Walker & Dunlop, Inc. ($WD)

Coming in. It's an honor to have you here. we're going to start recording the Walker Webcast, and we're going to play this is a Walker Webcast next week. And so I guess I ought to do an official welcoming to Phil Washington, who runs the Denver Airport Authority after having run the Los Angeles metro system for many years. And prior to that running Denver RTD. And so Phil was in Denver that went to L.A., was extremely successful down in L.A. and then came back to Denver, and we are the great beneficiaries of Phil running a couple of things that are just really noteworthy. First of all, it is the largest employer in the state of Colorado. It is 10% of Colorado's GDP is at DEN, 10%. By far, the largest contributor to the state of Colorado's annual GDP is the Denver Airport. It is the third largest airport in the United States of America. It is quickly growing to become #1, with 84 million passengers in 2025. Correct on that?

82.4 million.

82.4 million. I want you to correct me on my stats here, Phil. So 83 million passengers last year, very focused on 100 million and going well beyond 100 million. 100 million by 2030?

If not sooner.

If not sooner. Takes getting to 105 million annual passengers to surpass Atlanta is the busiest airport in the world?

Correct.

Right. So that's a growth trajectory that most airports, most companies would love to have in front of it.

What's the biggest challenge right now as it relates to expanding DIA from 84 million annual passengers to 100 million and then on to 125 million?

Well, first of all, thank you for having me.

It's great to have you.

Willy, it's wonderful to be here with all of you. I think our biggest challenge is making sure the facilities match the growth. We're talking about an airport at Den that was built and designed and built for 50 million annual passengers. And so having to make sure that we can accommodate this tremendous growth is probably the #1 thing and also doing it safely. Safety obviously is our #1 priority. But this growth that we're seeing, not just at Dan, I mean, Dan is the fastest-growing airport, I think, in the country, but also making sure that we are multimodal and making sure that it's not just by passengers. Obviously, that's our #1 priority, but we want to branch out into other sectors. And hopefully, we can talk a little bit about that. But the biggest thing is the modernization and keeping up with that growth, I would say.

So a couple of things that you've done recently. First of all, to give people a sense you have a competitive advantage because of the land you have.

Yes.

So the airport itself is as large as the city of Miami to -- or the City of San Francisco or 2 reference points as it related to how much land you have. You have 6 runways 1 of which is 16,000 feet long.

The longest in North America.

The longest in North America, which allows any size jet to land and land comfortably.

Correct.

They're also wider than most landing stretch. Correct?

Yes, yes,.

So all that comes into being an advantage in what way?

Well, as you said, I mean, we can land any aircraft in the world right here. the land, 53 square miles gives us an incredible advantage in terms of development, in terms of things that we can do and what we can accommodate with regard to development as well. It also allows us to expand our cargo operation, which is, I think, one of the huge, huge potential avenues to bring more cargo into Dan. So this land thing is incredible. It really is. And there are some challenges with that as well, having all that land. I mean you would be shocked to know that we've got a lot of wild life out there. We've got...

You've got people who jump the fence.

Yes, we do. We do.

Are you -- can you talk about that at all? Or is that something because of what happened? You just tested -- I mean, I don't want to ask you a question, you can't. I mean if you say I can't talk about it, that's fine.

No, I can talk about it. I mean, I can talk about what we've said in public.

Anyone who doesn't know an individual jump defense in DIA 2 weeks ago, ran out under the runway and got hit by a Frontier flight that was taking off for Los Angeles was killed that has been deemed to be a suicide.

Correct.

So it's them that he did it on his own fruition and was there purposefully, if you will. Anything?

Well, I mean, it bears mentioning that we have about 36 miles of fence of perimeter fence. So when we talk about the land that we have, there's a lot of it unfortunate incident, we are assessing our security right now. We always do that anyway. NTSB, National Transportation Safety Board, is -- has an active investigation on it. But it was unfortunate. I'm very, very concerned. i was very concerned about the passengers on that flight and concerned about our operations and maintenance people who had to clean all of that up. And we had that runway back open the next morning at 10 a.m., after working all night to make sure that we clean that runway up. So safety, obviously, is #1. We're still working on this. We're talking to Frontier Airlines, which is our hometown airline here in Denver. We have a very, very close relationship with all the airlines, but especially the hometown airline here, but a very unfortunate incident.

Does that engine -- can it be repaired? Does that have to be replaced?

I am actually talking with the CEO of Frontier next week. I hesitate to say it can be repair. I mean it's a tough thing. But these engines are very resilient, you know what I mean, and there's a lot of repair that goes on with the engines and the aircraft. So our hope is that it can be salvaged.

