Airports are some of the largest, most highly regulated forms of commercial real estate, which makes managing them incredibly difficult. I had the pleasure of speaking with Phil Washington, the CEO of the Denver International Airport, about the state of Colorado's largest economic engine. The wide-ranging discussion covered everything from the logistics of removing snow from Rocky Mountain runways to how TSA Precheck and Clear are shaping the future of airport security.
In addition to being the third busiest airport in the world by passenger volume, DEN is also one of the largest airports in the world by area. With an airfield larger than the borough of Manhattan, DEN has plenty of room to grow, unlike other major international airports. Currently, airport officials are weighing the possibility of adding an additional runway, which is a luxury that other large airports, like JFK, LaGuardia, and LAX, just don’t have.
As a hub for three major airlines (United, Frontier, Southwest), DEN is looking to grow its number of domestic and international routes, with a sharp focus on international travel. DEN’s current focus on cementing itself as an international travel hub relies on adding service to existing destinations, such as Europe, as well as establishing and re-establishing routes to Asia and Africa.
The airport is doing so by introducing nonstop flights to Tokyo through United, as well as focusing efforts on establishing nonstop service to Africa. Airport officials see great potential for DEN to become a key connecting hub for both domestic and international travelers as it begins to service these continents.
Although the pandemic had devastating effects on the travel industry, it didn’t have a similar effect on the number of TSA Precheck enrollees. Currently, there are around 27.4 million people enrolled in the PreCheck program, compared to just 18.9 million in 2019. Clear has also seen a recent surge in enrollments, with roughly 12 million members today.
While many airports have struggled with line placement for these security programs, Phil still believes they are well worth the money; he’s a member of both himself. He also mentioned that DEN is working to mitigate a common issue that many Clear/PreCheck members face - having to search for their line.
Much like many other airports, DEN previously funneled all PreCheck/Clear members to a line at the north end of the airport, forcing passengers to walk long distances. A plan is in the works now to add additional lines at the south end of the airport.
Every week, I chat with well-known industry experts, from the travel sector to commercial real estate and beyond. If you want to hear more from some of today’s greatest thought leaders like Phil Washington, be sure to watch the full webcast.
Willy Walker: Good afternoon and thank you for joining us for another Walker Webcast. It is my great joy to have Phil Washington, joining me today to talk about Denver International Airport and all that goes into managing the world’s third busiest airport and economic impact of it and all the things that each of us run into each day as we travel both across the United States as well as around the world by air transportation. Before we dive into our discussion, let me give a quick introduction of Phil and then we will get going.
Philip A. Washington was unanimously confirmed by the Denver City Council as chief executive officer of Denver International Airport in July of 2021. Denver International Airport is the world's third busiest airport by passenger traffic and is Colorado's largest economic engine, with an annual economic impact of $33.5 billion.
Prior to Mr. Washington's arrival at the Denver International Airport, he was the CEO of the Los Angeles County Metropolitan Transportation Authority (Metro) from 2015 to 2021. At Metro, Washington managed a balanced budget of more than $8 billion and provided oversight of an agency with 11,000 employees that transported 1.2 million boarding passengers daily on a fleet of 2,200 clean-air buses and six rail lines.
Mr. Washington also served as CEO of the Denver Regional Transportation District (RTD) from 2009 to 2015. He worked as the assistant general manager of RTD for nearly ten years prior to being named CEO. In Denver, he led and implemented the FasTracks program, one of the largest voter-approved transit expansion programs in the country.
Originally from the south side of Chicago, Washington is a 24-year veteran of the U.S. Army, where he held the rank of Command Sergeant Major, the highest noncommissioned officer rank an enlisted soldier can achieve. He retired from active duty, as a disabled veteran, and was awarded the prestigious Defense Superior Service Medal for exceptional service to his country. He holds a B.A. in Business Administration from Columbia College and an M.A. in Management from Webster University.
That is quite the bio, Phil.
Phil Washington: Well, thank you, Willy. It sounds like my obituary or something. (Laughs)
Willy Walker: Let's hope not. So let me back up for a moment, Phil, as it relates to having come from an army background, logistics and everything that goes into that. What brought you to the transportation sector?
Phil Washington: Well, it was quite by happenstance, actually. You know, I was preparing to retire from the Army. I talked to the then head of the transportation agency here in Colorado, in Denver, and he was a Vietnam vet. And I cannot say I planned to get in transportation, but he understood my level of responsibility. He understood my rank as I was about to retire. And he interviewed me and said, hey, you can get into transportation. And so that's how I ended up here. And, you know, I think it was a great choice. It fit well into the logistics area that I was working in the Army. But I got to say, I didn't plan for it. It was by happenstance.
