Big Apple time
The Port Authority of New York & New Jersey is using public-private partnerships to create world class terminals and transform customer experiences across its airports, writes deputy director of aviation planning & development, Sarah McKeon.
The concept of public entities partnering with private investors to bolster and complement public-sector capital spending – popularly referred to as P3 – has received a great deal of attention over the past decade or so, but at the Port Authority of New York & New Jersey, we’ve leveraged such deals for more than half a century.
Although they weren’t called P3s at the time, we pioneered the practice of airport P3s in the 1960s at John F Kennedy International Airport, where we teamed up with Pan Am, TWA, Northwest, National, Eastern and other aviation giants of the past to design, build, operate and maintain air passenger terminals and their supporting infrastructure.
The Terminal City that emerged helped Kennedy Airport become the No. 1 international gateway in the United States as airlines featured their spectacular new terminals as showpieces that helped link the New York metropolitan region to the rest of the world.
Much, of course, has changed since the dawn and initial expansion of the jet age. All those airlines are gone now, but air travel has continued to grow, along with the use of P3s.
The latest iteration of P3s at the Port Authority airports began in earnest at the start of this century, when we collaborated with a private-sector consortium led by the Schiphol Group to build and operate Terminal 4 at JFK. That terminal opened in 2001, has been expanded multiple times since, and is viewed today as a model P3 airport partnership.
Building on that success, JFK today is in the initial stages of a massive public-private redevelopment programme that will deliver terminal expansions at existing facilities and two new terminals to anchor the north and south sides of the original Terminal City, creating a more centralised airport with a system of new, more efficient roadways, critical electrical and related infrastructure, and more.
But JFK is just one part of the equation. The three New York City metropolitan region airports we operate – JFK, Newark Liberty and LaGuardia – together comprise the busiest system of airports in the Americas.
Pre-pandemic, they served more than 140 million annual passengers, and a sustained recovery since 2020 has led to us forecasting to return to 2019 passenger levels by 2023, which means it’s more important than ever to invest in our facilities.
And we’re doing that at an unprecedented pace: The three airports currently account for a record public-private investment programme that will deliver about $30 billion in systemwide improvements.
Making such extraordinary investments is one of the three pillars that underpins our vision to be a world-class operator of world-class airports, which simply means that by every objective measure, we expect to compare favourably to our peers around the world – in customer satisfaction surveys, implementing cutting-edge technology, leading innovations in airport safety and sustainability, and more.
In addition to investment, we also are focused on delivering a customer experience that exceeds expectations while also integrating governance standards and accountability mechanisms into all agreements at our airports to allow us to enforce a world-class operation at every level and maintain our redeveloped infrastructure in excellent condition for years to come.
At LaGuardia, we’ve already seen the benefits of our vision. New York’s premier short-haul airport located just a few miles from midtown Manhattan has undergone a remarkable transformation with two new terminals as part of a comprehensive plan created in 2015 to construct a whole new LaGuardia Airport.
The goal was simply to create a world-class, 21st century passenger experience featuring modern customer amenities, state-of-the-art architecture, more spacious gate areas and a unified terminal system.
Two-thirds of the $8 billion project was funded through private financing and existing passenger fees.
A collaboration between the Port Authority and the LaGuardia Gateway Partners consortium resulted in a spectacular new Terminal B, a $4 billion overhaul that has already been recognised with UNESCO’s Prix Versailles as ‘Best New Airport in the World’.
The new terminal includes 1.35 million square feet of new facilities and features 35 gates, a 3,000-car parking garage, and new covered, convenient pickup facilities for both taxis and ride-sharing vehicles.
The terminal offers best-in-class retail, vast dining experiences and stunning art and amenities. Related roadway improvements and supporting infrastructure were all built while keeping the terminal fully functional during construction.
The opening of LaGuardia’s new Terminal C in June 2022, just months after Terminal B was unveiled, marked the substantial completion of our whole new LaGuardia Airport just six years after beginning construction.
At a cost of $4 billion – including a $500 million investment by the Port Authority for new roadways and supporting infrastructure – Terminal C represents Delta Air Lines’ largest ever investment in an airport facility. The 1.3 million square foot complex is 85% larger than the two terminals it replaced – consolidating access to 37 gates through a single arrivals and departures hall.
