Long Island MacArthur Airport’s profits dropped 56 percent in 2018 compared with the year before largely because overtime spending surged, officials said.
MacArthur recorded an estimated $972,000 in profits last year, down from $2.2 million in 2017, said airport Commissioner Shelley LaRose-Arken.
But the airport continues to thrive, reporting a profit for the fourth consecutive year and a steady increase in passengers. MacArthur, which has generated more than $5 million in profits since 2015, is poised for a $70 million expansion in an effort to compete with the New York City market.
MacArthur Airport revenues and profits
LaRose-Arken has said repeatedly the airport is trying to lure passengers away from LaGuardia and Kennedy airports and is actively recruiting new airlines to Long Island.
The dip in profits in 2018 was partly because MacArthur paid $550,000 more in overtime — $1 million compared with $450,000 in 2017. The airport had 18 full-time vacancies last year, a dozen more than in 2017, LaRose-Arken said. The airport has about 80 full-time positions.
“We had a large number of retirements and people who left,” she said. “To fill some of these positions … it takes over a year under the Civil Service process. So, during that period of time, we used existing staff to back-fill.”
The airport also spent $415,000 of its profit in 2018 on several infrastructure upgrades, a move LaRose-Arken called “fiscally responsible.”
“Why go out and bond that money and pay interest on it when we are able to do it ourselves? That is the advantage of having a surplus.”
The upgrades included two new HVAC units, roof repairs and spending $305,000 on a contract to design a parking ramp for airplanes for the yet-to-be-built 100,000-square-foot concourse, airport officials said.
LaRose-Arken said she expects overtime expenses to decrease this year, noting that of the 18 vacancies since 2017, six will be filled April 1.
MacArthur is self-sustaining and does not use tax dollars to support its budget. In years of financial loss, it survived on past profits. Daily operations are funded through fees for concessions, leases and other services. Capital projects are funded by federal, state and other grants or with profits.
Islip Supervisor Angie Carpenter called MacArthur "one of my favorite town success stories" during her state of the town speech this month.
"The airport was not serving the public well, and it was operating in the red." But now, MacArthur is "on sound fiscal footing," Carpenter said.
American, Southwest and Frontier airlines currently fly out of MacArthur. It served about 1.6 million passengers last year, up from 1.3 million passengers in 2017. The airport also saw the biggest increase among mid-to-large airports of seats offered on domestic flights in 2018, according to data gathered by Innovata SRS Analyser, a group that monitors the airline industry.
Sen. Chuck Schumer last month said he will advocate for Federal Aviation Administration funding for the new concourse and other renovations. The Senate minority leader said MacArthur is ideally positioned for growth with the Island's 3 million population and its proximity to Queens and Brooklyn.
Aviation industry analyst Robert Mann, a former airline executive and president of R.W. Mann & Company Inc. based in Port Washington, said MacArthur is on a “good growth trajectory” and airlines prefer to fly out of airports that make money.
“Airlines look for big pools of revenue. It’s like going fishing, you fish for big ones, you don’t fish for minnows,” Mann said.
But Mann said MacArthur needs to land more airlines, giving the public more options, or else people will continue to fly out of New York City.
“It will come down to additional airlines to serve the Long Island market," he said. "That way, you’ll retain more people who otherwise, while driving on the LIE, will just head to LaGuardia and Kennedy.”