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"Detroit bankruptcy plan calls for revitalizing Detroit city airport"



Thursday, April 4, 2014

Detroit bankruptcy plan calls for revitalizing Detroit city airport
By John Gallagher 
The Detroit (MI) Free Press


Detroit's aging city airport could gain new life and again provide passenger
service if a plan is approved to spend millions on a terminal, Jetway for
passengers and major upgrades.

The $28.5 million earmarked in Detroit emergency manager Kevyn Orr's
restructuring plan would also set aside money for a study of the airport's
role in its east-side neighborhood. The area near Conner and Gratiot and
along French Road has persistently high crime and poverty.

"I look at Detroit city airport and think it is a jewel that nobody's
polished," said Michael Boyd, an aviation consultant and president of
Colorado-based Boyd Group International. "Our idea is that it could be the
thing that revitalizes that entire area. The airport has huge value both as
a facility and also in terms of revitalizing that whole area of Detroit."

The money would come from the city's anticipated bankruptcy settlement. Like
other recommended investments in Orr's plan of adjustment, including $520.3
million for blight removal, the airport investment would take place over the
next several years as savings become available from settlements with
creditors.

The city's general fund has subsidized the airport in recent years because
its revenues "have fallen far short of expenses," Orr's plan says. In 2013,
the city's general fund contributed $300,000 to fund the airport's
operations. That contribution increased to $600,000 in 2014.

The facility - officially the Coleman A. Young International Airport - may
soon get some of the new partnerships it needs. Officials are talking to two
unidentified start-up regional carriers about providing scheduled passenger
service, airport manager Jason Watt told the Free Press on Thursday. The
planes would carry perhaps 75 to 100 passengers, providing flights to
destinations such as Chicago, Boston and New York.

As recently as the 1990s, hundreds of thousands of passengers a year
traveled through the airport on Southwest Airlines and Pro Air. But
Southwest pulled out in the '90s, and Pro Air closed in 2000 in a dispute
with federal regulators.

Since then, the facility, formerly Detroit City Airport, has operated solely
as a base for corporate jets and small private planes. It remains a busy hub
for those flights, with about 80,000 a year, but Watt said the airport could
handle much more.

"We are still an underutilized airport. We're nowhere near capacity, not
even close," he said in an interview at the airport.

Out of date

Watt said the airport needs a lot of new investment. The T-hangars, which
cater to smaller private planes, are decades out of date and underutilized.

"The facilities are just old. They're very difficult to maintain," Watt
said.

About $20.7 million of the new investment would pay for upgrades to hangars
for general aviation, upgrades to the airport's 53,000-square-foot passenger
terminal, and a new Jetway to let passengers board larger planes. Another
$6.5 million would go for personnel costs including training and benefits,
and about $1.4 million would go for new maintenance, security and the master
plan.

Experts interviewed by the Free Press agreed the airport could be great
again, as it was decades ago, provided its gets the new investment it needs.

The upgrades foreseen in Orr's plan do not include a runway extension or a
new runway, something that some outside critics have long maintained the
airport needs. The airport's main runway, known as 15/33, is about 5,100
feet long, and some aviation experts believe the airport needs a runway of
from 6,000 to 7,000 feet to accommodate the sort of jets carriers like
Southwest use on their routes, such as Boeing 737s.

In November 2012, Orr noted, a consultant prepared a 10-year capital
improvement program for the airport, which included several rehabilitation
plans, ranging from $55 million for upgrades other than runways to a
$273-million plan that included a new runway paid for in part by federal
grants.

In his plan, Orr said the city would explore a possible sale or lease of the
airport but would continue to subsidize and operate the airport until a
viable transaction was found. As Watt and other experts said, a sale is
highly unlikely because it would trigger a requirement that Detroit repay
the Federal Aviation Administration for airport funds previously received, a
figure Watt said could run from $25 million to $50 million.

Huge potential

Located on 263 acres in one of the most depleted districts of Detroit, the
airport retains huge potential. A 2011 study by University of Michigan
planning students found that 60% of the region's population lived closer to
Coleman A. Young Airport than to Detroit Metro Airport. The east-side
airport is a 10-minute drive to downtown Detroit and is close to expressways
and rail lines.

The 100-page U-M study, titled "Preparing for Takeoff," suggested that
instead of extending the existing 5,100-foot runway, which would require
relocating a portion of a cemetery just outside the airport, a new longer
runway might be built 750 feet to the west, which would not require a
relocation of graves. Watt said the idea makes sense, although it is
unlikely a new runway is in the airport's near future.

The U-M study also suggested the airport make relatively simple changes like
creating a better website and providing shuttle service for pilots and crews
to downtown hotels.

The U-M study noted several obstacles to the airport's growth beyond a
shortage of cash. A previous fixed-base operation, the company that handles
private and corporate planes, did not perform well and earned the airport a
reputation of high costs and poor service. A new fixed-based operator has
improved service, Watt said.

In addition, some pilots considered the neighborhood unsafe and hesitated to
fly or store their planes there. In the past, some travelers cited
insufficient parking for large numbers of cars. There is also competition
from other regional airports, which besides Metro and Willow Run airports
include Oakland County International and Bishop International in Flint.

Despite those obstacles, Watt and other advocates for Coleman A. Young
Airport believe new investment and a new regional carrier or two can help
the airport return to greatness.

"The end goal to all of this is to turn the airport into a destination where
people would like to come and benefit from all the wonderful things that are
happening downtown," Watt said. "Our location is second to none."

Coleman A. Young International Airport
 
Founded: Planning began in 1927, runway completed 1930 
Location: Conner Avenue between Gratiot and McNichols 
Owner: City of Detroit 
Current use: General aviation - private planes and corporate jets. About
80,000 flight operations a year. 
Previous use: Low-frills carriers Southwest Airlines and Pro Air flew from
the airport in the 1990s, but there has been no regularly scheduled airline
service since 2000. 
Longest runway: Approximately 5,100 feet

New investment

Detroit emergency manager Kevyn Orr proposes investing about $28.5 million
to upgrade the airport. The breakdown: 
$20.7 million: Facilities upgrades 
$6.5 million: Personnel costs, including training and benefits 
$1.4 million: Security, maintenance, master plan study

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