http://archives.californiaaviation.org/ ... 09637.html
Tuesday, August 1, 2000
TWA officials promote vote for airport improvements
By RANDOLPH HEASTER and MIKE RICE
The Kansas City (MO) Star
On Monday afternoon, a top executive and a top labor official from Trans
World Airlines Inc. plan to stand at the gate of the airline's overhaul
base, urging employees coming and going to vote next Tuesday.
This won't be just a civic exercise. They will be trying to do their part to
ensure that 2,600 TWA jobs at the overhaul base will exist in the future.
Upgrading the city-owned overhaul base is one of the key elements of a $395
million bond issue proposal that goes before Kansas City voters next
Tuesday. In addition to improvements to the overhaul base, the bond money
would go for three other high-dollar improvements at Kansas City
International Airport.
The bonds would be paid for through various airport user charges and would
not amount to any broad-based tax increase. Those charges eventually could
be passed on to airline passengers, but city Aviation Department officials
contend that airlines' fees make up a minimal percentage of any airline
ticket's price, compared with labor, fuel and maintenance costs.
That makes Question No. 1 on Tuesday's ballot relatively noncontroversial,
and passage of the bond issue is highly likely. No one spoke up against the
proposal at City Hall when it was being put on the ballot. And because taxes
aren't affected, there seems to be little, if any, organized opposition.
However, those whose livelihoods could depend on the bond issue passing
aren't taking any chances.
Aviation Department officials think the bond issue's approval is the final
element needed to ensure that TWA will renew its long-term lease at the
overhaul base. The city and the airline have been in lease renewal
negotiations for months. Though TWA has not commented on the talks, it is
widely thought that a 25-year lease will be signed once financing for the
overhaul base improvements is in place.
TWA extended its current lease by six months at the end of May.
Butch Sponaugle, president of Machinists Local 1650 in Kansas City, has been
distributing literature to his 2,200 members who work at the overhaul base.
He also appeared on a radio talk show over the weekend to discuss the bond
issue.
Sponaugle will be holding a sign at the overhaul base's gate Monday. He is
expected to be accompanied by the executive in charge of the maintenance
base, Jim Jensen.
"We don't want to have our guard down, by any means," Sponaugle said about
the union's campaign. "We don't want to engage in overkill, but we don't
want to be complacent, either."
In addition to helping TWA's overhaul base workers, Sponaugle said, the bond
issue would result in a boost to the overall economy.
"We're talking about a lot of work," he said. "It's a pretty good deal not
just for our aspect, but for the entire local community."
TWA urged its employees and supporters to vote in favor of the bond package.
"The bonds will fund improvements to the overhaul base that are essential to
TWA's future operations and will do so at no expense to the taxpayers," said
Julia Bishop-Cross, a TWA spokeswoman. "That protects thousands of Kansas
City jobs and a major Kansas City business, and makes KCI in particular an
attractive business environment."
Passage of the bond issue would lead to much design and construction work at
KCI over the next five years. Here is a breakdown of what the bond issue
would pay for:
$110 million for improvements to the TWA overhaul base.
$40 million for a new 15,000-space satellite parking lot.
$60 million for a consolidated car rental facility.
$185 million for an automated people mover among the parking lots, rental
car facilities and the airport's three terminals.
"This will take the airport further into the 21st century," said Jerry
Fogel, chairman of the Greater Kansas City Chamber of Commerce's Aviation
Committee.
The latest bond authorization that voters approved for KCI was in 1988. Of
those $330 million in bonds, $125 million paid for a second north-south
runway at KCI, renovation of Downtown Airport's terminal, new parking
garages in Terminals B and C, land acquisitions, and improvements to the
well and levee system at Downtown Airport.
The remaining $205 million will pay for the first big renovation of the KCI
terminals since the airport opened in 1972 and the overlay of the runway at
Downtown Airport. That project is expected to begin early next year and will
take until 2003.
"The (KCI) terminals really haven't been improved in any way since they've
opened," said Russ Widmar, director of the city's Aviation Department. "And
it's starting to show."
Widmar said the face-lift to the terminals would involve reroofing,
upgrading the heating and cooling systems, and replacing the glass, floors,
furniture and carpeting.
The baggage systems will also be changed and will be completely owned by the
city, creating more-efficient operations, Widmar said. Some baggage systems
at KCI are owned by the airlines that use them.
The terminal renovation could also involve moving some airlines to different
terminals. Vanguard Airlines, for example, may eventually move from Terminal
B to Terminal A, Widmar said.
