Yearly growth at Little Rock airport put at 1.4%; boarding rate called not enough for expansion

FILE — Passengers are shown checking in at the Bill and Hillary Clinton National Airport/Adams Field in this 2017 file photo.
FILE — Passengers are shown checking in at the Bill and Hillary Clinton National Airport/Adams Field in this 2017 file photo.

Passenger traffic at the state's largest airport is projected to grow over the next 20 years but not at a rate that would require expanding the terminal anytime soon.

Photo by Arkansas Democrat-Gazette
A graph showing passenger boardings at Clinton National: Past, present and future

The aviation consulting firm Leigh/Fisher said its most likely scenario sees Bill and Hillary Clinton National Airport/Adams Field growing from 997,085 boardings in 2016 to just more than 1.3 million boardings by 2036, a 1.4 percent annual growth rate.

From 2006 to 2016, the airport's annual growth rate was negative 2.4 percent. Last year was the first time since 2012 that the airport recorded a positive growth rate in annual boardings, increasing less than 0.50 percent.

"I'd like to see the number bigger," Ron Mathieu, the airport's executive director, said of the forecast. "But at the end of the day, based on the data that they presented, it is a conservative number. I wish it was 10 [percent] or 12 percent, but we have to deal with it. They are the experts."

The number of boardings equates to airport passenger revenue. Each ticket purchased for a flight out of Little Rock has a $4.50 passenger facility charge, a mandated federal fee that is returned to the airport to help pay for aviation-related improvements.

Based on last year's boardings, Clinton National will receive more than $4 million. The airport doesn't receive the full amount because a small portion is kept by the airlines as an administrative fee. The airport, which is self-supporting, also earns income from concessions, parking, vehicle rentals, landing fees, and leasing land and buildings on airport property.

The Federal Aviation Administration also uses the forecast to determine how much airport improvement program money to which Clinton National is entitled and to confirm improvements the airport proposes are appropriate.

"It's important we get it right," Mathieu said.

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The latest projection for passenger boardings is a far cry from earlier estimates that were used to help plan a $67 million upgrade of the main passenger terminal, which has happened, and an expansion of the concourse from 12 gates to up to 18 gates, which was to happen as soon as 2020.

A 2006 study forecast that passenger boardings at the Little Rock airport would total 1.44 million by 2009. A 2007 forecast set the total at just shy of 1.4 million. The actual figure turned out to be 1.13 million.

By 2010, estimates showed that Clinton National wouldn't exceed its 1999 high of 1.28 million passengers until 2018, when 1.3 million passengers were expected. The latest projections show the airport won't reach 1.3 million until 2036.

"It's a new world," Mathieu said, underscoring changes in the commercial aviation industry in the past decade.

The changes, according to Leigh/Fisher, include industry consolidation that has left four major carriers, a change that has hit Clinton National and other small-hub airports particularly hard. At the same time, the airlines have retired 50-seat regional jets in favor of larger models and mainline aircraft. As a result, fewer planes are flying more passengers, making scheduling flights at smaller airports more difficult, the consulting firm said.

Closer to home, Southwest Airlines, once the dominant airline at Clinton National, began flying out of Memphis International Airport. At one time, people in the Memphis area flocked to Clinton National to fly Southwest, according to data Leigh/Fisher compiled.

According to the consultants, the change cost Clinton National about 125,000 boardings a year.

"They were never our customers," Mathieu said. "They were our passengers, of course. But they're not coming back.

"It's not a failure of the market. People are doing what is in their best interest. It used to be to go to Little Rock. Now it's to stay in Memphis."

Leigh/Fisher officials on Tuesday briefed the Little Rock Municipal Airport Commission as part of its agreement to help develop a long-range plan for the airport, which is done every seven to 10 years. The consultants also held a similar briefing later Tuesday for the master plan advisory committee, which is composed of representatives of airport tenants and local, regional and state officials.

Leigh/Fisher has been working on elements of the plan for several months.

"The key finding to date: It's a great airport," said Tom Schnetzer of Leigh/Fisher. "It's well-run, well-maintained. But like all airports, there's always something to improve."

That was underscored by the net income the airport reaped last year -- $12.6 million, or $3.7 million more than 2015. That money will be put back into the airport for improvements, Mathieu said.

"We're going to spend it in this community and spend it at this airport and spend it to improve the customer experience at this airport," he said.

Some will be set aside specifically for the future terminal improvements, Mathieu said.

"Every April or May, we take a portion of the money we've taken in and dedicate it toward the future of the terminal. We've got about $12 million or so we've earmarked or restricted for future terminal. We will continue to do that."

But it won't necessarily be spent on expanding the concourse, which was the thought 10 years ago. Instead of doing the work originally envisioned all at once, airport officials decided to do it in phases.

"It's a completely different world today than what it was in 2006, and I think the real story on the ground is that despite that, we adapted our plan to the reality and we still paid off our debt, we still met our goals, we are still financially strong," Mathieu said. "We weren't caught off guard."

The trigger for the previously planned concourse expansion was 1.5 million passenger boardings and an increase in the passenger facility fee to $7, which had been projected to be reached by 2020 or shortly after.

It looks unlikely now.

"We will see what happens between now and 2020," Mathieu said. "But at this point, if we stay at this level, the only thing that I think is warranted, to be prudent, is to continue to improve the facility as opposed to a big expansion of the facility."

Metro on 01/18/2017

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