DALLAS — Dallas-Fort Worth International Airport expects its annual debt service cost to double over the next decade as it embarks on a $2 billion renovation of its original four terminals built in 1974.
From the current $100 million per year, debt service would rise to about $233 million by 2020 under financing plans described at a planning retreat last week.
Plans call for construction on the seven-year project to begin in February 2011, just after Super Bowl XLV in nearby Arlington. Terminal A will be the first one completed, sometime in 2014, and the entire project should be complete by the end of 2017. The construction schedule requires one-third of each terminal to be shut down at a time.
The airport has not yet scheduled a bond issue, but officials last week began identifying new sources of revenue to cover debt service.
DFW expects parking revenues to double over the next 15 years with higher rates as the airport gains additional income from concessions and commercial development. Revenue from those sources is expected to rise from the current $200 million to about $500 million in 20 years.
Landing fees, rentals and other charges will also rise, but Fort Worth-based American Airlines has tentatively approved a 10-year lease under the new terms. With 85% of the passenger traffic at DFW, American must agree to the plans for its terminals.
The new lease and redevelopment outlays will increase cost per passenger to $12 from the current $7.
In general, the new lease with American and other airlines allows DFW to take more control of its finances than it currently has by sending some revenue directly to the airport.
Some of the revenues that will go to the airport are currently used to lower airline operating costs. DFW's per-passenger costs are among the lowest in the nation.
DFW's $3.7 billion of outstanding joint revenue bonds carry ratings of A-plus from Standard & Poor's and Fitch Ratings and A1 from Moody's Investors Service.
The airport refunded more than $600 million of outstanding bonds last September in anticipation of the upcoming debt.
With facilities somewhat outdated 36 years after the airport's opening, the remodeling plan is designed to improve efficiency, security, and opportunities for vendors.
"A great deal has changed since these terminals were designed in the 1960s, including vastly different modern requirements for security and customer services," said Jim Crites, executive vice president of operations for DFW.
Officials hope to increase parking revenue from the current $170 million per year to $250 million by 2030 through expanded facilities at each terminal. The South Express parking lot will also gain covered spaces to compete with growing off-site lots.
URS Corp. of Dallas has already begun design work under a $21 million contract awarded in September. Initial designs resemble those for the international Terminal D, which opened in 2005 at a cost of $1.2 billion. The terminals are also now connected by the SkyLink system that opened the same year.
The terminal redevelopment is part of the airport's current master plan, which includes future rail service from Dallas Area Rapid Transit and the Fort Worth Transportation Authority. A major highway redevelopment north of the airport known as "the Funnel" is also underway.
As the nation's third-busiest airport, DFW is seeking to enhance its status as a world-class hub for passenger and cargo traffic. Along with the remodeling, DFW is pursuing new service from carriers such as Jet Blue and increasing the number of nonstop flights to major cities throughout the world.
According to the most recent Census data, Dallas-Fort Worth was the fastest-growing urban area in the nation from July 1, 2008, to 2009.