Airport of Tomorrow Mired In Mile-High Controversy

DENVER International Airport was pitched to Colorado taxpayers as an airport for the 21st century - a state-of-the-art travel facility that would capitalize on the city's unique mid-continent location.

But, nine months after its opening, the tepee-topped "airport of tomorrow" continues to kick up a mile-high controversy over its finances and future. The $4.8-billion facility has been ferrying passengers smoothly in foul weather and fair, and has avoided making any news-highlight reels lately in which the contents of peoples' luggage shot in the air like popcorn.

But DIA, as its called, continues to stir local complaints about it's cost and "remote" location. It also faces increased competition from smaller regional airports.

The nation's sixth-busiest airport, which opened Feb. 28, will face its first major test this holiday season. Technologically, it now performs up to 21st-century standards. Its automated baggage system problems, which caused the airport to open 16 months late, have been cured. United Airlines says DIA's lost or damaged "bag ratio" is comparable to or better than other airports."

New radar equipment, which allows planes to land in zero visibility, has helped the airport weather two early season snowstorms. But the equipment is so technologically advanced, only about 40 percent of planes in the air today have the capability of using it.

Financially, too, the airport recently received some good news. About $3.6 billion in airport bonds, which at one time were labeled junk bonds by Standard & Poor, have been upgraded to BBB, or investment grade.

This costs the city less in interest. An additional $90 million in bonds sold Nov. 14 was insured, giving DIA its first AAA rating. "I think investors originally wondered why we had such an elaborate airport in such a strange place, and they could see it wasn't a fabulously run project," says Mark Koza, vice president of the Denver brokerage firm Hanifen Imhoff. "Now they see that [airport] traffic flow is good and that the facility has outperformed original expectations."

Still, the Securities and Exchange Commission's regional office has recommended the SEC sue the city of Denver over alleged fraud in the sale of airport bonds. Charges include lack of disclosure about airport delays and costs. The city's response is scheduled to be filed with the SEC by the end of the month. A commission would then decide whether to continue fraud investigations.

In terms of traffic, DIA is nowhere near projections. In the first nine months of operation, airport traffic dropped 7.1 percent from the same period in 1994. Original predictions called for a 2.5 percent decrease in passengers this year, with a 2.7 percent increase beginning in 1996 and continuing through the end of the century.

MUCH of the decline can be attributed to the loss of Continental Airlines, which moved its hub out of Denver in response to Chapter 11 reorganization. Continental spokeswoman Peggy Mahoney says because of competition with Denver's other hub airline, United, ticket fare structures were too low to be cost effective.

United's virtual DIA monopoly has contributed to higher prices, and an unexpected development: Some Coloradans are choosing to fly out of the Colorado Springs Airport, 60 miles south.

Dave Zelenok, director of transportation for the Colorado Springs facility, says his airport, which opened on-time and on-budget last year, is the nation's fastest growing. He predicts 1.4 million passengers will use the 12-gate facility by year's end, up 73 percent from last year.

Zelenok says the flood of passengers and low debt have enabled Colorado Springs to keep its cost per passenger to $2, below the national average of $8 to $10 and DIA's $12 per passenger. This translates into substantial savings. Travel agents report a round-trip ticket from Denver to Newark, N.J., can cost as much as $550 out of DIA; and as little as $220 from Colorado Springs.

There is also enduring grousing over DIA's location. Spoiled by the proximity of the old Stapleton Airport, seven miles from downtown, residents resent the extra 17 miles they have to drive to reach DIA. Airport officials, though, continue to take the long view. "We've had visitors from around the world and they all say they'd give their left arm to have this airport," says DIA spokesman Chuck Cannonhe.