Flying into the future

San Diego International Airport is served by 21 airlines and offers 213 daily nonstop flights to 48 destinations. It is owned and operated by the San Diego County Regional Airport Authority, which was created on 1 January 2003.

Successfully operating San Diego International Airport (SDIA) means balancing three imperatives; working within unusual physical constraints (we are a single-runway airport on only 661 acres in the middle of downtown San Diego), providing an exceptional passenger experience while meeting growing demand and becoming more sustainable and ‘green’ over time.

Although SDIA’s physical footprint has expanded over its history, it is now uniquely constrained by downtown, San Diego Bay, a military training base and residential neighbourhoods. One certainty is that we cannot plan anything that would require additional land.

Passenger growth

 Nearly 17 million passengers travelled through San Diego International Airport’s three terminals in 2010. While the airport’s customer service is superior and the airport strives to provide a stress-free experience for all travellers, experts predict that the number of passengers at the airport will increase to 27-33 million by 2030 – no small number for a single-runway airport.

To accommodate this increase in demand and ensure we maintain a high level of customer service, SDIA has begun construction on the biggest improvement project in the airport’s history – The Green Build. Within our limited footprint, we are expanding.

What is the Green Build?

Named for a commitment to sustainability, as well as its positive economic impact, The Green Build is a $1 billion expansion project that will make much-needed improvements to the airport. The Green Build will allow the airport to handle the projected increase in passenger demand for air travel, while improving customer service and airport efficiency.

The Green Build will provide an enhanced experience for travellers, enabling them to move more quickly through check-in and security checkpoints, and offering facilities and services to make their time at SDIA more enjoyable, comfortable and convenient. Project highlights include:

• 10 new gates to reduce terminal congestion and provide expanded, more comfortable passenger waiting areas
• 445,000 square-foot, three-story terminal expansion, including a new ticket lobby and baggage carousels
•  Curbside check-in, allowing most pass – engers to check in, print boarding passes and check baggage before entering the terminal at an easy-to-use curbside kiosk
• Dual-level roadway with arriving pass – engers on level one and departing passengers on level two, to relieve curb-front traffic congestion
• More security lanes to improve flow of passengers through the terminal
• Expanded concessions area providing more dining and shopping options
• 1,500,000 square feet of new taxiway and jet parking, increasing airfield efficiency

Boost for the local economy

At a time when construction was slowing dramatically due to the recession, we decided to move forward with this massive project. Why? Because the project was 10 years in the making and as the economy rebounds, the airport will need the gates. Additionally, the airport’s Board of Directors decided that the downturn was actually a good time to start a project of this magnitude, due to decreased construction costs and increased bargaining power.

The Green Build also offered an opportunity to provide much-needed jobs for San Diego County residents, and contracts for local and small businesses during a critical time.

The Green Build will create approximately 1,000 jobs at peak construction and provide numerous contracting opportunities for small businesses. In fact, more than $45 million in construction contracts have already been awarded to local small businesses. In recognition, the Airport Authority has received awards from the San Diego Chapter of the American Subcontracting Association and the Airport Minority Advisory Council for its small business outreach efforts.

As construction progresses, we are committed to doing everything we can to continue to engage local and small businesses in the project.

Project funding

As with any capital improvement project of this size, funding is of critical importance. The project’s $1 billion – $865 million for the project and the remainder in financing costs – is coming from user fees, airport revenue bonds, airport cash and FAA grants. To say it is an interesting time to float bonds is an understatement.

 The Airport Authority’s finance team has been deeply involved in looking at the project financing from multiple perspectives, and in 2010 completed the largest bond sale in the airport’s history. The sale was a huge success, taking advantage of recovery act provisions and our solid financial position. We secured an all-in interest rate of 4.38% for the bonds – one of the lowest rates to date in the nation for an airport related long term bond sale.

