Airport To Lose $800 Million A Year
Calling the commercial aviation
industry "at a perilous juncture," an economic impact report
prepared by renowned economist Dr. Bernard Weinstein from the
University of North Texas estimates that North Texas and DFW
International Airport will lose $782 million annually when Delta
Air Lines completes its announced reduction in flights at DFW in
early 2005.
The reduction will cost the regional economy over 7,000 jobs
paying more than $344 million in annual wages, salaries, and
benefits. Property income from rents, dividends, and other sources
will decrease by $143 million each year. State and local
governments will also experience an estimated loss in yearly tax
revenues of about $58 million.
The results of the comprehensive economic impact study were
announced today in DFW's Terminal E, which will be left largely
vacant by Delta as it decreases its daily flights from 254 to 21 by
January 31, 2005.
"Since 1990, Dallas/Fort Worth has been the fastest-growing
major metropolitan area in the nation in terms of people and jobs,"
concludes Dr. Weinstein in his report, co-authored by Dr. Terry
Clower. "Without question, DFW International Airport is one of the
economic engines that has helped sustain that growth. Ongoing and
planned expansion projects will ensure the airport remains
competitive in the decades ahead. But for the near-term, the
airport faces some serious challenges as a result of Delta’s
decision to "de-hub" at DFW. And when Delta withdraws 90 percent of
its operations at DFW International Airport, many local businesses
will lose a valuable, long-term customer."
Delta Air Lines announced in early September it would drop DFW
as one of its major hubs and drastically reduce flight operations.
Delta has been a tenant at DFW since the Airport opened in 1974 and
had grown into its number two carrier, behind American
Airlines.
The Weinstein report offered this
prognosis for new air service and revenues at DFW: "New flights
planned by American Airlines next year will generate some
additional landing fees, but the airport will be severely pressed
to fill the 24 gates left vacant by Delta. Given Southwest
Airlines’ decision not to move any flights to DFW, and the
reluctance of other discount carriers to serve DFW with Southwest
making noises about expanding service from Love Field, it may be
many years before DFW’s gates and terminals are fully
utilized."
"The terminal area where we are standing today will be empty by
late January and that is unacceptable for DFW and our region," says
Joe Lopano, DFW's executive vice president of marketing and
terminal management. "The impact of Delta's decision is already
hurting local businesses. One of our concessionaires in Terminal E
reported a total income of $46 on Saturday of last weekend, during
one of the busiest travel weekends in history. Rest assured DFW
will continue to aggressively reach out to low-fare carriers to
fill the void left by Delta and provide low fares for our loyal
passengers who are now benefiting from the incredible competition
between American and our five low-fare carriers who already do
business here every day."
Drs. Weinstein and Clower used the respected IMPLAN economic
impact model to accurately measure the impact of the Delta move,
reviewing all aspects of the North Texas economy from tax rolls and
pay rolls to losses in employment and spending. The huge losses
extend well past the runways and concourses of DFW.
"This is certainly a major blow to
the regional economy, affecting everyone from flight attendants and
pilots to travel agents and fuel providers," says Dr. Weinstein.
"This multiplier effect occurs not only when a new company comes to
the region or an existing firm expands, but also when an ongoing
business like Delta Air Lines leaves the local economy. Aviation
plays a major role in the overall health of the North Texas
business climate and the numbers clearly tell us that our region
and DFW are not out of the woods yet."
The Weinstein report specifically detailed annual projected
losses to DFW Airport, Dallas and Tarrant Counties, North Texas,
and the State of Texas as a result of Delta's decision to reduce
its flight schedule.
DFW International Airport:
The Airport estimates that lost landing fees from Delta’s
reduced schedule will total about $18 million per year while lost
gate rents and increased operations and maintenance expenses will
be about $13 million annually. In addition, DFW Airport will lose
$3.6 million in concessions fee revenues due to lower passenger
volumes in Terminal E.
The loss of landing fees, gate rentals, and concession income of
approximately $35 million is equal to about seven percent of
DFW’s $494 million operating budget.
The loss of $29 million of taxable sales from terminal
concessions will reduce the state’s collections by about $1.8
million and the City of Grapevine’s revenues by $290,000.