"No-frills approach might be boon for Phoenix Gateway airport"

Friday, June 13, 2008

No-frills approach might be boon for Gateway airport
by Art Thomason
The Arizona Republic 


Ever wonder what all those frills at an airport terminal may be costing you
as you wait for a flight?

Some low-cost airlines figure it's too much and are heading in the opposite
direction, says a new study.

Beneficiaries could include Phoenix-Mesa Gateway Airport, which is planning
to build efficiencies into passenger accommodations as fuel prices elevate
the cost of flying. 

The approach is counter to a trend of showering passengers with lavish
accommodations like boutique shops, a variety of dining and other
conveniences otherwise found in exclusive retail districts.

"We're very vocal in encouraging airports not to build Taj Mahals," said
Tyri Squyres, spokeswoman for Allegiant Air, Gateway's largest carrier. "We
want them to minimize construction or efforts that increase our costs. We
micromanage every expense. It's a tough day right now. Every penny counts."

An internationally known expert on airport design and operations said in a
new study that low-cost carriers with a preference for the budget setups
require terminals about half the size of those used by the legacy airlines,
a factor that helps minimize waits and delays.

"Airport planners are still building airports with fancy architecture and
lots of retail space, but the low-cost airlines often won't use them,"
Richard de Neufville, a Massachusetts Institute of Technology professor,
said in a prepared text about his research. "And the low-cost airlines are
not necessarily small anymore; they are a growing sector that represents the
future. They want smaller, cheaper airports that increase efficiency."

They use terminal space more intensively, such as sharing gate lounges while
requiring few if any retail outlets and restaurants, he said.

Such dynamics also lend themselves to fewer ground and air traffic control
delays than at larger airports, said de Neufville, who teaches at the
school's Department of Civil and Environmental Engineering. 

"Efficiency is the key," said airport planning consultant Jim Harris, who is
revising Gateway's blueprint for future development. "You've seen it happen
in other cities. Low-cost carriers move from one airport to another and make
it work. Southwest made a career of that."

But Harris cautioned that customer conveniences are not to be ignored when
passengers are spending more time than ever in terminals.

"Before 9/11 you could run through security and hop on a flight," he said.
"Now everybody comes two hours earlier. You'll find most of the restaurants
and bars packed. It's an interesting dynamic."

Considerably shorter waits at airports like Gateway, however, mean less
expense to the airport and to carriers such as Allegiant, Squyres said.

"People going on vacation who are our customers are in the airport a very
short time," she said. "They're not looking for a luxury experience."

Targets of built-in savings at Gateway include expansion of the existing
terminal and eventual construction of a new, larger terminal, Harris said.
Those are efficiencies expected to help the airport lure more low-cost
airlines.

"Efficiency is also in line with Gateway's marketing strategy," said airport
spokesman, Brian Sexton. "Passengers are willing to accept charges for extra
baggage as long as they get that basement price. And if they're looking to
save money, there's nothing more efficient than operating a satellite
airport with more built-in efficiencies."

An example of creature comforts that passengers are willing to sacrifice
will evolve within the next year as trailers are set alongside the terminal
to accommodate passenger growth while planning for the terminal's expansion
continues.

The $3 million terminal opened in 2001 and daily scheduled passenger
service, which began in 2007, quickly placed it at capacity.

"We'll do the best we can to make it a pleasant experience so our customers
don't feel like they're in a mobile-home park," Sexton said. "I guess you
could say it's an example of flexibility."

The terminal, even when expanded, will be fraction of the size of any of the
three terminals at the Valley's principal airport, Phoenix Sky Harbor
International Airport. 

"You'll be able to find what you want for travel, but it's not going to be a
castle of luxury," Sexton said.

Although the Phoenix airport's concession-laden terminals generate tens of
millions of dollars in annual revenue to finance operations, the airport is
raising fees it charges airlines for landing, leasing terminal space and
using gates and ticket counters. 

The timing for higher fees may not be good but the airport's fees are among
the most competitive in the nation, said Paul Blue, Sky Harbor's assistant
aviation director.

What Sky Harbor charges an airline in user fees represents 5 percent or less
of a carrier's operating costs, he said.

The price of fuel, however, has all airlines looking more closely at all
costs, said Whitney Eichinger, public relations manager for Southwest
Airlines. 

"We'll continue to work with Sky Harbor to keep costs at a manageable
level," she said.

To minimize charges to airlines, Blue said, airports have to generate
revenue from other sources and continue to provide amenities that keep the
airlines' customers coming back.

"We deliver efficient facilities, but we continue to recognize in the end
that many of our customers are coming through the front door of Arizona
maybe for the first time and making investment decisions and spending
dollars on vacation. We want them to have a very favorable attitude about
Arizona."

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