San Diego International Airport generates over $12 billion in annual economic impact for the region and directly provides over 7,000 jobs. Our organization strives to grow and efficiently manage capacity for future demand, both landside and airside, including international facilities. The Airport Authority’s financial strategy is to implement a Plan of Finance that is flexible, nimble and able to proactively address future changes.
IN THIS SECTION:
- Optimizing Our Facilities
- Enhancing Revenue
- Reducing Expenses
- Driving the Regional Economy Through Small Business
- Planning Ahead
- Additional Social Key Performance Indicators
Optimizing Our Facilities
- Align facilities to meet demand, both international and domestic (Organizational Strategic Plan Initiative, Operations Strategy)
At the onset of the pandemic, the Airport Authority was in the midst of numerous capital improvement projects that would enhance passenger services and airport operations. With economic impacts from COVID-19, the Airport Authority delayed or reduced in scope more than $220 million of these capital projects.
Federal financial assistance came in 2020 when the Airport Authority received $16.3 million in grant funds from the FAA for airport improvement projects (a 17 percent decrease from 2019) and $2.1 million from the federal government for previous capital investments’ interest rebates, (a decrease of 55 percent from the previous year).
In energy savings derived over 10 years by installing LED lights on the airfield
In 2020, the Airport Authority continued to move forward with the planning and design of San Diego’s New T1, formerly known as the Airport Development Plan, which envisions the replacement of the 54-year-old Terminal 1 with a more efficient and modern facility that achieved several major milestones.
To date, the Airport Authority has completed the environmental certification process for the New T1 under the California Environmental Quality Act (CEQA) and hopes to soon complete the National Environmental Policy Act (NEPA) review process with the FAA.
In September 2020, the Airport Authority Board of Directors approved the selection of design-build firm Turner-Flatiron for the design and construction of the terminal and roadways portion of the New T1. This approval launched the New T1 validation team which began work establishing the maximum contract price.
Despite the pandemic, all construction was completed on schedule in 2020 on the critically needed Airport Support Facilities (ASF). The ASF includes the Facilities Management Department, Airline Fueling Operations, Procurement and the Airline Support Building. Another component of the ASF is the underground three-million-gallon stormwater cistern which is estimated to capture 19 million gallons of stormwater runoff annually.
High Pressure Sodium bulbs on the apron were replaced with energy-efficient LED lights which will help the airport save nearly $1 million over 10 years.
Currently being installed is a new battery storage system that will be paired with SAN’s existing on-site photovoltaic (PV) solar system, to reduce the daily peak electricity demand and significantly lower utility demand costs.
In 2021, the Airport Authority celebrated the grand opening of SAN’s new Airline Support Building, a 93,000-square foot state-of-the-art facility. The building consolidates airline belly cargo, ground service equipment maintenance and storage areas for aircraft provisioning items in one energy-efficient, sustainable structure.
These services were originally operated from numerous buildings that were more than 50 years old. The new facility’s location along North Harbor Drive improves access for the public and transport vehicles.
COVID tests provided onsite for passengers from Nov. 2020 – July 2021
When COVID testing sites were less acessible early in the pandemic, the Airport Authority took advantage of an underused space and repurposed a vacant valet parking lot. The Airport Authority contracted with Carbon Health to offer COVID-19 tests for all departing passengers who wished to be tested. The facility offered the polymerase chain reaction (PCR) test for $170 that produced test results in about a day. Between November 2020 through July 2021, Carbon Health administered more than 25,000 tests.
- Attract domestic and international airlines and passengers (Organizational Strategic Plan, Customer Strategy)
- Invest/participate in innovation that improves efficiency or enhances revenue (Organizational Strategic Plan, Financial Strategy)
San Diego International Airport generates $12 billion annually in economic impact and connects the traveling public to destinations around the globe. Air service provides the Airport Authority opportunities to enhance revenue by facilitating travel to and from San Diego which in turn translates to revenue gained while passengers are in the airport and revenue for the community as visitors stay at hotels, dine at restaurants and visit attractions.
Economic impact generated by SAN annually
In 2020, SAN served 16 passenger airlines and three cargo carriers. More than nine million passengers utilized SAN in 2020, representing a 63 percent decrease in passenger traffic; however, the number of aircraft operations only decreased by 41 percent compared to the previous year. Due to international travel restrictions, only three percent of 2020 passenger traffic was international, which decreased by 77 percent compared to 2019.
Despite the COVID-19 pandemic, airlines added service from SAN in 2020 and 2021. In February 2020, SAN had non-stop flights to 71 destinations. In May 2020, airlines had suspended many flights and as a result, SAN had non-stop services to only 27 destinations. As of June 2021, SAN had non-stop services to 68 destinations, having recouped most of the domestic route network and adding new domestic destinations. Due to travel restrictions imposed by other countries that impede American travel abroad and presidential proclamations that prohibit travel between international countries for most non-US citizens, SAN was only able to resume service to Mexico and Japan in 2021.
In February 2021, the Airport Authority Board approved a new Air Service Incentive Program (ASIP) to be more competitive and encourage airlines to launch new routes from SAN. The ASIP provides operational and marketing incentives to support airlines as they launch and grow new markets.
- Invest/participate in innovation that improves efficiency or enhances revenue (Organizational Strategic Plan, Financial Strategy)
In deferred capital projects in 2020 due to COVID-19
The COVID-19 pandemic hit airlines and airports hard as cities and borders closed and people were asked to stay home. In April 2020, passenger traffic at SAN was down 95 percent over 2019. The Airport Authority collects revenue in several different ways, but primarily through services travelers use at the airport such as parking, concessions, and rental cars.
