Yampa Valley airport faces a decade of austerity due to slow recovery in passenger numbers | SteamboatToday.com

Yampa Valley airport faces a decade of austerity due to slow recovery in passenger numbers

Yampa Valley Regional Airport has been slowest among seven mountain resort airports to recover passengers numbers in the post recession era and that translates into a decade of austerity ahead for the airport, according to a consultant working on the airport’s new 10-year master plan.

Airport management consultant Steve Horton of Leibowitz & Horton in Greenwood Village, told the commissioners to plan for negative operating cash flow through 2024 and living with annual cash reserves at about a third of what they should be.

“We reviewed the last update to the aviation forecast and since that time, the economy tanked on us – enplanements (passenger numbers) dropped through the floor. In 2008 you had 140,000 enplanements and it’s dropped every year since.”

He said reduced passengers numbers erode the revenue streams that airports depend on and even make it more expensive, on a per passenger basis, for airlines to serve YVRA. Airport revenues from landing fees on down to operations like parking and rental car fees decline when passenger numbers drop.

Commissioner Tim Corrigan asked Horton if Routt County’s airport had fared worse than others and he replied: “I think you crashed worse than others.”

A question Horton could not answer is why YVRA has been slower to recover passenger numbers than airports like Aspen/Pitkin County Jackson Hole and Montrose/Telluride. He did provide a chart showing that YVRA actually peaked in 2007 with 140,765 enplanements and dipped to 140,289 in 2008 before beginning to fall more dramatically to 122,076 in 2009. Enplanements in 2014 totaled 95,917 representing a 35 percent fall from the peak.

Over that same period, Aspen and Jackson bounced back to within 2 percent of their pre-recessionary peak. The experienceVail/Eagle County Airport has been closer to that of YVRA. It’s still 24 percent down from its peak of 228,421 in 2007.

If Horton’s intentionally conservative projection of 2.6 percent annual growth in passenger numbers going forward at YVRA comes true, that would put annual enplanements at 108,163 in 2018 and 123,274 in 2023. The Airport would finally reach 140,500 departing passengers by 2028.

Horton said airports should carry a reserve of about 25 percent of their annual expense budget (or in YVRA”s case about $1.2 million), but many small airports don’t come close to that, and in the case of YVRA he can’t see a way to make that happen in the decade ahead.

“Yampa Valley probably did it for a few years, but I see no possible way you can do it now,” Horton said. “The estimated year-end cash balance is $200,000 at the end of a 10-year period. With your net cash flow, it’s feasible any little blip in the road can put you in trouble.”

Airport Manager Kevin Booth, who has been in the post for less than four months, said he’s already been busy pushing back against airport expenses to create more room in the budget.

Steamboat Today reported in September 2014 that the airport restaurant was expected to lose $358,000 last year and Booth said Tuesday he has that reined in.

“We’re on a trajectory to solve the restaurant,” he said. “I can tell you we’ve cut losses by 75 percent and I think we can make money.”

Realistically, Booth said, he will have to put off the date when the airport replaces heavy equipment, for example, in order to create more room in the annual budget over the short term.

“We’re going to push off some small capital expenditures and some maintenance,” he said. “There are some trucks we’re going to run longer than industry standards tell us we should. We’re taking some risk to make our balance not red.”

However, he also said the airport will need to find a way to make modest capital investments to achieve longer term costs savings. He said the airport terminal is beautiful, but it’s outdated electrical system is ringing up excessive bills.

Corrigan praised Booth for the initiative he has shown in a short time and asked him to continue his efforts.

“My takeaway I’m getting from this is that you have a workable plan, it’s by the skin of our teeth and it’s that the county is the ultimate backstop for large equipment failures,” Corrigan said. “It’s not like the airport is an amenity. It’s a necessity.”

Commissioner Cari Hermacinski called for a creative approach to finding more revenue streams.

“I think we need to think strategically among ourselves to see what we could do to change the dynamic of the regional airport,” she said.

To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1

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