DALLAS — A multibillion-dollar series of projects to reshape how travelers get to and through Dallas-Fort Worth International Airport have all begun construction, with completion expected to take six years.
At the airport itself, a $2.7 billion remodeling of its four main terminals began last week at Terminal A. The project will be financed with traditional bonds, $300 million of which were issued last year.
That issue brought a downgrade from Fitch Ratings to A-plus from AA-minus amid signs of weakening in the economy. The ratings drop applies to $3.5 billion of outstanding joint revenue improvement bonds issued by Dallas and Fort Worth, which jointly own the airport.
“The downgrade to A-plus reflects the significantly higher leverage position the airport will face after the planned $2.7 billion in additional debt is issued by 2015 due to the terminal renewal and improvement program,” Fitch analyst Emari Wydick said in the report.
“After the planned borrowing, DFW will have one of the highest debt burdens among peer airports, creating materially higher fixed costs for its operating budget,” Wydick added.
The downgrade brought Fitch in line with Standard & Poor’s A-plus with a stable outlook. Moody’s Investors Service affirmed its equivalent A1 rating, also with a stable outlook.
As the DFW remodeling proceeds, freeways are undergoing expansion to funnel traffic more fluidly to the airport as a light-rail line approaches from the east to connect to Dallas.
Two projects designed to improve traffic flow include the $2.7 billion LBJ Freeway redesign that brings traffic to DFW from north Dallas and the $1 billion DFW Connector that is designed to remove bottlenecks from several freeways near the airport’s north entrance.
With limited state money available for the projects, the LBJ project is operating as one of the largest public-private partnerships in Texas’ history.
Spanish toll road outfit Cintra is financing and building the new LBJ Freeway and adding new paid lanes that will be managed by the North Texas Tollway Authority.
The state contributed $490 million, and a loan of $850 million came from the federal government.
Private firms invested $664 million in equity, and issued bonds for another $615 million of proceeds.
To improve mass transit access to the airport, the Dallas Area Rapid Transit Authority is making steady progress on its $1.8 billion Orange Line, which will connect downtown Dallas and key transit centers in the suburb of Irving to the north end of DFW.
Rail service to Irving is expected to begin next year, and the DFW station is scheduled to open on the 14-mile line in 2014.
The Orange Line shares part of its route with the recently opened Green Line, which serves Dallas Love Field, a small competitor to DFW. Unlike DFW, Love Field does not have an actual airport rail station, but the line runs just to the west of the airport.
Dallas and DART officials agreed in 2007 to make Love Field Station a surface-level facility after a long debate of whether or not to make it an underground station.
As DFW undergoes remodeling, Love Field’s terminal is also being redesigned by Southwest Airlines under an agreement that will allow the smaller airport to serve any U.S. destination by 2014. Currently, airlines at Love Field can only fly to cities in Texas and nearby states.
The $500 million Love Field project is bond financed through the Love Field Modernization Corp. The first $300 million of tax-exempt debt, backed by Southwest, was issued last year.
With its recently completed merger with AirTran Airlines, Southwest is working on plans to end AirTran service at DFW. Under its Love Field agreement, Southwest cannot operate at both airports.