Airport director aims for 5M passengers by 2018


Former Rhode Island Airport Corporation (RIAC) President and CEO Kevin Dillon made extending Green’s major runway his goal. And now that plans are in place to have the extension built and operational by the end of 2017, Dillon’s successor’s goal is for 5 million passengers to be using the airport by 2018.

Kelly Fredericks outlined how he expects to achieve that goal to members of the Warwick Rotary Club on Thursday. Fredericks spoke at the Norwood branch of the Boys and Girls Clubs of Warwick, the same place where less than 24 hours before he addressed the Norwood Improvement Association.

He said the message to the two organizations was basically the same, although he had a PowerPoint presentation to accompany his talk to Rotarians.

Growth is a word Fredericks used frequently in describing what’s happening at Green and his vision for the airport.

He said airport revenues of about $55 million are growing and exceed expenses of $37 million.

“We’re doing much better than competing airports,” he said.

Passenger traffic, which hit a high of 5.7 million in 2000, is making a slow return since it took a nosedive following 9/11. With jetBlue initiating service from Green and increases from other airlines, passenger totals this year are expected to show marginal improvement from last year. Fredericks projected 3.8 million to 3.9 million passengers for the calendar year.

"We want to see this grow," he said.

And he has a plan to bring the airport back to its heyday by marketing Green as the airport to use to people south of Rhode Island in Connecticut and those in Massachusetts east of the state. And even before a longer runway is up and running, which would make international and non-stop service to the west coast more feasible, Fredericks is looking to add service. Top on his wish list are New York City and Texas. He would also like to see a return of service to Las Vegas.

"This is not pie in the sky," Fredericks said of hitting his target of 5 million passengers in five years. "We have to recapture what we’ve lost to Boston's Logan."

Later in his talk, Fredericks said the airport needs to regain the people who used to fly from there. He called international service very viable, as Green already has custom facilities.

"We’ve got the infrastructure in place," he said.

Possible destinations, even without the longer runway, are Ireland, London and the Caribbean.

To bring the traffic back, Fredericks said the Go Green Alliance that lobbied for the longer runway is being re-organized by the Greater Providence Chamber of Commerce as the Go Green Partnership. The airport will market its easy access and convenience. Also, Fredericks aims to show airlines that they can operate more profitably from Green.

Passengers aren’t the only growth Fredericks is looking for. While many other airports showed a decline in air cargo last year, Fredericks said Green was up by 6.7 percent and is looking at double-digit growth this year.

All this growth had some club members wondering whether they were going to be subjected to more aircraft noise. Club member Joseph DesRoches noted he is awakened by aircraft arriving, as well as those warming up their engines, before 6 a.m.

"Is there any chance of getting quieter airplanes?" he asked.

Before Fredericks could answer, a fellow club member suggested he get earplugs. There were some laughs and then Fredericks got back to the topic.

He said he hopes future growth of cargo flights can happen within the parameters of the voluntary curfew for flights between midnight and 6 a.m. Yet, he also pointed out the economic benefits of a vibrant airport have got to come at a price.

That didn't sit well with Edward Tavares. He said the state payment in lieu of taxes [PILOT] program doesn't come close to what Warwick is losing in taxes from properties taken because of airport expansion.

"Warwick is taking the brunt," he said.

Fredericks didn’t argue.

"My aim," he said, “is to get to the point where what is good for the airport is good for the city of Warwick."


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Does anybody know how much tax revenue has been lost to the airport expansion vs. the PILOT payments or rather if the payments have been increasing to match the houses acquired? It seems the houses that are in that neighborhood are capes that wouldn't have that high a tax bill.

I think at some point some of the properties will go back on the tax rolls as industrial or commercial space.

Wednesday, October 30, 2013

RIAC audited financial statement for 6/30/2013 year end shows Operating Revenues of $50.3 million against 48.6 million of operating expenses. Total revenues minus total expenses shows a net loss of $6.0 million which was offset by a "capital contribution" of $6.4 million. That capital contribution was shown in the financial statement as a provision for $146 million of bonds that slipped into junk bond status (Standard and Poors BB as reported by the airport in a Material Event Notice filed on March 7, 2013.

This event notice document's over half of RIAC's non-Intermodal Train Station bonds into junk raising the question if RIAC should be considered as having generally fallen into junk status. The notice invites the public to correspond with the airport's CFO for any questions. Perhaps the Beacon's readership should contact him for details.

New bond ratings for both the airport's regular bonds and the Intermodal should be out shortly. This is a required component of RIAC's attempt to refinance some of this badly slipping debt prior to seeking more financing for the Runway 16-34 safety projects and what seems now to be an almost impossible mission to raise debt to pay for the extension of Runway 5-23.

It is interesting to note that the issuer of RIAC bonds, the RI EDC staff, has not informed its board of the Material Events Notice of March 7, 2013. One would think that after the 38 Studios fiasco, RI EDC staff would go ultra conservative - but it did not. In fact RIAC and EDC failed to tell the RI Clean Water Financing Agency of this junk bond situation when an arrangement was made to borrow $35 million from that agency this past June. Clean Water's financial adviser who specifically claimed that all was OK with RIAC when pressed by the Clean Water board -- this adviser is being sued by RI EDC for its role in the 38 Studios fiasco.

It's time for RIAC to come clean regarding its financial mess and at least report to the public what is in its financial reports!

Wednesday, October 30, 2013