How will mandated federal budget cuts affect small city airports like Savannah’s?

When I wrote my City Talk column for today (Savannah airport business struggling compared to our rivals), I didn’t even know the board of Savannah/Hilton Head International was meeting today. And I didn’t know anything about the report issued last week by the Center for American Progress: Oops, I Lost the Airport; Automatic Federal Budget Cuts Will Wreak Havoc in the Skies.

That sensationalized report was discussed today at the airport board meeting. From the Savannah Morning News, Savannah airport director: Federal cuts won’t force it to close:

The report, issued Aug. 1 by the Center for American Progress, listed 106 airports – including Savannah/Hilton Head International – that it said could be forced to close in 2013 when $1.2 trillion in automatic federal budget cuts become effective.

“Will there be cuts? I’m sure,” [airport executive director Patrick] Graham said. “But you can’t just shut down one of the nation’s major transportation systems. It’s not as simple as closing smaller airports – everything is so connected.”

Having now looked at the Center for American Progress report, I agree with Graham. For the most part.

The report is a partisan but nevertheless appropriate broadside reminding readers about the key role the federal government plays in all sorts of commerce that is taken for granted, about the “fiscal cliff” at the end of the year, and about automatic budget cuts if no deficit deal is struck.

From the Center for American Progress report:

The Federal Aviation Administration will have to slash its budget in 2013 by about $1.35 billion, under across-the-board spending cuts known as “sequestration.” And under the terms of the 2011 law dictating the cuts, FAA officials will be unable to shield air traffic control (or any other FAA-funded service) from cuts. To minimize disruption at major airports, therefore, FAA officials will likely be forced to cut air traffic service at airports where they would have the least impact on the traveling public—the smaller airports.

The crisis facing the Federal Aviation Administration is illustrative of problems every federal agency will face in the coming months, unless Congress finds a smarter way to ease deficits—one that includes a combination of responsible budget cuts and tax increases.

The analysis has a lot of ifs, but the numbers and the methodology are sound as far as I can tell. But they presume a series of worst-case scenarios and even more political dysfunction than we’ve seen previously.

With 785,000-ish enplanements per year, the Savannah airport is the largest of the 106 airports that will be threatened with closure, according to the study.

The key point in my column today was the steep decline in passengers. As recently as 2007, we had over 1 million enplanements per year. Charleston is above its pre-recession peak; Jacksonville is much closer to their peak than we are. And the Savannah airport is still seeing year-over-year declines.

After AirTran stopped serving Savannah in 2008, it became common to hear local commentators cite that as the main — even the sole — reason for the decline. But the numbers never added up — sure, we took a hit, but that wasn’t responsible for all or even most of the 20%-plus decline, which ironically occurred just as the airport expanded the terminal and the parking.

We simply saw a dramatic decline in economic activity in the Savannah area — far steeper than many area leaders wanted to admit — and local economic development folks seemed to waste some precious time assuming that things would soon bounce back to normal. There’s been more urgency over the last year or two, and the airport seems to be really serious about attracting a low-cost carrier. But they might need to cut bigger deals than they’ve been willing to in the past to make that happen.

Interestingly, tourism is booming, which makes the airport numbers even more worrisome.