Port board: Business model needs to be altered

Toledo Express Airport revenue slides again

2/26/2013

With Toledo Express Airport struggling to maintain passenger service, the Toledo-Lucas County Port Authority sees a need to better refocus its business model.

During an all-day brainstorming session Monday at the posh Toledo Club, the agency’s board of directors reaffirmed its support for the airport as a core program but agreed external forces that have downsized the airline industry nationally will force more changes locally.

The port authority, which operates the airport, has $8 million in revenue to work with in 2013. But that’s down a third from the $12 million budget the agency had in 2000, with the agency’s staff being reduced from about 73 employees to 48 over the same time.

Passenger travel has struggled: According to 2012 year-end statistics from the port authority, 143,514 travelers got on or off planes at the airport in 2012, down 1.05 percent from the 145,050 who flew there in 2011. It was the fourth straight year that passenger business was lower than the 182,898 travelers who used Express in 1955, its opening year.

In 2001, the airport produced more than two-thirds of the port authority’s money. Today, that figure is 46 percent.

During the same period, the percentage derived from economic development doubled, from 18 percent in 2001 to 36 percent today.

“We had to refocus efforts because of losses we had no control over,” Paul L. Toth, Jr., the port authority’s president and chief operating officer, said.

Those changes have been largely a result of higher fuel prices, the effect of deregulation on smaller-market airports, and security changes to the industry in the aftermath of the terrorist attacks of Sept. 11, 2001. The sluggish economy of the last five years also has slowed business travel.

But that’s not all. The Port of Toledo experienced nearly a 13 percent decline in cargo shipments in 2012, mostly because of record-low coal shipments.

That decrease is attributed to tougher pollution controls on coal-fired power plants, and a greater market shift toward natural gas, Mr. Toth said.

“It’s just a different demand out there now,” he said.

Board member Dr. Lloyd Jacobs, University of Toledo president, said less money is a symptom of the problem but that energy is the root of it. Changes in the energy market are affecting businesses across the country. The port authority needs to adjust better to them itself, he said.

“Energy is fundamental to human survival on this planet,” Mr. Jacobs said. “If you lose sight of that for the next 40 to 50 years, you’re not going to do well. Energy is the biggest driver of the future.”

Contact Tom Henry at: thenry@theblade.com or 419-724-6079.