Profit at the Port of Seattle rose sharply in the first half of the year as revenue shot up at Seattle-Tacoma International Airport, the...
Profit at the Port of Seattle rose sharply in the first half of the year as revenue shot up at Seattle-Tacoma International Airport, the Port said yesterday.
The Port’s operating income after depreciation rose 46 percent from the same period a year ago, to $54.9 million in the first half. The Port of Seattle runs both the seaport and Sea-Tac.
The increase was fueled by rising revenue at Sea-Tac as the Port earned more money from parking, car-rental agencies and concessionaires, including Pacific Marketplace in the central terminal, which formally opened in June.
The revenue gain also reflected Sea-Tac’s ongoing $4.2 billion makeover. As new facilities open, their costs increase and are charged to airlines, adding to Port revenue.
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“The airline rates and charges rise to cover the cost,” said Sea-Tac director Mark Reis.
In the first half, airlines were charged $95.4 million to operate at Sea-Tac, compared with $72.5 million in the same period a year ago.
At the same time, Sea-Tac earned $63.4 million from concessions in the first half, a gain of nearly $10 million compared with last year’s first half. The airport also saw a surge in grants and donations.
For the airport, operating income after depreciation rose to $50.4 million in the first half from $33.7 million in the same period last year.
Sea-Tac’s strong financial performance came despite falling traffic at the airport, where airlines cut flights this year.
Alaska Airlines canceled 16 daily flights to eight cities this summer to help curb late arrivals. United Airlines and Northwest Airlines also cut flights this year, the Port said.
There were about 6 percent fewer flights than the Port expected, but passenger totals were off only about 0.4 percent from forecasts because planes are more full, officials said.
That means the Port may not reach its forecast of 2.7 percent growth in passengers at Sea-Tac, said Borgan Anderson, manager of finance and budget for aviation.
However, passenger totals for the first half are up 2.6 percent compared with the year-earlier period.
The traffic decline could affect the Port’s concession income, since fewer passengers would pass through the terminals.
That’s a concern to airlines because they get half of the Port’s concession revenue above a certain threshold. A fall in concession income could hurt airlines and drive their costs up a little.
However, airport director Reis said passengers are spending slightly more than a year ago. Because of that, the Port cut its forecast for the airlines’ cost per passenger to $11.33 for the year, from $11.45 previously.
At the seaport division, a loss in grant funds for security projects dragged down results. Revenue for the seaport, which maintains ocean cargo and cruise facilities, fell nearly 14 percent to $50.4 million in the first half, despite a 28 percent rise in cargo containers passing through.
Factoring out the loss of security-grant money, seaport revenue rose 16 percent to $48.5 million in the first half. The seaport earned $6 million after depreciation in the first half but is forecast to post a loss of $2.2 million for the year, the Port said.
Alwyn Scott: 206-464-3329 or email@example.com