AA To Announce Love Field Flts On Friday 11/18?

[NewHampshire Black Bears]

Jimntx.

I wanted to run this by you.

I'm starting to think that Ch 12 is a "mirror Image" of a certain A320 captain, at US Air !!

????

NH/BB's

 

[jimntx]

Same can be said about American Airlines.

One should not be so critical of an airport doing the same thing that AA is.

Difference being that Love Field is not competing with anyone for business as AA is. Also, as I understand it, it is a violation of state law for a governmental agency, like the city Aviation Department to "deliberately" operate at a loss--in fact, it is against state law for any government agency to indulge in deficit spending (wish this law applied to the Federal government as well ). No city in Texas can pass an annual budget where spending exceeds expected revenues. If actual revenues drop below projections, the city government has to go back and cut the budget.

The airport has been dipping into it's reserves to pay bills. And, Moody's or S&P downgraded the airports bonds because of this issue.

 

[corl737]

[...] Well, you need to call the Dallas Morning News and the City Council and tell them that the deficit that has been turned up at DAL is not really a deficit.

That was just the point. DAL had been trying to cover losses from the minuscule landing fees with all the other sources of revenue that you mentioned. However, the house of cards has come crashing down because the city is going to have to step up now and cover some bills.

Read this article from the Airport Business Journal to get a better grip on how Love Field's financial situation isn't so grim. Numbers can be made to say a lot of things. With $46 million in reserve funds, budgeting a shortfall in then near term (while the $59-million parking garage gets paid off between 2001 and 2011) doesn't seem so ominous.

In particular, note this excerpt:

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But for each of the past five years, the department has budgeted for deficits between $1.5 million and $5 million. That adds up to $15.7 million in budgeted deficits since the 2002 fiscal year, which began Oct. 1 of the previous year.

For two of those years, 2003 and 2004, budgeted losses of $2 million and $1.7 million, respectively, turned out to be surpluses [emphasis added] of $2.8 and $2.9 million. Ryan Evans, the assistant city manager who oversees the department, said the department periodically dips into reserves to cover deficits.
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The article did not mention that several large corporate tenants have relocated from Love Field to the Collin County Regional Airport in McKinney within the past few years. Specifically, Texas Instruments and EDS have both moved high-dollar corporate fleets away from Love, taking their hangar lease payments and user fees with them.

Sounds to me like the Aviation Department is very conservative on its revenue estimates. Still, I don't argue that an increase in landing fees isn't out of line given the disparity between Love and other airports of similar composition in the nation.

 

[CruelSummer]

Try the Fort Worth paper next time --- DNM will never print anything remotely critical of Love Field's existance.

Fort Worth Star Telegram
Funny that WN has argued that DAL's low costs are why they stay there and can't afford to go out to high cost DFW, and now it appears that they're on the verge of bankrupting the airport... Perhaps if DAL had priced their product to cover their costs, as opposed to giving WN low fares, this wouldn't be an issue!

Interesting point... I've always understood why SWA wants to stay at Love, they have a good thing going. But it seems pretty hard to argue finances as the reason why they can't schedule flights out of DFW at this point. No one can argue that SWA is having financial trouble at this point...

 

[Ch. 12]

Try the Fort Worth paper next time --- DNM will never print anything remotely critical of Love Field's existance.

Fort Worth Star Telegram
Funny that WN has argued that DAL's low costs are why they stay there and can't afford to go out to high cost DFW, and now it appears that they're on the verge of bankrupting the airport... Perhaps if DAL had priced their product to cover their costs, as opposed to giving WN low fares, this wouldn't be an issue!

Thanks for the link. Guess I should have known better and looked to FtWorth (DFW probably had something as well!)

If DAL is like most airports, they have plenty of reserves and would not go bankrupt anytime soon. But then again...you definitely don't want to continually operate at a loss and use up your reserves just to fund operations.

However...I cannot draw the conclusion that jim has dug so deeply to get...that DAL has been SUBSIDIZING WN's ops. I would imagine that even at the low landing fees currently charged at DFW, if the WA were repealled, enough passengers would flow through providing ample PFCs as well as retail and rental revenue to the airport. If anything is going to bankrupt the airport, it is the WA. And from that, I draw the conclusion that AA and DFW are at fault for DAL's deficits...not WN.

And I would doubt that WN has much control over the landing fees...DAL will charge what they want/need, and they probably think that since carriers can't fly to much of any sizeable metro-area, nor can they carry through pax, they need to have a relatively low fee compared to the airport up the street. Lift the WA and I guarantee that you sould see the landing fees "lifted" as well.