ORLANDO, FL. – While slow growth in passenger traffic at Orlando International Airport (MCO) is encouraging, the Greater Orlando Aviation Authority (GOAA) Board continues to pursue fiscal belt tightening. At today’s monthly meeting, the Board received updates on next year’s budget, changes to long-term capital
improvements and requests by airport partners for financial relief.
Chief Financial Officer Kathleen Sharman presented the Board with the preliminary budget for Fiscal Year 2021. In comparison to the previous year’s budget, Airline and Non-Airline revenue both showed significant decreases. Airline revenues are derived from fees paid to use the airfield and terminal facilities. Non-Airline revenues include rental car fees, parking, concessionaire rents and the hotel.
The overall FY2021 budget showed gross revenues of $443,356,000 compared to $593,549,000 in FY2020. The $150.2M decrease reflects an inclusion of $83.4M in CARES Act grants. On the expenditures side of the ledger, the FY2021 budget shows an overall decrease of $30.3M, however, the airport expects to increase expenditures for janitorial services by $1.2M.
Three notable areas of interest include an increase in the Landing Fees airlines pay, a decrease in the Terminal Premises cost per square foot and an increase of Cost Per Enplaned passenger (CPE) from $5.32 to $13.90. This CPE is in the range of other large hub airports in Florida and less than Miami International.
The Orlando Executive Airport (ORL) budget also showed an overall decrease from last year. In 2020, ORL’s total budget was $4.3M. The preliminary budget for next year is $4.083M. The budget proposal will next be considered at a Public Hearing by the City of Orlando next month before returning to the GOAA Board for final adoption.
Capital Improvement Plan (CIP) Modifications
To manage long term development and maintenance projects, the Aviation Authority regularly reviews the Fiscal Year 2018-2025 Capital Improvement Plan. The program matches resources with demand to strike a balance between what needs to be built with available funding sources and keeping the facility affordable for airlines.
Since 2016, the CIP has been adjusted to accommodate growth, but with the current decline in demand, the CIP has been revised. After reviewing the current economic environment and resulting reduction in passenger demand, the Authority has proposed modifications in the overall CIP, including the scope of the South Terminal Complex (STC) Phase 1 and STC Phase 1 Expansion projects.
All tolled, projects involving the terminal, airfield, ground transportation and the STC face a total reduction of $360 million. That scales back the total CIP from $4.116 billion to $3.756 billion. This approach is consistent with the Authority’s approach to construct demand-driven facilities.
The Board also revisited the complicated subject of addressing requests from the airlines, rental car companies and concessionaires for relief of certain fixed costs. In May, the Board approved 90-day waivers and deferrals for eight airlines, one cargo carrier, 21 concessionaries and one rental car company. The financial impact of the approved resolutions was over $30 million. The Board agreed to the supplemental relief at today’s meeting.
The additional relief is subject to a number of conditions, including concessionaires being current on payments due the Authority through August 31, 2020. The In-Terminal Concessions (ITC) and Rental Automobile Companies (RAC) will receive deferral of specified August and September costs and a 50 percent waiver from October 2020 through March 2021. The total financial impact of the supplemental relief package is $47.6 million, but could vary based on the number of companies that qualify. Approval is subject to certain conditions and applications must be submitted by September 4, 2020.
“In reviewing the actions presented to the Board, today’s items were about reducing our cost of operation and capital improvement program while assisting our business partners,” said Phil Brown, Greater Orlando Aviation Authority CEO. “We continue to navigate a challenging course and need to explore all available options in order to make it through together.”
The Aviation Authority Board also elected new officers for the current term. Carson Good was named Chairman, Ralph Martinez Vice Chairman and Mayor Jerry Demings agreed to serve as Treasurer. Phil Brown remains Secretary; and Dayci Burnette-Snyder the Asst. Secretary.
Basic MCO Information: With more than 50 million annual passengers last year, Orlando International Airport (MCO) is the busiest airport in Florida and 10th busiest in the U.S.
The information herein is provided as of the dates specified. Due to the outbreak and continuation of COVID-19 subsequent to the date of such information, the information contained herein may differ materially from the current operational and financial data.