At Cincinnati/Northern Kentucky International Airport, about $70 million in runway improvements won't be done as soon as planned and lights on non-primary runways and taxiways are being turned off at night, which saves the airport $6,000 a month.
Louisville International Airport put $1.5 million in major projects and purchases, including baggage system upgrades and new terminal seating, on hold in fiscal year 2009.
But drive by Lexington's Blue Grass Airport and you'll see construction crews scurrying to finish a host of projects, from a new runway to a revamped front entrance.
About $60 million is being spent on major projects, mostly construction, at the local airport, which is much smaller than the Kentucky airports to its west and north.
Some of the Blue Grass Airport projects have been on the books for years, and the airport is trying to get them done before the 2010 World Equestrian Games come to Central Kentucky.
But the work at Blue Grass also is being done at a time when the airport's flight and passenger counts are going down.
The number of weekday flights is expected to go from about 39 to 34 this fall; passenger boardings for 2009 are predicted to be 7 percent lower than in 2008. And the airport board adopted a 2010 fiscal budget that reflects a projected 11 percent decrease in overall revenue from commercial airlines, the airport's largest source of regular income.
Much like in mid-2008, when high fuel prices prompted airports across the country to cut back in spending, air travel industry experts say the dramatic decline in the economy has caused airports to do some major belt-tightening this year. Many airports have been watching their pennies for the past several years because of financial problems in the commercial airline industry.
Blue Grass Airport, like many others that are seeing their flight and passenger numbers decline because of the economy, is reining in spending. While tens of millions of dollars are being spent on construction, an approximately $8 million project involving the relocation of Terminal Drive and the creation of 1,393 new parking spots for cars, has been put on hold, said Eric Frankl, the airport's interim executive director. The local airport is also cutting its spending on training and travel, insurance and capital equipment purchases, among other things, in the 2010 fiscal year, which began July 1.
A lot of airports are cutting back on construction — "certainly more than five years ago" — as they see revenues decrease due to a fall in passenger demand, said Sean Broderick, a spokesman for the American Association of Airport Executives.
"They're doing anything they can to mitigate the current challenges, to weather the storm," he said.
But, he added, "You always must prepare for the future." It's a pretty good bet that air travel will increase in the future, he said.
"If you're an airport, you need to be ready for that," he said. "Airlines have the advantage of being able to add or move passengers very quickly. Airports can't."
Dealing with losses
While many airports are cutting or delaying construction projects, many others are plunging ahead with multimillion-dollar improvements.
John Wayne Airport in Orange County, Calif., is working on a $460 million project that includes a new passenger terminal and parking structure. Washington Dulles International Airport has been working on its $1.4 billion AeroTrain passenger transport system for the past several years.
Airports across the country have gotten a boost in recent months as $1.1 billion in federal stimulus money has become available for construction projects.
Blue Grass Airport is using about $2.9 million in federal stimulus money to relocate an electrical vault and for renovation and upgrades at the airport's aircraft rescue fire fighting training center.
Much of the rest of the money for the projects being done at the local airport this year has been secured from other federal government funds, state government and a 2008 bond issue.
"In general, many, but not all, of the projects we are working on are intended to spruce up the place before the World Equestrian Games," Frankl said.
"Each airport has its own situation, of course," Broderick said. Airport managers must manage current situations with an eye on the future, he said. "It's a huge challenge. Obviously, we're in volatile economic times now."
Blue Grass Airport's fiscal year 2010 operating and capital improvement budget, at $11.5 million, is 11 percent lower than the previous year's fiscal budget.
Landing fees for commercial airliners are projected to be 19 percent lower in fiscal year 2010 than they were projected to be in fiscal 2009. The Lexington airport's fiscal 2010 budget also reflects a projected 13 percent drop in food, beverage and gift concessions revenues and a projected 6 percent drop in car parking income.
This fall, there won't be as many flights to Cincinnati, Detroit, Chicago, New York and Memphis. But airport spokesman Brian Ellestad said the airport has added a round trip to Dallas and has added two Florida destinations within the past year.
The number of passengers boarding planes at Blue Grass Airport totaled more than 505,000 in calendar 2008. Airport officials are predicting a drop to 470,000 for 2009, Ellestad said.
Blue Grass Airport's banner year for passenger numbers was 2004, when the total enplanement and deplanement count was 1,168,397, he said. That compares to a total count of 1,008,552 in 2008.
The decline in passengers departing from the Lexington airport these days doesn't have a lot to do with ticket prices, Frankl said.
"There is no question that we struggle to compete with low air fares out of both (Louisville and Cincinnati/Northern Kentucky) airports but particularly out of Louisville," he said. "However, our loss of passengers is not impacted primarily by fares in this case."
Frankl said airlines are cutting the number of available seats at airports throughout the country because of the economy.
"The fewer available seats that serve a market results in fewer passengers that can fly from that market," he said. "That is the primary reason we have estimated fewer passengers."
Faring comparatively well
Blue Grass Airport officials said that the Lexington airport is doing much better than a lot of other airports in stemming the downward trend in flight and passenger numbers.
In 2005, the Cincinnati/Northern Kentucky airport had more than 22 million arriving and departing passengers and 496,000 takeoffs and landings by commercial aircraft. In 2008, there were 13.6 million passengers and 285,000 takeoffs and landings. The number of passengers is forecast to drop even further this year, said spokeswoman Barb Schempf.
"It's been a combination of the economy ... as well as the merger between Delta and Northwest," she said of the drop in passengers and flights. "Most airports are seeing a downturn."
Louisville International Airport saw a 19 percent decline in passengers in May 2009 over May 2008. There were 15 percent fewer seats in May 2009, airport spokeswoman Trish Burke noted.
In 2008, the Louisville airport was on track to set an all-time record with 4 million arriving and departing passengers, she said.
"Unfortunately, the price of oil spiked in July 2008 and the economy tanked in the second half of 2008, forcing airlines to cut flights nationwide," she said.
Burke said that Louisville airport officials are forecasting that monthly flight and passenger activity will level out in the second half of 2009.
"We may see some increase in (calendar year) 2010 as corporate travel returns," she added.
Yet, the Louisville airport authority has approved a fiscal year 2010 budget that is 20.3 percent lower than the previous fiscal year's — $76.9 million vs. $96.6 million in fiscal 2009. The amount budgeted for capital construction and major maintenance projects in fiscal 2010 is $15.8 million, compared to $33.2 million in fiscal 2009.
Officials at the Cincinnati/Northern Kentucky airport, which operates on a calendar year, haven't yet done the airport's budget for 2010. But they've been watching carefully the airport's dollars since 2005, when Delta Air Lines went into bankruptcy, Schempf said.
The two runway rehabilitation projects that have been delayed were slated for 2010 and 2011; now they've been moved tentatively to 2012 and 2013, she said.
"We've had a hiring freeze in place since 2005 when Delta first went into bankruptcy," she said.
