A year into a multi-billion-dollar renovation taking place at the San Diego International Airport (SAN), the recent announcement of $20 million in grant funding from the federal government toward planned improvements may seem like a drop in the bucket, but airport officials know that every dollar counts.
On the heels of a $24 million grant to SAN from the Federal Aviation Administration in 2022, the FAA announced in late February that the Biden administration awarded the airport another $20 million this year in discretionary grant funds.
Both grants for SAN are part of the Bipartisan Infrastructure Law – Airport Terminal Program and were part of several billions of dollars designated for airports across the United States.
Locally, the federal funding is being used toward the airport’s new T1 program, a major effort expected to be finished in 2028 that will replace the current Terminal 1 with a modern and efficient facility and include redesigned roadways in, out and around the airport; additional gates; a new parking garage and more concession areas.
The T1 project is the largest construction project in the history of the San Diego County Regional Airport Authority, the organization that owns and operates SAN, the busiest single-runway airport in the world.
“With the previous funding, this puts us in a good place,” said Scott Brickner, CFO for the Airport Authority. “We will continue to apply for this same funding every year. While the total budget is $3.4 billion, the terminal is about $2.8 billion.”
Brickner said the majority of the funding for the airport work is through “extremely high debt funding,” and said that the group has had very successful financing, upsizing a deal in 2021 which has “proved to be very lucky, or very smart.”
He said the next time the Airport Authority will access the markets is likely to be in 12 to 15 months.
Upgrades to San Diego’s Airport Are Needed
Upgrades to the airport are long overdue, airport leaders agree. While the original terminal was built the north side of the airport, the current Terminal 1, a single-story structure, opened on the south side in March of 1967; Terminal 2 opened in July of 1979. When Terminal 1 opened, the airport served about 2.5 million travelers annually; more recent figures showed 11 million passengers used SAN in 2019.
“Anyone that has flown in or out of the current Terminal 1 can see it’s small, congested, and there is not a connection between the two terminals,” said Sabrina LoPiccolo, Airport Authority senior communications specialist. ” We like to say the airport is people’s first and last impression of our city and we want that impression to be memorable. The New T1 will provide a positive customer experience.”
A 2023 report from the FAA said that this year’s $20 million to SAN will used toward funding a portion of the construction of a new 1,210,000-square foot terminal building with the addition of 30 gates – of which 19 gates are expected to be open around September 2025 – and includes a final 11 gates slated to be finished by early 2028.
The FAA’s 2022 report related to the initial $24 million from the bipartisan airport terminal program indicated the funds were going toward the demolition of the existing Terminal 1 facility and construction of “a new terminal with 19 gates.”
The 2022 funds were also going toward additional energy efficiency improvements to be made to the airport, which includes improvements to the airfield and transportation improvements to make it easier to get to and from the airport.
Kimberly Becker, president and CEO of the Airport Authority, said the region “appreciates the support of Senators Alex Padilla and Dianne Feinstein (and) Congressman Scott Peters as well as our entire delegation in making these funds available through the Bipartisan Infrastructure Law.”
Becker added: “Our purpose is to create an exceptional airport experience for the community and the world. When the project is complete, the terminal will support that purpose by making our airport more attractive to the millions of people who want to visit our beautiful city.”
The FAA reports that nationwide, air traffic poised to reach or beat pre-pandemic levels this year and that the funding helps meet the growing demand for air travel.
This year’s $1 billion in grants will fund projects at 99 airports across the country, the FAA said, and will improve the passenger experience at airports in communities of all sizes. The improvements aim to make it faster and easier to check bags, get through security and find the proper gate, while creating jobs and supporting local economies.
In an FAA media release, U.S. Transportation Secretary Pete Buttigieg said, “Americans deserve the best airports in the world, and with demand for air travel surging back, this funding to improve the passenger experience couldn’t come at a more urgent time.”
San Diego County Regional Airport Authority
CEO: Kimberly Becker
HEADQUARTERS: Harbor Drive near the San Diego International Airport
BUSINESS: Independent agency, owns and operates the San Diego International Airport
REVENUE: $504M (FY ‘22 audited)
SOCIAL IMPACT: The New T1 project is creating an estimated 15,000 to 20,000 construction-related jobs in the San Diego region.
NOTABLE: San Diego International Airport is one of the busiest single-runway commercial service airports in the world and the third-busiest airport in California; it also contributes nearly $12 billion in economic activity for the region.