Fuel sales ease airport’s revenue loss

LOVELAND – The number of passengers boarding planes at Fort Collins-Loveland Municipal Airport was projected to have dropped more than 90 percent last year, but record fuel sales from corporate and charter travel helped the airport make up for some of the lost passenger-fee revenue.

The drop in passenger traffic – just 2,500 to 3,000 passengers in 2013 – is a sharp change from 2011, when the airport saw 45,000 passengers boarding planes. The numbers began dropping in 2012 after the airport’s sole commercial airline, Allegiant Air, announced it would cease operating at the airport.

The lower number of passengers in 2013 means the airport will lose $850,000 in federal funding in 2015, airport director Jason Licon said. The airport receives a minimum of $1 million in funding from the Federal Aviation Administration as long as it has at least 10,000 enplanements. Distribution of the funding by the federal agency lags by two years.
The airport still will receive $150,000 in funding from the federal agency in addition to discretionary dollars for airport improvement projects, Licon said.

“We’re going to still be a priority on the FAA’s funding system,” he said, “but the minimum amount we get is just going to be changed.”

The airport’s classification also will change from a commercial-aviation to general-aviation airport, similar to Greeley-Weld County Airport and Longmont’s Vance Brand Municipal Airport.
The passenger figures for 2013 are estimates: The Federal Aviation Administration won’t release enplanement data until July, Licon said.

The lower numbers also mean lost fee revenue. The airport projected $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 airport, however, saw record-breaking fuel sales of nearly 1 million gallons in 2013. Fuel sales have come from charter and corporate flights and have steadily risen since 2008, when 731,000 gallons of fuel were sold.

The airport is home to business jets used by companies such as Woodward Inc. (Nasdaq: WWD), Crop Production Services Inc., Bohemian Cos. and Otter Products LLC, manufacturer of OtterBox.

“We’re busier than we’ve ever been,” Licon said. “The economy is the leading factor.”
Increased activity from the oil and gas industry and other corporate travel has boosted fuel sales. Flights for medical emergencies also have contributed, including a helicopter based at Medical Center of the Rockies.

The fuel comes from the Loveland Jet Center and other companies. The airport charges fees of from 6 percent to 10 percent of the total cost of the fuel, depending on who sells it. It generates anywhere from $150,000 to $200,000 in revenue per year depending on fuel prices, Licon said.

Loveland Mayor Cecil Gutierrez said the increased fuel sales and corporate travel marked a positive development for the airport.

“There has been a lot more interest from the corporate folks out at the airport,” he said.
“They’ve been involved with the cities in evaluating where we are, where we need to go.”

Last year, a group of Northern Colorado business leaders joined as part of an airport study committee. The group is developing a business plan and vision for the airport. Members held a two-day session earlier this year to develop goals for the airport, including looking at forming an aviation-industry cluster to generate regional economic activity and an airport authority.

“The two-day… process was very valuable and productive for our group,” said airport group member Rich Shannon. “We’ll be reconvening again in March.”