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Dallas-Fort Worth Airport Taking Its Place On International Stage

Jan 12, 2014 9:00 am

Skift Take

DFW is making strides for being recognized as an international gateway, but it still has a long way to go. A $1.9 billion renovation will take seven years until it is complete.

— Dennis Schaal

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Max Faulkner  / Fort Worth Star-Telegram/MCT

An American Airlines jet crosses International Parkway as motorist slowly travel at Dallas/Fort Worth International Airport, Friday, Dec. 6, 2013. Max Faulkner / Fort Worth Star-Telegram/MCT


Dallas/Fort Worth Airport is looking ahead to life after 40.

The airport, which celebrates its 40th anniversary Monday, is entering middle age with a $2.3 billion face-lift on its original terminals and more flights to exotic international destinations like Shanghai and Abu Dhabi.

It’s also home to the world’s largest airline now that American Airlines and US Airways have merged.

The airport, built on an open prairie in 1974, has become a multibillion-dollar economic engine for North Texas, with 1,800 daily flights carrying over 60 million passengers a year. Almost 60,000 people go to work at DFW each day.

And even though it spent the last decade recovering from an industry downturn after the 9-11 attacks, DFW is poised to become an international hub connecting one continent to another, said Sean Donohue, the airport’s new chief executive.

“There’ll be more consolidation around the true global superhubs and obviously, that’s where we want DFW to be — one of those successful super global hubs,” Donohue said.

A Look Back

When the Civil Aeronautics Board ordered Fort Worth and Dallas to agree on a location for a regional airport in 1964, many were skeptical that it could be done. But political leaders managed to choose an 18,000-acre plot, roughly equidistant between the two cities, and construction began on the $700 million airport in 1968.

“DFW Airport was really the first time that Dallas and Fort Worth got together and agreed to jointly fund and operate a public convenience,” said Bud Weinstein, an economist at Southern Methodist University. “It’s historically important because it helped identify DFW as a region.”

On Jan. 13, 1974, the first commercial flight landed at the airport. It was American Airlines Flight 341 from New York, which had stopped in Memphis and Little Rock.

Eight airlines started service at the airport, which originally had three runways and 56 gates. The largest carrier at the time was Braniff Airways, with 152 daily flights.

When Congress deregulated the airline industry in 1978, American moved its headquarters to Fort Worth, the first of many corporations that would relocate to North Texas. Exxon, J.C. Penney, AT&T, Fluor and others moved to the Metroplex, partly because the airport had so many direct flights to U.S. cities and it was centrally located, making flights to either coast about three hours long.

Braniff added international flights from DFW, including one-stop service to Asia through Los Angeles after deregulation. But Braniff’s decision to buy new planes during a recession marked by high interest rates and fuel prices led to its demise in 1982.

American turned DFW into a hub, as did Delta Air Lines in the 1980s. The two carriers dominated the market, carrying 9 in 10 passengers who flew out of the airport in the 1990s.

After 9-11, the entire industry struggled with higher operating costs and lower travel demand. In 2005, Delta abandoned its hub at DFW, dropping from 268 daily flights to 20.

DFW has recovered from the economic slump, crossing back over the 60-million- passengers-a-year mark in 2013 and adding several domestic carriers, including JetBlue Airways, Spirit Airlines and Virgin America, along with international airlines such as Emirates and Qantas Airways.

“DFW Airport is the biggest economic engine in the region,” Fort Worth Mayor Betsy Price said. “It’s not just the airport but it’s the spinoff businesses that supply the airport for this region and the people they bring in for business purposes, for tourism and for conventions. It’s a major driver for us.”

And with American and US Airways completing their merger late last year, DFW is now the largest domestic hub for the largest airline in the world.

“DFW is our largest hub for the combined airline and will continue to be our largest hub,” said Tim Skipworth, American’s vice president for airport affairs and facilities. American operates more than 800 flights a day out of DFW and flies to about 190 destinations, he said.

A Much-Needed Makeover

As DFW turns 40, it has new leadership at the helm.

Donohue, a former Virgin Australia executive, took over the top position in October when the previous CEO, Jeff Fegan, retired after almost 20 years. Donohue has spent his first weeks battling an ice storm and becoming familiar with DFW and its $2.3 billion terminal renovation program.

“As we celebrate 40 years, the infrastructure of this airport is 40 years old and it really needs to be updated and refreshed,” Donohue said of the construction project, which won’t be complete until 2018.

