Houston Airport’s flying high in new era of international expansion

On 5 December 2007, the long–awaited Houston-Dubai flight connecting two giants of the energy industry arrived at Houston’s George Bush Intercontinental Airport (IAH). The new nonstop Emirates service is a perfect example of how airlines that until recently were not seen at Houston’s air terminals, are poised to take advantage of the city’s growing demand for passenger and cargo services.

The Houston-Dubai route promises to be a money-maker for Emirates and provides a much needed nonstop link to the Middle East for Houston’s vast number of oil and gas companies. Thanks to the growth of foreign carriers and the availability of aircraft like the Boeing 777-200LR, which can fly longer distances, routes like this are no longer just a penciled entry on an airline planner’s dream sheet.

Today a number of airlines are showing keen interest in availing themselves of Houston’s growing market opportunities. As international agreements continue to open markets and new long-range aircraft with the ability to bypass traditional entry points take flight, their numbers will continue to increase.

Houston’s diverse economy and population are a strong incentive for new carriers to enter the market. The City’s population is so diverse that more than 99 languages are spoken by Houstonians and its international ties are exemplified by the 88 consular offices open for business.

Long dominated by the energy sector, Houston has experienced a boom in other business categories over the last 25 years. These include medicine, biotechnology, aerospace, information technology and many others. Transportation, one of the Houston area’s original key industries is thriving as well with rail, road, and sea transportation networks complementing Houston’s growing airports.

Over a dozen international carriers already fly from Bush Intercontinental, serving more than 70 worldwide destinations. In 2007, carriers like Korean Airlines and Emirates either expanded services or inaugurated a presence at the airport. In 2008 they are scheduled to be joined by Qatar Airways, with nonstop flights to Doha, and Singapore Airlines, with flights to Singapore via Moscow.

“The new carriers entering the market do not diminish the importance of our two main carriers; Continental Airlines at Bush Intercontinental and Southwest Airlines at William P. Hobby Airport,” says Rick Vacar, Houston’s director of aviation. “These two airlines are the backbone of our two commercial airports, but the new entrants bring added value to our airports, Houston travelers and cargo customers.”

As Houston’s hometown carrier, Continental Airlines plays a starring role in the growth of Bush Intercontinental, its largest hub. They operate out of four of the airport’s five terminals. Their international expansion is responsible for Bush Intercontinental’s position as the U.S. airport with the most Mexican destinations and flights. This international expansion is expected to continue as the airline accepts delivery of the new Boeing 787 in 2009.

What does this new marketplace mean for Houston, and more importantly what role is Houston ready to play in it?

“As traditional ports of entry on the East and West coasts of the United States continue to experience congestion and the limitations of their ground and airborne capabilities, airports like Bush Intercontinental stand to gain new airlines, new routes and importance to airline profitability. New aircraft with extended flight range are further opening Houston’s market to the world,” says Vacar.

Bush Intercontinental has the infrastructure to meet today’s needs and the ability to economically expand for many years into the future. Overall, the airport offers favourable weather conditions, an enviable geographic position and a growing local market.

The modern terminal complex at Bush Intercontinental includes the United States’ largest facility for processing international passengers. Built with the future in mind, the facility can handle more than 4,500 passengers per hour and has 80 Customs and Border Protection passenger processing positions available. During its first three years of operation the facility has proven its worth by helping attract new carriers, decreasing passenger processing time and improving the overall traveler experience at the airport.

More than a billion dollars worth of improvements have been completed at Bush Intercontinental during the last five years. These include; expanded parking garages, renovated concession areas, a new consolidated car rental facility, an above ground people mover connecting most terminals, baggage handling equipment, a new terminal, taxiway and runway improvements and the new Runway 8L-26R opened in 2003.

Bush Intercontinental has five air carrier runways. The configuration of these runways allows simultaneous takeoff and landings of three aircraft in all weather conditions. In a few years, a fourth parallel east-west runway will allow the simultaneous launch and recovery of four aircraft in all weather conditions. This ability will be unique to Houston, as no other airport in the world currently enjoys this capability.

Air cargo is a growing business sector in Houston, with more than 900 freight forwarders and other cargo related businesses in the region. The Port of Houston and extensive rail and road networks easily accessible to Bush Intercontinental make Houston a unique transshipment and consolidation point. Here you can execute air-air, air-ocean, air-truck and air-rail intermodal combinations allowing unparalleled scheduling and cost management flexibility.

