20260211-002 Financial Memo — original pdf

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TO: FROM: DATE: MEMORANDUM Airport Advisory Commissioners Rajeev Thomas, Chief Financial Officer, Austin Aviation February 11, 2026 SUBJECT: Austin-Bergstrom International Airport Financial Update December 2025 Financial Results Passenger and aircraft activity in December 2025 increased compared to the prior year because of growth in air service. Daily departures grew 8% to 257 in December 2025, driven by growth from Delta and Southwest. As a result, passenger traffic increased 3% and landed weights increased 8% compared to the prior year. Cargo volume decreased 10% due to adjustments in air cargo carrier strategies and a decline year over year in domestic belly freight volume. Table #1 FY 2026 FY 2025 Variance December December Fav (Unfav) FY 2026 YTD FY 2025 YTD Variance YTD Fav (Unfav) Enplanements Landing Weights Cargo Tonnage Operating Revenue Airport OPEX Total Requirements Net Income 960,181 926,479 3.6% 2,921,515 2,768,019 1,173,089,113 1,089,210,074 7.7% 3,547,261,829 3,316,264,851 11,140 12,336 (9.7%) 35,439 37,577 5.5% 7.0% (5.7%) $36,469,957 $28,687,714 $7,782,244 $111,770,051 $87,996,470 $23,773,582 $16,445,531 $13,214,770 ($3,230,760) $43,429,412 $39,380,857 ($4,048,555) $24,991,763 $21,707,597 ($3,284,166) $69,721,331 $63,005,313 ($6,716,018) $11,478,194 $6,980,116 $4,498,078 $42,048,721 $24,991,157 $17,057,564 Operating revenue increased 27% compared to the prior year and is comprised of 60% airline revenue and 40% non-airline revenue. The increase in operating revenue is mostly driven by increased airline rates and charges in FY2026 resulting from a new rates and charges methodology in the bridge airline use and lease agreement. Airline revenue streams increased 48% due to the escalated rates and growth in aircraft activity. Non- airline revenue streams increased 5% due to growth in passenger traffic and increased parking rates. Airport operating expenses increased 24% compared to December 2024 due to the timing of annual employee gainsharing payments. Gainsharing payments were distributed in November in FY2025 and in December in FY2026. When adjusted to include the FY2025 gainsharing payments, December 2025 operating expenses increased 9% because of growth in personnel cost and increased maintenance expenses. Improvement in employee vacancy rate and across the board wage adjustments drove increased personnel cost. The increase in maintenance expenses are driven by increased utilities costs, plumbing/electrical augmented staffing, and elevated preventative maintenance costs. Debt service cost declined 1% in December 2025 primarily because the 2019 refunding bond issuance was paid off. Additionally, in the first quarter of FY2026 the 2014 bond issuance was refunded resulting in net present value savings exceeding $17M over the life of the bonds. Other requirements increased 7% because of an increase in citywide allocated costs and increased transfers to the subordinate obligation fund from the initiation of the airport note purchase program in February 2025. Austin Aviation reported net income of $11.5M in December 2025, a 64% increase compared to December 2024. FY 2026 FY 2026 Budget vs. YTD Variance Budget vs. YTD Variance Table #2 Approved Budget - Seasonalized YTD $ Fav (Unfav) % Fav (Unfav) Operating Revenue Airport OPEX Total Requirements Net Income $107,600,417 $111,770,051 $4,169,634 $42,768,047 $43,429,412 ($661,365) $69,203,934 $69,721,331 ($517,396) $38,396,483 $42,048,721 $3,652,238 3.9% (1.5%) (0.7%) 9.5% Austin Aviation delivered favorable financial performance compared to the seasonalized FY2026 budget. Operating revenues exceeded the budget estimate primarily because of non-airline revenue performance resulting from strong passenger activity in December 2025. Operating expenses exceed seasonalized budget estimate by 1.5% because of elevated contractual and commodity costs in the first quarter of the fiscal year. As a result of favorable activity compared to the budget, net income is 10% above seasonalized budget estimate. Attachments: December 2025 - AAC Financial Report