The Coronavirus pandemic has taken its toll on travel throughout the United States and internationally, and that means the Orlando International Airport is feeling the impact, and will for the foreseeable future.
At a recent virtual meeting, the Greater Orlando Aviation Authority (GOAA) Board learned more about how the airport is dealing with the fiscal fallout and what the way forward may look like. Orlando International Airport (MCO) is facing financial and operational challenges due to the effects of COVID-19 on the aviation industry.
Like many of the nation’s major airports, passenger traffic at Orlando International has decreased by more than 90 percent over the past few months, negatively impacting MCO’s main revenue sources: airlines, rental cars, concessionaires and parking.
“We are in a very challenging situation. It is our responsibility to balance the interest of airlines, concessions and other business partners with the need for fiscal responsibility and solvency,” Brown said. “It comes down to the management of cash for the sustainability of Orlando International Airport and the preservation of a vital asset for the community’s development and future.”
Striking that balance will include two key elements: promoting health and safety protocols to restore passenger confidence and engaging in prudent business practices to reduce expenses and rebuild revenue. On the financial front, the Aviation Authority previously implemented several actions, including a reduction of the FY2020 budget by $18.4M; $28.6M in deferred Renewal and Replacement projects; and offered the airlines, concessions and rental car companies to defer certain months’ fees for 30 days.
On Wednesday, the Board considered a number of additional measures:
- A total $372M in proposed reductions to the Capital Improvement Program Significant revisions to the scope of the South Terminal Complex construction o Reduction from 19 gates to 15 gates o Budget reduced by $226M o South Terminal currently at 60% completion
- A choice by In-Terminal Concessionaires for either a limited deferral or a waiver of Minimum Annual Concession Fees (MACF) for three months, contingent on a number of conditions including with complying with CDC and other sanitation guidelines.
- Rental car companies will be granted a waiver of the Annual Privilege Fee for the months of May, June and July, 2020, in exchange for releasing the Authority of certain obligations.
- Airlines were offered to defer specific fees for an additional 60 days. Federal Funding Orlando International Airport received $170 million in CARES Act funding from the Federal Government. The grant money covers less than one-third of the MCO’s operating budget and can be used for operating expenses, debt service and capital expenditures, with additional conditions.
Passenger Traffic Projections Projections indicate passenger traffic won’t return to pre-COVID levels until sometime between 2022 and 2025. At MCO, where passenger numbers surpassed the 50 million mark in February, levels are expected to drop to nearly 27 million in 2020 and just over 25 million in 2021.