"Cincinnati Airport Will Lose Millions Due To Delta Cutbacks"

Saturday, September 10, 2005

Delta cutbacks hit airport hard 
By Bob Driehaus
The Cincinnati (OH) Post

 
The financial hit Cincinnati/Northern Kentucky International Airport will
take from the loss of one quarter of Delta Air Lines' current flights came
into sharper focus Friday after a Delta vice president laid out details of
the cut's impact.

The airport stands to lose more than $8 million in 2006 that it collects
from a fee it tacks onto the tickets of most passengers. That money is used
to pay for a new runway under construction and numerous other capital
projects.

But despite the cuts, the Hebron complex remains a key to Delta's long-term
plans, said Doug Blissit, Delta vice president of public affairs.

Blissit flew from Atlanta on short notice to speak to a worried crowd of
Northern Kentucky business and government leaders at Covington's
Metropolitan Club.

"Delta and (Delta-owned) Comair remain wholeheartedly committed to the hub
we built up here," Blissit said. "We are here to stay and here to stay as
the biggest carrier."

Blissit estimated that 20 percent fewer Delta passengers will use the
airport due to the plan to cuts 26 percent of the airline's flights at the
airport. He estimated no more than 5 percent of passengers who begin or end
their travel at the airport - called origin and destination travelers -
would be lost. Most will simply find other flights at the airport, he said.

A 20 percent cut in total Delta passengers would mean about 2.4 million
fewer people will fly through the airport in 2006 than this year.

About 85 percent of flyers, including about 9.1 million Delta passengers,
pay a $4.50 passenger facility charge. A 20 percent cut to 9.1 million
passengers translates into more than $8 million lost from the fee in 2006.

The burden of that loss will fall partially on passengers of all flights at
the airport. The airport planned to cut the fee to $3 per ticket in 2010
after paying off debt on the new runway. But the loss of the Delta
passengers means that the fee will remain $4.50 for an undetermined time,
Airport Finance Director Sheila Hammons said.

The airport had already extended the $4.50 fee to 2009 from summer 2008 to
pay for higher-than-expected property acquisition costs for the runway,
slated to open in December.

How the airport pays for other capital projects, such as sound insulation
for schools and homes affected by the new runway, is still being determined,
Hammons said.

She and other airport staff are working long hours to reconfigure the 2006
budget with a lot less revenue coming from the airport's dominant carrier.
Delta currently operates more than 90 percent of all flights at the airport,
a number that will dip considerably beginning Dec. 1, when the flight cuts
kick in.

Another big hit to the budget will be in the form of lost landing fees,
which are based on the weight of planes touching down at the airport.

The loss of revenue won't be clear until the airport and airlines that use
it complete complex negotiations on landing fee rates, Hammons said.

Blissit emphasized Friday that Delta was committed to the airport. He said
the routes to nine cities whose service will be completely eliminated Dec. 1
were not generating enough revenue to warrant keeping them,

But he said the changes the airline will enact will make the airport more
efficient and maintain it as Delta's second-largest hub.

CVG will remain the 10th largest U.S. airport in terms of departures and
eighth largest in terms of non-stop destinations, Blissit said.

Blissit emphasized that the changes don't ward off the possibility that
Delta will have to file for bankruptcy protection. He said the airline's
efforts to trim costs and stem losses have been hobbled by factors beyond
its control, including surging fuel prices.

"Every dollar that we've pull out (of other expenses) has gone right back
into fuel," he said.

Blissit said that bankruptcy would not mean a disruption in service and that
that airline's frequent flier program would not be affected.


 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************