Airport Division once again projecting a loss in the millions for FY2016
Port Administration Department is projecting a nearly $4 million loss for current fiscal year 2016 for the Airport Division, which recorded a loss of over $5 million in FY 2015, according to the Airport Division’s profit and loss statement included as part of its FY 2017 proposed budget.
Of the total $3.21 million operating revenue proposed in the FY 2017 budget, the Airport Division is projecting $1.23 million from rents & leases; $36, 500 under the hotel room tax, which went into effect in June last year; $317,500 in airport landing fees; $143,000 from parking fees; $110,000 in ‘other income’ and only $42,00 from the jet fuel excise tax.
ASG is proposing a $1 million subsidy for Airport Division. In allocating the subsidy, Gov. Lolo Matalasi Moliga said Pago Pago International continues to be one of the territory’s most important assets given its implications in American Samoa’s social and economic developments.
Historically, he said, ASG has depended on Federal Aviation Administration (FAA) to finance major project developments at the airport. To demonstrate a local commitment, local resources must be pledged, he said.
Not including the $1 million subsidy, the airport is projecting to collect $2.21 million in revenues.
(Samoa News notes that the FAA continues to provide the majority of funding for major airport infrastructure improvements, through the FAA’s Airport Improvement Program.)
ASG made the same $1 million subsidy allocation for current FY 2016, although it was $500,000 in FY 2015 and $200,000 in FY 2014, according to the budget document, which also shows that the airport is projecting an increase in the number of aircraft operating in and out of the Tafuna airport by 25% compared to FY 2016.
Lawmakers are expected to question Port Administration officials, during budget hearings, on the reason for the project increase in revenue sources. Samoa News notes that one example of increase in aircraft operation is Samoa-based Talofa Airways, set to launch flights between Pago Pago and Samoa next Monday, Aug. 29.
Of the total budget, the highest amount of $2.34 million goes to personnel costs for 132 employees, followed by $603,500 for “all others”; $233,000 in contractual services, $4,000 for materials and supplies; $3,000 for equipment; and only $28,500 for travel.
Airport Division — which covers all three of the territory’s airports (2 airports in Manu’a), has the same budget amount for current FY 2016 with 137 employees, according to budget document.
The highest expense under ‘All others” budget item is $400,000 to cover electricity for all airport facilities. Other big expenditures includes Fitiuta land lease at $60,000; Ofu Airport land leases at $30,000; and another $30,000 for a land lease on Tutuila.
PROFIT & LOSS
According to the profit and loss statement, the Airport Division is forecasting a loss of $3.93 million at the end of FY 2016, and this is based on the first eight-months of the fiscal year, in which total operating revenue is $2.70 compared to $6.64 million in expenditures.
In FY 2015, according to the statement, actual total operating revenue totaled $2.33 million compared to $7.95 million in expenditures — resulting in a $5.61 million loss at the end of the FY 2015. The loss in FY 2014 was at $2.65 million with total expenditures at $7.94 million while total operating revenue at $5.28 million.
Port Administration officials told lawmakers at last year’s budget hearings that the Airport Division has been operating at a loss every year for many years, and unless the government moves to increase some of its fees such as landing fees and rates for leases and rents on airport property, losses will continue.