So 6 runways very wide, very long, gets you to a flight cancellation rate that is way lower than any other major airport. You're at 0.85% of flights canceled on an annual basis last year. To give people a reference point to that, Atlanta was at about 1.5% of flights were canceled in the last year. And ORD or Chicago was at 1.85%, so almost 2% of their flights were canceled last year. What does that give you as well as the airlines that fly in and out of Den as it relates to consistency, cheaper to operate? There seem to be a lot of derivative effects from having that low flight cancellation rate. And it's not like the weather here is any better than it is in Atlanta or in Chicago. So is that all based off of the length and the width of the landing strips?

I think it's some of that, and it's our people, too. who keep runways open, who maintain runways. We close the runway in the summer every year just to do runway maintenance. And so when we talk about just maintenance in general, that is a huge part of it. And you mentioned the winter. We know snow here at this airport. And it's amazing that our snow crews can actually plow a runway in about 15 to 20 minutes with the equipment that we have. And so all of that plays into it. So you've got runway maintenance, you've got our ability to increase non-aeronautical revenue that keeps cost low for airlines. There's something called cost per enplanement. We are very low or sort of middle of the row with the large airports around the country. That means a lot because we keep airline costs low in terms of how we handle our business and handle maintenance and financial management as well. Last year, we -- from all 3 credit rating agencies, we got the highest rating in the history of Denver International Airport. And so all of those things kind of play into how we are attractive to airlines to come in and out of Denver International Airport. So all of that plays into it.

That's got to help you with your borrowing cost and your $7 billion of debt.

That's right.

We talked a little bit about the ability to grow the airport. You also talked about passengers. TSA wait times at DIA are shorter than they are at any of the other major airports buying quite some bit. Your average wait time right now is 6 to 10 minutes on your TSA lines that stacks up to 15 to 20 minutes at all the other majors and some even 20 to 25 on the TSA. How do you pull that off?

Well, a couple of things and great on the stats.

I have -- that's why I have a pause -- about aviation. I also love it. And I also happen to live at DIA. I mean I'm in and out of that airport all the time. So all this stuff is a big interest of mine.

I'd point to a couple of things. One, we invested heavily in the new security equipment. And we wanted to get it in very -- as quickly as we possibly could. And so the biometrics that we have there, the various -- the 4 stations, if you will, that we had at 3 or 4 stations that we have in one lane has taken us from about 140 passengers per hour per lane to over 200 per hour per lane, and that is a big deal. So I point to the technology that we have brought in on the security side. And we want to do more of this. We think we can do more in terms of AI with security and different things to move folks through much, much faster. So we were very, very proud of the fact during the shutdown that we did not have these issues in Denver that you saw in Houston and some of the other places. But it's the investment that we have made in security technology that has gotten us there. And we're going to do more of that. When you look at the East and West security checkpoints, we are going to have 12 additional lanes on Level 5 as well as we build out that entire terminal or great haul, if you will. But I point to the technology that has helped us keep those wait times low.

So people get through the security and then they go down the escalator and they get to the trams.

Yes.

And so the trams went down over your last fiscal year, 130 times that when I first read that fill, I was like, well, that's a lot. And then I read a little bit further. They went down 130x, but for an average time of 4 minutes, which gave you a redundancy rate or the network being up 99.903% of the last fiscal year. Okay. So everyone in the telecom industry used to always say five 9s that you needed your network to be 99.9999% reliable for it to actually be a network that you would be able to go and actually sell. You're at one 9, but that's still damn good.

It is, but I want 100%. And look, I -- we need redundancy at Denver International Airport for the trains. Now my operations folks tell me that all the time, "Hey, Phil, we got 99.86% uptime for the train." When that train is down, it's chaos at the airport. I mean it's...

We've got 160,000 people a day using, right?

That's right. That's right.

160,000 people a day using it.

It's incredible. -- the airport, when the train goes down, the airport is really quiet. You have been in a quiet airport, it's scary actually. So we need that redundancy. And I was talking to one of the -- Mayor Federico opinion, Secretary opinion not long ago. And I was joking with him and with others that we must atone for what I consider the original Sin of Den, SIN, the original sin was not having redundancy for that train. And we want to atone for that by having redundancy.

Redundancy in another train or redundancy in walkways?

We're looking at either or both or actually the train itself, how can we have redundancy from A to B, C. And so we have been working on that. And...

