May 31, 2006
2350 11112.91 Dec-05
3770 1196.00 Jan-06
7715 2394.05 Feb-06
13006 3411.25 March-06
Numbers are hard to read above, but here are the 4 month totals
Total Revenues 26,841.00
Total Expenses 8,114.21
Net Revenue 18.726.79
Average monthly profit during the first 4 months was $4,682 per month. That is actually better then estimated (or what I expected). Still think, however, the marketing of FREE PARKING would reap more benefits. At the same time, these were the peak months. I will post an update monthly.
Air-taxi companies -- the now-operating Linear Air and start-ups DayJet and Pogo Jet -- intend to acquire fleets of several hundred VLJs over the next several years, as on-demand air travel catches on and aircraft makers ramp up production. Air-taxi companies will probably start by focusing their service in one or more compact, highly populous regions -- for example, Linear and Pogo in the Northeast, DayJet in the Southeast. To make a profit they must keep their planes in the air and their few seats full, rapidly picking up and delivering passengers on flights of 200 to 500 miles, averaging an hour each.
They will shun crowded hubs such as O'Hare, LAX, Dulles, Hartsfield, LaGuardia and Logan. Linear Air is already using Hanscom Field, in Bedford, Mass., a suburb of Boston, and Teterboro (N.J.) Airport, five miles west of Manhattan.
The initial target customer isn't the typical personal traveler. Rather, the core market for the new air taxis will be the thousands of middle managers and professionals -- sales execs, consultants, CPAs and attorneys -- who travel extensively within their home region. Florida-based DayJet is aiming squarely at this market. It believes this traveler will readily pay 30% to 50% more than a full coach fare in exchange for getting more business done on each travel day and saving the cost of an overnight hotel stay.
May 29, 2006
An anonymouse blogger mentioned Skybus is the airline talking with ORH?? We might as well put them on the radar screen. For a little history on the company check out:
Also note this from another story:
The upstart low-fare carrier is planning to begin operations in February, airport officials said. Skybus Chief Executive Bill Diffenderffer had predicted the airline would be able to offer seven daily flights on two 150-seat planes in late 2006 or early 2007. Prices and destinations remain undisclosed, but airport officials said some "firm decisions" about those details are expected by the end of June.
May 28, 2006
In comparison on page look at the airport on page 110. You need to add the actual loss (679,555) plus the subsidy from MassPort (Intergovernmental - 1,241,001) to arrive at the operating loss of 1,920,556. In other words the airport loses 160,046 in month, twice as much as Green Hill in an entire year. Do not get me wrong, I am happy to see people do not want to lose any monies on the Green Hill Enterprise Account, but at the same time wish people would be as concerned about the Airport Enterpise Account that is losing 25 times more.
In business, there are two things: Revenues and Expenses. Initially this blog focused on recruiting airlines (revenues) without having a true understanding of the finances. Now that we understand the expenses, realize the debt service is 100% the City of Worcester, the MassPort subisdy drops to 68% on July 1st and end in 398 days, we need to cut the expenses. We simply can not afford this "Enterprise" losing this much money.
Mesa Air Group, Inc. and its wholly-owned subsidiary, Freedom Airlines, Inc., began service for Delta Air Lines as a Delta Connection carrier in October 2005. The Company currently operates 14 regional jet aircraft as Delta Connection and will operate a total of 30 regional jet aircraft as Delta Connection at August 1, 2006. On March 7, 2006, the Company announced the expansion of its Delta Connection arrangement with the addition of 12 Dash-8 aircraft. The Dash-8 aircraft will commence operations in New York - JFK in July 2006.
Airports operated by the Port Authority include John F. Kennedy International Airport and LaGuardia Airport, both of which are located in Queens, New York; Newark Liberty International Airport, located in Newark and Elizabeth, New Jersey; and Teterboro Airport, located in Teterboro, New Jersey. The Authority also operates the Downtown Manhattan Heliport.
Lori McGrory figures she will benefit from today's startup of service to Portland by JetBlue Airways, even if she never sets foot aboard one of the airline's planes. McGrory, who flies to Florida to visit her parents about six times a year, said the discount carrier's new service allows her to fly less expensively from Portland, instead of traveling to Manchester, N.H., or Boston in search of low fares, even though she hasn't booked a flight on JetBlue yet......
One good thing was announced just last week: Delta Airlines said that, starting in September, it will add four daily round trips to JFK International in New York, which is JetBlue's hub. Delta and other airlines have already cut their fares substantially to meet the challenge by the discount carrier, at least on routes where they compete directly with JetBlue.
