The Massachusetts Port Authority on Thursday sharply cut back its ambitious multibillion-dollar renovation and expansion of Logan Airport in the face of a worldwide slowdown in air travel brought about by the pandemic.
Massport’s board voted to reduce its five-year, $3 billion construction plan by a third, shelving efforts to build a monorail-like people mover and two parking garages and trimming three of seven gates from the expansion of Terminal E.
The authority will also continue the suspension of Logan Express bus service from the Back Bay and Peabody for now, and has trimmed bus Braintree and Framingham bus service.
COVID-19 has devastated the travel industry. Passenger counts at Logan are roughly 90 percent below the levels of a year ago, reducing revenue from the fees that airlines, restaurants, and other airport businesses pay Massport. And the authority isn’t forecasting any kind of quick recovery: It estimates as few as 13 million passengers will use Logan in the fiscal year beginning July 1, under its worst-case scenario. There were about 42.5 million passengers in 2019, up from 25.5 million a decade earlier.
“This kind of rapid decline in our business activity necessitated a plan to sustain the health of the authority,” said Lisa Wieland, Massport’s chief executive. “Airports big and small have seen a reduction in operations. There are not a lot of people traveling right now.”
Other Massport facilities are affected, as well. At Worcester Regional Airport, two of the three airlines ended service in June. Shipping volume has dropped at the Conley freight terminal in South Boston. The nearby cruise ship terminal, which once boasted of as many as 150 ship visits annually, may not see a single ocean liner this calendar year.
In response, the Massport board on Thursday adopted a new budget for the fiscal year that begins in July that anticipates $600 million in revenue, down from about $900 million two years earlier.
Before the pandemic, Logan was a major economic engine as the Boston area enjoyed a boom in international travel that powered the hotel, restaurant, and tourism sectors. That success helped propel an ambitious improvement and expansion program in and around Logan, much of which will still go forward.
Massport expects to repave Runway 9/27, finish reconstruction of the serpentine ramps between terminals B and C, and move forward on a new connector between those terminals that will be behind the TSA security checkpoints.
But one of the expansion plan’s anchors has been downgraded considerably: a $700 million enlargement of Terminal E, the international terminal, to add seven gates. For now, just four gates will be added, paring $135 million from the cost.
And plans to connect the terminal to Airport Station on the MBTA’s Blue Line have been shelved.
A futuristic red roof remains part of the project.
Massport also pulled its plan to build a garage on the Terminal E parking lot. Other parking facilities will be affected, too: Expanding the Framingham garage and the airport’s economy garage are on hold. The authority also shuttered a Chelsea garage that airport workers use. They now drive to the Terminal B garage, which has been closed to the public. Also closed for now: the economy garage, just outside of the airport ring road.
A Massport spokeswoman said the deferred capital projects will be revisited at some point; the authority just doesn’t know when.
“I think they’ve made the smart decisions,” said Tom Kinton, a former Massport chief executive who now runs an aviation consultancy. “As the money and revenue start to come back, you can put some of these projects back on the table.”
A former state transportation secretary, Jim Aloisi, expressed hope that Massport might take this as an opportunity to put more emphasis on access to public transit: “It’s a chance to work with others about reimagining how people will get to and from Logan once air travel regains its footing.”
Cutting back on construction will save Massport about $100 million in the next fiscal year. It’s trimming operational costs by a similar amount. Wieland said she has no plans to lay off anyone in the authority’s 1,350-person workforce, though Massport has frozen hiring. Fifty to 100 jobs will be eliminated through attrition.
Massport will also use more than $100 million from the federal stimulus law known as the CARES Act to close the potential $300 million funding gap.
For budgeting purposes, officials have outlined a “most likely” scenario in which revenue could hit $675 million over the next 12 months. That assumes 22 million passengers over that time, a big jump from the current count.
Traffic at Logan is starting to recover, as airlines respond to an increase in demand: It’s now up to 300 or so a day, compared to fewer than 200 in late April. Masport expects a worst-case scenario of 480 a day, on average, through the next fiscal year, a far cry from busy pre-pandemic days when about 1,200 flights would take off or land.
Kinton said he expects leisure travel to recover more quickly than business travel. Logan is lagging many other major airports, in large part because state government has been conservative about reopening the economy here.
“I think you’ll see Boston rapidly ramp up if we stay on course for our opening, and there’s not a bad fall-early winter in terms of a [COVID-19] rebound,” Kinton said.
R. John Hansman, director of the MIT International Center for Air Transportation, said there is one benefit for Massport: Repaving Runway 9/27 shouldn’t contribute to many flight delays.
“If you don’t have something like this [slowdown], those are incredibly disruptive,” Hansman said. “That’s the only silver lining I can see.”