I know you're going to go from C to D because as someone who spends a lot of time in that airport, when I'm at Gate 92. I don't mind walking long distances. It's a long way. how further can you go east, west before you go north, south?

Well, a couple of things. We don't want to do a Concourse D. And the reason we don't want to do a Concourse D is that is more strain on the train. And so for us to get to 100 million, there is an expansion that we're doing on Concourse C West, Sea West. That is the last expansion that we can do on the existing Concourse infrastructure, right? We've already expanded all of the other Concourses. In the last 5 years, we have built and opened 39 new gates. That's like another airport. That's like Kansas City. Anybody from Kansas City, yes, that's likew Kansas.

We don't like people from Kansas City. They got to go football team.

Well, they got good barbecue ribs, too. But -- so the last expansion we can do is Concourse West, which we have already started, that is 11 additional gates. That gets us to 100 million. Beyond that, we've got -- well, we actually have forecast for 120 million by 2045. What we want to do is expand the terminal itself. So think about the terminal. The south end of the terminal is where the hotel is. We want to expand to the north end. There's space there to expand that with a new, what I call a, processing facility and then have walkable concourses off that area. So you can walk to the concourses that we will build off that new facility that will have airline counters and security and all of that. So it's a walkable concourses with 25 gates each. We have already started sort of the preconstruction utility relocation work on the facility that we have to build first to lead to 4 additional concourses, 2 on the north and 2 on the south end by the hotel.

Will you charge more for those gates? Is there any difference in cost between Gate C82 and A10?

We have use in lease agreements for the airlines. And so there's not much difference. I mean closer to the center core, they may be a little bit more expensive.

But that's typically for bigger jets, too.

Correct. And we have international gates as well on A that might cost a little bit more as well.

So someone brings in and Well, A380 is different because it's a double deckers. So let's just stick with 1 level airplanes. But someone brings in a Dreamliner versus the 737. The 737 is out on one of the far gates, the 7 -- the Dreamliner is on one of the closed gates just because of the number of passengers. But does that airline paying more for having a bigger jet come and use that gate?

There's a difference yes. There is, yes. Absolutely.

Okay. I was talking about the cost of operating and why airlines like flying out of DEM, jet fuel is another one, okay? So right now, the WTI crude is trading at $100 a barrel today, a barrel of Jet 1a is trading for $165 a barrel. So to give everyone a sense of how much more refined jet fuel is than just normal crude that shows you the price differential of a 65% premium on jet fuel. So all the airlines today are trying to come to the cheapest. I pulled up you, Atlanta and Dallas. And it didn't surprise me that Dallas was the cheapest, you're in the middle and Atlanta is significantly more expensive on a gallon of Jet A. How do you keep your cost so low and how do you get the fuel?

Well, we have pipelines. We have fueled this truck in as well.

But it's predominantly from the pipeline that goes straight to the refinery, correct?

Yes. That's right. That's right. Well, on the cost, I think the first thing is increasing non-aeronautical revenue as best we can. That's parking, that's a number of other concession revenue, things like that, where we can keep airline costs down. And I mentioned that cost per enplanement piece that CPE, please, where we are sort of in the middle of the pack, and that's actually a good thing. What airports are really, really struggling with right now is how to increase non-aeronautical revenue. And I was at a conference not long ago and we have this form of the 100 top airports -- the CEOs from 100 top airports. And you go around room and they mentioned their challenges or whatever. And you come up with this word salad thing. Yes, what this thing. And every one of the predominant thing was growth, modernization, keeping costs down and increasing non-aeronautical revenue. And so what we have done in a big way is the parking is our biggest revenue generator.

So you got 51,000 parking spaces at DIA today.

Correct. Correct. About 51,000 or so. And we also have...

You're going to grow that? Is it going to 70,000?

At some point, we likely will grow that, but we're also looking at what public transits can do as well, namely the A-line, which happy to say I had a part in when I was running RTD. But we may have to -- as these numbers grow, we may have to look at parking, we may have to look at additional parking, but we'll look at that. We haven't decided on that just yet. We want to increase transit usage.

Will there be new parking space in the new rental car facility?

We're looking at that. We are building a new consolidated rental car facility. We are well on our way with that. We have a professional team that's helping us with that. We're going to start design and construction. We're looking at perhaps employee parking likely on the top level of that. We're looking at about 16,000 to 18,000 spaces in that consolidated rental car facility. Quick story, though, when you look at all of that rental car space when you're driving a long [indiscernible], I was talking to one of the pioneers of building the airport and he said, "Phil, that space was temporary." And I thought, well, temporary for 31 years, which -- so one of our big priorities is to build out that space or build out that consolidated rental car facility and really EV chargers and all of that on our way to a zero emission airport.

