With the Guam airport’s primary business operations significantly dependent on visitors from Japan, Korea, and the Philippines, the novel coronavirus (COVID-19) pandemic had adversely impacted the financial position, results of operations, and/or cash flows of the airport.
According to the Office of Public Accountability, the Guam airport’s operating revenues significantly decreased by $25.8 million (M), going from $69.0M in FY 2019 to $43.2M in FY 2020.
Facilities and systems usage charges took the biggest hit, taking in $13.8M less than the previous fiscal year. Concession fees declined by $8.7M, rental income decreased by $1.7M, and miscellaneous revenues dropped by $1.6M when compared to the previous fiscal year.
Operating Costs and Expenses Decreased by $3.5M
The Airport’s operating costs and expenses decreased by $3.5M, going from $44.9M in FY 2019 to $41.4M in FY 2020. Contractual services primarily attributed to the $4.9M decrease, specifically from a reduction of $2.5M in professional services, $1.3M in power, $752 thousand (K) in repairs and maintenance, $326K in advertising and promotions, and $181K in travel/training and certifications.
The decrease in operating costs and expenses was offset by a $1.1M increase in personnel services, going from $18.1M in FY 2019 to $19.3M in FY 2020. In FY 2018, personnel services totaled to $13.9M, an increase of $5.4M when compared to FY 2020, primarily due to the FY 2018 personnel services impacted by the initial implementation of GASB Nos. 68 and 73.
The implementation significantly reduced personnel services due to the decrease in retirement contributions from $3.9M in FY 2017 to negative $132K in FY 2018. The Airport reduced full-time employee count from 203 in FY 2019 to 202 in FY 2020.
The Airport’s total non-operating revenues (expenses) net, showed a significant increase of $9.5M, going from ($477K) in FY 2019 to $9.0M in FY 2020, primarily due to a $14.7M increase in grants from the United States (U.S.) government.
In spite of the pandemic, OPA noted that the Airport proceeded with its capital improvement program focused on developing programs and the infrastructure to create future opportunities for the island and communities throughout the region. Capital improvement projects in excess of $200M are currently underway or in the planning/design phases. Some projects currently underway include the:
· 3rd Floor International Arrivals Corridor with Seismic Upgrades: This project will allow the Airport a permanent solution to conform with the Transportation Security Administration’s (TSA) mandate to separate departing TSA-screened passengers from non-TSA-screened arriving passengers. A topping-off ceremony was held for the last phase of this project in January 2021 and is anticipated to be completed in 2021;
· Aircraft Rescue and Firefighting Facility: A new state-of-the-art facility that will improve response time in the event of a crisis is currently under construction. This project is funded in large part by $20.5M in discretionary grant funds from the Federal Aviation Authority; and
· Runway 6L/24R Rehabilitation: This project is currently in progress and is to be completed in phases. Phase Ia will provide rehabilitation and reconstruction to over 1,550 linear feet covering 155,000 square feet.