Comair has said it must have concessions from the flight attendants as part of a plan to cut $42 million in annual costs. Unions representing pilots and mechanics have agreed to concessions, but those deals are contingent on the flight attendants accepting cuts as well. Like its parent Delta, Comair, which has 6,400 employees and operates 850 flights daily to 108 cities, is trying to emerge from Chapter 11 bankruptcy filed last year.
A U.S. bankruptcy judge in New York refused last month to allow the company to reject its contract with flight attendants so it could impose $8.9 million in wage and other cuts. Negotiations are set to resume the week of June 5 with the 970 flight attendants, represented by the International Brotherhood of Teamsters.
May 27, 2006
I am not sure of the exact amount spent on IMG so I have asked our airport liaison for all the qtrly reports filed with the DOT to get a grasp as to exactly how all the monies have been spent. Maybe IMG will end up doing a great job, but check out their website (http://www.imggroup.com). Do you see much of a track history helping cities recruit airlines? Now check out a consulting firm like Boyd (http://www.aviationplanning.com/airservicedevelopment1.htm).
Last questions--do you think mgmt would have retained IMG to help recruit airlines, if they recommended in their 100,000 report to SELL ORH??
May 26, 2006
Looking at the IMG Executive Summary at the bottom of page 4. It does not look like it will save much money. It will save a little money (not being 139 certified), "it will likely require extremely high subsidization".
At the same time extending the agreement with MassPort, this will cost us money as well since we still pay 100% of the debt service and no way will MassPort go with 100%. Bottom line IMG estimates about 1,400,000 cost to the General Fund if we extend the contract.
So it will still cost is alot of money to downgrade to a GA airport and it will still cost us alot of money to extend the contract with MassPort. What are options are left? Close or sell are the only two left.
Versus even trying to get into whether or not we can close the airport, why don't we do everything possible over the next 400 days to SELL ORH!!! IMG dismisses this in their reports, but so what? Why not try?? What exactly do we have to lose to put up a big FOR SALE sign on ORH??
The real debate right now is what will we do over the next 400 days. As we get closer to the deadline, we will see more letters like today's letter to the editor (which I can not disagree with).. The airport has consistently lost $2,000,000 per year the past 5 years working with MassPort, can you blame anyone criticizing results like these--$10,000,000 is alot of money. We need to start marketing the sale of ORH today, 400 days before the end of the operating agreement with MassPort, not another three extension of the current agreement with MassPort.
Friday, May 26, 2006 Time to end struggle for Worcester’s airport
First, they built a fancy new terminal so we would come to the airport on the hill. Then they improved the runways and instrument landing system so planes could land safely. Next, they posted signs so we could find the hill. Then they got Massport to run the complex and woo airlines to fly to and fro from the hill. Then they proposed, without success, tearing up a big chunk of the city to build an access road to get to the hill. Now, they have proposed a catchy new name for the airport on the hill, hoping that computer screens around the world will herald the shiny airport located just west of Boston. Voila, a full flight to Disney World.
For years, they have spent millions upon millions of our dollars on bricks, asphalt and mortar, high-paid consultants, endless meetings and debate, numerous marketing plans and expensive studies to prove them right. But despite all of their efforts and all that money, airline after airline has come and gone. And the airport continues to languish — a few flights to and from Orlando do not spell success. How much more of our money will we allow our local, state and federal officials to spend on a well-meaning but futile attempt to revive an ailing albatross that simply will never fly? It’s time to tell them that enough is enough.
RICHARD A. HOWARD
May 25, 2006
It’s hard to know exactly why there has been a recent outbreak of airport name changes in Northern New England. Last month, Manchester Airport changed its name to Manchester-Boston Regional Airport in hopes of reviving declining passenger numbers. In Massachusetts earlier this month, Worcester Regional Airport authorities opted for the total mouthful gambit by changing its identity to Worcester Metrowest Boston Airport in hopes of reviving declining passenger numbers.
And now we have a local angle on what some would consider the triumph of marketing overkill over common sense. Last week, the Pease Development Authority board of directors approved the change from Pease International Airport to Portsmouth International Airport at Pease.
According to news reports, the new name of Portsmouth International Airport at Pease represents a compromise. There were those who believed the Pease name was too connected to the former Air Force base and it wasn’t geographically specific for the flying public and potential carriers.
On the other side of the table, there were those like PDA board member Anthony MacManus, who voted against the name change because “there’s more to Pease than Portsmouth — it represents an entire region.” MacManus also opposed the airport name change because it went against the grain of a larger marketing effort for Pease International Tradeport. PDA Vice Chairman Peter Laughlin, who supported the name change, said, “I’m pleased the way we worked through the input we received.”