It will be a great spot for a data center, except for the fact that City Council just passed a law that says you can't put a data center in Denver.

I know. I know. yes. It also -- and I should mention this ties to our efforts around energy resiliency and being energy independent.

So you had a blackout. You had an energy loss in March, which was at Excel substation. So when that happened, what happens? Do you have just massive generators that kick in? I know you've got solar out there, but can you run without connection to Excel?

We do have some redundancy, but we depend on Excel. We've got generators and all of that. But is not optimal. When that outage happen, and we have quite a few of them, as you mentioned, all the escalators and the elevators and all of that stopped at an airport. That's -- it was, again, very, very eerie. And so what we've done is that we want -- and we've put out a request for information to the private sector on how we can be energy independent eventually. And I stand by that. I mean we cannot be down. We cannot afford to be no airport can afford to be down. I mean we saw the outage in Madrid last year, another in Heathrow last year as well. In Atlanta, in 2017, they were down like 10 hours. I mean can you imagine that? And so we've had these outages. And so we went out to the private sector and said, "We want alternative energy options for this airport." It's like a problem statement in college. You put out this. We put out our problem statement, our challenge statement and said, how can we eventually be energy independent. And let's put a pathway or a road map together to energy independence. And so we put out that RFI, a request for information. We got 31 proposals from all over the world on how we can do this. We would be the first airport in the world to be energy independent. And so we're on our way to doing that, which will bring in a whole new industry to the Rocky Mountain region. That is that multi-modalism and multi-industry focus that we have a whole energy industry we could do here at Denver.

So as you think about other revenue sources, first of all, revenues in DIA now are $1.2 billion, $1.3 billion?

Yes, neighborhood, yes.

And by law, you don't return any , if you will, they're not profits that come out of DIA that go to the city of Denver. It all stays at DIA and then you continue to reinvest. So we, as a community, benefit from about $40 billion of economic activity that happens around DEN, but it's not as if the city of Denver is there and says, well, we got a windfall on us a check for $300 million last year, and so we don't have to go and do X, right?

Right, right, right.

And that doesn't change. That's by federal law federal -- that's federal off. So you take this cash flow and just pour it back into it with the thought of being the best airport in the world, potentially the largest airport in the world, but then also bringing other economic development to the city of Denver and the State of Colorado.

Yes, that's correct. And let me just put a finer point on it. We use no sales tax dollars, right? We are an enterprise. So we actually live on what we make, to your point, right, through those revenue-generating mechanisms that I mentioned. And so what we generate must stay at the airport. If it leaves the airport for any reason, that is called diversion of revenue. And that diversion of revenue is a violation of federal law, as you mentioned. So the revenue we generate, we plow back into the airport, and we need to do that. We absolutely need to do that primarily because of the growth that we're seeing. And it's not just us. We are probably the fastest growing. But when you think about like the 20 largest airports in this country and in the world, all of them have what's called a capital improvement program. And so this capital improvement program, or CIP, when you hit that term, that CIP is in the billions of dollars.

Yours is $12 billion?

Ours is about $12 billion over a 10-year period. I spent a lot of time in Los Angeles, LAX. Theirs is something like 20-some billion.

But they don't have any space to grow.

No, they don't. They don't.

So they're going to continue to go into the existing infrastructure and just upgrade the infrastructure, but they've got no ability to say, let's move from X number of passengers to Y because they can't put another runway down.

That's exactly right. And so we have this incredible benefit, this incredible resource of land here where we can spread and we can develop and maybe we'll talk about that development piece in a minute as well.

What's a new -- what's runway 7 cost? If you just said tomorrow, I want to go build runway 7. What's the runway cost?

Between $700 million and $1 billion.

That's pretty cool. That's a lot of money.

Right, right.

And that's just trading and paving.

Yes. Yes. But I mean, this thing is very deep. It's not like paving your driveway.

No, I got it. And on that, what about putting radiant heat underneath that -- could you do that?

We could. I mean there's technology...

Are there airports that have radiant heat underneath the...

I can't think of one right now. I think there are some, but 6 runways. We are doing the pre environmental work on a seventh runway right now. There's a lot of discussion about that.

What's the environmental work cost you? I'm asking this because you know my next question is going to be about the penny Bolivar. But what's the environmental cost to go? And by the way, we're talking about farmland between here and Kansas City.

Yes. Yes. That's right. That's right.

