August 6, 2008

D/FW Airport Looking to Keep 2009 Budget Flat

By Suzanne Marta, The Dallas Morning News

Aug. 6--Despite rising costs and a projected decline in revenue, Dallas/Fort Worth International Airport officials said Tuesday that they hope to keep their budget flat during the next fiscal year.

The airport -- the world's third-busiest in terms of takeoffs and landings -- is proposing a budget of $640.2 million for 2009, even with 2008.

That will be no small feat. Airport officials said costs are expected to rise $23.6 million, while revenue is expected to decline by $22 million, thanks to scheduled reductions by tenant airlines that are expected to result in 7 percent fewer passengers.

Airlines foot the bill for about 35 percent of D/FW's costs; the rest is paid by non-airline income such as parking and concessions.

Jeff Fegan, D/FW Airport's chief executive, said his staff has already identified $23.6 million in cost savings and has ideas to generate at least $12 million in new revenue. The rest would come from a transfer of up to $10 million from D/FW's capital fund to its operations fund.

The airport does not anticipate any layoffs but will hold off on hiring for some positions, Mr. Fegan said.

"The airlines, they want costs to be flat, and we want to be cost-competitive," Mr. Fegan said. "We have taken a very methodical, strategic, businesslike approach to manage this."

Mr. Fegan said some of the revenue-generating measures the airport is considering include allowing natural gas to be piped under airport property, increasing commercial development projects and boosting concessions and parking revenue.

To cut expenses, the airport is exploring locking in energy prices at lower rates and renegotiating some contracts.

Looking long-term, Mr. Fegan said the airport might consider consolidating airlines into fewer terminals or closing a portion of some terminals. Some related closures would likely be necessary anyhow while the airport conducts much-needed renovations on its original four terminals.

Belt-tightening measures this year have proved successful. Based on projections for the fiscal year ending Sept. 30, the airport board will be able to refund $7 million to the airlines because revenue exceeded expenses.

The airport board will formally vote to approve the budget plan at its regularly scheduled meeting Thursday.


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