Gateway Airport faces $1.8M budget shortfall

Phoenix-Mesa Gateway Airport is reporting a $1.8 million budget shortfall and enacting measures to trim expenses without cutting staff, according to airport officials.

The "airport is looking at making cuts to our operating budget - that is our day-to-day activities," said Brian Sexton, airport spokesman.

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Sexton listed cuts to the airport's advertising campaign, contracts with outside consulting firms, as well as cutting back on special events, amid other areas where the airport will trim expenses.

An open house scheduled in February may go away in order to save money, Sexton added. No definite plans have been made to bridge the $1.8 million budget shortfall, he said.

The airport is committed at this time on not eliminating staff positions, he said.

Sexton said the airport is currently in talks with businesses about renting some of the vacant hangar spaces as a means of generating revenue.

Casey Denny, the airport's deputy director, said Gateway has more than 333,000 square feet of leasable airport space, and at present about 200,000 square feet is occupied. With more than 130,000 square feet of space left available, he said the airport is currently attempting to increase that occupancy rate.

He said the airport's budget shortfall is actually less than in previous years. But he agreed that the current economy does exacerbate the challenge.

"The airport has always had an annual operating loss," he said, adding that last year the operating budget loss was $2.3 million.

Denny said fuel sales, leasing more airport property and continued increases in passenger services were all factors moving the airport closer to closing that budget shortfall. He said lease revenue is currently down more than $800,000 below budget and revenue from sale of fuels is below budget projections by about $600,000.

"Can we make up those lease losses with additional fuel sales? That's a possibility," Denny said. "Or we could have more passenger service than we had planned for."

Denny credited Allegiant Air's growth with stabilizing the airport's drop in revenue from leases and sluggish fuel sales.

He said even as Boeing left the airport last year, along with the shuttering of a helicopter pilot school at the airport, sustained growth in passenger service has somewhat offset those losses.

"When we talk to other airports like us, they have had the real estate hit them as well without the corresponding passenger service gains," Denny said, pointing to Allegiant. "In this tough economic time that we're in, at least Gateway has other aspects they can rely on, such as national passenger service activity."