Delta Cuts Pack $782M Annual Economic Hit for North Texas
(Here's estimates of what I've been talking about - Chispas)
Wednesday, December 1, 2004
By Connie Gore
DALLAS-An economic impact study, released at a press conference today, shows North Texas and the Dallas/Fort Worth International Airport will incur a $782-million annual setback and 7,056 job loss from Delta Airlines' decision to de-hub DFW. Of that, about $143.3 million will be lost in property income from rents, dividends and other sources.
Leading economist Dr. Bernard Weinstein from the University of North Texas presented his findings in DFW's Terminal E, which will be practically empty by Jan. 31, 2005, when the Atlanta-based Delta slashes its gate count from 254 to 21. "Since 1990, Dallas/Fort Worth has been the fastest-growing major metropolitan area in the nation in terms of people and jobs," says Weinstein, who co-authored the report with Dr. Terry Clower. "Without question, DFW International Airport is one of the economic engines that has helped sustain that growth."
Airport officials' project roster ensures the facility will retain its competitive hook over the long run. But, Weinstein says, "for the near term, the airport faces some serious challenges."
DFW officials are continuing to search for a discount carrier to backfill some gates, but many are steering clear of the region due to Southwest Airlines' route expansion plan and firm commitment to Love Field in Dallas. "Rest assured, DFW will continue to aggressively reach out to low-fare carriers to fill the void left by Delta," Joe Lopano, DFW's executive vice president of marketing and terminal management, says in a press release.
Weinstein concludes "it may be many years before DFW's gates and terminal are fully utilized." Delta, an airport tenant since 1974, is the facility's second largest carrier, accounting for $222 million in business property taxes for Dallas and Tarrant counties. About 50% of the re-assigned flight crews live in Dallas/Fort Worth.
Weinstein's report shows the hard-hitting losses, representing about 7% of the airport's $494-million operating budget, amount to more than $344 million in annual wages, salaries and benefits; $143.3 million in property income; $58 million in annual tax revenues for state and local authorities; $18 million in yearly landing fees; $13 million in annual gate rents; and $3.6 million in projected concessions revenue due to fewer passengers in Terminal E. The sales tax loss, projected at $29 million, will cut $1.8 million from the state coffer and $290,000 from the City of Grapevine. As for business property taxes, an estimated 90% of the revenue is expected to disappear when Delta is done with the cost-savings shift being made to stave off bankruptcy.
(Mish, no WONDER home prices collapsed.)
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