Skift Take

In any other situation we'd sound flip and lazy if we said "we'll believe it when we see it." But this is an airport under the Port Authority of New York and New Jersey, which is the benchmark for corrupt and incompetent transportation and development agencies in the U.S.

Congestion is the biggest reason why LaGuardia Airport in New York is regularly rated the worst in America: Neither planes nor people move in an efficient manner through a facility designed for far, far less traffic.

When it’s completed in summer of 2022, a gleaming new LaGuardia will be a modern space featuring a collection of aeries and ample natural light, where passengers walk above moving airplanes as they head to their gates.

Designers are planning to reduce the distance from curb to gate by an average of 300 feet, the project’s chief executive, Stewart Steeves, said in a recent interview. New, more upscale dining and retail options are also likely. The first new gates are slated to open in the spring of 2018.

For New Yorkers faced with the prospect of using LaGuardia, going there early has always been a function of terrible necessity. No more, says Steeves, who oversees LaGuardia Gateway Partners, the consortium managing the aged central terminal and its $4 billion, six-year overhaul.

“Our objective is to get to a place where people make a conscious decision to say, ‘Let’s go to the airport early and have dinner there because there’s some great restaurants,’ and then get on the plane,” he said. “That sounds a little bit humorous in the current [airport] context.”

The consortium won a contest for the project earlier this year. In June, it took over the terminal, which houses carriers that include American Airlines Group Inc., JetBlue Airways Corp., Southwest Airlines Co., and United Continental Holdings Inc.

LaGuardia Gateway Partners will construct and operate the new 35-gate facility through 2050 as part of a public-private partnership with the Port Authority of New York & New Jersey. The consortium has also budgeted $5 million to address the most offensive aspects of the current terminal, including patches to its famously leaky roof, upgrades to notoriously unwelcoming restrooms, and new paint and repairs to the spotty air-conditioning system, Steeves said.

Delta Air Lines Inc. reached a similar agreement with the Port Authority this past summer and will spend a large sum to revamp its end of LaGuardia, terminals C and D. Those buildings will be collapsed into a 37-gate facility with four concourses. The Port Authority is contributing $600 million to Delta’s costs, though a final agreement on design and budget is still pending.

Avoiding Hours on the Tarmac

A central tenet of the maligned airport’s overhaul is creating more space for aircraft movements, helping to avoid LaGuardia’s perpetual “we’re No. 27 for takeoff” conga line. To do this, the airport design incorporates several features aimed at increasing “airside flexibility,” or the ability of aircraft to maneuver more easily at the city’s smallest airport than they can today. To accomplish this, LaGuardia will feature concourses that allow aircraft to taxi 360 degrees around the terminals, avoiding the narrow alleys that currently impede traffic flows.

“Today it’s one way in, one way out,” Steeves said of the airside. Planes will also need to move less before pilots fire up the engines—jet blast into an adjacent gate won’t pose an issue, thus allowing flights to get underway faster.

The non-Delta part of the airport will also see a major revamp in airline real estate. The consortium is gradually ending the carriers’ gate leases and shifting to a “common-use” plan for all 35 gates of Terminal B. This “hotel-style” approach means the carriers will no longer need to own ramp equipment, signage, gate computers, jet bridges—or to fix stuff that breaks. That will allow a gate that Southwest typically uses to host a United flight, or vice versa, when bad weather hits and the airport must triage.

It’s New York: Someone Has to Pay

This arrangement, common in Europe and Canada, coupled with a new airport whose investors want steady returns, will mean operating costs for airlines roughly triple those of current Terminal B prices. Under the new scheme, direct expenses for things such as tugs, new signs, and replacing broken IT will disappear as airlines fund infrastructure through their payments to LaGuardia Gateway Partners.

Revenue from airlines using Terminal B will rise from an estimated $49.9 million next year to almost $230 million in 2025, three years after the project is scheduled to finish, according to projections filed with the April offering document the project’s backers used to pitch bonds to finance the renovation. Airlines have been accepting of the higher costs, Steeves said.

“It’s the price of progress, and we are big supporters of the project,” said Mike Minerva, vice president of government and airport affairs at American, the second-largest carrier at LaGuardia. The higher operating cost “was already baked into everybody’s thinking.”

Southwest, the third-largest carrier at LaGuardia, declined to comment. A United spokesman said the airline had no one available to comment this week.

“The whole story there is that this airport needs to be torn down and rebuilt,” Minerva explained. “You want to operate in New York, this is what you got to pay to do it. And New York is obviously a tremendously important aviation market.”

Potential for More Revenue

Spirit Airlines Inc., an ultra low-cost carrier, likes the common-use approach because it will offer greater flexibility, company spokesman Paul Berry said in an e-mail. “We’re hopeful this will be a cost-neutral proposition for us,” he said of the new operating environment.

The good news for airlines is that while the future LaGuardia will be more expensive at the front end, it’s likely to boost their revenues as well, Steeves said. The industry’s trend toward “upgauging,” or flying larger aircraft as 50-seat regional jet use fades, will be more practical at a LaGuardia with more elbow room. The airport’s average seat count today is just a bit more than 100 due to a heavy mix of 50- and 76-seat regional jets.

Each new gate will be able to accommodate the largest Airbus Group and Boeing Co. narrow-body aircraft, the A321 and 737-900, respectively, while several will be equipped to handle a wide-body jet as large as the 767-400.

Moreover, Delta has been pressing regulators to revoke LaGuardia’s “perimeter rule,” which limits flights to 1,500 miles except on Saturday. That change would enable nonstop service to Los Angeles and San Francisco—and likely command a premium given LaGuardia’s proximity to Manhattan and the fact that its operations are governed by federal “slots” allotted to airlines.

Rival carriers have argued that LaGuardia can’t manage its current customers, making talk about long-haul service premature. The revamped airport, however, won’t have that problem—and the airlines might well be eager to offer new, higher-priced West Coast routes.

©2016 Bloomberg L.P.

This article was written by Justin Bachman from Bloomberg and was legally licensed through the NewsCred publisher network.

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Tags: laguardia, lga

Photo credit: A Port Authority customer care representative helps arriving passenger Katie Smith, of Chicago, find a temporary taxi pickup location outside of Terminal B at LaGuardia Airport in New York, where a $4 billion upgrade is underway. Kathy Willens / Associated Press

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