Capital News Service

of the Michigan State University School of Journalism

Airports hurt by reduced funding

By BRANDON HOWELL
Capital News Service

LANSING – Less state funding has caused Michigan airports to make changes to make ends meet, such as higher landing fees.

Department of Transportation (MDOT) Director Kirk Steudle said shrinking aviation fuel tax revenue is one reason for the airports’ financial woes.

“The aviation fuel tax is three cents per gallon,” he said. “Commercial aircraft are more fuel-efficient now. They used to fly around with four engines but now they’re flying around with two, so the consumption is going down.”

Michigan’s aviation fuel tax hasn’t been increased since it was introduced in 1929.

A proposal to increase the tax is pending in the House Transportation Committee. Its sponsors are Rep. Gabe Leland, D-Detroit; Marie Donigan, D-Royal Oak; Steven Lindberg, D-Marquette; Pam Byrnes, D-Chelsea; Harold Haugh, D-Roseville; Michael Lahti, D-Hancock; and Judy Nerat, D-Wallace.

Steudle said less tax revenue directly hurts airports.

“For the past six or eight years, the money going into the aeronautics fund has decreased,” he said. “We’ve cut everything except limited essential programs.”

The Michigan Air Service Program is among those hit. Eliminated five years ago, it had provided marketing funds for airports, according to Janet Foran, public information officer for MDOT.

“It was also intended to recruit and retain air service for the state’s 18 air carrier airports,” she said. “It was a very highly regarded program that became a national model for states interested in developing air service.”

The program is sorely missed, said Billi McRoberts, manager of the Alpena County Regional Airport.

“We used the funds to market our airport,” she said. “Alpena County doesn’t have the advertising money now, so for small airports where we don’t bring in a lot of revenue and aren’t self-supporting, those programs were very important.”

McRoberts said her airport now has “very minimal” advertising and marketing funds.

Steudle said regional airports are also dealing with the adverse effects of lower passenger traffic.

Such is the case in Alpena, where commercial passenger traffic has dropped since 2007. Delta is its only commercial carrier.

In additional, the airport has lost county funds, McRoberts said, creating further financial problems.

“We had to raise our landing fee from $1.50 per thousand pounds of gross aircraft weight to $2,” McRoberts said. “The county cut the appropriation funding, so we had to make up the difference.”

Keith Kaspari, manager of Sawyer International Airport in the Upper Peninsula, said his airport – which handles more than half of all passenger traffic in the U.P. – has been losing passengers for a couple of years.

“It was an unfortunate year in 2008 because of the economy,” he said. “We had almost a 20 percent reduction in overall passenger traffic. Complicating that was 2009, when we had almost a 5 percent drop.”

Kaspari said elimination of MDOT’s Michigan Air Service Program has hurt his airport too, but that it comes as no surprise considering the economic climate.

“Since 2008 and 2009,” he said, “air carriers have been operating fewer aircraft, flying fewer routes and flying smaller aircraft and more fuel-efficient airplanes, which results in a decrease in fuel tax revenue. That’s then translated to the suspension of programs.”

Kaspari said Sawyer is doing more e-mail contacts and more promotion among civic organizations, trade groups, hospitals, universities and other customers. Those are cheaper alternatives to the kind of marketing made possible by the Michigan Air Service Program.

The airport also increased landing fees for Delta and American Airlines in 2008.

Instead of charging 30 cents per thousand pounds of landed weight as it had for many years, it now charges either a set fee based on landed weight or per inbound passenger.

“It’s kind of a hybrid landing fee methodology that seems to have worked and been received very well by the airlines,” Kaspari said.

Things are looking up for Sawyer though, he said.

On April 6, Delta began two non-stop daily flights each from Gwinn to Detroit and Minneapolis-St. Paul on 50-seat regional jets. Before that, Sawyer offered four daily trips to Detroit on 34-seat Saab jets. Sawyer also had daily flights to Minneapolis-St. Paul, but that service was terminated by Delta in August 2009 due to decreased passenger traffic.

“We’re real pleased we can now boast that,” Kaspari said.

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

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