Willy Walker: And thinking about a military background, and sort of the hierarchy of military life, military leadership, military management. It seems to be almost perfect training for the public-private partnerships that basically underpin America's transportation system, that while private, it always has a government piece to it. And that understanding of the public side and the private side would seem to be great training for what you've done. Is that a fair assessment or am I missing something about it really actually being a lot more private sector than we would think or being more public sector than we would think?
Phil Washington: No, I think you're right, Willy. I think the convening of both the government sector and private sector has served me very, very well. And people don't think of the U.S. military as sort of being involved with the private sector. But we were, any place that I was stationed, where we were dealing with the communities in those areas, and looking through sort of P3 lens, Public-Private Partnership lens. And so I think you're right now that transition to the public sector, the government sector was actually quite easy for me because I was used to convening people and bringing people together and actually motivating people towards a common goal, whether that was a funding referendum or a sales tax referendum like we did in both Denver and Los Angeles, whether it was talking to the community about projects, construction projects that would benefit the public. Convening people, I think worked very, very well for me. So, I think you're right in terms of the transferable skills that I brought from the military to government.
Willy Walker: So, let me do a little bit of a description of the enterprise that you run today, because I think that, as I said, most people listening to this have either flown through or flown to the Denver airport. And the one thing I'm used to calling it DIA, and I know it's called DEN, and so forgive me as I try and get the lexicon correct on DEN versus DIA.
The airport was opened in 1995. And I remember actually, Phil, you and I talked about this when I was at business school, there was a case study that was written on the baggage handling system at the DEN. Kim Clark, who at that time was my operations management professor, had done both consulting work with the airport on the creation of a, if you will, a human contactless human baggage handling system. And it was all to be automated and what have you. And as you well know and have told me now that the system that was supposed to come online in 1995 is actually now about to come on online in the 2020s, and we'll talk about that in a moment.
But the airport opened in February of 1995, sixteen months behind schedule and at a cost of $4.8 billion, which is the equivalent of $8.5 billion today. You look back on that and you look at the economic impact that the airport has on the state of Colorado, and that looks like a drop in the bucket from my standpoint, a fair assessment, given the amount how much the passengers have grown and how much Denver has become a hub for the U.S. air transportation industry?
Phil Washington: Yes, I think so, and don't worry about the DIA-DEN comparison. I still call it DIA sometimes myself. No, I think you're right. You know, the airport at $4.8, $8.5 billion in today's dollars is a drop in the bucket. Considering the $33.5 billion that we generate in revenue. Most definitely.
You know, the airport back in ‘95 was built for 50 million annual passengers. And it's pretty incredible that at Stapleton, the old airport, it was at 35 million annually. And so, when you talk about that, we're at really 70 million now. I know we'll talk about Vision 100 in a few minutes, but when you talk about the jump in annual passengers from this airport being designed for 50 million, it's really incredible. That baggage handling system that you mentioned, there were a lot of challenges back in 1995. And here we are about to replace that baggage handling system. And it's really incredible. I go out to, of course, the airport every day to work. And I'm amazed at how many people are out there traversing the airport on a daily basis. I don't think anyone, and I was talking to former Mayor Wellington Webb last week, actually, and I don't think anybody could have anticipated the numbers that are going through Denver International Airport. I mean, it's just phenomenal. And so, I think it's been an investment that has paid off three or four times over. And we're looking at a 30% increase in travelers in the next 5 to 8 years or so.
Willy Walker: So, it's economic contribution of over $33 billion with 35,000 employees – you are the largest employer in the state of Colorado. You are the largest airport in North America from a landmass size, which is 33,000 acres. To give people a sense of that, it's 1.5 times the size of Manhattan, which when I read that stat, Phil, I was like, wow, 33,000 acres sounds big, but 1.5 times the size of the island of Manhattan is really big! It's the second largest airport in the world behind King Fahd International Airport in Saudi Arabia, which I guess King Fahd probably owns not only the airport, but all the other land around it. So, I'm not sure how they designate what the airport is. I guess they probably just want it said that they wanted to be the largest in the world. But you've also got the longest runway in North America at three miles long. So, 16,000 feet. What length of runway does a commercial jet need to be able to take off and landing? And what's the minimum length? So how much longer is a three-mile-long runway?
Phil Washington: Well, I mean, you know, it depends on the size of the aircraft, of course. So, we have the ability with that with the largest runway in the country to land the biggest aircraft in the world. And so that runway is also the newest runway at Denver International Airport. We have six runways out here and we have to do repair work. We typically close one runway every summer to do repair work on a runway. And so, when you talk about the land mass, it's incredible. Now we can talk about how we are looking at developing the land that is here on the DIA proper, which is a whole ‘nother conversation. We want to do it smartly. We want to do it with developers that understand what our mindset is on development.
