Staying Well Grounded

by Alan Sipress

Sunday, July 9, 2000

The breathtaking growth that has made Dulles International and Baltimore-Washington International the country's fastest rising major airports now confronts them with the high-wire challenge of rapidly building more ticket counters, parking spots and gates in the face of a mercurial airline industry with an unpredictable future.

For travelers, the explosive expansion has meant more frequent flights to more destinations, often at the lower fares born of competition. But it also translates into exasperation for those languishing on longer lines and scavenging for parking spaces.

Dulles, reaping the benefit of United Airlines' decision to make the once-sleepy airport into a hub for international flights, increased its number of passengers last year by 25.8 percent. BWI grew at 16.2 percent by capitalizing on Southwest Airlines' steady expansion to become a teeming source of low-cost travel.

The number of travelers at both Dulles and BWI surged at more than four times the average growth rate for North American airports in 1999, ranking them atop the list of the 30 largest, according to statistics recently released by the Airports Council International. They are each on a pace this year to serve 20 million passengers for the first time.

"It's busier than a year ago. Look at the number of people and lines like this," said Jim Gyolai, a Bel Air, Md., businessman departing from BWI, gesturing to a queue at the US Airways counter that coiled back and forth before snaking down the terminal and around a bend. "I don't remember it ever like this."

BWI and Dulles must plan and invest now, while keeping the airlines from knocking them off balance.

Just how unpredictable air carriers can be was underscored by the sudden announcement in May that United would seek to acquire US Airways. The deal could rock not only Dulles, if United decides to rethink its corporate strategy, but also BWI because of US Airways's extensive presence there, including its regional Metro Jet service.

"There's an enormous amount of volatility," said Richard de Neufville, founding chairman of the technology and policy program at the Massachusetts Institute of Technology. "Just as United decided to goose up Dulles, then for all sorts of corporate factors they can say: 'That was then, this is now.' "

Many industry analysts are optimistic Dulles will weather the merger, still under federal antitrust review, and can emerge even stronger. Officials at Dulles and BWI share this confidence but acknowledge feeling vulnerable because the growth at each airport has been powered in large part by the decision of a single corporation.

"That's something we worry about a good bit," said James A. Wilding, president of the Metropolitan Washington Airports Authority, which runs Dulles and Reagan National Airport. "We've taken on tremendous debt for more building at Dulles. We fret about that."

The number of travelers at National, where flights are limited by the federal government, declined 5 percent last year and has yet to rebound. Although 24 new takeoffs and landings are being added at National this year, the federal cap will still channel most of the burgeoning demand for air travel in the Washington region toward Dulles and BWI.

As the frustration of travelers mounts, Dulles and BWI are weighing substantial capital programs to add garages, terminals and even new runways that are estimated at $1 billion each. Dulles is now conducting preliminary engineering work on a fourth and fifth runway. The Federal Aviation Administration is evaluating the need for a fifth runway at BWI, where this fall, Gov. Parris N. Glendening (D) is expected to announce an ambitious expansion program.

If the airports fail to keep step with their popularity, they could choke off growth, sending passengers and airlines to other locations. But if they overreach, they may have trouble paying their bills because much construction is financed from landing fees and rents paid by airlines, taxes on passenger tickets and levies on parking, rental car agencies and other businesses. It is a tall challenge.

"The rate of growth comes with some risk," said David L. Blackshear, executive director of the Maryland Aviation Administration, which runs BWI. "If you misjudge the amount of infrastructure you need to respond to growth, you've made a serious mistake. If you build it and they don't come, there's no way to pay for it."

One reason that officials at both airports feel upbeat about gambling on the future is that they have achieved their sharp growth largely with passengers who begin or end their air travel at the airport rather than connecting to another flight. Origin-and-destination traffic is more reliable because it reflects the underlying demand for air service in the region, while connecting traffic can evaporate if hub airlines decide to overhaul their routes or pull up stakes.

Even as United has been building a hub at Dulles, origin-and-destination travel has remained between 70 percent and 75 percent of all trips there over the last five years. BWI has fared even better: Such passengers represent more than 85 percent of the trips in each of the last three years.

