"Report Casts Cloud over Indianapolis Airport's Midfield Terminal Project"

Wednesday, June 9, 2004

Report Casts Cloud over Indianapolis Airport's Midfield Terminal Project
The Indianapolis (IN) Star


Massive capital investments at Indianapolis International Airport during
the 1990s boosted cargo volume dramatically, but not passengers -- and
there's no guarantee that a $974 million midfield terminal will generate
enough passengers to have a dramatic impact on the economy. 

Those findings, contained in a recent report by an IUPUI professor, are
the subject of some debate by city and airport officials. 

"Public officials generally believe that modern airport facilities can
boost economic development in a region. Clearly, aviation infrastructure
plays a crucial role in national and international networking, travel,
materials processing and regional development," writes Sam Nunn,
research director at the Center for Urban Policy and the Environment at
Indiana University-Purdue University Indianapolis. 

"However, in many ways the role of airports in economic success is
unclear, and even a cutting-edge airport, by itself, may be incapable of
sustaining adequate regional economic growth," Nunn wrote in a summary
of his report. 

City and airport officials have spoken broadly of economic benefit from
a new terminal but have stopped short of naming dollar targets. 

Probably the biggest initial impact will come in the form of
construction contracts that will have a positive impact on the local
economy, said John Kish, program manager for the midfield terminal. His
team estimates about $739 million in direct construction costs. 

Nunn said investments at the Indianapolis airport in the 1990s --
including continued expansion of FedEx's second-largest U.S. hub and a
U.S. Postal Service air hub that since has closed -- contributed toward
a 661 percent increase in enplaned freight tons over the decade -- the
highest among all nine airports Nunn examined. Among the airports were
Columbus, Ohio; Cincinnati; Kansas City; Nashville, Tenn.; and Raleigh-
Durham, N.C. 

At the same time, Indianapolis' passenger boardings rose 19 percent. 

"Thus, although aviation investment volumes in Indianapolis improved the
region's material throughput, the region's investments did not generate
parallel increases in passengers per capita, and they have had a weaker
effect on Indianapolis' economic success." 

He estimates an average of roughly $25 million a year spent on airport
infrastructure improvement in Indianapolis from 1990 to 2001 -- and now
even more with the massive midfield project. 

But even that spending on the passenger side doesn't guarantee economic
payoff, Nunn says. He points to other assets such as industry clusters
that can sustain economic development even if a city's aviation
infrastructure is lacking. 

Indeed, Indianapolis airport officials have said the city's life
sciences initiative helped business travel pick up last year and
contribute toward a 7 percent jump in passenger boardings for 2003. 

David Dawson, spokesman for the new terminal project, said Nunn's
research falls short of saying what kind of economic impact to expect,
so to raise doubts about its economic benefit is itself questionable. 

Dawson also said economic impact is too narrow a gauge of the terminal's
benefits. It fails to recognize other benefits, such as reduced aircraft
fuel consumption because aircraft no longer will have to taxi all the
way to the eastern edge of the field, where the current terminal sits. 

Moreover, the new terminal better accommodates post-9/11 security
improvements and is more adaptable to future passenger growth and new
low-fare carriers launching service here. 

"These things are being done for reasons of safety, conservation,
security, convenience and attractiveness. Indianapolis needs a new
terminal," Dawson said.

Kish said the vision for the new terminal has never been solely economic
in nature. "We're looking at it as building expansion capacity for the
next 50 years," he said.


 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************