COVID-19 is having a devastating impact on airports and the airline industry. In Wichita, in addition to the extensive hygiene procedures implemented for cleaning of Airport facilities and measures intended to protect the health of our employees and patrons, our biggest issue we are facing is the financial impact on the airport system revenues. Airline passenger traffic has dropped significantly in the past week compared to last March. That in turn means far less revenues from passenger-based demand items, such as food/beverage/retail concessions, parking lot activity, rental cars, hotel occupancy, ground transportation fees, airline landing fees, passenger and customer facility charges, etc.
Staff has already implemented several cost-cutting measures at the airports ranging from operational expense cuts, to capital equipment cuts or deferrals, to capital improvement program cuts or deferrals. Everything is being examined with the goal of preserving our cash by eliminating or minimizing expense outlays.
To further compound the problem, the various tenants have started requesting financial relief from their lease obligations. Depending upon the type of tenant, relief desired ranges from rental abatements or deferrals, concession fee minimum guarantees, waiver of fees entirely, etc. Airport staff is reviewing each request in light of the contract language that is contained in the various lease and concession agreements.
The airport industry is working with Congress and the Administration to obtain a financial relief package of $10 billion that could be used to pay for airport expenses such as debt service obligations, personnel retention, operating expenses, and any lawful purpose. The Kansas Congressional Delegation and the City’s Washington legislative advocate have been apprised of this proposed bill, and our strong support for it. In fact, Senator Moran has been one of the champions working with our airport industry trade associations to move the bill through Congress.
Airlines are reducing capacity at airports nationwide. Allegiant has had to cancel its flight to Destin-Ft. Walton Beach on March 26. With Destin’s beaches closed, this is not a surprise. So far, the scheduled reductions at ICT are in seats, not flights, so expect smaller aircraft. Compared to April 2019, these are the major reductions at ICT, subject to change:
Largest reductions in capacity, April 2020 compared to April 2019:
- American is reducing seats to Dallas by 20%
- Delta is reducing seats to Atlanta by 26%
- United is reducing seats to Denver by 30%
Many flights have been cancelled at ICT recently. On Monday, 12 flights were cancelled and we expect this will continue. The Federal Aviation Administration said late Saturday that 11 of its air traffic control facilities nationwide have employees who have tested positive for covid-19 including at Las Vegas which is also causing flight cancellations at ICT.
Updates to the airlines’ policies, travel information and CDC resources can be found here.
