A new $31.6 million terminal at Niagara Falls International Airport will open its doors in September with a sweeping roof designed to evoke the Niagara River and enough space to handle more than one commercial flight at a time.

But don’t expect an influx of new passengers this fall.

The airport now handles three incoming and three outgoing commercial passenger flights a week, and prospects for additional traffic have not materialized.

Its financial picture remains just as cloudy. The Niagara Frontier Transportation Authority, which owns the airport, hasn’t scraped up all the money it will need to pay for the new terminal.

“I just would hope that the model going forward is one that is sustainable,” said Robert Gioia, a former NFTA chairman who oversaw the expansion of Buffalo Niagara International Airport during the 1990s. “There have been several disappointments of passenger traffic out of Niagara Falls.”

To the skeptics, its strongest supporters say this: Give the airport a chance.

“Niagara Falls, its industry of the future is tourism,” said Henry Sloma, of Lewiston, NFTA chairman and a key Niagara County force behind the construction of the new terminal. “People have waited a lifetime to have a facility that supports that development process. And now, the transit authority has taken the steps and provided that facility for that community. So not only functionally, but socially, I think the facility needed to be developed.”

The project has a do-or-die sort of mentality for those betting that the new terminal will bring success that has eluded the airport for four decades. Don’t build, they have maintained, and they’ll never come.

“We’ve had limited activity in Niagara Falls because we didn’t have a plausible facility,” Sloma said. “The question always came down to the chicken or the egg. Do you have to build the facility to get the traffic, or vice versa?”

The airport today operates out of a

one-story terminal with no air conditioning and a baggage conveyor belt that backs up if a handler doesn’t stand at the end and remove luggage.

Today’s passenger and baggage screening requirements make it “virtually impossible” to process an inbound and outbound flight at the airport at one time, according to a report prepared in 2007 by transportation consultant McFarland-Johnson.

“We came to the conclusion that it could happen in Niagara Falls and it was worth spending money on a new facility and taking the chance,” said Lawrence Meckler, NFTA executive director. “Because if you didn’t, it would be almost like giving up on Niagara Falls forever by just leaving this antiquated terminal in place without taking a shot at a new facility.”

Meckler and other NFTA officials are betting that the airport’s assets — its long runway and low landing fees — will propel it to success.

The new terminal will triple the size of the old building and will meet post- Sept. 11, 2001, standards for processing passengers.

Plans for marketing the airport focus on luring charter flights or direct overseas flights to Niagara Falls. Both markets, Meckler said, are underserved at the Buffalo Niagara airport.

But both have fallen short of expectations in the past, and firm prospects for new flights at the new terminal have not materialized.

Niagara Falls International Airport has failed to live up to expectations for decades, and the new passenger terminal will open at a difficult time for the airline industry.

A plan to bring in Skybus Airlines to Niagara Falls fell through last summer when the airline went bankrupt. Another plan to route charter flights between Shannon, Ireland, and Niagara Falls never materialized.

Worse yet, the economic realities of the new terminal includes these facts:

A third of the project budget remains unfunded. The NFTA is short $14.5 million for the entire $42.5 million airport improvement project and will have to borrow the money or tap into other funds by September if it does not find another source.

The airport will continue to lose money after the new terminal opens. Money made at Buffalo Niagara International Airport will bridge the gap.

Passenger traffic through the airport would have to see major growth for the facility to break even. Officials have estimated it would take roughly 525,000 people coming and going from the airport each year for the airport to break even. Last year, it had 39,633 passengers.

Before Direct Air started running flights to Myrtle Beach, Fla., from Niagara Falls in 2007, the last regularly scheduled commercial flights was a Newark-Niagara Falls route operated by Kiwi International Airlines in 1998. The run lasted 100 days.

Direct Air gives boost

That said, things are looking up.

Direct Air has brought new energy to the tiny airport.

The low-cost carrier operates flights

to Myrtle Beach year-round and to Punta Gorda, Fla., in the winter. Meckler said the airline is close to adding a third destination to its Niagara Falls flights.