Designed for optimal efficiency and speed, it allows travellers to navigate to and from their gates quickly and intuitively by utilising the latest technologies such as hands-free bag drop and Digital ID screening capabilities.
The departures hall features 36 full-service check-in counters, 49 self-service kiosks and 16 bag-drop counters. A larger and consolidated security area features 11 screening lanes with room for five additional lanes in the future, featuring state-of-the art technology to expedite screening while prioritising the safety of passengers.
The Port Authority and its private partners also are transforming Newark Liberty International Airport with three major projects underway totalling about $5.3 billion in public and private investment.
Newark’s new Terminal A, a $2.7 billion terminal, features the latest passenger amenities, dazzling artwork, digital technology and dining and retail from 60 regional, national and global brands.
The design-build project was led by Tudor Perini/Parsons, with terminal operator, Munich Airport International (MAI), brought in to operate and maintain the one million square foot complex. Its facilities include 33 gates capable of handling larger aircraft, as well as a common-use check-in area, and more passenger friendly security and baggage claim areas.
The terminal is expected to handle an estimated 13.6 million passengers a year.
In addition to the new terminal, the redevelopment programme also includes a $400 million integrated public parking garage with new centralised rental car facilities – the Port Authority funded the public parking portion – and $175 million for airfield paving.
The facility is the largest design-build project in New Jersey’s history and the largest single investment in New Jersey by the Port Authority in our 101-year history.
Also at Newark, the Port Authority recently hired Arup, one of the world’s top aviation planning and design firms, to oversee an ambitious vision plan for future development of the airport, in partnership with leading architecture firm Skidmore, Owings & Merrill.
The master planner will develop a comprehensive development strategy and blueprint – including extensive local community outreach and participation – to accommodate future growth and demand, improve the travel experience and identify opportunities for enhancing the sustainability and resiliency of the facility.
At JFK, a public-private redevelopment programme to rival all P3s is in its initial stages, with the Port Authority contributing more than $2.9 billion of the $15 billion-plus programme.
The $9.5 billion, world-class New Terminal One is being built under an agreement with the New Terminal One consortium, which includes lead investor Ferrovial, a global airport operator which recently agreed to acquire 96% of The Carlyle Global Infrastructure Fund’s 51% stake in the New Terminal One.
The consortium that was selected to design, build and operate the new terminal that will anchor JFK’s south side. At 2.4 million square feet, it will be the largest terminal at JFK when complete – nearly the same size as LaGuardia’s two new terminals combined.
Construction of the new terminal will take place in phases. The first phase, including the new arrivals and departures hall and first set of new gates, is expected to open in 2026.
After completion of all three phases in 2030, the New Terminal One will have 23 gates as well as bright and airy check-in halls and arrival spaces designed to enhance the customer experience and compete with some of the highest-rated airport terminals in the world.
As part of the project, the Port Authority will undertake infrastructure upgrades and improvements including roads, parking, and utilities including a new electrical substation.
Three other major components are part of JFK’s transformation:
- The $4.2 billion, 1.2 million-square-foot Terminal 6, to be built by JFK Millennium Partners on the airport’s north side, will seamlessly connect with JetBlue’s existing Terminal 5. The new Terminal 6 is a public-private partnership between the Port Authority and JFK Millennium Partners, American Triple I, real estate operating company RXR, and JetBlue Airways.
- The $1.5 billion expansion of Terminal 4, led by Delta and JFK International Air Terminal and financed by private capital, will create 10 new gates, while adding 150,000 square feet to expand the terminal.
- The $425 million expansion of JFK’s Terminal 8, led by American Airlines, which operates the terminal, and British Airways – which will be relocating to Terminal 8 from Terminal 7 – is also underway.
The key for P3s to truly work is that they must strike a balance – and maybe 50-50 is too much of an ideal – but something must be gained on both sides of the equation.
By creating a healthy marriage of private and public sectors that allocates risk, we’ve been able to deliver financial benefits to all parties while, most important of all, vastly improving the customer experience by revitalising our facilities.
Fewer places make better sense for the private sector to engage the public sector than the Port Authority of New York and New Jersey’s airports. People want to fly to New York and people need to fly to New York, and for all their inherent challenges, these airports were, are, and will remain, a lucrative market with limitless possibilities for public-private partnerships/ P3 projects.