Just two months ago, it was standing room only at Michigan airports.
Now those same terminals are in free fall amid the national coronavirus emergency, burning through cash and losing flights on routes that took years to establish.
“These airports are like ghost towns,” said Peter Hansen of Mio, who flew into Flint Bishop Airport from Florida on Tuesday, May 5.
“I’d be fine flying again," Hansen said. “It’s kind of nice without all the people hanging around, but who knows” how long this will last. It’s probably going to be (this way) throughout the summer if not longer.”
Hansen is seeing with his own eyes what airport officials and analysts have seen in the balance sheets since mid-March.
Daily passenger counts at Transportation Security Administration screening stations dropped more than 95 percent on some days last month when compared to the same date one year ago.
Airport officials estimate each departing passenger lost costs them about $20, not including landing fees, which are different at each commercial airport in the state. If passenger traffic were to remain down 90 percent for the year, that would translate to a loss of more than $347 million at airports statewide with Detroit accounting for more than 90 percent of those losses.
Airport managers and analysts say a full recovery is likely to take years, not months.
With fliers staying at home and flights reduced to the bare minimum required by the federal government, revenues from parking and landing fees are quickly drying up, too. Meanwhile the cost of keeping the lights on remains.
At Bishop and MBS Airport, which is owned by Bay County and the cites of Saginaw and Midland, airport officials have even stopped charging for parking because the cost of the operation is more than the money being collected.
“Normally we would have a terminal with 12,000 to 14,000 people in it every day coming and going," said Tory Richardson, chief executive officer of Gerald R. Ford International Airport in Grand Rapids. "It would be hustling and bustling. Our garage up until the COVID-19 pandemic … was at capacity and we were having to close it because it was full several days a week every week …
“Today you can walk through the building and see literally just a handful of people -- maybe. The restaurants, the bars – those places are closed – they’re dark. The lights are off. The chairs are shoved in a corner and the tables are shoved back so you can clearly walk through the building and say something is not right. This is not the way you would normally expect it to be."
Losses are staggering
Grand Rapids’ passenger counts are down about 95 percent compared to a year ago; 15 employees have been laid off, furloughed, or outsourced; an early retirement program is being offered to 24 eligible employees, and officials are considering something that was unthinkable just a few months ago -- closing one of two concourses that connect the Gerald R. Ford terminal in an effort to weather the storm.
At Detroit Metro Airport, officials aren’t yet discussing just how badly passenger traffic has suffered in April, but passenger counts in March alone were down more than 50 percent compared to the same month last year.
Spokeswoman Lisa Gass said in an email to MLive that DTW officials are still assessing the full, long-term impact of COVID-19.
“As you know, U.S. airlines are continuing to reduce their flight schedules, which affects the revenue that we receive from them. In addition, there are fewer passengers, which impacts revenue ranging from parking to concessions. We are analyzing the data. We should be able to share more information in the near future,” Gass said.
Although flights are continuing at DTW and elsewhere, they are being cut back as airlines adjust to very low demand, staying afloat with federal money that requires them to fly in markets they served before the coronavirus emergency.
At MBS, United Airlines could end its flights provided by SkyWest and the flights it is providing are being routed through to Muskegon on the way to and from Chicago, said James Canders, assistant airport manager.
Passengers not ready to fly
“There’s still going to be a lot of people who are scared" going forward, Canders said. “As soon as you’re in that airplane, social distancing is gone ... you’re all together in that tube.”
Airlines like Delta have asked the Department of Transportation for exemptions that would allow them to stop service to some markets, including Flint, Lansing and Kalamazoo/Battle Creek -- a request that’s still pending -- and United requested but was rejected in its bid to end service in Kalamazoo while still collecting money that’s been provided through Coronavirus Aid, Recovery, and Economic Security Act.
Aviation consultant Brad DiFiore of Ailevon Pacific said the struggles of airports will continue as long as people are staying away from flying because of worries about COVID-19. Airlines are in a survival mode -- parking and decommissioning aircraft they don’t see a need for on the horizon, he added.
“The industry is in an existential crises. Never before has basically the entire industry’s revenue gone down to virtually zero overnight ...,” said DiFiore, who has consulted with both Flint and Grand Rapids. “It’s primarily driven by the fact that nobody wants to fly anywhere. That’s completely understandable, but it certainly puts the industry in a really, really difficult situation ... It’s not going to get any better until people feel it’s safe to fly."
Timm Allen, a travel agent who works in customer relations and industry affairs at Travel Brokers, which has offices in Flint, Fenton and Grand Blanc, said he still has clients who are flying, but it’s just a small fraction of what it was just two months ago.
Not only are fliers worried about their health, they don’t know when the locations they are traveling to will reopen.
“People are just beginning to reschedule flights for after the first of the year,” Allen said. “We still have people traveling for some business, but it’s extremely rare ... I think, until there’s a vaccine and that assurance, our world is not going out to travel like we normally do.”
Hard road back
Airports across the country got a boost of $10 billion from the federal government on March 27, but Bishop officials, for example, expect to spend their portion of that -- $7.2 million -- long before things return to normal.
In Flint, there have been no layoffs or furloughs of employees because of the coronavirus slowdown, but the hiring of seasonal temporary employees has been shelved, overtime has been eliminated unless an emergency exists, an economy parking lot has been closed and projects have been deferred to save money.
A strong start to 2020 helped Bishop and other Michigan airports deal with terrible March and April business.
Before the coronavirus emergency, passenger traffic statewide was up more than 10 percent after two months compared to the same two months of 2019, according to state Department of Transportation records.
Those gains have been erased, and in addition to Flint, Grand Rapids officials have also deferred capital improvement projects.
“We have had to reduce our operating and capital expenses," Richardson said. “Capital projects that we can defer, we are doing that. In some cases we are delaying them indefinitely. In other cases we may not even proceed with a project if we don’t see the traffic come back to the way it was. Those are literally put on hold for a future decision once we know what the future holds.”
Some things that have changed due to coronavirus aren’t going away, Richardson said, including more regular and rigorous cleaning and extra hand sanitizing stations.
Nino Sapone, Bishop Airport director, said that’s part of the new normal for aviation regardless of what happens next.
“Airlines, airports are the cleanest they’ve ever been. You see our airport now, it’s immaculate and that’s the standard now," Sapone said. "That’s going to be the standard going forward ... We’re here to support it. We’re ready to go as the public responds and the airlines respond.”
‘It’s going to take a long time’ to recover
But DiFiore says it will take years to return air travel to what it was before coronavirus and there’s a secondary fallout from the pandemic -- people’s uncertainty over their own pocketbooks with unemployment high and businesses shuttered.
“It’s going to take a long time. ... two to three years I think is probably the minimum" before passenger traffic returns to 2019 levels. “This isn’t going to be a short-term impact. We’re expecting now for 2020 the entire year is going to be down over 50 percent for pretty much the entire country and probably more than 50 percent.”
Richardson said he expects Grand Rapids will operate through the summer at no better than 15 percent of the traffic they had during the same months a year ago.
“Finishing the year, I would say around 50 percent of where we were a year ago. I think that’s probably pretty optimistic and I think that trend will continue into next year,” he said. "But nobody knows. Is there another cycle of this that hits us in the fall? Is the economy going to do something that will further exacerbate what’s going on in the business cycle? There are those two caveats out there, but I think the optimistic view at this point is that airports get back to at least 50 percent of where they were a year ago by the end of this year with recovering continuing probably for the next two years before we can get back to … record-breaking growth.”
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