July 4, 2008

D/FW Expects 7% Fall in Passenger Count

By Trebor Banstetter, Fort Worth Star-Telegram, Texas

Jul. 4--Dallas/Fort Worth Airport is expecting a sharp drop in passengers next year as airlines cut their schedules and the demand for travel slows amid the softening economy.

The airport is planning to tighten its belt to adjust for lower revenue from passengers, parking services, vendors and other sources. And despite putting a lid on expenses, the airport will have to charge airlines more to make up for the lost dollars.

"We're going to have a difficult ride for the next year or two," Jeff Fegan, D/FW's chief executive, said during an airport board meeting Thursday. He gave the board a preview of the fiscal 2009 budget, which goes into effect Oct.1.

The airport is expecting about 7 percent fewer passengers in its next fiscal year than this year. That would be the second-largest decrease in D/FW's history, topped only by a 9 percent decline in passengers in 2001 after 9-11.

The drop is expected largely because Fort Worth-based American Airlines, which operates its largest hub at D/FW, is cutting its D/FW schedule by about 5 percent, part of a nationwide downsizing as the airline grapples with record fuel prices.

The carrier plans to cut 42 flights from D/FW and eliminate service to six airports, including Oakland, Calif.; San Salvador, El Salvador; and Buffalo, N.Y.

Airport officials said they expect an additional decrease in passengers because of the slowing economy and reductions at other airlines.

"People are cutting back," particularly leisure travelers, said Joe Lopano, D/FW's executive vice president of marketing and terminal management.

"People still need to travel for business, but that vacation to Orlando or Las Vegas may not happen this year."

The airport's total budget of $640 million is the same as in fiscal 2008, the first time in the airport's history that expenses have not grown. Officials said they plan to clamp down on costs and can save money with reductions in some debt-related expenses, medical and insurance costs and reducing the airport's operating reserve.

No layoffs are expected, although any new hiring will be closely reviewed.

But the cost-cutting won't be enough to offset the drop in revenue. The airport will have to collect $15.5 million more from the airlines to make up for the shortfall.

The total cost per passenger will rise to $8.18 in fiscal 2009 from $7.18 this year.

The board will review the budget again at a special meeting July 24.


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