The fierce competition between Seattle’s Alaska and Atlanta’s Delta airlines is spilling over to the Port of Seattle, and it may reach your wallet in the form of higher airfares.
The Port Commission, which manages Seattle-Tacoma International Airport, must decide whether to build a new international arrivals terminal at the south end of the airport or expand the north satellite to accommodate additional domestic flights. At this point, there isn’t the money to fund both.
The commission puts the international terminal as its top priority, but there’s a problem – the price keeps ratcheting up. It started at $344 million and has now swollen to $608 million.
Because Delta has more than 5,400 flights daily to 64 countries on six continents, it would benefit most from a new international arrivals terminal. On the other hand, Alaska, which is mainly a domestic carrier, wants the Port to enlarge the north terminal, increasing the current 12 gates to 20, with more room for restaurants and shops.
The commission’s decision will shape the future of Sea-Tac Airport.
Sea-Tac handled 37.7 million passengers last year and analysts predict that number will grow to 66 million passengers by 2034. While 20 years seems like a long time, airport megaprojects take years to design, permit, finance and construct.
For example, the Port started planning the airport’s third runway in 1992, but after lawsuits and delays, it did not open until November 2008. Preliminary costs shot from $216 million to $1.1 billion at completion.
The commission’s decision on the dueling terminal expansions involves two of the Port’s most important customers, airlines that are also direct competitors.
Alaska is the Port’s biggest customer. It pays the Port $115 million a year and uses 40 percent of the terminal gates. While other airlines have consolidated and grown just six percent over the last decade, Alaska has grown by a whopping 43 percent on its own.
Delta is the world’s second-largest airline. The company, which has grown due to a number of major airline mergers, plans to nearly double the number of flights originating in Seattle by 2017. And Delta has begun competing directly with Alaska Airlines, even flying into Alaska’s remote state capitol, Juneau.
Alaska leaders object to the commission’s plan to pay for the new international terminal with a surcharge on all airline tickets, including Alaska and its subsidiary Horizon Airlines, which have more than half of the passengers flying through Sea-Tac.
In a recent Puget Sound Business Journal article, Joe Sprague, Alaska’s senior vice president, says the passengers who use the international terminal should pay for it. Mike Mederios, Delta’s vice president in Seattle, counters that the international arrival facility was built in 1973, and since that time, not a local dollar has gone into it.
The bottom line is, whatever the commission decides, it has to rein in the project costs. The Port’s airport master plan includes a list of other essential projects. It is in the best interest of all airlines to control skyrocketing construction costs. Another third runway fiasco is not in the interests of travelers, airlines or the Port of Seattle.
Failing to control costs could also shape the future of Sea-Tac Airport in ways the commission did not intend.
Raising air fares unnecessarily could drive passengers to other airports such as PDX, Portland’s international airport, where ticket prices may be lower. PDX, which has grown at nearly the same rate as SeaTac, also has twice as much room to expand and is just 150 miles away.
The commission should make sure its decision doesn’t tip the balance in favor of one airline over another or force Northwest travelers to look elsewhere to book a flight.
Don C. Brunell is a business analyst, writer and columnist. He recently retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.