Delta nears deal for $1.2b terminal overhaul at JFK

Delta Air Lines is poised to get the green light for a US$1.2 billion overhaul of its outdated terminals at New York's John F. Kennedy International Airport, according to people familiar with the matter, reported The Wall Street Journal.

The board of the Port Authority of New York & New Jersey plans to vote on the massive project today.

Delta, the largest US airline, has been in talks with the authority for years in a bid to upgrade its facilities at JFK and capture a bigger share of the country's biggest air travel market.

The JFK construction project coincides with a sharp rebound in the US airline industry after the recession sent traffic plunging last year and an increasingly heated battle for Manhattan's lucrative business-travel market.

Several airlines are vying for the upper hand over New York skies. Delta is trying to narrow the gap with area leader Continental Airlines, which operates out of Newark Liberty International Airport in New Jersey. Continental and Delta also are trying to fend off American Airlines and JetBlue Airways, two other major players in New York.

American and JetBlue have completed major terminal overhauls at JFK in recent years. Delta's facilities, by contrast, date back about half a century and company executives have described them as the worst ones that the carrier operates in the US.

Under the plan, Delta would move out of JFK's Terminal 3, the iconic but beaten-down former Pan Am Worldport, and relocate to an expanded Terminal 4. Delta also would continue to fly out of Terminal 2.

Construction on an expanded Terminal 4 would begin this autumn and be completed by mid-2013, according to people familiar with the plan. Terminal 3 would be demolished and the site would be used for additional parking, they added.

The project would be financed through some mix of special project bonds backed by the lease on the new terminal and passenger financing charges, according to people familiar with the matter.

Heightening competition, American Airlines and JetBlue joined forces in a limited partnership targeting the New York market earlier this summer. Under the agreement, American and JetBlue offer customers "interline" service that allows one-stop booking and check-in, as well as automatic bag transfers, on some connecting flights.

Delta also has been trying to expand its presence at New York's LaGuardia Airport, which serves mostly domestic flights. But those efforts hit a roadblock after US regulators thwarted a plan earlier this year under which Delta would have traded some of its slots at Ronald Reagan Washington International Airport for LaGuardia slots belonging to US Airways. Delta and US
Airways are appealing that ruling in court.

Continental is expected to become an even more powerful force in New York through its planned merger with United Airlines. That merger, which would create a new No. 1 airline in the US, still requires regulatory approval.
(Source:www.cargonewsasia.com)