Austin Bergstrom's Continuing Expansion
New terminal restores some 1950s glamour to the airport
Midcentury modern is all the rage. Turn on any design show, open any home improvement magazine, and it's chrome frames here and starburst patterns there. Even Austin-Bergstrom International Airport is getting in on the act: Midcentury modern has taken over as the style of its new terminal.
The idea behind the design of ABIA's South Terminal, which opened last month with service through Allegiant Air, is to restore some 1950s glamour to the increasingly tiresome task of air travel. This latest three-gate addition to Austin's airport is as old-school as it gets – and not just in the carpet design, or the swooping font on the signs. (See online for a photo gallery, and to read an interview with Jennymarie Jemison, who designed the terminal's signs.) Even embarking the planes entails an old-fashioned walk along the tarmac and up a shaded ramp, rather than the hermetically sealed jetway tubes modern fliers so often endure. On the wall inside the terminal hangs a mural, a vintage image of hat-wearing men in suits and women in sundresses, walking down the steps from a vintage prop plane. But the backdrop isn't Bergstrom: It's Mueller, Austin's original airport. And when that look was cutting-edge, and not simply Mad Men chic, the area that is today ABIA was more likely to see fighter bombers than commercial airliners.
In 1999, Bergstrom flipped from a U.S. Air Force base to become one of the nation's largest city-owned commercial airports. The city will be thanking the USAF for Bergstrom for years. What it inherited at the time was basically a $5 billion airport for a little over one-tenth of that cost, with big-ticket items like two large runways already up and running. Even some of the airport's signature structures, like the Hilton Hotel (formerly the 12th Air Force HQ Building), are holdovers from those days.
Not that everything was in pristine condition. Up until a few months ago, the space where the South Terminal now stands was a dilapidated, single-story, red brick National Guard motor pool. Now it's the latest stage in ABIA's perpetual mission to keep pace with constant and increasing demand.
"A Destination Airport"
Tenured Austinites will remember Mueller, located off 51st and I-35. When it opened in the Thirties, that area represented the outskirts of town, but development turned it into the city's center, a logistical and environmental nightmare for operating airports.
The old bomber base served as a natural alternative, but just as it outgrew Mueller, now the city is growing into Bergstrom. A decade ago, it was the 57th busiest airport in North America and the 43rd busiest in the U.S. In 2015, ABIA had jumped to 41st throughout the continent and 37th in the nation, placing it on what communications director Jim Halbrook called "the large end of medium-sized airports."
Only one thing is driving ABIA's growth: That's Austin. "We're an origin and destination airport," said Halbrook. "We're not a hub." Moreover, no matter how big ABIA gets, it will likely never become an air travel epicenter to the scope of Chicago or Atlanta. For that, blame (or thank) Dallas and Houston. With American using Dallas/Fort Worth International as a hub, United operating out of George Bush Intercontinental, and Southwest concentrating so much of its operations out of Dallas Love Field, there's little need or market space for another firm to hub out of Austin's airport.
That doesn't mean ABIA has a shortage of traffic, both domestic and, increasingly these days, international. In the last five months, direct flights have been added to Boston, Branson, Cleveland, Indianapolis, Pittsburgh, St. Petersburg, San Diego, Seattle, Tampa, and Washington, D.C. ABIA has seen year-on-year growth in passenger embarkations throughout its history. In 2009, it handled roughly 8 million passengers. Last year, that number shot to over 12 million. "And year-to-date, we're up 5.5 percent," said Halbrook.
ABIA both handles growth and stimulates it. Some of Austin's most aggressive expansion has come along the airport corridor, like the Circuit of the Americas and the Pilot Knob development – so much so that the Central Texas Regional Mobility Authority is speeding along with construction of a long-overdue tolled and non-tolled expansion of U.S. 183, from Highway 290 in North Austin, down to the airport's gates. In turn, that's triggering new activity in what had been moribund research and industrial parks along the highway, all located there for ease of access for business travelers.
