San Antonio International Airport’s significant drop in passenger numbers in the wake of the coronavirus pandemic has led to a $33 million revenue loss for 2020, according to airport officials.
An estimated 5.3 million passengers are expected to travel through the San Antonio International Airport (SAT) this year, almost half the traffic of 2019 and a decrease of more than 5 million from last year’s passenger totals. The trend is nationwide as data from the Transportation Security Administration showed that on Aug. 26 only about one-fourth of the total passengers on that day last year went through TSA checkpoints in the U.S.
As a result, airlines have cut schedules nationwide, including 10 direct flights from SAT.
Now officials at the airport, which had been in an expansion mode of adding more cities and direct flights, have cut costs and instituted a hiring freeze while putting plans on hold for expanding capacity with a new terminal.
With most of the airport’s budget funded by tenant and passenger use fees, airport administrators adjusted to this year’s losses by deferring some capital improvement projects – including a new airport operations center – and delaying its strategic planning process.
In evaluating this year’s performance in preparation for the 2021 budget process, Director of Aviation Jesus Saenz told council members at a special session Wednesday, “Please take this into consideration: We will have had seven of the 12 months [of 2020] battling COVID.”
The airport received emergency federal funding of $15.6 million and recovered $17 million through cost-cutting measures.
Administrators are already preparing for the losses to be felt into next year and beyond. While the 2021 budget is balanced, Saenz said, “this has been an extremely difficult adjustment for our team in the industry.”
Saenz, whose first day as aviation director was Feb. 10, outlined a proposed 2021 budget to council members that account for reduced revenues stretching into 2021, including cutting the capital improvements budget by $9.5 million from the previous year.
“A comprehensive review and prioritization effort was introduced in our mid-year review, and some projects were cut, while others were deferred to outer years,” Saenz said. Those include airfield improvements and a new taxiway.
Other projects will move forward with a $42.6 million capital budget for 2021. Much of it will be covered by $28 million in federal coronavirus relief funding, the Federal Aviation Administration airport improvement program, and the voluntary airport low emissions program.
The other 35 percent of the budget will come from contingency improvement funds and interim financing and cover upgrades to the baggage handling area, modernizing the paging system, and a new terminal design at the San Antonio International Airport, as well as projects at Stinson Municipal Airport.
But the airport’s strategic development planning process that was underway since August 2019 and expected to be complete in 2020 has been suspended, Saenz said, because the pandemic prevented officials from holding in-person public input sessions. He acknowledged that, as the new director, the delay also gives him the opportunity to participate in the process.
“We are currently planning to continue this exercise in the coming months,” he said. “And we’ll have more information in the upcoming weeks so we can be transparent with our communities.”
Also in a holding pattern is what will happen to air service development and lofty goals to bring more direct flights to SAT.
In January, the city of Frankfurt was on the minds of airport officials after fielding a survey among business travelers who said the German city was their preference for a direct flight to Europe.
It made sense to them, and coming off a record-breaking year, they hoped it would make financial sense to major airlines as they embarked on a pitch to add the city to San Antonio’s expanding schedule of flights.
Today, airport officials are looking to retain the airlines and flights they have.
Since the pandemic began raining havoc on the airline industry, the first carrier to cancel service with SAT was the Mexican carrier Interjet. Though the other 11 airlines servicing SAT have remained, they have reduced the number of direct-flight destinations from 39 to 24.
Some of those were temporary summer-travel destinations, Saenz said. “They’ve committed to us that they’ll be back next year and they will continue to fly those routes.”
SAT’s busiest carrier, Southwest Airlines, has cut one-third, or 35,000, of its flights from the October schedule, according to a Dallas Morning News report, though those may be reinstated during the traditionally busy holiday travel season.
So far, two airlines have signed and submitted the airport’s new, more competitive airline use agreement, the contract between carriers and airport operators. But Saenz said he is expecting the others to sign in the coming weeks.
In comparing the most recent seven-day average of travelers who have passed through TSA at the San Antonio airport with the national average, Saenz said, “there is good news.”
While recovery since March has been up and down with current passenger numbers in San Antonio now closer to 35 percent of what they were in 2019, it’s about five points better than the national average.
“The overall trajectory is more aggressive than the U.S. growth, a fact that we continue to share with our carriers, as they plan their future schedules,” Saenz said. “It does help illustrate a sense of resiliency in the market.”
On a recent afternoon at the airport, a few travelers were checking in and approaching the security area while larger numbers sat socially-distanced by signs on chairs at the gates. Most wore face coverings, as required by state laws and the airlines, but not all.
Some travelers ordered food and beverages at the concessions that are open, including the new Smoke Shack restaurant and Local Coffee shop in Terminal A.
Lisa Helmke, a manager at the airport wine bar Vino Volo, waited for customers to approach the store and purchase food and bottles of Texas wines to go. Sales were down by more than half, Helmke said. “We’re just hanging on, hanging on as best as we can.”
In his office above the terminal’s ticket and overlooking the flight line, Saenz told the San Antonio Report he hopes the airport can return quickly to pre-pandemic passenger numbers, which showed 36 months of continuous growth in the past three years.
“That’s one of the elements that really attracted me to the city of San Antonio – the growth opportunities that were being experienced here,” said Saenz, who previously worked in Houston’s airport system.
But he’s also cautious, emphasizing the aviation department’s continuous focus on safety as well as compliance with executive orders in the face of a public health crisis. Since the outbreak, 15 of the airport’s more than 6,000 on-site workers have tested positive for coronavirus.
“On one side of the lens, we want people to fly and we want to boost the economy,” Saenz said. “On the other side, we’re saying, stay at home and, please, we want you to be safe in everything that you’re doing. So those two elements have been extremely important to us and we’ve had to balance that out.”