NEWS

Board gives green light to airport Patriots contract, terminal renovations

By LAURA WEICK
Posted 6/18/20

By LAURA WEICK The Rhode Island Airport Corporation (RIAC) approved a $54 million budget for the upcoming fiscal year, discussed airport renovations and renewed its partnership with the New England Patriots during a virtual meeting on June 11. The

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NEWS

Board gives green light to airport Patriots contract, terminal renovations

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The Rhode Island Airport Corporation (RIAC) approved a $54 million budget for the upcoming fiscal year, discussed airport renovations and renewed its partnership with the New England Patriots during a virtual meeting on June 11.

The budget for the upcoming fiscal year reflects a projected decline in revenues by $6 million due to a drop in travel because of the COVID-19 pandemic. Cuts were made in wages, taxes and benefits, contractual services and travel, training and dues.

Wages at $10 million represents the single largest expenditure.

Brian Schattle, senior vice president and chief financial officer, presented several future financial projections based on how safe people will feel traveling by air post-COVID-19, as well as if airline business plans, government travel restrictions and the state of the economy change. Schattle also said his models were based on the assumption that there will be no major second wave of COVID-19.

“RIAC budgets are ‘anticipatory’ based on the residual nature of the airline lease agreements/rates and charges,” Schattle said. “The airport forecasts revenues and expenses for budgetary purposes from which actual results may vary. At the end of the fiscal year amounts are reconciled based on the audited financial results. In essence airlines would pay more should the year- end actual results require additional payments.” All three committee members, Deborah M. Thomas, Christopher Little and Jonathan Savage, were present to vote, as well as RIAC President and CEO Iftikhar Ahmad.

After the Finance and Audit Committee meeting adjourned, the Board of Directors meeting began at 9 a.m. with a financial report. Schattle reported to the board that passenger activity including deplanements and enplanements increased by 4.8 percent in February 2020 compared to February 2019. However, passenger activity in March 2020 decreased by over 50 percent compared to March 2019. The fiscal year-to-date report showed a 8.7 percent decrease in passenger activity overall. Airline carriers also had 5.6 percent fewer daily airplane departures in March as well as 7.4 percent fewer daily seats offered. Schattle attributed these losses to the spread of COVID-19 in the United States.

This resulted in a loss of revenue for airports. Schattle reported that airline revenue declined 11.99 percent in March 2020 compared to March 2019. Non-airline revenue, which includes services such as food & beverage, gift shops and automobile parking, was 4.89 percent lower in March 2020 compared to March 2019. Meanwhile, operating expenses increased by 0.10 percent. However, Schattle said that RIAC was meeting financial expectations prior to COVID-19.

Christine Vitt, senior vice president and chief infrastructure officer, then spoke about proposed T.F. Green Airport renovations, part of RIAC’s master plan. She outlined proposed renovations to the concourse entrance, food court, information desk near baggage claim, five public restroom areas and the southern terminus. The designs had a natural color scheme made up of white, grays, browns and plants for pops of green. They also featured natural lighting as well as abstract textures that Vitt said were based on natural settings found in Rhode Island such as sand, pebbles and forests.

“We focused on visual listening through word and pictorial association to define what is unique to Rhode Island and the region that our airports serve, and themes that resonated,” Vitt said. “You’ll see [we] included the coastal culture, a unique heritage and history. The idea that it all starts here, that there's so much that can be reached and so many things that can be done once you're at PVD.”

Vitt estimates interior renovations at $27.6 million. She also said that the airport would submit their Federal Aviation Administration (FAA) grant application for construction funding by June 15. Bids for construction are currently being evaluated.

Although the board responded positively to the proposed redesign, Vitt said she is open to feedback regarding potential changes.

“These aren’t perfect,” Vitt said. “We have work to do on these concepts. But we do think they’re reflective of where we can take the design and the future of terminal renovation.”

John Goodman, director of media and public relations for RIAC, said that restroom renovation construction will begin later this year, and is expected to be completed by 2022. The timeline for other renovations is not yet known due to delays caused by COVID-19. Goodman explained that the virus’s impact on passenger volume and investments may determine when they can begin construction.

Vitt also outlined reconstruction plans of Runway 16-34, which includes reconstruction of a remaining portion of the runway as well as safety and efficiency improvements. This project has a $33.33 million budget, with $30 million funded by a FAA grant. The project is expected to begin construction in August 2020, with completion projected for December 2021. 

The board also discussed the New England Patriots’ aircraft stationed at T.F. Green. According to Schattle, the airport waives fees in exchange for marketing, including branding T.F. Green as “The Official Airport of the New England Patriots.” The board voted to continue this marketing partnership, which Schattle projected would have a $1.1 million marketing value in 2020.

 The agreement runs through June 30 2025 with the right for either party to terminate the partnership with 180 days notice.

“We are completing our third year of this arrangement with the New England Patriots,” Schattle said. “It has worked out very well for the airport.”

The board then entered executive session, where they discussed airline operating agreements and terminal leases, as well as negotiating concession leases with Paradies Lagardere and Carry On Coffee, Inc., a Dunkin franchisee. The board returned to open session and voted unanimously to authorize the airport president to enter or renew all of these agreements.

This was Russell Hahn’s last meeting as vice chair. The board unanimously voted for board member Michael A. Traficante to become the new vice chair. They also re-elected Christopher Little and Thomas for the positions of secretary and treasurer, respectively.

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