We have no problem with a name change at Pease as part of a larger marketing effort for the tradeport in general and the unprofitable airport side in particular. We do take issue with a mouthful of a name that could undermine the airport’s ability to attract more commercial aviation business.
We are glad that the new name isn’t Portsmouth-Boston Regional Airport or even Portsmouth Metronorth Boston Regional Airport. But Portsmouth International Airport at Pease ranks in puzzling logic with the switch done a few years ago by the professional baseball team The Los Angeles Angels of Anaheim. It simply doesn’t make sense and invites ridicule. We recommend that the PDA go back to the drawing board and choose an emphasis on either Pease or Portsmouth but not both.
May 24, 2006
This fiscal year (2006) which ends at the end of June is on target for another $2,000,000 loss. Would you recommend continuing the current management structure? (numbers above from page 19 of IMG Final Report).
May 23, 2006
Mr James Cote--- great letter.
Tuesday, May 23, 2006
Study Worcester’s future without an airport
The Worcester Regional Airport’s financial impact to the city is no different from that of the former City Hospital off Chandler Street. Once we got over the sentimental feelings, it was easy to see the need to close the financial drain that was once an excellent hospital. The city infrastructure needs work and that work begins with the school system. Increased property values and our quality of life are impacted directly by the effectiveness of our schools. Please, has anyone ever spoken to anyone who told you they moved here because of the airport? There is no doubt that the airport is a valuable piece of property, but that value is not as an airport.
Any and all future studies should be conducted on what to do with the property after the airport closes. Hopefully, now that we are changing the name, the airport will go the way of radio station WAAF. Remember, they were WAAF Worcester, then WAAF Worcester-Boston — and now they are WAAF Boston and out of the city.
Flying as a Delta Connection to the hub in Chicago, this would be a great flight especially with their fleet of CRJ's and Embraers. ComAir, another Delta connection, would be nice flying to the other Delta hub, Cinncinnati, but I just do not see ComAir coming here when they fly out of Boston..
SkyWest is expanding and is bigger, maybe they could be convinced to fly out of ORH?
May 22, 2006
My travel experience with Allegiant Air out of Worcester was very positive. The Airport makes a very nice first impression for passengers. It is refreshing to see airport employees that smile, wish you a good day, and even greet you by name. Besides the warm welcome and friendly service. the Airport itself looks great. It is clean & neat, easy to find your way, and of course, no lines or traffic jams. I would recommend the Worcester - Orlando flight to others. The other passengers I spoke with were also very happy and relieved the flight took off, despite the fog & rain.
The only other items to note/compare are that Sanford Airport was much larger than Worcester, but old and in need of remodeling. It was also evident that the actual airplane was an older model, but well maintained with a friendly and helpful staff.
My last concern was that both flights were only half full. I hope that that Allegiant can maintain success to warrant perhaps more destinations, flights and attract other airlines to Worcester. As you can see the "clock is ticking" and we need to aggressively market all the positives about the airport.
Once again, if your going to Florida, you will not be disappointed with this flight! From a pricing perspective, this was the lowest airfare I found - inlcuding Southwest. So, go ahead and check it out!
May 21, 2006
Story from Portsmouth Union Leader.
The Pease Development Authority voted 5-1 yesterday to rename its airport.
Pease International Airport would become Portsmouth International Airport at the Pease International Tradeport.
The change may, however, require approval from the Federal Aviation Administration, which has pumped more than $60 million into improvements since 1992.
At the same time, my brother-in-law has bought a similar business, not far from mine, that is struggling badly. To keep peace in the family I have help him pay his monthly bills to stay open.
One night I drive by my brother-in-law's store and it is empty, then I get to my store where there is traffic congestions, no parking and the lines are long inside. Let me ask you a question, would I walk up to people in the line and suggest that they may want to try my brother-in-law's store. Answer-I would not. Now that may seem mean, but that is business and people who disagree me, surely do not own their own business. Customers are the lifeline of any business and you never send them to the competition.
Let me change the analogy. What if I had bought my brother-in-law's store or had a 99 year lease to run it? I would surely inform customers of our second location. In case anyone is confused MassPort manages the thriving business and ORH is the brother-in-law.
May 19, 2006
"One thing you can never have enough of is money," said Sieber, based in Evergreen, Colo., after Allegiant announced its initial public stock sale. "From that perspective I think it's a good move" by Allegiant. "I went through their papers last night and it looks like they're sitting on about $53 million in cash. That's not a bad amount of money for the size of airline they are, but it's not a great amount. "This gives them some cushion that would allow them to weather some rough times, if that happens, and provides some capital to grow the business and make sure it's sustainable," Siebert said.