The addition of Direct Air brought more passengers through Niagara Falls International Airport last year than ever before.

The airport already has exceeded forecasts for future airport growth approved by the Federal Aviation Administration before construction began on the new terminal.

Those models, based only on the addition of Direct Air to the airport and not the potential for adding other airlines, assumed that 14,460 scheduled commercial airline passengers would use the airport by 2011. The airport has already more than doubled that traffic.

“We’re way over what we anticipated,” said William R. Vanecek, NFTA director of aviation.

Vanecek and Meckler also see growth in luring more passengers from the north.

“We know there’s a tremendous market in Southern Ontario, Toronto and even beyond,” Meckler said. “I think that’s one of the reasons we feel very confident about the Niagara Falls airport and its potential.”

Donald G. Hobel, a community watchdog who has kept a close eye on government spending, was among several people who expressed skepticism about the planned construction of a new terminal at Niagara Falls International Airport in 2004. He wanted to see more demand to warrant the public investment.

Direct Air has changed his view.

“Anytime I go by the airport, I see quite a few cars in the parking lot,” Hobel said. “Whatever is happening there seems to be going in a new direction.”

Casino key factor

What has changed in Niagara Falls since the failure of Kiwi International Airlines is the addition of the Seneca Niagara Casino & Hotel.

The casino has brought in new opportunities for charter flights at the airport and—more importantly—has provided a new revenue stream to help pay for its expansion.

More than $12 million of the local share of slot machine revenue has been dedicated to the construction of a new terminal. The rest of the project is made up primarily of NFTA funds, state grants and federal transportation money.

Requirements tied to the casino revenue provided a “window of opportunity” that would have been missed had the NFTA failed to begin construction on the airport, Meckler said. By state law, the authority would have lost the casino revenue if construction hadn’t started within two years of receiving it.

“If we didn’t act when we did, we would probably be sitting without a new facility,” Meckler said. “Without the Seneca money, there would not have been a decision to go ahead and build the terminal.”

The NFTA is still seeking another $14.5 million for the project and has applied to the state’s Upstate Regional Blueprint Fund.

Deborah Leous, the NFTA’s chief financial officer, said the agency will consider taking out a short-term mortgage on the new building to make up the gap if an outside funding source is not found by the time construction is complete in September.

“If it wasn’t for the economic climate, I’m sure we would have filled that gap by now,” Meckler said. “The project is in no jeopardy whatsoever. We have the ability to complete the project.”

Facing future losses

Opening the doors to the new terminal, however, will not guarantee its success, and officials know that the airport will continue to lose money into the future.

The budget deficit — about $1.6 million — is plugged each year by money made at Buffalo Niagara International Airport. The gap is expected to grow to $2.6 million this fiscal year because of the construction of a new parking lot at the Niagara Falls airport.

Airlines at Buffalo Niagara International Airport also pay a portion of the operation costs at the Niagara Falls airport because it is designated as a reliever airport for the Cheektowaga site.

Meckler said an earlier projection that the airport could break even by 2012 has been pushed back. He expects additional prospects to emerge as the economy shapes up.

He points to the economic impact of people who use the airport as another important factor to measure its success. The NFTA estimates that passengers who flew into Niagara Falls on Direct Air last year spent $3.5 million in the region.

Vanecek, the aviation director, sees the NFTA’s experience with Skybus as evidence that the economic model at Niagara Falls International Airport works.

He said the airline was on the verge of running two flights a day out of Niagara Falls before it was bankrupted by fuel costs.

The fact that some airlines are now grounding flights, Vanecek said, could provide new opportunities for Niagara Falls in the two areas the NFTA has focused its marketing efforts: charter flights and direct overseas passenger routes.

Vanecek and the NFTA are taking the long view in Niagara Falls.

So are the skeptics.

“Ten years from now, I just hope that the community can continue to afford it because you don’t want it to be just good for a couple years,” Gioia said. “This is about long-term sustainability in a very volatile industry.”