“If you have not explored the cargo-related facilities in and around Bush Intercontinental in a while you will be surprised by the rapid expansion of facilities and activity over the past few years.” says Vacar. “Areas that were undeveloped around the airport are now brimming with new facilities catering to those exploiting Houston’s air cargo shipping advantages.”

For some of the same reasons as the passenger segment, Bush Intercontinental is experiencing a number of new market entrants, including Korean Air Cargo and China Airlines Cargo in 2007, and in 2008 Air Bridge Cargo begins freighter service to Russia. The IAH CargoCenter is capable of simultaneously handling 20 747-type freighters and offers more than 550,000 square feet of warehousing and office space. Plans are already underway for IAH CargoCenter II, with added aircraft and freight handling facilities. Additionally perishables warehousing capabilities are planned for the area.

Bush Intercontinental offers relatively easy expansion capability that is the envy of most airports around the country, reasonable costs, a nonunion labor market, a business friendly environment, and a strong regional economy. This all translates into ease of entry for new carriers and a market to support new services.

This year marked some important milestones for two of Houston’s airports. Hobby Airport, the birthplace of commercial aviation in Houston, celebrated its 80th year of operation and Ellington Field reached its 90th birthday as one of America’s cradles of military and scientific aviation.

Southwest Airlines is the anchor carrier at Hobby Airport. It was one of the airline’s first destinations when it was founded in 1971 and at one time was the airline’s largest hub. Over the years the airline’s growth helped create a low cost carrier hub at Hobby. Today the airline has been joined by low cost carriers JetBlue and AirTran, and by legacy carriers Delta and American at the airport.

“Hobby Airport continues to thrive as a low-cost carrier hub,” says Mary Case, Airport Manager. “We offer a brand new concourse that centralises airline gates, offers the latest amenities and capabilities; yet retains Hobby’s historical ease of access.”

In 2007, JD Powers & Associates named Hobby Airport as the nation’s favourite small airport among American travelers. This was the second year in a row that it earned the award. Houston’s second largest airport is still in the process of a transformation and the future holds further improvements. The check-in, baggage claim and other terminal facilities will be completely renovated or rebuilt. A number of airside improvements, including runway expansions are in Hobby’s current master plan.

Houston’s oldest airport, Ellington Field is also experiencing a number of improvements. These are opening new areas of the airport to air operations-related development. The most significant of these is the recent completion of Taxiway Kilo, which is already attracting new corporate and general aviation activities and construction.

At the same time the military side of Ellington is also changing; with the construction of a military reserve center and the future establishment of a Predator squadron at the former Air Force base.

Military-related operations will be a part of Ellington for the foreseeable future, but business opportunities are also plentiful at the 90-year-old airport. A number of large parcels of land, both airside and landside, are available for compatible development. Discussions are currently underway for a number of possible uses, from manufacturing to space science projects in support of NASA’s Johnson Space Center.

“Houston is very fortunate to have three separate airports with complementary capabilities and the management structure that unifies them under one vision,” adds Vacar. “Our airports can accommodate, build for and support all takers, be they passenger or cargo airlines, legacy or low cost carriers, aviation or space businesses, support industries and others. That is one advantage we are proud to flaunt.”

About the author

Rick Vacar is Director of the City of Houston Department of Aviation. He is responsible for the overall management of the Houston Airport System’s three aviation facilities – George Bush Intercontinental Airport, William P. Hobby Airport, and Ellington Field – and its 1,200 employees.

Prior to his early 1998 appointment, Mr. Vacar served three months as acting director of the Houston Airport System, after nearly two and a half years as the department’s deputy director of aviation/chief operating officer responsible for the operation of the city’s three aviation facilities.

He has served as executive director of Florida’s Sarasota Manatee Airport Authority, and as deputy director of operations and noise program/environmental manager of the Burbank-Glendale-Pasadena Airport Authority.

Mr. Vacar is an accredited executive of the American Association of Airport Executives, a licensed attorney admitted to practice in California and several federal courts, an Air Force veteran, and a licensed pilot. The former commuter airline and corporate pilot has previously worked in several positions within the Federal Aviation Administration.