Today was a big day.
Today we finally learned from the airlines themselves that not only would a shiny new terminal not attract flights, it might cost us some of the non-stop service we now enjoy.
Ron Ricks and Bob Montgomery, the two executives at Southwest Airlines in charge of airport relationships and more or less deciding where Southwest flies or doesn’t fly, spoke today at the Mayor’s Airport Terminal Advisory Group on behalf of all the airlines that serve KCI. They testified what we pointed out last Spring: Terminals don’t attract flights, demand and anticipated profits attract flights. They also cited the recent problems in Sacramento saying that their recent billion dollar terminal project, that has resulted in airlines cutting flights to Sacramento, was a case study in “what not to do.”
This reality-check comes after several years, several million dollars and multiple single-terminal proposals presented by the Kansas City Aviation Department, apparently without input or indifferent to input from the airlines who would actually use and pay for them. Southwest, we now learn, is happy with KCI in its current configuration. And while they concede that some improvements could be made, they are relatively minor, not things their customers are demanding and could be made for a few million instead of a billion should we decide to do so. Other amenities promised with a new terminal such as new restaurants have already been added. TSA Pre✓™, something we were told would not be possible in the existing terminals, has been operating smoothly since late last year.
Kansas City currently enjoys exceptional air service for a market our size with about 50 non-stop destinations of which Southwest accounts for half. So how would a new terminal put that non-stop service at risk? Currently the fees KCI charges airlines per passenger are among the lowest in the country. Were we to spend a billion or so on a new terminal, a large chunk of that expense would be passed along to the airlines. The per passenger fee would rise dramatically and since ticket prices are based on consumer demand, the airlines can’t simply pass that fee along. It comes out of profits. At that point, Southwest has to consider whether or not a market like Memphis, who just lost a hub and is agressively trying to attract replacement service, is a more profitable place than KCI to hub that Oakland to Orlando flight or that LA to Baltimore flight. You see, the reason we are a connection stop for Southwest is because we are a profitable place for Southwest to land. Period. Remove those profits and they’ll remove those flights.
The next ATAG meeting will feature members of the business community testifying about their needs concerning KCI. Among them will surely be additional non-stop service. Pete Fullerton, President/CEO of the Kansas City Economic Development Council said as much in a Kansas City Business Journal article last year. But today we learned that last year’s mantra from single-terminal advocates of “build it and they will come” might be better stated as “build it and they will leave.” Just ask Sacramento.
Reality has finally landed at our KCI discussion. Let’s hope it has a long layover.
There was a time when I flew well over a hundred times a year. I saw airports that didn’t work or were clumsy to use or were over-rated Taj Mahals. KCI was not on the bottom of the pile. It was always a pleasure to return to KCI but there were drawbacks. When I would return late there was hardly ever anything open where I could get a bite to eat before heading home. But other than that KCI was always the easiest to get in and out of and the easiest to get around in. KCI does have a drawback in the length of the terminal if you ever find yourself needing to walk the length of it. But the length of the longest possible walk at KCI may not be any greater than other terminals.
Additionally, I gather from those who want a new terminal that their main reason is they want a bigger, newer, shinier terminal with shops and restaurants and other kinds of really cool places to do ‘stuff’ while they hang out in the terminal.
There is a way to solve all of the problems without a new terminal. First, KCI’s donut shape is the most efficient as it is and that fact cannot be washed away with a new terminal of a different shape so we need to work within the constraints of that shape or spend a billion dollars for less efficient traveling – dumb. Can’t go up really, can’t go down but we can go out. If the existing outer glass wall were left in place and the width of the terminal was moved out 100-150 feet or so it would leave the existing inner ring for the ‘cool stuff’ that people want like restaurants, bars, gift shops, kiosks, organ grinders, piano players, etc. The existing glass wall could become part of security. All secure boarding areas would move outward. Moving walkways could easily be installed in the new and older portions of the building resolving the distance problem from one end of the terminal to the other. A major facelift to paint the interior brighter colors could easily happen. KCI does need better colors.
But there is another aspect of this airport issue that must be understood – self justification. If I hire a consultant he is going to tell me what I want to hear generally. This issue is no different. A home inspector once confided that he downplays his end result because if he tells the truth then he won’t get recommended within the industry. He goes along to get along. Consultants at any price are influenced by that same perception. They are afterall just humans like the rest of us. But in this case we are talking about a lot of money to appease someone’s need to be entertained for a short time. That isn’t my concern or something I want to destroy KCI for just to say we tried something new. Everybody can get what they want if we work with what we have. I suspect that the consultants are influenced by the perception that KCI is being targeted for replacement and they may let that cloud their influence. We are not accusing them of that but just on guard that such does not happen.