A filing with the Securities and Exchange Commission said the initial offering could be worth as much as $100 million. The number of shares, their price and when they will become available were not disclosed. Proceeds will be used to buy aircraft and for general corporate purposes, the filing said.
The shares are expected to be listed on the Nasdaq Stock Market under the symbol ALGT. The offering will be made through an underwriting syndicate led by Merrill Lynch & Co. Allegiant posted net income of $7.3 million for 2005, down from $10.3 million a year before. Siebert said growth by the company might be based on its successful model in Las Vegas. "The jury is still out on how successful Orlando is going to be," he said. The demographics for people flying to Vegas and its 24-hour lifestyle are different from Orlando's family theme parks, Siebert said.
May 18, 2006
If the City of Tacoma and its airport were a married couple, they’d be heading for divorce court.
Tacoma’s looking for a way to walk away from this unhappy, 43-year relationship. Fortunately, at least one suitor may be waiting in the wings for the unwanted Tacoma Narrows Airport.
Sometimes such breakups are for the best, and the former partners do better apart than they did together. That very well may be the case for the Narrows airport, which has not thrived under what some observers have described as the city’s neglectful management.
Tacoma City Manager Eric Anderson has recommended that the City Council consider closing the airport or transferring it to some other entity. The Port of Tacoma and Gig Harbor once looked at taking it over, but decided against it. But now Pierce County Councilman Terry Lee, who represents the Gig Harbor Peninsula, where the airport is located, has suggested that the county look into taking over its operation.
Lee’s rationale – to keep the airport from being taken over by another entity that might expand operations in order to make money – has struck some as curious. Tacoma’s complaint about the airport, after all, was that it was a money pit. But Lee’s on the right track. The airport is in the unincorporated county, which makes it a better possible steward than Tacoma. Many of the airport’s problems can be traced to the fact that it’s outside the city, and planning must be coordinated with the county and Gig Harbor.
If the airport were better managed, some say, it’s possible that it could break even or even make money without increasing the number of flights in and out – and the number of complaints from neighbors. Given the key roles the airport plays in civilian aviation, medical airlifts and possible emergency response, every avenue should be explored to try to keep it operating. Lee plans to talk about this proposal later this month with County Executive John Ladenburg and the Federal Aviation Administration.
Keeping the airport open – while keeping a lid on the amount of air traffic – are both worthwhile goals. If Tacoma is no longer interested in making the relationship work, it should step aside and give someone else a chance.
May 17, 2006
StockTuesday May 16, 12:42 pm ET
LAS VEGAS, May 16 /PRNewswire/ -- Allegiant Travel Company today announced that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to the proposed initial public offering of its common stock. The shares of common stock to be sold in the offering are expected to be offered by Allegiant and by certain of its stockholders. The number of shares to be offered and the price range for the offering have not yet been determined.
Las Vegas, Nev. based Allegiant Travel Company is the parent company of Allegiant Air, LLC, which is a low-cost passenger airline linking travelers in small cities to world-class leisure destinations such as Las Vegas and Orlando, Fla.
May 16, 2006
The thing I found interesting was the item on IMG under new business item 6. It discusses a contract with IMG not to exceed 55,640 to continue "air service marketing initiatives". To date from a prior qtrly DOT I know that IMG has already billed $39,375 for these services. Is this an increase from 39,375 tp 55,640 or is the 55,640 in addition to the 39,375 already billed? I will e-mail and mail the airport liaison to get a clarification.
Least anyone forgets IMG already has received $100,000 for their reports that are on the City Website.
May 15, 2006
Think this is the 3rd or 4th time that I have read that the TSA leasing a 1,000 square feet of space at ORH is a ringing endorsement on the future of ORH. How??? Bet the lease has a clause that allows them to leave without penalty if their resources are needed at ORH. Lastly a disclaimer stating that an employee of the Telegram is a past chairman of the aiport commission and sits on the board would be nice.
Here's the editorial:
A robust demand
Allegiant’s success should attract other carriers
As Massport and city officials seek to add new carriers, flights and destinations at Worcester Regional Airport, the most powerful tool in their sales kit may be the success of the leisure-oriented Florida service provided by Allegiant Air. Since the December launch, Allegiant has maintained an average load factor of a little more than 80 percent, with many flights booked full or near capacity. On two Saturdays in the peak vacation period in April, Allegiant had to put on extra planes to meet the demand. Allegiant’s success underscores the importance of matching services to consumer demands. Although other factors are involved, the key criteria for air travelers in Worcester Regional Airport’s “primary service area” — encompassing a population of some 625,000 — are desirable destination and competitive price.
