Airport income on track for strong year
Columbus airports expected to have their second best year ever, finances-wise
After a year of travel restrictions that nearly decimated the airline industry and the airports that support it, Columbus' two airports are on track to have their second best year ever, finances-wise.
In the first nine months of 2021, the Columbus Regional Airport Authority earned net operating income of roughly $27 million. That figure equals the authority's revenue minus expenses like upkeep and payroll. The record for net operating income was set at $45.9 million in 2019, and the average total was $30 million per year for the previous five years.
Passenger traffic is on its way to 2019 levels, Paul Streitenberger, the authority's interim CFO. “We're at nearly 65% of our 2019 highs.”
Rickenbacker, on the other hand, is primarily a cargo airport, he said. In recent months shipping companies sent more cargo through the air as shipping containers piled up in backlogged seaports.
“... we have not slowed down our capital improvements. We opened a rental car facility, and invested in a new hotel. We’re optimistic about the future.” Paul Streitenberger Columbus Regional Airport Authority interim CFO
“And with the increase in cargo activity, that allows them to be more self-sufficient,” Streitenberger said of Rickenbacker.
But cargo and passenger numbers are only part of the equation.
Airport authority officials said they kept costs down by deferring some maintenance
and not filling open positions. And money from a pair of COVID relief bills helped the airport stay afloat.
The airport authority and the air travel industry have come a long way since the onset of COVID.
Air travel plummeted after the first cases of coronavirus were diagnosed in the United States in the spring of 2020, throwing airlines and airports into crisis. Workers were furloughed as terminals emptied and planes flew with only a handful of passengers.
Conditions improved as lockdowns and restrictions lifted, business travel resumed, and vaccines became widely available.
International air travel has yet to recover, but passenger numbers on domestic flights are slowly approaching PRE-COVID numbers.
Nationally, airline travel is at roughly 80% of 2019 highs, but passenger numbers have nearly doubled since the low point in 2020, according to the International Air Transport Association.
“John Glenn is right in there with the rest of the industry domestically,” said Rod Borden, a former CFO of the airport authority and a lecturer at Ohio State University's Center for Aviation Studies.
However, some industry insiders caution that a return to normal is still years away.
“Most airlines and the FAA think that by 2025, they'll be beyond the pre-pandemic levels,” said Joseph Sobieralski, who teaches airline economics at Purdue.
The airport authority in Columbus benefits from a number of fortuitous circumstances. The city's airports, for example, have not returned to full staffing, reducing labor costs. And an increased emphasis on air cargo sent more goods through Rickenbacker.
“Folks are going more to aviation to move goods,” Streitenberger said. “And Rickenbacker has been in a great place for that.”
Tourists are still reluctant to travel abroad, helping cities like Columbus, said Silke Forbes, an associate professor of economics at Tufts University who has studied the airline industry. After crossing foreign destinations off their travel lists, they look to domestic attractions, she said.
“Hocking Hills is one of those destinations that's seeing a big increase in business,” Forbes said. “Locations inside the U.S. that didn't see as much tourism in the past overall are seeing more travel.”
International travel to the United States, on the other hand, still lags well behind PRE-COVID rates, having dropped roughly 70% from pre-pandemic highs, according to the International Air Transport Association Trade Group.
Most industry insiders expect foreign travelers to eventually return, but not until travel restrictions are lifted entirely.
“You often have to take COVID test to go back to your home country," Borden said.
That means an infection can result in an unexpectedly lengthy and potentially expensive stay in a foreign country, he said.
Some experts worry conditions may never completely return to normal. The rise of videoconferencing during the pandemic showed employers that travel is not always necessary.
“We think that business travel won't recover for a while, if at all,” Forbes said. “Many people have gotten used to working remotely.
Streitenberger is a touch more optimistic. The airport's airline partners are projecting that traveler numbers will continue to improve next year, he said.
“By the second quarter of 2022, we expect things to be more like normal,” Streitenberger said.
In the meantime, a lucrative year lets the airport authority focus on plans it made before the pandemic, he said.
“It's no secret that we've had a master plan in place for 20 years or more to develop a new terminal” at John Glenn, Streitenberger said.
The airport authority CFO couldn't provide a timeline for the terminal's construction, but said rising revenue helps the airport authority set aside money for that long term goal.
As the authority saves for the future “we have not slowed down our capital improvements,” Streitenberger said. “We opened a rental car facility, and invested in a new hotel. We're optimistic about the future.”
pcooley@dispatch.com