Airport facing budget shortfall; reduced hours eyed

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Tom Ada, GIAA executive director, said: "This orange line here, was the revenue forecast of $76 million that was approved for Fiscal Year 2020. And, the gray line here starting in February, actually January, we started taking a downturn and we bottomed out in April with the COVID impact. And we projected that the gap was a loss of $51 million in projected revenues."

While the Guam International Airport may have just skimmed by this year thanks to federal CARES Act funding, the airport’s 2021 fiscal outlook is not looking so rosy.

There’s no question the COVID-crisis plummeted the Guam Airport’s revenues for this year.

Tom Ada, GIAA executive director, said: “This orange line here, was the revenue forecast of $76 million that was approved for Fiscal Year 2020. And, the gray line here starting in February, actually January, we started taking a downturn and we bottomed out in April with the COVID impact. And we projected that the gap was a loss of $51 million in projected revenues.”

Ada says that’s around a 49 percent drop from the projected $76 million in revenues.

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“So then the difference between the revenues that were expected and we’d budgeted, left us in a $25 million deficit. Then comes the CARES Act…and the CARES Funds that the airport received was $20.7 million, rounded off to $21 million. So, that still left us a deficit of approximately $4 million,” Ada said.

Ada says they were able to relieve that remaining $4 million dollar deficit by cutting back operational expenses by around 15 percent.

While the airport is basically breaking even for FY 2020, next year is a different story.

Without federal funds for 2021 and business not yet back to pre-COVID levels… the airport is staring down a massive budget shortfall. And that will mean tough decisions ahead.

“So we definitely need to take a look at possibly having to reduce our operating budget by as much as 50 percent,” Ada said.

Ada says there are fundamentals that cannot be reduced like security, maintenance, debt service payments, and flight tower controllers.

But personnel hours and layoffs are being considered.

“That’s always a possibility, but probably before we go there, we may need to take a look at maybe 32-hour workweeks,” Ada said.

He says the retail merchandise and food concessions represent around 45 percent of the revenues for the airports in addition to car rentals and the tour buses that come in.

“They have set up a business based on a customer base of approximately 1.6 million passengers a year. Well, with a slowdown in traffic, that customer base is not there. So the customers aren’t there, they don’t make revenue, we (the airport) don’t make revenues either,” Ada said.

The reduced number of flights is also hurting the airport’s bottom line, with the lack of landing, departure, and other aeronautical fees, which is about 55 percent of their revenue.

Ada says they should be finalizing their next fiscal budget by the end of July.

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