XNA marks 20 years in business, connects region to the world

In the late 1980s, business leaders Sam Walton, J.B. Hunt and Don Tyson were working to update their 10-year plans, and one of the goals that continued to come up was a direct link to the U.S. highway system. Another was an airport connecting Northwest Arkansas to the national aviation system.

The challenge to reach those transportation infrastructure goals was the lack of a unified voice among the five largest cities in Northwest Arkansas.

“We’re like five siblings, if you will, fighting for crumbs that fall off the table instead of joining together with a common voice and say the same thing that this is the No. 1 highway project in Northwest Arkansas,” said State Sen. Uvalde Lindsey, D-Fayetteville. “It’s not a Rogers project, not a Fayetteville project; don’t care where the thing’s built. Determine among yourselves collectively and unitedly what project you want to be built first, and once you get that built, you’ll get the second one. And sooner or later everybody in the group of five is going to win.”

Walton, Hunt and Tyson eventually formed a group called the Northwest Arkansas Council. Its goal, Lindsey said, was to build Interstate 49, formerly I-540, and a regional airport. In 1990, under the leadership of chairwoman Alice Walton, Sam’s daughter, the council launched an effort that would lead to the creation of the Northwest Arkansas Regional Airport Authority, which included representatives from Bentonville, Fayetteville, Rogers, Siloam Springs, Springdale and Benton and Washington counties.

That spring, the group pitched its plan to Lindsey, who at the time was the executive director of the Northwest Arkansas Economic Development District in Harrison.

“We met in the McIlroy Bank boardroom,” recalled Lindsey, a Harrison native who spent time as a budget officer in the early 1980s for Gov. Bill Clinton. “Everybody was there: Don, J.B., Sam, Johnelle, Mark Simmons, all the mayors. I mean everybody was in the room. As I jokingly said, there was more money in that room than God had.”

Lindsey was one of the first employees of the council — along with his late wife Carol — when it was born in 1990. He operated as what would now be known as executive director.
In July 1990, the Lindseys established Ozark International Consultants. About a year later, they hired Scott Van Laningham as the public face of the council.

In September 1990, former 3rd District U.S. Rep. John Paul Hammerschmidt, R-Harrison, convened a field hearing in Springdale to discuss investing in Northwest Arkansas, and those who attended were members of the House Public Works and Transportation Committee and business leaders, such as Walton, Hunt and Tyson. After the hearing, the airport board received a federal grant to plan for, design and select the location of the airport.

“The site out there is 2,158 acres, and its ultimate design plan is for two parallel runways,” Lindsey said. “And the terminal building is in the middle. So there will be a runway to the east. The one on the west now is the first one, and the other one would’ve been on the east. The land is long enough to do 12,000 feet.”

In the early 1990s, the airport was promoted as a $260 million cargo facility with two 12,500-foot runways, which would have been one of the longest commercial runways in the nation at the time. Denver International Airport has the longest commercial runway at 16,000 feet. But after the Federal Aviation Administration determined that cargo airports were only feasible in large metropolitan areas, plans were scaled back to a $144 million project with one 8,800-foot runway and a 4,000-square-foot terminal building.

In 1994, the airport board purchased land after receiving a $9 million federal grant. Construction started about a year later, and the $107 million Northwest Arkansas Regional Airport (XNA) opened on time, and about $37 million under budget, in 1998. Some of the savings were a result of reusing concrete from existing chicken houses to build detention ponds instead of having it hauled away, or selling the trees where the runway would be built instead of having them cut and burned.

“At least from my perspective, the highlight of XNA was it was the first completed regional project of major significance,” said Lindsey, who plans to retire from his Senate seat at the end of the year. “When you started buying land and concrete started being poured in ’94, you could see that this regional idea, this concept of everybody working together, was working.

“The council’s galvanizing of the region into a common regional focus and regional effort is part of it, but as you know the economy of the region is fueled by Walmart, Tyson and Hunt and George’s and Simmons. But they’re all tied into that same unique pattern of commerce that we have that exists here and the people that work for them. If we had not had an airline, Sam (Walton) couldn’t have recruited David Glass to come here from Consumers [Markets] in Missouri, or we couldn’t have recruited Don Soderquist to come from Chicago and Ben Franklin. Who wants to move to a place where you’ve got to drive two hours to get on a plane to go see the Cubs play?”

SYMBIOTIC RELATIONSHIP
For Van Laningham, seeing Air Force One make its final approach at XNA was the highlight of his career. Everything was in slow motion as the plane made its way to land, said Van Laningham, who retired at the end of October as CEO and executive director of the Highfill airport. President Bill Clinton dedicated the airport five days after it opened for commercial service Nov. 1, 1998. In 1999, the airport board named the airport’s terminal the Alice L. Walton Terminal Building.

“The Northwest Arkansas Regional Airport is an example of the great heights we can reach when our communities work together,” Alice Walton said in a statement. “The same tenacity that defined our efforts two decades ago is needed today to secure the more accessible fares that will improve this transportation hub.”

