PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA
Item No.
6c
Date of Meeting
August 11, 2009
DATE: July 24, 2009
TO: Tay Yoshitani, Chief Executive Officer
FROM: Michael Ehl, Director Airport Operations
Robert F. Riley, Director, Aviation Capital Improvement Program
SUBJECT: C1 – C88 Baggage Handling System connection project at Seattle-Tacoma
International Airport (CIP # C800170).
ACTION REQUESTED
Request authorization for the Chief Executive Officer to perform full design documents; prepare,
execute, award, and amend service agreements; and execute service directives for C1 to C88
Baggage Handling Connection project (CIP # C800170) at the Seattle-Tacoma International
Airport (Airport) for an estimated cost of $280,000. The ultimate cost for the constructed project
is estimated to be $2,800,000.
SYNOPSIS
The two baggage handling systems (BHS) involved are in the north Main Terminal (C1 and
C88); C88 feeds the North Satellite. Alaska Airlines is growing its presence at the North
Satellite, taking additional gates and re-arranging their locations in cooperation with United
Airlines (UA). Today Alaska must make up all baggage for flights departing the North Satellite
by using the Alaska pier sortation system located on the ramp level of Concourse D. This
requires all bags destined for the North Satellite to be transported via tugs towing carts across the
aircraft parking areas and active taxilanes. A connection between the Alaska baggage system
and the North Satellite system will automate this transport through an existing underground
tunnel and thereby reducing vehicle traffic to improve operational efficiency, air quality, and
safety. The airlines who operate at the Airport have formally agreed to go ahead with this
project.
BACKGROUND
This project connects the C1 baggage handling system (BHS) to the C88 BHS. It installs two
High-Speed Diverters (HSD) plus additional baggage conveyor length that will connect the two
C1 sortation loops to the C88 BHS which goes to the North Satellite (NSAT). Once Alaska
Airlines' outbound baggage flow has passed the C1 security screening matrix and entered the
Alaska pier sortation system, a portion of it can be routed to the NSAT's pier sortation system to
Alaska's NSAT gate operations. Currently, only bags screened by the C88 BHS (UA outbound
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
July 24, 2009
Page 2 of 6
baggage) are conveyed to the North Satellite pier sortation system. This will add capacity for
Alaska Airlines baggage make-up operations, and will increase carrier/gate use flexibility in the
overall north main terminal baggage system by making use of the available capacity at the North
Satellite BHS.
PROJECT DESCRIPTION/SCOPE OF WORK
Project Statement:
This project will connect the new C1 Baggage Screening Facility to the C88 North Satellite
Baggage Sortation System by June 2011 for $2,800,000.
Project Objectives:
1) Improve future flexibility in baggage introduction point to ultimate destination, i.e., common
use ticket counters.
2) Address Alaska Airline's request to connect baggage from their ticket counter to North
Satellite sortation system.
3) Provide a connection consisting of two new conveyor paths that connect both systems post-
screening.
Scope of Work:
Develop infrastructure to accommodate the installation and operation for two conveyor line
connections from C1 mainlines to C88 conveyor lines. Infrastructure development will, at a
minimum, include:
1) Site preparation for installation of conveyors.
2) Removal of regulated materials as required.
3) Installation of electrical power and control systems.
4) Installation of communication system.
5) Installation of conveyor equipment.
6) Re-striping tug lanes and bagwell area.
7) Installation and revisions to fire sprinklers systems.
8) Structural and mechanical revisions to the base building.
9) Commissioning of conveyor systems.
10) Testing of conveyor systems.
11) Training to Airport and airline staff.
12) Closeout of completed project.
STRATEGIC OBJECTIVES
Ensure Airport and Seaport Vitality
The project provides enhanced capacity and flexibility in critical baggage infrastructure,
especially for the Airport’s largest customer in utilizing the North Satellite.
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
July 24, 2009
Page 3 of 6
Exhibit Environmental Stewardship through Our Actions
This project is in alignment with the Port’s goal of improving the long term sustainability of its
facilities and operations. This project supports and encourages airline environmental initiatives.
This project has a generally positive effect on the environment to the extent that automated
baggage handling systems reduce airport and airline reliance on less energy efficient baggage
conveyance alternatives (tugs, trucks, etc.). Passengers will benefit from faster, more reliable,
baggage screening.
FINANCIAL IMPLICATIONS
Budget/Authorization Summary
$2,800,000
$0
$2,800,000
$0
$280,000
$
$2,520,000
Source of Funds
This project was included in the 2009-13 capital budget. It was deleted from the budget due to
the general economic crisis, but now it is once again desired and justified. A surplus budget to
cover this project will be transferred from C-1 to Aeronautical New Projects. Hence the budget
for this CIP (C800170) will be transferred from the Aeronautical New Projects, so there will be
no change in the overall capital budget. The funding source will be the Airport Development
Fund and/or future revenue bonds.
