Airlines facing huge COVID-related cost increases at Cleveland Hopkins airportAirlines facing huge COVID-related cost increases at Cleveland Hopkins airport
TAFC: BLAME IT ALL ON COVID. This is just the beginning.
Costs per passenger rising $10-12 dollars to start? Or more? If they don’t get public funding? Is this going to start looking like public housing? I’m not sure where the article was going with this except to warn the public that costs will be rising – dramatically.
Chances are, they’ll start with a small rise in fares. But then you begin getting charged for all the baggage or maybe they’ll even start weighing you and the baggage, then it goes up $30-40 dollars for the skinny people – just to be fair and not make the fat people angry, and on and on until only the people with large incomes will be able to fly; everyone else takes the rails, bus or car.
All the wealthy people will foot the high cost bills of flying, get plenty of leg space, in fact they’ll be able to get rid of some seats to accommodate social distancing. They’ll get great meals, and the carriers will be called Privilege Flights. Yeah, “It’s been a privilege to fly with you!”
“Let’s do it again, real soon, okay? Bring a friend with deep pockets. You know how we love pockets, the deeper the better.”
Free vaccinations too. Maybe a swag bag. And roll out a red carpet – in fact change all the carpet to red inside the plane. Guzzy it up.
I thought the airlines already got a huge bailout with the first allocation from CORONA give-aways. No? A $25 billion dollar bailout in 2020? What did they do with all that money?
People talk about a billion dollars like it’s a drop in the bucket. Like it’s a Kentucky Fried Chicken bucket, done extra-crispy.
What happens to all those investment dollars? How does accepting money from the government in the form of a bailout affect stock prices of airlines? Are people getting rich off of the bailouts, when they sell their stock, leaving the airlines without any money? How does that work? Does the bailout money get factored in? The public deserves to know.
How could a runway cost $645 million dollars two decades ago, that they’re still paying for? It’s practically a billion dollars for a runway at a minor airport. Something must be wrong with that figure. What banks are getting rich off of the interest on THOSE loans? I hope they’re at least Cleveland-based.
An investigation is warranted. Too big to fail usually means too big to be investigated and prosecuted for mismanagement of funds. Cleveland has a big corruption problem, so I’d start there.
Cleveland airport is small in comparison to other cities. People leave Cleveland, they don’t come here to live and work unless it’s for the government – generally. Is there going to be a big government expansion?
So what’s the rush to expand the airport when they haven’t paid for the last upgrades from two decades ago?
The thought of free money is burning a hole in their pocket.
Is this article a prelude advertisement for a new airport?
BLAME IT ALL ON COVID. In two years, COVID may be reduced to the common cold.
Then they’ll say, did we really need all of this?
Updated Feb 24, 2021; Posted Feb 24, 2021
Airlines operating at Cleveland Hopkins are facing a steep increase in airport fees due to the pandemic. The Plain Dealer
By Susan Glaser, cleveland.com
CLEVELAND, Ohio — The cost to airlines operating at Cleveland Hopkins International Airport skyrocketed last year, a function of the huge drop in passenger numbers and the facility’s high debt.
The loss of revenue in parking, food and beverage, retail and other non-aeronautical areas has to be made up somewhere – and the airlines are bearing the brunt of it, said Airport Director Robert Kennedy, in a discussion with Cleveland City Council’s Finance Committee this week.
The extra cost to the airlines couldn’t come at a worse time – as carriers are dealing with catastrophic financial issues of their own because of the coronavirus pandemic, and as the city gears up to ask them for a huge sum to build a new terminal in the years to come.
“This is going to be a difficult discussion over the next couple of years,” said Kennedy.
The airport’s budget – projected to be $151.5 million in 2021 – must be balanced without any city tax dollars. Revenues come from both the airlines, in landing and other fees, and non-airline areas, including rent, parking and other sources.
In recent years, airport officials have worked to decrease the costs to airlines of operating at Cleveland Hopkins, by increasing parking and passenger drop-off fees, for example, with the goal of making the facility more competitive as it vies for new service.
The airlines funded 46% of the airport’s costs in 2019. In 2021, the airlines’ costs to operate in Cleveland will increase by $21 million and make up 66% of the airport’s revenue, according to city figures.
The airport did receive $46 million in federal stimulus money in 2020, and is expected to receive another $9.7 million in 2021, but it’s not enough to stem the losses from the steep drop in passengers.
Airport officials project that 5.2 million passengers will travel through Cleveland Hopkins in 2021, a 48% decrease from 2019 numbers.
Industry analyst Robert Mann said Cleveland isn’t facing this financial crisis in isolation. “It’s an industry-wide problem,” said Mann, noting that the Port Authority of New York and New Jersey, which operates three of the nation’s largest airports, recently asked the federal government for $3 billion to help make up revenue shortfalls.
He added, “Airlines aren’t in a mood to see increases on anything.”
At the same time, there’s only so much that airports can do to reduce expenses. “You have to maintain the ramps and the runways,” said Mann, principal at R.W. Mann & Co. in New York. “And you really don’t save very much by mothballing a terminal.”
In 2020, Hopkins’ cost per enplanement – that’s the average cost per passenger that an airline pays to operate at an airport – was projected to be $12. Instead, it was nearly $32, and is expected to be even higher in 2021.
Other airports in Cleveland’s competitive set – Columbus, Pittsburgh, Cincinnati and others – also will see per-passenger costs increase, but are expected to top out at $10 to $15, according to Kennedy. “We are damaging our competitiveness,” he said. “This is what drives airlines elsewhere.”
Part of the reason for Cleveland’s high costs is the airport’s large debt, much of which stems from the construction of a new runway nearly two decades ago. At $645 million in 2019, Cleveland’s debt is significantly higher than Columbus’ $172 million, and Pittsburgh’s $43 million.
Payment on the airport’s debt in 2021 is expected to be more than $65 million – that’s 43% of the airport’s $151.5 million budget.
TAFC: BLAME IT ALL ON COVID. This is just the beginning.