Empty Arkansas Airports ‘Eerie’

There’s plenty of parking available these days at Bill & Hillary Clinton National Airport in Little Rock.

Airport CEO Aaron Burkes said most of his employees are reporting for duty as usual at Northwest Arkansas National Airport. It’s everything else the airport is experiencing that’s unusual.

“It is very eerie,” Burkes said of walking through the near-empty terminal at XNA. “It still feels like an airport. You still see planes taking off, just not as many.”

The COVID-19 pandemic has caused air travel to plunge, and Arkansas’ two major airports have not been immune. XNA, in Highfill, has seen a passenger reduction of about 96%, and Little Rock’s Bill & Hillary Clinton National Airport has been hit with a 95% decrease.

“We are getting beat up,” said Bryan Malinowski, who was named permanent executive director of Clinton National in November after serving on an interim basis since May. “What is happening at Clinton National Airport is no different than what is happening at all the major commercial-service airports. There is nothing exclusive here. We are doing the very best we can with that situation.”

The decline in passenger traffic came on suddenly in March as concerns about the pandemic grew. Until then, both airports had experienced good business.

Burkes said XNA had been off to a robust start and was predicting it would have another record year after more than 1.8 million passengers used the airport in 2019.

The airport had 270,000 total passengers in January and February, up from 232,000 in the same two months of 2019.

Then March landed with a thud: 70,500 passengers, down from more than 144,000 a year ago.

Clinton National also started the year strong with more than 300,000 passengers getting on or off planes in the first two months of the year. In March, that number dropped to 86,229 — almost 100,000 fewer than in March 2019.

And April has been exponentially worse.

“Somewhere around March 7th or 8th is when it dropped off a cliff,” Burkes said.

Good Foundation

The good news for the airports is the relative financial strength of both when the effects of the pandemic began to be felt.

Burkes said XNA had about $29 million in cash on hand to help keep the airport in the black operationally. Malinowksi said Clinton National has been debt-free since 2015, which gives it some breathing space despite the drastic drop in revenue.

Malinowski said being debt-free when the pandemic all but shut down air travel is comparable to the benefits of having your home mortgage paid off when you get laid off from work. It is one less bill, and a significant one, that the airport doesn’t have to pay.

“Little Rock is unique, and that puts us in a pretty decent financial position,” Malinowski said. “We don’t have big debt-service payments to make. In terms of the long term, we will get through this pandemic and start working our way back up” with passengers.

Both airports have kept their full staff on the payroll; Clinton National has 155 employees and XNA has 55. Malinowski said the no-layoff claim at Clinton National comes with an asterisk since several employees took a voluntary furlough but are welcome to return to work at any time.

“What airport staff do, we pretty much have to do regardless of whether we have a lot of enplanements or not very many enplanements,” Burkes said. “They all have to be there. We are almost like a little city. We have to provide security.”

However, neither airport is filling positions that have opened since the pandemic hit.

Tenants Suffer

Clinton National has gone from 41 departing flights a day to maybe 12 on a good day, and those planes have just a handful of passengers. Malinowski said he is averaging 186 passengers a day — the equivalent of less than two pre-pandemic planeloads — and Burkes said approximately 100 people are checking through XNA daily.

This drastic decrease in passengers has a ripple effect.

When hardly anyone is flying, hardly anyone is paying for parking or for a coffee and bagel or for anything else. All seven of XNA’s terminal concessions have closed while Clinton National has one food vendor and one retailer open out of 11 total; vendors made the decision to close, with the airport’s approval.

Airport concessions have lease agreements with the airport. The payments are usually based on a minimum annual guarantee, something that a closed store or one with drastically reduced business can’t hope to meet.

Malinowski received permission from the airport commission to temporarily waive the “MAG” payments while the pandemic is roiling business. Malinowski said the airport and the concessions will decide again in two months how to proceed.

Burkes said XNA wasn’t ready to publicize what it will do with its concessionaires, but the idea he expressed is similar to Malinowski’s.

“Eventually we will put those MAGs in place when conditions improve,” Malinowski said. “In the meantime, it is very difficult to ask a tenant to pay a high MAG when we have one restaurant location open. I have 186 passengers, but that doesn’t mean every one of them is going to buy a sandwich.

“Our intentions are to work through the pandemic together and get [tenants] back on their feet and viable. As we get more traffic in, they can open more locations and get more employees back working.”

Lengthy Recovery Foreseen

Malinowski and Burkes pointed out that each airport is a self-sustaining enterprise; neither relies on local or state tax dollars to operate. Clinton National will receive more than $25 million and XNA $8.2 million in federal aid from the CARES Act.

Malinowski said he believes air travel will be one of the last industries to recover after the pandemic eases. Many people who have lost their jobs or experienced cutbacks in pay are going to find leisure travel less of a priority for a while.

Business travel may be slower because many companies are finding that work can be done remotely in an efficient way.

“I don’t see a lot of people going to Disney and Destin or even visiting Grandma,” Malinowski said. “They don’t have the finances. It is going to take aviation, and the Little Rock airport, longer to recover from this, and ultimately it will take us even longer to get back to the traffic levels we saw before.

“I think that [business] traffic will bounce back faster than the leisure side. I still don’t think it will get back to the 100% level.”

Clinton National travelers are approximately 65% leisure travelers, Malinowski said. XNA, in the heart of Walmart country, is about 70% business travel.

“We are optimistic; in northwest Arkansas it is easy to be optimistic about the future,” Burkes said. “We are certainly optimistic about the airport’s future. There will be a transition period here that is going to be challenging for everybody.”

If there is a silver lining for Clinton National, Malinowski said, it is the fact that construction renovation and repair work are more efficient now.

The airport wanted to repair concrete aprons around gates but could shut down only one gate at a time because of travel volume.

Now, with the drastic schedule slowdown, construction crews are working on three gates simultaneously.

And repair work inside the terminal is easier because travelers are not being inconvenienced by the work.

Even the empty parking lots can be seen as a temporary benefit.

“Those impact the passengers a lot and this is the best time to do that kind of stuff,” Malinowski said. “In the parking lot, we are doing striping and seal-coating, and there are just very few people there, and it is a lot easier to coordinate those activities.”