INFRASTRUCTURE, TRANSPORTATION & UTILITIES INTERVIEW
Safe bet With health measures in place, the airport and airline segments expect a continous recovery
Michael Landguth President & CEO – Raleigh-Durham International Airport
What are your main takeaways from having operated in the pandemic landscape for more than a year? The initial impact of the pandemic was unprecedented. We lost 96% of our customers in April 2020 and the recovery has been slow, particularly in the business travel segment. But with all the precautions we have implemented, we believe air travel is safe, and our customers agree. In a survey of RDU travelers last year, 83% agreed we are taking the appropriate steps to keep them safe and healthy when they travel. We are emphasizing social distancing, providing free hand sanitizer in the terminals and requiring everyone to wear a mask in the airport. There has been no evidence that people are at higher risk of contracting the virus as a result of air travel. In fact, a recent study from the Harvard School of Public Health found that flying is as safe as grocery shopping. 104
What is the long-term view for your capital improvement projects amid decreased revenues? In March 2020, our board approved the airport’s FY 2020-2021 budget, which included a 21-gate expansion in Terminal 1. The following month, after COVID hit and passenger traffic plummeted to historic lows, we quickly transitioned to survival mode, cutting our $300 million budget in half and pausing nearly all capital projects. The board approved another survival budget in 2021 that included a list of contingency projects linked to passenger traffic thresholds. The contingency projects were identified as high priority projects to accelerate recovery if traffic returns sooner. Examples include Terminal 2 checkpoint expansion, roadway improvements and an e-commerce platform. We are also starting the environmental assessment for the replacement of our primary runway, which should take around 18 months. We expect recovery to continue throughout the year but it is hard to predict an exact time frame and it may be inconsistent, so we are being strategic and financially conservative. What message is sent by airlines investing in RDU? In November 2020, JetBlue increased the number of nonstop destinations it serves at RDU from three to 12. American Airlines, Delta Air Lines, Frontier and Spirit have also added new routes during the pandemic and Sun Country became RDU’s 11th airline when they began service in May. This reflects the overall feeling in the business community that this is a hot market. Airlines are investing here because they want to ensure that they have the capacity and network in place to support the impending return to growth. Businesses in the Research Triangle region have continued to recruit during the pandemic, and they will need robust air service once things return to normal.
| Invest: Raleigh-Durham 2021 | INFRASTRUCTURE, TRANSPORTATION & UTILITIES