Without XNA, Northwest Arkansas wouldn’t have been as prosperous and as dynamic as it is. The two have fed off each other, Van Laningham said.

Between 1999 and 2017, enplanements, or the number of passengers flying out, have risen 120%, from 329,216 to 725,284. Over the same period, the population of Northwest Arkansas increased 88.6% from 285,017 to 537,463. Between January and August, enplanements have risen 7.7% to 515,869, from the same period in 2017.

As a point of pride for the region, the airport has been making it easier for business and leisure travelers to get in and out of Northwest Arkansas and has grown from offering two nonstop flights to 15 direct flights to destinations such as New York City and Washington, D.C., Van Laningham said.

“This was a risky venture 20 years ago,” he said. “Nothing was certain about the success of Northwest Arkansas.”

About seven or eight years ago, the airport started to see a rise in family leisure travel as average household income increased in the region. Between 2005 and 2017, average household income in Northwest Arkansas has risen 45.2% from $53,829 to $78,173. Families started to take long weekend trips, and the parking lot would fill up, especially over holiday weekends, including Independence Day, Labor Day and Memorial Day. About 30% of passengers fly for leisure, compared with more than 60% who fly for business.

The airport has allowed businesses to better maintain and build customer relationships, said Kelly Johnson, who started at XNA in 1996 and was recently promoted to chief operating officer. People fly to see their clients in person rather than having to talk on the phone or via Skype.

“You build a mile of runway. You can go around the world. It’s an economic engine for Northwest Arkansas,” she said, adding that XNA has a $450 million impact on the region annually.

ROOM FOR GROWTH
The nearly 2,200 acres on which XNA was built offers the opportunity for expansion, but capacity isn’t expected to be an issue for at least 20 years, Van Laningham said, adding that the airport doesn’t have the issue of airplanes flying around waiting to land.

The airport’s terminal has been expanded four times, and its parking lot has been expanded seven or eight times, he said. This year, XNA hired architect Hight Jackson Associates of Rogers to design a project to renovate the terminal entrance and add an elevated platform to connect the terminal to a four-story parking garage, which opened in August.

In 1997, the airport took on an initial debt of $79.5 million at a 7.62% interest rate, and it’s down to about $41 million with an interest rate of 2.08% after being refinanced three times. The airport also has a $25 million debt at a 2.35% interest rate for the parking deck. Total existing debt is about $66 million.

The airport still needs an access road, and the board recently established an access road task force and hired a consultant to study how the road could have a broader impact on the region. The road was planned to run south for about 3 miles to where it would intersect with a future segment of the U.S. Highway 412 bypass. Other planned projects included adding another concourse on the northwest side of the terminal and building a parking deck exclusively for rental cars.

LOW-COST CARRIER
With the exception of travel costs, people are pleased with the airport and its success, Lindsey said. In 20 years, he expects the population of Northwest Arkansas to be about 750,000 and for the airport to add a low-cost carrier. He would like to see the airport add destinations to the Northwest, such as Seattle, or possibly international flights, such as to Mexico City or Cancun. He expects with an additional low-cost carrier, more people would fly for leisure out of XNA instead of going to other airports.

A major unfulfilled goal has been attracting a low-cost carrier that offers daily flights, said Van Laningham, adding that XNA has worked to bring on such a carrier for the past eight or nine years.

In March 2009, low-cost carrier Allegiant Air announced it would start offering nonstop service to Los Angeles, from XNA, twice a week. On Feb. 13, the Las Vegas-based carrier announced it would establish a nonstop flight to Destin, Fla., offered twice a week. Including this flight, Allegiant offers nonstop service to four cities from XNA. The carrier accounts for about 6% of the airport’s traffic, Johnson said.

About five or six years ago, XNA joined forces with the Northwest Arkansas Council to attract a low-cost carrier offering daily service. Van Laningham said the issue with attracting one has been, in part, convincing the carriers that the airport has the demand to fill their airplanes, some with between 120 and 130 seats.

The consolidation of the airline industry also has had an impact, Johnson said. Four airlines control about 82% to 83% of the market, and XNA has three of the four. Another part of the puzzle is the market size, and once a region reaches between 800,000 and 900,000 enplanements, airlines start to take a region more seriously, Johnson said. Northwest Arkansas is the 14th fastest growing metro area, and the 104th largest in the United States, according to the U.S. Census Bureau.

NEW LEADERSHIP
Van Laningham started as staff director at XNA in 1998. He was named CEO about five years later.

When asked what’s kept him at the airport for so long, he said the challenge, the reward and the success. He was able to see the airport be built as a consultant and succeed as a CEO. It was fun to be a part of, he said. But he’ll miss the people, Van Laningham said, adding that “I’m a people person.”

Aaron Burkes began Oct. 30 as the new CEO. When asked what advice he would give to the new CEO, Van Laningham said “take your job seriously but not yourself. Realize you’re part of a bigger ecosystem that you benefit from and contribute to. We are not an island. We need our government and business partners to remain successful. You’ve got a good team. Enjoy it, and keeping moving forward.”