After withstanding a historic crash in passenger travel activity at the onset of the COVID-19 pandemic, a mild recession would hardly phase the air travel industry. That’s the view of Tory Richardson, the president and CEO of Gerald R. Ford International Airport in Grand Rapids. With the Grand Rapids airport nearly back to pre-pandemic passenger and cargo activity, Richardson said the industry has emerged from the pandemic as more nimble and efficient. With business continuing to return, the Grand Rapids airport also is in the middle of roughly $300 million in capital improvement projects, including a $100 million concourse expansion, to prepare for future growth.
Overall, where are passenger travel levels since the early 2020 crash?
We are doing much better. We had several consecutive years of record growth — 2019 is in the books as our best year ever because come April 2020, things started to tank. If I look back to 2019, the high water mark and year we like to benchmark ourselves to, we’re at almost 98 percent of 2019 numbers. It does indicate a pretty robust recovery. We will end this year strong and start the new year in a good spot in 2023. I do think we will be into what we consider new growth territory, meaning passenger numbers like we haven’t seen before, and I think that’s coming in just a few months.
What’s driving that recovery?
I think there’s a few things. One, I think what we’re seeing is the change in the passenger profile. We used to try to look very hard and see if it’s a leisure passenger or a business passenger, and that dynamic has really changed through the pandemic. In fact, it’s almost impossible to tell anymore because what we’re finding is that those passengers are a blend. They’re business and leisure. We’re finding people are working but also taking that leisure time or vacation, or going to spend time with friends and family. The pandemic has taught people to refocus and do things they want to do. Post-pandemic, the mindset is: If I want to go do it, I’m going to do it.
Based on the airport’s latest travel report, cargo activity has dipped a bit. Is that a sign of a softening economy?
It’s a good question. I would say it’s probably premature to directly call that a trend or tie it to something specific. However, this is the peak season for cargo. In the fourth quarter of the year, that’s when you typically see the largest volumes of cargo traffic taking place. It’s a little bit premature to see what those look like. We won’t know those numbers until January or February on how peak season went, but our numbers here locally in West Michigan are pretty well in line with what you see in the national and international markets. And that is that it’s down about 6 percent.
Are you concerned more broadly about what a recession could mean for the industry?
Not really. For the most part, what we’re seeing is the cargo airlines have ramped up and ramped back down in the pandemic and the airlines are adjusting to the market and figuring out basically what their new business plan is. What we’ve seen is a good stress test and exercise for both the cargo and the passenger service air carriers for them to be more dynamic and nimble and say, ‘We need to change things up more frequently.’
If you back up the clock five to 10 years ago, you would never see that happen. They were just very static, very set on their schedules, fees and routes and how they operated. Today, it’s a much more nimble dynamic and you see them pivoting and responding to that. If we were to have some sort of recessionary measures or actions that would occur, I think we would find both passenger and cargo airlines are going to react or anticipate that and make adjustments. I don’t think it’s going to be detrimental or anything alarming. The pandemic has taught them to be very nimble and very efficient that way.
What is the status of the airport’s latest capital improvement projects?
We continue to work on these projects pretty much around the clock. We just opened up our airport operations center a little earlier this year. Our Concourse A expansion is well underway and a little over $110 million, providing additional gates, seating areas, food, beverage, retail, and a second-level lounge. In the next seven months, we should be opening some of that new space. The whole expansion project should be online about a year from now.
At the same time, we have several other significant projects underway in various stages. The next one we’ll be breaking ground on is our CONRAC (consolidated rental car) facility, which buys us some time and parking spaces out of our garage by getting our rental car area out of the public parking garage and in their own facility adjacent to the terminal. It’s a much more efficient operation, and at same time gets us about 1,000 spaces back in our public garage. We know we’re already 1,100 spaces short today, but we can’t get built until we get the control tower moved, and that’s a project that continues to be advanced with the design and planning phase, which is something people don’t see or hear about. Also next year, we’ll be embarking on our terminal enhancement project, which is going to be a combination of consolidating our ticket counters at the west end of the facility. At the east end will be all the baggage claim areas.
Between the CONRAC and the terminal enhancements, it’s about $300 million of improvements we’ll do out here. Those projects will take roughly two years to complete. And if a recession happens, we’re in a good position and proud to be able to be putting local people to work during that time building these infrastructure improvement projects that need to be done.
Does Grand Rapids have any new flight offerings planned this year?
We are constantly working with the airlines and partnering with them, providing them information about what’s happening with West Michigan businesses and selling West Michigan to airlines to provide their service and enhance their service here. For the most part, we’ve seen incredible success with the airlines seeing that West Michigan is worth investing in, and they are putting their resources here to serve the market. We’re clearly growing, and the airlines see it. We’re having conversations with them right now about new services heading into next year. We certainly think the market is ripe for additional services.