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Director: CIRA doing well as business travel slows

Frontier airplane on runway
Central Illinois Regional Airport

While passenger traffic is up 13.6% at the Central Illinois Regional Airport through the first three quarters of the year, airport director Carl Olson said ongoing recovery from the pandemic is not as fast as it was last year.

"CIRA came back in 2021 very quickly, quicker than the other airports in central Illinois, significantly faster. And now they are starting to catch up as our increases are starting to slow," said Olson.

More than three quarters of U.S. airports have lost flights since the pandemic. Airports serving smaller communities have lost disproportionately more flights than bigger city airports. Some, like Dubuque, Iowa have lost commercial service entirely.

But with only two daily flights lost in Bloomington, Olson said the Twin City facility is doing better than most. CIRA now has two daily flights to Atlanta and two to Chicago, down one to each hub.

Olson said there is enough traffic to justify bringing those daily flights back, but airlines can't add them because of a workforce shortage. There are other pressures, too.

"What's hurting us right now is we are starting to see softening of business travel, which came back really well earlier this year. As you get to the end of the year and with inflationary costs, we're seeing the major travel generators slow their business travel down," said Olson.

Some analysts predict the push to cut flights will continue over the next two years. Olson said CIRA is planning for that, but it is well positioned to withstand that pressure. He said the airport has taken steps to diversify revenue streams to lessen reliance on ticket fees.

“We have de-emphasized airline revenue as a total percentage of our operating income because we recognize out of all our revenue streams, that is one of the most volatile. The other thing we've done is we work with airlines closely to make sure they understand new opportunities for them, whether it's Ferrero’ss new investment in Bloomington, or Rivian’s investment in Normal, or the continued vitality of State Farm,” said Olson.

Farm income, property rental, and efforts to enhance cargo carriage all play a part in that revenue diversity he said. Bloomington-Normal air service has fared better than in many cities, Olson contended, because the airport is linked to conditions in the rest of the community.

“The success of CIRA really is directly and completely attributed to the strength and the vibrancy of the Bloomington-Normal-McLean County economy. We have strong stable large manufacturing providers, universities, medical providers, and that creates a need for business travel, which also creates and stimulates an interest in leisure travel,” said Olson.

Through the first three quarters of the year, passenger traffic through the airport was more than 303,000 people. Last year at this time, it had nudged above 266,000 people. CIRA cargo traffic is essentially flat from last year, down 1.4%. But Olson said that is misleading.

“Because we're comparing it to the pandemic e-commerce surge of 2020 and 2021. The fact that we're flat with last year is still an increase over previous years. Interestingly enough, FedEx has become CIRA's single largest employer right now,” said Olson.

As efforts build to create an industrial park in Bloomington-Normal, some economic development officials said rail and air access make airport property an attractive prospect for that site. Olson said those conversations have yet to be had.

“Typically, airports look to lease the ground through a long-term lease, which can be renewed. And that gives the airport authority more control over the future use to make sure that something incompatible, like a cell tower, or a wildlife attraction doesn't get generated on airport property, which could be a concern for aircraft safety,” said Olson.

As flight schedules continue to contract nationwide in the face of potential business slowdowns, Olson acknowledged the risk of triggering a a spiral of higher ticket prices that in turn depress demand and force higher prices.

“That's always a concern," he said. "If you look at the airline industry through generations; the deregulation era, the bankruptcy consolidation era, the high energy price era, you always have that threat. And that's where good planning and good management works to fight through those challenges.”

He said airports control very few of the variables. They just have to stay clean, operate safely, remain convenient, and control operating costs to airlines that find them attractive to fly from.

This week, the airport board also approved the sale of more than $6 million in bonds. The proceeds will pay the local share of the cost of capital project items such as a new airport fire vehicle, new aircraft apron, design work to rehabilitate a runway, and replacement of the roof on the terminal.

WGLT Senior Reporter Charlie Schlenker has spent more than three award-winning decades in radio. He lives in Normal with his family.
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