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Airport Authority board passes FY 2022 budget

Memphis International Airport

$128.4 million budget includes CRRSAA funding, lower rent and landing fees for airlines/tenants

MEMPHIS, Tenn. (May 21, 2021) – The Memphis-Shelby County Airport Authority (MSCAA) Board of Commissioners voted Thursday to approve a balanced MSCAA budget for Fiscal Year 2022 (July 1, 2021 through June 30, 2022).

The $128.4 million Operations and Maintenance (O&M) budget sets the fees and charges that the airlines pay to the Airport Authority and establishes spending authority for MSCAA operations. This budget does not include construction project expenditures. The MSCAA budget was unanimously supported by the Memphis International Airport’s airline committee partners and approved by the Board’s Finance and Administration Committee. MSCAA is self-funded and receives no local tax revenue from the City of Memphis or Shelby County.

This fiscal year budget reflects the Airport’s initial stages of recovery from the effects of the COVID-19 pandemic. The recent increase in passenger air travel and the strong presence of cargo activity at Memphis International Airport has contributed to very competitive rates and charges for the airport’s passenger and cargo airlines.

For the upcoming fiscal year 2022, operating revenues are projected to be up by 6.9% compared to the previous year. This projected increase in revenue is due to the initial recovery of air service from the effects of the COVID-19 pandemic, which had significantly reduced air travel, parking and other passenger revenue at MEM. The increase in total revenue will be supplemented with $8 million of remaining Federal CARES funds, $14.4 million in new federal Coronavirus Response and Relief Supplemental Appropriation Act (CRRSAA) funding and $4 million in surplus funds that will carry over from the prior FY2021 operations. In addition, MSCAA increased operating expenses and capital outlay by 11.9 % in several areas that were reduced or deferred due to cost control and cutting measures in fiscal years of 2020 and 2021. MSCAA did not furlough or lay off any employees during FY 2021. FY 2022 personnel expenses are flat compared to FY2021 with no expected reductions in staff or increases in salaries and wages.

This budget decreases terminal rates and charges to $69.99 per average per square foot compared to $77.01 per square foot in FY 2021. Airline terminal rental fees are calculated by dividing the terminal’s net operating cost by the total rented space.

Landing fees decreased to $1.2723 per 1,000 lbs. of landed weight compared to last year’s rate of $1.2993. The addition of Federal CARES and CRRSAA funding greatly reduced the pandemic’s impact on MEM rates.

Terminal rent and landing fees comprise a small percentage of the airlines’ overall operating costs at airports and do not have a significant effect on airfares.

While passenger traffic has decreased significantly nationwide due to COVID-19, the pandemic has had a much lesser impact on cargo. The presence of FedEx, which represents the vast majority of landed weight revenue for MEM, reflects a huge asset that other airports do not have.

“The MSCAA staff has worked tirelessly to overcome the budgetary challenges of this historic pandemic, and the subsequent ongoing recovery” said Pace Cooper, Chairman of the MSCAA Board of Commissioners. “MSCAA is financially sound and is keeping costs as low as possible for our airlines and tenants, who are also dealing with the financial effects of COVID-19. While it will take time, MEM is well positioned to be a leader in the aviation industry’s recovery.” 

Highlights of the FY 2022 MSCAA budget:

  • Total revenues/other sources: $128,391,600
  • Total expenses, capital outlay, debt service, and debt service coverage: $128,391,600
  • Landing fees: $1.2723 /thousand lbs., compared to $1.2988 last year
  • Terminal square foot rate: $69.99, compared to $77.01 last year