The successful sale – in some maturities, the bonds were oversubscribed by more than four times – and excellent rate was a result of several factors, including positive ratings for Airport Authority bonds from the nation’s top three ratings agencies: Fitch Ratings, Moody’s Investor Services and Standard and Poor’s.

The low rate means that we will save an estimated $40 million dollars over the 30-year term of the bonds, and will have our cash flow needs met until 2012. For a critical improvement project, this financial success is huge.

Progress so far

Construction on The Green Build began in July 2009 and the opening day is scheduled for 2013.

The Airport Authority is working closely with its contractors on the design-build project – Kiewit-Sundt, which is leading the land side improvements, including the dual-level roadway, parking and roadway improvements, and the Turner-PCL-Flatiron joint venture, which is responsible for the air side improvements, including the terminal expansion, new gates and airfield improvements. Highlights of construction so far include:

• Demolition of two pedestrian sky bridges at Terminal 2 to make way for construction of the dual-level roadway  Relocation of the airport’s USO Center (the new USO will be the largest in the nation, supporting San Diego’s large military population)
• Placement of nearly 800 piles for the terminal expansion
• Paving of 2,500 yards of concrete, out of a project total of 20,000
• Placement of 325 tonnes of rebar, out of a project total of 1,120

Installation of 5,000 tonnes of structural steel for the terminal expansion begins in February.

The ‘customer’ rules

SDIA takes great pride in providing superior customer service. In 2010, Conde Nast Traveler ranked SDIA fifth in the nation’s top airports and first in California in its prestigious annual Business Travel Awards. This was the fifth year in a row that SDIA landed a top-10 ranking.

The airport is also diligent about surveying its passengers; customers ranked the airport 87% in overall passenger satisfaction in 2010, and we constantly strive to improve that rating.

Another aspect of superior customer service is constantly working to bring new air service to SDIA. In 2010, SDIA announced new, daily nonstop service between San Diego and London’s Heathrow Airport through a joint business agreement between British Airways, American and Iberia. San Diego to London service begins in June 2011. Besides benefitting travellers to and from Europe, the new service also means good things for the San Diego regional economy – one daily international flight can generate up to $250 million in economic impact to the region.

SDIA enjoyed several additional air service announcements in 2010, including San Diego–Maui service via Alaska Airlines, San Diego–Omaha service via Frontier Airlines and seasonal daily service between San Diego and Puerto Vallarta, Mexico.

In addition to excellent air service, SDIA provides added-value services to enhance the traveling experience. Around the holidays, the airport offers free gift wrapping service at the terminals so travellers can have their gifts wrapped after passing through security. During flu season, flu shots are also offered in the terminals, as well as immunisations including the whooping cough vaccine, hepatitis A and B and H1N1.

SDIA also provides other comforts in the terminals, such as our extremely popular rocking chairs, musical and artistic performances and art installations. For instance, as part of the airport’s public art programme, we recently presented a puppet show for children; a contemporary art installation by a local artist featuring pieces made of industrial mesh, beads, thread, yarn and rope; a flash-mob performance for Valentine’s Day and a live Latin music concert to welcome international dancers, judges and spectators visiting for San Diego’s First Annual World Latin Dance Cup.

Going green as a major commitment

As I mentioned earlier, a central reason for calling our expansion project ‘The Green Build’ is the project’s environmental components. Sustainability has been a strong focus for The Green Build.

The airport is pursuing Leadership in Energy and Environmental Design (LEED) silver certification for the project. Some of our goals include water efficiency, use of natural lighting, energy conservation and stewardship of resources. Currently, construction material waste from the project, such as concrete, is being recycled and reused on site.

One of the project’s most significant accomplishments was achieved before a single shovel of dirt was turned on the actual construction. Because of our much limited land for expansion, we chose to remediate a former military landfill adjacent to the airport. At a cost of $45 million, the Airport Authority performed an innovative clean closure with minimal environmental impact from beginning to end. This now-clean site provided the additional acreage to build a much needed aircraft parking area.

