PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA
Item No.
6g
Date of Meeting
August 25, 2009
DATE: August 7, 2009
TO: Tay Yoshitani, Chief Executive Officer
FROM: Michael Ehl, Director Airport Operations
Peter Garlock, Chief Information Officer
Robert F. Riley, Director, Aviation Capital Improvement Program
SUBJECT: Common Use Expansion at Seattle-Tacoma International Airport.
ACTION REQUESTED
Request Port Commission authorization for the Chief Executive Officer to execute a design
consultant contract, complete design, and purchase and install computer hardware and software
for the Common Use Expansion project at Seattle-Tacoma International Airport (Airport), for
$506,000 out of a total projected program cost of $3,018,000.
SYNOPSIS
As a productivity and cost-savings program, the Airport has installed “Common Use” equipment,
such as common gate areas and ticket counters, at several locations in the terminal that can be
used interchangeably by participating airlines. By creating a flexible, common-use environment,
more airlines are able to use the existing facilities without major capital investment, which helps
hold down their costs. The Airport is further able to handle more passengers and support future
growth within the current terminal footprint. This project brings the latest Common Use
equipment and technology to the remaining gates at the South Satellite, and at various gates on
Concourse A.
This project will install a common-use environment at the combined Delta/Northwest Airlines
(DL/NW) eight South Satellite (SSAT) preferential gates, one Port common gate, Horizon Air’s
gate S16c/d, and at three Concourse A gates (A12, 13 & 14). The project relocates gate podiums
locations closer to the passenger loading bridge doors at the SSAT. The scope also includes
conversion of up to fourteen ticket counter positions to common use at the former Delta ticket
counter. This authorization will provide for design by outside professional services and
replacement of selected hardware and software by Port staff. A future request will seek
authorization of construction funds and approval to advertise for a major construction contract.
The airlines that operate at the Airport have formally approved this project.
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
August 7, 2009
Page 2 of 6
BACKGROUND
The combined DL/NW airline has consolidated its departure gate operations at the SSAT for
operational and marketing purposes. This will create efficiencies as its international operations
increase, since the Federal Inspection Service (FIS) area is located at the SSAT. The existing
NW VIP club is also currently located near their operations at gates S-8 and S-9. The Port has
agreed to their request to consolidate at the SSAT with the stipulation that all their gates be
converted to common use. This stipulation is necessary because international operations by
other carriers are also predicted to increase over time. There will be a need to use the DL/NW
mid and wide-body gates to handle expected overflows in international operations. Overflows
commonly occur during irregular operations caused by bad weather or other operational
anomalies, by the introduction of new services, or by scheduling changes from existing carriers
that would exceed the capacity of Port gates.
In an ongoing effort to reduce their operating costs, the carriers are interested in creating
additional efficiencies at the gates. To support this effort, the Port intends to relocate certain
podiums and backscreens to positions closer to the passenger loading bridge doors so the carriers
can effectively manage the boarding of a flight with fewer gate agents. Since some of the
podiums will be relocated; additional lighted gate signs will be required for passenger
wayfinding.
Additionally, Icelandair started operations at the Airport in July. As an interim step they are
temporarily performing ticket counter operations at agent positions that are not up to current Port
standards. These temporary common use operations will be "riding" on existing DL cabling
through a tenant leased communications closet and will be upgraded to permanent Port
infrastructure as part of this project.
PROJECT DESCRIPTION/SCOPE OF WORK
Project Statement:
The purpose of this project is to facilitate an expansion of Sea-Tac’s common use environment
through a program of Port sponsored projects that will support operations, bring gate podiums
and ticket counters to Port standards and provide common use infrastructure. The work will be
accomplished between now and the end of 2011 for an estimated cost of $3,018,000.
Project Objectives:
Increase utilization of existing SSAT gates while avoiding a major capital investment.
Support future international carrier growth.
Allow irregular operations to be handled without delays to arrivals and departures.
Update gate podium and ticket counter facilities to meet current Port standards.
Increase efficiencies at gates by relocating podiums closer to the boarding doors.
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
August 7, 2009
Page 3 of 6
Reduce airline agent training costs at ticket and gate counters due to increased common
use and facilities standardization.
Expand a passenger processing system that meets operational needs and reduces airline costs.
Reduce airline expenses through more efficient use of resources necessary to manage
boarding and check in processes.
Maximize flexibility for air carriers at the South Satellite, ticket counters and Concourse A gates
through common use infrastructure.
Convert remaining gates to common use at South Satellite.
Convert abandoned Delta gates at Concourse A to common use.
Convert former Delta Airlines ticket counters to common use.
Scope of Work:
At the completion of this project gates and ticket counters will be newly equipped with the
following:
Gates S-1, S-6, S-7, S-8, S-9, and S-16
Port standard gate podium casework and backscreen monitors relocated closer to
boarding gate doors
Common use equipment and infrastructure
Updated task lighting and signs
Gates S-2, S-3, S-4 and S-5
Existing Port standard casework relocated closer to
boarding gate doors
Updated task lighting and signs
Gates A-12, A-13, A-14
POS standard gate podium inserts
Common use equipment and infrastructure
Former Delta Ticket Counter
Port standard ticket counter casework
Common use equipment and infrastructure
Authorization for construction of this ticket counter
will be requested as the need arises and may be phased separately from the rest of the
scope.
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
August 7, 2009
Page 4 of 6
STRATEGIC OBJECTIVES
The Common Use Expansion project supports two of the Port’s Strategies and Objectives,
notably:
This project promotes the Port’s strategic goals to “Ensure Airport and Seaport Vitality” and “Be
a Catalyst for Regional Transportation Solutions” by providing the airlines with the tools and
equipment to increase on-time performance. Flexible gate and ticket counters will improve the
Airport’s asset base since more airlines will be able to use existing facilities for their operations.
Since deregulation, air carriers are continually vying for increased market share, which drives
constant change in their facilities requirements. By creating a flexible, common-use
environment, carriers and the Airport will need to spend fewer capital dollars recreating facilities
as market conditions change. More carriers are able to share the same ticket counter and gate
facilities, including communications hardware, without constant redesign and construction
dollars spent to customize the operating environment to their specific proprietary needs. This
also helps increase total Airport through-put rates, in a finite sized terminal, as passenger
volumes increase.
FINANCIAL IMPLICATIONS
Budget/Authorization Summary
Original Budget
$3,018,000
Budget Increase
$0
Revised Budget
$3,018,000
Previous Authorizations
N/A
Current request for authorization
$506,000
Total Authorizations, including this request
$506,000
Remaining budget to be authorized
$2,512,000
Project Cost Breakdown
This Request
Total Project
Construction Costs
$1,574,000
Port furnished equipment and installation
$135,000
$563,000
Sales tax
$13,000
$210,000
Outside professional services
$177,000
$221,000
Aviation PMG and other soft costs
$181,000
$450,000
Total
$506,000
$3,018,000
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
August 7, 2009
Page 5 of 6
Source of Funds
This project is included in the 2009-2013 capital budget and plan of finance as a business plan
prospective project, CIP #C800276. The funding source will be the Airport Development Fund.
Financial Analysis
CIP Category
New/Enhancement
Project Type
Renewal & Replacement
Risk adjusted Discount rate
N/A
Key risk factors
N/A
Project cost for analysis
$3,018,000
Business Unit (BU)
Terminal
Effect on business performance
NOI after depreciation will increase
IRR/NPV
N/A
CPE Impact
CPE will increase by $.02 by 2012. However, no
change to business plan forecast as this project was
included. The asbestos abatement costs, depending on
the timing will cause a short term increase in CPE by
$.01-$.03 in 2010 and 2011.
OPERATION & MAINTENANCE IMPLICATIONS
Operation and Maintenance expenses by Aviation Maintenance to increase by $30,000 annually.
It is anticipated that the implementation of this project will involve asbestos abatement. The
current estimate is $500,000. The asbestos abatement costs will be charged to expense (as an
environmental reserve project) in the year the triggering event occurs.
ALTERNATIVES CONSIDERED/RECOMMENDED ACTION
1. The recommended action is for the Port to provide a common-use environment at the
South Satellite, Concourse A and at additional ticket counter facilities, utilizing the
latest technology, to optimize flexibility to accommodate growth and irregular
operations by all carriers that use these facilities.
2. Icelandair could operate from the existing International ticket counters at the south end of
the terminal. This would eliminate the immediate need for ticket counter
improvements, but would cause severe overcrowding and impact the efficiency of all
the carriers’ check-in processes at this location.
3. Delta Airlines could retain proprietary communications technology at the SSAT gates,
resulting in a less flexible gating environment. This will not allow other carriers to
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
August 7, 2009
Page 6 of 6
benefit from the flexibility of the common use environment for growth and irregular
operations.
4. Expansion of the SSAT building to provide additional gates could be implemented
immediately, at high capital cost, to create adequate facilities to handle the irregular
operations and future growth of DL/NW and other international carriers. It is
expected that this option would have little carrier support at this time.
5. Delta and Northwest Airlines combined operations could relocate to another concourse,
but that would drive a costly domino effect of relocations for both other airline gates
and ticket counters.
ENVIRONMENTAL SUSTAINABILITY/COMMUNITY BENEFITS
This project demonstrates environmental sustainability by improving existing Port assets and
better utilizing existing resources. This reduces the potential environmental impact of new
construction. The traveling community will benefit from fewer delayed departures and an
increased processing rate.
Installation of common-use equipment aligns with the opportunity for Delta to grow their
international flights at the South Satellite. Delta and predecessor Northwest Airlines has
indicated their long-term strategy is to expand their international route structure in Seattle. This
common-use equipment will facilitate greater utilization of international gates, which if future
international flights materialize, will create significant economic benefits in Seattle and the
greater Puget Sound area.
TRIPLE BOTTOM LINE SUMMARY
This project standardizes gate and ticket counter amenities and gives the airlines opportunities to
operate their boarding and check-in operations more efficiently.
PROJECT SCHEDULE:
Begin Design 3rd Qtr 2009
Begin Construction 4th Qtr 2010
Project Completion 4
th
Qtr 2011
PREVIOUS COMMISSION ACTION
None.
