New Denver Airport:

Impact of the Delayed Baggage System

RCED-95-35BR: Published: Oct 14, 1994. Publicly Released: Oct 17, 1994.

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Pursuant to a congressional request, GAO provided information on the delayed opening of the new Denver International Airport, focusing on: (1) the problems with the baggage handling system that delayed the airport's opening; (2) the added costs resulting from the delay; and (3) whether the new airport's expected revenues will cover facility operating costs and debt.

GAO found that: (1) the airport's automated baggage handling system has serious mechanical and software problems and has not passed any of the tests necessary for certification; (2) the airport plans to install an alternative, conventional baggage handling system while the contractor modifies the new system to correct these problems; (3) the alternative baggage system is expected to cost about $51 million; (4) although Denver airport officials believe that an alternative system can be completed by the airport's February 1995 opening date, the airport cannot open until it has an operating baggage system; (5) it is uncertain whether the automated baggage system will eventually serve the entire airport or work in conjunction with the conventional system; (6) since January 1994, the airport's deficit has grown between $18 million and $19 million monthly because revenues generated from the neighboring airport have been insufficient to cover the new airport's construction costs; (7) the total cost of the airport's delayed opening will be about $360 million if the airport opens in February 1995; (8) the new airport should be able to meet its financial obligations if the forecasted number of enplanements are realized and if cost estimates are correct; and (9) the Denver airport should be able to meet the airline industry's user fee cap if current traffic, revenue, and cost projections are accurate.