Los Angeles World Airports commissioners reported positive growth Friday for their proposed budget for fiscal year 2024-25, which would represent an increase of $369 million over 2023-24 budget.
During Thursday’s Board of Airport Commissioners meeting, Chief Financial Officer Tatiana Starostina gave her second update on LAWA’s budget outlook for 2024-25. According to her report, LAWA’s revenues are estimated to reach $1.9 billion in 2024, and are projected to grow another 8%, or $146 million, by 2025 — reaching over $2 billion — and outpace projected expenses of about $1.2 billion.
LAWA’s budget for fiscal year 2023-24 was about $1.7 billion.
While operating revenues are expected to grow by about $146 million by 2025 due to higher aviation fees, expenses are also expected to increase by 14%, or $148 million, by that same year, in part due to salary increases, costs related to inflation, higher contractual costs and higher projected activity.
Starostina noted that there are some concerns with expenses increasing, and there are ongoing discussions as to ways to reduce spending in some of these areas of concern.
The spending plan also budgets for about 3,770 vacant positions. LAWA officials said they would be looking to hire more people, and the hope is that by adding to their staff they could look at reducing their contractual costs.
“You can see how your revenues have been changing, and while we are not forecasting all traffic to be fully recovered from COVID-19, our operating revenues are a different story,” Starostina said. “It’s all because of the aeronautical revenues that we generate.”
She noted that aeronautical revenues, such as landing fees and other fees related to airlines, have reached $1.5 billion, and in the coming years it’s looking like that revenue will continue to grow.
Part of the reason why aeronautical revenues are up is because LAWA is in the middle of a capital improvement program to update most of its terminals — and is passing on the cost to airlines, which officials say is something that these companies agreed to.
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The Board of Airport Commissioners is expected to discuss the proposed budget for fiscal year 2024-25 on May 16, when staff will present “near-final revenues and expenses.” Staff would then present the final budget for adoption on June 6.
LAWA, Department of Water and Power and the Harbor Department, which oversees the Port of Los Angeles, have separate budget processes because they are self-funded through revenue they each develop. Though the city doesn’t give them money and does not dictate how each of these departments spend it, the Los Angeles City Council is expected to formally approve their budgets before the 2024-25 fiscal year begins on July 1.