San Diego International Airport: Bouncing back
President and CEO, Kimberly Becker, updates Joe Bates on San Diego International Airport’s recovery from COVID and its $3 billion New T1 programme.
With traffic on the rise and a host of new domestic routes launched in the last few months, San Diego International Airport’s bounce back from COVID is beginning to gather pace.
Sixteen new domestic services this year and steadily increasing frequencies on a number of existing destinations means that the Californian gateway currently has one more non-stop route than it did before the pandemic.
Smaller, secondary cities have accounted for the bulk of the growth, and rising interest in San Diego itself both as a beach destination and as a place to do business – it is home to the third biggest biotech and biomedical science cluster in the US – is driving the recovery, with San Diego International Airport (SAN) now handling around 75% of the daily traffic it welcomed pre-COVID.
The upturn, boosted by the June 15 lifting of most of California’s COVID restrictions, has led to cautious optimism that more passengers will pass through SAN this year than the 9.2 million that used the gateway in 2020. The airport authority doesn’t do calendar year predictions, but forecasts that 6.2 million passengers will use SAN in its FY2022, although there is a good chance that the figure will be higher if the airport enjoys a strong end to 2021.
Whatever passenger total the airport ends up handling in 2021, it will still be way down on the record 25.2 million that passed through SAN in 2019 to cement its status as the third biggest airport in California after Los Angeles (LAX) and San Francisco (SFO) and busiest single runway airport in the United States.
The recent upward trajectory in traffic is most welcome for San Diego County Regional Airport Authority’s president and CEO, Kimberly Becker, who has no hesitation in admitting that the last 18 months have been difficult ones for everyone associated with SAN.
Indeed, statistics reveal that like most US airports, SAN was hit hardest in April and May 2020, when at the lowest point its passenger numbers dropped by 95% to just a few thousand travellers a day, and year-on-year monthly traffic figures remained down until March this year.
The airport authority responded to the traffic downturn and subsequent loss of revenues by cutting costs, introducing a hiring freeze and avoiding all unnecessary expenditure. The strategy is still in place today, and the need to be prudent while traffic levels remain down has led to questions being asked about whether SAN should modify, phase, hold off or even go ahead with its $3 billion New T1 development programme.
The plan, one of the most ambitious in the US, includes proposals for a new 1.2 million square foot terminal to replace the airport’s existing Terminal 1; new roadways to make it easier to access SAN; and airfield enhancements to improve the efficiency of airside operations. The airport authority has also “preserved the opportunity for a connection to a potential future transit system”, which is most likely to be an Automated People Mover (APM).
A final decision on the New T1 programme will be made at the airport authority’s monthly Board meeting in October. Becker, for one, believes that the new 30-gate terminal is desperately needed to boost SAN’s operational efficiency and make it a more appealing and user-friendly gateway for passengers.
“Whatever path we go down, our goal of providing the best possible facilities, services and connectivity for our passengers remains the same,” notes Becker.
“The new terminal won’t raise our maximum capacity of around 40 million passengers and 285,000 aircraft movements per year as that is ultimately determined by our single runway and the airspace constraints we operate under. We have one runway and will always have one runway.
“But the new terminal would transform the airport and the airport experience for passengers by providing new state-of-the-art facilities that will take us to the next level in terms of efficiency and customer service and, most importantly, avoid the need for users to go from airside to landside and back when travelling through our terminals.”
The experience enhancing improvements Becker refers to will include more gate-area seating, restaurants and shops, a single central security checkpoint instead of the confusing two in Terminal 1 today, and a host of new self service and touchless technologies.
The new roadways outlined in the New T1 programme will separate airport traffic from commuter and passing traffic to make it quicker and easier to get to and from the SAN, and the APM, when it happens, will operate between the airport and a planned new ground transportation centre around two miles away.
SAN is working in partnership with the area’s transportation body, the San Diego Association of Governments (SANDAG) on the APM project.
Pre-COVID, the goal was to break ground on the new terminal in late 2021 and open an initial 19 gates in the first quarter of 2025, before completing construction of the entire 30-gate facility in 2027.
A joint venture of New York city based Turner Construction and Colorado based Flatiron Construction has been awarded the contract to build the terminal.
Final piece in the jigsaw
It is generally accepted that the terminal will be the last major piece of new infrastructure added at SAN due its relatively small 661-acre footprint and the fact that the airport is surrounded by neighbouring communities leaving it no room for future expansion.
SAN is already considered a capacity constrained airport by the FAA, and prior to COVID it was estimated that it would reach its maximum capacity of around 40mppa by 2040, after which time a number of procedures would have to be put in place to allow the airport to continue to successfully serve San Diego.
Becker believes that COVID’s impact on the world and new technology might have added a few more years to the date.
