United: Controlling Houston Intercontinental Expansion Advantageous To Airline

MIAMI—By significantly investing in the expansion and modernization of Terminal B at its Houston Bush Intercontinental Airport (IAH) hub, United Airlines has “control over the scope” of the $2.5 billion project and will play a primary role in determining how the upgraded terminal operates, according to a senior United executive.

Controlling the IAH terminal expansion ensures the project is completed on time, said Michael Yost, United managing director for airport affairs at Aviation Week Network’s GAD Americas conference here in Miami. He added that airlines need to pay more attention to airport infrastructure.

“I think, historically, if you look at the airlines, where do we invest our money? It's not necessarily in maintaining some airport infrastructure,” Yost explained. “You know, we like buying planes and building clubs. And we might ignore restrooms for a little too long until you get pressured into making some of those investments.”

United has said it expects to invest around $1.9 billion in the Terminal B project by backing bonds issued by the city. The city of Houston, which owns the airport, will fund $624 million in “enabling projects” needed for the expansion, and late last year approved the first tranche of city money.

United says the expansion will increase its capacity at the airport by 40% on peak travel days by 2026, when the revamped Terminal B is set to partially open. The full project is scheduled to be finished in 2028.

Expansion will include a three-level, 765,000-ft.² Terminal B North Concourse with 22 new narrowbody gates, according to United. The airline says it will convert 30 existing small regional jet gates on Terminal B’s South Concourse to 18 gates able to accommodate larger, two-class regional jets. All flights will be boarded via jet bridge once the expansion is complete, the airline said.

The Terminal B upgrade will also include more than 115,000 ft.² of food and retail space and the construction of the largest premium lounge in United’s system.

“The big advantage for us is we will have control over the scope and the timing of this development,” Yost said. “That can be hugely advantageous to us because we know our planes are coming. We have a massive order book for planes and hopefully Boeing can deliver those, and we want to make sure [IAH is ready for the new aircraft]. I think we've all seen it, in other airports, sometimes when the city [has primary responsibility over] projects, they miss the mark a little bit on the timing, and we don't want to take the risk when all of these aircraft are coming.”

He noted that United, while funding the project, is working with the city of Houston on financing. “We obviously have access to capital,” Yost said. “To be clear, we're working with the city of Houston for that capital. So, the city of Houston will issue special facility bonds, but they're going to be 100% backed by United's special facility lease.”

United bases around 14,000 employees at IAH, from which it operates about 400 daily departures. It hired 2,100 new IAH-based employees in 2023 and plans to hire another 1,500 this year. In addition, the Terminal B expansion is expected to create around 3,000-4,000 construction jobs.