Hartsfield-Jackson to spend down relief funding over next two years

People are seen at Hartsfield-Jackson International Airport domestic terminal in Atlanta on Tuesday, April 19, 2022.  (Arvin Temkar / arvin.temkar@ajc.com)

Credit: arvin.temkar@ajc.com

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People are seen at Hartsfield-Jackson International Airport domestic terminal in Atlanta on Tuesday, April 19, 2022. (Arvin Temkar / arvin.temkar@ajc.com)

Credit: arvin.temkar@ajc.com

Federal pandemic aid to fill budget holes while revenue recovers.

More passengers are taking to the skies, and that’s helping revenues rebound at Hartsfield-Jackson International.

But officials at the world’s busiest airport say they’ll still need to use hundreds of millions of dollars in federal pandemic relief assistance over the next two years to cover expenses and pay bond debt for airport projects.

After handling more than 110 million passengers in 2019, traffic at Hartsfield-Jackson dropped about 60% in 2020, then partially recovered to 75.5 million in 2021.

Though airport officials expect passenger totals of nearly 100 million this year, passenger volume may not surpass 2019 levels until mid-2023.

For now, however, overall revenue remains down because business has not yet fully recovered compared to before pandemic. Airport officials plan to use the various pots of federal pandemic relief funds to help fill some budget holes.

Hartsfield-Jackson, like households and businesses, is also grappling with other pressures including ballooning costs to provide some services.

“Inflation is out there, it’s real. We see it every single day. That’s having a big impact on cost,” said Hartsfield-Jackson chief financial officer Bryan Benefiel.

The airport received $738.5 million of federal relief funds during the COVID-19 pandemic. It has used hundreds of millions so far and expects to spend the next two years drawing down the remaining balance.

The world’s busiest airport first received $338.5 million of funding from the CARES Act passed in March 2020 — early in the pandemic, making it the largest recipient of the funds among U.S. airports.

Then the Atlanta airport received another $75.8 million from the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act passed in December 2020, followed by $324.2 million from the American Rescue Plan passed in March 2021.

Most airport restaurants and shops, which pay rent to the city-owned airport, have reopened. But some remain closed, others have limited hours due to short-staffing, and concessionaires have been allocated federal aid as well.

Hartsfield-Jackson also received $57.3 million in relief funding for concessionaires. It expects to use $11.5 million of that this fiscal year, and the remainder over the next fiscal year.

The airport granted rent relief to concessionaires and extended contracts amid the pandemic slowdown in traffic and staffing struggles.

With its own federal relief funding, the airport has paid some of its operating expenses and made tens of millions of dollars of bond debt payments.

The relief funds also helped the airport to cover its expenses while waiving airline landing fees and rent, to make it easier for carriers to resume flights and for concessionaires to reopen so those businesses could recover from the effects of the pandemic.

In the coming fiscal year, the airport plans to use more than $196 million of federal relief funding to cover expenses and pay off bond debt.

After that, another $174 million of American Rescue Plan funds will remain, which the airport plans to spend in fiscal year 2024.

While overall revenue is expected to increase, the airport expects to see a decline in parking revenue year-over-year because it has blocked off thousand of spaces in its South parking deck for the first phase of a multi-year parking deck reinforcement and reconstruction project.

FY 2019FY2020FY 2021
Parking revenue$147.4 million$107.4 million$65.8 million

Operating expenses in the next fiscal year are expected to rise, including a significant increase for personnel and contracted services. That’s partly because the airport is increasing its minimum pay to $20 an hour and contractor pay is also rising.

Hartsfield-Jackson’s proposed operating budget

For fiscal year 2023 (July 1, 2022 to June 30, 2023)

Revenue: $427.6 million

Expenses: $390.3 million

Debt service requirements: $86.4 million

Source: Hartsfield-Jackson International Airport