HomeMy WebLinkAboutIR 0737INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-0737
To the Mayor and Members of the City Council
August 29, 2023
Page 1 of 2
SUBJECT: FY2024 DFW INTERNATIONAL AIRPORT BUDGET
Dallas Fort Worth International Airport (DFW) is requesting that the Owner Cities of Dallas and Fort
Worth approve its fiscal year (FY) 2024 Budget. The 1968 Contract and Agreement between the
Cities of Dallas and Fort Worth requires that both Owner Cities approve DFW's annual budget. As
a reminder, the City of Fort Worth does not pay for any of the costs of DFW Airport and has no
liability for repayment of the Airport's debt obligations. This document summarizes the major
components of the DFW Airport's FY24 Budget. The FY 24 Budget Book accompanies the
resolution scheduled for council consideration at the September 12 City Council Meeting.
Summary
The FY24 Budget demonstrates DFW's resiliency and continued strong growth with record
passengers, non -airline revenues, and net revenues to the DFW capital account. It also reflects
the current economic reality of inflation and a tight labor market in almost all areas. The FY24
Budget is based on the terms of the new Use Agreement which impacts cost allocations and how
rates and charges are established. Also, DFW used its remaining $100 million of Federal Relief
Proceeds (FRPs) in FY23 so there are no FRPs left to offset airline payments to DFW in FY24.
Since the negotiated new Use Agreement dictated a new business model and there were no more
FPRs to subsidize airline cost, management's focus during budget development was to ensure that
the total cost per enplanement (CPE) in FY24 was as close to, or lower than, the amount negotiated
with the airlines. The following table compares airline cost and CPE as negotiated as part of the
Use Agreement (i.e., the Financial Plan) for FY24 and the FY24 Budget. It also shows that
management's budget goal to reduce CPE was attained.
Financial FY24 Variance
Plan Budget S %
Airline Cost (Ms) $607.9 $613.3 S5.4 0.9%
Cost per Enplanement S14.72 $14.68 -S0.04 -0.3%
DFW continued growth is due primarily to increased air service provided by American Airlines.
• Passengers are budgeted at a record 81.6 million in FY24, a 2.6 million (3.2%) increase over
the FY23 Outlook and 11.4% higher than FY19.
• Non -airline revenues are budgeted at a record $520.4 million in FY24, a $20.2 million (4.0%)
increase over the FY23 Outlook and 30.3% higher than FY19.
• Non -airline net revenues (i.e., profits) are budgeted at $229.9 million in FY24, a $13.1 million
(5.4%) decrease from the FY23 Outlook and 50.9% higher than FY19. The decrease is due
primarily to the terms of the new Use Agreement.
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-0737
To the Mayor and Members of the City Council
August 29, 2023
Page 2 of 2
SUBJECT: FY2024 DFW INTERNATIONAL AIRPORT BUDGET
• Net Revenues transferred to the DFW capital account in FY24 are budgeted at a record
$120.7 million.
The FY24 Expenditure Budget is $1.243 billion, a $78.6 million (6.7%) increase from the FY23
Outlook.
• The FY24 Operating Expenditure Budget is $672.4 million, a $48.7 million (7.8%) increase
from the FY23 Outlook due primarily to costs related to increased passengers, fixed contract
increases, inflation in service contracts, parts, utilities, and technology investments.
• The FY24 Debt Service Budget is $570.8 million, a $29.9 million (5.5%) increase from the
FY23 Outlook primarily due to the issuance of new debt in FY23 and FY24.
• Airline cost and airline cost per enplanement (CPE) are budgeted to increase by $139.3 million
(29.4%) and $2.81 million (23.7%) from the FY23 Outlook, respectively, largely because $100
million of FRPs were used in FY23 to reduce airline costs. Without FRPs, airline costs and
CPE would have increased by 6.8% and 1.9%, respectively.
The DFW Board of Directors approved the FY 2024 budget in the amount of $1.243 billion on
August 10, 2024. The FY24 Budget request from the Cities of Fort Worth and Dallas is the approval
of a $1.253 billion budget that includes $10 million of contingency outside the airline rate base. This
contingency may only be used if approved by the DFW Board of Directors. The use of contingency
outside the rate base has been requested by DFW and approved by the Cities for over a decade.
Annual Expenditures (in Millions) FY24 Budget
Operating expenses $672.4
Gross debt service 570.8
Total expenditures budget within rate base $1,243.2
Board contingency outside rate base 10.0
Total budget with contingency $1,253.2
If Council Members have additional questions, please call Chris Poinsatte, DFW's Chief Financial
Officer, at 469.358.3678.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS