LR airport expects decline in fliers

Commission proposes $30.2M operating budget for 2015

Graph showing passenger boardings at Bill and Hillary Clinton National Airport/Adams Field.
Graph showing passenger boardings at Bill and Hillary Clinton National Airport/Adams Field.

The state's largest airport forecasts a larger decline in passenger boardings next year, but it expects revenue to be flat, according to a proposed 2015 operating budget.

The proposed $30.2 million operating budget is 2.6 percent smaller than the proposed operating budget for the year ending Dec. 31. It is 7.5 percent higher than estimates were for the actual 2014 budget.

The proposed 2015 budget for Bill and Hillary Clinton National Airport/Adams Field won the recommendation Friday of the Little Rock Municipal Airport Commission's finance committee. It will be reviewed by the full commission Tuesday.

Airport officials attributed a significant source of the decline in passenger boardings to the poor economic performance in the greater Little Rock area as compared with other parts of the state, such as Jonesboro and Northwest Arkansas.

The total number of passengers going through Clinton National this year through October is 1,752,627, which is down 4.7 percent compared with the same time a year ago.

Airport staff members forecast a 5.1 percent decline next year, with boardings dipping below 1 million for the first time in years.

From 2006 to 2013, passenger boardings fell 14.9 percent, or by 189,850, according to airport figures.

Other factors in the decline include increasing domestic airfares, the merger and consolidation of American Airlines and U.S. Airways, and the expiration of the Wright Amendment, which placed limitations on where Southwest Airlines could fly.

The Wright Amendment expired Oct. 13. As a result, Clinton National lost four daily flights to Dallas and Houston this month as the airline moves its aircraft from small and medium airports to more profitable routes, airport officials said.

But slow growth in the regional economy is also a factor.

"It explains why our emplanements are down," said Ron Mathieu, the airport's executive director. "The economy in this area is not producing at the rate of a Jonesboro or a Fayetteville."

The Fayetteville economy grew 5.8 percent on average from 2010 to 2013, while Jonesboro's economy grew 2.4 percent during the same period, according to the Federal Reserve.

The Little Rock area not only trailed both of those regions with a growth rate of 0.7 percent but it also trailed the national average of 2.1 percent.

"We can't overlook this information," Mathieu said. "This explains in part in a major way what we've been experiencing here."

Net income in 2015 is expected to be $7,397,682 on revenue of $30,251,649. The proposed 2014 budget had projected net income to be $6,792,700 on revenue of $30,402,522.

Actual net income for 2014 is estimated to be $9,139,216 on revenue of $30,402,005.

The comparisons between proposed budgets year to year and proposed budgets to actual budgets is a continuing source of friction between airport staff and one of the commissioners, Tom Schueck, who prefers comparing the proposed budget to what actually happened as far as revenue, expenses and income go.

But Mathieu said too many unanticipated things could happen year to year to expect the airport staff to use actual revenue, expenses and income as a base for the next year's budget.

"This is a plan with a lot of unknowns," he said at Friday's meeting of the finance committee. "We have to base it on what we know."

Schueck noted that proposed operating expenses in 2015 are $22,407,087, which the airport staff trumpets as 2.4 percent less than operating expenses in the current budget as proposed. But the figure is 7.5 percent higher than actual estimated expenses for 2014, he said.

Another commissioner, Virgil Miller Jr., pointed out that the 2015 budget anticipates no income from Dassault Falcon, the aircraft-maker that has a large completion facility at the airport, for renting hangar space at the shuttered Hawker Beechcraft facility to store aircraft. The airport has collected $185,000 from Dassault Falcon this year.

"Is this being overly conservative?" he asked.

Bryan Malinowski, the airport's deputy executive director, said Dassault Falcon uses the Hawker Beechcraft hangar on a month-to-month basis, and the airport cannot predict how long it will continue.

"It's very fluid," he said.

Overall, the commissioners praised the staff's proposed budget with Miller echoing Schueck's comments, calling it "very impressive and very detailed."

"It makes sense," Miller said. "You explain everything."

Metro on 11/15/2014

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