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Loudoun on edge as Dulles domestic travel plummets

Dulles International Airport is worth billions to Loudoun County, but several years of declining domestic traffic has local officials concerned their economic engine is laboring.

The increasingly successful Reagan National Airport has eaten into Dulles’ domestic traffic numbers as Congress adds slots and expands Reagan’s reach beyond its traditional perimeter. Reagan National, created as a short haul, slot-controlled, origin-and-destination airport, is expected to serve more domestic passengers in 2014 than its larger neighbor to the west.

“It’s very important that the balance be maintained,” Michael Cooper, state and local government affairs manager for the Metropolitan Washington Airports Authority, told the Loudoun board’s economic development committee Monday. “The two airports are designed to operate as a unit. It is what Congress intended.”

According to a recent economic impact study of MWAA’s operations on the region, produced by the George Mason University Center for Regional Analysis, Dulles is responsible for 18,692 direct, indirect and induced jobs in Loudoun, $796.3 million in annual labor income and $78.4 million in annual state and local taxes. It is “the engine now and critical for us going forward,” said Buddy Rizer, Loudoun’s economic development director.

Domestic travel at Dulles grew through the turn of the century, peaking at 22.1 million in 2005 and spurring a $5 billion capital investment in Dulles infrastructure. Then, domestic travel tanked: From 17.2 million in 2010 to 16.7 million in 2011, 15.9 million in 2012 and 14.9 million in 2013 — a 2.3 million passenger drop over four years.

Year-to-date, through April, Dulles has served 4.3 million domestic passengers to Reagan’s 6.3 million. As a result, Dulles’ Cost per Enplaned Passenger for domestic flights, a sign of an airport’s cost competitiveness in the market, has climbed to more than $20, while the CPE at Reagan is less than $15 and at BWI/Marshall Airport, less than $10.

“The goal is to do everything we can to make Dulles as attractive and competitive as possible,” said MWAA spokesman Chris Paolino. “Long term, the future for Dulles is still very bright. It’s one of the few airports on the East Coast with room to grow. This is the short term challenge we’re dealing with.”

That may mean, for example, working with Congress to halt the changes that have partly spurred Reagan’s domestic expansion.

MWAA officials, during a June 2 Northern Virginia Regional Commission summit, outlined their action plan to boost Dulles, which includes growing international air passenger traffic, attracting low-cost carriers to serve abandoned routes and niche markets ( see: Frontier Airlines), expanding air-cargo operations, developing the airport footprint with nonaviation revenue, refinancing debt, shifting some costs to Reagan and improving airport access.

Loudoun, meanwhile, has its own strategy to support Dulles, most notably, pursuing development around the planned Route 606 Silver Line station, scheduled to open in 2018. Three conceptual projects for Route 606 — involving landowners MWAA, WestDulles Partners and Dulles Gateway Associates — could produce millions of square feet of new mixed-use development. None have been approved or even submitted to the county, yet.

“The location of the station adjacent to the airport provides the County a tremendous opportunity to brand the station as an international destination that will in turn support the growth of the airport’s future passenger traffic,” Rizer’s department wrote in a report to the board’s committee.

International traffic at Dulles has steadily increased over the past decade, from 4 million passengers in 2003 to 6.99 million in 2013.

The Loudoun DED also sees growth in air-cargo, the flight simulation and training markets, plane maintenance and repair businesses, and the 400 acres of undeveloped property on the western side of the airport’s 12,000-acre footprint.

“We are concerned,” Rizer said Wednesday of Dulles. “I don’t think it’s critical at this point. I think there’s a lot of steps the airport is taking, I think there’s a lot of steps the industry is taking. We know that it’s a major driver economically here in Northern Virginia, specifically here in Loudoun County. Anything we can do to help the airport we’re certainly going to do.”


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