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Started By
Message
re: New Orleans to unveil plans for new airport at MSY
Posted on 1/16/14 at 4:11 pm to CarRamrod
Posted on 1/16/14 at 4:11 pm to CarRamrod
I’m guessing that the Airline Use Agreement at MSY is a compensatory model (airport charges the airlines fees and is on the hook to balance the books) versus a residual model (where the airlines split the costs of running the airport proportionally to what they use). The benefits of the residual model for the airline lie in the veto power over capital improvements (that is what has the O’Hare Modernization Plan hamstrung).
Typically Airport Improvement Grants, which were just fully funded in the 2014 Omnibus bill, are paid out annually as reimbursement for costs. So the airport will only get the money if they stay on schedule and budget. This is a pretty common arrangement and has been used by ATL for their latest runway, GSO for a cargo facility, etc.
What the issue is for MSY, is the rate structure which they will charge the airlines to pay for this. There is no hub carrier that is ‘pot committed’ to MSY and can grunt and take rate hikes. If the airport overestimates’ it’s value to the airlines, then the airlines will pare back service to a point where it meets the demand in a way it can operate profitably. A previous poster mentioned that the Cost Per Enplanement (CPE) is in the $8-9 range, which is significant and could be reduced by the new facility. (Note: CPE is not a fee, but rather an amalgamation of all costs to the airline, divided by the number of onboards).
I’d be curious to see how the new terminal actually could reduce the CPE, when factoring in the significant debt service that the airport will have to pay on the bond issuance (admittedly I do not know their current bond obligations). I hope for the best at MSY as I really do love visiting the city.
As far as new service goes, a lowered CPE could entice additional point-to-point flying such as seasonal non-stops to the Caribbean, 70-seat jet service to large ‘established’ spoke airports like PIT, BDL, etc. However MSY does not have the population base, nor O&D traffic to justify itself as a hub or even a significant focus city.
Typically Airport Improvement Grants, which were just fully funded in the 2014 Omnibus bill, are paid out annually as reimbursement for costs. So the airport will only get the money if they stay on schedule and budget. This is a pretty common arrangement and has been used by ATL for their latest runway, GSO for a cargo facility, etc.
What the issue is for MSY, is the rate structure which they will charge the airlines to pay for this. There is no hub carrier that is ‘pot committed’ to MSY and can grunt and take rate hikes. If the airport overestimates’ it’s value to the airlines, then the airlines will pare back service to a point where it meets the demand in a way it can operate profitably. A previous poster mentioned that the Cost Per Enplanement (CPE) is in the $8-9 range, which is significant and could be reduced by the new facility. (Note: CPE is not a fee, but rather an amalgamation of all costs to the airline, divided by the number of onboards).
I’d be curious to see how the new terminal actually could reduce the CPE, when factoring in the significant debt service that the airport will have to pay on the bond issuance (admittedly I do not know their current bond obligations). I hope for the best at MSY as I really do love visiting the city.
As far as new service goes, a lowered CPE could entice additional point-to-point flying such as seasonal non-stops to the Caribbean, 70-seat jet service to large ‘established’ spoke airports like PIT, BDL, etc. However MSY does not have the population base, nor O&D traffic to justify itself as a hub or even a significant focus city.
This post was edited on 1/16/14 at 4:18 pm
1
Posted on 1/16/14 at 4:16 pm to SM6
quote:
If the airport overestimates’ it’s value to the airlines, then the airlines will pare back service to a point where it meets the demand in a way it can operate profitably
I think I remember reading a while back that MSY sat down with SWA (MSY's largest carrier) to talk about the project and SWA seemed like they thought it was a great idea.
Posted on 1/16/14 at 4:20 pm to waiting4saturday
quote:
I think I remember reading a while back that MSY sat down with SWA (MSY's largest carrier) to talk about the project and SWA seemed like they thought it was a great idea.
That's the right way to operate. I do a lot of work with Chicago Dept. of Aviation and to see the difference between negotiations at ORD and MDW is night and day.
It is always a fight with AA and UA to get them to sign off on a project or initiative, whereas at MDW and WN are like BFFs. Granted WN is 90% of the capacity there.
Posted on 1/16/14 at 4:44 pm to waiting4saturday
quote:
I think I remember reading a while back that MSY sat down with SWA (MSY's largest carrier) to talk about the project and SWA seemed like they thought it was a great idea.
This is true. SWA is completely in favor of the project.
Posted on 1/16/14 at 4:45 pm to chillygentilly
quote:
New terminal video rendering from Mitch's YouTube channel
what is the electric bill going to cost in that building in august?
looks freaking awesome though
Posted on 1/16/14 at 5:08 pm to Uncs
quote:
Book it!
PEEJ?!
Posted on 1/16/14 at 5:38 pm to CarRamrod
quote:
the ticket id check station is HORRIBLE. Every airport i have been to is usually more crowded and takes less time to pass though than the one at MSY. it is usually only 1 or 2 people looking at tickets.
There are many problems with the way MSY uses its space. (And parts of the structure are seriously old.) They should have long ago figured out a way to connect all the concourses and have one (or at most two) security entrances.
But in terms of size, the existing terminal can get the job done really well. The amount of gates aren't too much for the slow times, and just enough to service the big events New Orleans hosts. Arrivals and departure curbsides are just long enough that traffic isn't horrible during peak rushes. Parking usually isn't an issue except for the holidays, which is an issue for every airport.
I just don't see how you can host a Super Bowl or NBA All Star game with 30 gates. I don't see how those smaller curbsides will hold up to holiday traffic without massive backups. And just imagine what happens when that traffic backs up into the smaller arteries in and out of the new airport.
Posted on 1/16/14 at 5:44 pm to Tigercat
quote:
I just don't see how you can host a Super Bowl or NBA All Star game with 30 gates. I don't see how those smaller curbsides will hold up to holiday traffic without massive backups. And just imagine what happens when that traffic backs up into the smaller arteries in and out of the new airport.
We currently host superbowls with 27-29 gates. The curbs will be split with 1 side for arrivals and 1 side for departures which should help out.
Posted on 1/16/14 at 5:44 pm to Tigercat
quote:
I just don't see how you can host a Super Bowl or NBA All Star game with 30 gates.
Same way they have done it in the past.
Same way Austin hosts SXSW and ACL with 25 gates?
Posted on 1/16/14 at 6:16 pm to Tigercat
Same way as Mardi gras. I imagine it pulls more folks. My concern is the city paying off those bonds they Better be expecting a ton of new revenue with those PFCs
Posted on 1/16/14 at 6:48 pm to SM6
Has anyone "in the know" heard anything about this comment on the mayor's facebook?
quote:
British Airways wants to expand services, and we are on the short list of potential sites for service to London.
Posted on 1/16/14 at 6:52 pm to Jefferson Davis
quote:
Has anyone "in the know" heard anything about this comment on the mayor's facebook?
I think it'd be a reach considering LHR-MSY would be solely O&D traffic and I can't see there being 250ish people daily traveling between the cities. Too easy to go MSY-IAH-LHR or MSY-EWR-LHR
Posted on 1/16/14 at 7:08 pm to waiting4saturday
quote:
We currently host superbowls with 27-29 gates. The curbs will be split with 1 side for arrivals and 1 side for departures which should help out.
More than 30 were used for the last Super Bowl; As many as 35-38. Gates that are never used for regular traffic were used then.
I imagine that a further out split will help out with traffic, but it will still pile up like crazy if you cut down on curb length.
Posted on 1/16/14 at 7:20 pm to waiting4saturday
Alright, as far as LHR goes the O&D market for the four quarters ending Q2 2013 was 45 pax/day. Outside of seasonal or seasonal once weekly frequencies it'd be VERY hard to support. BA would need either a lot of connecting through traffic or market subsidiaries. Both of which are very unsustainable for longevity. I think MSY would be more likely to pull season low frequency traffic from Thomas Cook, Norwegian, Arkefly or Condor. One of the Euro leisure long hauls.
I'll pull other euro city o/d numbers later and post them for reference.
I'll pull other euro city o/d numbers later and post them for reference.
Posted on 1/16/14 at 7:26 pm to SM6
All numbers are per day, 4Q ending Q2 2013, from US DOT DB1B survey data.
AMS-20
CDG-28.9
FRA-17
BCN-7.4
FCO-14.7
MAD-6.0
NRT-11.1
PVG-6.3
AMS-20
CDG-28.9
FRA-17
BCN-7.4
FCO-14.7
MAD-6.0
NRT-11.1
PVG-6.3
This post was edited on 1/16/14 at 7:28 pm
Posted on 1/16/14 at 7:27 pm to SM6
Just tuning in and not understanding this here. Sorry if this has been repeated but will new airport and terminal upon completion in 2018, lead to the closure of the old current terminals? Or will it function in addition to the current terminals with some sort of tram connecting the two?
Posted on 1/16/14 at 7:28 pm to SM6
Thanks for the responses, guys. I figured it was a reach but it peaked my interest nonetheless.
Would be nice to one day have a direct flight to Europe at MSY.
Would be nice to one day have a direct flight to Europe at MSY.
Posted on 1/16/14 at 7:39 pm to Jefferson Davis
MSY has had directs from LHR before.
Posted on 1/16/14 at 7:40 pm to Benw225
quote:
Just tuning in and not understanding this here. Sorry if this has been repeated but will new airport and terminal upon completion in 2018, lead to the closure of the old current terminals? Or will it function in addition to the current terminals with some sort of tram connecting the two?
Tearing part of it down and using part of it for GA/FBO
Posted on 1/16/14 at 7:45 pm to Golfer
quote:
MSY has had directs from LHR before.
True. I should say it would be nice to once again have a flight like that.
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