Virgin America ponders Phila. airport expansion

Having just arrived in Philadelphia, low-cost airline Virgin America will quickly find itself involved in the debate over the city's planned expansion of Philadelphia International Airport.

Virgin founder Sir Richard Branson and chief executive officer David Cush cautiously broached the issue this week, urging a weighing of the dueling priorities of the city-owned airport and its airline tenants.

"It's a very complicated balancing act for an airport," said Cush in an interview. "You have to build for the future, but you have to keep your eye on the costs in the present, or airlines just leave."

The expansion plan, which the city says would cost $6.4 billion over 13 years, would build a fifth runway, lengthen two existing runways, and add new terminal and parking facilities. The city says the expansion is necessary to increase capacity and reduce congestion at Philadelphia International.

The airlines that operate at the airport, particularly the two largest carriers, US Airways and Southwest Airlines, contend the cost would be much higher - about $10.5 billion - and that since they would be expected to pay much of that, it could force them to reduce operations in Philadelphia. They argue that a new runway would not substantially reduce congestion in Philadelphia, because the big problem is the crowded airspace between New York and Washington.

Officials for the city and US Airways are now in negotiations over a long-term airport lease for the airline. US Airways is balking at signing a new lease unless the current expansion plans are changed.

Cush said airports and airlines have different goals, which often creates tensions over development projects.

"Airports have to think longer-term than sometimes airlines do," he said. "When you're building a new terminal or building a new runway, in particular a new runway, these are 20-year projects. Airlines are thinking about the next quarter and the next year."

Still, it's important for an airport to hold down its cost structure, Cush said. "When airports overbuild or when airports build facilities that are too expensive, airlines leave."

Cush cited Miami International Airport, which recently has been losing business to nearby Fort Lauderdale-Hollywood International Airport.

"Miami has been building and building for the last 20 years, and they now have the highest cost of any airport in this country," Cush said. "And what's happened is a lot of the airlines have left and gone up to Fort Lauderdale."

The lesson, the Virgin chief executive said, is, "You can have a 20-year development plan, or a 10-year development plan, but if airlines leave after three or five years, you've got a big problem on your hands."

Branson, the billionaire record-company founder who has put the Virgin label on everything from vodka to space tourism, acknowledged he was unfamiliar with the Philadelphia airport debate. That didn't deter him from weighing in on the subject.

"The airlines may just be worried about extra competition, so they may be speaking with forked tongues," Branson said. "Generally speaking, the more runways, the more capacity you can give, the better it is from the traveling public's point of view."

Contact Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com.