Reagan National Airport will get a new concourse and larger screening areas, airport officials announced today. Meanwhile, Dulles International Airport’s decrepit United Airlines concourse isn’t getting replaced anytime soon. However, there’s hope for Dulles to get out of its doldrums.
For a while, the Metropolitan Washington Airports Authority has been facing a dilemma. More passengers are using National, while domestic traffic fell at Dulles. Dulles is not just unpopular, but also expensive for the airlines.
A 2013 Council of Governments survey found that National became the preferred airport for flyers in even larger swaths of Prince George’s and Northern Virginia than it was in 2011. It’s growing, and has been feeling the pinch in crowded waiting areas, parking, and security screening lines.
Changes should fix crowding problems at National
According to a briefing this morning, MWAA will build a new concourse for the regional jet flights. Today, flyers have to take a shuttle bus to these flights, which adds a lot of time and hassle, and the waiting area is crowded. There’s a building to the north of the existing concourses that’s now MWAA offices; that are will become the new concourse.
The security screening at terminal B/C, which now crams into the three hallways accessing the piers with the gates, will move upstairs to the level with the ticket counters.
The airport hit a record 20.4 million passengers in 2013, and MWAA expects it will soon pass 22 million. National is one of the few airports in the nation with legal limits on its airplane traffic. There is a set number of “slots” which let airlines take off or land planes, and a perimeter rule restricts flights to airports more than 1,250 miles away, except for a set of exemptions that Congress has added over the years.
Congress added eight new daily long-distance exemptions in 2012. Four of those, which went to airlines without a lot of flights at the airport already, also added to the number of total slots. When US Airways and American merged, the Department of Justice further required them to give up slots which went to Southwest, JetBlue, and Virgin America; those airlines are flying larger planes than US Airways had been.
But National has very limited space for new growth. Meanwhile, Dulles domestic flying is caught in something of a spiral: it’s less desirable than National, but its facilities also need more work. If people don’t fly there, the airport will take in less money, and airlines end up paying more per passenger. That might convince airlines to fly there less, meaning fewer people fly. And so on.
Isn’t that just as well?
MWAA frets a lot about this, but urbanists might ask, why is that a problem? National is more convenient for more people and has better transportation access. Why not have more air travel happen near the center of the region?
However, National’s runways can’t accommodate many more flights than there are today. The airlines could fly more larger planes (like 737s instead of regional jets; there isn’t room for widebodies), but there’s a limit on bigger gates. And even with the planned changes, there’s not a lot of spare space for passengers in the terminals.
Many flights and people are going to have to go to Dulles and BWI, and that means we all should want those airports to have a lot of flights. Dulles has long been a United hub. Most large airlines today fly a “hub-and-spoke” network where they fly almost entirely to and from their hubs. Without a United hub, there wouldn’t be flights to a lot of smaller eastern cities from Dulles, since United depends on connecting passengers to fill them.
This summer, some airline analysts even said United should drop the hub. Part of the reason: since it merged with Continental in 2010, United has an even better-performing (though also constrained) hub in Newark.
United hasn’t taken that advice, at least not yet, and a lot of people said it’s bad advice. But it reminds us that United does have to be successful at Dulles. And if people don’t want to fly in and out of Dulles, that creates a problem.
Dulles is more expensive
There is another reason people don’t like to use Dulles, and in particular, United’s gates there: Their concourse is awful. The C and D gates are in what was originally built to be a “temporary” concourse. It’s old, dark, and depressing. The A and B concourse, which serves international flights and other airlines, looks great… except for the little end of A for United regional jets, which is also terrible.
When MWAA built Dulles’ new train, it didn’t put the station right under the existing concourse, but a short ways away where the permanent one is supposed to go one day. Until that happens, however, you not only have to go from check-in to security to a train to the gate, but have an extra long walk.
United CEO Jeff Smisek has said United is reluctant to expand at Dulles because it is more expensive than other airports. Airports have to be self-sufficient and pay for their facilities and operations through revenue they earn inside the airport (like restaurant concessions) and fees airlines pay. When an airport wants to build new facilities, it has to take on debt that raises the costs for the airlines.
Airlines usually look at this as “cost per emplaned passenger,” or CPE. If passengers go up, the overall payment from airlines doesn’t change, but the denominator rises, so the CPE is lower. According to MWAA spokesperson Chris Paolino, Dulles’ is now about $26, though international carriers pay more and domestic ones (like United) less. The CPE at DCA is around $12 and at BWI under $10.
So not only is Dulles less desirable for passengers, but it’s pricier for airlines. If MWAA built a new concourse for United, it would expect United to foot most of the bill, and that means United would see Dulles as even more expensive than it is.
While Smisek isn’t revealing all of United’s calculations about what a new concourse might be worth to them, it’s not unreasonable for him to worry about that cost on top of all of Dulles’ other costs. That means either Dulles stays crummy or it gets even more expensive.
MWAA needs more revenue at Dulles
To lower the CPE, MWAA is trying to create new revenue at Dulles. Paolino, the MWAA spokesperson, said the authority is trying hard to do that, such as bringing in higher-end shopping and better restaurants to Dulles (and National).
MWAA has also been looking at developing some of the land around the airport with hotels and other uses, and pushing ideas for increasing cargo capacity at Dulles.
Unfortunately, this pressure to get more revenue at Dulles leads MWAA to push policies that are destructive for the region as a whole. It and other airport boosters lobby for more north-south highways along the Outer Beltway route so people can drive to Dulles, even though flyers would be a tiny fraction of the traffic on the road. It would mostly fill up with people buying houses in new sprawling subdivisions at the region’s fringe which would suddenly become more valuable with a highway.
New agreement will subsidize Dulles with revenue from National
The changes MWAA announced today are part of a proposed agreement with the airlines. If they ratify it, in addition to the changes at National, $300 million of revenue from National will help reduce the debt load at Dulles. Aviation reporter and GGW contributor Ned Russell reports that National’s CPE will rise to $14.68 and Dulles’ fall to $25.48. That’s still a big gap, but a little less than without the shift.
This seems sensible. While it’s a good thing more people are using National, it’s also not fair for the more desirable airport to have lower costs. The airlines want to fly at National no matter what; higher costs won’t deter them. At the very least, MWAA shouldn’t be making Dulles less desirable.
The new agreement doesn’t include any new concourses at Dulles, Russell said, but if United’s CPE can be more equal between the two airports, in a few years it could make economic sense for MWAA and United to agree to invest in that airport.