With near-empty terminals, the Airport Authority was quick to implement a Financial Resiliency Plan in March 2020. The plan deferred $220 million in projects, including capital improvements, delayed or reduced non-essential expenditures, delayed non-New T1 and non-mission critical project spending, and implemented a hiring freeze. These measures have kept the Airport Authority operational without having to decrease the workforce, an important goal of the Executive Leadership Team.
Taking advantage of the low passenger volumes in mid-2020, Airport Authority staff fanned out throughout Terminal 2 to install more than 300 energy-efficient LED fixtures. These new fixtures provide up to 60% in energy savings with a return on investment in less than a year. Maintenance costs are also reduced with LED lighting lasting up to 50,000 hours compared to fluorescent lighting at only 10,000 hours. Plus, LED lighting provides much more even light distribution than fluorescent lighting, in a very clean, modern looking fixture.
Driving the Regional Economy Through Small Business
- Provide Opportunities for Small, Local, Disadvantaged, and Veteran Owned Businesses (2019/2020 Sustainability Report)
- Execute regional engagement and education plan to clearly communicate SAN’s role in economic growth (Organizational Strategic Plan, Community Strategy)
The Airport Authority’s Small Business Development (SBD) program works with small, local, disadvantaged, and veteran-owned small businesses to provide them with the resources and knowledge to apply for eligible certification and ultimately successfully compete for Authority contracts. Creating opportunities for underrepresented businesses of all sizes and workers of all genders and ethnicities has been the goal of the SBD program since 2003.
Throughout the pandemic, the SBD remained committed to its core mission of supporting small businesses by shifting all in-person educational resources, workshops, and training to a virtual format.
Spent on local businesses and suppliers in 2020 despite the pandemic
Online business tutorials and monthly virtual workshops continued throughout the year helping small businesses stay informed about labor compliance, the certification process, and bonding for small businesses. Review of businesses applying for certification also shifted to a virtual platform.
The SBD provided information via email about federal, state, and county small business COVID-19 relief programs including the CARES Act Paycheck Protection Program, the Revolving Loan Fund, and the Economic Injury Disaster Loans.
The SBD’s annual “Meet the Primes” business networking event was hosted virtually. More than 400 small and disadvantaged businesses logged on during two educational sessions to learn about doing business at SAN from representatives of the Airport Authority, public agencies, and construction and concessionaire primes.
The SBD receives federal funding to establish an Airport Concessionaires Disadvantaged Business Enterprise (ACDBE) program and develop triennial goals for participation in airport concessionaire opportunities. The SBD participated in an “ACDBE Goal Methodology Stakeholder Meeting” to develop triennial goals for both Non-Car Rental Concessions and Car Rental Concessions.
The SBD also participated in a national Airport Rental Car Supplier Diversity Outreach event along with 70 other airports across the country to inform ACDBE certified businesses about contracting opportunities and supplier diversity certifications in San Diego and airports in Los Angeles, Sacramento, and San Francisco.
The SBD hosted a virtual Veteran Appreciation Panel to say “thank you” and inform attendees about new business opportunities and programs for veterans.
Despite the setbacks from the pandemic in 2020, the Airport Authority spent approximately $131 million on local businesses and suppliers. This cost represents a three percent increase from the year before.
- Ensure Plan of Finance that is flexible, nimble and able to proactively address future changes (Organizational Strategic Plan, Financial Strategy)
- Develop business plan that evaluates margins on non-airline operating revenue streams (Organizational Strategic Plan, Financial Strategy)
- Evaluate multiple funding methods for the Capital Program (ADP & CIP) (Organizational Strategic Plan, Financial Strategy)
- Implement a sustainable 20 year capital plan (Organizational Strategic Plan, Operations Strategy)
- Increase critical facilities resiliency to storm events (Sustainability Management Program, Water Stewardship Plan)
Received in federal COVID relief funding in 2020
The San Diego County Regional Airport Authority’s financial strategy throughout COVID-19 and into the future is to implement a plan of finance that is flexible, nimble, and able to proactively address future changes. In June 2021, the Airport Authority Board approved a $296 million operating budget and a five-year, $3.6 billion capital project spending plan.
Through a strict cost-cutting program in which all airport departments participated, and COVID-19 federal relief funds, the Airport Authority has been able to maintain 24/7 operations while also assisting tenants with hardships.
The Airport Authority received $91.2 million in the Coronavirus Aid, Relief, and Economic Security (CARES) Act funding which went towards Airport Authority operational needs. The Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act provided $22.9 million in total funding, of which $2.75 million was used to provide relief for airport concessionaires. The Airport Authority anticipates receiving $80-85 million in additional funding from the American Rescue Plan (ARP) Act of 2021 which will also go towards operational needs and concessionaire relief.
As an FAA-certified airport, SAN is required to keep and maintain an Airport Emergency Plan (AEP). SAN’s AEP outlines the procedures the airport must follow to plan for and respond to emergencies, including aircraft incidents, bomb threats, fires, and natural disasters.
In 2020, SAN conducted planning for the FAA-required mass-casualty field exercise that was scheduled to take place in April 2020. Due to the pandemic, the exercise was postponed until January 2021. The Airport Authority Operations team conducted the exercise with airport stakeholders including Port of San Diego Harbor Police, San Diego Fire & Emergency Management, American Medical Response, and the FAA. The exercise simulated a plane accident on the airfield to which the participating stakeholders responded. A debrief was conducted immediately after the exercise where stakeholders provided lessons learned.
Additional Social Key Performance Indicators
San Diego International Airport recovery and what to expect
As our region recovers, the number of passengers traveling through SAN continues to increase. Crowds are most evident in our aging Terminal 1. We traveled curbside to gate to show you what to expect and how to streamline your journey before boarding.