McCarran operating revenue, income slide


If you sensed that the interior of McCarran International Airport was a little less comfortable than in previous years, you were right.Airport management decided to bump up the thermostats by 4 degrees in the summer and lower them 4 degrees in the winter as part of an overall cost-cutting effort, according to the recently released annual audit.

The report did not state what the new temperatures were, but said that the airport kept its electric bill flat despite rising rates.

That fiscal victory, however, did not offset the effects of falling passenger and flight counts. During the fiscal year ended June 30, operating revenues for the Clark County Department of Aviation, which operates the airport, declined 4.4 percent compared with 2009 to $362.5 million. Operating income dropped 97 percent to $388,000.

As recently as the more prosperous 2008, operating income ran $47.2 million. The two-year plunge resulted from sharply higher depreciation deductions that resulted from the stepped-up capital spending program instituted by airport management. When excluding depreciation and considering just day-to-day expenses, operating income has risen 5.1 percent over the past two years.

Cost per enplanement, a critical indicator that measures how much the airlines pay in various fees as an average of each passenger they carry, dropped for the first time in five years. The 2010 figure of $7.54 per passenger marked a 1.7 percent decline from last year, but was still 63 percent higher in 2006.

Airport management places a priority on holding down cost per enplanement to keep McCarran financially attractive to airlines, which have focused more on profit margins in the past three years than they had previously. Cost per enplanement is projected to rise quickly again when the $2.4 billion Terminal 3 opens in mid-2012.

At the same time, the airport reduced the breaks it gave the airlines on paying the charges. In 2010, the airport deferred only $4.5 million of the charges the airlines owe until 2012, compared with a combined $46.5 million for the previous two years. The deferral is a way to lessen the sticker shock to the airlines as the cost per enplanement escalated rapidly due to falling flight and passenger counts.

The take from slot machines dropped far more than any of the other 11 revenue categories tracked by the airport, falling 38 percent in the past two years to $25.7 million. The airport blamed the performance on a smoking ban plus US Airways' decision to dismantle the hub it once operated here. During the hub days, hundreds of thousands of passengers never left the airport and tried their luck at slots while waiting for connecting flights.

As a result, airport management and concessionaire Michael Gaughan are scouting for better locations and looking at installing newer machines.

For the next five years, airport management predicts a "slow but steady economic recovery," with annual passenger count increases starting at 2.1 percent in fiscal year 2012 and rising to 3.5 percent in 2015.

Contact reporter Tim O'Reiley at toreiley@reviewjournal.com or 702-387-5290.

 

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