Burbank Airport Flying High Over Sluggish Market : Transportation: The arrival of low-cost, no-frills Southwest Airlines in April, 1990, helped turn the facility around.

In early 1990, the Burbank Airport was in sad shape. The number of passengers had declined to 2.7 million in 1989 from 3 million the year before. The airport’s profit had fallen to $1.9 million in the fiscal year that ended June 30, 1989, down 10% from fiscal 1988 and 27% below the fiscal 1987 profit. The number of daily flights was down to 60 from more than 80 a few years earlier.

The drop in business was largely due to the wave of mergers and acquisitions in the troubled airline industry, which has resulted in fewer shorter, regional flights--Burbank’s bread and butter. But airport officials also blamed themselves for not pursuing growth opportunities and instead focusing on smoothing community relations and calming local residents who complained about jet noise.

Then in April, 1990, the low-cost, no-frills Southwest Airlines made a splashy, highly publicized move into Burbank, with $59 one-way fares to Oakland.

The result: Burbank Airport is now showing startling growth in an otherwise lackluster air-travel market. Passenger levels surged 29% to a record 3.5 million in 1990 and are up another 15% through the first six months of 1991. By comparison, passenger levels at Los Angeles International Airport were down 0.4% in the first half of this year.

For the fiscal year that ended June 30, 1990, Burbank Airport’s profit jumped 57%, to $2.99 million from $1.9 million in the previous year. Financial results are not yet available for fiscal 1991, but airport officials expect that the data will show that it was another year of improvement.

Despite the recent growth, the Burbank Airport remains a quiet commuter airport servicing business people and weekend pleasure travelers, and markets itself on billboards and in magazine ads as a hassle-free alternative to LAX.

Weekdays, the airport is much like a freeway--with lulls in traffic between morning, lunchtime and afternoon rush hours. Passengers still board planes by walking out from the terminal and climbing mobile stairs.

But airport spokesman Victor Gill said Burbank’s booming business has proved a theory that airport executives have long supported: With 2.5 million people living within a 15-mile radius of the airport, many customers who would otherwise go to LAX could be lured to Burbank.

“Southwest was kind of a lab study for us,” Gill said. “If we put the services in and the air fares are competitive, what will happen? Will any of this stuff come true or are we just kidding ourselves?”

The turnaround at Burbank Airport is particularly dramatic in light of the airline industry’s consolidation, which continues to claim victims. In 1986, Burbank had 11 carriers. It now has six--Southwest, American Airlines, Alaska Airlines, America West, Delta and United Airlines.

In May, Burbank lost USAir--and its 20 daily flights to the Bay Area and Sacramento--when the financially ailing carrier scaled back all its operations at “satellite” airports in California.

The future of America West, which is operating under bankruptcy court protection, is also cloudy. So far, America West has announced no plans to leave Burbank, but it has been trimming operations elsewhere and further cutbacks are expected.

As other carriers retrench, however, Southwest, American and United have been quick to fill the gaps. United, for example, has tripled its number of customer service representatives at the airport and now uses five gates instead of three. Three months ago, United--which flies from Burbank to Oakland, San Francisco and Denver--carried more than twice as many passengers as it did the previous May.

“A lot of flights are going out full,” Joe Hopkins, a United spokesman, said. “We’re very pleased with the loads we’ve been carrying.”

Since its debut at Burbank, Southwest has increased its daily flights from 16 to 26. It now flies to Oakland, Las Vegas and Sacramento--a market previously served by USAir. The Sacramento flights, which started June 17, are now Southwest’s most popular route from Burbank, said Greg Golden, Southwest’s Burbank area manager.

“Burbank has far, far exceeded our expectations,” Golden said. He predicted that by March of next year, Southwest would fly 32 flights a day from Burbank and would add a new destination.

The increased business at Burbank Airport--officially the Burbank-Glendale-Pasadena Airport--has had a spillover effect on other local businesses. In response to brisk demand from business travelers, the Burbank Airport Hilton recently completed an expansion that increased the number of rooms from 280 to 500 and added a new 50,000-square-foot meeting facility.

John Kindt, president of Prime Time Shuttle in Sun Valley, the Burbank Airport’s biggest shuttle service, said demand for rides at the airport has significantly increased during the past year, and many other shuttle services that previously picked up passengers only at LAX are now scurrying over to Burbank.

The airport’s quick growth has had other effects. Most noticeable is that the daily parking facility has become overcrowded, despite the steep $24-a-day rate. In response, the airport recently began valet parking for $18 a day and so far, it has helped to relieve some of the burden on the short-term facility.

Meanwhile, despite the airport’s growth, progress remains slow toward achieving its long-stated goal of building a new terminal. The Federal Aviation Administration has pressured Burbank for many years to build a new terminal because the old one is too close to runways to meet modern safety standards, and there are concerns that a plane making a wayward landing or takeoff could crash into a row of parked planes or the terminal itself.

The Burbank-Glendale-Pasadena Airport Authority, which owns the airport, is negotiating with aerospace concern Lockheed Corp. to buy about 110 acres of Lockheed land next to the airport. Lockheed, which once also owned the airport, is leaving the property, site of the secret Skunk Works advanced development division and other military aircraft operations, in favor of plants in Palmdale and Marietta, Ga.

Airport officials believe that the Lockheed land would be suitable for a new terminal, but there’s a hitch: The land and nearby ground water are contaminated with the residue of toxic chemicals.

Robert W. Garcin, president of the airport authority, said Lockheed has agreed in general terms to clean up the property as a condition of a sale, but it has yet to be determined how extensive the contamination is and how much a cleanup would cost. Some estimates put the cleanup price tag as high as $100 million--about equal to the current market value of the property.

“We all agree there are contaminants,” Garcin said. “Our position is we have to have almost an absolute certainty that what we are acquiring doesn’t have a toxic problem.”

In addition to the land costs, a new terminal would probably cost about $150 million to $200 million to build, at least part of which would be paid for through a bond issue, Gill said.

Preliminary plans call for a terminal that would be 450,000 to 650,000 square feet and have 19 to 27 gates. The present terminal is 165,000 square feet and has 14 gates. The plans also call for construction to begin in four to five years and the new terminal to be completed in 1998, but with the land negotiations continuing, those dates could change, Gill said.

The Burbank Airport was carved from farmland in 1930 by the company that later became United Airlines. In 1940, the airport was sold to Lockheed and was used to test and service aircraft and for commercial and military flights. Lockheed sold the airport to the cities of Burbank, Glendale and Pasadena in 1978, and a Lockheed subsidiary still manages the airport.

If business continues to increase, Burbank’s days as a sleepy suburban facility might be coming to an end. “We’ve entered a new era,” Gill said. “We’re now dealing in a passenger-use level that’s a magnitude above what it used to be.”