Bradenton-Sarasota airport authority set to vote on budget proposal

cschelle@bradenton.comSeptember 16, 2013 

MANATEE COUNTY -- Sarasota-Bradenton International Airport Authority will vote on its annual budget Monday, which includes plans to raise fees in an effort to increase revenues to offset the loss of AirTran last year and the cost of reconfigured lease space.

The airport's governing board will consider adopting a mix of remedies to make up for the decreased revenue in its $21.6 million fiscal 2014 budget.

The airport authority will hold a public hearing on the budget at 1 p.m. Monday at the Dan P. McClure Auditorium, 5900 Airport Auditorium Lane. The authority also will consider at the meeting to purchase 76 acres on Tallevast Road for $1.8 million.

Potential revenue increases include a modest bump for parking in SRQ's short-term lot and increased rental and landing fees for airlines. The airport expects 53,400 fewer passengers next fiscal year largely because of AirTran's departure and an $892,779 drop in revenue for terminal space rentals under a revised leasing contract.

Overall, revenues are expected to decrease by $798,551, or 4.4 percent, according to the proposed budget prepared by Fred

erick "Rick" Piccolo, president and chief executive officer for SRQ airport.

Airline rental rates are set to increase 5.1 percent, or up $3.43 per square foot, as total rented space decreased 18 percent for a total of $70.55 per square foot. In these rates, airlines pay for gate usage, ticket counters and common areas. The decrease in available rental space was prompted by a change in how space is calculated in an agreement with the airlines, Piccolo said.

"Airline revenue decreasing here is a good thing because we're decreasing our costs to the airline," Piccolo said. Airport costs make up about 5 percent of operating costs for airlines, he said.

"We continue to have the lowest cost of our major competing airports," Piccolo said.

This is the airport's first year without revenue from AirTran, which left in August 2012. The airline continued to pay rental fees the remainder of the fiscal year, he said.

The maximum daily rate for the short-term parking lot will increase $1 to $14, putting it on par with the St. Petersburg-Clearwater International Airport, but still remaining the cheapest in the region. Punta Gorda Airport has the most expensive short-term maximum rate at $24.

SRQ anticipates parking revenue will decrease 10 percent, even with the hike short term parking fees, because of the decreased airport traffic. Long-term parking costs will be untouched.

The airport also proposed reducing its full-time workers and other operating expenses to help offset the losses. The airport is adding more part-time help, but it will keep strictly to 29 hours a week to avoid paying health care, Piccolo said. A new federal mandate will require employers to offer health care to employees working 30 hours or more.

Landing fees are also scheduled to increase from 69 cents to 89 cents per 1,000 pounds, still the most economical landing fees of nearby major airports. For comparison, Southwest Florida International in Fort Myers will charge $2.69 per 1,000 pounds in fiscal 2014 and Tampa International will charge $1.512 per 1,000 pounds.

The airport is expected to receive a 25.8 percent bump in landing fee revenue from signatory airlines and a 33.7 percent bump for non-signatory airlines.

The upcoming fiscal year also presents a new opportunity and challenge for the airport. The mortgage on the terminal will be paid off in August 2014, but airline agreements will also expire in 2014.

United's agreement is set to expire Sept. 30, 2014, because the airline did not extend the agreement when it took over Continental's contract, Piccolo said. United has not announced whether it will sign a new agreement or operate as an unsigned airline.

Airline agreements provide a discount to airlines that guarantee service through a number of years, Piccolo said. A carrier can remain unsigned, but fees are higher, he said. While they can collect more in fees as long as the airline is suing the airport, the downside to an unsigned carrier is that once the carrier leaves, the carrier can leave without having to pay any residual rents.

Still, United announced last month that it will add more holiday flights to and from Chicago.

While the airport is making progress adding flights, it has a 11.74 percent reduction in total passengers through August compared with the same period in 2012, according to an airport activity report released last week.

Charles Schelle, business reporter, can be reached at 941-745-7095. Follow him on Twitter @ImYourChuck.

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