Rolling Out the $650 Million Welcome Mat

A closer look at America’s fastest- growing airport with the man behind MSY - Aviation Director Iftikhar Ahmad

04/01/2015

Margaret Quilter,

April is going to be a busy month for the Louis Armstrong New Orleans International Airport. Last year’s Jazz & Heritage Festival boasted attendance figures of approximately 435,000, and as of mid-March, the New Orleans Airport was already reporting a 9.5 percent increase in airport traffic around the festival over last year.

Festival or not, on any given day, up to 20,000 passengers make their way through the airport – and that number is set to rise under the continued leadership of the airport’s Aviation Director, Iftikhar Ahmad.

Ahmad stepped into the role five years ago when the airport was trying to bounce back from a lull post-Hurricane Katrina. Under his leadership, the airport has since surpassed pre-storm 2004 figures. In 2013, the airport was named the fastest growing in the United States in terms of passenger traffic by Airline Weekly. Within the past five years, nine airlines have been added, along with 19 non-stop destinations.

Now, with the new $650 million North Terminal project due to break ground late in the summer of this year, Ahmad expects an increase in both passengers and nonstop service to both national and international destinations. The new terminal should increase the airport’s impact on the regional economy by approximately 21 percent by the year 2023.

“Airports are a community asset,” says Ahmad. “Our mission is to connect our city to the rest of the world in a meaningful way.”

A NATURAL FIT

Growing up in Pakistan, Ahmad attended high school in Cyprus, before moving to the United States to attend Oklahoma State University, where he completed a bachelor’s and master’s in civil engineering.

“I am actually a licensed engineer in the state of Texas – I used to manage design and construction activities for the Houston airport system when we had about $8 billion of work going on,” Ahmad says.

Changing course, Ahmad switched to the operation side of airports, moving from Houston to Nashville, Tenn., and then to Dayton, Ohio, before securing his current position at the New Orleans Airport.

“There was an attraction here yo the challenges of the job,” Ahmad says. “I have proven to myself that it was the right decision to come in and do some hard work on behalf of our community.”

GET THE WHITE GLOVES

Having spent so much time in airports, Ahmad admits without hesitation that his pet peeve is lack of airport cleanliness.

“Customers deserve respect, and it really speaks to your community and city if you land at an airport and it is not clean – it really forms a bad impression on incoming traffic,” he says.

To ensure the airport retains a high level of cleanliness, operations personnel take photos of all parts of the terminal, including bathrooms, every eight hours. Ahmad explains the photos ensure that if anything is out of place, his team can immediately work to get things back in order.

THE GIFT THAT KEEPS ON GIVING

Proclaimed by New Orleans Mayor Mitch Landrieu to be “the most transformative project for New Orleans since the Superdome,” the 650,000-square-foot North Terminal project is currently in the construction document phase – the final step before construction begins late this summer. It’s on track to be fully operational by May 2018 – just in time for the city’s 300th anniversary.

“It is going to be open architecture style,” says Ahmad of the new terminal. “It will give a very good first impression of Louisiana and New Orleans to the passengers and visitors coming from around the world to our region.”

One of the key features of the new terminal will be the security checkpoint. While the existing terminals have security in front of each concourse, the North Terminal will have one consolidated checkpoint. This means that during peak traffic times, passengers will be able to flow quickly through 17 lanes instead of four. Other features of the North Terminal will include a tripling of airport restroom facilities, the addition of two aircraft taxi lanes to reduce wait times for planes trying to get to their gate, and a $17 million on-site, state-of-the-art hotel.

Passengers will also benefit from an increase in destinations and non-stop flights made possible by the additional terminal.

“One of the reasons why we wanted to do the North Terminal project was to cut costs for the airlines here in New Orleans,” says Ahmad. “When we cut costs for the airlines, they become more profitable, and people will do more of what makes them profitable, so we will get more services out of New Orleans to other cities.”