The last few years saw the beginning of a massive round of growth and remodeling at ABIA. The Barbara Jordan Terminal added a new security checkpoint and nine new gates, increasing annual capacity from 11 million passengers to 15 million. There's a new multi-story garage for rental cars, and a new 6,000 car capacity close-in parking structure scheduled for completion in the next year. The cell phone parking lot has been relocated, so the original site can be upgraded with extra slots and a gas station.
More people means more time spent looking for something to do before the flight. According to Terry Mahlum, regional vice president of ABIA concession management firm Delaware North Co., ABIA has been ahead of the concessions curve. It spearheaded the reaction against generic airports, the kind where you can only tell where you are by looking at the T-shirts in the stores. When the airport opened in 1999, stores and restaurants on the concourse had generically Austin names. Mahlum's team reached out to what he called "the best of Austin brands" and had each brought into the fold. So, for example, the Hill Country Bar became Earl Campbell's Sports Bar. It's a business strategy often accused of just being set-dressing, but over time the involvement of the firms has been about more than just leasing name rights, to actually running the store. Moreover, it's a strategy that has been increasingly adopted in other cities, as local authorities see the value of emphasizing local identity as soon as passengers deplane. Mahlum said, "You go to L.A. and they have Pizza Hut [and] Taco Bell, and you don't know where you are. You get off the plane here, and you know you're in Austin."
Through its first two years, the combination of local brands and the novelty of poking around the old Bergstrom base had Austinites visiting the terminal and eating there, or catching one of the live musical performances along the concourse. Then 9/11 happened, and security culture overtook local engagement. Because ABIA was a destination and not a hub, retail employment took longer than most airports to rebound. Mahlum said, "We did talk to TSA back in the day – 'How can we change that to get locals back in the airport?' – but obviously they have rules to follow."
Now, the challenge for Mahlum becomes keeping up with Austin's major brands and what's on the up-and-up. Mainstays like Hoover's Cooking and Maudie's Tex-Mex have been joined by relative newcomers like Annies Cafe & Bar. Those brands must fit with the airport's customer base. Aside from the large number of millennials flying in for the cycle of festivals and special events, ABIA has a higher-than-usual number of female business travelers. That's part of the logic for the recently opened Vino Volo wine bar, a counterpoint to the good ol' boy vibe at Earl Campbell's.
How's Your Cargo?
Concessions are not the only part of ABIA's business model that had to dig itself out of a hole. While passenger traffic has consistently risen, the story of cargo is very different. In fact, current cargo weights represent less than 50% of what they did at the turn of the century, down from 357 million pounds in 2000 to 175 million in 2016.
ABIA started commercial cargo operations in 1997, two years before the first passenger flights. The loads carried were large and rising, but then dropped dramatically. "Everyone blames 9/11," said Ray Brimble, "but the reality is that the numbers started to drop about a year before that."
As the founder and CEO of facility management firm Lynxs Group, Brimble has been involved with ABIA since Lynxs won the competitive tender process to run cargo in 1994. He called the drop around the millennium the effect of "a structural, not a cyclical shift," with four factors. First, much of the payload was generated by Austin's computer manufacturing industry, particularly Dell. In 1999 and 2000, the PC market faltered, production shifted (first to other U.S. tech centers, then overseas), and demand for cargo space fell. Second, many of the original tenant carriers either relocated (Bax Global), went out of business, or got acquired by competitors (like Emery Worldwide, now part of UPS). The third blow came when the big remaining carriers realized it was cheaper and more efficient to drive trucks full of parcels to their hubs in Dallas and Houston than fly them there. Finally, Brimble said, "In 2000 the great recession hit. That clamped down on anything else that might be considered growth."
That cratering continued through the next recession, and it was only in 2011 that the trend started to turn upward. It's still down; local manufacturing never really returned. The bulk of cargo is carried on dedicated cargo planes owned and operated by integrated carriers like FedEx and UPS, with less than 5% in the belly of passenger planes. Brimble said that's an unusually low number compared to most airports, a byproduct of the fact that most Austin flights are sold out and in narrow-bodied planes, with no space for much more than bags.
