Wednesday, May 13, 2009

Friedman feels economic downturn

Landings, rentals, fuel sales all dip

Express Staff Writer

Friedman Memorial Airport isn't the high-flying income producer these days that it usually is. In fact, it's in something of a revenue tailspin.

Virtually all of Friedman's non-federal revenues—fees from air carrier landings, car rentals, aircraft tie downs, transient aircraft landings, fuel sales and security badge fees—are shrinking as part of the rippling effect of the national economic chill.

Airport manager Rick Baird reported revenues for the first three months of 2009 down 10 percent from the same period last year, while expenses were slightly higher, unlike 2008 when expenses and revenues were balanced.

One of the largest hits has been in the airport's rental car operation. Enterprise Rent-a-Car has closed its terminal counter and opened an off-airport location, leaving terminal rental car operations to Avis and Hertz.

From October 2008 to February 2009, car rental revenue fell 12 percent compared to the same five-month period in 2007-08 ($173,097 versus $198,853).

As a result of the sharp loss in revenues to car rental firms, the airport authority agreed to abandon for now a complex system of fees charged to the companies, and instead impose a flat 10 percent annual fee on their gross revenues. Baird estimates that will cost the airport more than $100,000 a year in revenue.

Enterprise, meanwhile, will pay a 15 percent fee on all rentals and must run a customer shuttle to and from the off-terminal office, rather than delivering cars to customers at the terminal.

Friedman's parking lot also has been plagued by losses. In just February alone, airport revenues from Car Park Inc., the parking concessionaire, dropped 50 percent from those collected in February 2008 ($6,007 versus $12,089). In hopes of reversing losses, the airport conducted a test incentive program, providing a free day of parking for every three days of paid parking. A Car Park official told the airport board the company was "thrilled" with the results. Now the board is considering a longer period for the incentives.

Baird said the objective is to encourage travelers to park at the terminal, rather than have family members drop them at the airport and then pick them up later.

Revenues from fuel sales also are off—down 24 percent for February 2009 over February 2008 ($12,351 versus $16,270). For the first five months of the fiscal year (October through February), fuel fees are off 17 percent.

Baird attributes that to fewer general aviation flights. Airline flight levels have remained generally steady. In March, the Friedman control tower recorded 2,052 flight operations of all types, versus 3,097 for March 2008, a drop of some 34 percent.

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