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State and Local Government / Transportation

KCI’s Overly Optimistic Estimates – Part 1

By Joseph Miller on Jul 11, 2013

The determination of some Kansas City officials to construct a new $1.2 billion terminal at Kansas City International Airport (MCI) is based on optimistic projections. Not only do their projections fly in the face of aviation industry trends in the last decade, they don’t even conform with the airport’s own 2012 financial report.

The Kansas City Aviation Department originally used 2006 baseline estimates to justify new terminal specifications. Back then, they predicted 2.8 percent growth in enplanements (the number of people boarding the airplane) from 2006 onward. But they were wrong, and eventually had to revise the projected growth down to 1.9 percent. The growth of passengers in the last decade has fallen even further, to 0.01 percent. This slide in growth started before the financial crisis. Even including the booming 1990s, total growth averaged a meager 1.9 percent from 1991 to 2012.

MCI’s passenger traffic peaked at 6 million in 2000, when the airport still handled 1 million transfers per year. This subsequent decline in passengers is the result of airline consolidation and transfer centralization in large hubs. It is affecting all airports, not just Kansas City’s. The airlines’ strategy has meant that fewer airlines operate out of MCI than any time in the last two decades. This trend is unlikely to reverse, making a repeat of the growth rate in the 1990s an unlikely scenario.

According to the planning documents for the new terminal, the Aviation Department claims that takeoffs and landings will increase at 1 percent per year. In reality, the number of aircraft operating out of MCI fell and then stayed flat in the last decade, with little evidence of any future increase, much less at a rate greater than 1 percent. As airlines focus on filling every flight to capacity, they require fewer flights per passenger. If we assume that passenger growth remains low or flat, total flights will grow even slower.

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Joseph Miller

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