Coronavirus: LAX Budget Shortfall Could Be As Much As $315 Million
LOS ANGELES (CBSLA) — Turbulent skies are ahead for Los Angeles World Airports.
With commercial air traffic down about 95% because of the coronavirus pandemic, budget cuts will be deep for Los Angeles World Airports, which oversees both LAX and Van Nuys Airport.
"Even if we don't end up planning for the worst-case scenario, the cuts will be deeper," LAWA Chief Financial Officer Tatiana Starostina said.
This time of year, LAWA normally reports an average of 1,900 flights a day, but that number is down to 400 during the pandemic — and most of those flights are shipping cargo.
Starostina says there are two possible scenarios for air traffic in the near future. In the first scenario, airport revenue next year would decline 15 % compared to last year, while expenses would also decline 10%, with a projected revenue loss of about $236 million. The second scenario shows the airport's revenue declining 24% while expense remain the same, losing a projected $315 million.
Airport officials expect to see about a 31% decline in total passengers by the end of this fiscal year, compared to last year, Starostina said.
Neither scenario, however, accounts for money coming to LAX via the Coronavirus Aid, Relief, and Economic Security, or CARES Act, which allocated $326 million to LAX to mitigate its pandemic-related losses.
LAWA has already revised agreements for airlines and commercial tenants and put a freeze on hiring in March. At the next Board of Airport Commissioners meeting this month, they will make a "deep dive" into budget details, and present finalized projected revenue and expenses at its second meeting this month. A draft of LAWA's budget will be presented at the board's first meeting in June, and will need to be finalized by June 30.
(© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. City News Service contributed to this report.)