The renovation will continue at all three terminals, and passengers who want
to get the latest update on the construction and changes can check
www.iflykansascity.com before going to KCI.
That leaves unfinanced the four projects envisioned in the $395 million
aviation bond issue proposal. Fogel said the proposed capital improvements
are important to the metropolitan area because of the airport's economic
effect.
A study that the Aviation Department commissioned in 1996 showed that KCI
contributed $3.3 billion to the local economy. Nearly 7,000 persons are
employed at KCI, while an additional 11,000 are employed indirectly through
businesses such as hotels, motels and transportation services.
Also, the city estimates that the passenger numbers, which reached an
all-time high of 11.5 million last year, could rise to an annual 20 million
by 2015. At the same time, cargo operations are expected to grow by 38
percent.
After being underused for years after Braniff's collapse, KCI has room to
grow. As other Midwest airports, such as those in Chicago and St. Louis,
become more crowded, carriers have begun to take advantage of the airspace
available at KCI.
"KCI is an economic engine for Kansas City," said Fogel, who has been
speaking to civic and neighborhood groups about the bond issue. Fogel also
heads the mayor's air bonds committee, which will finance a series of
television commercials on the proposal this week.
TWA's area employment has shrunk through the years while other businesses
have flourished in the Northland. However, TWA still has 3,600 area
employees, including about 2,600 at the maintenance base.
"The commitment is to keep those jobs in Kansas City," Fogel said. "The
Aviation Department and the city are committed to that."
The overhaul base is more than 40 years old, and the city enlisted Burns &
McDonnell to conduct a study on suggested improvements.
The engineering and consulting firm estimated that $48 million would be
spent on infrastructure, such as electrical system upgrades, roof
replacements, asbestos abatement, code compliance studies, roadway and
parking lot repairs, and waste treatment plant modernization.
Those upgrades, Burns & McDonnell estimated, would result in $1.6 million in
cost savings annually.
A second phase of improvements would cost $62 million. These projects would
be to allow the work force to do their jobs better and more efficiently,
such as adding equipment and tooling to work on new and existing engines.
TWA would pay for the bonds through lease payments made to the city.
In his talks with various groups, Fogel said a question he often was asked
pertained to TWA's shaky financial condition and what would happen to the
bonds if TWA collapsed. TWA, whose latest profitable year was 1988, lost
more than $350 million last year and has continued to post losses through
the first half of 2000.
The bond issue would be set up so the city will not be liable for repayment
if TWA shuts down, Fogel said. Aside from any remedy creditors could seek
should TWA file again for bankruptcy protection, the bondholders themselves
would be paying for the overhaul base improvements unless another tenant was
found.
"It would be in the hands of the investors, who knew the risks going in,"
Widmar added.
The most expensive project slated in the bond issue proposal is a
people-mover system, for which the city has commissioned a feasibility
study. It would probably be some kind of elevated fixed-rail system and
would provide connections among the terminals, new car rental facility and
the new satellite parking lot.
The people mover would either replace or supplement the buses that transport
people at the airport.
Supporters said the proposed rail system would move people much faster than
the buses. It also would reduce congestion outside the terminals and reduce
pollution.
The consolidated car rental facility would be in the existing satellite
parking lot near Cookingham Drive and Paris Street. It would provide space
for 10 rental car agencies and provide parking for about 8,000 vehicles.
The new facility would bring the car rental agencies closer to the
terminals. Most of those businesses are scattered around the north side of
the airport.
The new 15,000-space satellite parking lot would be built near Bern Street
north of Cookingham Drive -- the main entrance into KCI. It would open in
late 2003.
The existing 9,400-space satellite parking lot has no room to grow, said Tom
McKenna, marketing director for the Aviation Department.
"Projections show that we will need a substantial amount of parking spaces
in the years to come," he said.
McKenna noted that the 1988 bonds were originally intended to pay for a
fourth terminal at KCI.
But several events -- mainly the demise of Braniff and Eastern airlines and
the recession of the early 1990s -- caused the passenger numbers to fall at
KCI, thus putting the plans for the fourth terminal on hold.
But in recent years, KCI has thrived without a hub, led by the expansion of
Southwest Airlines. Aviation officials determined that the rest of the 1988
bond money would be better used for terminal renovations instead of a fourth
terminal.
Widmar said the airport projects proposed on next Tuesday's ballot are being
designed with the prospect that a fourth terminal may still be needed at KCI
someday.