The carriers being courted for Worcester’s airport are lean, strictly low-fare airlines that are well-adapted to today’s highly competitive air-travel market. They potentially could provide service to leisure destinations such as Las Vegas and to cities in the Midwest and Southeast likely to attract business travelers. Allegiant’s high reliability factor should allay concerns about weather patterns at the airport. Thanks in large part to sophisticated landing systems, only one flight last winter, during a storm in December, had to divert to another airport. The airport also received a vote of confidence from federal transportation officials recently when the Transportation Security Administration signed a five-year lease for space for its security personnel in the terminal building. The Central Massachusetts Regional Planning Commission’s recent affirmation of efforts by Worcester and Massport to revitalize the airport also is welcome. Allegiant is demonstrating there is a strong market in Central Massachusetts and Boston’s western exurbs for the right air-travel product. Now, let’s have more of the same.
May 14, 2006
I will find out if we applied this year, which may be the last year that this grant to help small communities attract air sevice may be around.
Why do I say this?
Currently we are about to end year 2 (June 30th) of the 2nd 3 year operating agreement. In other words June 30th will make the end of the 5th year. Here are the operating results for the first 4 years (all losses):
Fiscal Year Ending
Fiscal Year ending 2006 looks the same as 2005, approximately $2,000,000. Of course the effect on the City of Worcester has not reflected these monies due to the varying percentages subsidized by MassPort. Bottom line is that at the end of the 5th year of 6 years with MassPort, the airport has consistently lost $2,000,000 per year.
Reminds me of a quote “We have a sound, unremitting, 10-year history of losses at the airport, and they are getting worse,” said City Manager Eric Anderson in regards to their airport (Tacoma Narrows). IMG further goes on to state the an extenion with MassPort will result in 1 to 1.3 million cost to the City of Worcester each year. Based on the past results and future forecasts, why would IMG recommend an extension of the agreement?
Despite the finances, maybe this would be acceptable if we had the results, but we have only one airline flying four times per week to Sanford-Orlando? Think that would be a pretty hard arguement to make.
Is it MassPort's fault? I say no and make the same analogy, as I have before, between renting an apartment and owning a house. If you rent an apartment, you are not going to spend monies on major improvements since you will never reap the rewards of the increased value. MassPort has been a huge help financially, but has not made the commitment to turn around ORH. Can you blame them??? What's in it for MassPort if they turned around ORH in 3 years? Answer---Nothing.
It appears to me that MassPort has the ability through their mission statement, the power through the legislature and the financial ability to buy ORH not to mention save Worcester alot of money. Our own consultantant, IMG, estimates 1 to 1.3 million per year from the General Fund, if we extend the agreement at the end of this agreement June 30th, 2007.
May 13, 2006
"Massport's Mission Massport’s mission is to enhance and enable economic growth and vitality for the benefit of our stakeholders through public service leadership in the operation of world-class transportation facilities. By defining our mission in this manner, we declare our reason for being and acknowledge the unique impact we have on New England’s standard of living. "
Section 4 of the MassPort Enabling Act specifically authorizes MassPort to purchase any land, property rights, rigths of way, franchises, easements and other interests in lands, as it nay deem expedient, necessary or convenient for the construction or operation of any project at reasonable price and terms. "project" refers to the Tobin Bridge, the airport properties (Hanscon/Boston), the port properties, or any additional facility, including a trade and transportation center, financed or acquired under the Act.
Seems to me that the outright sale of ORH would help meet the MassPort mission and the Enabling Act sure gives them the power to do so. Sell ORH.
Pierce County Councilman Terry Lee wants the county to explore taking over the Tacoma Narrows Airport from the City of Tacoma. Lee, whose council district includes the Gig Harbor Peninsula, thinks that might be the best way to strike a balance between preserving the airport and making sure that air traffic doesn’t increase too much, something the nearby community has long feared.
acoma City Manager Eric Anderson prompted the discussion by announcing last week that he thinks the city should consider selling or closing the airport.
May 12, 2006
"Worcester airport would pop up on computer searches by people traveling to the region."
This is true. What will people find-- 4 flights per week to Sanford. We need to have airlines for people to fly when Worcester MetroWest Boston Airport "pops" on their screen to make ORH a viable option to be taken seriously.
"The name change also would signal to airlines considering entering the Southern New England market that Worcester’s proximity to Boston makes it a potential alternative for air travelers"
Not only will passengers consider Worcester now, but so will airlines with the name change??? Evidently the strategic flight planners for the airlines are not exactly sure where Worcester is in relation to Boston, but now will with the name change?