“It is amazing what we can do on such a small footprint,” says Becker, noting that SAN is half the size of her previous airport, Mineta San Jose, which she also thought was small for a major airport.
“The volumes of traffic we are able to handle on a single runway and the ability to act so efficiently with such limited space is incredible. It’s just like a well-oiled wheel. The airlines are more than aware of the space limitations and work well together, and together with our operations team, we make maximum use of our facility.”
She admits that the predicted $3 billion cost of the New T1 programme may increase because of rising construction costs in the US as a result of the COVID pandemic.
However, she notes that the airlines continue to support the New T1 programme as the existing Terminal 1 is no longer fit for purpose.
“Anyone familiar with San Diego International Airport will know that Terminal 2 is a beautiful, modern, user friendly building with state-of-the art technologies and an International Arrivals Facility – added in a West Wing extension in 2018 – that any airport would be proud to have.
“Sadly, the same cannot be said for Terminal 1, where possibly the kindest thing I can say is that it is 53 years old and beginning to show its age! When it opened in 1967 it was a modern, 19-gate facility and handled 2.5 million passengers in its first year. Fast forward to 2019, the same terminal in the same condition served more than 12 million people, and the congestion and facilities it offers are absolutely not what we want for our airport.”
Becker adds that going ahead with the new terminal will also provide a huge economic boost for the local community, with the airport authority estimating that its construction alone will create 15,000 to 20,000 new jobs.
Location and market served
She notes that SAN is located in one of the most competitive regions in the US for commercial aviation and within an incredibly complex airspace corridor that covers 16 airports, including a number of military airfields, within a 150-mile radius of San Diego.
Most notably these include Los Angeles International Airport (LAX), Tijuana International Airport (TIJ), LA/Ontario International Airport (ONT), John Wayne Airport (SNA) and Palm Springs International Airport (PSP).
Having such tough competition on its doorstep ensures that expanding its international route network is not easy. Pre-COVID, SAN’s international services comprised non-stop flights to Frankfurt (Lufthansa), London (British Airways), Tokyo (Japan Airlines) and Zurich (Edelweiss) and regional services to Canada and Mexico courtesy of Alaska Airlines, Air Canada and WestJet.
The cross border services to Canada are set to be joined by a seasonal non-stop service to Edmonton, Alberta, operated by ultra-low-cost-carrier, Swoop, later this year.
Referring to SAN’s international route development challenges, Becker states that gaining an international service is a marathon and not a sprint, pointing out that it might take years for a new carrier to enter the market.
“Don’t forget, we are competing with every airport across the world for that one aircraft,” she comments.
It is a totally different story domestically, however, where Becker notes that “with the odd exception”, most major US cities are served non-stop from San Diego. This ensures that SAN primarily serves as a domestic gateway for the 3.3 million people that live in San Diego County.
Southwest (32%), Alaska (21%), American (14%), Delta (13%) and United (11%) are biggest of the 16 airlines currently serving San Diego in terms of market seat share with Seattle, Denver and Phoenix being the most served routes.
The fact that domestic services traditionally account for around 95% of its annual passenger throughput will almost certainly work to SAN’s advantage in the coming months and even years ahead as domestic travel drives aviation’s recovery from the global pandemic.
The airport’s heavy reliance on domestic travel doesn’t, however, reflect a lack of ambition in the international arena, with Becker admitting that expanding SAN’s international network remains a personal goal of hers and has been since the day she arrived in San Diego four years ago.
“San Diego is the second biggest city in California with significant appeal to both leisure and business travellers,” says Becker. “In fact, our traffic is about 50/50 between leisure and business, so I know we have the potential to develop our international route network, and will continue to work on it.
“Pre-COVID we had a couple of flights to Europe and one to Japan but we didn’t, and still don’t have anything to South America or Latin America, so that is where our focus needs to be when the market picks up and our region can support the new services.”
Talking about SAN’s overall mix of airlines and route network, she adds: “I am pretty happy with things. We are very strong domestically and continue to look to grow to our international route network.
“I also think that not having a hub carrier works to our advantage, and certainly has done for the last 18 months as we have not been overly dependent on one airline.”
Like most airport bosses, Becker is hesitant to put a timescale on when traffic at SAN might return to pre-COVID levels, but reveals that the airport authority’s latest, “arguably over cautious projections”, predict that it could be 2023/2024 before 25 million passengers per annum pass through the airport again.
Airport Health Accreditation
Preventing the spread of COVID on its facilities and restoring the public’s faith in air travel have been high on the agenda for SAN since the outbreak of the pandemic and continues to this day. Indeed, the airport’s efforts through its ‘Let’s Go Safely’ programme led to it becoming one of the first eight US gateways to gain Airport Health Accreditation (AHA) from ACI World last October.
