The Memphis-Shelby County Airport Authority (MSCAA) Board of Commissioners voted Thursday to approve a balanced MSCAA budget for Fiscal Year 2023 (July 1, 2022, through June 30, 2023).
The $143.8 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.
The FY23 budget represents a closer return to MSCAA’s more traditional pre-pandemic budgets, reflecting recent passenger levels that are more than 90% of 2019 traffic.
For the upcoming fiscal year 2023, operating revenues are projected to be up by 26.9% compared to the previous year. This projected increase in revenue is due to the 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 $14.4 million in federal Coronavirus Response and Relief Supplemental Appropriation Act (CRRSAA) funding and $3 million in surplus funds that will carry over from the prior FY2022 operations. In addition, MSCAA increased operating expenses and capital outlay by 14.6% in several areas that were reduced or deferred due to cost control and cutting measures in fiscal years of 2020, 2021 and 2022. FY 2023 personnel expenses increased 12.5% due to increased salaries and wages, new positions and expected increases in healthcare costs.
This budget increases terminal rates and charges to $71.24 per average per square foot compared to $69.99 per square foot in FY 2022. Airline terminal rental fees are calculated by dividing the terminal’s net operating cost by the total rented space.
Landing fees increased to $1.4372 per 1,000 lbs. of landed weight compared to last year’s rate of $1.2723. The increase in landing fees was expected and approved by airlines due to the planned opening and operation of the new $305 million Centralized Deicing Facility in the 2022/23 winter season. The addition of federal 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.
“The MSCAA staff has overcome many challenges that resulted from the pandemic,” said Michael Keeney, Chairman of the MSCAA Board of Commissioners. “While no organization is immune from the current effects of inflation, MSCAA continues to be financially sound. We continue to keep costs as low as possible for our airlines and tenants.”
Highlights of the FY 2023 MSCAA budget:
- Total revenues/other sources: $143,835,400
- Total expenses, capital outlay, debt service, and debt service coverage: $143,835,400
- Landing fees: $1.4372 /thousand lbs., compared to $1.2723 last year
- Terminal square foot rate: $71.24, compared to $69.99 last year