I'm a Denver resident. I like to have clean water. I like to make sure we don't have chemicals running off and into the rivers, all that kind of stuff. But you're going to spend millions on an environmental impact study to try and build Runway 7 when it farmland.

Yes, yes. Well, I mean, I've been in this role for almost 5 years. And the environmental contracts for the seventh runway was let before I got here. So that pre-environmental was awarded about 5.5 years ago, 6 years ago.

To do a pre environmental study?

Environmental overall. So we're still in the pre environmental stage. But but that contract was let for all of the environmental for a seventh runway. And so that's being done. Now the issue is -- and what we've run into from various stakeholders is, namely the airlines is, are you fully optimizing the 6 runways you have? So therefore, do you need a seventh runway? Now what I've said and what we've said is that once we go over 100 million, in order to sustain, we need a seventh runway because of the rate of departures and takeoffs and all of that. And so we know at some point, with forecast for 2045 of 120 million, we're going to need a seventh runway.

Talk that through for a second as it relates to -- everyone in this room has flown in and out of DIA. My understanding is that the slope that your jets come in is the exact same slope at every single 3%, which is the same at every major airport. So you can only have 2 coming in simultaneously and 2 taking off simultaneously. Is that correct? Or if you added a seventh, you could actually add a third inbound or a third take off?

I believe we could, yes. Yes. We could do that.

Is there any other for that's done that where they've got 3 jets taking off simultaneously...

I don't know of any. I don't know of any right now. But keep in mind that we're geographically, we have wind conditions and all that. So we change runways like all the time based on wind conditions and all of that. So...

But you don't have to worry about any buildings and you don't have to worry about any noise ordinance. And as a result of that, you have a massive advantage.

Well, we -- I would say we don't have to worry about noise. I mean...

Really?

We have a 1988 intergovernmental agreement with Adams County that talks a lot about noise and measure and noise and all of that. So we're always concerned about noise. It's inevitable at an airport, though. But I wouldn't say we don't worry about that. We do. We're very concerned about that in many ways.

That's surprising. So you've got, I think, 350 miles of roads out there. If you add it all together, that's from D.C. to Boston of continuous roads that you've got to maintain.

Yes.

You've also got more snowfall than another major airport. You and I have talked about this before. What do you do with all that snow?

Well, hopefully, it melts.

But you've got a melter.

Yes. We've got a melter. We've done very, very well with snow management, if you will, a melter...

Big environmental issues to it, right? So it all gets melted and then what happens to the water? Does it get recycled? Does it get...

Yes, we look to retain and capture all of the water. We look to retain and reuse the deicing fluid and all those things, that sustainability piece that we have. But we look to capture and recycle as much water as we possibly can. And I think we do a pretty good job of it.

And is there anything that doesn't meet the eye that goes on at DIA? So for instance, you've got like 1 of the things that I looked up First of all, you got a jail there. Hopefully, nobody in this room knows what the jail at DIA looks like.

Yes, we've got a morgue there, too. So...

You've got a morgue there too. How many passengers die on an airplane and end up at DIA to be taken care of, back of the envelope?

A year, I don't know, probably 10% or below I mean we -- I mean it's not as rare as you think. We have a lot of emergencies on aircraft. We have a lot of emergencies and not deaths, fortunately. But we take care -- I mean, in the concourses in the terminal, we have a lot of medical emergencies.

You have the largest service dog training facility in the state of Colorado. Why is that?

Yes. Well, the CATS program, the C9 program is really a fantastic program. Keeps people calm this whole idea of neuro diverse and all of that, and people get nervous when they fly. And so the K9 program, the CATs program really -- I mean, you would be amazed. When we bring all those dogs, those K9 in, it really calms a lot of people now, especially kids and seniors as well. And so that is one of our great programs. People that own these lines that bring them in, I'm forever grateful to them, bring in their dogs and they got to pass a test. I don't think -- we don't have any rock wides or anything in that K9 program.

And as it relates -- I mean, all of us look at Instagram, and we see all these very sad kind of road rage that happens inside of the cabin of airplanes. Just last night happened to see one of the Southwest Airlines fight between 2 women. It just kind of came up and I don't need to see that. But that happens. How often do your either EMTs or law enforcement get called out to a plane to take care of sort of what I would call road rage would be what I call even though it's plan rage?

Yes, plane rage, air rage. It happens -- I won't say frequently, but...

I thought you happens more than I thought.