Lastly I will be posting last month's board minutes, which includes a letter from Bob Nemeth, a columnist for the Telegram/past aiport commission chairman/current airport commission board member, on behalf of the airport commission explaining their preference for the name change. Is it just me or should the Telegram post a footnote stating that one of their columists is on the Airport Commission, when writing an editorial supporting decisions by the airport commission. If you ever read a story regarding an stock, the writer always puts a disclaimer on the bottom that they in fact own this stock.
May 11, 2006
In comparison ORH has cost the City of Worcester 634,729 for the first nine months (July-March) in fiscal 2006 and our percentage of the operating deficit increases to 32% July 1st.
For the record I think Worcester-Boston was better. Isn't it kind of ironic that Manchester has added Boston, Worecester wants to add Boston and Boston itself (Logan) does not have Boston in its name..
Lastly I am keeping the MassPort clock on the blog, but have turned off the alarm. It was driving me crazy.
May 10, 2006
Front page of today's paper--"The Landing Field That Time Forgot". Evidently the two digital clocks above the baggage carousel were not moved forward an hour ahead for daylight savings. Right now the time is one hour behind the actual time. What is the solution?
The short-term plan is to put up two battery-operated clocks next to the two digital clocks.. So will passengers now see two different times? I say lets put up two more clocks with the West Coast time, so we have three seperate times and write above each clock West Coast, Midwest and East Coast. Why don't we simply change the digital clocks?
A worker in the city's Technical Department has to crack the system's code to make the changes to these 12 year old digital clocks. One would think that there would be a manual for a 12 year old system with a section to change the time? Evidently not. Does this mean then that the past 12 years that these clocks have been slow an hour every year from the first Sunday of April till the last Sunday of October (day light savings)?
The long-term plan is to spend $15,000 on a new system to show the correct time. Julie Jacobcson, Assistant City Manager had to try and explain why this is was the case, which is not fair to her (worrying about the clocks at ORH). Give her credit she said "there is no excuse" for this situation. Why did the Assistant City Manager have to answer for this situation?
Airport Manager Eric Waldron did not return three calls yesterday to the Telegram Reporter. Does he ever return calls or e-mails?? As soon as I get the airport minutes for the April minutes that were approved Monday at the May meeting from our airport liaison, I will post. Maybe there is something about the clock situation in the minutes?
May 09, 2006
My only comment to the anonymous poster, who called the blog negative this week, quoting Tom, "what's negative about asking for accountability from our government?" In the end there are alot of questions about "salaries and fringe", maybe we should have a city councilor file an order to clarify the situation? What do you all think (including all your anonymous posters). Put your comments here.
Technically, the FAA doesn’t allow the city to sell the airport. But it could transfer the airport to another entity. Gig Harbor and the Port of Tacoma have both looked at taking over the airport, but both passed on it after concluding that it loses too much money.
Narrows Airport budget problems
Two-year operating deficit:
Debt payback shortfall:
Safety zone improvements:
Total: $3.2 million
May 08, 2006
Story sound familiar??
A decade of financial losses at Tacoma Narrows Airport has forced City Hall to consider offloading the 43-year-old, 650-acre airport located near Gig Harbor in unincorporated Pierce County. “We have a sound, unremitting, 10-year history of losses at the airport, and they are getting worse,” said City Manager Eric Anderson Tuesday, during a city council study session.
According to data provided by city staffers, the city defaulted on two inter-fund and general fund loans totalling $3.2 million at the end of last year. Additionally, the costs associated with an agreement between the city and the Federal Aviation Administration (FAA) to create runway safety zone improvements has climbed from an initial estimate of $6 million to nearly $18 million. The city would need to pay $1.1 million toward those improvements -- money that isn’t budgeted, according to Anderson.
The news Tuesday upset the mayor and several councilmembers. “We were assured repeatedly that this was a slam-dunk deal that would generate tremendous revenues,” said Baarsma, who recalled two council decisions in 2000 and 2002 to authorize the loans. “I find this surprising and I’m disappointed. If those assurances hadn’t been made, we wouldn’t have approved the loans.” Councilmember Julie Anderson was concerned that councilmembers weren’t notified that both loans defaulted Dec. 31. “I don’t think it comes as any surprise it’s a losing proposition,” said Councilmember Jake Fey.
