ORLANDO, Fla. — Florida’s gradual move to a new normal could take years to resemble that of pre-COVID times, some predict.
Orlando International Airport never shut down, but flights dwindled dramatically.
Operations at the airport are down 98 percent, with just a fraction of the 25,000 workers still on the job compared to the peak of normal times.
Shutdowns and safer-at-home orders quickly shuttered lives along with the theme parks, restaurants, and hotels where hundreds of thousands of Central Floridians work.
Florida Chief Financial Officer Jimmy Patronis estimates the state lost more than $700 million in sales tax revenue in the month of April alone, with a ripple of potential consequences for cities and counties.
The visual seen throughout the now-bare terminals at Orlando International Airport can be striking. It can also be a window into the wider effects of the coronavirus.
According to a 2019 FDOT report, Florida Statewide Aviation Economic Impact Study, MCO supported more than 343,000 jobs, creating a more than $41 billion economic impact to the region.
This year, 2020, was supposed to be the year for Central Florida, on the brink of surpassing 75 million visitors in our region.
“First part of the [fiscal] year starting in October was gangbuster,” Orange County Comptroller Phil Diamond said. “We were on track to set a record.”
Then the world in 2020 suddenly stopped.
Few Rides, Fewer Dollars
“Now I’m sitting here out of desperation,” said Albert Fairley.
We met Fairley sitting in his SUV in a lone shaded spot on the outskirts of Orlando International Airport.
The father of a 3-year-old and 6-year-old is trying his best to make a living as a Lyft driver. The large, open parking lot filled with a fraction of the usual for-hire drivers shows you how real the impact of the coronavirus has been.
Fairley said in good times he could have 40-50 trips in a day. Airport trips are especially good, with rates ranging above $60.
However, on Tuesday afternoon in a span of several hours, he had made just a single trip totaling $7.55.
“It’s nothing basically,” Fairley said. “Bill collectors don’t know that and they keep hounding you and stressing you.”
Tourists and trips are few and far between at this point.
More than 122 airplanes are parked at spots across Orlando International Airport, parked with no place to go anytime soon.
The coronavirus forced airlines across the globe to ground more than 16,000 airplanes.
“The airline industry has never been through anything like this, it’s completely unprecedented,” said Paul Hartshorne Jr., a veteran commercial airline flight attendant and member of the Association of Professional Flight Attendants.
U.S. airlines have cut their schedules 70 percent to 80 percent while collectively putting tens of thousands of employees on leave. That includes pilots, flight attendants, ramp and gate agents, and others.
“It’s a different world, you’re fearful for your safety, but also fearful for the future of your job,” Hartshorne said.
Airlines themselves are bracing for long term adjustments because of the coronavirus, opting to keep shares of their fleet permanently grounded, reducing future flight schedules, and rolling out policies that include enhanced cleaning procedures and requiring employees and passengers to wear masks and face coverings.
"In March it just started to slide and April, it was off the cliff"
On any given day before the spread of the coronavirus, you could watch as a dozen jumbo jets from Europe and elsewhere landed at Orlando International Airport, bringing thousands of international tourists to Central Florida theme parks and destinations.
The flight boards still show the international flights that haven’t landed in more than a month. In fact, most scheduled flights haven’t.
Airline cut and canceled hundreds of daily flights at Orlando International Airport and it’s noticeable.
“In March it just started to slide and April, it was off the cliff,” said Phil Brown, executive director of Orlando International Airport. “When you have 90 percent reduction in activity it’s pretty noticeable.”
Months ago they had predicted more than 75,000 passengers would be arriving and departing on Monday, May 4. In reality, the actual count was closer to 4,800.
Wait times at TSA security checkpoints are nonexistent.
In April 2019, TSA agents screened an average of 2.3 million people every day at airports across the U.S. In April 2020, that number plummeted to an average of 106,000 people per day.
This is what it looks like to have the fewest flights in America in 26 years.
“Now we’re looking at an entirely different situation,” Brown said. “It’s changed the focus, not only at the airport, but the entire Central Florida economy.”
Why What Happens at MCO Matters
The airport is an economic thermometer of sorts. Fewer flights and passengers at MCO mean fewer people spending money in theme parks, hotels, and restaurants across Central Florida. That means less money being spent, less revenue being generated, and more questions about what government services and programs may have to be reduced or cut as a result.
“We’re doing those belt tightening things at this point,” Orange County Mayor Jerry Demings said.
Mayor Demings said recently while anticipating a decline in revenues, he has given guidance to county department leaders to expect to potentially not be able to hire for certain jobs and to plan for 0 percent pay increases for non-contracted employees.
“It is unlikely we’ll fully recover during this fiscal year or calendar year in question, so we will see the most significant impact, not in fiscal year 20-21, but fiscal year 21-22,” Demings said.
There is optimism however in the county’s “healthy reserves” of hundreds of millions of dollars, although it is not clear the total financial cost the coronavirus will have on cities and counties.
Orange County Comptroller Phil Diamond says the county’s budget relies heavily on tourist spending, who contribute to various sales tax and tourist development funds.
“Before the pandemic hit, tourists were probably paying about half of the sales tax. So if you take away tourism, you take away probably half the sales taxes that would have come back to Orange County,” Diamond said.
Fewer Tourists, Fewer Dollars
“Over 70 percent of our state’s revenues come from sales tax,” said Jimmy Patronis, Florida’s Chief Financial Officer. “We had the performance in January and month of February where sales tax revenues were trending ahead of forecasts, but as we got into March we saw the tumbling effect. With the closure and shutdown in April, we’re see sales tax projections of a loss of close to $700 million, and it’s incredibly concerning for the state’s current budget year.”
CFO Patronis said the revenue loss is impacting services and programs approved by the Legislature for the current budget set to end in June, and may have to be covered by funds in the state’s reserves.
