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Old Posted Dec 2, 2007, 4:29 PM
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and now the rest of the story

Airlines resist cost of airport upgrade
They say they are being asked to pay too much and claim their customers will suffer.
By Tony Bizjak - tbizjak@sacbee.com
Published 12:00 am PST Sunday, December 2, 2007
Story appeared in METRO section, Page B6




In just months, bulldozers are scheduled to move dirt for the biggest expansion in Sacramento International Airport history.

But the project's hefty $1.3 billion price tag remains a subject of debate.

Several national airlines complain they're being asked to pay an outsized share, and want Sacramento County airport officials to consider cost-cutting measures.

"We have heartburn at trying to build a facility for $1.3 billion," said Gregory Gillis, an executive with Southwest Airlines. "That's a very high price tag."

American and Alaska airlines officials expressed similar concerns last week.

Airport director Hardy Acree counters that Sacramento's facility needs a major expansion to keep pace with Northern California growth, and that airlines benefitting from the increased ridership must pay their fair share.

"From the beginning, we've taken the approach we (will) build what is needed, and the costs are what they are," Acree said.

The county's financing plan will require airlines to pay slightly less than half of the total expansion cost, Acree said.

The remainder of the funding will come from passenger fees, parking revenue and other airport rents and fees.

Under federal rules, airports are allowed to set "reasonable" fees on airlines. The airlines can protest those fees with the federal Department of Transportation, federal officials said.

Airport executive Acree said his agency is aiming to start construction this spring with or without a fee agreement with the airlines.

"This train has left the station," he said.

However, Acree said his team will continue to discuss financing options with Southwest and other airlines.

County officials and Southwest are scheduled to meet the first week of January to talk about arranging lower-cost construction bonds.

The expansion, county officials said, will turn an outdated airport into an efficient and stylish entrance to Sacramento.

Its anchor will be a four-story, glass-walled central terminal to replace the 40-year-old Terminal B complex. It will be built partially on the existing Terminal B parking lot.

The county hopes to open the new terminal in 2011.

Expansion plans also include a tram to shuttle passengers between the new terminal and a new remote concourse, as well as a second multilevel garage and a new airport hotel.

Southwest official Gillis said the airlines still would like the county to consider reducing the project size.

Increased fees are likely to become higher fares for fliers, Gillis said. "We have to find a way to lower our costs for the new terminal so we can continue to proceed with low fares."

County officials say they estimate their financing plan would increase airline fees from the current average of $6 per passenger to as high as $11.

It's up to airlines to decide whether to pass that on to consumers, Acree said.

The county recently agreed to reduce the number of gates at the new concourse from 23 to 19, but has not agreed to any other major changes.

Acree said the new terminal and concourse ought to be big enough to handle an expected 40 percent increase in passengers through 2020, and accommodate even more expansion later.

The proposed new terminal size will be about 800,000 square feet, Acree said, more than twice the size of the existing Terminal B complex.

Initial work, expected to start in late spring, will involve building new parking lots on the west side of the airport to temporarily replace nearly 3,000 parking spots that will be lost when excavation starts in the summer for the new terminal.

Officials also are planning additional parking south of Interstate 5.

The existing Terminal B will remain in use during construction, then will be razed when the new terminal opens.
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