Airport Passes $127.3 Million 2014 Budget

By Jennifer Johnson Backer

The Memphis-Shelby County Airport Authority on Thursday approved a $127.3 million budget that slightly lowers the overall amount airlines pay at Memphis International Airport even after Delta Air Lines drastically reduced the number of flights it operates.

Airport officials said they have strived to control costs as they work to lure discount carriers like Dallas-based Southwest Airlines Co. amid criticism over high airfares and fewer flights options.

Authority board members were told the airlines were satisfied with their share of the expenses, which they pay in landing fees and terminal rent, in the face of what has been a difficult year for the airport after Delta Air Lines cuts.

The Memphis International Airport budget for the 2014 fiscal year that begins July 1 will increase 2 percent to $127.3 million, compared with $124.8 million last year.

The 2014 fiscal year budget will generate a $1.4593 landing fee per 1,000 pounds, compared with $1.4557 a year earlier. Average terminal rent per square foot will rise 17.3 percent to $86.31, compared with $73.58 a year earlier.

Overall, airlines will pay $54.5 million in 2014, compared with $54.8 million a year earlier. Airport expenses will increase to $64.9 million, from $62.2 million last year, while total fixed revenue will rise to $55 million, from $54.2 million a year earlier.

While airport officials remained upbeat about the budget, passenger activity continued to slump in April.

Total passenger activity slumped 33.2 percent to 411,740 passengers in April, compared with 616,354 passengers a year earlier. Scheduled flights also declined 28 percent to 131, compared with 182 the same period last year.

Total flights from Delta and its airline partners fell to 92 scheduled flights in April, compared with 147 scheduled during the same year-earlier period. As Delta began paring flights, total origination and destination traffic exceeded connecting flights for the first time in September 2012. Flight transfers have continued to decline.

United Express, AirTran Airways and U.S. Airways all slightly increased scheduled flights in April, compared with last year, but those increases were not enough to offset Delta’s hub rollback.

For the fiscal year to date – July 1, 2012 through April 30, 2013 – total passenger traffic fell 28.6 percent to 4.7 million passengers, compared with 6.6 million passengers during the airport’s previous fiscal year to date. The airport’s fiscal year runs July 1 through June 30.

Cargo continued to buoy revenue for Memphis International, the world’s second busiest for cargo behind Hong Kong.

Memphis handled 720.8 million pounds in April, up 4.3 percent from 691 million pounds a year earlier.

For the fiscal year to date, Memphis International handled 7.5 billion pounds of cargo. That’s up 2.5 percent compared with 7.3 billion pounds of handled cargo during the same year-earlier 10-month period.

In other business, the commissioners approved a $1.6 million purchase agreement to buy 12.4 acres of property from ParkIt Here for future use as a rental car maintenance and storage facility. The property address is 3441 Airways Blvd.

The Airport Authority also approved a $578,000 contract with Barge Waggoner Sumner & Cannon Inc. to provide design services and airport improvements at General DeWitt Spain Airport. The firm will relocate a taxiway, extend a runway, relocate the levee, conduct property acquisition research and replace the airfield lighting system.

Commissioners also approved a contract with EMJ Corp. to relocate several loading bridges to prepare for Southwest Airlines’ arrival in the fall.