Tenants at Van Nuys Airport should expect to see revenue decrease by $16.4 million by the end of June, and $26.5 million by the end of the year, according to a study released this month from a group of graduate students at the UCLA Anderson School of Management.
The students’ study was based on anonymous questionnaire responses from six master tenants representing about 60 percent of the total leased acreage at the airport and from data from the Federal Aviation Administration through the end of April.
With more than 200 aviation businesses located in and around the airport, Van Nuys Airport is a major economic engine for the Valley. The six tenants surveyed for the study employ about 1,500 workers and paid about $1 million in local taxes last year.
“The scope of work covers gathering and analyzing new and existing data important to determining the impacts of the current global health crisis on airport jobs and businesses,” the study said.
Forty-three percent of the surveyed tenants had laid off or furloughed employees.
“These airport businesses reduced their workforces by a range of 10 percent to 50 percent with a total of 152 employee layoffs or furloughs recorded during the post-pandemic (March and April) period,” the study said.
The study noted that the job losses were only accounted for through the end of April and that “it is unforeseeable how many future employees will be laid off, furloughed or even terminated, but the number may grow larger as the pandemic persists and air travel is impeded.”
The study’s revenue projections for all airport tenants were based on a prorated calculation.
The airport’s fixed-based operators were especially hard hit by the decrease in traffic due to these business handling air charter operations and by the sale of fuel. The monthly fuel delivery went down to an average of 1.8 million gallons through the end of March from a monthly average of 2.3 million gallons in 2019, the study said.
“The trend is in sync with reduced operations at the airport, and we expect this number to decrease even further,” the study concluded. “Most importantly, the decrease translates directly into the revenue losses of FBO tenants, with an unknown date of recovery.”