Tough times at Burbank airport after airline’s departure
The loss of a major airline, declining parking revenue and fewer passengers are being blamed for one of Bob Hope Airport’s toughest budget years, officials said.
“These are difficult times for us,†Dan Feger, the airport’s executive director, said last week at a meeting of the Burbank-Glendale-Pasadena Airport Authority. It’s “perhaps the most difficult budget year we’ve seen.â€
The Burbank airport was hit hard last month by the departure of American Airlines. Operating revenues are only about 1% above budget projections, so it’s important to ensure that income doesn’t take another big hit, said Kathy David, the airport’s deputy director of finance and administration.
Credit rating agency Fitch has warned that keeping the airport’s rating at AA- is “unlikely†if it takes out a multimillion-dollar bond to build a transit center, which would bring rental car, bus and rail services under one roof. The project’s budget is estimated at $81 million.
Overall the airport appears to be in good financial health, Fitch officials said, noting that many mid-sized airports have single A ratings.
But even before American’s departure, the airport had been struggling with declining parking revenue for four years, while passenger numbers have also fallen off, according to a recent report. Now airport officials must set some budget priorities.
Airport spokesman Victor Gill said the transit center is needed to integrate the airfield with the region’s public transportation system and improve convenience for rental-car customers. The current car rental offices are also too close to a runway, according to FAA standards.
The goal, Gill said, is to make the airport more public-transit friendly and environmentally responsible.
Transportation consultant Jack Keady, who has looked over the airport’s financial data, pointed out Bob Hope’s comparatively low per-passenger cost for airlines. He said at $2.09 — the lowest by far in Southern California — adjusting the airfield’s fees upward could be an untapped source of additional revenue.
The next highest per-passenger cost is $4.07 at Palm Springs International Airport and $5.34 at Long Beach Airport, according to financial data from individual airports. Los Angeles International Airport’s per-passenger cost is $11.
“There is some room to increase airline charges,†Keady said.
David last week recommended against increasing airline fees, although she left the door open for a future hike.
“That is something we may have to look at as we develop next year’s budget,†David said. “But at this time, we don’t have a good support presentation to bring to the airlines, and we hope we don’t even have to get there.â€
American’s departure from Bob Hope puts Southwest, the airport’s largest carrier, into an even more prominent position.
Ashley Dillon, a Southwest spokeswoman, said Bob Hope’s per-passenger cost is one of the lowest of any airport the company serves and is one of the things that makes the airport so attractive.
If an airline fee hike is proposed, Southwest would work with other airlines to reach a “mutually agreeable cost,†Dillon said in a statement.
“Southwest is not in the habit of exiting airports,†she said. “We will do what we can to ensure we are paying fair prices.â€
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