Airport sees revenue dive after sole carrier takes off

LOVELAND – Fort Collins-Loveland Municipal Airport is projecting a 38 percent drop in local airport fee revenue in 2014, following Allegiant Air’s departure a year ago.

The airport is projecting $580,000 in fee revenue in 2014, down from $931,000 in 2013. Airport fee revenue comes from terminal lease fees, fuel sales and landing fees.

The fee income represents a significant portion of the airport’s total revenues, which include state and federal transportation dollars. The facility had 2013 total revenue of $2.5 million and is projecting total revenue in 2014 of $2.4 million.

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The new budget comes as consulting firm AvPorts develops a marketing plan in an attempt to lure a new airline. Parts of the plan are expected to be released this month. The Business Report first reported earlier this year that, as part of the plan, officials were examining a range of options to lure a commercial airline back to the region, including a $500,000 to $1 million fundraising campaign, aviation fee waivers and corporate commitments to purchase tickets.

Allegiant, the airport’s sole commercial airline, stopped air service in October 2012 although the number of passengers boarding commercial planes had increased to 44,999 in 2011 from 35,671 in 2010. Allegiant chief executive Maury Gallagher blamed the lack of an air-traffic control tower and too many general-aviation aircraft in the sky.

The Federal Aviation Administration contributes $1 million annually as long as at least 10,000 passengers boarded planes at the airport, known as enplanements.

Because the airport won’t see that many passengers this year, it will lose 85 percent of that funding, or $850,000, in 2015. Distribution of funding by the Federal Aviation Administration lags by two years.

Even if the airport found a carrier this month, approvals and flight scheduling can take six to eight months before flights start, airport director Jason Licon said. The airport has spoken with a “number of airlines,” although no deals have materialized.

“If we look at this realistically, I assume in 2013 we will not make that 10,000 enplanement mark,” Licon said. “We will be closer to 2,500 to 3,000 based on all our public-private charter activity.”

City councils of both cities will decide this month whether to give preliminary approval to the airport’s 2014 budgets. To cope with the reduction in fee revenue, the airport eliminated one position and asked that the cities increase their $85,000 contribution by an additional $92,500 for a total of $177,500 apiece to shore up lost revenue.

Fort Collins Mayor Karen Weitkunat and Loveland Mayor Cecil Gutierrez voted to pass the budget in their roles as members of the Airport Steering Committee, which also includes managers of both cities.

Gutierrez acknowledged that the cities were adding to subsidies they contribute to the airport. The budget reflects planning by the cities for operating the airport without a carrier, he said.

Weitkunat said the budget is appropriate until the airport finds a new carrier.

“Forever and ever, kicking in X amount of dollars, no it’s probably not going to work,” she said. “It’s got to be viable for the region.”

She said she sees good times ahead for the airport, “but we’ve got to go through this slump to get there.”

The city of Loveland planned to consider first reading of an ordinance to pass its 2013 budget Oct. 1, after the Business Report’s print deadline. The Fort Collins City Council is scheduled to take similar action on Oct. 15.