Every one of the 12,000 pilots worldwide who fly for United Airlines — Denver International Airport’s largest carrier — soon will be trained in the Mile High City.
On Wednesday, United announced the consolidation of its global pilot-training operations to its training center in Stapleton — a move that will keep 400 jobs in Denver and will add 200 jobs in exchange for a $13.2 million tax-incentive package from the city and state.
United operates two training facilities. The Stapleton center, at the corner of East 35th Avenue and Quebec Street, houses flight simulators for the airline’s Airbus fleet as well as some Boeing aircraft. The site in Houston handles training for some of the airline’s Boeing fleet.
Stapleton, which has been in operation since the mid-1950s, will be completely renovated to accommodate the additional equipment and personnel.
United spokesman Luke Punzenberger said this approach — as opposed to building a new facility — will save United more than $80 million in upfront capital expenses.
United’s capital investment at the site will total about $40 million, according to the city.
Competition was stiff between Denver and two cities under consideration — Houston and Chicago, where United is based. In the end, the scale tipped for Denver.
In an internal memo to pilots, Howard Attarian, United’s flight operations senior vice president, said lower capital expense, an expedited two-year timeframe and minimal disruption to operations are key reasons why Denver got the edge.
DIA CEO Kim Day said the proximity of the training center to Regional Transportation District’s East Rail Line, which will begin service to the airport early next year, also was crucial.
Plenty of state and local incentives also sweetened the pot.
The state’s Office of Economic Development chipped in about $9.2 million in Job Growth Incentive Tax Credits in exchange for the creation of 265 full-time jobs over eight years, said OED spokeswoman Holly Shrewsbury. Those jobs will have an average annual wage of about $62,300.
The Job Growth Incentive Tax Credit is equal to 50 percent of the company’s 7.65 percent Federal Insurance Contributions Act tax on net job growth each year.
However, unlike many other states, Colorado requires the jobs to be created, hired and retained for one year before tax credits are issued.
The city of Denver committed an additional $4 million in incentives tied to “performance benchmarks,” pending City Council approval, said Mayor Michael Hancock.
Paul Washington, executive director of Denver’s OED, said United must meet stipulations in capital investment into rehabilitation of the Stapleton site and its flight simulators, as well as the number of jobs it delivers to the area, to receive the incentives.
“We, of course, looked at the direct economic impact of those investments and job creation metrics, and the incentives are based on the achievement of them as projected by United Airlines,” Washington said.
The 12,000 pilots — and the thousands more Punzenberger says the airline anticipates hiring over the next few years — will each stay in Denver for up to three weeks at a time.
This totals 69,000 travel nights per year, Washington said, keeping hotels in the Stapleton area busy and possibly leading to new investment in the area.
The Houston training center will remain in use during the transition, but United expects some staffers and equipment to move to Denver by the end of this year.
“With the amount of training we need to accomplish over the next few years, it is essential that we minimize disruption to our training schedule,” Attarian wrote.
As for job losses in Houston, Punzenberger said it’s too early to know how many will be affected, but he said there will be a “net job impact” — positive for Denver and negative for Houston.
“We will do a complete assessment of all jobs, top to bottom, and then interview for those positions,” he said. “Consolidating is the best choice that will allow us to build the best team now.”
This is the second large deal between the city and the airline over the past year. In August, United extended its lease with DIA through 2035 in exchange for savings of nearly $35 million a year for the airline.
The initiatives from that deal are not related to those offered on the training center, Day said.
Laura Keeney: 303-954-1337, lkeeney@denverpost.com or twitter.com/LauraKeeney
