On course to expand

Airports across the country are shelving or downsizing planned expansions because of a sharp drop in passengers, yet John Wayne Airport in Orange County is proceeding with a $652-million terminal project -- its first major improvement since 1990.

John Wayne officials say the project will meet future demands for air travel and maintain the airport’s position as an attractive alternative to the much larger Los Angeles International Airport, which handled more than 61 million travelers last year.

Plans call for a third passenger terminal that would increase the gates for commercial aircraft from 14 to 20 and help the airport accommodate up to 10.8 million passengers a year -- the ceiling set by an earlier court settlement with residents of neighboring cities.

Airport officials say the proposal includes a parking structure with at least 2,000 spaces, renovation of the two existing terminals and a marketplace with restaurants and shopping. The county-owned airport also plans to resurface the runway, add more parking for commercial aircraft and build permanent facilities for commuter air services, which now have seven gates in temporary modular buildings.

In addition, space will be added for a federal customs and immigration facility to process passengers from international carriers that airport officials hope to attract in the future.

“We’ve sort of outgrown the original improvements,” said John M.W. Moorlach, chairman of the Orange County Board of Supervisors. “We were looking to accommodate 8.4 million passengers a year back in 1990. We are way beyond that now. Adding six gates makes a whole lot of sense.”

In 1990, the airport opened the $63-million Thomas F. Riley Terminal, a sleek, cavernous structure with arching roofs that contained two concourses divided by a glass and steel main lobby. Combined with the adjacent parking structures, the facility was 12 times larger than the aging Edward J. Martin Terminal it replaced.

The airport is still known for its short runway of less than a mile, which limits the availability of nonstop flights and requires commercial pilots to climb steeply on takeoff to reduce noise as they pass over adjacent neighborhoods.

Nevertheless, airline customers say they often prefer the convenience and accessibility of John Wayne, though the ticket prices are higher than at other airports and there are far fewer flights to choose from compared with LAX.

“In Southern California, John Wayne is the only airport as far as I’m concerned,” said Jon Graves, 53, a sound engineer from Rancho Santa Margarita who travels on business much of the year. “It’s great for personal comfort, and it has everything a big airport has. If they’re already working on a new terminal, I can’t see an argument against it.”

Airport officials say the project conforms to a 1985 court settlement reached in a lawsuit brought by community activists and neighboring cities that challenged the airport’s master plan. The agreement set a passenger cap of 8.4 million per year, but subsequent amendments increased the limit to the current 10.3 million.

In 2011, the ceiling will be raised to 10.8 million per year -- a restriction that will expire in 2015 but may remain in place pending further discussions, airport officials say.

To make room for the latest improvements, demolition crews are now tearing down a 1,200-space parking structure on the south side of the airport. Construction of the 250,000-square-foot terminal is scheduled to begin in mid-2009, and the entire project is expected to be finished in 2011.

“The expansion is a good idea,” said Amanda Griffith, 31, of Aliso Viejo, who takes about a dozen flights a year from John Wayne. “It could provide more options, and I have seen long security lines stretching through the terminals. Adding international flights would be nice.”

The work, however, is getting underway during a severe downturn in the airline industry triggered by high fuel costs over the summer and a deepening recession that has cut the demand for air travel here and abroad. As a result, carriers are slashing service and opposing costly airport improvements that could raise their fees. The nation’s credit crisis also has made it difficult for some major airports to finance new terminals and runways.

The misfortunes of the airline industry have prompted concerns that a third terminal at John Wayne might not be justified because passenger volumes have fallen 9.6% for the first 10 months of this year to 7,650,528, compared with the same time period last year. The airport handled about 9,980,000 passengers in 2007. Aviation consultants predict further declines the rest of this year and next.

Leonard Kranser, a veteran airport activist in the county, said the present terminals can handle 10.8 million passengers a year, the maximum allowed by the settlement.

“The third terminal is a classic example of not following good business practices,” Kranser said. “They have no plans that I can discover to actually convert the additional terminal space and parking into more seats on planes -- only more seats on the ground.”

Some regular John Wayne users who were at the airport Wednesday say they feel the same way because they have rarely encountered congested terminals and long waits at counters or security points.

“I don’t see the need,” said Harry Bizios, 58, of Dallas, who works for Lennox Hearth Products based in Orange. “What they have now is great. It’s one of the most accessible airports in the country for a business traveler. It’s not excessively crowded, and there’s convenient parking across the street. Not once have I been tied up in a long security line.”

Airport activists, many of whom live near or under flight paths, contend that the new terminal is designed to handle more passengers than the court settlement allows. They warn that any airport growth will increase harmful emissions from aircraft engines, including greenhouse gases that contribute to global warming.

“This is an expansion,” said Charles Griffin, who has been involved with several opposition groups, including AirFair, the Airport Working Group and Stop Polluting Our Newport. “This is very threatening to those who live in Newport Beach and the corridor cities, such as Tustin.”

Airport officials disagree. They say the new terminal will accommodate growth up to the 2011 passenger cap and relieve overcrowding and long security lines during the busiest travel periods. They are optimistic that the downturn in the airline industry is temporary and the demand for air travel will recover in Orange County in the next few years.

Traditionally, airlines serving John Wayne have enjoyed high yields over the years from strong markets for business and leisure travel. The airport’s fast recovery in the months following 9/11 is at least partly attributable to the healthy demand for air travel in and around the county.

Airport officials say they do not anticipate serious problems financing the project, given the facility’s economic health. Annual revenue is about $91 million. There is a cash reserve of roughly $300 million, and a passenger facility charge -- $4.50 per airline ticket -- is expected to raise $321 million over 17 years.

Some of that money will be collateral for $300 million in bonds that are scheduled to be sold to investors in the spring, when, airport officials say, the nation’s credit markets probably will have thawed.

“We need the project. We’ve seen continuous growth overall,” said Jenny Wedge, an airport spokeswoman. “Even if our passengers drop 10%, we will still be putting more passengers through the airport than the original terminals were built for.”

--

dan.weikel@latimes.com