But the airport’s environmental conscious – ness neither begins nor ends with The Green Build. Being good stewards of the environment is a hallmark of operations at SDIA. In fact, ours was one of the first major airports in the U.S. to adopt a sustainability policy, which formalised the airport’s commitment to a sustainable future for the airport and the region.

Environmental consciousness is part of all areas of the airport’s operations. In 2010, the airport introduced a new fleet of shuttles with cleaner-burning engines powered by compressed natural gas, as well as 14 all-electric vehicles. We estimate these changes will cut our fuel costs by almost 80%.

The airport also committed to reducing greenhouse gas emissions formally in May 2008, entering into a landmark agreement with the California State Attorney General’s office. The airport is also a recycling champion. In 2002, the airport introduced a single-stream recycling programme, which allowed all recyclable material to be collected in the same container. The results? An increase from 107 tonnes of recycled waste product in 2002 to more than 250 tonnes in 2003. The airport has been named ‘Recycler of the Year’ by the City of San Diego for four years in a row.

In addition, a new universal waste programme collected close to 2,500 pounds of fluorescent light bulbs, batteries and other materials in 2009. And SDIA’s environmental program has a particularly unique component due to its natural location on San Diego Bay. SDIA is home to the California least tern, a federally listed endangered seabird species. The airport provides the least tern with nesting habitat and easy access to foraging opportunities in nearby San Diego Bay.

The airport is the most productive nesting colony in all of San Diego Bay; last year the colony yielded more than 144 viable least tern nests, the second-highest total on record.

Looking ahead

 The Airport Authority is currently implementing a comprehensive Concession Development Programme that will completely revamp all of our concessions offerings. The program will institute a shift from a master concessionaire model to a hybrid approach of direct leasing and multiple primes, creating greater opportunities for existing as well as new concessionaires, and providing more variety and options for travelers.

As part of the program, the total concessions area at SDIA will increase by 41% to 84,000 square feet. The new area will include a flagship concessions area called Sunset Cove in Terminal 2, designed to be a gathering place that creates a San Diego ‘feel’, and features a floor-to-ceiling window wall, views of the airfield and stunning public art installations. The programme will also mean fresher, better and more varied concessions in Terminal 2 East and Terminal 1 as well.

The Airport Authority recently launched the bid process for the Concession Development Program and passengers will be able to enjoy the new concessions opportunities in 2013.

Getting social… and mobile

SDIA has emerged as a leader among airports in the social media world, named a ‘Top Airport on Twitter’ by Forbes.com and cultivating a following in the thousands between its profiles on Facebook, Twitter, Flickr and its employee blog.

The airport’s SMS text programme, launched in 2010 to provide on-the-go updates on The Green Build construction and other critical information for travelers, is one of the first of its kind. (Text ‘alert’ to 45995.)

The airport is also launching a mobile website in 2011, providing an easy-to-navigate experience for those accessing the site (www.san.org) via their mobile devices. The mobile version of the site provides access to the most-visited pages on SDIA’s full website, including critical information about flights, ground transportation and parking.

More to come

As construction moves forward on The Green Build and the economy continues to rebound, SDIA is looking forward to the exciting changes that are in store. Along the way, the airport is committed to providing the same superior customer service that passengers traveling through San Diego are accustomed to.

Today, working within our physical constraints, we are expanding SDIA. Our customers – air passengers using SDIA – tell us that we are providing an exceptionally good experience. External benchmarking, as well as various honours and recognitions tell us we are becoming ever more sustainable. We will continue to strive to balance these three imperatives as we look to the future.

About the Author

Thella F. Bowens is President/ CEO of San Diego County Regional Airport Authority, owner and operator of San Diego International Airport. Bowens is responsible for management of the Authority’s $148 million annual budget, a $376 million rolling Capital Improvement Program and approximately 367 employees. She is currently First Vice Chair of Airports Council International – North America.