By Job Conger, Correspondent
Background: Following airline deregulation in the late 1970s, a frequently heard lament was that Capital Airport (as it was known then) did not have airline jet service. Eventually American Airlines introduced their Fokker 100 twin-jets, similar to the well-remembered Douglas DC-9s of legendary Ozark days. In the years since, largely because of the public demand for jets, the world airliner industry has introduced smaller, more efficient Canadair CRJ and Embraer Emb-145 regional jets. Today, Abraham Lincoln Capital Airport (SPI) has nothing but jet service.
Still, Executive Director Mark Hanna, who arrived in January 2007 from Quincy's Regional Airport-Baldwin Field, wrestles with public misperception and the challenge of setting the record straight. Springfield Business Journal learned in meeting with him how considering the airport only by activity near the ticket counters is akin to assessing an iceberg by what you see from the bridge of your ocean liner.
"I haven't received complaints that the taxes for the airport are too high," Mark Hanna, executive director of Abraham Lincoln Capital Airport (SPI), said. "What I'm getting are blogs and letters to the editor that say 'Plow it under and make another cornfield' and other sources that notice when service is changed. A lot of people who complain about the airport feel they're not getting the punch or value from the place, that we should be generating more than seven flights a day. The air carrier service as it relates to the rest of the airport is just a sliver of the pie. The traffic count is so much more substantial than what's generated by commercial flights. Charter flights are up, particularly with Allegiant Air with its flights to Las Vegas. They're still here, flying 150-seat MD-80s to casinos in Reno and they serve their special clients in their own way; not with a lot of local advertising."
Until November, American Connection will fly its Embraers to St. Louis Lambert, then American Eagle will fly to Chicago O'Hare. The change represents not a loss of boardings, but a re-arrangement of destinations.Total passengers arriving and departing SPI is up 7.69 percent in 2008; 70,868 compared with 65,806 last year based on year-to-date figures for July. The figure includes charter flights by McClelland Aviation on the airport's south side.
Hanna cites two factors impacting airline service to SPI. Federal subsidies, which allowed airlines modest profit to service small cities that could not support it on their own, were replaced by locally funded subsidies which guaranteed them an acceptable bottom line. Case in point, the Washington, D.C., flights that ended after 14 months and were redirected back to Chicago O'Hare. Hanna sees a static near-term flight schedule "unless we want to start doling out six and seven-digit figures in revenue guarantees to generate different markets, which just isn't a good idea right now. A lot of airports are fighting to keep what they have. They have very little
negotiating power with the airlines," he said.
He credits road and highway improvements as factors in diminishing flight schedules at smaller airports. "Years ago people faced three to five hour drives to big city airports. That has been cut to 90 minutes to two hours because of better highways. People who used to fly to those airports now drive to them," he said. The airport owns and maintains 2,513 acres and employs 32 full time; six part time.
In Fiscal year 2009, sources in funding are:
- Interest income on demand deposit accounts and investments: $10,000
- PFCs (airline ticket taxes): $366,000
- Revenues from property taxes: $1,895,000 (includes $208,000 income from a general obligation bond that matures in 2012)
- Tenant fees and rents from on-airport businesses: $2.9 million
- Federal grants: $5.7 million
- State grants: $107,000
A large part of the grants come from fuel taxes paid to "the feds" and cycled back to the airport. The Federal Aviation Administration operates the SPI control tower, a maintenance component who keep everything functioning there, and the Flight Standards District Office (FSDO). The latter serves most of Illinois south of Davenport, Iowa, and outside the St. Louis area. Its personnel certify aircraft and pilots, conduct inspections of facilities to ensure compliance with fed guidelines, compile statistical data and provide essential information to pilots.
The Illinois Department of Transportation's Division of Aeronautics has a FY09 operating budget of $12.1 million. It employs 64 and the Springfield facility pays $45,328 to SPI in annual rent according to information provided by IDOT spokesperson Mike Claffey. The base is home to a variety of helicopters and business aircraft which transport state officials and conduct safety inspections of Illinois airports, survey the changing land, and provide emergency transport.
"Total property tax levied has remained almost constant over a seven year run and in the past few years, the uptick has been due to increases in insurance cost and other factors beyond our control," he said. Aside from some terminal office space vacated recently by the Illinois State Police, there are few assets on the books that are not being engaged.
The airport's total economic impact to the central Illinois community, including the Air National Guard, is $254 million, according to director Hanna. Aside from a token lease arrangement with the airport, virtually zero income is generated from the unit though it alone generates economic impact estimated at $158 million.
"Taxpayers need to know they have good people working for them," Hanna said. "This never makes the news, but for the last five years, we've received a Certificate of Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada. For 11 of the past 12 years, 10 years consecutively now, the airport has had zero discrepancies on its F.A.A. safety inspection audits.
"We are not seeing a stagnant market. For the most part we haven't reduced flights. We've just shifted from one destination to another. I feel this is due to the staying power of the Springfield economy. We are fortunate in not relying so heavily on airline travel ticket revenues for the maintenance of the airport. With a reasonably modest portion of funding coming from property tax revenue, it is also less of a burden to already harried taxpayers."
Current debt is minimal. "We're in the black on what we pay in debt service on some new hangars versus the annual income generated. We have some bond debt service on miscellaneous improvements that will expire in 2012. Other than that, we are bought and paid for. There are no long-term obligations. Generally speaking we don't have big spikes and falls. We're pursuing a grant to resume Northwest flights to Memphis."
"This is not a waypoint where we expect people to sit around for four to six hours drinking $10 coffee, shopping the terminal jewelry shops and waiting for their flights," Hanna said. "We want people in and out of here. That's the kind of airport we want to be."
Job Conger is a freelance writer from Springfield.
