Mayor: Airport in need of new, modern terminal
Mayor Ron Nirenberg says San Antonio International Airport needs to think big and build a newterminal, despite the current plunge in passenger traffic stemming from the COVID-19 pandemic.
“For San Antonio’s airport to reflect the big-city, tier-one status that we aspire to, we’re going to have to upgrade our facilities and our air service delivery in general,” Nirenberg said.
Airport officials and the mayor-appointed Airport System Development Committee are putting together a 20-year master plan that will in part help determine what to do with the airport’s 36-year-old Terminal A, its main departure and arrival area.
Despite recent renovations that cost more than $30 million, the terminal’s narrow passageways are about half the size of more modern terminals, and they can’t be widened. There aren’t enough restrooms, and seating areas near the gates aren’t spa
cious, leading to overcrowding.
The plan also could recommend improvements to the airport’s smaller Terminal B, which opened 10 years ago. That facility already is considered outdated, given modern airport design.
The final plan, which will need to be approved by the mayor and the City Council, has been pushed back to next summer. City officials had hoped to approve the plan this summer, but they had to put on hold public hearings necessary to finish the plan because of the pandemic.
The plan is in the works as the airline industry weathers a historic downturn. Like other airports across the U.S., San Antonio International had seen strong passenger growth in recent years until the pandemic stopped most travelers from flying.
More than 10 million passengers passed through the airport in 2019, up 20 percent from five years ago. Though growth projections for the next two decades were more modest, the case for more gates at the airport was clear.
Now, with the passenger count dropping to less than a third of what it was before the pandemic, the question is how long it will take the facility to return to 2019 levels.
While it may take several years for passenger traffic to recover, Nirenberg said, the airport still needs a modern terminal.
“From a customer experience standpoint, people know their airports based on their terminal experience, and right now their terminal experience reflects a midtier airport — and that’s not what this city aspires to,” he said.
Nirenberg said better facilities and air service would ease business travel for existing companies andwould be a plus for those considering relocating to San Antonio.
“It’s essentially the welcome station for the city of San Antonio — it raises the bar to attract businesses,” Nirenberg said.
San Antonio International’s limited nonstop destinations, compared with other airports, have been a detriment for the business community. The issue made headlines when telecommunications giant AT&T announced in 2008 that it was moving its headquarters from San Antonio to Dallas in part because of the lack of direct flights at the airport.
A new terminal wouldn’t guarantee more nonstop offerings at the airport, Nirenberg said, but up-to-date facilities could help.
“One of the questions we have to ask ourselves is what elements do we have some degree of control over?” Nirenberg said. “One of them is ensuring that business travelers or visitors or tourists have a first-class experience in our airport.”
Despite San Antonio’s standing as the seventh-largest city in the U.S. — though its metropolitan area ranks 24th largest — the Federal Aviation Administration categorizes the airport as a midsize facility. The latest FAA data, from 2018, shows that 43 other airports had larger passenger departure counts.
How to pay for future upgrades will be partly in the hands of Aviation Director Jesus Saenz Jr. He took over earlier this year after serving as chief operating officer at the Houston Airport System.
Nirenberg said the city hired Saenz in part for his experience with airport renovation projects. Houston’s George Bush Intercontinental Airport opened a newdomestic terminal in 2017 and is building a facility for international travelers.
“That’s one of the strengths that Jesus brings to the table,” Nirenberg said. “He’s done it in every way it can be done, and we need that experience because we need a financing plan, and that’s obviously critical.”
A new terminal could cost as much as $1 billion.
Saenz declined a request for an interview.
In a statement, he said the “data-driven” master plan “will allow us to make informed, tactical decisions to determine what we can afford and to prioritize future airport expansion or construction projects — while also taking into account changes in the aviation industry as a result of the COVID-19 pandemic.”
In the past, officials funded airport upgrades through a combination of bond financing, rents from airport concessions and user fees on passenger air tickets and rental cars. But revenue has dropped in recent months, with fewer passengers using the airport, making it potentially harder to fund new projects.
The airport’s $79.1million operating budget for the new fiscal year, which starts Thursday, is $33 million smaller than this year’s because of the fall-off in revenue from airport concession and parking fees. The airport had to use more than $15 million in federal stimulus money to make up for lost revenue and pay for continuing operations this budget year, Saenz told the City Council on Aug. 26.
Repayment of $388.4 million in bonds for San Antonio International also is tied to the airport revenue and user fees. Two bond rating agencies, Standard & Poor’s Financial Services and Fitch Ratings, have issued negative outlooks on the debt but have not lowered the airport’s bond ratings.
A downgrade would increase the interest rate the airport would have to pay to borrowers for future bond sales.
The newest facility at the airport opened in 2018. The consolidated rent-a-car facility was funded largely with a $123 million bond issue.
John Dickson, co-owner of a San Antonio cybersecurity company and chairman of the Airport System Development Committee, said the pandemic could affect funding options for a new terminal, with financially struggling airlines likely to balk at higher fees.
“We understand the economic status of the airlines right now, and that is part of our planning process,” Dickson said.
Nirenberg said one of the problems at the airport is that the city previously made upgrades on the cheap.
“The calculus for passenger capacity is changing across the world as a result of the pandemic,” he said. “Butwhat remains the same is that wewant to havea21stcentury experience in the San Antonio airport, and right now our terminals reflect the kind of penny-pinching 1980s and 1990s mindset in which they were largely built.”
New airport terminals across the U.S. have spacious seating, inviting areas featuring artwork and restaurants, and other amenities built between gates so travelers still can keep an eye on their flights.
Dickson said even the newer Terminal B is “antiseptic.”
The terminal was built for $120 million, considered a bare-bones price even a decade ago.
Nirenberg said he wants art and restaurants in the airport to reflect San Antonio, so travelers get a sense of place.
“There’s no way to retrofit a midtier terminal into a top-tier terminal,” he said. “You just can’t do it. We gotta set ourselves a vision we want to have and go for it.”