"CVG dedicates new airport runway"

Thursday, October 6, 2005
 
CVG dedicates new airport runway
By James Pilcher
The Cincinnati (OH) Enquirer

 
HEBRON - With the financial future of their main tenants in question,
Cincinnati/Northern Kentucky International Airport officials officially
dedicated a new runway today.

The $250 million project will be justified over the next few years - and in
fact is needed now - even in light of Delta Air Lines' bankruptcy, say
airport and Federal Aviation Administration officials.

"A runway is a long-term project and investment for the future," FAA deputy
administrator Robert A. Sturgell said in an interview after the ceremony.
"And even though Delta may be cutting its schedule in December, they will be
packing more flights into a shorter period of time, meaning capacity will be
at a premium."

The new runway won't officially go into use until Dec. 22, after new
air-traffic procedures are worked out and the new layout of the airport is
published and updated in national maps and charts. 

But because of potential weather problems, airport officials held the
ceremony more than two months in advance, using skydivers to officially cut
a large ribbon held across the concrete by two large fire trucks.

The event was held as Delta and subsidiary Comair slog through the
bankruptcy process. Atlanta-based Delta and its Erlanger subsidiary operate
Delta's second-largest hub locally and control more than 93 percent of the
traffic here.

Delta has lost nearly $10 billion in the last four years, and both Delta and
Comair plan to cut 26 percent of its flights locally.

But in restructuring its schedule locally, Delta will be putting more
flights into "banks," or closely scheduled groups of flights, meaning the
potential for more congestion during peak hours. 

Local airport officials say the new runway will help that congestion as well
as help airlines conserve fuel by cutting taxi times as well as take-off and
landing delays. An estimate done earlier this year showed the runway could
save up to $200 million in fuel in the first year.

Still, the local flight cuts will impact up to 1,000 jobs, mostly local,
including 350 at Comair. Delta and Comair combined to employ about 8,000
locally while the airport as a whole generates about 15,000 direct jobs
between airlines, concessionaires and service companies.

On Wednesday, Comair president Fred Buttrell told that airline's workers
that even more cuts in pay, work force and flights could be announced as
soon as next week.

Then today, Delta chief executive officer Gerald Grinstein said that if that
airline's pilot union didn't agree to negotiate $325 million worth of cuts -
including a 19.5 percent pay cut - he was prepared to ask the bankruptcy
judge to nullify the existing contract. Pilots already gave up $1 billion
worth of cuts, including a 32.5 percent pay cut, last fall.

"We've asked them, but they've not been willing to consent," Grinstein said.

Other non-union workers took a 10 percent pay cut on Jan. 1, with cuts of
between 7 percent and 9 percent for most front-liners coming on Nov. 1.

Airport officials have said Delta has stayed current on all its bills save
$2.9 million worth of landing fees. The new runway was paid for in part
through a $131 million grant from the federal government, and by
per-passenger fees collected on each trip through the airport.

Airport executive director Bob Holscher said the airport has a debt level of
$330 million, including insured bonds taken out for the runway that are to
be paid back using the federal money and the fees.

"But it won't come to that," Holscher said. "Even if Delta were to cut
further, we will be able to meet those obligations."

Delta included Comair in its filing on Sept. 14, the same day that Northwest
Airlines filed for Chapter 11 protection. That put more than half of the
domestic airline capacity in bankruptcy, with US Airways and United Airlines
still trying to get out.

But Sturgell said that even considering the financial straits of major
carriers, demand for air travel will not abate, and that more capacity will
be needed nationwide. He said six more runways would open in the next six
years nationwide, including one set to open next spring in Atlanta - the
site of Delta's largest operation.

"Our forecasts continue to call for growth of 3.5 percent a year, with the
system handling more than 1 billion passengers a year by 2015," Sturgell
said. "And if you look at the industry over time, there are always new
carriers, especially since deregulation."

William Robinson III, chairman of the Kenton County Airport Board, said even
if Delta were to downsize even more drastically locally, the new runway
would make the airport even more attractive for new competition - a sore
spot with many local travelers whose fares are much higher than the national
average due to Delta's dominance.

"The better air service an airport can provide, the better chance it has to
attract new carriers, and you couple our low landing fees with our increased
capacity, and we have a better story to tell when we go out and sell
ourselves to all airlines, including the discount carriers," Robinson said.


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