No. It happens occasionally, I will say. Where we have a disturbance on an aircraft. We have a fair number of planes that are sent to den for various reasons or -- and it might be a disturbance in the air. It might be a medical emergency and they are diverted to Dan. I think a lot of that happens when they are sent to us is because they know that our teams are very, very proficient, both our medical teams, both our fire department there. We pay for those services from downtown as well, police and fire and all of that. We pay the city for that, by the way. But I think many of these are sort of referred to Dan because they know we have the personnel to handle pretty much any situation.

When you have police, you have paramedics, you have gate agents, you have pilots, you have passengers, you have caterers, you have fuel -- 40,000 people working in this ecosystem. They're not all your employees.

Correct.

How do you manage the access/safety component when they all have access to your facility and are all participating there. But if some, let's just say, Southwest Airlines gate agent decides that he or she doesn't want to act the way that they're supposed to act in going to the gate and being engaged with a flyer who may be or not be flying with Southwest, how do you deal with that?

Well, I think the first thing is creating a culture within the entire ecosystem, even though we don't handle everyone. We're not responsible for everyone. I think that we can really lay out a vision of safety and excellence and all of those things and create that culture ecosystem wide. And so we've done that. We meet with the airlines once or twice a month as a sort of a consortium of all the airlines. And so we talk about this culture thing. We talk about safety. We talk about all these things. And the airlines, they handle their business as well. Airline employees, the example that you gave, all of the vendors, the concessions and all of these folks out there, I think -- I want to think that they understand what the culture is and what the vision is of the airport itself. And I think they adhere to it. That's not to say we don't have issues, we do. But I think for the most part, everyone understands that we need to run a good ship, and we have done that.

Is there a person -- so United has 90 gates at DIA, Southwest has like 40%. Is there a person at United who sort of is the station manager, everything that goes on at DIA. So you call him or her and say, "Hey, we got an issue where they call you and say, "Hey, we were on Gate A20 and something is that happening?

Absolutely. We talk to those station managers on a daily basis. You mentioned United. They have a wonderful lady who is the station manager, great professional, and we talk to her frequently. Again, probably almost every day. The same thing with all of the other airlines. And then we meet as a group, at least once a month. And I'm in that meeting. Several other folks from our team are in that meeting. So we work through these issues. If we have an incident, we talk about the lesson learned. We talk about the after-action review that we do. So it works. I mean it's a big ecosystem and people find it hard to imagine how we control all that. But we've got good people there at the airport that help us do that.

I was looking at what your biggest city payers are. I was surprised that Phoenix is your largest city payer. And then it goes to Phoenix, Vegas, I believe, then Dallas and then L.A. But I was surprised about those. I would have -- I think about this being a regional hub and people coming in here and then going off to places like Boise that don't have a whole lot of direct access or -- but all 4 of those airports are major international airports. They've got lots of international flights coming into them. That surprised me that those were your biggest city payers. And I guess the question would be, how much are you working on getting flights from Asia to fly over San Francisco, fly over L.A. and come to Denver to then allow passengers to spread out into the United States. -- because your #1 international destination is Cancun, which is just Denver rights going to Cancun or someone from Boise who comes through here to go to Cancun. That's not necessarily someone in Tokyo, saying I'm going to New York. And I'm not going to go direct to New York, I am going to Denver and transfer across. What's the opportunity there?

Well, I think what we bill ourselves, what we've been saying over the last 5 years is that we are the gateway to the West. So it's -- in my mind, it's not just about Denver. The gateway to the West is come into Denver, catch that connecting flight to Phoenix or whatever. And so we have been sort of promoting ourselves that way internationally. We have been very, very aggressive over the last 5 to 6 years on international. We believe that with the rise of the middle class in Asia, in Africa, that travel will just -- we're already seeing the growth. And so we have taken delegations to the continent of Africa. We are really targeting the continent of Africa. We actually went to Otis Ethiopia, Otis Ethiopia and took a delegation there and met with the government because Ethiopian Airlines owned and managed by the government of Ethiopia. And met with the Prime Minister there about a flight from Otis to Denver. There are some challenges with that. Otis is actually a higher elevation than Denver. And so we would have to take off from here with a less than full tank because of the weight that is involved with that. But I see tremendous growth on the continent of Africa, Asia as well. Quick story, I was in Istanbul about a year ago. And we're in a setting like this, we had a delegation that went there because we got a direct flight, Turkish Airline. And the gentleman from the Chamber of Commerce came in and said, "We don't aspire necessarily to a big house like Americans do and the picket fence and all of that. We aspire to travel." So we're not so much concerned with maybe how Americans think about a house and all of that. Because what he said was we can't afford it, but we want to travel and our children want to travel. And I thought, you know what, that's pretty incredible to me. And we need to put Denver on the map, if you will, and not just have it as the flyover city. And so that is why this whole idea of economic development and us being a generator of $47 billion a year, whatever it is. It really boils down to what's happening here in Denver that people want to come to, and the West. And so all of these things that city government is doing, the mayor is doing and all of that really ties into the potential that we have for folks to come here from all over.