But we don't want to stand in the way of things that we don't know in terms of developing the land out here, which is why we have gone with this sort of a request for offers or an unsolicited proposal type arrangement to develop the land out here at the airport. But when you talk about the runways, we're doing our due diligence on a seventh runway right now. We're doing our environmental on the seventh runway. And whenever I mention that, whenever I say we're doing the environmental work on the seventh runway, the very next question is: “Where will that runway be?” And the answer is, we don't know yet. The environmental work will determine where the seventh runway will be and whether we need a seventh runway as well. So, we have a lot to manage in terms of land out here. But it's a good problem to have, I think, because we can grow more so than any airport really in the world. When you look at airports like LaGuardia and LAX and other air airports, they are sort of land locked and it's very difficult for them to grow. So, I think this is why we are growing at such a rapid pace and will continue to grow into the 2030s and 40s.
Willy Walker: So, you mentioned that long runway being able to take the largest aircraft in the world. There is no A380 that lands it at DIA to ay. Am I correct on that?
Phil Washington: You're correct.
Willy Walker: Right. And as it relates to international, as I looked at the top international destinations from DIA, Cancun is by far your largest, your #1 by almost 3X over #2, which is Cabo. Only one European destination gets in that top ten, which is Frankfurt, which is #4 on that list. But how do you think about… you are adding gates Phil, you've got 179-180 gates at the airport? You're adding another 60 gates now. 60 or I overshot?
Phil Washington: Well, we just completed 39.
Willy Walker: Right. And so, a lot of that has international travel behind it. You're putting it on Terminal A, so it goes directly into U.S. Customs. But is the vision here as you move towards 100 million passengers on an annual basis, that the airport becomes a more dominant domestic airport or that it grows internationally and that you've got the capability to have flights come in from Asia, from Europe and from other locations beyond just North America?
Phil Washington: Well, we want both. We want to grow our domestic base; we want to grow our international base. I mean, right now we're welcoming back three foreign flag carriers that were suspended because of the pandemic, and that is Cayman Airlines to Grand Cayman, Edelweiss with flights to Zurich. And then WestJet with flights to Calgary. United has also inaugurated a new service to Munich in April that will start up again and we are doubling up on flights to London and Heathrow. We're also welcoming back the return of nonstop flights to Tokyo on United Airlines. Frontier has launched a flight to Jamaica as well in February.
I should also say that in our Vision 100, we have a pillar that talks about expanding global service specifically to the continent of Africa. We want a direct flight to the continent of Africa, the exchange of cultures, the rise of the middle class, both in Africa and in Asia, I think will bode well for the Rocky Mountain region. And so, we're actually taking a delegation that's leaving tomorrow to the continent of Africa, to Ethiopia and to Cairo, Egypt. And so, we are looking at, again, more international flights. And in increasing our domestic flights, we have the capacity to do that. And I'm very, very excited about the continent of Africa, I think the benefits and the potential of that is incredible.
Willy Walker: So, in the U.S., on the domestic side, Vegas is your #1 city pair by a pretty wide margin. I was surprised still that Atlanta is your #5 city pair, not because Atlanta Hartsfield is not the largest or the most active airport in the United States in the world, which I understand, but that it's a Delta-dominated airport and your United-dominated airport. And so, I wouldn't have thought that that city pair would be that high given the strength of Delta in Atlanta and United in Denver. Am I thinking about that wrong? I guess it's just that there's a huge amount of traffic and United has to go to Atlanta, just as Delta has to come to Denver.
Phil Washington: Absolutely. You're right on. I mean, I think that is the nature of the demand. You mentioned Delta dominating Atlanta. One of the benefits for us is that we really have a three-hub airport. Obviously, United is the largest, then Southwest and then Frontier, our hometown airport here. And so having three airlines that have their hubs here in Denver is a great benefit for us because there's not one airline dominating the airport. So, we find that as a huge, huge benefit. And I should say that our relationships with all of those three hubs are very, very good. Denver has taken over as the hub for United. So, we've surpassed Chicago in terms of United's hub. And so, their headquarters is still in Chicago, but the number of flights here in Denver have surpassed O'Hare Airport. So that's a really good thing.