City Manager Anderson proposed transferring the airport to another owner, or shutting down the airport and selling the land. News that the city could sell the airport pleased Councilmember Bill Evans. “We were always told that we couldn’t close it,” said Evans, referring to a long-time belief that the FAA would not permit a sale. “I’m happy to hear that.” According to Anderson, the FAA is “reluctant to close airports, but cannot requite an entity to operate an airport at a loss.” However, if the city closed the airport and sold the land, if would have have to return 95 percent of the market value to the FAA because the airport was built with federal funds. Still, Anderson was confident that even five-percent profit on the sale would cover the loans because the airport was located on “prime development land.” “Almost as important,” said Anderson, “it would stop the bleeding.”
May 07, 2006
Lastly the other interesting thing about the story is that it also indicated Allegiant would be picking up a second Florida destination--St Pete's (guessed in the April 7th blog).
A second $400,000 Master Plan (paid by the Mass Aeronautics Commission and the FAA) has been silent since a meeting in December, 2004 at the airport. One of the reasons cited for the delay was that we were waiting for results from the third study.
The third study is the New England Regional Air Study Plan. Today I noticed under the "project status" tab that on 2/27/06 :Airport specific forcasts individual airport data packets provided to each airport manager. Does that mean we can resume the Master Plan now that we have the information from the New England Regional Air Study Plan?
It would be nice to have our Master Plan completed ASAP, when we have some very critical decisions to make over the next 419 days.
May 05, 2006
All kiddin aside how can you run a business when the "salaries and fringe" alone are 902,264, never mind other expenses (like debt service), which is approximately 50% more then corresponding revenues during the same period (639,937). In the private sector, you would be out of business fast!!!!
Maybe we did not pay close enough attention to this when MassPort was payingt the tab, but we are going to pick up 32% of the operating deficit (not including debt service) in two months followed by the whole bill in 14 months. We need to get a better grasp of "salaries and fringe" at ORH now.
Airfield Suport 225,680
Terminal Building 162,815
Ordinary Maintenance 720,361
Less Debt Service 986,357
MassPort (85%) 838,404
Worcester (15%) 147,953
Debt Service 486,776
Total Cost To Worcester 634,729 (15% of the loss plus debt service)
During the first nine months of fiscal 2006, the cost to the City of Worcester to run ORH was $634,729. Keep in mind our percentage increase to 32% in two months (July 1st, 2006) from 15%. Couple of other very interesting numbers comparing the the first nine months of fiscal 2006 to fiscal 2005:
- Revenues have dropped from 674,654 to 639,937.
- Salaries have increased from 548,760 to 629,303.
- Operating loss including debt service has increased from 1,295,473 to 1,473,133.
The actual losses for the first 9 months of this fiscal year (2006) compared to the first 9 months of last fiscal year (2005) have increased 177,660. The thing I find the most disturbing is that the cost of ORH for the first 6 months of 2006 was $403,257 and now it increased to 674,654 after 9 months. This past qtr, with the arrival of Allegiant, was actually worse to the bottom line then the prior two quarters without Allegiant??
I have the actual spreadsheet which I will post on http://www.flyorhcom under the minutes page.
Linear Air unveils Eclipse, check out link:
Here is a small part:
Experience - inside and out - the aircraft that is transforming private air travel!
Saturday May 13th 4:30 p.m. - 8:00 pmSunday May 14th 8:30 am - 10:00 amAfter sitting in it, watch the Eclipse fly at 10:00 am Sunday!
Jet Aviation, Hanscom Airport, Bedford MAclick here for directions
May 04, 2006
John D Sullivan
In particular April 28th blog with comments from fan favorite Boyd Group:
Here's another strategic trend forecast from The Boyd Group, one that the aviation cognoscenti will sneer at today, and next year will be preaching like an evangelist who just discovered a gospel tent: The airlines best postured to weather this oil price storm are legacy carriers. The ones that will be hurt worst and first will be low-cost carriers. Some key points:-
- Legacies have reduced their operating costs, so they aren't wildly at variance with LCCs any longer. -
- Higher fuel costs will lead to higher fares. Higher fares will hit discretionary, price-driven passenger segments first. Passengers who in the past were created by low fares to Orlando will think twice with higher ticket prices and $3-per-gallon gas for the SUV.-
- Legacies will continue to have access to the strong growth traffic at places such as Shreveport, Taipei, Montgomery, Tupelo, and Kaoshiung. (Tupelo? Yup. Traffic's up almost double in two years. Maybe it's the consultant they hired.) LCCs don't have the fleets or the route systems to access these flows. -
- Most importantly, legacies are not as vulnerable to traffic down-turns as are LCCs. That's because several legacies have significant fleets they can quickly park, and have limited aircraft on order, unlike most LCCs. In fact, the new-airliner orderbook may well be the Achilles Heel of the LCC segment in the next 18 months.
