Work on San Antonio International Airport’s $525 million expansion program will slow down due to fewer passengers than expected at the facility.

Interim aviation director Mike Sawaya told the San Antonio City Council last week that the number of passengers using the airport in 2009 is expected to be down 4% from the 8.4 million passengers in 2008. As a result, he said, one of the two terminals in the capital program that was to be operational by 2012 will not be needed until 2014.

Officials had anticipated a 2% annual increase in passengers through 2012.

Financing for the capital improvement program includes 27% from federal grants, 15% from future bond issuance, and 7% from passenger facility charges.

The city sold $83 million of general airport system revenue bonds and $74 million of PFC subordinate-lien bonds in November 2007 for the expansion effort.

Officials had anticipated issuing $17 million of revenue bonds in 2012, and $70 million of additional subordinate debt through 2012 to finance the construction effort.

Work is under way on a $134 million terminal that will replace a 40-year-old structure, and on an elevated road that will link two terminals.

The airport bonds carry ratings of A-plus from Fitch Ratings and Standard & Poor’s and A1 from Moody’s Investors Service.

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