Philadelphia International Airport’s financial recovery from the pandemic continues to hinge on the return of passengers flying for business and traveling internationally, the head of the airport told City Council members Monday.
“It’s almost all leisure travelers right now,” CEO Chellie Cameron said during a budget hearing. The airport is anticipating a “pretty busy” summer as more people get vaccinated against the coronavirus.
But if business and international travel don’t pick up by fall, “then we see the passenger numbers dropping off a cliff again,” Cameron testified.
Compared with passenger levels in fiscal year 2019, traffic at PHL remained down about 60% through February 2021, according to testimony that the division of aviation submitted to Council. Officials expect a full recovery to take three to five years.
“We have a long way to go,” Cameron said.
PHL does not depend on city tax dollars for its budget. It is self-sustaining, and derives funding from landing fees paid by airlines, concession revenue, and other charges for airport use. During the pandemic, the airport also received about $260 million in federal relief funding, which has been used primarily to pay debt service and cover operating costs, Cameron said.
Heading into its fiscal year 2022, which begins July 1, the airport has proposed a 2% budget reduction of nearly $3 million, to bring its funding down to $150.6 million.
The budget proposal reflects 100 fewer staff positions, leaving the airport with funding for 730 employees.
Last month, the city approved an early retirement program for airport employees who are within five years of retirement. About a quarter of the workforce is eligible.
The program is a more “humane” alternative to layoffs, Cameron said, and PHL expects to have a final count in July of those taking the offer.
The airport is also focused on reestablishing European travel and regaining other business lost during the pandemic, as public health officials recommended against unnecessary travel, and the federal government imposed restrictions on passengers coming from certain countries.
By the end of 2020, PHL was serving 95 nonstop domestic and international destinations. But by the close of 2021, the division of aviation said, that figure is expected to climb to 128 nonstop destinations, a 35% increase.
On the international front, Cameron said the airport is advocating for travel protocols — such as proof of vaccination — that would allow those routes to reopen when safe.
Before the pandemic, Philadelphia was the gateway hub for American Airlines’ flights to Europe. The airline’s vice president of network planning, Brian Znotins, told The Inquirer last month that PHL will continue to be a primary transatlantic gateway in the future, but that current demand was low because of country closures and COVID risk.
The drop in passenger traffic affects the airport’s concessionaires, as well. Out of about 160 restaurants and shops, 86 businesses have reopened. Cameron said all of the airport’s minority and women-owned concessions are now open.