Peninsula Airport Commission Says Cost Cutting Could Help Avoid Deficit This Year
The jury is still out on whether taxpayers will have to step in this fiscal year to keep the Newport News-Williamsburg Airport afloat, but airport officials say the financial situation may not be so dire: they expect to save some money through cost-cutting.
The Peninsula Airport Commission’s recently approved 2025 fiscal year budget had expenses exceeding projected revenue by about $3 million. Commission Chair Lindsey Carney Smith said last month the airport’s unrestricted reserves are about $2.9 million, which would help it sustain operations. But she suggested the airport likely would need financial support from local governments.
During a Thursday meeting, members revealed the airport commission has been spending less money than initially budgeted. Carney Smith noted “it’s going to be close” whether the airport ends up at a deficit this fiscal year.
“We continue to be very conscientious about our monthly cost to the extent that we can cut costs,” she told the Daily Press. “Staff is doing a really diligent job of cutting those costs.”
One of those savings is the airport doing its marketing “in house,” according to Carney Smith. The airport budgeted $338,199 for marketing and advertising but ultimately spent $54,064 over the past fiscal year. During that time, which ended June 30, the airport had a financial shortfall of about $1.5 million — which was less than the $2.1 million expected. Budget documents indicate the airport passed a $8.2 million budget for fiscal year 2025.
Treasurer Jay Joseph said the airport “should have sufficient cash to make it through the next fiscal year. Again, it could be tight. I wouldn’t bank on it necessarily.”
The airport has faced numerous setbacks in recent years, losing traffic to Norfolk or Richmond airports, which are larger and offer more consumer choices. Newport News has seen a sharp decline in passengers — from more than one million travelers in 2012 to about 150,000 in fiscal year 2023. And last year, Avelo Airlines discontinued service from the regional hub, citing “market factors” that exceed the control of the airport or the Peninsula Airport Commission, leaving American Airlines as the only commercial carrier.
The airport’s commission fired Executive Director Mike Giardino last year, hoping different leadership would bring more commercial air service. The Airport Commission is accepting applications through Aug. 11 for executive director.
Thursday marked the first commission meeting after the public release of a consultant’s study suggesting the airport should move away from commercial air service and focus on other operations to remain viable.
The report acknowledged the airport’s financial struggles, reporting that it operated at a loss for 16 of 17 months in a period ending in November 2023, with the total reaching $4.2 million.
During Thursday’s meeting, Peninsula Airport Commission Vice Chair Tommy Garner raised questions about the validity of the study, alleging the results could have been skewed.
Garner claims that Norfolk Airport Authority President and CEO Mark Perryman told him one of the consultants, Swelbar-Zhong Consultancy, had Perryman’s staff crunch Newport News airport’s numbers for the study.
“Perryman said his accounting department did all the work to prepare the financials for Swelbar,” Garner told the Daily Press last month. “Direct statement to me. And that’s when I said, ‘Well, I think that’s unethical. Why would he ask you to be involved if he is the consultant?'”
Garner said if Perryman were involved in preparing the financials, it would be a conflict of interest as the Norfolk airport is a competitor with Newport News.
“The regional study was supposed to benefit the region, with the intent of trying to look at all the air traffic, military bases, all the different airports, but it’s kind of focusing on Newport News shutting down commercial service,” Garner said. “Well, if Norfolk put together the financials that say, ‘Oh, based on your financial status, you should shut down.’ Well, definitely, because then where would the closest airport be? Norfolk, Richmond.”
Norfolk Airport Authority spokesperson Chris Jones provided a written statement from Perryman refuting the claim.
“ The Norfolk Airport Authority did not produce nor provide financial information related to the Newport News/ Williamsburg International Airport to the authors of the recently released Hampton Roads Air Study,” Jones wrote. “Any such assertion is wholly inaccurate.”
According to Jones, Perryman was contacted by William Swelbar — one of the study’s authors — who had questions on certain assumptions the latter made when drafting the document. He said Swelbar wanted to know whether some of his assumptions correctly aligned with standard aviation industry accounting practices. As a member of the study’s steering committee, Perryman directed Swelbar to run his questions past the Norfolk Airport Authority’s CFO. But Jones said that inquiry was general in nature and not specific to any airport.
“The report itself includes citations of where its figures were obtained, and that alone should address any questions as to their sourcing,” Jones wrote. “I’ll also note Mr. Perryman first saw the draft’s preliminary calculations at the same time they were presented to the other steering committee members, including Mr. Garner.”
Swelbar denied that Perryman’s accounting department prepared the financials. He said he merely asked Perryman’s chief financial officer some questions pertaining to airport finance and he stands by the report.
“Newport News has been struggling for 15 years,” Swelbar said of the airport. “None of this should be a surprise to anybody. And they won’t be the last.”
Carney Smith backed accounts from Swelbar and Perryman, saying Swelbar independently prepared his report.
The Daily Press on Thursday asked Garner to reiterate whether he was “sure” the study was skewed or if he merely felt there was enough reasonable doubt considering the potential conflict of interest.
“If it stinks, it stinks,” he replied.
Josh Janney, [email protected]
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