Airline that plans to lay off hundreds of workers wants to defer lease payments to Dayton

A look inside a PSA Airlines maintenance hangar at Dayton International Airport. THOMAS GNAU/STAFF
A look inside a PSA Airlines maintenance hangar at Dayton International Airport. THOMAS GNAU/STAFF

PSA Airlines, still reeling from huge declines in air travel due to the coronavirus epidemic, wants to defer its lease payments for a maintenance and hangar facility it rents at the Dayton International Airport.

PSA Airlines, which is headquartered at the airport, wants to suspend its payments for one year to help cut costs at a time when passenger traffic has plunged and the aviation industry is facing unprecedented challenges related to weak demand.

PSA Airlines already has announced plans to lay off a few hundred workers because of disruptions in air travel. Most leisure travel and a significant share of business travel have been cancelled because of infection fears.

“Due to the unprecedented impact of COVID-19 on the airline industry, we are engaging in critical financial discussions with the city as part of our ongoing work to reduce costs during this time,” a PSA Airlines spokesperson said.

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On Wednesday, the Dayton City Commission will decide whether to amend the city’s lease agreement with PSA Airlines to suspend its rental payments through August 2021.

The company leases a 77,500-square-foot hangar and maintenance facility at 3751 Cargo Road.

Under the proposal, PSA Airlines will not have to pay the $586,690 it owes over the next 12 months, and the company’s 20-year lease agreement would be extended for an additional year, through January 2037.

If the changes are approved, the city says it expects to collect an additional $87,730 in revenue over the life of the agreement because PSA’s monthly lease payments will shift to a higher rate.

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PSA expects to pay the city more than $12.4 million over the 20-year agreement.

JobsOhio provided $5 million to help fund the construction of the maintenance hangar.

The organization has agreed to defer the city’s loan payments until August 2021 to provide some financial relief.

Earlier this summer, PSA Airlines notified the state it plans to lay off nearly 260 workers at the airport in October. This includes about 156 pilots, 62 flight attendants and 13 dispatchers.

In late August, the company also announced plans to lay off an additional 47 employees, including maintenance staff and other specialists.

The company said it planned to outsource its professional maintenance and engineering technical services work to a third-party vendor to “increase reliability,” according to a WARN notice letter.