The first flight for the Denver International Airport has been delayed three months until March 9, the city of Denver said Monday.
The holding pattern - expected and even demanded by the airport's major airline tenants - has finally been established after months of speculation and waiting for a decision by Denver Mayor Wellington Webb. The March 9 date can be met if there are no further problems in construction, engineers said.
"No one's going to tell you there's no risk in association with the March 9 date. There's always risk in this world. We don't control all the construction. All we're saying is that it's 95% reliable," said project manager Ginger Evans.
The originally scheduled opening date had been Dec. 19. But airlines joined other critics in denouncing the timing as ill-advised because of concern over the pre-Christmas rush.
It turns out that the $2.875 billion facility wasn't ready anyway. The chief problems are wiring and testing of communications systems, such as fiber optic telephone and reservation lines, safety system wiring and testing, and baggage system wiring and testing.
Under the current scenario, the city would turn the facilities over to the airlines on Jan. 3. The airlines, contractually, have 60 days in which to train their employees.
The delay was expected by the financial community and a Fitch analyst said no downgrades are expected on the $3.4 billion in outstanding debt, which includes $600 million in capitalized interest. Moody's, Fitch and Standard & Poor's rate the bonds two notches above junk.
"The crux of the matter is that the airlines are on board with the delay and willing to pay for it, so it shouldn't be a major dislocation with the availability of funds," said Fitch analyst Andrea Bozzo.
"We never put much credibility in that [Dec. 19] date," Bozzo added.
But Standard & Poor's analyst Todd Whitestone, who has been the most critical of the three rating agencies, said Standard & Poor's was "concerned," and would make a statement Tuesday as to the impact on ratings.
"We're concerned about anything March or later," Whitestone said.
All the airline tenants have promised to repay their 70% portion of the interest costs on the Denver International bonds as well as on existing Stapleton debt. The DIA bonds' capitalized interest costs amount to $15 million per month, minus $6 million per month in profits from Stapleton International while it remains open. The payments will be made as part of the airline leases and per-passenger charges, city officials said.
Instead of borrowing more money in the debt markets, the city has identified $179 million in airport system reserve funds that officials say can be used temporarily until airlines repay the money through leases, which in turn are repaid by higher passenger charges.
The delay did not come as a surprise," Moody's analyst Adam Whiteman said. "Without having seen detailed numbers, there doesn't appear to be any major cause for concern."
