MCO Moving Toward 2022 Opening Of South Terminal

BY DAVID WARD

Above: Among the innovations in the new MCO South Terminal is a new baggage-handling system that delivers luggage to the top floor, enabling arriving travelers to immediately experience the sunshine and greenery the Orlando area is famous for.

Though it can be hard to see beyond the disruptions caused by COVID19, Orlando International Airport (MCO) is hard at work on its postpandemic future, with construction of a new $2.7 billion South Terminal still moving forward in anticipation of an early 2022 completion.

Phil Brown, CEO of the Greater Orlando Airport Authority (GOAA) says this is actually the authority’s third attempt at a new terminal in the last 21 years, noting the earlier plans, both driven by leisure travel and one involving a separate international terminal, were delayed due to first 9/11 and then the Great Recession.

“This time around we were experiencing growth in both leisure and business travel and were facing a lack of gates for airlines to expand in Orlando,” Brown says. “We were tracking in February to be on pace for 51 million annual passengers in 2020, so we were over capacity and our growth projections.”

The new South Terminal is the cornerstone of the $4.2 billion, multi-year MCO Capital Improvement Program, although GOAA scaled back parts of the overall project in May 2020 to reflect the expected multi-year impact of the COVID19 pandemic.

The $3 billion original cost for terminal was cut by $226 million, with most of the cost savings coming from a reduction in gates from 19 to 15, eliminating the need to build an additional wing on the new terminal.

“The major airline in the South Terminal is going to be JetBlue, and we’ve been in close discussions with them for more than a year about what that move will look like,” Brown says. “We think it’s probably going to take between four and five years to get back to pre-pandemic levels.”

During the fall, MCO was tracking at about one-third of the numbers the airport was seeing in February, a reality that caused carriers to reexamine service levels.

“Airlines are trying to figure out how to manage their schedule and manage their cash burn,” Brown says. “Not profitability, because no one is profitable, but they’re just trying to manage the cash burn on a daily basis.”

He says that the real key to viability will be restoring consumer confidence in aviation, adding that in both MCO’s existing terminals and in the new South Terminal, the airport will be doing all it can to provide travelers with a safe, enjoyable experience.

In a nod to the new realities, the South Terminal will feature 100 percent automated screening lanes at TSA checkpoints as well as 100 percent facial recognition for international arrival and departures.

“We’re looking at more contactless processing,” Brown says. “That’s going to take some effort, but the one thing the pandemic has been is an accelerant for technology, including the focus on touchless technology, using apps to process all the security requirements.”

Concession Contracts In Place

Construction on the South Terminal in more than 60 percent complete and Brown says the concessions contracts for the South Terminal have been awarded.

A group led by HMSHost will operate seven food and beverage locations, while another six F&B concessions will be operated by a joint venture led by Delaware North. A third F&B package, with seven locations, was awarded to Orlando Hospitality Airport Partners.

Marshall Retail Group will operate four locations in a combined retail and F&B package, while Paradies Lagardère won three retail locations.

There are direct retail agreements for locations for DFASS Duty Free, Universal Studios, Walt Disney World and Sea World.

“Pre-pandemic, 72 percent of our revenues came from concessions, parking and rental cars,” says Brown. “The other 28 percent came from the airlines. That’s why you can get competitive fares into Orlando.”

Brown says the South Terminal concession contracts will likely have some adjustments.

“We funded most of the South terminal through bond issues, and we were going to fund it through pay as you go with PFCs and customer facility charges,” he adds. “There’s also a $3.50 charge on the rental car contract on a daily basis, that is used for transportation improvements and the rental car infrastructure. We’re not going to collect as much because enplanements are down, so we had to scale some portions of the project back.”

The $2.7 billion South Terminal project is part of a $3.5 billion airport overhaul that also includes the Intermodal Terminal Facility and South Airport APM (Automated People Mover) Complex that are also currently under construction.

In addition to concessions featuring both local and national brands, MCO’s South Terminal will also include largescale interactive digital media screens highlighting local attractions while improving the customer experience.

Showcasing The Florida Sunshine

In its design of the South Terminal, MCO is borrowing from what already works well in the existing MCO terminals.

“The North Terminal has a lot of skylights and water features and foliage,” Brown says. ‘We’re taking that to 21st century in the South Terminal project, combining Florida hospitality with modern architecture.”

Designed by Fentress Architects, the South Terminal incorporates indoor and outdoor green spaces, plenty of windows and glass, and a large-scale interactive digital media presence to heighten the visual experience.

Orange County Brewers, an HMSHost concept, is one of several new concessions set to open next year in MCO’s new South Terminal.

The new terminal will also feature a stateof-the-art baggage system that includes RFID chips for all the bags. But the biggest innovation is where baggage claim will be located in the terminal, Brown says, adding that traditional conveyor baggage systems relied on gravity, which is why most baggage claims areas are always at the bottom of an airport, the lowest floor.

“Ours will deliver bags to the top floor, so passengers who come to baggage claim will have the true Orlando experience, with skylights and lots of natural light and lots of experiential content that will give them a very enjoyable experience,” he says. “By using new technology in the baggage system, we’re better able to bring the outside Orlando environment into the airport.”

Because of Walt Disney World, Universal Studios and other theme parks, Orlando will always be best known as a tourist destination.

But the GOAA is working closely with the local business community to reach out to carriers about new routes that not only serve the Orlando tourist sites, but also the area’s growing business, technology and manufacturing footprint.

“Orlando is the number-one visited destination in the country, but what many

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people don’t know is that leisure and hospitality make up only 20 percent of our local job market,” says Casey Barnes, vice president of business development for the Orlando Economic Partnership. “The other 80 percent is grounded in industries outside of our tourism sector.”

The growth industries in the area include aviation, aerospace and defense, life sciences and healthcare, innovative technologies, advanced manufacturing and professional and business services, says Barnes, adding “It’s those other sectors that helped Orlando lead the nation’s large metros in job growth from 2014 to 2018.”

Barnes says the Orlando area has long attracted leisure and business traffic from Europe, Latin America and Canada, noting that direct MCO flights to Dubai International Airport (DXB) BRAND NAME: SUMMER HOUSE has increased linkage to Asia. “We also continue to see company growth from U.S. firms based in the Northeast and other major metros expanding or relocating to Orlando,” he says.

While it will remain a tourist haven, Barnes praised MCO for not forgetting the needs of business travelers, including keeping rental car facilities on-site. “While so many other airports placed rental cars so far away travelers must take a shuttle or tram, Orlando International didn’t,” he says. “Business travelers especially enjoy this ease of access and time savings.”

Delaware North will operate six concessions spaces, including Summer House, in the new South Terminal.