Chief seeks to diversify NW airport’s income

HIGHFILL — The Northwest Arkansas National Airport should diversify its income so the airport will be better prepared should something like the covid-19 pandemic occur again, according to its chief executive officer.

Members of the airport board’s finance committee talked about diversification at a meeting Wednesday. A larger discussion is planned at next week’s full board meeting, said CEO Aaron Burkes.

“We won’t be asking for any decisions by the board, but we want to plant some seeds, throw some ideas out there for your reaction,” Burkes said. “Basically, just an effort to look at what we learned from the covid pandemic and see what kinds of things we need to do differently going forward to reduce the risk to us here at the airport.”

Burkes said he expects a lengthy process.

“It’ll be years down the road before we reap the rewards, but no better time to start than the present,” he said.

The airport saw passenger traffic drop 96% at the beginning of the pandemic in March. Recovery has been slow. Having almost no passengers meant the airport got little to no income from airlines, car rentals, parking fees and food and beverage sales.

Tim O’Donnell, chief financial officer, said, regardless of when passengers return, other sources of income are needed.

A new access road should open the area around the airport for more development, O’Donnell said. Adding cargo operations, buying land for long-term development or lease, landing manufacturing operations and retail businesses and taking over operation of the airport’s fixed base operations — the gas station — are some options, O’Donnell said.

Enplanements were down 61% for the year. The airport saw 360,133 passengers in 2020, compared with 922,533 who caught a flight out of the airport in 2019. Based on preliminary 2020 numbers, operating revenue from airlines slipped 40%, from $6.3 million to about $4.2 million, in large part due to deferring payments. Parking income was off about $4.8 million, or 62%, for the year, and car rentals were down 60%, or about $1.4 million. Fees collected for facility improvements were off 60%, as well, at about $3.8 million.

The airport got $8 million in federal covid relief last year and expects another $4 million this year. That money has been used to pay the bills and keep the lights on until passengers return. There may be some more money available if a federal infrastructure bill is passed.

O’Donnell said airports in Little Rock, Tulsa and Springfield, Mo., all have substantial income from other sources.

“All of them have $3 million to $10 million in cargo and other things that we don’t have, which tells us we’ve really got to dig in and find some diversification, long-term, which will help us weather covid-22 or 28 or whenever the next one happens,” he said.