Council to see start of contracts for nearly $2.5B to fund airport expansion

City Council will consider a handful of funding items today that collectively would approve almost a half-billion dollars in contracts for the expansion of Austin-Bergstrom International Airport.

The five requests total $497.8 million and represent the next major decisions in a series of possible approvals that would total nearly $2.5 billion in the coming months.

A memo released Tuesday gives Council an accounting of the items on today’s agenda as well as others expected for the meetings on Sept. 12 and 26.

The largest single expenditure for the airport on the agenda is a pair of requests related to the design and construction support services for the improvement of the airfield at ABIA. Together, the two items total $346.7 million, which will include replacement of existing midfield taxiways to make room for the new concourse structure.

Other requests include $60 million to fund a rotation of engineering and architectural services, $72 million to design the new concourse and tunnel system, and $19.1 million to design and build a new baggage handling system.

At the Sept. 12 meeting, Council will likely see a request to allow the airport to accept grants from federal agencies including the Federal Aviation Administration (part of the Department of Transportation) to help fund some of the expansion costs. The request would allow up to $500 million in grants with the possibility for more, with the midfield taxiway project seen as eligible for nearly $220 million in funding.

Two weeks later, Council will likely see three more requests totaling $1.89 billion.

The largest contract will be $1.03 billion for the construction of the new concourse and tunnel. Another $865 million will cover costs for the design and construction of a new arrivals and departures hall, with a final $1.1 million contract to cover the transportation of a stockpile of soil left over from previous construction work.

The expansion is seen as essential for the airport, which has fully recovered from the effects of the decline in travel caused by the Covid-19 pandemic. More than 22 million people traveled into or out of the airport last year, an increase of almost 28 percent from just prior to the pandemic. Through earlier this summer, five of the 10 busiest days in the airport’s history had occurred this year.

Despite that growth, there has been some volatility in the availability of flights, with American Airlines and Allegiant making substantial cuts to their routes available out of Austin.

Meanwhile, carriers such as Delta, Frontier and Southwest have recently announced additions of nonstop flights from the airport.

Earlier this month, the Airport Advisory Commission heard a detailed report on the timelines and logistics of the expansion. Much of the work will be conducted in the next three years, though the new concourse is projected to be completed in 2030.

That meeting also included a detailed financial breakdown of the airport’s budget and financial forecast for the next two fiscal years. Airport CFO Rajeev Thomas shared that a large portion of the $351 million budget for 2025 was due to a planned increase in personnel to continue to reduce the 38 percent vacancy rate that had created a number of operational challenges in recent years.

Thomas said the airport currently has a 19 percent vacancy rate, with plans to reduce the number to 13 percent through the 2025 budget. He said those new hires will be necessary to help travelers navigate through the facility as portions of it go through closure for construction in the coming years.

This story has been changed to correct the expected date of completion for the project and clarify the airport and FAA’s roles.

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