20250813-005 Austin Aviation's Proposed Budget — original pdf

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City of Austin 2025-26 BUDGET Austin Aviation Proposed Budget August 13, 2025 Major Assumptions • New airline use and lease agreement effective FY26 with new rate methodology • 3% annual passenger enplanement growth in FY26 • Flat enplanement growth expected in FY25, which drives moderated non-airline revenues in the current year estimate • Across the board wage adjustment of 4% in FY26 • New FTEs to support facility and passenger traffic growth: FY26 – 24 FTEs Increase in contribution to retirement from 8.7% to 9.6% and increased legacy liability contribution Increased preventative maintenance costs for infrastructure Increased wage cost for airport APD unit and 3 additional officers for checkpoint coverage Initiation of contributions to a Major Maintenance Fund recovered through airline rates and charges to be used toward capital projects. FY26 contribution is $30 million • • • • 1 AUS Activity • Average daily departures continue to optimize as carriers adjust strategies • YTD FY25 average daily departures through June total 243 • FY24 enplanement growth of 0.4% due to adjustments to carrier strategies • Enplanement growth of 3% annually from FY26-30 2 Revenue Assumptions • Annual passenger enplanement growth of 3% drives non-airline revenue growth • Annual growth in aircraft landed weights of 2% and airfield requirements increases landing fee revenue • New Airline Use and Lease Agreement expected in FY26, will modify airline terminal rate methodology • Parking revenues increase in FY26 from increase in passenger traffic and rate adjustments. • TNC revenues increase as trip activity growth continues to exceed passenger growth • Terminal concessions growth trend aligns with passenger growth 3 Operating Revenues Budget 2024-2025 CYE 2024-2025 Proposed 2025-2026 $ Change % Change vs FY25 Budget vs FY25 Budget Planned 2026-2027 Operating Revenue Airline Revenue Landing Fees Terminal Rental & Other Fees Total Airline Revenue yoy change % Non-Airline Revenue Parking Ground Transportation for Hire Rental Cars Food & Beverage Retail Advertising Other Concessions, Rentals & Fees Total Non-Airline Revenue yoy change % 59,625,915 111,271,727 170,897,642 12.2% 59,625,915 111,271,727 170,897,642 12.2% 79,896,787 168,236,307 248,133,094 45.2% 20,270,872 56,964,580 77,235,452 81,247,697 11,615,065 21,948,757 20,109,576 7,508,056 5,148,000 27,509,304 175,086,455 5.7% 77,751,861 11,043,783 21,477,962 20,213,799 7,094,410 5,983,168 25,448,019 169,013,002 2.0% 80,200,462 11,374,092 21,695,821 21,002,326 7,216,411 6,384,403 26,218,633 174,092,148 -0.6% (1,047,235) (240,973) (252,936) 892,750 (291,645) 1,236,403 (1,290,671) (994,307) Interest Income Total Operating Revenue yoy change % 5,000,000 4,600,000 3,000,000 (2,000,000) 350,984,097 8.7% 344,510,644 6.7% 425,225,242 21.2% 74,241,145 34.0% 94,153,582 51.2% 180,703,424 45.2% 274,857,006 10.8% 86,140,200 -1.3% 13,849,027 -2.1% 22,128,830 -1.2% 21,636,680 4.4% 7,659,831 -3.9% 6,833,349 24.0% 30,173,004 -4.7% -0.6% 188,420,921 8.2% -40.0% 21.2% 2,000,000 465,277,927 9.4% New airline use and lease agreement expected to be in place in FY26 will modify rate methodology to ensure cost recovery for airport expansion and operations. Increased expenses and debt service will drive increased airline revenues. 4 Operating Expense Assumptions • Across the board wage adjustment of 4% in FY26 • 24 new FTEs are included in the FY26 budget to support new facilities opening in FY26 and beyond. • Employer’s contribution to retirement increasing from 8.7% to 9.6% and legacy liability payment increasing $604k • Increase in building maintenance contractual costs primarily for preventative maintenance • APD cost increasing due to wage increases in labor agreement and due to addition of 3 officer FTEs • Initiation of third-party operations of virtual ramp control center in FY26 • Cost savings identified in information systems, South Terminal closure, and support services to partially offset increases to contractual costs 5 Operating Expenses Airport Operating Expenses Personnel