
here," Mr. Cannon said. "They've got a nice, efficient operation here.
They can move flights in and out even in bad weather."

  United has larger hubs - both Chicago's O'Hare International Airport
and San Francisco International Airport offer more flights - but nowhere
is United more dominant than in Denver. The airline's closest rival is
Frontier Airlines, which accounts for less than 12 percent of passenger
traffic.

  Other major airlines, such as American and Continental, account for 10
percent or less of the airport's business.

  A United bankruptcy filing could result in a downgrade of the
airport's bond debt from its A-plus rating. Airport managers already
have been asked to cut 6 percent more from their 2003 budgets.

  "There's a lot at stake here," said Randy Petersen, editor of
InsideFlyer magazine in Colorado Springs.

  He said the September 11 terrorist attacks might have helped prepare
airports like Denver's for a season of post-crisis belt-tightening.

  "The airlines, after September 11, didn't start flying 100 percent of
their schedule right away," Mr. Petersen said. "So the airports have
seen a smaller United already. If anything, it'll be deja vu all over
again for all the hubs."


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