HomeNews Loss of Dallas and Houston flights could hit airport hard
Loss of Dallas and Houston flights could hit airport hard
Written by Alissa Johnson
Wednesday, 20 February 2013
Too early to know what it would mean for jobs
The potential shift of Dallas and Houston air service from the Gunnison Crested Butte Regional Airport to the Montrose Regional Airport has the entire north end of the valley talking: Is that a foolhardy move by Crested Butte Mountain Resort or a bold but necessary step?
Time will tell but the thing that becomes immediately clear is that the Gunnison Airport could stand to lose a significant portion of its revenues. And that could reverberate throughout the valley. According to information provided by Ben Cowan, the county’s assistant finance director, the airport has budgeted revenues of $1,164,677 in 2013. In examining the various fees and revenue sources, Cowan thought “It would be fair to say the loss of those outside Colorado markets would have a significant impact on Airport Operations, possibly approaching a 25 percent reduction in the annual revenue.” Flights landing at the airport generate revenue through a variety of sources, including landing fees, terminal rent, use of the boarding bridge, passenger facility charges, ground transportation, and fuel taxes. As an example, landing fees are generally $5.35 per 1,000 pounds of a plane’s weight per landing. So according to Cowan, a typical American Airlines Boeing 757-200 would generate a landing fee of about $1,000. In addition, $4.50 is collected per enplaned passenger and generates monies that are typically used for matching funds for Federal Aviation Administration Airport Improvement Grants. In 2013, landing fees make up about 10.3 percent of revenues; use of the boarding bridge makes up 5.15 percent; contract fees are roughly 18 percent; and rent is roughly 33 percent. Cowan said the loss of revenue would have significant effects on expenditures. “This impact on the expenditures would involve many budget work sessions with staff and the commissioners, and would potentially involve many solutions including cost avoidance, fee schedule changes, service reduction, etc.,” Cowan said. “Speculating if there would be a decrease in personnel expenses specifically would be a stretch at this point because the airport still would need to maintain a minimum level of staffing in order to maintain required certifications, and coverage.” At a meeting of the Gunnison Valley Rural Transportation Authority in February, board members indicated they were looking into the possibility of increasing the frequency of flights out of Denver. However, without knowing the result of those negotiations with United Airlines, it’s important to note that a reduction in overall capacity could impact other funding as well. Sarah Mick, an administrative assistant with the Gunnison Airport, pointed out that a reduction in the passenger facility could have greater ramifications than simply having enough money to cover the matching portions of FAA funding. The FAA awards funding based on who needs it most. “If two similar airports have the same need (like a new taxiway) and one gets 20 flights a day and ours gets one, who do you think stands a better chance of getting funds?” she said. In addition, the economic impacts would undoubtedly be felt throughout the community. County manager Matthew Birnie cited an aviation study from 2008 that found 1,950 jobs were generated by having a regional airport. According to the study, conducted by the Colorado Department of Transportation, those jobs include positions at the airport and businesses that are aviation-related. The annual payroll amounted to $55,972,100 and an annual economic impact of $177,646,500. Those numbers have likely changed as the number of enplanements have steadily decreased since 2008, but the message is still the same: the Gunnison Valley stands to lose more than a few direct flights if flights originating out of state shift to Montrose.