The AHA programme, of course, provides airports with an assessment of how aligned their health measures are with ACI’s Aviation Business Restart and Recovery guidelines and ICAO’s Council Aviation Recovery Taskforce (CART) recommendations, along with industry best practices.
Speaking at the time, Becker said: “This accreditation provides SAN with third-party verification and recognition of professional excellence in maintaining safe, hygienic facilities and promoting best practices that align with efforts across the aviation industry.”
Artwork and sense of place
Having facilities that display a sense of place is important to the airport authority, which has made sure that a selection of popular San Diego restaurants and stores are among the F&B and retails outlets in its terminals, while its Arts Program regularly showcases the work of local as well as international artists.
The décor of the International Arrivals Facility, for example, is designed to take visitors on a San Diego journey, starting with a top level that reflects the blue San Diego sky and descends down to lower levels that are modelled on the local canyons and then beaches.
“Art is an integral part of our terminals and the artist James Carpenter is part of our actual design team for the New T1, so it’s not just about bringing art into the facility, it’s about creating a facility that has an artistic feature about the structure itself,” says Becker.
She is particularly proud of SAN’s long-standing Arts Program, which in addition to artworks also includes performing arts and temporary exhibitions which are aimed at engaging travellers and creating an ambiance unique to the culture of San Diego.
Its offerings are so well received in fact that during the COVID pandemic SAN transitioned some of them to the virtual environment so that it could “continue to bring the local community in through the arts programme”.
“The Arts Program is a way for us to infuse light, levity, comfort, and life- enriching experiences for passengers and our community,” enthuses Becker.
SAN recently enrolled into San Diego Community Power’s (SDCP) – the not-for-profit community choice energy programme – service and has decided to opt-up to the Power100 service level.
This is worthy of note as it means that SDCP will provide 100% renewable and 100% carbon-free energy to SAN, which continues to be a leader in environmental stewardship for the region.
“Having the opportunity to work with San Diego Community Power enables us to reach our goal of 100% renewable electricity well before our planned timing of 2035,” says Becker.
“SDCP’s ability to provide reliable, zero-carbon energy at competitive costs is a game-changer for us and everyone in the region.”
Becker is keen to stress that “good environmental stewardship” is a hallmark of operations at SAN. Indeed, the airport has one of the most comprehensive sustainability management programmes (SMPs) in the business, which she says guides its actions every day.
Water Stewardship; Sustainable Energy; Biodiversity; Zero Waste; Climate Resilience; Clean Transportation; and Carbon Neutrality are the seven key issues tackled by the airport’s SMP, and you don’t have to look very hard to find evidence of its successes in each topic.
SAN, for example, is currently developing a stormwater capture and reuse system that will eventually be able to collect and reuse more than 16 million gallons of rainwater annually. San Diego International Airport is also one of only two airports in North America to achieve carbon neutrality under ACI’s Airport Carbon Accreditation programme.
Other ongoing sustainability initiatives include providing noise insulation for up to 400 homes around SAN this year; bicycle lanes; expanding the gateway’s electric vehicle charging infrastructure; and protecting an endangdered species of bird that nests on the airport site.
And it seems that no job is too small when it comes to sustainability as Becker tells me that some of the inspiration for its stormwater capture and reuse initiative came from the dedication of airport staff that used to collect and recycle the condensation from jetbridges, even using it to make a locally sold beer!
Airport Innovation Lab
Another way that San Diego International Airport has been truly innovative, and successful, has been in setting up its own innovation lab to test and support the development of new solutions that could be used now and in the future at SAN and at other airports and industries across the world.
Located in a 3,500 square foot space in the old Commuter Terminal, SAN’s Airport Innovation Lab is essentially a safe place for companies to use to test new ideas and technology in a real airport ennvironment.
Ultimately, they are hoping to get a contract with SAN at theend of the programme either by introducing their solution atthe airport or at other gateways and venues such as train stations, shopping malls, hotels, theme parks and sports stadiums.
Although Becker says that the motivation behind SAN’s Airport Innovation Lab wasn’t 100% financial, there’s no doubting that a five year revenue share of the most successful concepts is a good way to diversify the airport’s revenue streams.
“The motivation behind the decision to set up the Airport Innovation Lab was the desire to develop new services and amenities that can truly enhance the airport experience for everyone, as there is always a need to do things better, faster and smarter,” says Becker.
More than 25 companies have used the lab since it opened in the summer of 2018, with the most successful concept to emerge to date being the AtYourGate app, which passengers at SAN and 10 other airports across the US can use to receive food deliveries and other retail items at their gates.
Innovation, it seems, is everywhere at SAN and will continue to play a major role in its success story for many years to come.