Willy Walker: That's a really interesting stat and one thing that you talk about having three airlines here, Frontier, United and Southwest makes me think back to the origins of DIA. And many people who've been to DIA know that there's a bridge between the Main Terminal and Terminal A, and that bridge has a nickname of Lorenzo's Bridge. And the reason it's called Lorenzo's Bridge is because when DIA was being sort of conceptualized, Frank Lorenzo at that time, ran Continental Airlines and Continental, obviously, Continental is part of United, but Continental was making a big commitment to the development of DIA, and Lorenzo didn't want to trust the tram system. And so, he required the planners to build that bridge over the taxiway between the Main Terminal and Terminal A, And it's obviously still there. And fortunately for you and for all of us, the tram system has been exceedingly reliable. But it's just interesting how in the planning of it, they had to go build that whole bridge because one airline run by Frank Lorenzo was saying, “I don't trust the tram. I want that bridge built.”
Phil Washington: Yeah, yeah, that's very interesting. And, you know, everything old is new again. of course. Last year, I directed our team to put out what I call a request for interest or a request for ideas on how we could do some pedestrian bridges or some train redundancy from A to B and B to C. And so, we're looking at that. And ironically enough, that A bridge we're doing repairs on the A bridge right now. It’s that time to do repairs on the roof of the Lorenzo Bridge, as you call it. You know it's really incredible. I kind of wish that the original builders of DIA would have done bridges to the other terminals as well. Even though the train is very, very reliable, it is still a vulnerability for this airport. If that train goes down, which it actually did in August of 2021, the train went out and it was a little bit different in terms of what happened. The track was ripped up, actually, and we were down for a good while and that can cause havoc at the airport. It was incredible. August of 2021 and I had just started at the airport probably a couple of months prior. And I thought, okay, this is a great welcoming thing for me that this train is out. But the train has been about 99% reliable. But I still want to look at some redundancy for the train in the way of possibly a pedestrian bridge. It would be a gigantic span across A to B and B to C, though.
Willy Walker: Well, just do me a favor. Don't put in the tram system that they have at Dulles so that we all have to get on those mobile lounges. That I was just on one this past week when I went to Dulles and I said this was designed back in the 1960s, 1970s. I think it's time for us to move beyond that.
So, Phil, as I think about the renovations that you're doing right now, you're doing significant renovations to the Great Hall to basically get the original design back where you get that main hall that has the great tents underneath the tents that we've all seen that look a lot like the Rocky Mountain peaks as we look out onto the front range. And in the process of that, you're moving TSA, if you will, out of the middle and moving it to the sides and trying to make it far more efficient. A couple of things as it relates to TSA. The first thing is, are the TSA employees included in that 35,000 employees? Are those out because they're federal workers?
Phil Washington: No, no, we count them as well, whether they work for DIA proper, city employees or not.
Willy Walker: As you think about restructuring all of that, how much of the design and the investment in equipment is left to you and your team versus left to the Transportation Security Administration?
Phil Washington: Well, I mean, you know, that's all of us. We're funding that whole thing. And of course, we do it with input from the TSA as well. But you're right, Willy, we are moving all of that security from where it's at now to level six. It will be covered. That construction is going very, very well. We're doing it in phases. Phase 1 is complete. We completed $25 million under budget ahead of schedule, Phase 2, and the Completion Phase, which are the phases we're in now, begin to move all of that security up to level six. We will open the first half of that security on the north end of the airport, northwest end, we will open that in the first quarter of next year. And so, people will be able to go up to level six, the highest level, go through security and go all the way down to the train platform on a set of triple escalators that we're finishing up right now. You may have seen that in the terminal. And then we will start with the other side of the north end, for the other side of security. So, I have challenged our team to accelerate that construction. And this is going to be an incredible feat. I mean, it's the largest construction at the airport since the building of the airport. That along with the baggage system upgrades, the gate expansion, completion, the new concessions, all of that will make for an even better airport here in the Rocky Mountain region.
Willy Walker: As I think about the moving of TSA, and I think about what you have as it relates to layout today. I went and took a look at TSA wait times and forgive me if my data is old because this was a 2018 study, but it had DIA very well placed in the second tier. The best in 2018 TSA wait times was Salt Lake City which had an average wait time of 9.1 minutes. DIA was at 13.8 minutes. Newark was the worst in that study at 23 minutes.
My question to you, Phil, is this: How much of TSA wait times is due to the equipment versus the staffing versus the general layout? Because as you're reconfiguring everything, I mean, we've all gone through TSA processes, if you will, they make a lot of sense as it relates to taking stuff out, grabbing the pass, showing what have you. And there are others, at least I, as a professional traveler, sit there and pull my hair out saying this is not designed properly, the layout isn't right, it's got old equipment, etc.. How much can you, in this redesign, impact the throughput times?
