Hot Flash - August 4, 2003
A Textbook Lose-Lose
Denver International Airport
United: Make DIA Even More Non-Competitive
Denver International is absolutely astronomical in terms of cost, and it''s getting worse by the minute... I think one day we''ll probably be in Colorado Springs.
Colleen Barrett, President, Southwest Airlines. 7/31/03
Gee, who is this woman to dare speak such heresy? She''s blaspheming the airport that was touted by politicians and the usual suspect consultant crowd as the facility that would unclog the western skies, open up the Mile High City to nonstops to practically every point on the globe, and be the new international model of efficiency.
The bill for this boondoggle is now coming due. Southwest, for one, isn''t interested in paying it.
It''s going to get worse. Southwest''s comments are just the latest indication of the mess that DIA is evolving into. Not only is this airport too expensive for Southwest, it may be too expensive for United, too. This week, standby for some real Kabuki Theater, as the city and United will square off on gate leases and future expansion. See, this boondoggle was built with fewer gates than the allegedly-congested airport it replaced. Fewer, not more.
Now, both Frontier and United want to expand at Denver, in part to get the airport''s obscene costs spread over more passengers. The solution, of course, is just build more gates. But there''s a fly-in-the-DIA-ointment: to do that will make costs at Denver even more astronomical. And there''re more insects in the ointment - Denver says it doesn''t have the long green to give both United and Frontier what they want in terms of additional gate space. One or the other.
Build It Cheap, Then. What makes this even more bizarre is that United wants the city to spend $50 to $65 million for an Eisenhower-era facility that will put the Denver connecting experience right up there with an episode of Wild Kingdom. United''s senior management, which seems to have a planning horizon somewhat in excess of a week, wants a new wing of 38 regional jet gates. Ground-level regional jet gates. The type of gates where its passengers will get the outdoor thrill of slopping across a noisy, open ramp that''s maybe covered with snow or water, leave their carry-on at the foot of the stairs, and slog up into the airplane. All this at a $5 billion airport that was touted as the next wonder of the aviation world. If this were for flights to West Podunk, maybe that would be okay. But these regional jets aren''t used for service to backwater burgs. They are used for service to mainline destinations. It''s tough enough on the consumer to sit in a cramped seat for up to three hours, enplanement to deplanement. It''s worse when they have to fight the elements to do it.
United''s senior management might want to take a look at the rest of the industry. Its competitors are doing away with the mess of ground level boarding. If United gets its way at Denver, the city will be out $50 million for a set of gates built for an aircraft type that will be in phase-out status in a decade, not to mention one that makes connecting at Denver a third-rate (and Third World) experience compared to what the consumer gets from American at DFW, Continental at IAH, and Northwest at DTW and MSP. Or, for that matter what the consumer gets from Northwest at Muskegon.
Message to whatever visitors from Space who are advising United: Regional jets are fine airplanes. But they are not service transparent with larger aircraft. Ground-level boarding at a $5 billion hub tells the customers that the service - and their business - is second-rate.
DIA: Build It And They Won''t Come. All of this is not unexpected. DIA was built for crooked politicians, not for airlines. Back in the late 80s and early 90s, we were the only aviation consulting firm which attempted to point this out. As late as 1988, the city''s own documents estimated that the old airport could be expanded to efficiently handle over 35 million enplanements. (Today, DIA is at about half that.) Then Denver''s Mayor, the ethically-challenged Federico Pena, got some campaign contributions and suddenly the old airport was too small, too congested, and impossible to expand. Nice what some dollars can do when greasing the right palms.
We said repeatedly - in studies, reports, and in the media - that DIA was being built on lies and doctored data. In just those words. We pointed out that the promises of higher efficiency were bogus - whatever benefits that might - and that means might - have come from the new airport would be more than offset by the obscenely high operating costs. We said that the promises that the new airport would of itself be necessary to attract more international service were pure hype. We said that the new airport would drive Continental''s hub out of town. (It did.)
In one particularly bold piece of dishonesty, the city claimed, and the local media was only too eager to repeat, that DIA would be an airport that could land three streams of aircraft, no matter how bad the weather... Think that one through. In another case, a major blizzard, airport officials actually crowed that DIA wasn''t closed, only that the airlines were refusing to land there. This, one assumes, was due to the refusal of cranky pilots who insist on landing only on plowed runways.
In congressional hearings after this thing was built, Rep. Oberstar, (who, by the way, has family ties to consultants doing work for Denver) glowingly drooled about how the new airport was needed because Denver is the gateway to the West. Aside from his apparent East Coast orientation, we pointed out that Denver was a gateway for United. The difference is not subtle to anyone who understands the hub-and-spoke system, which gives Oberstar an out.
So here we are today. DIA''s costs are going up. United, in bankruptcy, is playing hardball to get the city to build gates that''ll make the airline and the airport even more non-competitive with other hubs. And Southwest thinks Colorado Springs is a better bet.
The lesson should not be missed. The nation needs more airport capacity. But building the wrong kind isn''t the answer.
Like at Denver.
