Massport Prepares For Uncertain Global Economy
The Massachusetts Port Authority, which receives its revenues from airlines, cruise lines and shipping companies, is preparing for the uncertainty of the global economy in its fiscal year 2013 budget, which was unanimously approved by the Massport board on Thursday.
“Next year’s spending plans reflect the economic realities of a struggling economy, hampered by uncertainties in the European nations, and business activity growth that, while still strong, is tempered by the challenges of an aviation industry that is consolidating and a shipping industry that is working through a glut of shipping capacity,” read one piece of the quasi-public agency’s budget.
Massport is financially independent from the state, but the board is appointed by the governor.
Increased revenue from Massport’s most lucrative property, Logan International Airport, is expected to lead the way toward a 1.8 percent overall revenue increase in Massport’s $577.6 million budget. However, in light of the economic forecasts, Massport will reduce its operating expenses by 1 percent, sending the leftover $10.2 million toward capital expenses and the repair budget.
“[The budget] mixes the fiscal caution needed in an uncertain economy with a bedrock commitment to providing excellent customer service, safety and security and new ways to promote high occupancy vehicle trips to and from Boston Logan International Airport,” said a statement from Massport Ex-Officio Chairman Richard Davey, who is also the state’s transportation secretary.
The budget does not include plans for Massport to take over the MBTA’s ferry service, an idea that had been proposed in the state Legislature as a cost-savings measure for cash-strapped public transit agency.
“We’re still waiting to hear what the [Federal Aviation Administration] has to say about that. That would be the first step,” said Massport spokesman Matthew Brelis.
A record 29.2 million passengers are expected to pass through Logan in fiscal 2013, when Massport revenues from the airport are expected to rise by $35.3 million, reaching $492.6 million, or about 85 percent of authority’s total estimated revenue. The fiscal 2012 increase in Logan revenue was a more modest $1.6 million.
In April, the first Japan Airlines flight direct from Tokyo to Boston touched down at Logan, but most of the increased traffic at the airport was from discount airlines, such as JetBlue.
The Port of Boston is still hampered by the global economy, the budget said. A new shipping route from China was indefinitely suspended six months after it was launched, last summer, and the Conley Terminal in South Boston, which handles all container shipping, is well below its 2008 high of handling 124,000 containers. The current projected total of about 105,000 containers handled is far lower than the 167,500 forecast last year, according to the budget, which blames the mid-year suspension of the shipping route.
Total port revenue is expected to drop by $21.7 million, and the operating budget of the maritime division will drop by about $13 million, or 15.6 percent. Meanwhile, Massport has been subsidizing the Conley Terminal’s operating and capital costs and the Massport board has authorized a $70 million upgrade at the terminal, which would add four new cranes, allowing the terminal to handle two ships at a time.
“Our eyes will remain on the economy as there are many domestic and international concerns that could derail us from our desired growth track,” read the budget letter signed by Massport interim CEO David Mackey and Massport Director of Administration and Finance John Pranckevicius.
WBJ Web Partners
Most Recent
Most Recent
0 Comments