Top Airline Taps Dulles as a Base

by Frank Swoboda; Alan Sipress

Thursday, January 7, 1999

United Airlines announced yesterday that it will make Dulles International Airport the base of its East Coast operations, initially increasing the number of domestic flights at the airport by 60 percent and possibly adding low-fare shuttle service to Boston, New York and Atlanta within a year.

"We see Dulles as our place on the East Coast," United Chairman Gerald Greenwald said in an interview. "There's real economic growth in the Washington-Baltimore metropolitan area, and we want to be there."

Nearly 10 million square feet of commercial construction is underway within a 20-minute drive of Dulles, equal to a third of the total office space available in Atlanta, Denver or Seattle. Growth in the area surrounding Dulles has already attracted new service by Arlington-based US Airways and Delta Air Lines. Passenger traffic at Dulles during the past year was up about 14 percent over the previous 12 months, to 15.7 million passengers from 13.5 million.

The arrival of the new United flights is apt to trigger new fare wars at Dulles. Greenwald said yesterday that even without a designated low-fare operation, United, the nation's largest airline, would be "price competitive" with its new operations.

With the existence of Delta Express, AirTran and most recently US Airways MetroJet, Dulles is also beginning to rival Baltimore-Washington International Airport for low-fare air service. Last year 29 percent of BWI's domestic passengers flew on low-fare carriers while 19 percent of the passengers at Dulles did so.

Starting in April, United will increase the number of jet flights out of Dulles from 73 to 117, with new or added nonstop service to Boston, Hartford, Conn., New York, Orlando, Tampa, Miami, Atlanta, San Francisco, Seattle, Los Angeles and San Diego.

Rono Dutta, United's senior vice president for planning, said in a telephone news conference from Chicago there was a high probability United would start a low-fare shuttle service to Boston, New York's La Guardia Airport and Atlanta within four or five months after the start of the new nonstop flights to the three cities. Both Dutta and Greenwald said they wanted a chance to study the flight patterns from the three airports before making a decision.

The potential problem is airport congestion. United's low-fare service on the West Coast -- Shuttle by United -- requires a 20-minute turnaround time to be successful. United officials worry that they will be unable to land, unload, reboard and take off again in such a tight window at East Coast airports.

Dulles already has seen major growth in the service to La Guardia in the past year, and a low-fare service would have a major impact on air service in the Washington-New York-Boston corridor.

James A. Wilding, president of the Metropolitan Washington Airports Authority, said the United announcement "takes Dulles from a superheated growth rate to whatever you call two degrees beyond a superheated growth rate."

"We have our work cut out for us to deal with that growth rate," he added.

The additional flights by United and new flights announced earlier by US Airways represent a 30 percent increase in jet departures from Dulles, according to authority officials. That growth would come on top of a what has already been a sharp rise in activity at the airport. Passenger traffic in November was up 21.7 percent over the same month in 1997, the fastest growth rate in Dulles's history, the authority reported yesterday.

The expansion does not include the United Express operation of Dulles-based Atlantic Coast Airlines, which operates 236 daily flights out of the airport.

Greenwald predicted the same kind of expansion at Dulles that United has just completed at Los Angeles International Airport, where the airline has more than doubled the number of its flights and greatly expanded its international operations over a four-year period. Greenwald said this is just the first phase of an expansion at Dulles that will take several years to complete. United said it currently employs more than 10,000 people in the Washington area, and Greenwald said the airline would be adding another 355 full-time jobs at its reservation center near Dulles.

United said it plans to continue its presence at both Reagan National Airport and BWI, where it has between 15 and 20 flights a day. But there are no plans to expand United's operations at either airport.

Economic studies conducted by United show there are more "high-mileage" passengers in the Washington area than in Denver, where the airline controls more than 70 percent of the air traffic. The studies also showed what Greenwald called a "growing concentration of the flying public" in the Dulles area.

David T. Ralston Jr., chairman of the airport authority, asked airport officials yesterday to begin a two-week evaluation of how the additional flights would affect airport services in the short term.

Despite the dramatic increase in flights, Dulles Airport Manager Keith Meurlin said he expected that only minor staffing changes would be required because most of the flights would be added during the morning and early afternoon, when the airport has excess capacity.

Airport officials said the major long-term impact at Dulles would be to heighten the need for capital improvements already in the planning stages. The authority would look in particular at accelerating the timetable for building a new parking garage, which is already needed to ease parking difficulties at Dulles.

The authority also would consider speeding up its construction of a new passenger tunnel, a larger baggage handling facility and additions to the main terminal, officials said. Funding for these projects, which require federal approval, has been stalled since the fall because of a dispute with Sen. John McCain (R-Ariz.) over operations at National, which is also run by the airport authority.

United's announcement was seen as a direct threat to US Airways. In a special bulletin to that airline's employees, Chairman Stephen M. Wolf and President Rakesh Gangwal called the United expansion a "serious concern" but said "US Airways is ready for this challenge."

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