Without emergency funding, Dayton’s aviation department would have faced a financial shortfall in excess of $10 million this year, airport officials said.
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Passenger traffic is down about 95% at the airport, concessions have closed and the airport has been put on a negative credit watch status by its bond raters.
The federal money is very helpful but likely will not come close to replacing the financial losses caused by COVID-19, mostly due to severely reduced air travel, officials said.
“Experts estimate it could take as long as 30 months to fully recover just to 2019 levels,” Gil Turner, Dayton’s interim aviation director, told this newspaper. “Taking actions now to reduce expenses will ensure the Dayton Airport can remain financially stable for future recovery and growth.”
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The Coronavirus Aid, Relief and Economic Security (CARES) Act set aside $10 billion in emergency resources for U.S. airports to provide economic support at a time when few people are flying over infection concerns.
The money will fund the continued operations of the nation's airports and will save workers' jobs, according to U.S. Transportation Secretary Elaine L. Chao.
On Wednesday, the Dayton City Commission approved a resolution authorizing the city to accept a $14.62 million grant for the Dayton International Airport and the Dayton-Wright Brothers Airport.
The Dayton International Airport will get $14.55 million. Dayton-Wright Brothers will get $69,000.
Passenger traffic has plummeted as the Dayton airport has become a ghost town.
Before the coronavirus, average daily enplanements were about 2,000 to 2,500 passengers. The airport right now is averaging between 100 to 200 passengers each day.
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The CARES Act money will help cover the costs of staff salaries, utility expenses, service contracts and supplies and will help ensure the aviation department’s more than $7.1 million in annual debt service obligations are paid, officials said.
Fitch gave the airport a negative credit outlook in the first quarter of the year because of the COVID-19 emergency.
Costs for capital upgrade projects would surge if the airport’s credit rating was downgraded.
The federal grant money will help maintain critical staff and service at the airport, and funding recipients are required to retain 90% of employees through the end of the year, unless they receive a waiver, officials said.
Turner says he does not know if the airport will apply for an economic hardship waiver.
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Airports that receive CARES grant funds must continue to employ at least 90% of airport workers who were employed as of March 27, which does not include retirements or voluntary separations, according to the Federal Aviation Administration.
The airport is trying to reduce its payroll from 122 employees to 86 using voluntary seperations, because that is what its budget likely can sustain for the 18 to 24 months or longer it will take for passenger traffic to rebound to 2019 levels, Turner said. The airport also eliminated all 26 unfilled positions.
These and other cost-cutting measures are needed because otherwise the airport would run out of cash reserves within six months, officials said.
“The $14.5 million grant will provide a boost to the Dayton International Airport’s liquidity and help to mitigate some immediate concerns,” Turner said. “However, it does not present a complete solution to the airport’s financial crisis due to the COVID-19 pandemic, nor does it mitigate the financial imbalance that existed before the crisis struck.”
The aviation department’s budget woes predate this crisis, and trace back to Southwest Airlines’ departure in mid-2017.
In 2019, the department’s expenses exceeded revenues by $1.6 million. But the COVID-19 crisis has dramatically exacerbated the financial problems.
Turner said air travel continues and the airport has never closed during this pandemic. But he said it’s hard to know when air travel could return to something like normal.
“This is a totally unprecedented crisis that the world has never before seen,” he said. “It is difficult to forecast when the recovery process will begin and how long it will take.”
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