But the federal government is expected to cover any net operating losses.
The airport anticipates about a $311,000 net operating loss for the 2020 fiscal year and a $476,000 loss for the 2021 fiscal year, Airport Authority commissioners were told during an Administration and Operations Committee meeting held virtually via Zoom.
Still, the airport can draw up to $10.3 million from the federal government under the CARES Act to cover any losses.
“All I can say is thank God for the CARES Act otherwise we would be in bad shape,” Commissioner Dan Mahoney of Johnson City noted.
The CARES Act, according to airport officials, includes a Federal Aviation Administration mandate that the airport “stay operationally ready and retain substantially all personnel.”
Airport Finance Director Rene Weber pointed out airline accounts were down 80 percent in May and 75 percent in June.
“We do have some indications of flight changes that will be made in July, but that’s about as far out as it goes,” Weber said. “The airlines are working with reduced staff and assets. We do anticipate the traffic and activity to come back.”
As of last March, Weber said the airport was experiencing double-digit increases ahead of previous projections. Now, traffic isn’t expected to return to previous flat levels until next spring.
Even with the operating losses, the committee approved a $6.9 million spending plan for 2020 and a $7.2 spending plan for 2021.
“If anybody has a crystal ball and can tell me what’s going to happen with flights and passenger demand in the next year, I would love to see that crystal ball,” airport Executive Director Gene Cossey told commissioners. “Our biggest fear at this point is not that demand won’t come back but is the airlines won’t have the same capacity put back into the market. They’re not willing to fly empty airplanes.”
To give the airlines an incentive, the airport has proposed to reduce airline rents and charges by 5%.
“I was hoping we would see a little more uptick (in travelers) that we’re seeing at this point,” Cossey said. “We were concerned that (American Airlines’) Dallas-Fort Worth flight would not be coming back but we did get notification that American is putting Dallas back on the schedule in July, and we’re excited about that. We’re also seeing that Delta and American increasing their capacity to Atlanta and Charlotte. We were in a strong growth mode prior to the COVID-19 issue and we want to get back to that growth mode as quickly as possible.”