Southwest Airlines, being a low cost-no frills carrier, said that it would not service DIA. Southwest wanted to keep its airport fees below $3 a passenger. Current projections indicated that DIA would have to charge between $15 and $20 per passenger in order to service its debt. This was based upon a March 9 opening day.

Continental announced that it would provide a limited number of low-frill service flights in and out of Denver. Furthermore, Continental said that because of the high landing fees, it would cancel 23% of its flights through Denver and relocate some of its maintenance facilities.

United Airlines expected its operating cost to be $100 million more per year at DIA than at Stapleton. With the low-cost carriers either pulling out or reducing service to Denver, United was under less pressure to lower airfares.

March 1994

The city of Denver announced the fourth delay in opening DIA, from March 9 to May 15. The cost of the delay, $100 million, would be paid mostly by United and Continental. As of March, only Concourse C, which housed the carriers other than United and Continental, was granted a temporary certificate of occupancy (TCO) by the city.

As the fingerpointing began, blame for this delay was given to the baggage handling system, which was experiencing late changes, restricted access flow, and a slowdown in installation and testing. A test by Continental Airlines indicated that only 39% of baggage was delivered to the correct location. Other problems also existed. As of December 31 1993, there were 2100 design changes. The city of Denver had taken out insurance for construction errors and omissions. The city's insurance claims cited failure to coordinate design of the ductwork with ceiling and structure, failure to properly design the storm draining systems for the terminal to prevent freezing, failure to coordinate mechanical and structural designs of the terminal, and failure to design an adequate subfloor support system.

Consultants began identifying potential estimating errors in DIA's operations. The runways at DIA were six times longer than the runways at Stapleton, but DIA had purchased only 25% more equipment. DIA's cost projections would be $280 million for debt service and $130 million for operating costs, for a total of $410 million per year. The total cost at Stapleton was $120 million per year.

April 1994

Denver International Airport began having personnel problems. According to DIA's personnel officer, Linda Rubin Royer, moving 17 miles away from its present site was creating serious problems. One of the biggest issues was the additional 20-minute drive that employees had to bear. To resolve this problem, she proposed a car/van pooling scheme and tried to get the city bus company to transport people to and from the new airport. There was also the problem of transfering employees to similar jobs elsewhere if they truly disliked working at DIA. The scarcity of applicants wanting to work at DIA was creating a problem as well.

May 1994

Standard and Poor's Corporation lowered the rating on DIA's outstanding debt to the noninvestment grade of BB, citing the problems with the baggage handling system and no immediate cure in sight. Denver was currently paying $33.3 million per month to service debt. Stapleton was generating $17 million per month and United Airlines had agreed to pay $8.8 million in cash for the next three months only. That left a current shortfall of $7.5 million each month that the city would have to fund. Beginning in August 1994, the city would be burdened with $16.3 million each month.

BAE Automated Systems personnel began to complain that they were pressured into doing the impossible. The only other system of this type in the world was in Frankfurt, Germany. That system required six years to install and two years to debug. BAE was asked to do it all in two years.

BAE underestimated the complexity of the routing problems. During trials, cars crashed into one another, luggage was dropped at the wrong location, cars that were needed to carry luggage were routed to empty waiting pens, and some cars traveled in the wrong direction. Sensors became coated with dirt, throwing the system out of alignment, and luggage was dumped prematurely because of faulty latches, jamming cars against the side of a tunnel. By the end of May, BAE was conducting a worldwide search for consultants who could determine what was going wrong and how long it would take to repair the system.

BAE conducted an end-of-month test with 600 bags. Outbound (terminal to plane), the sort accuracy was 94% and inbound the accuracy was 98%. The system had a zero down-time for both inbound and outbound testing. The specification requirements called for 99.5% accuracy.

BAE hired three technicians from Germany's Logplan, which helped solve similar problems with the automated system at Frankfurt, Germany. With no opening date set, DIA contemplated opening the east side of the airport for general aviation and air cargo flights. That would begin generating at least some revenue.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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