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Best of Benjamin Spillman

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Benjamin Spillman
 

Las Vegas airport official outlines cutbacks

6 January 2009

LAS VEGAS, Nevada -- Management at McCarran International Airport is making about $30 million in budget cuts in response to a sharp decline in commercial air traffic to and from Las Vegas.

On Monday, Clark County Aviation Director Randall Walker told Clark County Commissioners about the cuts, which include a hiring freeze, reductions in maintenance and professional services and shutdowns of lightly used parts of the airport.

Walker's report to the commission was for informational purposes only, but he said he interpreted a lack of objections from commissioners as tacit approval to move forward with the plan.

The cuts are the direct result of a national recession that has sharply reduced the number of people who visit Las Vegas.

In November, traffic at McCarran fell 14.7 percent to about 3.2 million arriving and departing passengers. Through the first 11 months of 2008, traffic was down 7.1 percent.

Walker said he expects traffic declines to continue at double-digit percentages this year.

"That affects the revenue of the airport," Walker told commissioners.

According to Walker's presentation on the subject, the airport had been expected to incur about $266 million in expenses for the 2009 fiscal year. After the cuts, expenses will total about $236 million.

The budget is set in consultation with airlines, which pay to use the airport and get billed for the difference if revenue doesn't cover expenses.

The arrangement means taxpayers don't pay directly for a shortfall, but it also poses a potential hardship for airlines by making Las Vegas a costlier place for them to do business.

"The airlines pay whatever it takes to operate the airport," Walker said. "Which is good in a growing economy, not so good in a shrinking economy."

Reductions in maintenance and professional service contracts will save about $12.4 million. The figure represents savings from delaying some planning for the proposed Ivanpah airport, a multibillion-dollar project that is expected to eventually complement McCarran. But Ivanpah is likely at least 10 years from going into operation.

A hiring freeze that affects 109 open positions will save $5.3 million.

The cuts discussed Monday follow a $360 million reduction in the airport's $3.7 billion, long-term capital improvement plan, which was announced in August.

Much of the latest effort is directed toward concentrating operations as much as possible.

Airport officials will close restrooms in the slowest parts of the airport. They will also move active airlines from areas where other airlines have canceled or reduced service to concentrate boarding and deplaning in the most bustling spots.

For example, a rotunda area serving the A and B gates could be closed and eight bathrooms in slow areas are closed altogether. Another 14 restrooms are closed during non-peak times.

The rotunda will close in February and will prompt relocation of WestJet and USAir. In July there are plans to close the southeast wing of the D concourse, which would prompt relocation of American.

As for vendors, Walker told the commission he doesn't think the cutbacks will harm sales. That's because most vendors have multiple locations and customers will simply move, not go away.

Still, he said vendors may decide to shed employees as they concentrate their services into fewer spaces.

"In a lot of those, there are going to be people who are laid off," Walker said.

So far, staff members at the airport have avoided layoffs.

The 109 frozen positions represent 7.5 percent of the 1,450 full-time positions at the airport.

County Commissioner Rory Reid said there may be more cuts at the airport and elsewhere in the county if that's what it takes to bring budgets in line with the reality of the recession.

"What you have presented is sufficient to balance your budget," Reid told Walker. "I hope you don't think you are done. Because you might not be."