Rapid City and Sioux Falls airports are asking South Dakota for roughly $5 million in additional funding on top of $15 million low-interest loans each, as record passenger volumes strain terminals designed for far smaller aircraft and crowds.

The executive directors of the two airports — Patrick Dame at Rapid City Regional and Dan Letellier at Sioux Falls Regional — briefed the South Dakota Aeronautics Commission on Thursday. They asked the commission to form a subcommittee to tour their facilities and examine funding in greater depth.

Both airports already hold claims on $15 million each in state loans. The Legislature and Gov. Larry Rhoden authorized the loans earlier this year from a state housing infrastructure fund. The loans carry 2% interest over 20-year terms, with repayments flowing back into the housing fund for future development projects.

Rapid City: gate congestion limits growth

Rapid City boarded a record 452,195 commercial passengers last year, up 5.8% — the airport's third consecutive year of growth, Dame reported. That growth is colliding with infrastructure built for a smaller operation. Passengers stand in hallways for lack of seating, and baggage handling still relies largely on manual labor.

"We actually do get notifications of upwards of 45-minute wait times to get through TSA," Dame said. Gate areas designed for 76-seat jets now handle aircraft carrying up to 115 passengers.

A shortage of overnight aircraft parking is also discouraging airlines from adding routes, he said — a direct constraint on network development at the airport.

Rapid City's near-term fix is a $70.6 million rebuild of the Transportation Security Administration checkpoint, baggage screening and ticketing areas. Federal sources cover roughly 70% of the cost, with 25% local and 5% state. The new TSA checkpoint is scheduled to open in October.

The larger project is a $121 million addition of five gates. Dame expects $40 million in federal funding; the remainder comes from state and local sources, including the $15 million state loan.

"So there is a considerable amount of local funding going into this project, because our community views us to be a very important project and very instrumental to the future development of western South Dakota," Dame said.

Inflation, however, is eating into project budgets. Dame declined to name a specific request, saying he preferred to work through a subcommittee, but when pressed he estimated "$5 million between the two airports."

Sioux Falls: 25 years of growth, outdated concourse

Letellier presented a $135 million program to expand Sioux Falls Regional's terminal, runways and taxiways, relieving capacity and gate constraints.

"We've seen consistent passenger growth, really for the last 25 years, averaging 3.5% per year," Letellier said. Gate areas built for 50 to 60 passengers now serve flights carrying 180. The existing concourse is "grandfathered" against current fire code standards and would fail them if rebuilt as-is.

The airport has secured $83.9 million in federal funding, with another $5 million requested. State funding stands at $3.5 million, plus the anticipated $15 million loan. Local funding is projected between $47 million and $50 million. Notably, while Letellier's presentation described a $135 million project, the requested and obtained funding sources total almost $160 million.

New-route negotiations have also stalled. Letellier said talks earlier this year with Southwest Airlines and American Airlines about additional service cooled after fuel prices spiked amid the Iran war, prompting airlines broadly to reassess their schedules.

Letellier asked the commission to back additional state support — either as a match for federal grants already received or toward an $8.5 million terminal reconstruction project that remains $5 million unfunded.

Both directors will make their case in detail if the commission forms the requested subcommittee, with the outcome likely to shape how quickly the two largest airports in the state can add gate capacity that carriers need to launch new routes.