Tucson Airport Outlook Bleak

By JACK GILLUM

FUEL UP, FLIGHTS DOWN

The Tucson Airport Authority expects to see an 18 percent drop in operating income next fiscal year, as Tucson and other cities grapple with slashed air service amid rising fuel costs.

Next year also will bring big decreases in funding for capital- improvement projects at Tucson International Airport, due in part to fewer available state funds. Some projects, such as the expansion of a general-aviation runway, have been put on hold.

The new figures, released at a TAA board meeting Tuesday, mark a noticeable change in revenue and income from fiscal 2008, in which total income was budgeted to rise by nearly 10 percent – to $12.7 million – from fiscal 2007. The airport’s current fiscal year ends Sept. 30.

The new budget changes will mean officials will “put TAA dollars into maintenance, safety and security,” CEO Bonnie Allin said, rather than future projects. The reductions, she said, also mean “significant cutbacks in new development” of capital plans, such as the runway expansion, in part because of cuts from state funds.

The figures also come as TIA has seen a reduction of 40 percent in the number of non-stop destinations from the Old Pueblo – a factor that airport officials acknowledged would have an impact on the budget. At the start of 2008, TIA had 30 non-stop destinations; this month, that number dropped to 18.

At the same time, the airport saw entire airlines leave its gates, including JetBlue Airways and ExpressJet Airlines.

Airport officials said TAA, which operates Tucson International Airport and Ryan Airfield, can still weather the storm because of careful management of expenses and boosting non-airline revenues, such as money from rental-car fees.

“We have the financial flexibility to do things in order to keep our costs low, and not cause the airline rates to go up dramatically,” said Dick Gruentzel, TAA’s vice president of finance and administration, referring to the rates the airport charges airlines.

Revenue from nearly all passenger airlines is expected to fall by about 8 percent to about $11 million. Concession revenue is also projected to decrease by 7 percent to $16.1 million.

At the same time, the airport is expected to pay about a quarter- million dollars more in personnel expenses, which includes increases in contributions for public safety retirement plans.

Officials on Tuesday also introduced new airport signage and parking-payment plans, which include uniform, purple-color roadway signs and kiosks that allow customers to pre-pay for parking before they leave. Allin said some of the current road and parking signs are more than two decades old.

Tucson is not the only airport that’s facing a financial squeeze.

Phoenix Sky Harbor International Airport expects a $26 million decrease in revenue for fiscal 2008-09, an airport spokeswoman said. Officials also said Sky Harbor may reduce its current operating budget by about $8 million, and may defer about $200 million to $300 million of the airport’s $1.6 billion capital budget – deferring spending to at least 2012.

Find the latest local aviation news at www.AzStarBiz.com.

* Contact reporter Jack Gillum at 573-4178 or at jgillum@azstarnet.com.

Originally published by JACK GILLUM, ARIZONA DAILY STAR.

(c) 2008 Arizona Daily Star. Provided by ProQuest LLC. All rights Reserved.