Work on Hawaii’s $3.2B airport modernization project hits halfway mark

Spending on the $3.2 billion modernization effort underway across Hawaii’s airport system is at the halfway point, and most of the big-ticket capital improvement projects are slated to wrap up by December 2021.

Among the most visible projects in the works at Daniel K. Inouye International Airport (HNL): the $220 million Mauka Concourse — to be fitted with gates for six wide-body or 11 narrow- body aircraft — at the site of the old commuter terminal, which was razed last year; and the $330 million, five-story consolidated rental car facility, which will house all vendors, thereby doing away with the circling of company vans through the airport.

“I have never see so much demolition and construction of improvements as in the last five years,” said Hawaii Department of Transportation Airports Division Deputy Director Ross Higashi, whose employment at the Honolulu airport is nearing the three-decade mark.

Prior to the ongoing upgrades — first envisioned during former Gov. Linda Lingle’s administration — the last major construction completed at the airport was the current Terminal 1 (formerly the interisland terminal), which now serves as the hub for Hawaiian Airlines’ interisland and mainland flights. It was built in the early 1990s.

Overall, progress has been slow-moving due in part to the airport system’s tether to the Legislature and the shifting priorities of lawmakers and gubernatorial administrations. Honolulu’s airport is one of only three major airports nationwide not run by a fiscally autonomous authority or corporation. The others are in Alaska and Maryland.

“When you have a change in administration, you move back two years. Everybody has to get comfortable with the (modernization) program, and then they approve or disapprove moving forward,” Higashi said. Even though DOT’s Airports Division is self-sustaining in that it does not receive funding from the state’s general fund, the Legislature and governor control the purse strings.

Despite backing from the DOT and airline chiefs, since 2016, bills to switch to the airport authority model, in which a state tasks a government-appointed private entity with responsibility for airport operation and oversight, have stalled at the state Capitol.

An airport authority?

Supporters have maintained that an authority offers much-needed flexibility and opportunity to avoid bureaucratic snags and delays.

For example, currently, once the Legislature has adjourned from its regular session in May, funding adjustments must wait to be taken up the following session, typically starting in January. An airport authority could allow the state to approve lump-sum annual appropriations — generated from airport concessions and airline revenue — allowing the authority to make necessary adjustments between legislative sessions.

At the Honolulu airport, plans often need tweaking due to the vast scope of the place. With an estimated 20 million passengers a year, HNL has 23,000 badged employees tending to everything from security to food service within a property that’s larger than Waikiki.

“There are a lot of moving parts, I call it an aerotropolis. It’s a community within itself,” Higashi said.

Much of the opposition to the airport authority model has been linked to the reach of state procurement rules. Proposed legislation has envisioned a corporation as exempt from procurement procedures that control how the state’s budget is implemented.

The state’s procurement code requires contractors to list their subcontractors, which guards against businesses farming low-bid work to subcontractors for profit. Some labor groups have worried that without state-imposed procedures, their interests would be less protected by a profit-oriented authority.

Moving forward, in addition to supporting authority-focused legislation, Higashi said the Airports Division is looking into other means to “modify” procurement in which intent is sound, but in practice, have rules that are cumbersome for the 15-airport, statewide system.

“We’re the entry point and the exit point for our economy here, which is leisure tourism,” he said. “We need to be competitive with the rest of the airports worldwide.”

Room for improvement

The Honolulu airport has room for improvement on that score. J.D. Power’s 2018 North America Airport Satisfaction Study found that across the industry, passenger satisfaction reached an all-time high, fueled by rising approval for retail and food and beverage offerings as well as the security check process.

However, the market research company ranked HNL at a lackluster No. 22 among 25 large airports, based on customer satisfaction is six categories: terminal facilities, airport accessibility, security check, baggage claim, check-in and baggage check, and food, beverage and retail.

Honolulu fared better with a 2019 best-worst rankings compiled by The Points Guy, a popular air-travel-focused website — No. 26 out of 50, based on factors ranging from amenities to environmental sustainability efforts and industry staples, such as on-time flights.

On the punctuality measure, HNL ranked No. 2. It had the highest score in fending off flight delays and cancellations. But it also had the longest recommended connection time (75 minutes), which lifted Portland International to the timeliest airport spot.