"You're less vulnerable to the corporate decisions of hub carriers. It's more a function of the local economy," said David Z. Plavin, president of ACI-North America. By contrast, some major hub airports such as those in Atlanta, Pittsburgh, Minneapolis and St. Louis are dominated by one airline with connecting passengers representing a substantial majority of the business.

High rates of origin-and-destination traffic also mean that the vast sums invested by local airport authorities largely benefit travelers and businesses in this region.

Indeed, it is the dramatic growth in the local economy, especially in Northern Virginia's high-tech sector, that underpins much of the airport boom by making it more alluring for airlines such as United to ramp up service.

"High-tech companies generate an awful lot of air travel growth. Some of the companies are very high-growth companies," said George W. Blomme, president of Aviation Planning and Technology Systems Consulting. Business travel is especially attractive to airlines because passengers often fly first class or pay a premium for last-minute tickets.

And while the spread of the electronic economy might have been thought to make much long-distance flying unnecessary, the Internet and other New Economy communications have actually fostered more air travel, analysts say. These technologies have allowed companies to extend their reach globally without diminishing the business person's appetite to meet clients and colleagues face to face.

The kind of home-grown prosperity that has made Fairfax County one of the richest counties in the country has also created a taste for high-end leisure travel. "There's a huge number of people in the region who will go to London for the weekend to have dinner and see a show," Wilding said. "From the airlines' perspective, this is really lovely."

Wilding likes to point out that most of the travel at Dulles is generated by the economic engine of Northern Virginia and the business corridor along Interstate 270 in Maryland. Only 10 percent of the travelers at Dulles are either coming from or bound for the District, he said.

BWI, by contrast, has tried to bind its image more closely to Washington, even advertising itself with pictures of the Capitol on posters in the London subway and in English taxis. The airport also paid about $140,000 last year for 28 public telephones in the terminals that can make local calls to the District.

The rising fortunes of the Washington area have finally persuaded airlines to turn their full attention to a region that was once grossly short of air service. Officials still remember when so few passengers used either Dulles or BWI that they had trouble finding enough customers to keep their restaurants and parking lots open.

"Dulles was probably the most underutilized airport in the United States until a few years ago," said Darryl Jenkins, professor of airline management at George Washington University. "BWI and Dulles were both underutilized airports. That's why they have such a rate of growth."

That's also why it will be difficult for the airports to keeping adding flights at this pace. Much of the excess demand has already been met.

Now, the lunchtime line at City Deli at BWI backs up well into the main terminal hallway, forcing suitcase-lugging travelers headed for outbound flights to weave through travelers headed for turkey sandwiches. "It's tremendously busier. It's crazy. There are no places to eat and no places to wait," said Bill Fleckenstein, headed home to New Hampshire after a family reunion in Bowie.

While tales of frustration with traffic, parking and the mobile lounges are nothing new at Dulles, a similar refrain is increasingly heard at BWI. Some longtime BWI flyers now avoid the airport. "Every time I come here, there's tons of people. There are so many people and the lines are so long that it's easier for me to fly out of National," said Gregory Walker, of Baltimore, who was waiting to swap his ticket for Las Vegas so he could depart from National instead.

Yet many passengers continue to swear by BWI. "I fly out of here all the time," said Linda Butcher, who lives near Frederick and could choose National but still finds it much easier to get in and out of BWI. "There are more people flying in and out of here all the time. The lines are longer. But they move fast."

Blackshear and Wilding acknowledge that the remarkable growth rates at their airports will inevitably decline. They hope to settle at a lower but sustainable level. But how long can they accommodate even that more moderate pace?

Only 15 years ago, Dulles was a provincial outpost amid dairy farms handling barely 5 million passengers a year. Critics scoffed at the decision to design an airport that would ultimately expand to accommodate 55 million a year. Now, Wilding wonders whether that will be enough.

"It's only a question of time when we reach the limits of what Dulles can do for the region," he said. "Some place out there for the region is another airport."

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