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Flying colors

With a recovering regional economy, positive passenger trends and the blessing of the financial markets, expansion of the Portland International Jetport gets underway.

By Kathryn Buxton
 
It’s mid-morning on a recent Friday. The scene inside and outside the terminal at the Portland International Jetport could be described as controlled chaos. Inside, passengers are lined up waiting to pass through airport security. Outside, a major construction site wraps around the airport’s parking and terminal areas, heavy equipment rumbles around, preparing the site for a 137,000-square-foot, $78-million expansion that officially broke ground in early May and will come close to doubling the terminal size.
 
To Paul Bradbury, the jetport’s director, the chaos is just a sign of long awaited progress story of passenger growth. “After years of planning and design, I can’t tell you how pleased I am to be here today,” Bradbury told the crowd assembled at the groundbreaking.
 
Bursting at seams
 
Maine’s largest regional airport has been bursting at its seams for several years now, a victim of its own success and the challenge of increased security demands after the 9/11 terrorism attacks in 2001. Passenger traffic has shown a remarkable increase since 1995 – 57 percent. The biggest increases came after the jetport landed two low-cost carriers resulting in a 17 percent increase in enplanements in 2007 after Jet Blue began offering flights from Portland; and another 6.8 percent jump in 2008 after Air Tran launched its service to the city.
 
Even last year, when the nation was struggling to recover from a devastating recession and comparable regional airports saw major declines, passenger traffic held relatively steady at Portland. The city lost only 2 percent of its annual passenger traffic. Meanwhile, Manchester, New Hampshire, dropped 14.5 percent and Providence, Rhode Island, dropped 17.8 percent through December 2009. Even Boston’s Logan Airport saw a bigger cut, dipping 3.7 percent. Nationally, air passenger traffic declined 10.4 percent during the same period.
 
The possibility that Portland could experience a similar decline doesn’t appear to worry Bradbury. With the expansion finally underway and relief from terminal overcrowding in sight, Bradbury, in fact, couldn’t be more positive. His office on the second floor of the old terminal is packed with giant charts depicting passenger travel trends and architectural plans. Bradbury believes Portland stands to gain another half a million annual passengers in the years to come.
 
Eye to future gains
 
Bradbury expects Portland’s passenger count to hit 1.8 million this year followed by slow-but-steady gains in the years to come. “When I look at MaineDOT’s projections based on population growth, that sweet spot is 2.1 million passengers,” he said.
 
Ralph Nicosia-Rusin, airport capacity program manager for the New England Division of the Federal Aviation Administration (FAA), agrees. Portland still has room to grow within its catchment area. Still, he wants it made clear the expansion’s purpose and financing is not reliant on future growth. The chief impetus for the expansion is to allow the airport to “catch up with the growth it has already experienced” and to position it for the near future.
 
A lot of the strain on the airport’s existing facilities results from passengers leaving at peak early morning hours. “The market is a follow-the-sun market,” Bradbury recently told the press. “We are the start and the end of aviation in the U.S. so we start with the sun. We have a very early morning push of 6 a.m. to 7.30 a.m., and that’s our peak volume time of day, and during that peak hour, that’s where the facilities are most constrained and we need the additional capacity, and you have to meet that because that’s when the flights need to go out to meet their connections in other parts of the country.”
 
“All we’re trying to do is size the airport appropriately for the next 10 years or so,” said Bradbury. 
 
The FAA forecasts Portland’s growth to be in line with air passenger trends throughout the region. Region-wide, New England airports are expected to serve about 21 million passengers this year. By 2020, there will be about 26.6 million enplanements in the region and 33.3 million by 2030.
 
Security issues
 
Officials report the $78 million project is the largest in Maine history. The work includes the addition of three new boarding gates, eight passenger screening lanes, a new pedestrian “sky bridge” connecting the jetport’s five-story parking garage with the terminal and renovation of 10,000 square feet of existing terminal space. Also included is a new in-line explosives detection system (EDS) that will streamline passenger check-in (the $9.1 million cost for the EDS system is being covered by a Transportation Safety Administration grant). Currently, passengers have to check their baggage and carry it to the explosives detection system in the lobby. Passenger screening lanes would increase from four to eight, allowing the jetport to more efficiently screen the volume of passengers who leave early every morning. The project also includes construction of a $3.6 million multi-lane access road.
 
Mike White of White Bros. Inc., whose company completed several projects at the airport during the past 25 years, said this project is not only larger than anything the airport has done before, it has special challenges. Most recently White Bros. completed work on the airport’s general aviation apron, and White said the fact that so much of the work will take place within the airport’s security areas will present a major challenge to project contractors.
 
Turner Construction, a national firm with regional offices in Boston, is the primary contractor. Gorham Sand & Gravel has been hired for the dirt work and Turner says it is still in the process of negotiating with local subs. Construction is due to be complete in early 2012 and is expected to create about 100 jobs, about 90 of them estimated to go to Maine workers.
 
One particularly innovative aspect of the project will be the new geothermal heating and cooling system. That portion of the expansion project is being funded by a $2.53 million FAA VALE (Voluntary Airport Low Emissions) program matching grant. It is one of only two VALE grants awarded to date in New England. (Knox County Regional Airport in Rockland received $150,000, also for a geothermal HVAC system.) The jetport is putting up a local match of $133,000 for the energy-efficient system.
 
Market time out
 
The airport expansion was originally scheduled to be completed in 2009, but was sidetracked by the global recession. The investment firm Bear Stearns had been slated to issue the bonds, but collapsed in the economic meltdown. The city of Portland put the project on hold until the financial markets had improved. In April, J.P. Morgan, which bought Bear Stearns, became the underwriter for the $70.1 million in 30-year general airport revenue bonds, and the issue earned strong ratings from the two major investor services, Moody’s (A3) and Standard & Poor’s (BBB+).
 
“The positive outlook reflects the likelihood of an upgrade if the airport meets its financial performance, maintains its liquidity position and enplanement trends remain favorable,” Standard & Poor’s wrote in its analysis. Moody’s cited the jetport’s “conservative debt structure,” growth of low-cost carrier service and “resilience through the economic downturn.” On the strength of those recommendations, the bonds sold out quickly.
 
That Portland’s passenger numbers remained relatively strong for the past two years, despite the downturn, was a key factor.
 
The ‘comfort factor’
 
The fact the project is mostly user funded was important in gaining support for the expansion from the city or Portland, the FAA and bond markets. The bonds will be repaid from a $4.50 fee collected on every ticket sold.

A user-fee approach is what makes the numbers work – and gives passengers value for dollar.
 
“The passengers are buying this improvement in service,” said the FAA’s Nicosia-Rusin who describes the investment in chicken-and-egg terms. The money invested now, will help the jetport retain its customer base – and its diversity of air service providers. Currently, seven airlines offer flights out of Portland, though that will decrease by one when the planned merger of United Airlines and Continental takes place later this year.
 
The competition among air carriers helps keep ticket prices low, and combined with shorter driving times and improved security processing times will contribute to what Nicosia-Rusin calls the “comfort factor.”
 
“Air travelers will still have access to a small airport and if that airport can remain efficient, they’d rather travel [to the Jetport] than drive 90 or so miles to Boston,” said Nicosia-Rusin. “That gives you an environmental advantage, as well.”

 

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