Full Occupancy, Not Full Capacity
ABIA has handled its post-Y2K recovery and demand growth so far. Yet there are no grounds to believe that growth will stall out. Fortunately, thanks once again to the USAF, the two runways will give them flight capacity for decades. (Halbrook said the San Diego International Airport handles more than 18 million passengers each year with only one operating runway.) With features like the high-speed taxiways, Brimble said, ABIA is "one of the most efficiently designed airports of any I have seen."
Efficiency is increasingly becoming a key consideration. Adding gates on the main terminal increased annual capacity to 15 million, but while current calculations say that space won't max out until 2025, that will happen eventually. According to Halbrook, the airport is very close to the all-important trigger point of 13 million passengers, at which point planning will kick in for the next round of passenger growth.
Brimble is confident his cargo tenants have operational capacity to spare. "We're operating at full occupancy, not full capacity," he said. Over the last decade, cargo firms have gotten "really good at shoving more stuff through these facilities. What might have taken 10,000 square feet of warehouse 10 years ago takes 5,000 square feet now, because they have improved the velocity." However, while passenger growth seems sure but steady, that spare cargo capacity could get gobbled up quite quickly; as in the late Nineties and early 2000s, Brimble envisions another structural change. While the mass, high-end manufacturing will likely never return, e-commerce has expanded exponentially. It's not just the rise of Amazon – "the big A," quips Brimble – but the expansion of more time-sensitive produce, or the rapid growth of "bespoke cargo," such as pharmaceuticals and medical supplies from overseas. His department is already seeing signs of startling growth, and may have to start planning for added capacity within as few as five years.
Inevitably, at some point the city will also have to start considering a second full passenger terminal. In public funding terms, that 15 million passenger limit is not that far away. However, if a second terminal, or even a third runway, becomes necessary, Halbrook said, "It's not in this expansion, or the next one, but the one after that."
Austin Airports Through the Years
1928: Austin voters approve a municipal bond election to construct an airport at what was then the outskirts of the city.
1930: Robert Mueller Municipal Airport, named after the late member of City Council, opens for private flights.
1936: Commercial services begin out of Mueller Airport.
1942: Del Valle Airfield is opened by the Army Air Service Command as a training base. The land is leased from the City of Austin, with a stipulation that it would revert to the city upon closure.
1943: Del Valle is renamed Bergstrom Army Airfield in honor of Captain John Bergstrom, the first Austinite killed in combat in World War II.
1947: Bergstrom is transferred to Strategic Air Command, and a year later is renamed Bergstrom Air Force Base.
1961: Mueller adds a new passenger terminal and the iconic blue porcelain control tower.
1971: City begins considering a long-term replacement for Mueller as housing growth re-places it in the middle, not edge, of the city.
1987: After several rounds of expansion, the city and Federal Aviation Administration tap Manor as the top contender for a Mueller replacement. Discussion begins for land acquisition.
1989: The Texas Legislature passes Senate Bill 1707, requiring the City of Austin to either relocate Mueller or pay for noise abatement.
1990: USAF begins examining closure of Bergstrom; city suspends Manor planning.
1993: Bergstrom closes as an active military base, triggering the land clause in the 1942 deal. Austin residents vote 63% to 37% in favor of Prop. 1, approving $400 million in bonds to convert BAFB to ABIA.
1995: Conversion construction begins at Bergstrom.
1996: Final Air Force Reserve operations out of Bergstrom.
1997: Cargo flights begin at Bergstrom. City contracts with ROMA Design Group to redevelop Mueller upon closure.
1999: Passenger flights begin at Bergstrom, and Mueller ceases all operations.
2007: Housing and commercial construction begins at the new Mueller development.
2014: ABIA launches first flights for direct intercontinental service, to London Heathrow Airport.