A new report claims that maintaining commercial air service at Newport News-Williamsburg International Airport “has proven financially unsustainable” and that the airport must transition to alternative, advanced forms of service if it wants to remain viable.
A Hampton Roads Air Study released Thursday delved into the financial woes of the airport, often referred to as PHF.
“PHF consistently operates at a loss, with expenses far exceeding revenues,” the study says. “This unsustainable financial model highlights the urgent need for strategic changes.”
The study was commissioned by the Hampton Roads Alliance and prepared by Universal Solutions International, Inc. and Swelbar-Zhong Consultancy.
The airport has struggled in recent years, losing traffic to Norfolk or Richmond Airports, which are larger and offer more consumer choices. The Newport News airport has seen a sharp decline in passengers — from more than 1 million travelers in 2012 to about 150,000 in fiscal year 2023 .
The study acknowledges the airport has struggled to attract and retain commercial air service. Last year, Avelo Airlines discontinued service from the regional hub , citing “market factors” that exceed the control of the airport or the Peninsula Airport Commission, leaving American Airlines as the only commercial carrier.
The report notes the airport has faced declining economic impact and significant financial struggles, operating at a loss for 16 of 17 months in a period ending in November 2023, with the total loss coming to $4.2 million. The report says the airport’s loss of commercial air service, coupled with a difficult financial outlook, “highlights the need for strategic change” and that authorities face tough decisions to prevent the airport from becoming a financial burden on Newport News.
“Authorities should consider transitioning PHF to focus on non-traditional sectors such as Advanced Air Mobility (AAM), encompassing both manned and unmanned systems,” the report states. “By leveraging regional strengths and emerging market opportunities, PHF can transform into a hub for innovation and economic growth, ensuring long-term success in the Hampton Roads region.”
The report says this approach would align with broader shifts within the aviation sector, positioning the airport as a center for technological advancement and economic revitalization. It notes how the airport heavily relies on small jets for departures, but that this presents challenges as airlines phase out smaller jets in favor of larger, more efficient models.
While it acknowledges that transitioning from traditional commercial air service to non-traditional sectors would be challenging, the study says the shift is “essential for long-term viability.”
The study describes the airport as a “loss-making enterprise,” heavily relying on one-time capital infusions to maintain liquidity. It argues that discontinuing commercial air service could lead to significant cost reductions and potentially improve the airport’s financial position.
Peninsula Airport Commission Chair Lindsey Carney Smith and Vice Chair Tommy Garner said while they agreed that the airport needs to diversify, they didn’t believe the airport should discontinue commercial service.
“The Peninsula Airport Commission is open to looking at all opportunities for additional air service at the airport,” Carney Smith said. “And when I say all opportunities, that would certainly mean retaining American Airlines, who is currently our commercial air service provider, but also looking to the more non-traditional, progressive aviation/aerospace, unmanned systems opportunities that are coming online across the industry.”
The fiscal year 2025 budget the commission recently approved has expenses exceeding revenue by about $3 million. Carney Smith said the airport’s unrestricted reserves are about $2.9 million and will help it sustain its operation. However, she also said the airport needs to find additional revenue and will likely need some financial support from the city government to buy some time until the airport can secure other revenue.
In an earlier statement released by the city of Newport News, Carney Smith said the airport commission and City Council have discussed improving the airport’s profitability and protecting its long-term economic health.
None of the other Peninsula Airport Commission members nor Newport News Mayor Phillip Jones could be reached for comment.
Josh Janney, joshua.janney@virginiamedia.com
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