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Regional Report: Planes & Cranes

Airport expansion has continued in Greater Phoenix even during the coronavirus pandemic.

As vaccine distribution ramps up, aviation leaders joined our latest ‘Regional Report’ to discuss ongoing infrastructure projects and expanded flight service, the impact of COVID-19 on operations and optimism for the industry that has suffered over the past year.

Panelists included:

Andrea Goodpasture, director of airport affairs, Southwest Airlines

Jack McCain, director of state and local government affairs, American Airlines

Brian O’Neill, executive director and CEO, Phoenix-Mesa Gateway Airport

Charlene Reynolds, interim director, Phoenix Sky Harbor International Airport

Expanding infrastructure

Phoenix Sky Harbor Airport is undergoing two major construction projects.

First, the Phoenix Sky Train is being expanded westward. Currently, it begins at the metro station at 44th and Washington and connects to Terminals Three and Four. The expansion will take passengers to the 24th Street station and the airport’s rental car center.

“We consider the western half of the airport our new gateway,” Reynolds said.

The airport is also adding a concourse to Terminal Four, one that will be entirely leased by Southwest Airlines. The new eighth concourse will include touchless services for concessions, a free-standing bar and common-use lounge for business travelers.

“We will have four retail spaces, a lounge, and we will also have more food and beverage opportunities in this concourse,” Reynolds said. “While we’re all recovering from pandemic, we have some great things going on at Phoenix Sky Harbor Airport.”

The new terminal is scheduled to be completed in June 2022. Southwest will offer additional baggage claim, ticketing and baggage screening areas, Goodpasture said.

In the East Valley, Phoenix-Mesa Gateway Airport is working to accommodate the influx of residents in the area.

“If you look at the growing population of the Phoenix East Valley, there’s over two million people that live within a 20-minute drive of Phoenix-Mesa Gateway Airport,” O’Neill said. “A lot of the growth in the Greater Phoenix area is to the east and to the south. Years ago, we were on the outskirts of the Valley, and now we’re getting much more centralized.”

The airport is part of six private development projects that will account for more than 400,000 square feet for hangars, offices and a hotel.

Gateway’s projects include:

  • 65,000 square-foot hangar and corporate headquarters
  • 50,000 square-foot hangar
  • 82,500 square-foot hangar
  • 127-room dual-brand hotel
  • 50,000 square-foot flex industrial building
  • 187,000 square-foot hangar complex

Phoenix-Mesa Gateway is partnering with SkyBridge Arizona on developments. The first three collaborative projects will be Gateway’s industrial building, the 82,500-square-foot hangar and the hotel.

Skybridge is investing $40 million in horizontal infrastructure over a long-term, 49-year commitment with Gateway.

“When it comes to fruition, this will represent nine or 10 million square feet of additional development and high-wage jobs for the region,” O’Neill said.

SkyBridge also offers a unique program that will benefit Gateway’s cargo shipping to Mexico.

With its Unified Cargo Processing Program, freight shipments will be able to go through joint customs inspection in the United States, which will allow the plane to fly directly to its destination in Mexico instead of stopping in Mexico City or one of the other five airports in the country with customs and immigration services. This is the only such program offered in the United States.

Gateway is also at the beginning stages of a 400-acre non-aeronautical master development project dubbed Gateway East. O’Neill said they initiated an RFQ and are searching for a developer.

Expanding reach

In a typical year, Southwest adds one or two destinations, according to USA TODAY. In 2021, they already have plans for at least 10 new locations.

It’s a continuance of their expansions announced last year, when the airline established non-stop domestic flights from Phoenix to Miami, Palm Springs, Cali., and Montrose and Steamboat Springs in Colorado.

In February 2021, the airline introduced flights from Phoenix to Chicago’s O’Hare Airport and Sarasota, Fla. Southwest has also announced routes that will open in the coming months from Phoenix to Colorado Springs, Colo., Fresno and Santa Barbara in California, Bozeman, Mont. and Destin-Fort Walton Beach, Fla.

Additionally, international flights to Puerto Vallarta and Cabo were introduced in October, and Southwest has plans to begin flying to Cancun in March.

Phoenix-Mesa Gateway announced operations in Houston and Traverse City, Mich. in February 2021, and has plans to open routes to San Diego in May and Jackson Hole in June.

American Airlines announced one-stop flights from Sky Harbor to Bangalore through Seattle are scheduled to begin in October.

Airlines have seen a slight uptick in leisure travel as COVID-19 restrictions ease with case numbers dropping and the vaccine distribution ramping up.

“We see people trying to get out – sometimes it’s to see friends and family, but we also see a lot of travel to destinations like Arizona or like Colorado, where there’s a lot of outdoor space,” McCain said. “People can play golf or go hiking, enjoy the outdoors in a way that’s not going to put them in proximity with other people.”

Moving forward with the coronavirus and vaccines

Sky Harbor Airport experienced a 90% decrease in passengers in April 2020 in the immediate wake of COVID-19 protocols and stay-at-home orders being implemented around the country. Over the final four months of 2020, it saw about half the traffic it had when comparing to the same period over the previous year.

Gateway was not impacted as severely, as traffic dropped 20% to 40%, depending on the month, O’Neill said.

McCain said American travel was down about 50% in October 2020, which aligned with Southwest’s rate.

“Air travel is depressed. Not just due to lack of demand because of the pandemic, but we’ve had some notable events across the country recently that have also depressed demand,” he said. “American Airlines headquarters is in Dallas and the weather recently — the freeze has really impacted our operations.”

American and Southwest have experienced different avenues of demand. McCain said business travel has seen a surge in American flights, while there has been a light increase in leisure travel. Southwest is seeing more leisure-oriented demand while business travel remains muted, Goodpasture said.

To increase demand to normal levels, airports recognize that travelers and businesses must feel comfortable with the safety measures implemented at airports and on planes.

Southwest is using different disinfectants, manually cleaning airport counters and kiosks twice a day, and has installed sophisticated HEPA air filters into every aircraft. They’ve also limited close contact by installing plexiglass at stations in the airport, altering the boarding process and requiring masks for employees and customers.

Sky Harbor Airport has similar measures including air filtration and more cleaning and mask mandates. It also offers on-site testing and PPE vending machines.

O’Neill said he thinks some of the health adjustments the airlines industry is making will continue even after the effects of the coronavirus have subsided.

“We’re talking about the sanitation of high-touch areas, we’re talking about respecting physical distancing, so I do think that there are going to be modifications made as we continue to develop our terminal with respect to the possibility of a reoccurrence of a pandemic, and really the realization that the way that we were doing it before might not have been the most healthy way,” he said.

McCain said he doesn’t believe vaccines will be required for domestic flights, but for international travel, there could be mandates similar to testing protocol required by many countries, including the United States, prior to arriving in the country.

Despite a difficult year, panelists expressed optimism for the industry.

“We believe that the vaccine will lead us to new growth,” Reynolds said. “We use the word hope a lot, but we are hopeful, and we are ready to serve our passengers when they are ready to return to Sky Harbor Airport.”