“The customer that is obviously traveling through DFW Airport, they want to see the changes. We have to improve the infrastructure. We have to improve the ability to operate the airport, so there is no question we have to spend the money.”

The program, however, has already encountered over $200 million in overruns since it was planned in 2010, partly because of rising material costs and larger-than-expected asbestos abatement in Terminal B. Donohue said that his team has come up with $35 million in savings and that his priority is to get the project back on schedule.

Construction will be completed within weeks on three gates that connect Terminals B and D and on the DART station that connects to Terminal A. The Terminal B north stinger, which will add nine regional-jet gates to the terminal, will open this spring, and the second renovated section of Terminal A will open later this year.

“The refresh to these terminals is going to make this all much more customer friendly for the foreseeable future,” American’s Skipworth said.

In the renovated section of Terminal A, Gates 10 through 16, passengers like the security lines with more space and enjoy the variety of concessions, Skipworth said.

Although DFW was designed as an origin-and-destination facility, not as a connecting hub airport, industry analysts say it has done a good job of improving its terminals with Skylink to make it easier for passengers trying to make connections.

Terminal D, which opened in 2005, also features numerous shops, restaurants, clubs and spa services that cater to premium travelers.

“Sixty to sixty-five percent of passengers are connecting through DFW,” said Weinstein, the SMU economist. “They have a couple of hours to kill, so you want them to go shopping.”

A Domestic Challenge, an International Future

This year, the Wright Amendment, which limits flights from Dallas Love Field, will expire, allowing airlines to fly anywhere in the U.S. from the smaller airport.

For years, DFW fought against lifting the restrictions. But now that it’s about to happen, Donohue sees it more as a competition between American and Southwest Airlines and not between the airports.

“There is enough traffic in the Metroplex area to support both airports,” Donohue said. “We just need to be ready from an airport perspective that if it does drive a competitive reaction where there is more service, we need to be able to support that.”

The Wright Amendment compromise does not allow for international flights at Love Field, and that’s the market where DFW is likely to see most of its growth.

Aviation consultant Mike Boyd said DFW is turning into a global portal, like Dubai’s and Amsterdam’s airports, which funnel passengers between continents.

“That is what American is going to turn DFW into,” Boyd said. “They are going to connect Latin America with Asia and Latin America with Europe.”

The airport recently announced that Qatar Airways will launch service from DFW to Doha, and Etihad Airways will start flights to Abu Dhabi this year. American also plans to start nonstop service to Hong Kong and Shanghai in June.

But the biggest challenge, Boyd said, will be persuading a Chinese airline to start passenger service at DFW. The Oneworld alliance, which American is part of, does not have a Chinese airline partner, and Air China, the national carrier, began flights to Houston last summer.

Donohue said China is a focus because Asia is considered the hottest-growing part of the international travel market. But for possible growth opportunities, he also asked the airport staff to look at northern European carriers in Scandinavia that fly to the U.S. but don’t have service at DFW.

If the airport can attract more international carriers, it may need more gate space. The DFW staff has already started talking about building Terminal F, which would be on the west side of the airport, just south of Terminal D.

“We need to plan for it now. In my mind, Terminal F is not if. It’s when,” Donohue said. “If you look at the most conservative growth projections in terms of customers, by the end of this decade, we’ll have over 70 million customers going through DFW Airport. So even under the most conservative numbers I’ve seen, we’re going to need more gate capacity.”

American, which operates 85 percent of the flights from DFW, agrees that additional gates may be needed but said its new management team is focused on merging the two airlines before examining long-term growth opportunities.

“As we go forward and start looking 20 years out, 30 years out, certainly if things continue the way they are, we are going to need additional gates,” Skipworth said. “Whether that is [building Terminal F], whether that’s some other solution, there is going to need to be something in the next 20 years.”

For Donohue, the next 40 years at the airport will still be driven by growth and economic progress in North Texas. And if more Fortune 500 companies move to the Metroplex and more international carriers start service at DFW, the airport must be ready to accommodate the premium traveler.

“I want to make sure we’re doing everything we can from an airport perspective to take the premium customer experience and make it best in class, because when you look at this growth we’re seeing, we’re going to see more international, first- and business-class customers coming through Terminal D than we’ve ever had in the history of this airport, and they have higher expectations,” Donohue said.

This report includes material from the Star-Telegram archives.

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