MANATEE -- Airlines will get a break on the fees they pay at Sarasota-Bradenton International Airport next year as SRQ officials do what they can to make flying there more financially appealing.
For the second consecutive year, SRQ is set to shave a bit off what it charges air carriers when they fly aircraft in and out of the airport. In writing a proposed $17 million 2016 budget, airport administration reduced airline fees by an average of 36 cents per passenger. That follows a 59-cent cut for the current fiscal year.
With the lower fees, airlines will pay an average of $11.69 for every passenger they load on an aircraft at SRQ. Though well above the estimated $5.50 per passenger cost at Tampa International Airport and the $7.50 at Fort Myers' airport, the cut is still expected to be an incentive for carriers to bring more people to Bradenton-Sarasota.
Passenger volumes are expected to rise slightly in 2016 to 624,737. The airlines could realize even greater savings if they bring in more passengers than that projection and increase airport revenues.
"You can increase your operating costs but show the airlines that they've reduced their cost per passenger by just increasing their number of passengers," said Fredrick "Rick" Piccolo, SRQ's CEO, during a budget work session Monday.
The reduction in fees total a $193,000 drop in airport revenue compared to the current year's budget. SRQ has picked up more airline service over the past two years, including the recent addition of twice-a-week, in-season flights to Ontario via Canadian discount airline Westjet.
Overall, Piccolo presented a conservative 2016 budget to members of the Sarasota-Manatee Airport Authority. Despite the reduction in airline fees, the airport is budgeted to earn a net profit on operations of $1.56 million. Expenses fall slightly, paced by a 46 percent cut in capital equipment spending and nearly $95,000 in savings on utilities.
Piccolo said a revenue sharing agreement negotiated with the airlines last year means the airport is able to reduce airline fees. Under the agreement, the airport receives all profits from leased spaces inside the terminal, a 50 percent share of net concessions revenue and 50 percent of terminal area revenues, including car rentals and parking. Previously, the airlines received those revenues in exchange for paying on bonds that funded the construction of SRQ's terminal.
The new agreement was inked after the $70 million debt for that construction project was paid off. It does come with some risk. SRQ now takes the full brunt of any losses on those revenue generators.
It's a risk members of the authority board were happy to take.
"Since we don't have a mortgage payment any more, we decided that risk was well worth it," said Carlos Beruff, the board's vice chairman.
The top expense item in the airport's operating budget is for employee salaries. SRQ is budgeting $7.5 million for 125.5 full-time equivalent positions. That's up about $188,000 from the current year budget. In all, expenditures on personnel total a projected $11.2 million.
Outside of the operating budget, the airport will begin paying on its largest capital project in 16 years in the coming year. Authority members voted unanimously during their regular business meeting Monday to accept a $16.02 million bid from Halfacre Construction of Lakewood Ranch to build its new aircraft control tower. The airport will cover a third of the cost of the project, which has a total budget of $8.3 million. Construction is expected to begin this fall.
Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027 or on Twitter @MattAtBradenton.