You're talking about flights from Africa or from the Middle East or from -- you won't make it from the Middle East, that's too far right now. But from Asia and from Europe. What about space? Could DIA ever be a landing pad for people who go up to space and come back to space, given you got long runways, you've got runways that have very, very sturdy runways below them and you're pouring concrete down? How deep is that concrete? Is it 6 feet?

Yes, it's at least 6 weeks.

Really. Have you guys thought about space?

We have. We actually have -- listen, we've got a space for it within 5 miles of the airport, right? And we meet with the folks from Spaceport all the time. I absolutely believe that we are in the best position of any airport in this country to have space travel from. Now we've got to build the infrastructure and all that. But I think that we're so well suited. We talked about the land that we have and we talked about the space that we have to build. We talk about -- we haven't talked too much about the opportunities for development that we're doing right now. But I absolutely believe when I think about 20, 30, 40 years from now, Dan is the launching pad. It's the launching pad.

So if you think about that in the context of SpaceX and Tesla, and how Elon Musk is the S3 on -- or S1 on SpaceX came out yesterday that gives lots of insight into what the FaceXIPO is going to look like. And in it, they -- one of the things that I thought was so interesting was the fact that Elon has these 2 ecosystems between Tesla and everything that's in Tesla and SpaceX and everything that is SpaceX. And it's all co-mingled. You've got base buying the Tesla SUVs, right? You've got his -- all of these different companies are interacting with each other. So you're sitting here saying we're positioned as potentially the best airport to try and attract space activity, and yet the Denver City Council yesterday banned the development of data centers. You think Elon Musk comes to Denver?

What I will say from an infrastructure standpoint, what I feel our team's job is, is to prepare the way. I am not, of course, an elected official.

No, but I'm trying to push you on this front.

Yes. I'm an infrastructure guy. I was an infrastructure guy since I was a kid. You know what I mean. I was just like when my mother worked 14 hours a day and wondered when the next bus would come as we lived in public housing. My mom is a single mother. I was enamored with infrastructure for the good of humanity. I'm talking about -- I'm talking sidewalks, water, transit and all of that. We want to do what we can in our Fox hold, if you will, to show that we can prepare the way in terms of infrastructure for anything that we can dream of. And when I think about space, I think about what do we need to do at Denver International Airport to prepare that facility with the hope, with the hope that the politics will follow, right?

To much to ask for the politics to lead.

I think so.

Fair answer.

I think so. And I'm not just here. I'm talking about just nationally. I think that if I think about how I can prepare the way, and I think about all these things. I think about -- that we've talked about, I think about energy independence pave the way for that. Whether that is geothermal, whether that is small modular reactors that I get beat up on, but I stand by it, though. Absolutely.

How much would a small scale reactor to be able to give you enough energy cost?

Well, I mean, I think right now, I think about the need to run -- have energy and electricity, 24/7 days a week or whatever. And it's not just SMRs. It's a combination of all these things.

Could you do it on just SMRs?

I think eventually, we will be able to.

And any idea what that would cost?

I don't know. I don't know. Right now, it costs too much to do that right now, but I'm looking down the road.

Even with you having a $12 billion capital campaign right now. So it's bigger than that.

Yes, I think so. I think so. I think so. But I mean, these things are expensive now. SMRs, there's no real...

Could you pull it off on solar or the storage doesn't allow you to do?

I think solar -- I don't think we have enough solar to do that. Even though we have more solar arrays, and we have the -- probably the largest solar farm of any airport in this country. We can't do it just on solar. And so I think we're going to need a little bit more. And so I'm not just stuck on SMRs. I think we can do this across the board. I think we can do a combination of various alternative energy options to get us where we want to go, which is energy independence.

Final couple of questions. I talked earlier about the environmental impact study on Runway 7. You've got an environmental impact study going on, on the widening of Penny Boulevard. Of all the bottlenecks, you've gone and you've changed the TSA lines and brought it down to the best in the country. You've got your canceled flights down at the best in the country. You've got more growth than any other airport in the country. And yet Penyu Boulevard is still 2 lanes out and 2 lanes back. And to anyone who goes out there all the time sits there and says, "Why am I waiting longer to get in my car out there than I am to get through security into my gate.

