The airport supports more than 10,000 direct jobs, including about 3,000 held by Clark County residents
Editor’s note: This story was produced and first published by the Vancouver Business Journal, www.vbjusa.com. It is published here with full attribution to and permission of the Vancouver Business Journal and Editor Joanna Yorke.
Portland International Airport, a key driver of the Portland-Vancouver economy, is facing serious financial headwinds as the coronavirus pandemic continues to cripple the global aviation industry.
The airport, which supports more than 10,000 direct jobs, including about 3,000 held by Clark County residents, is operating at 5 percent of normal capacity because of the coronavirus shutdown.
The contraction is jeopardizing every aspect of PDX operations from airport maintenance to rental car companies and parking services as well as retail and restaurant concession businesses – all looking for ways to reduce costs.
A dramatic decline in revenue from aircraft flight operations in March and April along with reduced returns from airport concessions and other passenger-related businesses will take an estimated $45 million to $50 million bite out of airport’s 2019-20 fiscal budget of about $250 million ending in June, said Kama Simonds, PDX aviation media relations manager.
PDX administrators are scrambling to rewrite the current budget and forecast what an aviation industry recovery might look like through the rest of 2020 and into 2021.
A $72 million stimulus package for PDX from the federal CARES Act passed by Congress will help, Simonds said, but “we’re using that to get through June.”
With passenger travel volumes expected to be 50 percent lower into next year, cost reductions at the airport are inevitable.
Simonds said the Port of Portland, which owns and operates PDX, already has implemented a no-hiring policy and initiated unpaid furloughs for its 750 port direct employees.
The real downturn began at PDX in March with a 50 percent decline in passenger traffic. April saw a 95 percent drop-off as stay-at-home orders locked down the global economy.
Now, industrywide, an average of only 12 passengers are flying on domestic flights with an average of 26 travelers on international flights, Simonds said. The International Air Transport Assn. has reported that the airline industry could be hit by $63 billion to $113 billion in lost ticket sales this year.
At PDX, Simonds said airlines are continuing to adjust schedules to diminished demand.
“They are reaching out to travelers to help them to rebook when there’s a change,” Simonds said. “We hope that there will be a return to travel but it depends on passenger safety and how the airlines accomplish that. Operations will open up when there’s a green light.”
About 23 concession businesses inside the airport remain open but at reduced hours aligned with flights, Simonds said.
Last year, PDX managers were celebrating another strong summer travel season and that PDX had been named Best Airport in the U.S. by Travel-Leisure magazine seven years in a row.
By year’s end, nearly 20 million people had moved through the airport on 490,000 landings and take-offs. The airport had been forecasting a 9.5 percent increase this year.
Now, industry experts say it may take three to five years to see a travel recovery. Some say it could be longer, even eight years away.
If there is any good news out of PDX since the virus shutdown slammed the aviation industry, it is that construction continues for a $213 million project to rebuild and expand Concourse E. About 1,250 construction workers (working in safe conditions) are on the job at the site as well as at other airport locations related to PDXNext, a five-year $2 billion plan to upgrade the airport.
Meanwhile, Simonds said PDX administrators are hoping for a “consistent” reopening of flight operations throughout the Western states, so that if a traveler gets on an airplane in Portland, they will feel safe getting off that plane in California, Nevada and Seattle.