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Bob Hope Airport faces tough times

Parking revenues and passenger numbers at Bob Hope continue to decline.

March 11, 2012|By Mark Kellam, mark.kellam@latimes.com
  • An airplane takes off from the Bob Hope Airport in Burbank on Thursday, April 21, 2011. Parking revenues and passenger numbers at the airport have declined. (Raul Roa/Staff Photographer)
An airplane takes off from the Bob Hope Airport in Burbank…

Thanks to the loss of an airline, declining parking revenues and fewer passengers using the airfield, Bob Hope Airport is facing one of its roughest budget years ever, officials reported this week.

Airport officials also are staring at a multimillion-dollar bond debt that will be needed to construct a transit center — a move that will be watched closely by credit rating agencies that have taken notice of the falling passenger and revenue numbers.

“These are difficult times for us,” Dan Feger, the airport's executive director, said at meeting on Monday of the Burbank-Glendale-Pasadena Airport Authority. “[It's] perhaps the most difficult budget year we've seen.”

Because of the departure last month of American Airlines, airport officials will closely monitor the economic picture during the next six months, said Kathy David, deputy executive director of finance and administration.

The airport's operating revenues are only about 1% above budget projections, so it's imperative to make sure American's unexpected move doesn't force revenues to drop, David said during a mid-year budget review.

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David is not the only one watching the financial health of the airport. Credit rating agency Fitch has warned that keeping the airport's credit rating at AA- is “unlikely” if it takes out a multimillion-dollar bond to build a new transit center, which will bring rental car, bus and rail services under one roof.

Overall, however, the airport looks to be in good financial health, Fitch officials said, noting that many mid-sized airports have just a single A rating.

Transportation consultant Jack Keady agreed, saying the airport looks to be in stable condition even if it takes on the additional debt for the center, for which the budget dropped by about 10% — to $81 million — following American's departure.

The deadline for bids to build the new transit center is March 22. Bidders were given the option to include additional plans using concrete to build the facility in an effort to further drive down the cost.

But the airport has been dealing with declining parking revenues, which make up about 40% of its operating revenues, for the past four years, according to a recent report. Likewise, passenger numbers have taken a tumble — two trends that concern Fitch.

Still, Bob Hope officials have held firm to building the transit center.

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