Phil Washington: I think we will impact it greatly. The wait times right now, you mentioned staffing, equipment, design. It's all of the above as to why we are in the upper tier in terms of wait times. We're working with the TSA. One of the issues is TSA staffing. We have been down at Denver International Airport since I've been at the airport at the helm, and I think the number is about over 100 vacancies on TSA at DEN. But that's not the only issue. The other issue is some of the equipment. We're replacing all of the existing equipment with new equipment and the build out of the Great Hall. This new equipment will be remote screening where if you come through the security line, your bag will be stopped only if there is an anomaly. And so that will increase the throughput. With the new equipment, we see faster times probably by 60% when we replace all of the equipment in the terminal. So, the technology will be better. The design, I mentioned will go to the security will be at level six. That design will be different, and it will help with that. So, when it's all said and done in terms of the Great Hall, which includes the security equipment, we're talking a 60% improvement in terms of wait times from where we are now, and that includes new technology as well with the equipment.
Willy Walker: That'll get you inside of Salt Lake City. 60% up in 13.8 minutes will get you inside of Salt Lake City.
Phil Washington: I want to overtake Salt Lake City. That's what I want.
Willy Walker: That’s great. So, as I was looking at this Phil, I also went and looked at I just you know, I started to do some research on this and thought, how many people have TSA Precheck? And I want to get your take on Pre and Clear for a moment as it relates to whether those are actually helpful or hindrances to running security and running the airport.
As of the end of 2020, there’s 27.4 million TSA Precheck members, which is up from 18.9 million in 2019. So, the pandemic and the number of people wanting to travel has added almost over 8 million people to TSA Precheck, which I thought was an interesting stat. And then on Clear they put out a press release in April of last year saying that there are 12 million total members, but that's a cumulative number since Clear began to now. So, I'm assuming that they don't have 12 million active clear members today, but it's still interesting to kind of think about 27-28 million TSA Precheck members and then 12 million Clear members. How challenging or helpful is it to have Precheck and Clear? Because when you show up at the airport today, the main stanchion area is packed, so is TSA Pre and so is Clear.
Phil Washington: Yeah. Well, it's definitely an advantage to have it. You know, I would say that I mean, I have it and I've had it for many years. It is definitely an advantage. And we would encourage people to get one of those, we need to do a better job of managing the lines and making sure that we keep TSA Pre up on both ends of the airport. There was a time where we were funneling people to the north end for TSA Pre and not the south end. The south end was the general. But with the increase in TSA staffing, we want to offer that on both ends of the airport. And I think what you'll see is a better throughput. But to answer your question, I would encourage people to apply for one of those. It works and we can get people through. The other thing, too, is K-9s. TSA have K-9s in use that really, really helps us. Now, there's not enough K-9 or dogs, but when they're there, it really, really impacts in a positive way the throughput at security.
Willy Walker: Phil, I hadn't thought about this beforehand, but it seems like service dogs on airplanes have sort of gone through the roof since the pandemic. It seems like every fifth passenger seems to have a service dog going on with them. Is my perception correct that service dog usage, if you will, has gone up dramatically? And is that a significant issue for the management of the airport as it relates to either checking in security, dog relief areas that you've had to put in on the terminals? Just curious.
Phil Washington: There has definitely been an increase. And it's not a problem for us. It's not a challenge for us. We do have those pet relief areas, as you mentioned, all over the airport, in the new areas, the new gate areas. We have been installing those pet relief areas as well. You know, I think it's necessary. I mean, as a former military guy, I've talked to a number of veterans that come through with service dogs as well. If you need to bring your service dog, hey, more power to you. We will accommodate that. The airlines have accommodated that in a great way. I've been on flights with service dogs. They are incredibly well-behaved, if you will, and well-trained. So, we will encourage that. It's not a problem for us at all.
Willy Walker: Talking about well-behaved and well-trained, we saw post-pandemic a lot of incidents on airplanes that broke out and had to have air marshals and security, what have you. Do you have a jail at DIA?
Phil Washington: Well, let me just say this. I have not been in that jail myself.
Willy Walker: Nor have I. That's why I have to ask. (Laughs) Thankfully, I haven't been in there. But, I mean, do you have a holding area? Or the police just come in and deal with the people.
