Future of airport could depend on who owns, operates itWritten by Duane Ramsey | | email@example.com
The future of Toledo Express Airport may not depend on passenger service but who owns and operates it, according to airport, city and port authority officials.
The City of Toledo currently owns Toledo Express Airport but has leased the operation of it to the Toledo-Lucas County Port Authority since 1973. That lease was set to expire in 2008 but last year the city extended the lease for an additional 25 years.
The FAA requires the security of 20 years into the future to maintain its funding and support of the airport, according to Eric Frankl, airports director for the port authority. The airport received $3 million in federal grants in 2007 and receives similar amounts annually to support its operation. With the 20-year advance requirement by the FAA, Toledo Express would not qualify for federal funding beyond 2009, Frankl said.
“We need a long-term development strategy for the airport to continue receiving federal funds,” Frankl said. “We need to diversify our revenue stream to make up to the loss of revenue from the lost passenger service.”
While the port authority receives $2.5 million of levy funds, currently no taxpayer dollars are used for the daily operation costs of the airport. The port authority does not get any revenue from the airport yet has operated and supported it for the past 25 years.
“We will continue to improve operational efficiencies and focus on what we can control to provide the best possible aviation service. Closing the airport is and should not be an option,” he stated.
Frankl cited four apparent options for long-term ownership and operation of Toledo Express. The city could extend the lease for a longer term, transfer ownership to the port authority or another entity, take over operation of the airport, or create an independent airport authority.
“The City of Toledo has absolutely no interest in running the airport now or in the future,” said City Council President Mark Sobczak. “We’ve had ongoing discussions about the future operation of the airport.”
With the interest in expanding the cargo business and developing additional intermodal facilities at Toledo Express, “we have to put someone in the position to operate the airport on a long-term basis. We’re putting forth our best effort to sell the airport or work out a long-term lease for it,” Sobczak said.
Frankl agreed that the city and port authority need to decide the best method to own and operate the airport for the long-term so appropriate investment and operational changes can be accomplished.
He did not speculate on whether the port authority would continue to operate or be interested in owning the airport at this time. Other port authority officials were not available for comment.
Frankl reported that there is interest in airport development from the cargo industry to add logistical and warehouse facilities on the current property. An 80,000 square-foot building is currently under construction there and is completely leased in advance, according to Frankl.
The city, specifically Mayor Carty Finkbeiner, has disagreed with the port authority on the development of an intermodal transportation center at or near Toledo Express Airport. The mayor was unavailable for comment prior to deadline.
“There is a significant economic impact to the community regardless of passenger air service,” Frankl said. “Passenger service generates about 15 percent of the annual revenues for the airport.”
The port authority reported that Toledo Express creates $640 million in annual economic impact for the northwest Ohio area.
“That’s an impressive number for a community of Toledo’s size,” Frankl said.
However, the airport owes a reimbursement of $127 million to the FAA with $120 million coming from the operations of Toledo Express and $6.7 million from Metcalf Field, according to Frankl.
Airport consultant Michael Boyd said that passenger service is not likely to change at Toledo Express as long as the price of fuel remains high. The sudden 30-percent increase in the price of jet fuel from $90 to $130 per barrel has created a problem for the airlines.
“Air service is being cutback across the nation due to the high cost of jet fuel. The airline industry has a problem providing passenger service with a model based on $50 per barrel let alone $130,” Boyd said.
“The airlines were not prepared for it and the industry is having a problem providing a product to the public. It’s too expensive to serve the levels of consumers it does today.”
“The airlines are not interested in taking a chance on entering mid-size markets such as Toledo under those market conditions. There are no other options for Toledo Express at this time,” Boyd said.
Boyd told the audience that business travelers should consider Toledo Express for connecting with flights in Detroit and Chicago.
“Toledo is curbside service for Detroit and Chicago because it’s easier to park, check-in and fly out of Toledo than Detroit,” Boyd said.
Boyd and Frankl addressed the airline industry and local airport issues at a meeting of Toledo business leaders and government officials hosted by the port authority July 24 at the National City Bank Building.
PHOTO: Eric Frankl, director of airports for the port authority, and Michael Boyd, president of The Boyd Group of airport consultants, discuss airport issues at the July 24 meeting.