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Dec. 5--Airlines operating at Detroit Metro will get a bill for an extra $12.8 million to balance the budget for the Wayne County Airport Authority.
The authority must balance its budget, and in its year-end report Thursday, it indicated that costs -- especially for parking, snow removal and debt service on bonds -- exceeded what was budgeted for fiscal year 2008, which ended Sept. 30.
For the fiscal year, the airlines already paid the authority $106 million in rentals and fees.
The airlines have an agreement with the authority that requires them to make up any annual shortfall. However, the airlines usually get a refund.
Northwest officials have said that airport operating costs can lead to higher fares. The airline recently clashed with the authority over increased costs for the 2009 fiscal year budget.
"Since I've been here, this is probably our worst year," said Lester Robinson, chief executive of the Wayne County Airport Authority. "Our parking revenue is off significantly."
In a statement, officials from Delta -- which acquired Northwest -- said the magnitude of the shortfall is disappointing.
"This demonstrates the need for strong fiscal discipline at the facility especially given the current challenges facing the local and global economy," the statement said.
Thomas Naughton, chief financial officer for the authority, said that in six of the last seven years, the authority gave the airlines refunds instead of handing them a bill at the end of the fiscal year. Last year, the airlines received a refund.
"This is a new order of magnitude. We prefer to be in a position where we are refunding," Naughton said.
"But the airlines guarantee they will pay the net operating cost of the airport."
The airlines are required to pay 80% of the $12.8 million by the end of December and the charges are based on the weight of the aircraft landed at Metro. Delta and its subsidiary Northwest with its regional carriers -- which combined form Metro's largest carrier -- will be responsible for about $10 million of that total.
Naughton added that the airlines already were asked to come up with more than $6 million more midyear because costs were above budget predictions. So for the year, costs were over by about $19 million.
Passenger traffic was down 1.5% in fiscal 2008 from the prior year. That meant fewer passengers parking and purchasing concessions.
Parking generated $9 million less than expected, Naughton said. The year also brought a heavy snow season, with about 73 inches falling, driving about $2 million in additional costs for removal. And the debt service on bonds was about $8.5 million over budget.
Contact MARY FRANCIS MASSON at 313-222-6159 or [email protected]