Phil Washington: No, we have a holding area. You know, it's not very large, but we have a holding area. And I'm glad you mentioned that because our partnership with the Denver Police Department is incredible. We have a contingent of DPD out here every day. They're stationed here along with fire as well. But yeah, there's a holding cell. And let me say that I think the U.S. D.O.T. has done very well with the incidents of passengers that become unruly. We've had our share of them at Denver International Airport, and they're handled very, very quickly and very, very well. I meet with our Denver Police Department commander out here on a monthly basis, and he has some great stories about what happens almost on a daily basis. I think the other thing, too, and I think this is a societal issue, people experiencing homelessness, this is beginning to happen at airports as well. As the cold temperatures set in, we have seen that at Denver International Airport as well. So, all of these things we're dealing with at the airport, we'll continue to deal with that. But we deal with it very, very, very well, I believe.
Willy Walker: So being in the Rocky Mountains, obviously, you have to deal with a lot of weather and moving DIA out to where it is obviously makes a big difference on approach and landing. But I was shocked that you have 324 pieces of snow removal equipment and that's just on the runway side. So that's just to maintain the landing strips and then the gate area, that's not to plow the parking lots and plow Kenya Boulevard and all that kind of stuff. And you just bought five new state of the art multifunction snow removal trucks, tractors, whatever you call them, at an average cost of $640,000 per machine. This is heavy machinery.
Phil Washington: Yes, absolutely. We have probably one of the largest inventories of snow removal equipment in the country, I would bet. And I think we do a fantastic job. I mean, we know snow.
Willy Walker: “We know snow.” I love it. That might need to be the new DIA tagline. Forget about all this stuff, about $100 million. “We know snow.”
Phil Washington: Yeah. Wow, I just thought of that. I gotta coin that phrase. We really do. And, you know, we have employees here that their primary job may not be snow removal, but they get trained in it and they can go out and do it overtime or whatever. The last snowstorm, we even had a few lawyers out there doing snow. And that's a dangerous thing as well, having lawyers handle the snow equipment. But we have. It's really amazing, for the weather that we get here and are still able to operate with really little or no impacts. Now, the holidays and the bomb cyclone that came in were something different because we had the cold along with the snow. But we have been very, very successful in handling the weather here at this airport.
Obviously, one of the things that the national space or airspace, anything that happens anywhere in the country, they affect almost every airport, really. And so, when there is a slowdown here that impacts the West Coast, East Coast, all over the country. So, I think we've done a decent job now. You know, is there room for improvement? Yes, there always is. But I would put our snow crew and our airport ops folks up against any area in this country, any airport in the country. For the third straight year (I think it's the third straight year we have had) we have no deficiencies in terms of how we operate the airport, snow removal and that sort of thing. So, I'm very, very proud of our folks in handling the weather in a place that is very, very tough to do so.
Willy Walker: One stat that I saw on your website was that you all have reduced the time it takes to clear a runway from 45 minutes to 15 minutes, which is really quite something given how quickly the snow can accumulate here. The other thing I thought was interesting, though, was that you melt the snow. Because you couldn't pile it all up, you couldn't see the airport right now if you piled it all up. And you got two different types of melters that can melt 600 tons of snow per hour on one of them, and the other one does 150 tons per hour. And then you recycle. Not only do you do a lot of recycling on the water, but you also do recycling on the glycol, which is used by the airlines to de-ice the airplanes. And so, there is a big kind of environmental impact. I mean, you talked about adding runway seven, which is getting an environmental impact study done on it before you decide where runway seven is going to go. But with the amount of water that's being collected and then recycled through the snow melt, as well as the glycol that is being used to de-ice the airplanes, there's a huge kind of environmental backdrop to everything you do.
Phil Washington: It really is. With so much snow and the ability to recycle all of that, it really makes us one of the greenest airports in the world. When I arrived here, I said I wanted it to be “The Greenest Airport In The World.” A lot of that comes with the recycle, the glycol, the water. We have ponds out here where we keep water so we can recycle it there as well. We have what's called an energy performance contract. It is the largest in the state of Colorado, and it significantly reduces energy and water use throughout the airport and that helps us reduce our carbon footprint.
So, we've undertaken some incredible sustainability efforts. We have plugged the abandoned oil wells on this airport. These oil wells were there, and they were actually costing us more to maintain these abandoned oil wells. And so, we just decided to close them down about a year ago. So, sustainability is really, really forefront. We've put it in our guiding principles, if you will, and that includes all the things you mentioned Willy, the energy performance contract, the recycling of water and glycol and the performance energy contract, which will guarantee a great degree of savings for us.
Willy Walker: ESG is an issue that not only corporations but all of society is focused on. We've just talked about environmental on the social side. In November of last year, you announced that the airport will start construction in mid-2023 of the Center of Equity and Excellence in Aviation (CEEA). Talk for a minute moment, Phil, about why you focused on that and its personal importance to you.
