Given current restrictions on international air travel because of COVID-19, plenty of people are predicting that bans on domestic flights will be put in place sooner rather than later. But Denver International Airport remains open, and in an update to stakeholders about the virus, Kim Day, the CEO of the facility, seeks to reassure potential customers that extraordinary measures have been put in place to ensure their safety.
"What we know of this virus and its effect on the airport is fluid and changes frequently," Day acknowledges. "However, as we go through this together, I want to share what information we have as it becomes available."
After noting that DIA is working closely with state and local health departments and following the guidance they offer, she lists the following efforts to keep the facility "clean and germ-free:"
• Installing sanitary wipes in jet bridges to allow passengers to sanitize their seat on the plane,
• Adding hand sanitizing stations for passengers and employees including the TSA security lines and information booths,
• Increasing the frequency and intensity of efforts to disinfect washrooms and other public areas with cleaning agents intended to kill germs,
• Sanitizing the trains to the gates daily with an even stronger focus to kill germs, and
• Disabling all air hand dryers in restrooms to reduce the spread of germs.
In addition, these procedures have been put in place "to ensure and promote social distancing":
• Reconfiguring our security checkpoint lanes to provide more space between passengers,
• Adding signage to remind passengers to space out six feet from one another,
• Encouraging our concessions to transition to a takeout or grab-and-go model, and
• Decreasing seating in concessions where tables and seats were in close quarters.
As Day points out, most concessionaires at DIA are still operating, since directives from both Governor Jared Polis and Denver Mayor Michael Hancock have exempted airports from bar and restaurant closures.
In Day's words, "We have an obligation to serve the traveling public and we know that passengers and employees are still in need of food and other essentials. Still, some restaurants have opted to close, others have reduced their hours and some are focusing on takeout options only. We continue to work on thoughtful and safe ways to ensure traveler and employee needs are met. We also recognize that the situation is changing rapidly, and we are adapting as well."
She admits that "what we are facing as an aviation industry is sobering. The decline in traffic we are seeing is dramatic and will surely have lasting impacts. Flights to Europe, including the United Kingdom and Ireland, have been suspended, airlines are making deep service cuts, and we as an airport are feeling the effects."
As for DIA's financial situation, Day stresses that the airport "holds more than a year’s operating budget of cash on hand for extraordinary situations like this one." Nonetheless, she adds, "we are already instituting cost-cutting measures and working on reprioritizing the timing and delivery of capital projects. We are also reaching out to [DIA's] largest contractors, asking for their help in identifying ideas for cost savings, scope reductions or rate changes that could help reduce their costs to us. We have a lot of balls in the air, and it will take us some time to put all the pieces together." (See more on one particular former contractor below.)
Meanwhile, Day wants "key tenants" to know that "we have proactively implemented policies to give them relief. We are allowing airlines to defer their rent for April, May and June until later this year. For the next three months, we are changing the payment owed...by concessionaires from a minimum annual guarantee (MAG) to a percentage rent as outlined in their leases, and we are similarly changing our rental car companies from a MAG to a percentage rent for this same period and have allowed them, too, to defer three months of rent until later this year. These measures will help all of them, and for some this may make the difference as to whether they can continue to operate.... We want them all to stay solvent, as that is vital to maintaining all the workers they employ. We are especially concerned for our minority, women-owned and small businesses, and we are working with our partners downtown to connect them to small-business loans and grants."
Day concedes that she doesn't have all the answers. But she ends on a positive note that references another national crisis: "While this is an uncertain and unprecedented time, I am sure of this: The aviation community is strong and proud. We have been tested before, and as many of us witnessed in the aftermath of September 11, we are up to the test. We are doing everything necessary today to protect the airport for the long term and will emerge from this healthy and ready for the next wave of growth when this passes."
And about that other contractor: At the same time Day was sending this missive, the airport also sent out an announcement that as part of the termination of its contract for the renovation of the Great Hall, it has finalized all remaining payments to its former developer, Great Hall Partners, in the total amount of $55.5 million.
"Following termination," the airport's announcement continues, "DEN was obligated to reimburse Great Hall Partners for its equity investment, work done to date and work performed during the transition of the project to DEN. Paying these types of transition and contract breakage costs are typical when a construction contract is terminated for convenience, and the Development Agreement between DEN and Great Hall Partners required these payments. DEN did not pay any termination penalties.
"This $55.5 million also settles the $290 million in claims filed by Great Hall Partners. This amount is in addition to the $128.1 million previously paid by DEN to Great Hall Partners announced in December 2019.... DEN has reimbursed Great Hall Partners a total of $183.6 million, which is within the range of $170 million to $210 million DEN announced following termination. All obligations and disputes (financial and otherwise) with the former developer are now resolved."
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