Lastly, we realize there could be a union influence in this debacle. Unions contribute heavily to campaigns and union labor will likely be used to do any work. But we also need to keep an open mind to controlling costs by using non-union labor WITH the unions – in other words, let the best contractors do the work without restricting participation based upon union affiliation.
Upgrade – yes. Replace – no. There are a lot of very good architects in Kansas City and it would be close-minded to ignore their renovation and rehabilitation suggestions. Make it a competition. But without a doubt DO NOT go to a single terminal because that is a very bad idea.
The following are the remaining comments that I have to the quotes mentioned in the article that came out in the KC Star on January 28th, by Lynn Horsley, I would like to continuing addressing some of the half-truths that were quoted to her by members of the mayor’s advisory council on KCI.
“Moran said he’s had to travel to San Diego via Minneapolis and to Austin via Memphis, Tenn.” By Bill Moran.
Again, I suspect that there is more to the story than is being told. SouthWest has an excellent schedule of flights to San Diego. Yes, you may be on a flight that does a quick stop in Las Vegas or Phoenix, but at least you are heading in the right direction. To get to Minneapolis on a MCI to SAN flight, that pretty assures that you were on a Delta (or Northwest) heading to their major hub. And probably the reason for taking Delta over the SouthWest flights is that SouthWest does not have First Class seating, like Delta. So for you executives that are only content flying First Class, then be assured that you will see interim stops such as Minneapolis, Dallas, or Atlanta, no matter where you may be headed. Note that all of these major hubs do have a full array of restaurants and bars available as you spend hours waiting for your next First Class flight to San Diego. My personal preference has been to take the SouthWest direct (or mostly direct) flight to San Diego, and then spending the time saved at one of the restaurants/bars on Pacific Beach watching the sunset. Much better than watching the sunset while in Minneapolis!
“He told the story of the company’s chief lobbyist, who was with a group of bankers, attorneys and entrepreneurs one night when their flight was delayed in Terminal A, which the airport has since shut down. All the shops closed by 6 p.m., and they were told they could take a shuttle to another terminal or the nearby Marriott hotel if they needed a meal.” By Bill White
I suspect that this is a true story, but only as a half-truth. I am sure that many people were caught in the same situation as Terminal A was being vacated to C. I do not believe that it is a scheduling issue, but again, a demand issue. A decade ago, KC had the demand to keep all three terminals functioning at near full capacity. It is clear that is not the case now. Please don’t point fingers at KCI management for the issues at Terminal A, instead ask why the business leaders of KC have let business slip away to reduce the demand for air travel.
While we are talking demand for air travel, lets take a quick look as to why demand is so low that Terminal A needs to be closed for now.
It is clear to see that KC has lost many major companies over the last decade, such as Hostess Brands, Marion Labs and others while YRC is currently on deathwatch. Even Sprint has shown major difficulties as compared to 1999 or 2000 time frame. At that time, Sprint stock was selling for around the $70/share. Now it is down to $8/share, and holding. (Delta = -88.6,,, wow!) The Sprint downward spiral is also clear when a person takes a drive around Sprint Pkwy to now see all the leased space to vendors and others.
Even Forbes has made some not so complementary comments about Sprint, and Sprint management. Here is a quote from Joan Lappin of Forbes (06/13/2013)
“After years of mismanagement and a collapsing stock price, Sprint brought in Dan Hesse a few years ago.”
So do we attribute the cause of this implosion of Sprint and others to an outdated and stodgy KCI, or possibly other reasons? (Sorry Bill, but how long have been with Sprint?) Hopefully, KC will see more growth companies like Garmin and Cerner to bring back the demand at KCI. Hopefully, Mr. Hesse can add Sprint to the growth list as well.
Build back the business community in KC and the new airport will be built because of need, not desire as is seen in today’s discussions.
Samarec of Olathe
It has been very interesting following the news articles and web postings on the new proposal for on the KCI airport. There seems to be some truthful discussions, as well as some discussions that are best described as half-truths. After reading the article that came out in the KC Star on January 28th, by Lynn Horsley, I would like to address some of the half-truths that were quoted to her by members of the mayor’s advisory council on KCI.
First off, I do have to commend Mayor James for assembling the council to study the benefits and downsides of a major overhaul of KCI. He has shown great leadership since coming to KC, and this is just another example.
So let’s start on the quotes mentioned in the KC article.
“We’re way behind what other airports are doing,” he told the airport task force. “We are a big league town … but we have a little league airport.” By Bill Moran.
