DESPITE AIRTRAN EXIT: With $28 million on reserve, it is retiring debt
SARASOTA - In the late 1990s, as airlines pulled out of a debt-burdened Sarasota-Bradenton International Airport, president Fredrick "Rick" Piccolo feared the worst.
"I was concerned that this airport would be the first airport to have to file bankruptcy," Piccolo recalled Thursday. "It was a very scary feeling."
Today, though it will soon lose AirTran Airways - its second-largest carrier - the airport is on more solid financial ground.
Sarasota-Bradenton International will retire its remaining outstanding bond debt of $9.3 million in August 2014.
At the same time, the airport now has $28 million in reserves, and Piccolo is confident enough to spend nearly $15 million on recently completed or upcoming upgrades in its terminal.
Piccolo acknowledges that AirTran represents a key loss, however. The discount carrier handled some 360,000 passengers last year between such key cities as Baltimore, Boston, Chicago and Indianapolis. Its final flights from Sarasota-Bradenton International will be Aug. 11.
This week, the airport unveiled a new marketing effort to try and hold on to those travelers, some of whom, studies show, are "leaking" to airports in Tampa and Fort Myers for flights.
Softening the blow, though, AirTran - now a Southwest Airlines subsidiary - remains one of the airport's "signatory" carriers, meaning it will continue to pay about $500,000 a year in rent through 2014, even after departing for good.
While the airport will lose revenue without AirTran's passengers spending on parking and concessions, it can absorb the loss more easily now because it is no longer saddled with the crushing debt of years ago.
The airport took on considerable debt more than two decades ago, when it issued bonds to pay for its terminal, which opened in 1990.
Piccolo says the airport has paid off $125 million in debt while funding $120 million in terminal and infrastructure improvements since he become CEO in late 1995.
"We will have what is a brand new terminal and taken care of all the debt, at a time when the economic climate changed dramatically," he said.
The more than $75 million in debt assumed for the new terminal was based on projections the airport would grow and handle 2.5 million passengers a year.
But it peaked at 2 million in 1990, and last year handled 1.3 million travelers, a 2 percent decline from 2010.
To combat that trend, the airport has generated new revenue streams by adding private aircraft hangars, expanding its fixed-base operations, and through non-aviation sources like an industrial park.
Federal grants also have paid for some of the improvements and debt reduction.
Even so, the improvements have not been enough to keep some customers, who contend it is more convenient and less expensive to travel from one of the larger airports to the north, south or east.
Sarasota-Bradenton estimates it loses more than 1.5 million local passengers a year to Tampa, Fort Myers and Orlando airports.
Its new "Do You SRQ?" campaign is aimed at retaining at least 95 percent of the current passenger volume.
United Airlines plans to launch a new Chicago flight in December, and JetBlue and Delta have added new flights, but some of AirTran's cities are so far unserved.
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