Editors Note: The Pandemic has had a deleterious effect on The Port Authority’s financial performance over the past quarter, and both the operating budget and the capital budget are affected. The operating budget by the continuing diminishing travel demand and reduced economic activity which affects both airport revenues and bridge and tunnel revenues; and the capital budgets because the cash layout to underpin the borrowing is not there. To save the capital projects which are listed below, the Port Authority is asking for a 15% investment by the Federal Government against the total estimated cost of $20 Billion dollars.
The following two articles paint a picture of diminished financial results and the need of direct financial support from the federal government to support the capital projects.
As announced in a July 28th speech and reported in NY Crain’s blog, The Port Authority of New York and New Jersey said it has had its worst quarter of its worst year ever, recording an approximately $777 million drop in revenues in the first half of the year so far, with losses accelerating between late March and June.
The agency forecasts additional losses through the remainder of 2020, it said in a release Thursday, potentially losing $3 billion in revenue by March 2022.
“The Port Authority’s second quarter financial performance is the worst downturn in the Port Authority’s recent history – perhaps in its entire history, and certainly since World War II,” said Executive Director, Rick Cotton. “This decline was completely driven by revenue losses resulting from the precipitous decline in volumes at the agency’s facilities across the region. We continue to tirelessly advocate for federal aid to offset the damage that the revenue loss will inflict on the agency’s Capital Plan.”
The losses came from precipitous drops in traffic and passenger travel as New York and the region went into shelter-in-place as the COVID-19 pandemic spread.
At the peak of the city’s COVID-19 crisis in mid-April, airport traffic had fallen over 98 percent compared to that same period in 2019 according to the Port Authority, which manages LaGuardia, Kennedy, and Newark airports, in addition to the area seaports, bridges, and tunnels.
PATH commuter rail ridership fell 94 percent; vehicular traffic on the bridges and in the tunnels dropped by 64 percent and truck traffic by 36 percent.
“This collapse in traveler volume continues to produce enormous revenue declines for the agency, with current estimates showing the Port Authority will have a reduction in revenue of approximately $3 billion due to the coronavirus crisis. The outlook for the aviation sector has worsened in recent weeks given the explosion of Covid-19 cases across the country and the impact on air travel,” the Port Authority said in the release.
“The Port Authority’s second quarter financial performance is the worst downturn in the Port Authority’s recent history – perhaps in its entire history, and certainly since World War II,” said Executive Director Rick Cotton, who also contracted COVID-19 in March and recovered. “This decline was completely driven by revenue losses resulting from the precipitous decline in volumes at the agency’s facilities across the region. We continue to tirelessly advocate for federal aid to offset the damage that the revenue loss will inflict on the agency’s Capital Plan.”
The Port Authority is asking the federal government for immediate and direct help to the tune of $3 billion — “to avoid the impact of sharp revenue losses to the agency’s critically important capital construction projects.”
