Operations Run Smoothly Without Tax Dollars

FEATURE ARTICLE

Operations Run Smoothly Without Tax Dollars
By DeAllous Smith

The world’s busiest airport generated over $289 million in revenue without collecting a single cent of tax dollars from metro Atlanta residents in 2005.

In fact, local tax dollars are not collected to fund or support operations in any manner at Hartsfield-Jackson Atlanta International Airport.

“The Department of Aviation [the agency that oversees operations at the airport] is an enterprise operation,” said Finance Director Art Bacon. “This means that the Department operates totally on the revenues and other funds that are generated at the facility.”

Primary funding sources include airline rentals, concession rentals and other revenue streams.

Airline rental fees are classified as landing fees and airline lease agreements issued to carriers operating in the main terminal building and on the concourses. Approximately $60 million or 21 percent of airline rental revenue generated last year was the result of terminal and concourse rentals.

Other airline rental fees are assessed through cost recovery charges for liability insurance coverage, emergency services provided by the airport’s police and fire divisions, and additional expenses associated with operating the automated people mover system.

Similar to an agreement between a commercial building owner and their tenant, the airport leases its space to airlines and allows them to operate their businesses.

Overall, Hartsfield-Jackson is a very attractive destination for air carriers operating at the facility. The airport’s landing rate schedule at 46 cents per thousand pounds is the lowest of any major airport in the nation.

The airport also has one of the lowest costs per enplaned passenger. Bacon adds, “In 2004, the median cost per enplanement at other major airports was $5.83. However, the actual cost at Hartsfield-Jackson was only $2.56 in 2004 and $2.43 in 2005.”

The number of enplaned passengers is expected to increase from over 41 million in 2005 to more than 61 million by 2015.

The top five revenue producing streams for the airport, last year, were Parking Operations at 24 percent ($70 million), terminal and concourse rentals at 21 percent ($60 million), inside concessions (Food and Beverage/Retail) at 19 percent ($54 million), car rentals at 11 percent ($31 million) and Landing Fees at 9 percent ($ 27 million).

Since Sept. 11, 2001, revenues have steadily increased at Hartsfield-Jackson. The facility generated $289 million in 2005 versus $250 million in 2002.

As the demand for air travel continues to rise, the Airport is experiencing a surge in airline and traveler activity at all levels. For example, the Airport experienced a 23.33 percent growth in international cargo traffic in 2004, accommodated more than 82 million passengers in 2006 and added the 17th air carrier to the airport’s roster of all cargo carriers in 2006.

“The facility’s accessibility means greater opportunities for travelers,” said Bacon. More than 200 million people or 80 percent of U.S. consumers, are within a two hour flight time from the airport, or one day's trucking by highway.

In addition, the facility offers convenient access to Interstate 75, I-85, I-285 and I-20.

“Hartsfield-Jackson is Atlanta’s crown jewel,” added Bacon. “It is the busiest airport in the world and generates $18.8 billion annually and provides over 650,000 jobs locally and regionally.”

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