Rapid City Regional Airport Board Votes to Lower Terminal Rental Rates, Landing Fees

May 11—The Rapid City Regional Airport Board of Directors voted Tuesday to recommend reducing terminal rental rates for air carriers by more than 23% and reducing landing fees by more than 55% beginning July 1, as the airport has received federal assistance through the CARES Act.

The final decision on the rate reduction will be made by the city council.

According to Toni Broom, the airport's deputy director for finance and administration, the adjustment in rates is needed to prevent large refunds to airlines because of the additional revenue from federal grants.

The airport received $9.2 million in emergency CARES Act funding in April 2020 from the Federal Aviation Administration. The funding was restricted to capital expenditures, airport operating expenses and debt payments.

"Due to the pandemic and the amount of grant revenue we've received, a mid-year reconciliation has been completed for this year, and based on the 2020 reconciliation the federal revenue share and the federal grants received, we are recommending a reduction in their rates," Broom said.

The airport's rates and charges were set prior to the onset of the COVID-19 pandemic. Based on the lower passenger draw to Rapid City during the outbreak and the increase in federal grants, the airport's expense rate was also lowered, Executive Director Patrick Dame said.

"Our agreement with the airlines is a true partnership in that if we're hurting, they're going to help us by paying for actual costs that are there," Dame said. "We budget so early for the city, it gets to be trickier for us to predict what's coming. Obviously, when we predicted the numbers that we're seeing in here was pre-COVID.

"We put our normal expenses in, then we get into COVID, we get a large amount of federal funding in to help pay for employee costs and to help us keep operating. We lowered our overall operating costs, which means now... we still have airplanes landing, we're still at passenger revenue coming in. All these things are boosting up all of our finances and we can't double-charge with the grants."

Dame explained the airport cannot charge the air carriers for what the airport is paying for with the federal grants.

"Naturally, we have to lower the rate to stop the fluctuation, slow it up, and what we're going to reconcile out to give back to the airlines next year," he said. "If we continue to charge them for 100% of the costs when we're putting it off on the grants, we've made too much revenue. We would have to make an even bigger swing, so we're trying to cut that off in the middle."

Contact Nathan Thompson at [email protected].

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