`

Airport forecasts fewer passengers

July 17, 2008
Airline woes will crimp the number of passengers expected to use Indianapolis International Airport next year, the airport authority projects in a 2009 budget the board will consider at its meeting tomorrow.

About 4.1 million passengers are expected to pass through boarding gates - 6 percent fewer than previously forecast for 2009 but similar to last year's level.

A memo to board members from the airport finance department said the curtailed forecast was prompted "...as more airline announcements of capacity cuts have continued to be made over the last few weeks."

Tomorrow's meeting follows yesterday's announcement of a lineup of restaurants and retail shops for the new $1.1-billion midfield terminal, which is slated to open Oct. 28.

Despite the lowered passenger expectations, the airport will end 2009 with surplus cash flow of $13 million. The surplus will remain after setting aside $5 million for reserves and deposits in the airport's capital improvement fund, the memo said.

A $13 million surplus is "very appropriate" for an airport the size of Indianapolis International, the memo said, and amounts to 1.8 times debt service, well above the required 1.25 times.

The airport is taking on debt for the terminal as the airline industry goes into another tailspin due to soaring jet fuel costs, a slumping economy and rising inflation. In fact, debt service will jump to $56 million next year from $31.5 million this year.

The revised budget assumes $2 million less in landing fee income, $1.6 million less in parking income, $400,000 less in fees from food and retail, and $700,000 less in ticket tax receipts.

Airline revenue, such as that from landing fees and terminal rent, is projected at $51.2 million, compared with $43.3 million this year. The increase amid flat passenger traffic is attributed to higher rates and charges assessed airlines to help pay for the new terminal.

Still, officials expect a marked increase in revenue raised from fees on food and retail stores. The fees will generate $87.8 million next year compared to a projected $69 million this year and $64.3 million last year, the memo said.

In addition to the increased debt service, the airport will incur $2.6 million in added personnel costs: 55 new employees plus 11 new workers for the food court who will eliminate contract labor.

The airport board is scheduled to vote on the new budget on Aug. 1.
Source: XMLFULL/XMLFull17371.xml
ADVERTISEMENT

Recent Articles by Chris O'Malley

Comments powered by Disqus