A $1.03 billion expansion of Salt Lake City International Airport is feasible and can be financed with "reasonable" costs to the air carriers and passengers who use it, airport officials have determined.

The next step is to gain informal approval of the financing plan from the airlines and to identify which of four alternative construction and phasing schedules to follow.The expansion, to include a new passenger terminal and two concourses, could be completed as soon as 2006 or as late as 2012, depending on which schedule is ultimately chosen.

"We know we can do it, so what we're looking for now are ways to refine it to decrease (financing) costs," said Cheryl Cook, the airport's director of finance and administration. "We've finally got enough technical information to have business discussions with the carriers."

Cook presented results of a consultant's financial feasibility analysis to the Department of Airport's board of directors at its monthly meeting Wednesday.

Airport officials were especially interested in whether a declining trend in passenger traffic would alter future needs and the project's viability.

In the past year, Delta Air Lines has de-emphasized its hub activity, decreasing the number of connecting flights through Salt Lake City. It now flies 19 fewer flights per day into Salt Lake City than it did last summer, although its companion carrier, SkyWest, has added 12 regional flights since then.

Consultants dismissed a 1997 projection that passenger growth would increase by 4 percent annually and adopted an average increase of 2.7 per- cent. Based on that figure, the airport still can generate enough revenue to pay for the expansion without a drastic reduction in profits for the airlines, according to the consultants.

The money to construct improvements will come from several different sources, including federal money, passenger facility charges, or PFC, and rents charged to the airlines.

Rents paid by the carriers in 2008 will be nearly double what they would be if no expansion was undertaken, Cook said. But the airlines' cost per passenger would remain below the national airport average and profitability for the airlines would remain fairly consistent, she said.

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Congress is now considering legislation that could both increase federal funding and allow airports to raise the PFC from $3 to $6. Currently, most airports charge the maximum of $3 per one-way ticket to every departing and arriving passenger. If Congress allows the change, the PFC added to most round-trip tickets would increase from $12 to $24.

While that tax may be hard for passengers to take, airport officials hope Congress approves the increase. If it does, PFCs will account for a larger share of expansion costs and help reduce debt-interest payments.

"I'm confident we are on the right time frame as we make some of these decisions," Mayor Deedee Corradini told the board.

Corradini said she met last week with Delta Chairman Leo Mullin. She said Delta is finalizing its future mix for Salt Lake City International with regard to how many larger jets it will fly here and how many regional jets SkyWest will operate. Since different gates are needed depending on the size of the aircraft, airport officials need to know what Delta projects as its future need.

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