Hays airport seeks to save $1M in federal money
Hays Regional Airport could lose $1 million annually in federal money if the number of commercial passengers at the city-owned field doesn’t climb back up over 10,000 a year.
During the pandemic, the airport’s regional carrier, SkyWest Airlines, has boarded as few as 29 passengers a month in its 50-seat Bombardier CRJ regional jet, according to Hays city manager Toby Dougherty.
“2019 was our best commercial passenger year ever; we flew over 15,000 boardings,” Dougherty said Tuesday during a visit to the airport by Sen. Jerry Moran, R-Kan.
“Last year, we flew about 5,400,” Dougherty said. “The low point was April, we flew 29.”
Before that, passenger volume had been high the past few years, earning the city $1 million in federal money for capital projects from the Department of Transportation’s Federal Aviation Administration.
“If we get over 10,000 boardings, we’re guaranteed the $1 million dollars in entitlement money,” Dougherty told Moran. “We are worried that in future years if it takes awhile for passenger travel to come back and we stay below that 10,000 boardings, the FAA may not use that last good year, that last normalized year. So we could look at funding those capital projects with other sources.”
Utah-based SkyWest, operating as United Express, flies 12-round trip flights a week between Hays and Denver International Airport. The flights are subsidized by the DOT’s Essential Air Service Program. Some service was lost during the pandemic, but resumed this year.
Right now, commercial traffic at Hays Regional Airport is lagging behind the national average for the nation’s major airports. Some of the biggest local users are Fort Hays State University and HaysMed.
As of the end of February, Hays is running about 40% of normal, Dougherty said, compared to 50% nationwide for the major airlines.
Dougherty gave the report Tuesday afternoon as Moran made a stop in Hays as part of a tour of Kansas’ airports. Moran heard from a small group of city officials, airport employees and pilots who gathered to see him.
Change the formula
The major airlines have lost a lot of money and it may take time for them to put some routes back in service, Dougherty said.
“Our biggest thing is we’ve come to depend on that million dollars,” he said.
“So one of the things we ought to be paying attention to,” Moran replied, “when the time comes, and COVID in a sense is behind us, we need to make sure that the formula takes into account the reduced passenger boardings that occurred during COVID, in the formula that continues to allow you to have your entitlement funding.”
“Yes, absolutely,” Dougherty answered. “I think most airports are going to trend the national trend, maybe lag a few percentage points behind.”
It will hurt funding if it takes a couple years for boardings to bounce back, he said, and Hays is only at 80% capacity of what it was pre-COVID.
If traffic comes back in Denver, Dougherty said, Hays is likely to mirror that, since the airport has been following the national trend since the start of the pandemic in March 2020.
As a result of COVID-19, the decline in commercial and general aviation means airport revenue is down, Dougherty said.
Collection of the airport’s $4.50 passenger facility charge per ticket, which pays for some capital improvements, is down 50%. Landing fees are down 30%. Fuel sales are down 20%.
The airport has made use of just over $2 million in grants from initial rounds of federal CARES Act COVID-19 relief in 2020, said airport manager Jamie Salter.
As allowed by CARES, the money went for terminal office remodeling and some ongoing airport improvements on the field, including apron and runway lighting rehabilitation, purchase of a plow truck, access road improvement, restriping the main runway, taxiway improvements and drainage.
Those are typically funded 90% by the FAA, with the airport paying the remaining 10%.
“Those were funded at 100%, which was huge for us,” Salter said, noting as well, “Those are huge costs, and truly we would not have been able to do them. We would have struggled to find the money to take care of those.”
As a Part 139 Class 1 airport, Hays Regional must meet the same costly regulatory requirements as bigger airports. Dougherty and Salter said the CARES money has allowed the airport to catch up and remain in compliance, ensuring future FAA grants.
“People don’t realize,” Salter said, “they see us as a small airport and don’t realize the things we have to do to comply with a very small staff, a fraction of the budget, a fraction of the equipment. Again, small staff, but worth their weight in gold … The CARES, the relief funding in general has just been the silver lining for us.”
Salter indicated she doesn’t know the amount of the next round of airport funding included in President Joe Biden’s recently approved $1.9 trillion in COVID stimulus, which Moran voted against.
But in 2021, the FAA projects will go back to being funded 90-10, Salter said.
Money in the bank
Moran mentioned he’s concerned Hays Regional Airport doesn’t have enough COVID costs to use all the money it will receive.
“And yet you have other needs at the airport that I assume you wish you could use that money on,” Moran said.
Salter indicated the first COVID grant, with more flexibility, goes for long-term capital improvements. The second one is being used to reimburse a lot of general operating expenditures, like salaries, utilities and contractual services.
“With both grants we can offset what would be considered normal operating expenditures,” Dougherty said. Money saved on operating expenses goes toward building reserves, he said.
“If this was your personal savings, you would be ashamed of the money we have in the bank out here,” Dougherty said. “So this allows us to put money in the bank.”
There’s talk the FAA will maintain the 2019 boarding numbers status for determining the $1 million entitlement in 2021, said Salter and Dougherty.
“We’re in the early stages of planning for a taxi-rebuild project, it’s a $5 million project, or more,” Dougherty said. “Us coming up with 10% of that is a lot of money.”
They indicated boardings have been improving.
“Last week the parking lot was full, which is great, it was nice to see that,” Dougherty said. “It’s fuller today than it has been.”
“I noticed it looked full today,” Moran said.
“Yes, it’s not quite as full,” Dougherty said, “but this is full compared to what it has been for the last seven, eight months.”