New terminal hangs on airfare subsidy

Approval of a new terminal at Wichita Mid-Continent airport hangs on the Kansas Legislature's renewal of a nearly $5 million subsidy for AirTran Airways, Wichita Vice Mayor Jeff Longwell said Thursday.

Longwell spoke at the annual Chairman's Lunch at Newman University along with Dave Unruh, chairman of the Sedgwick County Commission, and Lynn Nichols, chairman of the Wichita Metro Chamber of Commerce.

Letting the bids for the $160 million terminal could happen as early as July, Longwell said, if plans proceed as hoped.

The council has moved cautiously on the project because it is concerned about the risk to local taxpayers.

Longwell said that without the state subsidy, AirTran would leave Wichita and ticket prices charged by the other airlines would likely rise. As prices rise, passenger traffic would fall, cutting the income derived from the fees paid by air passengers.

If fee money fell short, taxpayers might have to step in to fill the gap.

The city thinks airport traffic will continue to increase with the economy.

"The recovery looks like it's coming and all of the leading economic indicators are looking more solid," Longwell said. "And we've started to see an increase in travelers through Mid-Continent already, so it looks pretty promising that it will keep going."

Some legislators have said that keeping the $5 million subsidy appears likely, despite budget cuts elsewhere. Gov. Sam Brownback included the project in his budget.

Rolled up in these calculations is the fact that Southwest Airlines is in the process of buying AirTran.

Longwell said continued subsidies and approval of the new terminal will put the city in a better position to land Southwest Airlines. Southwest hasn't said whether it will keep service in Wichita after the acquisition of AirTran.

A spokesman for Southwest said Thursday that no decision has been made and won't be until after the sale is completed in the second quarter.

The terminal would be paid for with passenger facility charges, airport revenue from airlines and concessions, and other income and grants. The airport would also use bond money paid back over five to 30 years.

The current terminal is aging and in need of major repairs. For example, new Homeland Security requirements have created a need for more behind-the-scenes baggage inspection areas. Electrical, heating and cooling, and other infrastructure needs to be replaced.

Renovating the existing 50-year-old terminal would cost about $150 million, according to airport studies, nearly as much as building a new one.