May 03, 2006
Councilor Rosen also brought up the fact that Year 2 of the operating agreement is coming to close and Year 3 (last year) is fast approaching, July 1st, which will in turn increase our financial burden. City Manager O'Brien responded by saying that fiscal 2007 funding from the City would only be in the area of $400,000, thanks a great deal from the added revenues provided by Allegiant (we have not seen any of these results yet). Councilor Rosen reminded the City Manager may not be included the debt service, which is 100% ours, so he believes that the true bill is more in the $1,000,000 range.
I, like Gary Rosen, believe and support the airport but like any business we need to have a grasp of the numbers. Kudos to Gary Rosen for being aware of the true cost of ORH, that we need more airlines (more so then a name change) to decrease the financial drain on the City of Worcester and that are current agreement is coming to an end fast.
Lastly just a reminder, I calculated (based on numbers from the City Auditor) that the cost of ORH for the first 6 months for fiscal 2007 was 403,257 to the City of Worcester, which included 100% of the debt service (324,517) and 15% of the 524,933 operating deficit (78,740). Keep in mind our percentage of the operating deficit (not including debt service) will increase to 35% effective July 1st, 2006 then 100% ours July 1st, 2007.
Current MassPort agreement with the City of Worcester. The percentage is the right hand column represents the portion of the operating deficit covered by MassPort. The remaining balance is the responsibility of the City of Worcester.
July 1, 2006 - June 30, 2007
MassPort pays 68% of operating deficit not including debt service
July 1, 2005 -June 30, 2006
MassPort pays 85% of operating deficit not including debt service
July 1, 2004 -June 30, 2005
MassPort pays 100% of operating deficit not including debt service
May 02, 2006
Thanks Bill. Ironically I was offered the #2 job at Worchester back in 1986; turned it down after a visit. Great view of the Boston skyline. Good to hear from you.
BobRobert W. O'Brien, Jr.,
AAEExecutive Director of AviationChicago/Rockford International Airport (RFD)
E-mail: firstname.lastname@example.orgWebsite: www.flyrfd.com
"RFD - It's the Way Flying Should Be"
Allegiant Air, the Las Vegas-based low-fare air carrier, has abruptly canceled an ad deal with an online casino company that would have turned six of the airline's jets into flying billboards.
Allegiant specializes in flying tourists from middle-market cities such as Des Moines, Iowa, and Shreveport, La., to Las Vegas.
Ponder Harrison, Allegiant's managing director, said Allegiant pulled the plug on the deal with Bodog.com after airline executives learned more about the Justice Department's views on advertising Internet gambling, which the government considers to be illegal. Allegiant canceled the deal after a Las Vegas Sun reporter questioned an airline executive .
Allegiant wouldn't disclose the value of the canceled deal, but published reports said it was worth $500,000. Harrison said Mylar film with the Bodog brand had already been applied to the fuselages of five MD-80 jets . "The more we did our due diligence, the more we became uncomfortable with displaying the brand," Harrison said.
Bodog had hoped its three-month deal with Allegiant would reach gamblers who go to Las Vegas once or twice a year and might consider playing online. Tray tables resembling blackjack tables were also planned . In a statement, Bodog's founder and Chief Executive Calvin Ayre said he understood Allegiant's decision. "I have no problem with Allegiant changing our agreement when faced with this type of threat," Ayre said. "We 100 percent support them and are saddened that they are not being able to pursue their constitutionally protected rights of free speech in this case."
May 01, 2006
Executives of the Port Authority of New York and New Jersey, which operates the three airports — La Guardia, Kennedy International and Newark Liberty International — say they fear that the increasingly crowded airspace could crimp the region's economy, driving some business travelers and tourists to other cities. They are mulling a range of incremental improvements that would allow them to squeeze more planes and passengers through the airports they have.
But the Port Authority's chairman, Anthony R. Coscia, said he believed a bolder, more controversial solution would be necessary. The time has come, Mr. Coscia said, to start creating another major airport to serve the metropolitan area.......
Mitchell L. Moss, a professor of urban policy and planning at New York University, endorsed the idea of a fourth airport as "a wise strategy for the 21st century" and said he favored Stewart because of its size and location. Stewart "is especially well suited for air cargo," Mr. Moss said, because "it has better highway linkages than any existing airport to the Midwest and New England."
One of the possibilities mentioned in the story to be the 4th airport is Stewart International, an hour from New York City, who want to change the name to New York Hudson Valley International Airport sound familiar.