The Investigators: Memphis International Airport sees $11M loss as COVID-19 pandemic persists

Updated: May. 5, 2020 at 10:14 PM CDT
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MEMPHIS, Tenn. (WMC) - As Memphis International Airport prepares for an influx of federal money, concerns remain over whether the airline will be able to pay their rent.

Memphis International Airport has already lost millions in revenue.

As the number of flights illuminated on the departures and arrivals boards at Memphis International continue to dwindle, so does the airport budget.

When the Memphis-Shelby County Airport Authority met virtually last month, the airport’s chief financial officer said the airport had already lost nearly $11 million in revenue.

But by freezing employee training and travel, and deferring some projects and bills, CFO Forrest Artz believes they’ll finish the fiscal year, which ends June 30 with a $1.3 million surplus.

“This is a very fluid situation,” said Artz. "We are looking at this constantly every day as we move through this. So this is a preliminary projection at this time.

Meanwhile, MEM stands to take over $24.6 million in CARES Act funds.

That money will be needed if the airlines can’t pay their bills.

“Obviously that’s a concern. That’s a concern for every airport is the what-ifs,” said Scott Brockman, Memphis International CEO.

Airlines and restaurants pay rent and fees to the Memphis airport. In turn, the airport relies on that revenue. But passenger traffic in March was down about 50% compared to last March. And the airport authority expects the numbers to get worse.

“The impact is pretty significant however, it’s not as significant as it could have been or what we’ll be looking at in April,” said Artz.

The airport says it’s been a more than 95% decrease in passenger travel in April though the numbers have not been finalized.

Meanwhile, in March American, Delta, United and Southwest airlines all saw around a 50% decrease in passengers at Memphis International.

Brockman says airports around the country are watching those passenger numbers closely.

“I’ve seen projections that the airlines aren’t back to profitability for 2 years or 3 years,” said Brockman.

The saving grace for Memphis International is FedEx.

The pounds of cargo FedEx handled domestically in March decreased by less than 8% and international cargo brought to Memphis increased by more than 1%.

“We have the silver lining of a very active cargo company in our midst that helped our airport maintain some semblance of stability. Thank God for them always,” said Pace Cooper, a Memphis Airport Authority Board chairman.

Meanwhile, most airlines have signed up for the $50 billion available to them through the CARES Act.

Brockman hopes that money will soften the blow to Memphis International.

“We’ll see if that keeps them operating without bankruptcy for a while," said Brockman. “It is possible.”

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