Director of aviation, Iftikhar Ahmad, is in no doubt about the importance of the planned new international terminal to Louis Armstrong New Orleans International Airport.
“Our current terminal is 50 years old and, quite frankly, no longer fit for purpose as it is built for a pre-9/11 aviation industry,” admits Ahmad.
“It is old and tired and doesn’t represent a good image of our city. Its outdated infrastructure and set-up have driven operational costs to high, unsustainable levels.
“The existing terminal also generates relatively low revenue from parking and concessions due to the set-up. This high cost, low revenue model makes costs higher for airlines to operate, and therefore puts the airport at a competitive disadvantage for attracting new flights and business.
“Change is long overdue. The new facility will totally change people’s perceptions of New Orleans Louis Armstrong.”
The $826 million terminal will be built on the north side of the gateway and, if all goes to plan, open in May, 2018 to coincide with the 300th anniversary of the city of New Orleans.
Designed to accommodate up to 12 million passengers per annum, the new 30-gate terminal’s facilities will include nearly 80,000sqft of concessions and a new inline explosive baggage system for screening checked baggage – something the airport currently lacks.
In addition to the 645,000sqft terminal, the Parsons Brinckerhoff managed project includes plans for a 3,000-vehcile capacity parking garage, an extra 42 acres of apron and a new environmentally friendly power plant.
Crescent City Aviation Team – a joint venture between LEO A DALY and Atkins – is leading the design efforts, while RS&H is conducting environmental impact studies of the new site and the terminal building.
Also on board are Unison Maximus Consulting Solutions (financial analysis) and Jones Lang LaSalle, which is examining the plans’ land-use options.
So why has it taken so long to take the decision to go ahead and build it? “There are many reasons, but in the past few decades it was primarily because nobody wanted to invest in the airport if it was to be relocated to another site,” answers Ahmad.
“A couple about to get a divorce don’t go and look for a new house,” jokes Ahmad, while conceding that the lack of a definite plan for the airport until as recently as 2010, was no laughing matter.
“Quite honestly, the airport has been plagued by decades of indecision and inaction. While other states and cities made big decisions about their airports and where they would be located in the 1960s and 70s, little was done here, and, as a result, getting consensus on the airport’s future has been a problem for 30 or 40 years.
“However, since 2010 when we decided not to privatise [Louis Armstong New Orleans was in the FAA’s Airport Privatisation Program] and to stay at our existing location, we have worked hard on gaining trust and building a consensus. Today, there is no more confusion. We are here for the long-term.”
The decision to build the new terminal comes less than two years after New Orleans’ mayor, Mitch Landrieu, requested the Aviation Board undertake an in-depth and robust analysis of four proposals for the future of Louis Armstrong New Orleans International Airport (MSY) from the airport’s master plan.
The airport was recently renovated in advance of Super Bowl XLVII, but the behind-the-wall infrastructure is in need of an overhaul.
According to the results of a comprehensive analysis of available options, the north alternative provides the best opportunities for revenue growth and sustainable operating costs, in addition to giving MSY and the region the best job and economic development potential.
“The Louis Armstrong New Orleans International Airport serves as a gateway to millions of tourists and business travellers each year and is a critical driver for the creation of jobs and economic development,” says Mayor Landrieu.
“Creating a new, modern airport is integral to our success as a world-class travel destination and hub for commerce. It makes economic sense and will create over 13,000 jobs in construction.
“Recently, significant progress has been made to improve the air service, facilities and customer experience at Armstrong International. But this option provides us with the ability to build on these improvements and create the world-class airport that this city deserves.
“We cannot afford to let another 30 years go by without a clear path forward. The north side option is financially feasible and delivers a strong return on investment for our region.”
And, Ahmad reveals that building the new terminal on the north side of the airport will allow the existing terminal to be redeveloped for other uses.
“One of the exciting things about choosing the north side alternative is that we have an economic development opportunity to convert the 110,000sqft Concourse D of the existing terminal into charter, general aviation, cargo, multi-modal and other commercial use,” says Ahmad.
The chosen north side terminal project will cost approximately $650 million with possible additions including a $72 million power plant project, $87 million for a flyover addition from the I-10 to improve access to the airport, and $17 million for a potential on-site hotel.
The total cost is estimated at $826 million. Pending completion of environmental reviews, which will include extensive community engagement, construction is expected to commence in 2014, with completion in 2018.
Funding for the new terminal project will come from various airport self-generated funds along with federal and state aviation grants. The City of New Orleans will not be funding any part of the new terminal project.
To streamline the remaining design and construction process, the City and Aviation Board are seeking approval from the state legislature to use the Construction Manager At Risk method (SB 65 by Senator Ed Murray).
“For decades, the Aviation Board has studied the possibility of building a world-class airport. We are now moving into action,” enthuses Nolan Rollins, outgoing chairman of the New Orleans Aviation Board.
“This plan will create jobs and economic development for our community and will make our airport more competitive. Perhaps most importantly, we will have an airport worthy of our city,”
But the news about the new terminal doesn’t mean that the airport was content for passengers to put up with “old and tired” facilities for the next five years.
Indeed, in early 2013, Mayor Mitch Landrieu unveiled more than $300 million in improvements at MSY as part of an Airport Modernization Program that includes a new and bright interior with a refurbished ticket lobby, expanded concourse, improved baggage reclaim, remodelled restrooms, updated exterior, a new car rental facility and new retail and restaurant offerings.
Those improvements will be utilised over the next five years, and then will be used in the repurposing of the existing terminal.
Ahmad is also quick to point out that increased efficiencies and a 30% rise in concession revenues following a recent revamp of 40 outlets have helped reduce MSY’s projected enplanement costs per passenger of $11.79 this year and $16.31 per in 2014 to around $8.41 – marginally less than at the average residual airport in the US.
“We’re pumped up about the new terminal, but we are just as excited about our new business model, which is low-cost to the airlines and allows us to compete much more on an equal footing with other tourism markets,” he notes.
Louis Armstrong New Orleans International Airport is a critical asset for the city, the region and state.
It currently carries approximately 80% of the state of Louisiana’s enplanements, provides over 12,450 direct and indirect jobs for the local community, and facilitates over $2.6 billion in tourism spending.
In 2012, MSY saw over 8.6 million passengers – a marginal 0.6% rise on the previous year, but still down on the 9.8 million accommodated at the airport before Hurricane Katrina.
Indeed, the airport has enjoyed double-digit passenger growth for seven of the last 12 months and the upturn in MSY’s fortunes – it now serves 41 destinations non-stop, one shy of the 42 before Katrina – has made Ahmad confident that it can attract new direct weekly routes to Paris and London in the near future.
It also means that the airport is on target to handle 9.5 million passengers in 2013.
Ahmad says that the airport’s importance to the city of New Orleans, and now the city’s support and commitment to MSY’s development, ensures that there are currently no plans for the gateway to re-apply to join the FAA’s Airport Privatization Program.
New Orleans Louis Armstrong was in the pilot programme, but withdrew in 2010, citing upfront costs, financial risks, loss of a key city asset and market uncertainty.
“They say never say never, but I don’t see that on our horizon today,” he muses. “We are quite happy with the way things are at the moment, and long may that continue.”