A bright Walt Disney World ad over an empty baggage claim area at Orlando International Airport. (Greg Angel, Spectrum News)
There is currently $33 billion in the state’s treasury, of which $6 billion was provided by Congress through the CARES Act. That latter funding is meant to support costs in K-12 and higher education, Medicaid reimbursement, as well as $4.6 billion for non-budgeted COVID-19-related expenses.
One of the most significant ways tourists provide sales tax revenue for state and local governments is through hotel stays.
Data released by VISIT FLORIDA, the state’s tourism marketing agency, estimates hotel demand is down 76 percent.
“You also have hotels which are down $1.5 billion, so if nobody is staying in hotels, there’s no sales tax paid for room nights, and with no rooms occupied, they’re not going to go to restaurants. So there’s the compounding effect,” Patronis said.
If tourists aren’t staying in hotels and visiting restaurants, they’re likely not traveling through the airport, meaning they’re not indulging on potential purchases on site at the many third-party operated stores and restaurants at MCO.
“At normal times there would be a line an hour long,” said Jay Kelly.
The Economic Domino Effect
Kelly has worked as a full-time barista for three years at the Starbucks at MCO, which is operated by third-party HMS Host.
Last week Kelly said he worked just 12 hours.
“There was nothing,” Kelly said. “We had like three or four people, that’s it.”
After having his full-time hours cut to 12 hours, this week Kelly said he’s not on the schedule at all. Evaporating work is making it hard to pay the bills.
As Kelly’s hours were getting cut, he watched as the majority of his 850 coworkers at third party restaurants around the airport were simply told not to return.
"All of That Has Evaporated"
Concessions, parking, and rental cars are the main ways of how the airport keeps the lights on and people employed.
Phil Brown, executive director of Orlando International Airport, estimates rental cars earned the airport approximately $100 million a year.
With more than 18,000 parking spots across property, MCO can earn upwards of $70 million a year on parking fees, but that too is expected to drop dramatically. Brown says just 10 percent of those spaces are currently being used, leading the airport several weeks ago to close the north side economy lot and Terminal C parking garage.
The Orlando International Airport's tower stands watch over one of many largely empty parking garages. (Greg Angel, Spectrum News)
The vendors renting the shops and restaurants around the airport also bring another $50 million to $60 million.
“All of that has evaporated,” Brown said.
Airport leaders have negotiated with vendors and airlines on foregoing payments in the interim, and figuring out how long-term changes will alter revenues going forward.
While the Greater Orlando Aviation Authority is a governmental entity, which operates Orlando international and executive airports. It is a governmental enterprise that has to be self-sustaining. It does not receive any taxpayer support or funding.
“It causes what I have to think about going forward,” Brown said.
Not just this year, but years ahead.
"I Think it will Take Us 5 Years"
The start of the year came with a prediction that by the end of 2020, MCO could have seen nearly 53 million visitors, a new record.
It is a level that Brown predicts may not be seen again for five years. He bases that prediction off of his experience leading the airport during the Great Recession some 10 years ago.
Corona Changes for Terminal C
The constant growth in passengers and flights are the very reasons why the airport authority started the nearly $3 billion Terminal C project.
The coronavirus has now pushed back completion to February 2022 and is forcing redesigns for cost savings.
“That’s not the best result, but that’s a cost we can forego at this point,” Brown said.
Some of the redesigns include pulling back on the number of gates being built, and holding on plans for a tram-style people mover.
“For the now, it’s basically managing your cash, that’s what it’s going to be for the next several months, managing your cash, sustain that so you can meet your obligations that are not going to change,” Brown said.
Cuts Across U.S. Airports
Airport leaders have found simple ways to cut costs the best they can, primarily through reduced energy consumption. The budget before the crisis was $593 million, but considering operations and debts, the airport is still burning through $1.4 million per day.
Orlando International Airport is joined by a long list of airports across the U.S. seeing significant impacts from the viral pandemic. Los Angeles, Atlanta, New York, Chicago, and other major cities are seeing a more than 90 percent drop in business.
The U.S. Department of Transportation issued $10 billion to airports across the U.S., of which Orlando International Airport received more than $170 million. While the funding will help the airport offset impact costs, it will also require GOAA continues to employ the 850 people who work directly for the airport.
Rebounding for the Future
The challenge now for the state’s busiest airport in terms of passengers is finding ways to defend against future challenges of this kind.
The theme parks and destinations will continue to make Central Florida a draw for people, but Brown said the region can be a draw for products, manufacturing, and the development of a cargo hub.
Brown points to the vast amount of undeveloped land surrounding the runways and proximity to major interstates, rail systems, and Port Canaveral.
According to Florida Department of Transportation, in 2017 Florida ranked second in the nation in terms of tonnage imported into the U.S. by air from international locations.
What is the New Normal?
Any cargo expansion is likely years in the making, but Brown says he has to remain focused on the now and the future.
The future for many can be hard to precisely predict, although most anticipate lasting changings.
Check-in counters at MCO now feature plexiglass shields to protect passengers and agents. There are sanitizer stands and caution signs throughout the terminals.
Some in Congress and within the airline industry are further pushing measures that may include TSA screening not just bags, but passengers’ temperatures. In an effort to rebuild confidence in flying, airlines are doubling-down on efforts and messaging on in-flight cleaning procedures and requiring the use of masks in flight.
“This one took the world by storm, so I think people are going to be more conscious about congregating in close proximity, especially if you don’t know the person or where they’ve been,” Brown said.
No matter the future precautions or imprecise predictions, one truth remains: many in Central Florida are ready to get back to the life we once had.
“We’ve got our back against the wall, but we’ve got to keep going and hopefully get better since they start opening up,” Albert Fairley said.
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