(Photo by Graham Womack)

Status Check: Sacramento County Airport System

Sacramento County Airport System uses $49.9 million in CARES Act funding to offset traffic decline from COVID-19

Back Web Only Aug 11, 2020 By Graham Womack

Sacramento International Airport hit a six-year high last year with 12.6 million passengers, and for the first nine months of the 2019-20 fiscal year, which ended June 30, seemed poised to do even better, says Cindy Nichol, director of the Sacramento County Airport System, which include Sacramento International Airport, Mather Airport, Franklin Field and Sacramento Executive Airport.
 
Then came the widespread shutdown associated with the coronavirus global pandemic, which hit airports especially hard as most people sheltered in place, canceled travel plans, and transitioned their lives to be as virtual and remote as possible. “In April, like the rest of the country, we were down 95 percent, 94 percent,” says Nichol.
 
Nichol, who assumed her post in October 2018, spoke with Comstock’s before under sunnier circumstances (“Flying High” in July 2019). At that time, she spoke of positives such as the system’s “phenomenal success in air-service development” and Sacramento International Airport growing faster than many other airports in the country. She also spoke of big plans such as developing 128 acres south of the airport and tackling deferred maintenance.
 
The pandemic has upended normal operations for the airport and continues to rage, with more than 4.5 million known cases and 150,000 deaths in the United States. But Nichol and other stakeholders associated with the four airports see room for optimism. 

One reason for this: Nichol says the airport system she oversees now seems to be recovering faster than most other U.S. airports, in terms of passengers. “Pretty much every single week we get the data, we’re about 5 percentage points better in terms of our speed of recovery than the rest of the country,” Nichol says.
 
All four of the airports in Sacamento’s system have seen a reduction in landing and takeoffs. Nichol says Sacramento International Airport’s passenger landings and takeoffs were down 11 percent for the 2019-20 fiscal year that ended June 30. The fiscal year also closed with roughly 9.9 million passengers at the airport, a reduction of 21.3 percent from the previous year.
 
Meanwhile, operations were down 9 percent at Mather Field and 6.9 percent at Executive Airport. Statistics Franklin Field, which services mostly agricultural traffic and has no control tower, weren’t available.
 
The smaller reduction in operations at Executive Airport could be attributable to the clientele it attracts — a mix of flight school customers, hobbyists and general aviation, with no commercial passengers. “Executive has been doing a bit better in terms of the operations,” Nichol says. “But I understand that it’s more … the individual people who are flying for fun who have not really been reduced. In fact, it’s one of the few things you can keep doing.”
 
Steven Thompson, owner of Executive Flyers, a pilot training and aircraft rental business at Executive Airport, says he took out a Paycheck Protection Program loan through the U.S. Small Business Administration after his business slowed to a crawl in March and April. But things have been moving briskly since his school, which has eight airplanes in its fleet, resumed full-time flight instruction in late May. “I think (these) last two months may very well be the best months that we’ve had in a long time,” Thompson says.
 
Thompson agrees with Nichol’s assessment on why Executive Airport is doing better than other airports in Sacramento County. “I think that a lot of people, probably just the mere freedom of being up there and flying,” he says. “It’s something to do, get away from things because people are probably feeling cloistered, so to speak, in their own domicile and they can’t be around crowds. Maybe it’s an opportunity to break free, like a bird or something — I need to fly.”
 
More drastic measures have been needed to triage other parts of the system, with Nichol saying they had frozen travel for employees and put a freeze on hiring what she terms “non-critical employees.” The county airport system has also cut $104 million from its capital budget “because we did a 180. We no longer have the same urgency to build gates, to build parking, to build a rental car facility.”
  
The system has also reached out to struggling customers, with Nichol saying it had deferred rents from airlines and concessionaires in gate and lobby areas for April, May and June until the end of the year. A minimum annual guarantee that concessionaires also provide to the county has been waived for those same months.
 
Sacramento County’s airports caught something of a break, too, receiving $49.9 million in funds from the Coronavirus Aid, Relief, and Economic Security, or CARES Act, which specifically allocated money for airports.
 
“Thank goodness that we’ve got $49.9 million in CARES Act money from the federal government,” Nichol says. “We’ve been using that money strategically. We just recently defeased (paying down principal on a loan) $34.5 million in our bonds.”
 
The airport system, which carries a significant amount of debt, in part due to Terminal B that was completed in 2011, is also planning to refund $130 million in bonds in August. “How much we can save on airports depends on what the market says,” Nichol says.
 
At this point, layoffs aren’t planned. “My goal is to avoid furloughs or layoffs to the extent possible,” Nichol says. “I have no reason to think we will need to do them. But we don’t know what will happen with more spikes in the pandemic or with the COVID. I think they’re calling it a COVID recession now.”
 
On July 28, the Sacramento County Board of Supervisors was given a master plan update for Sacramento International Airport that is going through the environmental review process. Supervisor Don Nottoli says he was pleased with Nichol’s job performance before the pandemic and remains satisfied with it, telling Comstock’s, “I think she’s a good administrator, good manager.”
 
And to Nottoli, it still makes sense for the county to be in the airport business. “It’s a valuable asset,” Nottoli says. “This region benefits in a variety of ways from having a really vital and a vibrant airport system.”

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