Reno Tahoe International Airport hobbled, bellwether for regional economy

The arrival and departure boards at the Reno Tahoe International Airport (RNO) were a light mix of on-time and cancelled flights. Walking through the main terminal at 2:00 p.m. on Monday afternoon, the number of people travelling could be counted on one hand, literally.

The terminals were quiet and looked and smelled meticulously clean. Rental car agents played with their phones. Slot machines were dark and quiet. Custodians pushed carts with blue, latex-covered hands, spray bottles at the ready to disinfect anything anybody touches.

Brian Kulpin is a spokesperson for the airport and said by phone that things haven’t been this quiet since the nation’s airspace was closed for three days following the attacks on the World Trade Center and Pentagon in 2001.

“Much quieter than people have ever seen, maybe since 9/11. It is probably the greatest drop in passengers we’ve seen since then, much greater than the Great Recession that we went through.

“And of course, this has dropped off like a stone. The recession was something that took place over time. This is taking place over a two-week period,” Kulpin said. “Typically, at this time of year, as people are returning from spring break, we would see about 9,000 passengers. Today we’ll see 500.”

Domestic air travel in the United States is highly interconnected. Individual airport passenger numbers tend to mirror national trends. Data from the US Transportation Security Agency – graph – Brian Bahouth/The Sierra Nevada Ally.

Economic Impact

Airports are well-documented economic engines. In 2018, EKAY Economic Consultants and the Center for Regional Studies at the University of Nevada analyzed data from both the Reno and Stead airports and the regional economy. Analysts estimated the total economic impact of the airports on the region to be $3.1 billion a year.

According to the study, Reno Tahoe Airport Authority operations and related industries make up somewhere around 11 percent of the Reno region’s gross domestic output.

The study documented that roughly 60 percent of visitors travel to the northern Nevada region by automobile. The remaining 40 percent arrive by air. Aircraft brought more than 4.5 million visitors to the region in 2019.

The baggage claim terminal in the Reno Tahoe International Airport on Monday March 30 – image – Brian Bahouth/The Sierra Nevada Ally

Roughly 3,000 people work at the Reno and Stead airports combined. The airfields’ economic magnetism is evident in the estimate that the airports support nearly 25,000 associated jobs in the region.

Regional Governments Take a Hit

In determining the effect of the airports on regional governments, researchers analyzed property tax payments, sales taxes, business license revenue taxes, gas taxes, and other factors. The airports and related industries spelled more than $50 million a year in various municipal tax revenue spread across a 10 county region to include Washoe, Storey, Carson City, Churchill, Douglas, Lyon, Pershing, Humboldt, Lander and Mineral counties.

The airport is self-supporting. Fees and rents collected from airport tenants like airlines, rental car businesses, restaurants, gaming machines, and gift shops pay to maintain the airport facility and support staff.

The Reno Tahoe International Airport Authority Board of Trustees owns and operates the airport. The city councils of Reno and Sparks, and the Reno-Sparks Visitors and Convention Authority appoint all nine members to the board.

No layoffs are planned at the Airport Authority for now, but Brian Kulpin described the board’s budgeting process moving forward as grim.

“What we’ve done is, we have literally taken a chainsaw to the remaining budget for this fiscal year and to the budget for next fiscal year. We have really, really gone after that to, to cut as close as we can to the bone so we can keep our operation going and not have to pass on charges to the airlines which are already struggling.

“It’s a tough battle, but we’re going to really tighten our belts and try to maintain the staffing that we have in trying to weather this storm,” Kulpin said. “And so, it’ll be a couple of austere years for us at the Airport Authority doing the basic operation to keep us going, but that’s what we have to do to hopefully keep bread on people’s tables.”

The flight departure board at the Reno Tahoe International Airport on March 30, 2020 – image – Brian Bahouth/The Sierra Nevada Ally

Federal Aid

The $2 trillion dollar coronavirus relief package includes $37 billion dollars for grants to help pay aviation industry employee wages. Another $3 billion is allocated for grants to help contractors for the aviation industry. Air carriers have $21 billion available for guaranteed, unsecured loans. The bill stipulates that neither the grants nor loans may be used to compensate corporate shareholders, to include stock dividends.

“We’re studying it (the federal relief package) as we speak,”Kulpin said. “We have a team looking at it right now as to what it could mean for us. But whatever it means, it won’t be enough to recover from the financial hit that we’re taking.

“Passengers translate into money in several ways. For us, they are our key revenue generators, our parking operations, our rental cars, our gaming machines, our stores and our restaurants. Without passengers going through those facilities, we can’t generate funding. And that’s a big blow, not only the passengers, but the money flowing to the airport. We generate $3.2 billion dollars in economic impact for the region per year. So when the airport is not operating like it should, that’s going to be felt throughout the entire region. It’s a huge blow to our region.”

Freight Terminal

The three primary freight carriers in Reno are FedEx, UPS, and DHL. Some 12 million pounds of freight moves through Reno’s terminal every month. Ground transport is closely integrated with air freight activities. Kulpin said the airport’s freight terminal volume is undiminished.

“We have a large cargo operation and that has not been impacted, thankfully, and that’s key for our region’s recovery from COVID-19. Because those aircraft that are flying in, they’re going to be carrying ventilators, test kits, gloves, masks, face shields, everything we need to help defeat COVID-19 here in our community. So that cargo operation is where we’ll put the maximum effort that we can right now to help that go because that’s going to make a difference in our community.”

Cargo continues to move through the Reno Tahoe International freight terminal on March 30, 2020 – image – Brian Bahouth/The Sierra Nevada Ally

The freight side of the airport underlies the region’s quality of life. Air freight provides consumers ready access to products like fresh fish, basic medicines, and overnight delivery of the panoply of products.

And more, what is the value of convenient access to an international airport? Is there an economic value to accurately characterize the utility of air travel?

This Russian cargo plane was in the air freight terminal at the Reno Tahoe International Airport on March 30, 2020. The Volga-Dnepr Group specializes in heavyweight cargo transport. This is one of twelve Antonov An-124s in their fleet. The Ally has learned that the Russian freighter carried machinery from Japan – image – Brian Bahouth/The Sierra Nevada Ally.

For Brian Kulpin and the Airport Authority, passengers support the airport. The future hangs not only on the course of the novel coronavirus and the lifting of nonessential business restrictions but in the nebulous future time when the flying public will feel comfortable in airports and airplanes again.

“It’s important to remember there’s 3,000 people who work at Reno Tahoe International Airport. That’s a lot of people. They work for those rental car outlets, those stores, those restaurants, those airlines, and for the airport authority itself, and those are paychecks that are not out in our community.

“And so it is tough without having those passengers come through, but we do have a mission to meet. If we have to shift that mission more from passengers over to the cargo side, we will, because that’s gonna be one key way they get this region going again.”

Hear an audio report produced in conjunction with KUNR Reno Public Radio.

Brian Bahouth has been a public media journalist since 1994 and has lived in Reno since 2000. He first came to northern Nevada to be news director at KUNR, Reno Public Radio and has subsequently filed scores of reports for National Public Radio, Nevada Public Radio, Capital Public Radio and KVMR in Nevada City, California. He is co-founder of KNVC community radio in Carson City. Support his work.

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