Cincinnati/Northern Kentucky International Airport Budget Short

Tuesday, February 17, 2004 

Airport Budget Short 
The Cincinnati Enquirer, OH


HEBRON - The Cincinnati/Northern Kentucky
International Airport ran its third straight budget
shortfall in 2003, nearly $800,000 on a $90
million-plus budget. 

 The unaudited results, released Monday to the Kenton
County Airport Board, are the first time since the
early 1970s that the airport has reported such
shortfalls between what it budgeted and what it
actually took in. 

Still, the 2003 shortfall of $792,805 was much smaller
than the $3.3 million recorded in 2001. 

This time, airport officials say, it was caused by the
war with Iraq - which led to airlines cutting flights
for two months - and heavy snow at the beginning of
2003. That compares with the previous two years, which
can be directly tied to both the Comair pilots' strike
of 2001 and the Sept. 11 terror attacks. 

"Sometimes you get hit by things you just can't plan
for," said Shiela Hammons, the airport's finance
director. 

The airport never truly runs a deficit, because it
must balance its budget either through refunding
surpluses to the airlines that use it and either
charging those airlines or the airport's own surplus
fund for deficits. 

To meet legal requirements set out in bond agreements,
the airport must charge 25 percent more than it
actually needs. Those charges feed the surplus fund. 

That account currently stands at $16.6 million, and
has been used to cover the difference between revenues
and expenses for the last three years, since
financially struggling airlines such as Delta Air
Lines are in no position to pay such shortfalls. 

Airport officials added that the continuing shift from
larger planes to smaller regional jets here at Delta's
second largest hub is not causing the trend of
shortfalls. 

Landing fees, which make up a good chunk of airport
revenue, are collected by weight of the plane. Delta
has been shifting more passengers away from larger
jets and onto smaller, more economical regional jets
flown by Erlanger-based subsidiary Comair and other
regional carriers. 

But Hammons says the airport plans for this shift
every year - it hiked landing fees by nearly 10 cents
per 1,000 pounds for this year's $92.9 million budget.


The Iraq war caused all airlines to cut flights
nationally for two months. And the airport spent $1
million more than planned on snow removal in January
and February 2003. 


Still, the total number of passengers rose to
pre-Sept. 11 levels for the first time, and the
airport's expenses were well below what was actually
budgeted. 

"But that still was not enough to offset the revenue
shortfalls," Hammons said. 

Airport officials say they have budgeted more
carefully in recent years to ensure they don't wind up
with too large of surpluses. That's so they don't hold
onto money that financially struggling airlines could
use now. 

"Obviously, it was a lot more fun in the old days of
surpluses, but now we have to be a lot more stringent
in this current reality," airport board chairman John
Domaschko said. 


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