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Letter to the editor

Caution urged amid airport's success

Because of airlines' volatility, St. Petersburg-Clearwater airport shouldn't count on repeating this year's record business to finance improvements, a study says.

By RICHARD DANIELSON
Published November 28, 2004

St. Petersburg-Clearwater International Airport is having its best year ever, with a record 1.1-million passengers through October.

Still, a Pinellas County consultant warns that officials shouldn't bank on that kind of success to pay for future airport expansion.

In a study done for the county, consultants with John F. Brown Co. of Cincinnati recommend that Pinellas officials take a conservative approach in estimating how much money they might have in the future to expand the airport's terminal and build a parking garage.

That means not counting on the airport to break passenger records year after year. It also means staying out of long-term debt and pursuing expansion projects on a pay-as-you-go basis.

"I think their recommendations make sense," airport director Noah Lagos said last week.

Pinellas County commissioners are scheduled to discuss the Brown report and the airport's proposed master plan at a workshop at 9:30 a.m. Dec. 14. The airport operates as a self-contained department of county government. The master plan, which has yet to be approved, calls for $223-million in airport improvements over 20 years.

Residents of Safety Harbor, Feather Sound, Clearwater and Oldsmar will watch the airport's moves closely. Last May, county commissioners voted 5-2 to move ahead with a plan to extend the airport's runway over objections from opponents from those areas, which are most affected by noise from low-flying planes.

Safety Harbor Mayor Pam Corbino, who opposed extending the runway, said residents are still concerned.

Corbino said she doesn't have a problem with improvements that allow arriving passengers to leave their planes without having to climb down steps.

But residents worry that the master plan would help bring in noisy cargo planes and corporate jets at all hours, she said.

"Our concern is that they will just act to expand and not give a thought to the quality of life of the people who already live here," Corbino said.

Without a doubt, the airport is posting record numbers this year.

During the first 10 months of 2004, the airport saw more than 1.16-million passengers. That's 75,000 more than in all of 1995, which held the previous record. And that total doesn't include numbers for November and December, two of the busiest months of the year for travel. For Thanksgiving, Lagos said, several airlines put on extra flights.

The growth represents a 46 percent increase over 2003. The airport also has set a record for monthly passenger traffic 13 months in a row.

Still, the airport's consultants recommend a cautious approach. They recommend basing future projections on a passenger estimate that's about half this year's numbers.

The reason?

Like many smaller airports, St. Petersburg-Clearwater depends on smaller airlines for much of its business. Those airlines tend to be less stable and more vulnerable to financial shocks.

In the case of St. Petersburg-Clearwater, the current high volumes of passengers can be traced overwhelmingly to one airline: ATA Airlines. The nation's 10th largest airline, ATA carries half the passengers using St. Petersburg-Clearwater International Airport.

The problem is that ATA's future is uncertain. Last month, the airline filed to reorganize its finances under Chapter 11 of the federal bankruptcy code, sold some assets and announced plans to create itself anew.

Since filing for bankruptcy protection, the airline has maintained steady service at the St. Petersburg-Clearwater airport, Lagos said.

But if ATA were to discontinue service, consultants say there's no way of knowing when or where the next low-cost airline might emerge.

"For financial planning purposes, we believe that current and future passenger levels are volatile and not sufficiently reliable and that the airport should instead adopt a lower baseline level of passengers for planning purposes," the authors of the Brown study conclude.

The airport has seen its passenger counts rise and fall dramatically since 1980, with big peaks in 1984 and 1995. Both were followed by big dropoffs.

That's why the consultants say the county shouldn't count too much on this year's current strong performance.

"While this (year's) sharp increase in passenger traffic is notable, it is a phenomenon that has repeated several times in (the airport's) history since 1980," they write. "In each previous occurrence . . . the rise was followed by a significant decline in passenger traffic."

Improving the terminal is seen as one way to make the airport more attractive, especially compared with its much bigger and busier counterpart across the bay, Tampa International Airport. Building a parking garage could be another way to improve the Pinellas airport.

But in their 34-page study, which was completed in September, consultants conclude that officials should not plan to do any long-range borrowing to pay for those big projects. The costs of borrowing the money and the risk of losing airlines make that too risky.

Instead, they recommend that officials adopt a pay-as-you-go approach toward financing big capital improvements.

Assuming the airport sees 300,000 outgoing passengers a year, they estimate that passenger facility charges, various state and federal grants and other revenues would bring in $38-million over five years for improvements. For 10 years, their estimate is $57.1-million.

Lagos said he wants to see a financially sound plan to create a better facility for both airlines and passengers and concurs with the conclusions of the Brown study. That means that construction of any airport improvements likely would have to be done in phases.

"I don't see us building a parking garage any time soon," he said.

[Last modified November 28, 2004, 00:41:12]