New Indianapolis International Airport Terminal is in a HoldingPattern

New Airport Terminal is in a Holding Pattern
Indianpolis Star, IN 

December 24, 2003
 

Mayor Bart Peterson on Tuesday announced a delay of 12 to 18 months -- to the 
end of 2008 -- in the scheduled opening of a new Indianapolis International 
Airport terminal.

The move comes in response to pleas from the financially troubled airline 
industry, which responded positively to the decision but did not rule out 
requests for even more delays in the future.

While Peterson expressed confidence that there will be no more delays, he said 
city and airline officials would sit down next fall before completing a new 
timetable for the terminal's construction.

"We're going to talk again in a year and look at the state of the industry 
before we pull the trigger," the mayor said.

The terminal is part of a nearly $1 billion airport expansion that has been 
hailed as one of the biggest construction projects ever undertaken by the city.

Reduced airplane taxiing times, a better layout for security, improved road 
access and increased economic development possibilities have been cited as 
benefits of the project.

But airlines, which are set to pick up roughly 60 percent of the project's 
cost, have long complained that the industry is in no condition to foot the 
bill.

"We, the airlines, have to pay for it, and we're anxious to get a head of steam 
going before we do that," said George Mikelsons, chief executive officer of 
Indianapolis-based ATA Airlines, the largest carrier here.

After a series of meetings in recent months, Peterson said the airlines 
convinced him a delay was the right move. He called Tuesday's news "a 
concession to reality that I would rather not have made but under the 
circumstances is the right thing to do."

Late last year, amid concerns about the airline industry's financial condition, 
Peterson expressed confidence that the timing of the project was right. 
Although air travel from Indianapolis and the economy have picked up since 
then, the mayor said the project's success relies on a healthy airline industry.

"While the (economic) signs are better than they were last year, the industry 
from 9/11 to today has not recovered at a pace that allows us to stick to our 
original schedule," he said.

John Kish, midfield terminal project manager, said much work on the overall 
project will continue on schedule in 2004, including road and other 
infrastructure improvements and construction of a new control tower.

That work is being funded with federal dollars and passenger fees.

Work on the new terminal building, however, was initially set to begin next 
fall and will now be pushed back to the spring of 2005.

The delay is important for airlines because their roughly $580 million 
contribution -- from rent and landing fees -- will not begin to be paid before 
the terminal opens for passengers.

Mikelsons, the ATA chief who has helped lead the industry's push to delay the 
project, praised the mayor's willingness to work with airlines. Still, he said 
it was hard to predict whether the industry would be prepared to endorse moving 
forward with the terminal construction next year.

"You have to see a strong trend that is really sustained over several quarters 
in a row," he said. "Give us three or four robust quarters and we'll be sure 
where the industry is going."

According to airport officials, things are starting to look up for the industry.

Kish estimated 3.68 million passengers will depart from Indianapolis 
International this year, a number projected to be up roughly 7 percent over 
last year. That's still below the nearly 3.87 million passengers who flew out 
of the airport in 2000.

While the industry has rebounded somewhat, Kish said, "we had hoped to recover 
more quickly than it appears that we are."

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