Project Cost Breakdown
This Request
Total Project
Construction costs
$0
$2,028,000
Port furnished equipment
$0
$0
Sales tax
$0
$193,000
Outside professional services
$200,000
$243,000
Aviation PMG and other soft costs
$80,000
$336,000
Total
$280,000
$2,800,000
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
July 24, 2009
Page 4 of 6
Financial Analysis
CIP Category
New/Enhancement
Project Type
Infrastructure Renewal/Replacement
Risk adjusted Discount rate
N/A
Key risk factors
N/A
Project cost for analysis
$2,800,000
Business Unit (BU)
Terminal
Effect on business performance
Increase NOI
IRR/NPV
N/A
CPE Impact
Will increase CPE by $.03. However, no change to
2009-13 business plan forecast since budget for
Aeronautical New Projects will be reduced.
From a financial analysis perspective, the Port will incur increased Operation and Maintenance
(O & M) costs of about $65,000 per year. These O & M costs are the expenses related for
required staffing, tools and supplies and the requirement for ongoing maintenance and periodic
component renewal as well as energy consumption.
ALTERNATIVES CONSIDERED/RECOMMENDED ACTION
At one time, the Concourse D baggage pier sortation system was adequate when Alaska Airlines
operated far fewer flights than today. However, the current pier configuration now has become
very inefficient based on Alaska's current flight operations. The piers have become extremely
difficult to operate ergonomically during heavy utilization, since they are a double-stacked
design and the concourse does not allow the baggage tugs/carts to drive through for easier cart
staging. Alaska must constantly re-position bag carts in and out by hand, which is a much more
labor intensive operation than a drive through configuration would permit. Alaska wishes to
reduce labor costs in this area, but that is difficult to accomplish as the current Concourse D pier
configuration actually drives more labor expense to operate in order to make flights departures
on time. Also, the Concourse D pier system is one of the oldest at the airport and will eventually
need major maintenance or replacement. This project will help relieve heavy utilization so
maintenance work can be performed.
Alternatives Considered:
1. Connect the C1 baggage sortation (with screening matrix) to the C88 make-up system in
the NSAT. This will give Alaska the baggage make-up capacity at the correct location in
relationship to their gates at the NSAT. The Port will also be able to generate additional
lease income from Alaska utilizing these piers. Alaska strongly supports this approach.
This is the recommended alternative.
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
July 24, 2009
Page 5 of 6
2. Alaska could take additional make-up capacity by using the former American Airline's
make-up device now that it is integrated into the C1 system. However, Alaska has
indicated that use of this device would create extra long transit time for bags to be
delivered to aircraft. This is not the recommended alternative.
3. Alaska could relocate a portion of their ticket counter check-in operations to the six
empty ticket counter positions north of the United Airlines ticket counters. That would
put the baggage from those positions in the C88 system at the NSAT. However, this
would be impractical as Alaska would then have an inefficient "split" ticket counter
operation and they would also have to segregate passengers at the ticket counters into
those boarding at the NSAT gates versus those boarding at Concourse C & D (which is
served by the C1 baggage make-up system). This runs counter to their service objectives
for ticketing and would likely confuse travelers. This is not the recommended
alternative.
4. Additional baggage make-up facilities could be constructed as part of a Main Terminal
expansion but would be cost prohibitive at this point in time and is not planned until well
into the future. This is not the recommended alternative.
ECONOMIC IMPACTS
The Port will generate additional lease income from Alaska Airlines.
ENVIRONMENTAL SUSTAINABILITY/COMMUNITY BENEFITS
There are significant benefits with reductions in traffic with a result in lower fuel consumption,
air emissions and vehicular congestion on the airport ramp. The project will improve the
efficiency of the airlines’ operations.
TRIPLE BOTTOM LINE SUMMARY
This project will provided tangible improvements to BHS operational flexibility. This common
use system will allow for maximum utilization by multiple airlines, help insure passenger safety,
improve airport security, and improve customer service for both passengers and airline partners.
This project is expected to help reduce the overall operating costs of the airlines. Reduced ramp
vehicular traffic will result in increased ramp safety, decreased air emissions, and decreased fuel
consumption. Environmental benefits include cleaner air and improved airfield safety.
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
July 24, 2009
Page 6 of 6
PROJECT SCHEDULE
Commission Authorization to Start Design August 2009
Start Design August 2009
Design complete January 2010
Commission Authorization to Bid and Increase Budget February 2010
Bid Advertisement February 2010
Commission Authorization to Award (if necessary) April 2010
Construction Start May 2010
Construction Complete November 2010
PREVIOUS COMMISSION ACTION
On October 23, 2007 (Item 8a) the Commission authorized for construction of Interim and Final
Baggage Screening Systems at Seattle-Tacoma International Airport, for an additional
$34,000,000 for the project, which brings the total authorization to $230,517,104.