Guam Airport Continues To Be a Low-Risk Auditee
Receiving a clean opinion from the Independent auditors Ernst & Young LLP, the Antonio B. Won Pat International Airport Authority qualifies as a low-risk auditee for the second consecutive year, according to the Office of Public Accountability.The airport closed FY 2016 with an increase in net position (net income) of $8.6 million from $13.1 million in FY 2015,” OPA said in a report released Tuesday.
OPA attributed the increase to the $14.2 million received in capital grants from the federal government. “Were it not for the capital grants, the airport would have had an operating loss of $5.7 million, in part due to the $3.6 million increase in depreciation and amortization to $27.8million,” the report said.
The key highlight to the airport’s 2016 fiscal performance was the authority's ability to achieve a 1.75 debt service coverage over the 1.25 debt service requirement under the 2013 GIAA Revenue Bond Indenture.
“That ratio is a true reflection of our strong fiscal performance and adherence to our fiduciary responsibilities. Our focus for Fiscal Year 2017 is moving aggressively forward with our capital improvement projects,” Charles H. Ada II, airport executive manager said.
Ada said most notable of the authority’s capital improvement program is the third Floor Concourse Isolation Project, a permanent solution to the TSA mandate to separate arriving and departing passengers and finally eliminate the temporary partitions that run through the existing concourse.
Another significant project is the completion of the Hold Bag Screening Relocation project which would relocate the TSA screening pods behind ticket counters that would facilitate passenger processing and recapture the ticket lobby floor areas, and tripling capacity in this area.
“Other projects include a new facility for our Aircraft Rescue and Fire Fighting crew, a new cargo apron adjacent to the integrated cargo facility and many other upgrades, improvement and enhancements. "We are committed to aggressive marketing to grow our business and will continue to remain financially prudent to safeguard Guam’s most valuable asset to our island’s tourism-driven economy," Ada said.
Other highlights from the OPA report are as follow:
Passenger enplanements for FY 2016 increased by 4.8% from 1,692,943 in FY2015 to 1,774,590 in FY2016. The increases can be attributed to the 35.2% increase in Korean visitors reported by the Guam Visitors Bureau (GVB) in FY2016. The proliferation of Low Cost Carriers, Jeju Airlines, Air Busan, Jin Air and T’way Air, along with Korean Airlines accounted for 32.9% of visitors. GVB also reported an 11.4% of growth in the China market. These markets were serviced by Eva Air and China Airlines via Taiwan, United’s direct service to Shanghai and a series of charters operated by Dynamic Airlines out of secondary cities such as Guangzhou, Chengdu, Dalian, Nanjin, Shenyang and Zhengzhou. Cebu Pacific’s entry into the Guam market in March 2016 was enthusiastically received and provided a third, lower cost option for direct service to Manila. Cebu Pacific increased seat inventory by 820 seats weekly to Manila. The trend of low cost carrier operations on Guam is anticipated to increase with continued aggressive route development programming throughout FY2017.
In FY 2016, the authority increased operational revenue and decreased operational costs. The airport ‘s operating revenue increased to $65.6M, compared to $64.2M in FY2015. This can be primarily attributed to increases in revenue from facility and system usage charges, and concession fees from food and beverage and car rentals that increased proportionately with the growth in passenger traffic in FY 2016. Concurrently, operating costs decreased by $936K in FY2016 due to decreases in contractual services and personnel services combined with decreased power costs and lower fuel surcharges assessed in FY2016, along with fiscal management of contracted engineering services required under the $167M Capital Improvement Program underway in various phases of completion at the Airport. The Authority ended FY 2016 with a 2.7% increase in net position, up to $320.6M from $312M in FY 2015.
Click here to see OPA’s full report.