Contractuals Commodities Non-CIP Capital Expense Refunds Total Operating Expenses yoy change % Budget 2024-2025 CYE 2024-2025 Proposed 2025-2026 $ Change % Change vs FY25 Budget vs FY25 Budget Planned 2026-2027 87,886,989 88,162,829 7,376,741 224,000 - 87,559,677 86,758,200 7,632,700 200,000 96,243,347 89,853,873 7,232,861 125,000 - 183,650,559 12.4% 182,150,577 11.5% 193,455,081 5.3% 8,356,358 1,691,044 (143,880) (99,000) - 9,804,522 9.5% 1.9% -2.0% -44.2% N/A 5.3% 103,916,041 102,347,663 8,612,440 150,000 - 215,026,144 11.2% • FY26 Proposed Budget increases by 6.2% compared to FY25 CYE primarily because of personnel cost drivers • FY26 Proposed Budget increases by 5.3% compared to FY25 Budget • FY25 Current Year Estimate is $1.5 million below FY25 Budget due to adjustment to shift note purchase program costs to subordinate obligation fund 6 FY26 Significant Expense Changes Personnel • 4% across the board wage increase • 24 new FTEs to support operations and expanded facilities in FY26 • Additional temporary staffing to assist with passenger needs and security during construction projects Contractuals • Building Maintenance costs increasing for preventative maintenance • APD cost increase for wage adjustments and 3 new officer FTEs in FY26 • Third-party ramp control operations scheduled to commence in FY26 Commodities • Facility services and information systems commodity purchases decrease because of more efficient usage Non-CIP Capital • Replacement of terminal waste bins completed in FY25 which decreases non-CIP capital budget in FY26 7 FY25 Budget Personnel Wage Adjustment New FTEs Temporary Employees Change in Vacancy Savings Retirement, benefits, etc. Total Personnel Contractuals Building Maintenance APD Ramp Control South Terminal Misc contractual costs Total Contractuals Commodities Non-CIP Capital Total Change FY26 Proposed Budget (in millions) $ 183.65 $ $ $ $ $ $ 2.34 1.50 1.37 0.89 2.26 8.36 $ $ $ $ $ $ 1.87 1.73 1.22 (1.83) (1.29) 1.70 $ (0.15) $ (0.10) $ 9.81 $ 193.46 AUS Forecast Summary Budget 2024-2025 CYE 2024-2025 Proposed 2025-2026 $ Change vs FY25 Budget % Change vs FY25 Budget Planned 2026-2027 Revenue Airline Revenue Non-Airline Revenue Interest Income Total Operating Revenue Operating Expenses Aviation Operating Expenses City of Austin Transfers Operating Reserve Short Term Debt Interest Debt Service (Net of PFC) Total Requirements 170,897,642 175,086,455 5,000,000 350,984,097 183,650,559 15,084,469 3,060,677 - 81,053,612 282,849,317 170,897,642 169,013,002 4,600,000 344,510,644 182,150,577 15,084,469 3,060,677 1,500,000 81,053,612 282,849,335 248,133,094 174,092,148 3,000,000 425,225,242 193,455,081 16,078,819 1,813,205 2,000,000 79,127,053 292,474,158 Net Income 68,134,780 61,661,309 132,751,084 Transfer to Major Maintenance Fund Net Transfer to Capital Fund - - 68,134,780 61,661,309 30,000,000 102,751,084 77,235,452 (994,307) (2,000,000) 74,241,145 9,804,522 994,350 (1,247,472) 500,000 (1,926,559) 8,124,841 66,116,304 30,000,000 36,116,304 45.2% -0.6% -40.0% 21.2% 5.3% 6.6% -40.8% N/A -2.4% 2.9% 97.0% N/A 53.0% 274,857,006 188,420,921 2,000,000 465,277,927 215,026,144 17,101,768 3,875,653 - 99,212,344 335,215,909 130,062,018 31,050,000 99,012,018 Net income increases 97% in FY26 primarily due to increased operating revenues generated by the anticipated new rate methodology in the new airline use and lease agreement 8 Facilities projected to be completed by FY26 Baggage Capacity Improvements West Gate Expansion West Infill and TSA Checkpoint Expansion International Arrivals (FIS) Improvements Atrium Infill 9 FY26 – CIP Spending Plan FY26 Capital Spend Breakdown AEDP Renewal and Replacements (R&R) IT Vehicles and Equipment AIPP Total Amount $713,998,876 $78,055,541 $15,841,924 $6,010,500 $1,784,854 $815,691,695 AEDP IT R&R • Midfield Taxiways • BHS • West Gate Expansion • Atrium Infill • West Garage • Central Utility Plant design 10 • Virtual Ramp Control • Self-Service • Terminal HVAC Air Handling Equip Passenger Processing • Elevator • Campus Digital Signage Display Replacements Refurbishment • Passenger Boarding Bridge Replacements Vehicles • COBUS • Replacement Vehicles THANK YOU 11