The Bill & Hillary Clinton National Airport is holding its own in the face of declining passenger counts. While that downward trend continued to cut into revenue from landing fees and parking, the state’s largest airport more than made up for it in other areas.
The 2,100-acre aviation development has encountered a resurgence of economic development activity that has generated new rental income. Enhanced revenue from fixed-base operators selling aviation fuel also contributed to the bottom line.
Plans also are in motion that could add leased sites for a hotel and convenience store on Roosevelt Road to the airport’s list of income-producing properties.
Ron Mathieu, executive director of the Little Rock airport, expects to begin the process to gather proposals from hoteliers for a potential project.
“We want it to be the type of thing where people go in and say ‘This is nice,'” Mathieu said. “There are too many examples of hotel projects that are the closest to the airport are the worst. Clean, safe and comfortable, that’s what we want.
“In the next three months, we’ll know which way we’re going with the hotel, and we’ll look at the other project after that.”
His vision for the convenience store is upscale, with a varied menu to feed vehicles to include compressed natural gas, electrical and biofuel. The response from would-be developers will tell if that is feasible or not.
“We’re about to test the market off of Roosevelt Road,” Mathieu said. “I think there’s going to be some interest there. I don’t like lazy assets. We need to get a return on more of our undeveloped land.”
The airport recorded a nearly $10.6 million profit from operations during 2015. The tally represented a 2 percent increase from more than $10.3 million in 2014.
Reimbursements from the Federal Aviation Administration and other items boosted adjusted net income to $14.7 million last year, reflecting a 2.2 percent year-to-year increase.
Behind the profit and loss statement, the airport is debt free. A check for nearly $7 million was cut in December to pay off a 2007 bond issue. The early payoff will save more than $2 million in future interest.
“We’re one of the very few airports that set out with that goal and made it,” Mathieu said of the debt-free achievement.
Nearly 997,000 passengers boarded flights at the Little Rock airport in 2015. That’s a 21.9 percent drop compared with 15 years ago when nearly 1.3 million enplaned.
A big variable behind those numbers is consolidation among carriers. Less competition means fewer flights. American, Delta, Southwest and United control more than 82 percent of the market today.
“This trend is going to continue,” Mathieu said. “The industry is getting smaller through consolidation.
“We have all four major carriers. Not all small hub airports can say that.”
With this backdrop, the airport commission put a hold on plans to expand the passenger terminal and instead plans to focus on upgrading the existing facility and improving its amenities.
Along the way, Little Rock became known for hosting the fastest airport Wi-Fi in the Western Hemisphere and the second fastest in the world.
“That’s pretty cool,” Mathieu said.
Leasing Property
The Little Rock airport is home to about 3,000 jobs, and efforts continue to grow that number while increasing revenue.
The 2013 closing of the Hawker Beechcraft operations at the airport ended annual lease payments of nearly $600,000 to the airport.
Helping offset this in October 2014 was a $276,000 increase in the Dassault Falcon Jet lease. The stepped-up rent accompanied Dassault’s $60 million expansion and renovation of its complex, which now totals more than 1.2 million SF.
A land acquisition program the airport commission began 10 years ago added the necessary acreage to allow Dassault to build a 250,000-SF hangar.
“Had we not started the expansion when we did, we likely would not have had the Dassault expansion,” said Shane Carter, director of public affairs and governmental relations for Clinton National. “You have to have the land before you need it.”
In October, the airport added a 24.5-acre tract adjoining the Dassault property in a $750,000 deal. The former Hollingsworth Grove housing project site was acquired from the Little Rock Housing Authority.
“We won’t see the full benefits anytime soon, but we’ve put ourselves in position to be ready for any growth,” Mathieu said. “We’d like nothing better than if Dassault comes to us and tells us, ‘We want our suppliers to be here. Can you accommodate us?’”
Next door to Dassault, a 55,882-SF piece of the former Hawker Beechcraft complex last year became home to a second fixed-based operator at the airport.
Fly Arkansas, which also runs an FBO at the Boone County Regional Airport in Harrison, is leasing two buildings. Annual rent payments start at $202,000 this year and will average about $216,000 over the course of the 10-year deal.
As landlord, the airport also will receive a flowage fee of 7.8 cents per gallon on Fly Arkansas fuel sales projected to generate an additional $11,000-$12,000 each year. More than 350,300 SF of hangar and office space remains vacant at Hawker’s former facility.
“I’m fairly confident that in the next year we will find tenants for some of that space,” Mathieu said. “We’re hopeful over time we will be able to attract folks over there to use all the facilities.”
The former Southwest Airlines reservation center, a 14-acre development owned by the airport, is leased to Cantrell Drug as of Feb. 1.
The project is an expansion for the Little Rock specialty pharmaceutical firm, which intends to eventually add 125 new staffers to work at the airport location.
The five-year deal for the 42,800-SF building starts at $360,000 annually and includes three five-year options to renew. Southwest Airlines was leasing the location for only $40,000 a year.
“Sometimes when there is turnover, it turns out to be a good thing,” Mathieu said. “It would’ve been nice to have some continuity over there, but it made it nice on the revenue side.”
Land and building leases generated more than $3.1 million for the airport last year, up from $2.8 million in 2014.
Bill & Hillary Clinton National Airport
Financial performance 2009-15
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
Revenue | $23.3 | $25.3 | $27.5 | $29.7 | $30.6 | $30.7 | $32.1 |
Net Income | $8.0 | $9.3 | $11.2 | $11.4 | $13.2 | $14.3 | $14.7 |
Source: Little Rock Airport Commission. All dollars in millions.
LIT Departing Passengers
Year | Total |
2000 | 1,276,145 |
2001 | 1,211,753 |
2002 | 1,101,623 |
2003 | 1,063,920 |
2004 | 1,138,249 |
2005 | 1,265,098 |
2006 | 1,236,223 |
2007 | 1,245,098 |
2008 | 1,181,846 |
2009 | 1,108,603 |
2010 | 1,097,403 |
2011 | 1,063,673 |
2012 | 1,111,442 |
2013 | 1,055,293 |
2014 | 1,005,251 |
2015 | 996,837 |