Exactly.

Are we going to get some relief here?

Absolutely. And listen, we are talking about improving Penyu.

Well, that's just tightening it, isn't it?

Well, we cannot predetermine the outcome during the environmental period. Actually, that's against the law. So I have my ideas, but this is why we are going through that environmental process.

This is a $12 million environmental impact study.

I forget how much it is, but it is...

I believe it is $12 million.

Yes, yes.

But to figure out whether a swallow is going to have its migratory pattern change by us adding 2 more lanes to Pennar Boulevard?

Yes. It's we are looking to accelerate that environmental process as best we can, but we've got to go through it.

You want to make a -- do you want to make a bet with me that you've got a fix to your duality on the trams before Pena gets widened?

No, I'm not going to bet. I'm not going to bet. But I will tell you this, we are scheduled to get to what's called a preferred alternative by the end of this year. Now the preferred alternative says, this is what we want and plan to do. Now you got to go through this community thing and all of that, right, which we're nearing the end of. And at the end of this year, we're going to come out with that preferred alternative. Widening is one of the alternatives that we are out there shopping.

Sorry, what would be something else?

I can't remember all of the alternatives.

Beyond just widening it. Is it we're just widening it?

Well, there's a couple. There's there's the widening -- I'll come back to you with the other ones. But there's a transit element that we're doing to -- we've got 20 recommendations for what's called transit demand management, 20 recommendations that we can improve the transit side. But people don't realize that we own Pina, the airport does. And we're responsible for maintaining it. But to your point, the fact that Penya has not changed in 31 years. It's about time that we do something about -- and we are. We're at the end of that environmental period. And here's a bit I'll make with you.

Great. I'm not sure I'll take it, but you put it out there.

I bet that they will be a lot of consternation with whatever preferred alternative we come up with or people might just say, "Hey, that's great, Phil." But listen, this is something that we need to do. I mean we've had to explain to people that we cannot go from 50 million annual passengers, airport design for 50 million to 100 million and not do something about Pena.

100%.

Yes. I mean, just like we're doing with all this other stuff, right, we are doing the consolidated rental car facility. We are looking at a seventh runway. We're building the North Terminal expansion to get us to 120 million. We are expanding Concourse C to the West to get us to 100 million. We're doing all the sustainability things. alternative energy options, all of this. We've got to focus on the road that gets us to the airport. And I'm happy to say over the last 4 or 5 years, we have done that. And we're nearing the end of it towards the end of this year, where we are going to announce that preferred alternative.

So as I was getting myself ready for all this and looking at all the stats, I looked at what impact what you manage has on this state, and I said it at the top, it's got tens of thousands of employees, the largest employer in the state of Colorado. It's got 10% of the state's GDP. There's no other company or government service that has that much of a contribution to our state's GDP. It's innovating, and it's growing faster than almost anything else, and you run it. So I was sitting there saying, is Phil the most important person in the state of Colorado. And I will tell you, you're damn close to it. The governor may have more sway over an overall GDP growth and where he puts his finger on the scale to say that needs to grow or that doesn't or we're going to invest there. But barring the governor, I don't know someone else who I could have had to this conversation, who has a bigger impact on growth and the GDP of the state of Colorado. And so thank you for all you do. Thanks for answering all of my very detailed questions. I love what you do. I love flying in and out of your airport, and I really appreciate you joining us today.

Thank you so much for having me. Thank everyone that's here or online or whatever and thank you for being just such a supporter of Denver International Airport and aviation in general.

Phil has the one drawback of knowing me as well as I know, Phil, is that he gets these texts from me at random time. I have been for 32 minutes from my value -- hasn't shown up on Carousel SP1 And he's like, it's coming really. I've got the team on. It's all good.

I remember that.

Yes. That actually, I'm not -- I hope everyone in the room who's watching this knows, I don't do that. What I did do once as I was coming back to the international terminal and literally the baggage cares. I was literally exploded in front of me. So I text it Phil said it baggage carousel on in the international terminal and the thing literally just exploded. He's like, thank you very much for audit. So I'm not quite as bad as my bags are taking me a long time the holding had blown up.

Well, what's funny about that. What you didn't know was that I was on an international flight right behind you.

Was it fixed by the time you got there?

No. No. But I had just landed and I was behind you on another flight, and I walked in and saw that. And our folks text it, our folks were working on it when I get to the international car sales, great.

So Phil, thank you so much. It's been great -- great conversation. Thank you all.

Thank you.