Indianapolis Airport Facing Revenue Shortfall

(MoneyWatch)  Indianapolis Airport, which opened a brand new terminal late last year, is facing a revenue shortage according to an article in the Indianapolis Star. Is anyone surprised? I think not.

I've written a couple times about the threat that the increased costs at the airport would have on the ability to keep flights. Of course, the decline in the economy has hurt every airport, but an airport like Indianapolis is a bit more vulnerable because of the high costs involved in building the new terminal. Now it appears that things aren't looking stellar and budgets are being cut.

The airport has an annual operating budget of $170 million, but $100 million of that goes into paying off the debt on that expensive terminal project. They are now projecting that revenues will come in $15 million shy of budget, and that's a big chunk of the remaining $70 million. They are even looking at things like turning off the lights and escalators when they aren't in use.

There's not really a concern that they won't be able to pay off their debt. They just need to tighten their belts to conserve operating cash. I have to imagine the situation would be much better had they not bothered with this new terminal, but of course, hindsight is 20/20.

Traffic is down 10 percent this year, and John Clark, who runs the airport, says he would like to get costs down to attract more traffic. That would have been much easier with the cheaper yet still functional old terminal. The article notes that fees per passenger are $10 right now and the airport would like to get it down to $8. Those numbers don't seem too high, but I have to wonder what the total cost per enplaned passenger is when you factor in terminal rents, etc. It's likely a different story.

A lot of airports are struggling right now, but those that have large debts to pay will struggle the most.