On wings of gold: Alternative financing schemes are propelling the high-flyin’ air terminals sector

The $4 billion renovation of New York City’s LaGuardia Airport is the first major U.S. aviation project delivered using a public-private partnership (P3) model.

October 05, 2017 |
Rendering of an airport concourse

P3 is taking off in airport construction. The $1.6 billion Midfield Satellite Concourse at the Los Angeles International Airport is among the P3-driven projects in the works. Rendering: Corgan in association with Gensler

Cities and airport operators are using innovative schemes to finance ambitious terminal projects at U.S. airports. The ultimate goal: improved passenger satisfaction.

The $4 billion renovation of New York City’s LaGuardia Airport is the first major U.S. aviation project delivered using a public-private partnership (P3) model. The airport’s new 1.3 million-sf Central Terminal B, which will replace the existing 1964 terminal building, is being led by a design-build joint venture of Skanska and Walsh Construction. WSP USA and HOK are the design partners.

“Given the extremely tight site and aggressive schedule, it would be extremely challenging to deliver this project through a traditional approach,” says Dwight Pullen, Director of Skanska’s Aviation Center of Excellence. “Our design and phasing solution worked a lot more seamlessly under a P3 arrangement.”

At Los Angeles International Airport, the new $1.6 billion Midfield Satellite Concourse, which is part of a wider $14 billion overhaul at LAX, is also being delivered using a P3 approach. Corgan and Gensler are collaborating on the design. A Turner-PCL joint venture is building the 12-gate concourse, which is scheduled to open in 2019.

“P3 is increasingly attractive to municipalities and airport operators, and I foresee a number of airports seizing the P3 opportunity in the next several years,” says Robert Chicas, AIA, LEED AP, Director of Aviation + Transportation in HOK’s New York shop.

They may not have a choice. According to Airports Council International–North America, airports will generate only about half the financing they’ll need to meet the estimated $100 billion infrastructure investment required through 2021. Combine the shortage of funds for capital infrastructure needs with uncertainty about whether the federal government will increase the passenger facilities charge, which is used for facility improvements, and “it’s a market ripe for new solutions,” says Pullen.

 

MAKING TERMINALS CUSTOMER-CENTRIC

Airports are creating hospitality-rich environments for passengers and visitors. “Customer satisfaction has bubbled to the top as one of the highest priorities at every airport in the country,” says Chicas. “All airlines see the terminals they operate in as an extension of their brand. They know the strength and perception of that brand is key to their commercial success.”

To adapt to changes in regulations and requirements, terminals are being designed as flexible environments with few columns, broad floor plates, clear lines of circulation, and lots of natural light. Air travelers are also demanding state-of-the-art technology and abundant amenities to enhance travel experience—or at least reduce some of the anxiety.

“Airlines and airports are working to put more control into passenger hands to streamline the process for experienced travelers,” says Wilson Rayfield, AIA, NCARB, LEED AP, Executive Vice President of Aviation with Gresham, Smith and Partners. His firm is helping Southwest Airlines integrate self-tagging kiosks in multiple locations across the SWA network.

Stuart Garrett, Project Manager in the Aviation and Federal Group at Burns & McDonnell, agrees. “People want to feel like they’re more in control of their journey. It makes them more comfortable. And less-stressed people spend more money,” he says.

 

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FOCUS ON REVENUE-GENERATING ACTIVITIES

Terminal designers are creating intuitive layouts and passenger flow that increase touch points around concession and retail offerings.

“With the tightening of connection times for domestic travel in the U.S., there has been an increased focus on grab-and-go concession opportunities and interactive spaces where passengers can plug in, recharge, and order food while still maintaining close proximity to their boarding gates,” says Thomas Haag, PE, National Director of Aviation with Walsh Group.

At the same time, airport operators recognize the need to accommodate a growing population of older flyers who need more time and assistance to pass through security and board their flights. “If it takes 15 more minutes for a person to board a flight, over the course of a day, that’s a huge impact on gate and aircraft utilization, which impacts airports and airlines,” says GS&P’s Rayfield. His team is working with the Airport Cooperative Research Program to develop a wayfinding guidebook for airport operators and planners to assist elderly and disabled air travelers.

Most AEC firms that specialize in terminal work see nothing but blue skies for the foreseeable future. “It’s obviously a great market for those of us who design and build airport projects, but it’s going to be a challenge to keep up with it all,” says Jay Fraser, VP and General Manager of Turner Construction Company’s Aviation Group.

 

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