The question then becomes why does MassPort have all this money to throw away when the T is strapped for pennies?
Data -- Massport makes money -- it receives no direct funds from the Commonwealth.
From the FY 2011 Comprehensive Annual Financial Report (CAFR):
www.massport.com/massport/Documents/.../FY2011_CAFR.pdf
Executive Summary [my edits of format for emphasis and clarity]:
The Authority’s business consists of two distinct operating departments:
Aviation:
1) Logan
2) Hanscom
3) Wocester
and the Port:
1) Conley Container Terminal
2) General Cargo
3) Cruiseport Boston (Black Falcon)
4) Autoport Boston
During fiscal year 2011, the Authority generated approximately $537.6 million in operating revenues from these departments, which represented an increase of $9.7 million or 1.8% compared to fiscal year 2010.
Operating expenses were approximately $524.3 million, an increase of $16.8 million, or 3.3% from fiscal year 2010. Please see further discussion in the MD&A section.
.....
The Authority has no taxing power and is not taxpayer funded. It uses revenues from landing fees, parking fees, fees from terminal and other rentals, revenues from concessions, tolls, ground rents, and other charges to fund operating expenses.
The Authority’s revenues also fund its capital expenditures and include other sources such as federal grants, passenger facility charges (“PFCs”), and customer facility charges (“CFCs”).
The Authority issues revenue bonds which are secured solely by the Authority’s
Revenues, as defined by the 1978 Trust Agreement, the PFC Trust Agreement and the CFC Trust Agreement, respectively.
The Authority’s bonds do not constitute a debt or a pledge of the full faith and credit of the Commonwealth of Massachusetts or of any political subdivision thereof.
Operating Revenues
Operating revenues of the Authority consist primarily of fees, rentals, concessions and operating grants.
Fees and other services (“Fee Revenue”) are comprised essentially of parking fees, landing fees, and container handling fees.
Rental revenues are earned through lease agreements for building and ground
rents across the Authority’s asset base, including Logan Airport, Hanscom Field, Worcester Airport and Port properties.
Concession revenues consist primarily of fees earned from ground services for airport
passengers, including car rentals, taxis, bus services, limousine services, and retail operations. The following table is a discussion of the Authority’s major operating revenues as shown on the Authority’s Condensed Statements of Revenues, Expenses and Changes in Net Assets.
The Authority’s Condensed Operating Revenues for 2011 (in millions)
Operating revenues:
Fees, tolls and other services 276.4
Rentals 174.4
Concessions 65.9
Other, including operating grants 20.9
Total operating revenues 537.6
Note that there is some question about who pays for all of the expenses associated with Troop F of the State Police who are based at Logan
Some other fascinating details taken from the FY 2011 CAFR
Logan:
1) serves the 8th largest domestic origin-destination air travel market in the U.S
during calendar year 2010
2) It is the primary source of the Authority’s revenues.
3) serves the 8th largest O&D market in the United States
4) nine out of ten passengers using Massport’s facilities call the Boston area home or come to the region to visit, vacation or to conduct business
5) the second largest U.S. international gateway airport among non-hub airports based on the number of international passengers
6) no single carrier dominates service and Logan Airport does not serve as any airline’s
hub
a) During fiscal year 2011, the largest airline accounted for approximately 14.5% of total landing fee and terminal rent revenues.
b) In addition, the top three airlines at Logan Airport accounted for 35.5% of its total landing fee and terminal rental revenues.
7) Logan Airport serves the Boston-Cambridge-Quincy Metropolitan Area consisting of Essex, Middlesex, Norfolk, Plymouth and Suffolk counties in Massachusetts and Rockingham and Strafford counties in New Hampshire. According to the Census Bureau for 2009 this metropolitan area (the “Boston MSA”):
a) is the nation’s 10th largest measured by population
b) 9th largest regional economy measured by gross metropolitan product.
8) The strength of a regional economy correlates with the demand for resident airline traffic, as well as business travel by both residents and visitors -- According to
the U.S. Commerce Department’s Bureau of Economic Analysis, in 2009 the Boston MSA a) had personal income that was 11% higher than that of New England
b) and 35% higher than that of the nation as a whole.
c) The Boston MSA’s substantial concentration of universities, colleges, hospitals and medical research facilities results in a greater share of 2010 employment in this sector (20.4%) than the national average (15.0%).
d) Similarly, in the Boston MSA the professional/business services sector accounts for 16.4% of employment compared to a national average of 12.8%.
9) Boston is one of the top-ranking destinations for overseas visitors to the United States ranking 9th in the nation in 2009, just ahead of Chicago. Also, Boston is home to two major
convention centers - the John B. Hynes Veterans Memorial Convention Center (the “Hynes Center”) and the Boston Convention & Exhibition Center (“BCEC”). Boston has been named one of North America’s top 10 convention destinations by Tradeshow Week magazine every year since 2006.
10) Logan Airport ranked 10th among U.S. airports in terms of domestic O&D passengers in the 12 months ended June 30, 2010, ahead of major connecting hub airports, such as Dallas/Fort Worth, John F. Kennedy and Newark Liberty International.