Sorry Mr. Moran, but KC is not a major league town, no matter how much we would like to believe that it is. KC is not in the same league as Denver, San Diego, NYC and others. By almost all evaluations, KC is considered a medium size city, along with a medium size airport. That is neither good nor bad, but just the facts.
The airport lacks restaurants, shops and even ample restrooms that corporate executives are accustomed to finding in other big-city airports. By Jim Heeter.
Again, KC is not a big city, and KCI is not a major hub airport, nor does it need to be.
As quoted later in the Star article,
“Out of more than 9 million passengers in 2013, only 268,000 were on connecting flights.”
Roughly 97% of the people visiting KCI are either departing or arriving, not connecting. So for the large majority of the people, quick access in and out of KCI are probably a higher concern than shopping and dining. No doubt major hubs like DIA do need the shops and restaurants to help with all the transfers that the airport handles. But again, KCI is not in the same league as DIA, nor need it be.
“The testimony Tuesday was at odds with the last advisory committee meeting, in which Southwest Airlines representatives said that KCI is generally adequate and that a new terminal could drive up ticket prices. They said KCI already has nonstop service to about 50 destinations, which is very good for an airport that size, and there’s no guarantee that an expensive new terminal would bring any new flights, either domestic or international, to Kansas City.”
Maybe we should be listening more to the people at SouthWest Airlines. Like it or not, they are the major airline of KCI. Also remember that SWA is one of the very few airlines that has not needed to file for bankruptcy protection to stay afloat, like many of the other airlines that service KCI. For whatever reasons, SWA seems to be doing something right. Maybe all of us ought to be listening more.
“KCI needs major upgrades in technology and close parking and needs to create the potential for more domestic and international flights.” By Jim Heeter and Bill White.
“But the business executives said they thought a new terminal could at least give Kansas City the potential to attract more nonstop domestic flights or international flights, which could bring more business growth in the city.”
The technology that is being discussed is a quick fix with no need for a major new airport. As for more domestic and international flight, Terminal A is now open for any new carriers that want to come to KCI. Maybe a British Air LHR to MCI or possibly an Emirates DXB to MCI. Both are well within range of the new long haul airplanes. Now it will just be up to the business community to create the demand for BA and Emirates to want to fly into KC. Mr. Heeter, Mr. White, the ball is in your court.
Above are just a few of the committee’s comments that I thought needed to address for now. I will post again later in the week with the rest of my comments to the Star’s article. I do appreciate Ms. Horsley reporting on this matter. The more reporting that is done, the better decision the mayor and the people of KC can make.
Samarec of Olathe
Please stop this hub nonsense about KCI. Here is but one of many articles explaining how cities less than 5 million only make the most vulnerable hubs.
http://www.brookings.edu/blogs/the-avenue/posts/2013/06/07-midsize-airline-hub-tomer#
We do not have the population of Chicago or Dallas-Ft. Worth, the low-cost take-off and landing altitude of Denver or the magnet attractions of a Las Vegas or Orlando (I note that you did not mention Disney World).
You also do not mention the billions of dollars in public contracts administered out of Austin nor that city’s and Nashville’s vibrant music scenes. Please do not try to compare our jazz heritage and 18th & Vine with these other venues.
We are fortunate that SWA has a hub here. That is due to a number of factors. First, it really exploded during the internet bubble when airline volume reached all-time highs. At this time, SWA had no presence in Denver. It does now. Please note the decline on SWA non-stop direct flights since its entry into the Denver hub.
Southwest was also the first airline to form a true hybrid of hub-and-spoke and point-to-point route structures. Kansas City fits into this structure. But, it means proportionally fewer thru passengers need to change planes while at the airport. Most just stay onboard. No secure mega mall required.
Please also look at Kansas City history. BRANIFF!!!! Flash forward to Vantage. Also review the evolution of Midwest. Why do you avoid such obvious historical examples? Maybe this would stop business men who should know better from demanding more non-stop service that can only be justified by higher passenger volume.
KCI is not perfect. It was built in an era of trust when security was not so necessary. Whatever happens, this issue must be better addressed. Simultaneously, ever newer, more compact and more effective security hardware must be considered. You consistently fail to report on security options. You also fail to point out single terminal disasters such as John Wayne Airport in Orange County, CA.
KCI was also built for a smaller population base when automobile volume was not as high. But, the parking complaints border on the absurd. Have these whiners ever tried to park at DFW or O’Hare or LAX? Please note that all of these airports (with much more expensive real estate) offer cell phone parking lots where you can wait without charge until your arriving passenger calls you for pickup. Fire the KCI airport management for blocking this no-brainer amenity.
Also, please tell the Sprint executives that smart phones now have apps to tell you if your flight is on time. You can then better schedule your arrival to the airport to minimize wait time before your flight’s departure. Perhaps Sprint coverage is so bad or the employees are so poorly trained or just generally incompetent that they are unaware of this technology? Maybe Sprint folks just prefer to get there needlessly early so that they can grouse about the amenities while wearing down their batteries? Oh, and there is internet check in now. Maybe we should tell them about it.
Speaking of Sprint executives – Bill White, why is Sprint laying people off and closing some underperforming stores? Why not take the $164 million set aside for severance and really fix up the stores and offer a slew of new high priced products. If such a strategy would work for KCI and bring in lots of new customers, why wouldn’t it work for Sprint?
How can Marcusse keep his job? A major CEO of a corporation that needs a home for thousands of high paying jobs flies into town and the president of the development council does not meet him with a limo to whisk him away to one of our many world class restaurants? Marcusse then uses the tired NSA tactic of saying, “There are many examples proving my point but I can’t tell you about them.” No responsible journalist should print such statements.
And, please, stop with the Terminal A stories. You may as well be talking about crummy stage coach service. Ancient history.
What does KCI have going for it. It is much more a ‘flow thru’ versus a warehouse facility. 21st Century logistics recognizes that the key to an efficient operation is to keep thing flowing as quickly as possible. A big screen TV makes no money sitting in a warehouse – get it to the showroom floor ASAP where someone will buy it. Or, sell it on Amazon and go even faster from factory to home user. Passengers want to be treated the same way. They want to get from point A to point B. They do not want to spend excess time in an intermediate warehouse to enjoy overpriced food and shopping. KCI can be improved by increasing this ‘velocity’. For example, speed up baggage handling. Here’s an idea: somehow check in bags on the shuttle bus from the parking lot? Possible? Why not explore this versus ‘hub’ fantasies?
Can we increase more international flights? If a carrier employed the Boeing Dreamliner, it could offer non-stops to Europe and Asia. Are there enough passengers to support such a service? You won’t find out looking at ‘peer’ airports. (Study of ‘peer airports’ = Mommy, Billy and Johnny have one. Why can’t I have one too?) You need to study local conditions. Otherwise, the consulting contract is a complete waste of money unless you are only interested in justifying a conclusion that you have already made for a problem you have not properly defined.
You can do good work. Please do so now.
Thomas Stroud
Thomas two points: one it was Vanguard not Vantage. And two Southwest does not HUB. They have Focus Cities and MCI is not one of them.
I enjoyed this quote from todays KC Star mid day business update right before I found your name and site Kevin
“Out of more than 9 million passengers in 2013, only 268,000 were on connecting flights.”
Read more here: http://www.kansascity.com/2014/01/28/4781377/business-leaders-kci-needs-changes.html#storylink=cpy
I will admit that I am somewhat ignorant is this issue as well as other issues in the sense that I believe a lot of things are out of We The People’s control as far as what and how decisions are made…i.e. Truman Sports Complex rennovations, Street Car line, etc. but I for one will say that the one most important thing to me in relation to this topic in particular is the lack of options for feasible public transit to and fro KCI. I would be more apt towards supporting expenses for a single terminal or major overhaul of KCI if there were better transit options…How bout a light rail from KCI to Olathe n/s bound and a connector line from Legends to Independence Events Center? Not to get off topic, its just hard to swallow these expenses when they only seem to benefit those who will directly profit from such projects…that and they all seem to go hand in hand…One last comment/thought is why do so many out of state contractors get these gigs? It appears that a lot of the commercial and infrastructure projects go to out of state contractors?! Think globally, spend locally!
Want non-stops? Listen to Southwest.
From the citizens perspective, the next stage of opportunity with the ATAG can build upon the success we’ve just experienced by getting Quality Questions in front of the presenters and in advance of the day of presentation.
The airlines would likely have presented these same truths had they been left to develop their own presentation, but the value of the reality that the ATAG asked and the presenter answered makes for a degree of “ownership” in what came forth that will be hard to ignore when it comes time to write the report.
As we heard – more cost without compensating profitable revenue increase will – with certainty – lead to fewer flights. So the question for Mr Fullerton and those he represents is simple: There is no presently foreseen way to increase the public’s discretionary travel in the next 10-15 years; that means the only source of added revenue seats is business travel – which KC businesses are willing to make the 5-10 year commitments to such added travel – at whatever price the airlines need to sustain the added capacity?
We need to post those kinds of questions to the ATAG website ASAP – and include the ones for the follow on session with the ATAG consultants.