The North Terminal will break ground late this summer, with a completion date scheduled for May 2018. Passengers will experience drastically quicker security checkpoint lines, a tripling of airport restroom facilities, and additional destinations and nonstop flights.
Rendering courtesy of Crescent City Aviation Team

AN ECONOMIC POWERHOUSE

A recent study (commissioned by the New Orleans Aviation Board and conducted by local economist and former chancellor of the University of New Orleans Dr. Timothy Ryan and The Mumphrey Group of New Orleans) revealed that in 2013, the airport had a total economic impact on Greater New Orleans of $5.3 billion. The airport supports approximately 53,300 jobs.

Construction of the new terminal will create 13,500 construction-related jobs and have a one-time economic impact of $1.8 billion. Following its completion, the airport’s total economic impact is expected to grow to more than $6.3 billion, with job projections exceeding 64,400.

WHO’S FOOTING THE BILL?

Before the 2013 Super Bowl came to New Orleans, the airport spent $300 million on renovations to existing terminals.

The sources that feed all of this debt vary. In March, the airport sold General Airport Revenue Bonds (GARBs) in order to secure approximately $486 million. They will also rely on federal and state funding programs and airport revenue that come from both non-airline and airline sources at the airport.
Take away the airport’s annual operating budget of $79 million a year from the total revenue, which hovers around $113 million, and the airport is left with some loose change to defray the cost of the new terminal.

“Right now our top priority is to get this terminal built,” says Ahmad. “We need to build it so that it looks and feels like a world-class facility, but that’s not enough either – we have to do it on time and on budget.”

HOW DOES MSY MEASURE UP?

Pre-Hurricane Katrina, the airport ranked 40 in the top 100 U.S. airports (ranked by total number of departing passengers and cargo). In 2006, the ranking dropped to No. 56. In 2013 (the most recent ranking) New Orleans was up to No. 37.

To date, the airport currently has 14 airlines providing service to 46 nonstop destinations, including three international destinations. The biggest markets for flying into New Orleans are Houston and Atlanta.

“The size of the airport is a reflection of the city and the region it serves,” says Ahmad. “We handle 80 percent of Louisiana’s overall passengers, so we are the biggest airport in this state – but it is not just about the sheer number of people; it is also about how many Fortune 500 companies and businesses we have.”

Ahmad continues to explain how the type of traffic an airport attracts can make a big financial difference.

“New York, for example, has a tremendous amount of business traffic that makes the airlines very profitable,” says Ahmad. “Business traffic is not sensitive to the ticket prices – they will buy their ticket a day or two before and pay a lot more, and the airlines really enjoy those revenues.”

New Orleans, on the other hand, relies heavily on leisure travel, a market that is sensitive to ticket pricing. According to the New Orleans Convention and Visitors Bureau, 46 percent of visitors to the city arrived by plane in 2013 – estimating that the airport influences about $2.8 billion in direct spending.

SPREADING THE WORD

As the airport continues to gain momentum, Ahmad believes the city still needs to invest more in marketing.

“Las Vegas, which is a very high leisure market, spent $120 million on marketing just a few years ago,” he says. “If I am not mistaken, we were spending $4 million.”

Last year French Quarter and Downtown hotels imposed a self-assessment to fund marketing – an initiative that Ahmad says the city needs more of.
“We are gaining ground left and right,” he says. “This community has a really bright future, and we as a city and a region need to invest more in marketing so that more people will come and visit us from around the country and the world.”

Following the new terminal’s completion, MSY’s total economic impact is expected to grow to more than $6.3 billion, with job projections exceeding 64,400.
Rendering courtesy of Crescent City Aviation Team

The Award for Busiest Airline Goes To…

Currently, 14 airlines provide service to 46 nonstop destinations out of Louis Armstrong New Orleans International Airport.

Southwest Airlines accounts for just over 40 percent of commercial traffic, followed by a virtual three-way-tie for second place between Delta Airlines, United Airlines and American Airlines /US Airways- each accounting for approximately 20 percent.

What’s In a Name?

Originally a U.S. government air base, commercial service to New Orleans airport began in 1946 when it was known as Moisant Field, in honor of aviation pioneer John Bevins Moisant. A nod to the airport’s history, the three-letter identifier (MSY) stands for Moisant Stock Yards.

In August 2001, New Orleans International Airport became Louis Armstrong New Orleans International Airport in honor of the famous native-born musician’s 100th birthday.