© 2003 The Boyd Group/ASRC, Inc. All Rights Reserved
A Textbook Lose-Lose
Denver International Airport
United: Make DIA Even More Non-Competitive
Denver International is absolutely astronomical in terms of cost, and it''s getting worse by the minute... I think one day we''ll probably be in Colorado Springs.
Colleen Barrett, President, Southwest Airlines. 7/31/03
Gee, who is this woman to dare speak such heresy? She''s blaspheming the airport that was touted by politicians and the usual suspect consultant crowd as the facility that would unclog the western skies, open up the Mile High City to nonstops to practically every point on the globe, and be the new international model of efficiency.
The bill for this boondoggle is now coming due. Southwest, for one, isn''t interested in paying it.
It''s going to get worse. Southwest''s comments are just the latest indication of the mess that DIA is evolving into. Not only is this airport too expensive for Southwest, it may be too expensive for United, too. This week, standby for some real Kabuki Theater, as the city and United will square off on gate leases and future expansion. See, this boondoggle was built with fewer gates than the allegedly-congested airport it replaced. Fewer, not more.
Now, both Frontier and United want to expand at Denver, in part to get the airport''s obscene costs spread over more passengers. The solution, of course, is just build more gates. But there''s a fly-in-the-DIA-ointment: to do that will make costs at Denver even more astronomical. And there''re more insects in the ointment - Denver says it doesn''t have the long green to give both United and Frontier what they want in terms of additional gate space. One or the other.
Build It Cheap, Then. What makes this even more bizarre is that United wants the city to spend $50 to $65 million for an Eisenhower-era facility that will put the Denver connecting experience right up there with an episode of Wild Kingdom. United''s senior management, which seems to have a planning horizon somewhat in excess of a week, wants a new wing of 38 regional jet gates. Ground-level regional jet gates. The type of gates where its passengers will get the outdoor thrill of slopping across a noisy, open ramp that''s maybe covered with snow or water, leave their carry-on at the foot of the stairs, and slog up into the airplane. All this at a $5 billion airport that was touted as the next wonder of the aviation world. If this were for flights to West Podunk, maybe that would be okay. But these regional jets aren''t used for service to backwater burgs. They are used for service to mainline destinations. It''s tough enough on the consumer to sit in a cramped seat for up to three hours, enplanement to deplanement. It''s worse when they have to fight the elements to do it.
United''s senior management might want to take a look at the rest of the industry. Its competitors are doing away with the mess of ground level boarding. If United gets its way at Denver, the city will be out $50 million for a set of gates built for an aircraft type that will be in phase-out status in a decade, not to mention one that makes connecting at Denver a third-rate (and Third World) experience compared to what the consumer gets from American at DFW, Continental at IAH, and Northwest at DTW and MSP. Or, for that matter what the consumer gets from Northwest at Muskegon.
Message to whatever visitors from Space who are advising United: Regional jets are fine airplanes. But they are not service transparent with larger aircraft. Ground-level boarding at a $5 billion hub tells the customers that the service - and their business - is second-rate.
DIA: Build It And They Won''t Come. All of this is not unexpected. DIA was built for crooked politicians, not for airlines. Back in the late 80s and early 90s, we were the only aviation consulting firm which attempted to point this out. As late as 1988, the city''s own documents estimated that the old airport could be expanded to efficiently handle over 35 million enplanements. (Today, DIA is at about half that.) Then Denver''s Mayor, the ethically-challenged Federico Pena, got some campaign contributions and suddenly the old airport was too small, too congested, and impossible to expand. Nice what some dollars can do when greasing the right palms.
We said repeatedly - in studies, reports, and in the media - that DIA was being built on lies and doctored data. In just those words. We pointed out that the promises of higher efficiency were bogus - whatever benefits that might - and that means might - have come from the new airport would be more than offset by the obscenely high operating costs. We said that the promises that the new airport would of itself be necessary to attract more international service were pure hype. We said that the new airport would drive Continental''s hub out of town. (It did.)
In one particularly bold piece of dishonesty, the city claimed, and the local media was only too eager to repeat, that DIA would be an airport that could land three streams of aircraft, no matter how bad the weather... Think that one through. In another case, a major blizzard, airport officials actually crowed that DIA wasn''t closed, only that the airlines were refusing to land there. This, one assumes, was due to the refusal of cranky pilots who insist on landing only on plowed runways.
In congressional hearings after this thing was built, Rep. Oberstar, (who, by the way, has family ties to consultants doing work for Denver) glowingly drooled about how the new airport was needed because Denver is the gateway to the West. Aside from his apparent East Coast orientation, we pointed out that Denver was a gateway for United. The difference is not subtle to anyone who understands the hub-and-spoke system, which gives Oberstar an out.
So here we are today. DIA''s costs are going up. United, in bankruptcy, is playing hardball to get the city to build gates that''ll make the airline and the airport even more non-competitive with other hubs. And Southwest thinks Colorado Springs is a better bet.
The lesson should not be missed. The nation needs more airport capacity. But building the wrong kind isn''t the answer.
Like at Denver.
© 2003 The Boyd Group/ASRC, Inc. All Rights Reserved
