Tulsa International seeks to expand revenue base

BYLINE: Ginger Shepherd

Airline contracts are up for negotiation in Tulsa, where leases expire next year. And while Tulsa International Airport wants to increase its revenue base, it wants to keep airline fees at current levels. The fiscal growth, said Airports Director Jeff Mulder, will likely come from the real estate development at the facility.

The airport generates about $34 million a year in revenues, which pays for the airport's $18 million in operating costs and $13 million in debt service associated with construction projects. The airport's revenues come from landing fees, terminal rentals, the public parking lot, and from concessions, from which the airport collects 10 percent of gross sales. Airlines pay about $10 million in fees and leases to the airport. Since those terms expire June 2008, the airport will soon renegotiate its contracts with the airlines. Those negotiations are one reason the airport wants to expand the revenue base. Mulder said it is an effort to help keep airline fees flat even as the airline industry is improving from more than five years of economic difficulties. Mulder said the airport wants to keep both its costs and revenues comparable to airports their size like Charleston, S.C.; Tallahassee, Fla.; and Jackson, Miss. Tulsa has less revenue than Oklahoma City's Will Rogers World Airport. In fiscal year 2005, Oklahoma City's Department of Airports saw $48.8 million in revenue, according to that year's annual report, the most recent available. Its operating expenses totaled $32.9 million. The operating cost per passenger departing Tulsa is $10, Mulder said, adding that if capital costs were included, that figure would increase to $17-$18. The average operating cost per departing passenger for airports Tulsa's size is about $14, he said. Tulsa's revenues per departing passenger are $17.72, while the average is $20, Mulder said. The airport is just now starting the strategic planning on how to expand its revenues, and the key growth area is likely to be development of airport land. By using the land assets, he said, the airport could expand its revenue base. Mulder said developing the land would also provide a place for the city's aerospace industry to grow. Warren Thomas, managing partner of Tinker Industrial Developers Tulsa LLC, has proposed a $10 million aerospace and technology park on 880 acres at Tulsa International. Thomas said at an aerospace meeting in October that Tulsa's future economic success would be derived from the emergence of "gazelle firms," formed by mining and commercializing regional intellectual capital. The aerospace industry in Oklahoma has an estimated annual economic impact of $11.7 billion, 143,000 direct and indirect jobs and an annual payroll of $4.7 billion. At that same meeting, John Uczekaj, president and COO of aircraft component manufacturer NORDAM, said his company had 250 job openings for engineers, sheet metal workers and composite materials workers. "Our number one marketing tool is to get the customer to fly into Tulsa and see the size of our aerospace industry," Uczekaj said. "It's very impressive. It made a big mark when I interviewed here, and it makes a big mark on others who come here also. "