"The great gate search at DIA"

Saturday, August 2, 2003

Commentary
The great gate search at DIA
The Denver (CO) Rocky Mountain News


Adouble shot of good news this week from Frontier Airlines: It banked a
quarterly profit even at a time when some airlines are flat on their backs,
and it is buying 29 more jets and expanding service.

The only question is, does good news for Frontier still translate into good
news for Colorado, too?

Frontier is based here, of course - the airline's current incarnation began
operations nine years ago - and its steady growth has certainly benefited
this state in the past. But the unfortunate fact is that Frontier is bumping
up against limits imposed by the number of gates it leases at Denver
International Airport. The shortage of gates is already distorting the
airline's schedules, forcing it to adjust arrivals and departures. And yet
it's unclear how DIA can meet Frontier's growing demand for additional
space.

DIA did announce a 16-gate expansion of Concourse A just last month that
would benefit Frontier, but that was under a city administration eager to
cut a deal before it packed its bags. In a statement to the Federal Aviation
Administration this week, Frontier raised reasonable doubts about whether
the project could even be financed given United's bankruptcy, and underlined
the high cost of any bonds that might eventually be issued. That cost would
be added to airline tickets, of course, at a time when airlines at DIA
already face the prospect of higher "enplanement" fees for every passenger.

It would be a shame if Frontier had to shift an increasing share of its
operations to another airport, yet that is possible if something isn't done.
Such as? In its statement to the FAA, Frontier makes a big deal over the
inefficient use of some gates at DIA. "United's current use agreement with
DIA," it says, "contains a minimum gate utilization requirement that is
unusually lenient relative to most other airport's use agreements."

Indeed, Frontier says it runs an average of nearly 10 daily departures from
its gates - significantly more than most other airlines, including United.
And Frontier argues that United's gates on Concourse A might not be used at
all if that airline weren't determined to block Frontier's growth.

Now, we don't know whether that last contention is true, but what is clear
is that DIA ought to be working to create a more efficient system for
utilizing gates, so that growing airlines aren't hemmed in by those that are
stagnant or in decline.

United still has a few months under bankruptcy proceedings to accept or
reject its lease at DIA. If the airport does wind up with the opportunity to
renegotiate the conditions under which United operates there, it should
insist on a higher standard of use for gates. It's crazy to spend hundreds
of millions of dollars expanding concourses and inflating the price of
tickets when the root cause of the gate squeeze is -let's face it - poorly
written contracts with the airlines.

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