NY, NJ Port Authority To Buy Stewart International

With uncongested airspace in dramatically short supply in skies above New York City and ever-growing numbers of passengers pushing the combined capacity of the city's three major airports to near maximum levels, the Port Authority of New York and New Jersey is doing something it hasn't done since 1949—buying another airport, namely Stewart International in Newburgh, N.Y.

According to the Port Authority's Board of Commissioners, the plan—which allows the agency to purchase the airport's operating lease from London-based National Express Corp. for $78.5 million for the contract's remaining 93 years—represents a necessary step in light of the city's crowded skyways and burgeoning ranks of travelers.

Some 104 million passengers in 2006, a record number, flew into and out of John F. Kennedy, Newark Liberty International Airport, LaGuardia Airport and Teterboro Airport, said spokesman Marc Lavorgna, up 20 million passengers since 2003, with 125 million anticipated by 2015 and 150 million by 2025. In the next 10 years, Port Authority will invest $4 billion in the airports.

"Our interest in Stewart has been known for some time and today's action is the result of a long-term vision for tackling the air traffic challenges we face in coming years," said PA chairman Anthony Coscia on Jan. 25, 2007.

The announced date for the agency to begin operating Stewart is October 2007. Until then, the final details of the deal will be worked out, said Lavorgna. "Stewart is being acquired as a 'reliever' airport because New York is running out of airspace and eventually will run out of room sometime in the 2015-to-2025 timeframe. Passengers flying in and out of New York are experiencing long delays within a 235-mile radius of the city," he explained.

The 11 million people who live in counties north of New York City are "primarily who will be using the airport for both domestic and international travel, as more airlines sign on to come in," he said. Stewart, 55 miles north of New York City and accessible via two interstate highways, I-84 and I-87, also expects passenger growth from southern New York and northern New Jersey.

In time, as Stewart's carriers and routes increase, business travelers from upstate New York and western Connecticut are expected to use Stewart as well, Lavorgna said, because it will be much more convenient and faster than going to the city.

"The idea is to get people to use the airport that the Port Authority calls an 'underutilized facility.' The current infrastructure could handle 1.5 million passengers annually. Since Stewart operates in different airspace than New York's, it would help alleviate the current and growing crush on the city," Lavorgna said. Last year, only 300,000 passengers used Stewart, he said.

Anthony Shorris, the Port Authority's executive director, added that through a program of "significant investments," including terminal development, Stewart would be "transformed into a dynamic transportation hub," a long, slow, measured process that takes time since it includes infrastructure, airlines and, among other issues, the impact of development on surrounding communities.

The airport covers 2,400 acres of land—slightly larger than Newark International and more than three times larger than LaGuardia's 680 acres—with two long runways that can handle major jet service. One runway is 11,818 feet long, the other 6,006 feet long and each is 150 feet wide. By comparison, LaGuardia's two 150-foot-wide runways are 7,000 feet long.

"We expect Stewart will play a major role in our regional airport system, and that it helps JFK, Newark and LaGuardia to meet the demands ahead," he said. No other "reliever" airports are under PANYNJ consideration at this time, Lavorgna said.

The Port Authority isn't the only one to see Stewart's potential, Lavorgna said: The airlines do too. One that has come on board at Stewart already is JFK-based JetBlue Airways, which began daily nonstop service from Stewart to Fort Lauderdale and Orlando on Dec. 19, 2006, adding West Palm Beach on Jan. 5. Another is AirTran Airways, which began service to 52 destinations nationwide, including nonstops to Atlanta, Tampa, Orlando and Fort Lauderdale, on Jan. 11.

"It's a great solution for people who live north of the city, a perfect position, one that's strategically placed for people south of Albany, for people who've had to drive out of the Hudson Valley area for low-cost service," said Bryan Baldwin, manager of corporate communications for JetBlue. Newburgh becomes the low-cost carrier's sixth destination in New York State, joining Kennedy, LaGuardia, Buffalo, Rochester and Syracuse. JetBlue service to Orlando from White Plains will commence on March 28, and to Fort Lauderdale and West Palm Beach later.

Stewart Airport general manager of marketing Tanya Vanasse said, "While I'm speculating on the Port Authority's long-term plans, which will take time, since it takes a long time to build infrastructure and attract airlines, the agency sees Stewart as one part of the congestion puzzle by working to bring in more airlines to go with the four here now—American, US Airways, JetBlue and AirTran, with Delta starting up this May."

"Stewart is used by a lot of corporate jets and it does a lot of charter flights, but not a lot of business travel yet," Vanasse continued. "A recent U.S. Department of Transportation study showed a 70 percent leisure to 30 percent business breakdown, but that was before we had AirTran and JetBlue, so that will change now, as business travel increases," she predicted.

Airline industry observers, she said, have wondered aloud why the airport hasn't grown much by now, adding that the terminal has had a complete facelift, and there are new gates and more parking. A small, international terminal may be in the offing, Vanasse said, in about two years.

"Given the saturation in the market now, a move like this to reallocate passengers had to happen," said airline industry analyst Robert Mann of Port Washington, N.Y. "The short-term impact will not be very substantial. Impact on the New York City market will be much more in the long term because Stewart doesn't have much air carrier service. In a chicken-and-egg scenario, you need service to attract passengers and passengers to attract service."

Travelers will drive a fair time and distance to access lower fares, he commented, whereas with the high demand in New York City airports the likelihood exists that fares there will tend to remain more expensive on average.

"Stewart has great potential and is much more than a field of dreams, but it's going to be in the developmental stage until at least 2010," according to Mann. "And intended results of the purchase probably won't be seen in New York City for at least five years."