Phil Washington: Yeah. So, the idea of a Center of Equity and Excellence in Aviation is something that we came up with about a year ago. I have been a huge proponent of training of small and minority women, of veteran-owned businesses, and also of innovation. So, we unveiled this conceptual rendering of this center. It's the first of its kind sort of training center that will help create a pipeline of aviation talent in the Rocky Mountain region. This is a physical space of about 66,000 square feet that we're building right now under the Westin Hotel. What we want, at least, there's three pillars. The first pillar is creating this aviation pipeline. Working with airlines, working with young people, working with underrepresented people in the community and all over the country who want the opportunity to pursue careers in aviation. We want to show them what a pathway looks like in aviation. Young people need to actually see the pathway. You know, a kid can say, “I want to be a pilot,” but they don't know what to do. So, we want to show them the pathway to be a pilot. We want to show them the pathway to be an aircraft mechanic, all of these things. So, we hope this Center will house career pathways.
The second thing it will house is how small businesses and sort of a small business boot camp to say how they can come in and do and work and do business in an airport environment. Working at an airport is different. You have to be badged. There's security. There are all kinds of things that come with working at an airport. So, we have started a nine-week course for small businesses to teach them and educate them on how they can do business in an airport area. We also want to encourage them to be prime contractors. Small businesses often are subcontractors. So, to build generational wealth, we want to award more prime contracts and have typical or traditional prime companies sub to them. So, it's flipping the script. And then the last piece of this is the innovation piece. We want people all over the world to come to the Denver International Airport with their ideas, we can be an incubator and then they can test that new idea in the laboratory – the laboratory being the airport itself. This is an incredible venture, an incredible effort. I have said that I want people all over the world to say that if you want good and even great aviation talent, come to the Rocky Mountain region, go to that Center of Equity and Excellence in Aviation if you want great aviation talent. And that's where we're getting employees right now.
Willy Walker: I salute your efforts along those lines, it's just absolutely fantastic. You mentioned, Phil, that the Center of Equity and Excellence in Aviation is going to be below the Westin Hotel. The Westin Hotel is a gorgeous, magnificent structure. But I've always thought that an airport hotel sort of a hotel that's going to do well wants an airport that doesn't do well or vice versa. Like if the airport's running well and doesn't have flight cancellations, the hotel doesn't do well and vice versa. Is the Westin doing well or are you doing too well running the airport that the Westin is suffering?
Phil Washington: You know what? I'm happy to say that both are doing well – the hotel and the airport. The airport is consistently at about 80% occupancy. I mean, whether we have bad weather or not. It's incredible. And only 20% of the occupancy are the airlines, the pilots, of course. But only about 20%. So, people are staying at that hotel. Now, there are a number of conferences there as well. And so, we have been attracting conferences around the world and around the country, most definitely. But the airport is doing very, very well. You know, we check on that. Obviously, we own the hotel and I get briefings on that at least once a month, how well they're doing. So, I'm happy to say that it's doing well. People have not just conferences but come out and have a beer at the hotel. So that's good.
Willy Walker: That's neat. Another area that I'd love to understand a little bit on is parking at DIA is exceedingly difficult to find, which is directly correlated to the number of people who are back traveling and the growth that you've seen in embarkation, if you will. But then the flip side to it is public transportation and the reluctance for people to go back to public transportation. Given that you ran RTD before going to L.A. and then coming back to Denver? How is the light rail between Denver and downtown doing? And most specifically, how's ridership? Has that met expectations, Phil, or is that still lagging on take up from using it to go down to Union Station?
Phil Washington: Well, I think we all want to see the transit mode share increase coming out of the airport. I think the transit mode share, the last time I looked was between 7% and 9%. And so, we want to see that increase.
Willy Walker: What would that be in another major U.S. city like the New York airports? Is that a 20% or 40%, I don't know what the number would be at LaGuardia.
Phil Washington: Well, LaGuardia is a little bit different because they don't have a rail connection. So, they have a bus, and I think it is not as good as the 9%.
Willy Walker: Is there one that really works? Because in Europe, all of the major I mean, you go to Heathrow and you take the Heathrow Express into downtown London, it's packed. And it makes all the sense in the world. And you go to Shepell, and they've got the exact same thing. Here in the States, we really haven't. I mean, even in Chicago, you take the subway out to O’Hare, and it takes you 2X what it would take you to get in a car and sit in the ugly traffic as you head out to O'Hare. Does anybody have that figured out?
