The state's largest airport netted a $6.7 million operating profit for the first six months of 2016, or $1.8 million more than the first half of last year, according to its latest financial statements.
While a recent increase in passenger numbers at Bill and Hillary Clinton National Airport/Adams Field was responsible for part of the surge in net income, airport officials said the higher profits also were derived from holding down expenses and producing more revenue from land and building leases, and fuel sales to general aviation aircraft.
Airport officials acknowledged that one-time adjustments, particularly on the expense side, contributed to the revenue upswing. The first six months of 2016, for example, had one fewer pay period than the same period a year ago, they said, a difference of $300,000.
More passengers mean more money for the airport, which means more money to spend on airport improvements. Such projects benefit the wider central Arkansas economy, said Ron Mathieu, the airport's executive director.
And the airport could use the money, as officials embark on developing a blueprint for the airport that likely will include a new $200 million concourse.
Because the annual debt service on a $200 million bond issue -- $20 million a year -- is too large for the passenger traffic a small-hub airport such as Clinton National generates, Mathieu said officials would like to have more than the $32.3 million now on hand for future airport improvements.
"I don't look at us as $30 million rich," he said Wednesday. "I look at us as $170 million poor."
Nevertheless, members of the Little Rock Municipal Airport Commission welcomed the higher profits at their monthly meeting Tuesday.
"It's really reassuring to see the financial position we're in," said Jim Dailey, the commission's vice chairman. "Congratulations and well done."
After the commission voted to accept the report, Dailey added, "gleefully accepted."
Revenue from airport operations totaled $15,982,927 through June 30, which was a 6 percent, or $836,578, improvement over the $15,146,349 the airport collected through the first six months of 2015, according to the airport's most recent financial statement.
Operational revenue includes: aviation sources such as landing fees; concessions, which includes parking, car rentals and restaurants; airport rentals such as building leases; and aviation services, such as fuel sales. Revenue from all four of those categories was up, ranging from 2 percent in airport rentals to 123 percent in fuel sales.
Bryan Malinowski, the airport's deputy executive director, said the rise in fuel sales, which totaled $242,760 in the first six months of 2016 compared with $103,293 for the same period a year ago, stemmed from a change in the way the airport collected it.
Previously, the airport collected the greater of two categories, fuel sales or leases, on the general aviation side of the field. That was changed to conform with what most other airports do, which is collect both, he said. In exchange, the airport phased in the fuel-sales collections and offered agreements with longer terms, Malinowski added.
Mathieu said the 2.72 percent increase in passenger traffic has a multiplier effect, increasing revenue in several areas.
"They park, we get some of that," Mathieu said. "They purchase something, we get some of that. They rent a car and so forth."
Such revenue also means more taxes collected for state, county and city governments, he said.
The airport also is starting to see revenue from previously vacant buildings. Fly Arkansas, a general aviation service center, is operating out of part of the former Hawker Beechcraft aircraft finishing complex, and Cantrell Drug has moved into the former Southwest Airlines call center.
Meanwhile, expenses fell 9 percent in the first six months of this year compared with the same period a year earlier. Expenditures through June 30 totaled $9,264,799. In the same period in 2015, expenses were $10,234,712, a difference of $969,913.
Expenses in three of the major categories ranged from a 13 percent decline in other operating expenditures, such as utilities; a 5 percent increase in materials/supplies/maintenance; and an 11 percent dip in salaries and benefits, from $5,322,717 in the first six months of 2015 to $4,750,410 through the first six months of this year, mainly because of one less pay period.
Mother Nature also was a factor in falling expenses, according to Malinowski, who said the mild winter reduced spending on personnel and equipment.
The money also gives Clinton National flexibility in paying for certain airport improvement projects now and seeking reimbursement from the federal government later.
The increased income will eventually benefit the wider economy, Mathieu said.
The airport doesn't return the extra money to partners or shareholders, the money "rolls back into the facility," he said.
Some items can't be purchased locally, such as the new passenger boarding bridges or the new seats for the concourse that will be outfitted with charging outlets for personal electronic devices, but Mathieu said they will be installed by local contractors with the wiring installed by local electricians.
"The better we perform financially," the better the local economy will be, he said.
Metro on 07/21/2016