- The Washington Times - Monday, June 27, 2005

A surge in air travel has pushed revenue at Washington’s two commercial airports to record levels.

Washington Dulles International Airport and Ronald Reagan Washington National Airport recorded combined operating income of $63.9 million on revenue of $442.2 million in 2004, according to their annual report released last week.

“It was one of the most — if not the most — successful years we’ve had financially,” said James Bennett, president and chief executive officer of the Metropolitan Washington Airports Authority, the group that operates the airports.

Last year’s operating income exceeded 2003 income of $24.3 million by 163 percent.

Revenue from concessions — including parking, rental cars, food sales, newspapers and other retail sales — accounted for $173.9 million, or almost 40 percent, of revenue at the airports. Rent paid by airlines generated $143.3 million, or 32 percent, of the airport authority’s revenue.

Airlines have rebounded from the decline in business after the September 11, 2001, terrorist attacks, and airports are among the beneficiaries, said Spencer Dickerson, senior executive vice president at the American Association of Airport Executives, an industry group representing airports.

“The fact that passengers have returned to pre-September 11 levels means more revenue from things like parking and food. The industry certainly has rebounded,” Mr. Dickerson said.

Dulles Airport had 22.9 million passengers last year, a 35 percent increase over the number of passengers in 2003 and a record for the airport. Reagan Airport had 15.9 million passengers last year, 12 percent more than in 2003, but short of the record 16.3 million passengers who used the airport in 1993.

Last year, 688.5 million people flew on U.S. commercial air carriers, according to the Federal Aviation Administration, and the number of passengers is expected to reach 1 billion per year by 2015.

Dulles Airport has benefited from the presence of Independence Air, which began service there in June 2004 and now operates more than 412 flights in and out of the airport each day.

“Some of the increase [in passengers at Dulles] is directly related to Independence Air starting service. Some of it is indirectly related to Independence Air starting service as other airlines responded,” Mr. Bennett said.

One of the most reliable measures of airport activity is income from concessions, and the airports — whose financial data are combined in the authority’s annual report — saw revenue from nearly all concessions increase last year. Revenue from parking posted the single-largest increase.

Dulles Airport and Reagan Airport grossed nearly $100 million in parking fees last year, up 25 percent from the $79.7 million collected in 2003.

The airport authority has 25,223 parking spaces at Dulles Airport and 7,800 spaces at Reagan Airport, where parking shortages often frustrate travelers prowling for a spot. On average, 82 percent of the parking spaces at Reagan Airport are occupied each day.

The shortage of spaces there has airport officials working on a plan to increase parking, Mr. Bennett said, with a likely boost in revenue.

But while the airports experience a surge in business, Mr. Bennett said the fiscal state of the fragile airline industry is cause for concern. Two of the primary carriers at Dulles Airport and Reagan Airport, United Airlines and US Airways, remain in bankruptcy.

The proposed merger of US Airways and America West, which won regulatory approval last week from the Justice Department, is unlikely to weaken the airports, he said.

“We very much have concerns about the stability of the airlines. But we look at the strength of the overall market — the number of people who want to fly into and out of Washington,” Mr. Bennett said.

The return of general aviation at Reagan Airport will boost revenue another $4 million to $5 million annually, he said. Federal officials are working on a security plan to allow for the return of noncommercial flights later this year.

The airport authority continues work on its massive capital improvement project at Dulles. The project, whose price tag has risen to $3.4 billion, includes construction of a fourth runway, a higher air-traffic-control tower and an underground train system to connect the main terminal to Dulles’ smaller concourses, all by mid-2009.

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