International terminal for BWI is put on hold Foreign traffic fell 6% at airport in '92

February 17, 1993|By Suzanne Wooton | Suzanne Wooton,Staff Writer

Construction of a long-awaited international terminal at Baltimore-Washington International Airport has been postponed because of the expected loss of a major European carrier and the continued slump in the airline industry.

State officials said yesterday that the $120 million terminal would not be built next year as planned, even though the facility was seen as crucial to attracting more international passengers to the underused airport.

"Basically, we're putting it off," said Secretary of Transportation O. James Lighthizer. "It could be one, two, three years. Who knows?"

International traffic has long been considered a key growth area for BWI and other airports as the airline industry becomes an increasingly global business.

Indeed, between 1989 and 1991, international traffic at BWI grew 77 percent, or by nearly 200,000 passengers, while domestic business remained flat. State transportation officials argued that BWI's three-gate international facilities should be enlarged to accommodate traffic at peak times and to attract new international airlines.

But 1992 figures released yesterday showed that international traffic declined by 45,000 passengers, or 6 percent, last year, and the number of domestic travelers fell by 1 million, the largest drop at BWI in more than a decade.

State transportation officials said USAir, the airport's hub carrier, offered fewer flights and handled 22 percent fewer passengers. Although other airlines showed a 12 percent growth in passengers, the airport handled 10.6 percent fewer passengers overall.

While domestic traffic could improve next year, international business was expected to worsen.

KLM Royal Dutch Airlines, which offers three non-stop flights a week from BWI to Amsterdam, plans to move its operation to Dulles International Airport, BWI's major international competitor. No date has been announced for that move.

"If KLM moves, the decision [to build a new terminal] becomes far more speculative," Mr. Lighthizer said.

KLM is one of three carriers currently offering service to Europe from BWI. While KLM's expected departure was seen as a major setback at BWI, construction of the international terminal, known as Pier F, also faced intense political scrutiny because it lacked advance commitments from airlines.

"KLM was just a symptom," said Del. Timothy F. Maloney, the Prince George's Democrat who is head of the House of Delegates subcommittee that handles the airport's budget. "The Department of Transportation was haunted by the risk of spending $100 million and having a largely unused terminal."

BWI has long suffered from the reputation as an overbuilt and underused facility. While strategically located in the nation's fourth-largest commercial air market, it competes with two Washington-area airports -- National, in Arlington, Va., and Dulles, in Loudoun County, Va.

In 1992, the number of international passengers at Dulles jumped to 2 million from 1.5 million in 1991. Dulles opened a $34 million international arrival building last year.

The new international terminal at BWI has always been a "field of dreams" kind of proposition based on the notion that carriers will come if the state builds it.

But with air traffic declining and no definite commitments from international carriers, the terminal became an even riskier proposition.

"It's always going to be a gamble," Mr. Lighthizer said. "We want to pick the best time to take that gamble."

The decision to postpone the terminal raises further questions about whether BWI can remain competitive with Dulles and other airports, like Philadelphia's, that have made significant improvements in international operations recently.

The payoff from international business is substantial. According to one study by BWI, daily nonstop service to London is worth about $240 million annually to the state, while a daily flight to Tokyo would generate $700 million a year.

The airport offers no service to the Far East, largely because its longest runway is too short for fuel-laden jets to safely take off. Last year, Japan Air Lines opted to fly from Dulles instead of BWI because of the runway problem.

While construction of the new terminal will be postponed, the state plans to move ahead with a $15 million expansion of a runway from 8,500 feet to 9,500 feet.

In October, BWI imposed a $3 ticket surcharge to construct the international terminal and make other airport improvements. That fee will continue to be collected over the next 10 years and used to pay for improvements, such as the runway and the international terminal once it is built.

Typically, international terminals require more space because they handle larger aircraft, such as Boeing 747s and 767s, and because passengers must be processed through customs and immigration. Space is also needed for amenities such as duty-free shops and VIP lounges.

The airport can handle between 400 and 500 international passengers an hour. The planned expansion -- including more gates, lounges and a larger customs area -- would have given it the capacity to handle 1,200. But with KLM leaving, the situation is "just at or a little under capacity," Mr. Lighthizer said.

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