Phil Washington: Yeah, I mean, it's international cities, as you said, Willy, have that figured it out. When I was running ground transportation, I always said that every airport should have a train connection. Every major airport should have a train connection. I happen to think we have the best train connection anywhere in this country. I really do. Now, having said that, there are some cities here in this country that have excellent train connections as well. I think about Portland, I think about even Washington, D.C. I mean, you have to go out and cross the bridge, but it is a really good train connection. I think we need to do a better job in this country making that connection to trains. I ride the train maybe three or four times a week out to the airport, and it's great. The ridership, I believe, is up or I haven't looked at the estimates and the actual ridership in a while. But just anecdotally, with me riding the train, I see more and more people on that train. So, we want to see that mode share creep up.
We haven't talked about this, but we are looking at building a consolidated rental car facility. And whenever you think about a consolidated rental car facility, you got to figure out how to get to that consolidated rental car facility. And I think the best connection is a people mover slash train.
Willy Walker: I can think of San Francisco, I can think of Miami and wow, I don't rent cars at DIA, but I think about when I go rent cars at SFO and Miami and I'm not sure I love the train ride I have to take to get there, but I sense to consolidate it.
Phil Washington: Yeah. I mean, with the weather, the security concerns that we have here – you want a covered facility. We have actually increased the daily fees, called the CFC fees. This is the per day, per vehicle charge, that will be increasing on February 1st. We currently have the lowest in the country, $2.15 per vehicle.
Willy Walker: I think Miami must be one of the highest. Whenever I rent a car in Miami, I always am aghast at what they charge me as far as the various taxes and add-ons when I rent out.
Phil Washington: Yeah, we have the lowest. It hasn't changed in about 15 or 20 years here at Denver International Airport. So, we're going to use the funding, the increased fees from that to build a consolidated rental car facility, to be about 15,000 spaces we're thinking about. This would be a massive multi story facility where we will have cars there. It'll be great for Denver, though, in terms of the protection and all of that.
Willy Walker: I know you told me that you're also putting in a new automated parking system that will allow people to find spaces easier to pay quicker and all that great stuff. And it's great to hear the advancement you're doing there.
One final thing then for you, Phil, because as you know, I could keep on talking about this stuff all day because I spend far too much time in airports, generally speaking, and in yours. I actually don't spend that much time on your report. I just zoom in and out of it.
The Blue Mustang. So, my sons, every time we drive by the Blue Mustang, always say “That's cursed.” And in doing research for this, I did actually read the very unfortunate story that the artist Luis Jiménez, who was tasked with building the Blue Mustang statue with the red eyeballs, actually died when he was making this piece of art, and a piece of it fell on his leg and he severed an artery and he died, which is a tragic story, which I'd never known about and may have something to do with why they think that the statue is cursed. But it's been quite controversial. You've added all sorts of neat artwork both inside the terminal as you're driving down Peña Boulevard. Those light wands are what I'd call them, they are just absolutely stunning and spectacular. But the Blue Mustang, is it going to stay forever? Is there a chance it doesn't last? What's the backstory on the Blue Mustang?
Phil Washington: Well, I'll tell you this. And you're right about the artist being killed there. Listen, that Blue Mustang is going to stay there as long as I'm here.
Willy Walker: (Laughs) The declaratory statement by Phil Washington.
Phil Washington: That's right. I will not be cursed by bringing it down. No, it's going to stay as the iconic figure there, the red eyes and all of that. It's just pretty crazy. But it's different. We are very, very dedicated to our art. On the A Bridge, we just put out a display for a gentleman who was the first African American astronaut candidate in this country, a gentleman named Ed Dwight, and we were fortunate enough to have him at that event. He is in his late 80s. Not only was he the first African American astronaut candidate, but he's a world-renowned sculptor. So, after he got out of the space business, he became a sculptor. And so, we have his work along the A bridge. Walk down there, Willy, and check it out. But our art is very, very important. When we are done with the Great Hall, the art that we are selecting now is incredible. So that Great Hall will be an art mecca, if you will, when we are done with the construction there. So, we are very, very serious about our art. We use a portion of all project budgets for that. And yes, the Mustang will be there for as long as I'm here and probably beyond.
Willy Walker: Well, I love that. And I will say that it obviously looks a lot like the Denver Broncos’ Bronco. And so, I guess we end all this by saying: Go Broncos and go DIA!
Phil, you've been so generous with your time. I love this. As you can tell I’ll geek out on airport stuff all day long. So, appreciate your responses to all the different questions. Thanks for managing the airport and running it to the degree that you do, because it really is a gem for the state of Colorado and for the United States of America. Good luck in all you're doing and thanks for taking the time.
Phil Washington: Thank you so much, Willy, it's an honor.
Willy Walker: Take care. See you soon. Bye bye.