11) In terms of international O&D passengers, Logan Airport ranked 7th, ahead of airports such as Orlando International, Bush Intercontinental and Washington-Dulles International:
a) Nearly 400,000 passengers flew between Asia and Boston in 2010
12) Capital Program -- On February 16, 2011, the Members of the Authority approved its capital program for fiscal years 2011 through 2015 (the “FY11-FY15 Capital Program”). The FY11-FY15 Capital Program represents a comprehensive and coordinated capital improvement and financial master plan for all Authority facilities. The program was developed in order to continue to fund security initiatives and airfield operation enhancements through maximizing:
a) Federal Aviation Administration (“FAA”) and
b) Transportation Security Administration (“TSA”) grant receipts and
c) utilizing a $4.50 Passenger Facility Charge (“PFC”).
d) Also, the program includes the construction of a new consolidated car rental facility specifically financed by a $6.00 Customer Facility Charge (“CFC”).
13) The FY11-FY15 Capital Program includes $1.023 billion of capital projects. Funding for these projects will be provided from Massport- generated funds, FAA, TSA and other grant funding, bond proceeds, PFCs, CFCs and third party or other non-recourse funding sources.
a) FAA’s Airport Improvement Program (“AIP”), which provides Airport and Airway Trust Fund money for airport development, airport planning and noise abatement programs.
b) AIP grant revenue in fiscal years 2011 and 2010 totaled $19.6 million and $31.3 million, respectively. AIP grant revenue represented approximately 87.0% and 91.0% of total capital grant revenue earned during fiscal year 2011 and 2010, respectively.
c) Federal funding totaling of $2.9 million and $3.1 million during fiscal year 2011 and 2010, respectively, for environmental and security enhancements.
d) During fiscal year 2004, the Authority and the FAA executed a Letter of Intent (“LOI”) pursuant to which the FAA agreed to provide approximately $90.8 million in grants over an eight-year period to assist the Authority with its airside improvement program. In fiscal year 2011, the Authority secured $8.6 million in grants under the LOI, which was included in the $19.6 million AIP grant revenue discussed above.
e) During fiscal year 2011, the Authority completed three airport development projects funded by the FAA through the American Recovery and Reinvestment Act (“ARRA”). The Authority received a total of $15.1 million in ARRA funding from the FAA to (i) re-pave Logan Airport’s 7,000 foot runway (Runway 9/27) with environmentally-friendly “warm mix” asphalt which uses 20% less energy to manufacture, (ii) install in-pavement centerline lights at Logan Airport’s Taxiway A to enhance pilot visibility in this area
and (iii) make taxiway improvements at Hanscom Field.
f) Passenger Facility Charge Program -- During fiscal year 2011, the Authority received approval from the FAA to increase the $4.50 PFC collection authorization to $1.4 billion. The projected expiration date for the collection is December 1, 2023.
g) Customer Facility Charge Program -- In fiscal year 2010, the Members of the Authority approved a CFC of $6.00 per day for car rentals that originate from Logan Airport. CFCs and the proceeds from the CFC Bonds are being used to design and construct a Consolidated Rental Car Facility (the “ConRAC”).
So Massport collects from:
people -- PFC, parking
airlines -- rental of terminals, landing fees
concessions -- businesses selling stuff at Logan
buses, limos and cabs -- fee for picking up passengers
advertisers -- all over the walls and on the web for wifi
Financial Highlights
• Logan Airport serviced 28.4 million passengers in fiscal year 2011, a 2.1 million, or 8.0% increase in passengers when compared to fiscal year 2010. Factors contributing to Logan’s passenger growth include the expansion of low cost carrier service to preferred destinations, increased market share from other regional airports, growth in legacy carrier service, and the recovering regional economy.
• The Authority issued $214.1 million of Special Facilities Revenue Bonds which will be used to construct a consolidated rental car facility (“ConRAC”) on Airport property. The bonds are secured by a pledge of $6.00 CFC for each day a customer rents a car originating from Logan Airport.
• The Authority’s net assets grew to $1.69 billion, a $64.5 million or 4.0% increase over last year. Operating revenues exceeded operating expenses by $13.4 million, net non operating revenues were $28.6 million, and capital grant revenue was $22.5 million.
• The Authority also issued five series of revenue bonds in August 2010. The $97.9 million of Series A bonds were issued to fund certain projects within the Authority’s capital program and the Series B, C, D, and E Bonds were refunding bonds issued in the aggregate amount of $326.5 million, generating over $13.5 million in present value savings.
• At the Authority’s request, the Federal Aviation Administration (“FAA”) approved the Authority’s PFC collection authority by an additional $392.1 million dollars to finance in whole or in part eleven additional capital projects.
Leading domestic destinations
Washington D.C.
New York, New York / Newark, New Jersey
San Francisco, California
Chicago, Illinois
Los Angeles, California
South Florida *
Orlando, Florida
Atlanta, Georgia
Denver, Colorado
Dallas/Ft. Worth, Texas
Leading International destinations: