Washington Dulles International airport will use $237 million from the sale of unused land on its western periphery to further lower airline costs.
The Metropolitan Washington Airports Authority (MWAA) board approved the sale of 424 acres, acquired for the fourth runway that opened in 2008, to Digital Realty Trust for a new data centre at a meeting today.
Jack Potter, president of the airport operator said that the only thing the airport can do with the funds is re-invest them in airport activity – it’s not roads or trains, it has to go to the benefit of airline operations.
That benefit will be further reducing the cost per enplanement (CPE), or the amount an airline pays to board a passenger on a flight, at Dulles, and not for capital improvements, MWAA confirms.
Airline costs at Metropolitan Washington Airport are forecast to fall 6% to $17.82 per passenger this year, benefitting from $35 million in revenues transferred from MWAA’s other airport Ronald Reagan Washington National and a $25 million grant from the Commonwealth of Virginia. The drop continues the trend that began in 2014, when CPE peaked at $26.55 per passenger.
MWAA has not estimated the impact of the land sale yet but, based on the amount alone, the deal could have a more significant impact than either the revenue transfer or grant.
As recently as May, Fitch Ratings forecast costs at Dulles would rise again to the $22-23 per passenger range after the benefit from the grant ends this year.
The lower costs are likely music to United Airlines’ ears. The largest carrier at Dulles, the airline is evaluating increasing the number of flights at the airport by half by creating two new connecting banks, or when a significant number of flights arrive and depart within a short time frame.
United president Scott Kirby emphasised this in August, when he told reporters that costs were one of the most important things to make “growth at a hub like Dulles successful”.
The possibility of further cost reductions at Dulles come as United Airlines faces potentially higher costs at its Newark hub. New Jersey is considering a four-cent levy on fuel the airline buys to fund a rail extension to the New York City-area airport.