Within the next three years or thereabouts, as Hawaii completes key components of modernization, Higashi expects to see traveler satisfaction climb. Right now, though, at HNL, travelers are navigating a sometimes confusing hodgepodge of the old and new framed by construction-related detours.

Because the hemmed-in Honolulu airport has no new land to build on, portions of modernization require some juggling. For example, Higashi said, “We had to build a temporary (car rental) facility and shut down half of a parking structure. We lost 1,000 stalls for the traveling public.”

But in the works is construction of a permanent “Consolidated Rental Car Facility,” dubbed CONRAC. The envisioned one-stop facility will include 2,250 parking stalls; the previous car rental site had 895 stalls. The facility is expected to ease previously jam-packed conditions that were worsening amid record-breaking visitor arrival counts.

Among other high-visibility changes taking shape: a $23 million sign-replacement project through which some 3,100 signs — inside and outside of the airport, along the roadways and within the terminals and parking structures — are getting updated for the first time in more than two decades.

Hawaii airports are also now drawing extra revenue — an estimated $2 million a year — with new indoor advertising, including digital signage. “Every dollar that we can generate helps offset the charges that our airlines pass on to the traveling public, Higashi said.

In addition, to better match user-friendly simplicity employed in other airports, HNL is changing its numbering and identification coding in parking levels and elsewhere.

Under the new ID mode, the old interisland terminal is identified as Terminal 1 (Hawaiian Airlines); the overseas terminal is now known as Terminal 2 (nearly all other airlines); and the commuter terminal, Terminal 3 (Mokulele Airlines).

What’s new in makeover

Among changes that may be less obvious to travelers hustling to catch flights: an increase in retail and restaurant options dotting HNL; restroom makeovers; and sustainability-focused initiatives.

>> In recent years, through a public-private partnership, DFS and restaurateur HMSHost have invested some $70 million to expand offerings. The lineup’s showcase is what Higashi calls the “Waikiki area,” a stretch of high-end shops, including Prada and Hermes, situated in a polished mall-like setting in Terminal 2. Nearby is a set of verdant outdoor cultural gardens.

Also new to Terminal 2 is the world’s largest wide-body aircraft and the state’s largest passenger lounge. Currently, All Nippon Airways (ANA) operates two double-decker A380 planes, each seating about 520 passengers. The Japanese carrier will add a third “Flying Honu” next summer.

The ANA suite lounge, which is available to ANA’s first-class passengers, seats 70. Another lounge, which also admits business class, premium economy and other select passengers, seats 300.

>> In response to the most-requested airport improvements — based on customer feedback submitted to the DOT — dated restroom facilities are being refurbished across the system and the overall count expanded; and free Wi-Fi is available in some capacity at each airport.

>> Green-minded strategies being implemented range from installation of energy-efficient lighting to an emissions-free CONRAC shuttle. And prominent in HNL’s sustainability profile is DOT’s installation of some 16,800 rooftop solar photovoltaic panels — a move expected to slice airport’s electric bill in half.

At the far end of the Mauka Concourse construction site are rail guideway support columns, near the H-1 freeway.

They signal the Honolulu Authority for Rapid Transportation (HART)’s intent to eventually wind its elevated rail transit route through HNL property — swooping through a maze of infrastructure to a future rail station near the lei stands area. The station will be connected, by walkway bridge, to Terminal 2 and airport parking.

HART plans to launch the the 20-mile line’s first leg, from Kapolei to Aloha Stadium, by the end of 2020; the entire line — stretching via HNL to Ala Moana Center — by late 2025.

Gov. David Ige’s stated ultimate goal for Hawaii’s airport system is to develop “world-class facilities.” That ambition is a tall order for the islands. Still, the DOT’s Airports Division and its private-sector partners are committed to continuing to push in that direction.

Regarding the downside of airport transformation by way of extensive construction, Higashi said: “It’s like widening the freeway. You’ve got to sacrifice” for awhile, sometimes contending with headache-inducing traffic flow tie-ups along with potential project setbacks and other assorted glitches. “Once the project is over, you get home a lot earlier.”

Air travel here will be “more efficient and aesthetically pleasing to the public” as this modernization venture reaches completion, Higashi said. In the meantime, he added: “Be patient and wait … things will get better.”