Delta Hits for Power in NYC:
$1.6 billion JFK Project Creating 6,000 Jobs

By JACK LYNE • Site Selection Executive Editor of Interactive Publishing

While New York's baseball devotees were drooling over the Mets-Yankees subway series, Delta Air Lines (www.delta.com) was hitting a Mark McGwire-size expansion homerun at John F. Kennedy International Airport (JFK):

The Atlanta-based carrier has just announced a US$1.6 billion expansion and overhaul of its JFK terminals that will create 6,000 new jobs. The projects are part of the airline's aggressive strategy in the U.S. Northeast's hotly contested "Wing Wars."

"JFK is the one airport that has physical growth opportunities in New York, the world's largest aviation market, and it's up for grabs," said Delta CEO Leo Mullin.

Expansion Will Up Delta's JFK
Flights 400 Percent-Plus by 2005

Like a hanging curveball, those growth opportunities are spurring Delta to swing for the fences. The expansion and renovation will enable the airline to increase its daily flights from JFK by more than 400 percent by 2005.

The heaviest expansion traffic will be at Terminal 4. Delta has signed a lease term sheet agreement with JFK International Air Terminal LLC (JFK IAT), a private consortium of Schiphol USA, LCOR Inc. and Lehman Brothers. JFK IAT, the first private non-airline consortium selected to run a major U.S. terminal, will construct 1.5 million sq. ft. (135,000 sq. m.) of Terminal 4 space, creating 26 Delta gates and a separate arrivals hall.

Delta's sprawling expanse of new space will actually be an addition to Terminal 4's original design, a $1.1 billion project that began construction in May 1997. (Terminal 4's original configuration is still scheduled for a May 2001 opening.)

Delta will also double its presence at JFK's Terminal 2, adding 10 to 20 new gates for regional jet activity and off-gate plane parking. Terminal 3 will be demolished to accommodate the project.

Pataki Trumpets 'America's International Gateway'

Delta is projecting a June 2001 construction start, with completion in 2004. The projects must still clear a few final hurdles, however.

The New York Port Authority (NYPA at www.panynj.gov), which owns and operates JFK, still approve Delta's plans, as must JFK's Board of Directors (acting on the NYPA's recommendation). The projects also must secure financing.

But no one at the project announcement, including Gov. George Pataki, seemed to anticipate any rhubarbs.

"Today is an outstanding day for JFK International Airport and for the economy of Queens," Pataki said. "Delta's $1.6 billion investment puts New York at the center of its Northeast expansion, creating 6,000 new permanent jobs and telling the industry that New York has re-emerged as a home for aviation."

Delta's expansion, Pataki added, "will be a cornerstone of our overall $9 billion JFK Redevelopment Program, the largest project in aviation history, which strengthens JFK's place as America's international gateway."

Mullin thanked Pataki, plus Empire State Development Corp. (www.empire.state.ny.us) Chairman Charles Gargano, U.S. Rep. Gregory Meeks (D-NY) and Queens Borough President Claire Shulman. "Each of these individuals encouraged our decision to invest in new facilities at JFK and played a critical role in our commitment," Mullin said.

The Wing Wars Escalation

If the expansion proceeds as planned, Delta will add 188 daily departures from JFK by 2005 and another 165 by 2014. Delta currently offers 57 daily JFK departures. Delta also plans to increase international daily departures from the current 21 to 82 in 2014. That would make JFK Delta's No. 1 international airport, passing Atlanta's Hartsfield International.

The JFK expansion is part of an ongoing escalation in the East Coast Wing Wars. Last year, Delta announced a $385 million upgrade of its operations at Boston's Logan Airport. Now, United Airlines is moving to acquire U.S. Airways, which has sizable operations in Boston, New York and Washington, D.C.

Other

planks in Delta's Northeast strategy include reaching more small and mid-sized cities on Delta Connection; improving business travel on Delta Shuttle, and developing additional leisure travel to Florida on Delta Express, airline officials explained.

American and Continental, however, remain the two top-ranked carriers in the New York area, which also includes LaGuardia Airport and Newark International. Delta's New York-area revenue share stands at 14 percent, the same level the airline has recorded for the past five years.

But with its $1.6 million JFK investment, Delta is obviously going to its fastball to try to muscle up its market share in Gotham.