Delta to Add New Gates, Expand Facilities in JFK Renovation
Delta Air Lines CEO Richard Anderson
Ramin Talaie/Bloomberg
Richard Anderson, chief executive officer of Delta Air Lines Inc., during a presser about Delta's expansion plans for John F. Kennedy (JFK) International Aiport in New York.
Richard Anderson, chief executive officer of Delta Air Lines Inc., during a presser about Delta's expansion plans for John F. Kennedy (JFK) International Aiport in New York. Photographer: Ramin Talaie/Bloomberg
Delta Air Lines Inc.’s $1.2 billion construction project at New York’s John F. Kennedy International Airport will add new gates and expand its facilities.
Delta will renovate Terminal 4, which is used by foreign carriers, and link it with Terminal 2, which it already uses. The 1960s-era saucer-shaped Terminal 3, formerly used by Pan American World Airways, will be demolished to make room for parking jets. The company will have 16 gates in Terminal 4 as it expands by 481,000 square feet and renovates 241,000 square feet of space, Delta said today at a press conference in New York.
The world’s largest airline will begin work next month and finish by mid-2013. JFK is one of Delta’s hubs for overseas flights, and one of the most competitive aviation markets in the U.S. with competition from AMR Corp.’s American Airlines and Continental Airlines Inc.’s hub at Newark airport in New Jersey.
Delta will gain nine more gates when the project is completed. Kennedy is Delta’s biggest base in the region, eclipsing the carrier’s operations at LaGuardia airport in New York and Newark Liberty in New Jersey.
Delta’s main jet fleet accounted for 21 percent of JFK passengers in the 12 months that ended in April, trailing only JetBlue Airways Corp.’s 42 percent, according to the U.S. Bureau of Transportation Statistics.
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Since exiting bankruptcy in 2007, Delta has been adding New York flights and local sponsorships, such as support for the Yankees and Mets baseball teams, to expand its foothold in the nation’s biggest aviation market.
Talks were under way with the Port Authority about renovating the Delta terminals before the terrorist attacks on Sept. 11, 2001, curtailed those discussions.
Delta’s JFK facilities have been a focus of passenger criticism.
“Customers equate that to a third-world country, and I think they’re right,” Delta Treasurer Paul Jacobson said on April 26 at an airline-finance conference in New York. “We’ve got to improve facilities at JFK.”
Some passengers are nostalgic for Terminal 3, formerly known as Pan American’s Worldport. Fans have set up two groups on the Facebook Inc. social networking site aimed at saving Worldport from the wrecking ball.
Financing for the renovation and construction includes $900 million in special-project bonds, as much as $215 million in passenger facility charges and at least $75 million in equity from Delta, Susan Baer, aviation director at the Port Authority of New York and New Jersey, said last week at a meeting in which the agency’s board unanimously approved the plan. The port oversees the airport.
Principal and interest on the special-project bonds will be paid through airline rent to John F. Kennedy International Arrivals Terminal, a corporate entity created by the Port Authority to be responsible for retiring the debt. Several airlines will be paying rent to use the renovated terminals’ gates, according to the Port Authority.
Delta fell 43 cents to $11.37 at 10:41 a.m. in New York Stock Exchange composite trading. The shares had gained 3.7 percent this year before today.
To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.
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