Pandemic takes all the wind out of air travel at Sky Harbor
During an update on Thursday to the Phoenix City Council on how the new coronavirus is affecting Sky Harbor Airport’s operations, Director of Aviation Services James Bennett shared a stunning statistic.
Two days ago, Phoenix Sky Harbor International Airport was the third busiest airport in the country.
He delivered that news while showing Council members pictures of the airport’s empty baggage carousels, lounges, restaurants and gate areas. He followed that with a graph showing Sky Harbor operating with just 15% of the passengers it would normally see this time of year.
That’s actually better than at many other U.S. airports. According to Bennett, that figure is close to 10% nationally.
For an airport that was on track to surpass 48 million passengers this year, Bennett did not sugar-coat the hard landing.
“This will be the most severe shock to the aviation business and Sky Harbor Airport that we have ever experienced,” Bennett told the Council.
Over the past week, when Sky Harbor should have been bustling with spring break and spring training visitors, it has experienced hundreds of flight cancellations and dozens of delays daily as airlines react to decreased demand caused by travel restrictions meant to help contain the spread of the virus that causes COVID-19.
To show the City Council what it could expect, Bennett brought back a graph he’s shown in past budgeting sessions that maps all of the impacts that recessions have had on passenger traffic at Sky Harbor since 1951. A new dotted line on the graph shows a sharp dropoff of passenger levels equal to those seen nearly 30 years ago.
“You could probably combine all of the impacts in the history of the airport together and not see something as shocking as what we are experiencing right now,” Bennett told the Council.
Historically, recessions have been followed by rebounds. The dotted line on Bennett’s graphic showed the ex
pected route for recovery. The airport’s conservative estimate indicated that passenger levels wouldn’t return to the 46 million served in 2019 until 2023.
Bennett also showed the Council how quickly the passenger counts plummeted. In February, the airport had seen a 6.4% increase in passengers over February 2019.
On March 2, Sky Harbor saw its first decrease in passengers. Unsurprisingly, that accelerated after travel restrictions and advisories meant to contain the virus were announced on March 11. By March 25, the airport had seen an 85% drop in passengers.
Which routes are available from Sky Harbor and which are canceled changes almost by the hour as airlines scramble to keep up with the drop in demand.
Sky Harbor has lost its London flights temporarily. And Bennett said flights to Frankfurt, Germany, which were expected to be competitive this spring as Lufthansa’s Eurowings brand joined Condor airline on the route, have now been postponed indefinitely.
Flights to Canada will be suspended starting March 28. Bennett said just one or two flights to Mexico remain, and he expects those will also be suspended.
The airport is funded entirely by revenues generated from passenger activity. It receives no taxpayer money.
Fewer passengers means fewer travelers buying concessions. With so few passengers, all of the shops and restaurants before the security checkpoints have closed. The ones beyond security are operating limited schedules and are take-away only.
According to airport figures, parking is down by 81%. The number of people riding the bus to the Rental Car Center is down by 93%, indicating fewer people are renting cars and paying the $6 fee the airport normally makes off of each rental car transaction.
The airport has instituted a 20% freeze on its remaining spending, halted some optional capital improvements and is subject to the citywide hiring freeze. It is looking at ways to save money on maintenance costs by closing some parking lots.
Some projects, ones covered by previously allocated grants and funds that can’t be used for any other purpose, will continue to move forward. Bennett said these are also improvements Sky Harbor will need when it comes out of this economic downturn.
Bennett told the Council that nearly every business operating at the airport has asked for some sort of relief.
The airport is allowing airlines and rental car companies to postpone paying rent for 90 days, with the entire amount due on June 30. The hope is that will give companies enough time to receive the federal assistance approved by Congress on Friday.
The airport also anticipates it will receive help from that bill, which has $10 billion set aside for emergency relief funding for airports, some of which will be to help airports with debt servicing.
The funds will be distributed according to formulas already in place by the Federal Aviation Administration and can only be used for the purposes that airports are lawfully allowed to use their airport revenue.