Despite airlines' protests, supervisors give initial OK to Sacramento airport expansion

Sacramento County leaders announced their intention Tuesday to launch a major airport expansion next month – sharply rebuffing airline officials who flew in to protest the project's cost.

The $1.27 billion plan, which would include a new terminal, hotel, parking garage and people-mover tram, has come under intense fire from airlines at Sacramento International Airport.

In letters to the Board of Supervisors this week, airline officials complained the county is pushing exorbitant fees on them to finance an oversized facility even as airlines struggle to survive.

Airline officials said they are being buffeted by the dramatic rise in jet fuel prices and the economic downturn.

Several asked the county to place its plans on hold and rethink the fees.

"We're only here because we're desperate," United Airlines official Korbey Hunt testified at a sometimes acrimonious hearing.

Donnell Harvey of Delta Air Lines went further, arguing a new set of fees proposed by airport officials appears to be "retaliatory," because the airport and airlines failed to come to terms on how much airlines would pay for the project.

Despite the airlines' plea, the supervisors unanimously agreed to increase airline fees, effective July 1, from an average of $6 per passenger to $9 a passenger. Those fees are expected to top out at $13.63 in 2013 before being lowered in subsequent years.

Tuesday's decision was preliminary. The board indicated it will officially ratify the fees in two weeks.

Southwest Airlines executive Greg Gillis said he will be back to make the airlines' case again to supervisors in the intervening days.

But supervisors made it clear Tuesday they felt that some of what they were hearing from the airlines was bluster, and repeatedly criticized airline officials for waiting so long to express their opposition.

"This is so last-minute as to be unbelievable," Supervisor Susan Peters said. "I'm just shocked to see you here today."

County officials said they feel they must break ground soon or risk an expensive, several-year delay. Because of flood issues in Natomas, a delay risks snagging expansion on an upcoming building moratorium while levee work is completed.

Airport officials pointed out they already sold several hundred million dollars in bonds two weeks ago to investors to finance the first phases of the project.

Supervisor Don Nottoli was most vocal in rebutting airline complaints. But, after some smaller airlines described the burdens new fees will cause, Nottoli chastised airport officials for bringing the fee proposal forward so late that supervisors had little chance to reflect before voting.

Executives at Alaska Airlines and Horizon Air, which have small operations in Sacramento, said the new fees will more than double their costs at the airport.

Several airline officials said the new fees could cause their companies to reconsider service expansions and may cause them to raise fares in Sacramento. None, however, said their airlines definitely would increase fares.

County airports director Hardy Acree characterized the airlines' opposition to higher fees as short-sighted. He said the county needs to build the airport to serve a market that has been growing and that will, after a rough patch, continue to grow.

If some airlines pull out, Acree said, other airlines will fill the gap.

That drew a rebuke from Kathy Smith of Alaska Airlines.

"It's disheartening," she said. "We're supposed to be partners."

Supervisor Nottoli concluded, "There are a lot of bridges that are going to have to be rebuilt."

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