Empty airports face huge financial losses

Rural and small markets could lose service

Airports are a contrived environment. Entry usually presents you with a bewildering array of lines and machines and counters, and after you decipher which one to go to, you then follow the herd through security, finally to be admitted to a shopping mall. Somewhere beyond the stores and Starbucks are the airplanes, usually half a mile away down long corridors, or reached only by some self-driving tram or an antiquated bus driving along taxiways next to 737s.

As George Clooney, playing Ryan Bingham in the 2009 movie, “Up in the Air” says, “All the things you probably hate about travelling—the recycled air, the artificial lighting, the digital juice dispensers, the cheap sushi—are warm reminders that I'm home.”

It’s one of my favorite movies, along with Tom Hanks’ “The Terminal.” They both remind me of my home away from home.

This year, airport terminals are mostly empty.

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When flush with travelers, airports make money from retail stores and restaurants. They make money from landing fees, land and building rentals, and from other aviation services. Almost all of those revenues have been shot down by the pandemic.

Take LAX for example. I’ve flown in and out of Los Angeles so many times that it feels much like Bingham describes: home.

So far this fiscal year, landing fee revenues at LAX are down 53.6%. Land and building rentals are more stable, but overall aviation-related income is off 32.7%.

Concession revenues from all those things you spend money on while in the terminal are down a whopping 88.1%. And the off-terminal income — parking, rental car and other transportation fees — are down 75.5%. (All data from Los Angeles World Airports Oct. 1 fiscal year budget performance review through August.)

“People are not traveling like they used to and that really plays itself out in airports.” — U.S. Rep. Rick Larsen (D-Wash.)

A CJR-900 on final approach to Portland International Jetport (PWM). © Dan Zukowski

The Airports Council International-North America projects $23 billion in losses for North American airports in the 12 months following the start of lockdowns. Airports are asking for additional federal financial help. Funds were included in proposed relief packages put forth by the Senate in July and the House in May, but as we’ve previously reported, legislation is stalled among warring parties in Washington.

“I don’t think all the airports that had commercial service on March 10, 2020 will have commercial air service on March 10, 2022.” - William Swelbar, Massachusetts Institute of Technology’s International Center for Air Transportation, quoted in Airline Weekly

For their part, airports are trying to restore confidence in flying. “I'm confident you've never seen cleaner, more sanitary airports than you have right now,” said Joel Bacon, executive vice president of the American Association of Airport Executives, speaking on a Politico webinar. Bacon said airports are emphasizing contactless technology and looking at how terminals should be reconfigured for the return of higher passenger traffic.

It took three years for air travel to recover following the terrorist attacks of Sept. 11, 2001 and more than seven years to recover from the 2008/2009 financial crisis.

Rural and small-market airports have already seen significant cuts in air service, and may be the last to see pre-pandemic schedules return. Airlines have parked or retired 20% of their regional aircraft fleet. It’s worrying to members of Congress from both parties, but absent additional aid, air carriers will make the financial decisions they need to make in order to survive.


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Author: transportation and environmental journalist DanZukowski.