The new Director of Long Beach Airport Bryant Francis delivered sobering news regarding the airport’s budget performance when he addressed the Airport Advisory Commission Thursday night, warning that a drop in the number of flights offered has the airport bracing for a substantial decrease in revenue.
According to the airport’s February activity report, enplaned passengers are down 13 percent from the same month last year and down nearly 12 percent for the year-to-date. The decline in seats offered has translated into a projected year-end dip in profits of 23 percent, a drop from over $10.5 million to just over $8 million. Francis said the low number of enplaned passengers the airport is witnessing hasn’t been seen since 2002.
Part of the problem can be attributed to the departure of Alaska Airlines Horizon service from the airport last year, but Francis said that when he met with JetBlue recently to discuss existing operations at the airport, the airline indicated that it would be offering four fewer daily flights during the summer compared to 2014, including the phasing out of a red-eye flight to Washington, D.C., and one less flight each to Oakland, Salt Lake City and Las Vegas.
“There was no specific reason given other than there were needs in other parts of the network that were stronger than those in Long Beach in terms of domestic performance so they’re shifting some of their mobile assets to other markets,” Francis said. “At this point, they’re not talking about any additions to their schedule so I don’t know that there are many opportunities they’re considering for domestic service for Long Beach but clearly it’s an area that I’m concerned about.”
Cutting back on flights offered during a busy travel season like Summer isn’t common, especially given that last summer, between June and September, JetBlue averaged over 109,000 enplaned passengers per month and nearly an 87 percent load factor average, a figure that represents the utilized capacity of an airplane. Year-to-date, JetBlue is averaging a load factor of 83%, but has enplaned 12,000 fewer passengers than this time last year over the same five month period (October to February).
JetBlue’s scaling back of flights out of Long Beach comes just weeks after City Council voted to put off any action regarding the airline’s formal request to LGB to build a federal customs checkpoint which would allow for international flights. The council decided that the vacant 4th District Council seat should be filled before any action was taken, considering that the district is one of the most affected by the flight path of the airport. The council won’t give further direction on the customs facility until 60 days after the special election for the 4th District seat is held April 14.
Stephanie Montuya-Morisky, a public affairs officer with the airport stated in an email to the Long Beach Post that a reduction in flights during summer is unusual, and in response to the question of whether or not the decision to decrease flights is in any way tied to the fate of the customs facility, Montuya-Morisky said that “the airlines determine their business plan and the airport will likely learn more about their needs in the coming months.”
Members of the commission raised the theory that JetBlue is merely straddling the threshold that they must meet to maintain their allotted slots at Long Beach. The airline is required to fly a minimum of 4 flights a week over a 180 day period or 30 flights over a 60 day period per slot to be in accordance with their contract. Francis said that if they were, and a pattern was noticed, determining if any action by the city against the airline could be taken would require legal consultation.
“I’d suspect because JetBlue is the type of business entity that it is, they’re watching very closely to ensure that they remain on the right side of that line,” Francis said.
Dale Worsham, an administrative officer with the airport broke down the numbers for the commission and said that the shortfall in revenue that has been projected given the current figures hasn’t been seen since before JetBlue started flying out of Long Beach. Although the figures only represent the current fiscal year that started in October, Worsham doesn’t expect them to get any better.
“Now that we have about 5 months worth of data they will be updating these estimates and I don’t think they’re going to look better, they’re going to look worse with the data that we have now,” Worsham said.
Whether or not the customs facility and resulting international flights would be a financially viable option for the airport has been one of the main topics of discussion for years. Long Beach resident Joe Sopo reminded the commission and Francis that his predecessor, Mario Rodriguez, who left Long Beach last year to become the executive director of the Indianapolis Airport Authority, had written multiple memos regarding the potential of building a customs facility.
Sopo quoted two memos from Rodriguez to City Manager Pat West that highlighted that in addition to the revenue stream from the airport being encumbered through August 2025 by other approved projects, the proposed facility could affect the financial solvency of the airport and it’s ability to remain competitive. Additionally, Rodriguez wrote that revenue generated would only serve to offset the cost of the facility and that it would expose the airport both financially and to international threats.
“As a neighbor and representative, I just want to let you know that this is out there,” Sopo concluded. “The neighborhoods are quite concerned about turning our municipal airport into an international airport. Our position is that we’ve got a gem here, a world-class airport and the neighborhoods are not willing to gamble with their property values and their quality of life for someone who thinks it’s a good idea to have an international airport.”