Bob Hope Airport hikes fees to realign budget

Burbank Bob Hope Airport commissioners approved a budget this week which included a 21% hike in airline landing fees and a decrease in projected parking revenues as the airfield grapples with dropping passenger counts and a lackluster financial picture.

It’s the first time the landing fees have been increased in almost 10 years — a move that is expected to generate an additional $627,000, according to airport officials.

“Yes, there was some unhappiness,” said John Hatanaka, senior deputy executive director, of his meeting with the airlines to deliver the news.

For the larger commercial airlines, the landing fee rose from 80 cents per 1,000 pounds in landed weight to 97 cents. The fee that affects primarily cargo carriers went from $1.29 per 1,000 pounds to $1.56.

Even with the increases, the airport still has the lowest per-passenger cost for airlines in the region, said Kathy David, the airport’s deputy director of finance and administration.

Parking revenues, which make up about 40% of the airport’s operating revenues, were projected at $18.95 million, down by about $550,000 compared to the current budget.

And income from investments was also expected to drop by $525,000 to $2.15 million compared to this year.

The income projections remain somewhat uncertain given the impact of sluggish economy and volatile fuel prices on travel rates and air carrier service, David warned, adding that the budget was “developed under great national economic uncertainty.”

Five projects make up about 91% of the $75.1 million budgeted for capital improvements. A new transit center, which will break ground next month, has $50.6 million budgeted in the next fiscal year alone.

Overall, the center is budgeted to cost $112 million, funded primarily through a bond, and is expected to be completed in the summer of 2014.

The airport’s ongoing residential soundproofing program will receive $7.1 million, and $1.45 million is set aside for improvements to the safety area on Runway 33.

During the next fiscal year, the airport plans to finish installing a system where any airline can use any terminal station to process passengers — a project that was allocated $7.7 million for the next fiscal year. Also, $1.6 million will go toward a new digital video surveillance system.

The budget also contains steep wage increases for the airport’s maintenance workers, who recently ratified a labor contract — their first since joining a union late last year.

While parking revenues are projected to be down for the upcoming fiscal year, concessions are expected to come in at a little more than $8 million, or $275,000 higher than the current budget.

The budget also earmarked $310,000 for air service development and retention through branding efforts and advertising.

“Given our economic situation, appropriations have been included for us to try to get our passenger levels back and hold on to what we have,” David said.