TRANSPORTATION hen Cindy Nichol , director of the Sacramento County Airport System , stepped into her job in October 2018 , Sacramento International Airport was in rapid ascent . Following six years of steady growth , the airport again saw ridership surge . In 2019 , passenger traffic rose by more than 1 million over the previous year , representing a 9.3 percent increase . After the first two months of 2020 , the airport was on track to again clock a 1-million-passenger jump .
Instead , the COVID-19 pandemic grounded much of the airline industry last spring . In April 2020 , the number of passengers plummeted almost 94 percent compared to April 2019 . That severely threatened Nichol ’ s department because passenger volume and services such as parking , concessions and car rentals are directly responsible for 45 percent of the airport ’ s revenue . Nichol says the losses were somewhat offset by a 21.8 percent increase in cargo traffic at SCAS ’ airports , attributable to the surge in online shopping and the demand for quick deliveries . Although some business has returned to Sacramento International relatively quickly compared to other U . S . airports , Nichol says , it closed 2020 with the number of passengers down nearly 58 percent .
Barely surviving a pandemic catastrophe was traumatic , Nichol says . “ It was the hardest thing I ’ ve ever done in my life ,” she says . “ We don ’ t have a backstop . … If we don ’ t cover our costs , we are in default . … The threat was there .”
Unlike most county departments , the airport does not receive money from the general fund — it operates much like an independent business . So
Nichol and her team cut operating expenses by $ 1.5 million by freezing hires and eliminating employees ’ travel budget . And a much bigger cost savings came from a couple of smart financial moves . Nichol , with more than 30 years in the airport business and a master ’ s degree in transportation economics from the Harvard Kennedy School , oversaw two debt-restructuring schemes that will result in tens of millions of dollars in cost savings .
First , the airport was able to refinance $ 80 million worth of debt at a rate of 2.1 percent , which , Nichol says , will save $ 2 million a year through 2041 . A
“ COVID has been horrendous — all of us have suffered losses , including me . But the silver lining for us is that it has given us breathing room so that we can now plan our needed facilities in a logical way and phase development more than we were going to be able to .”
CINDY NICHOL Director , Sacramento County Airport System
second more complex maneuver will save the airport almost $ 2.5 million in fiscal 2021-22 and could ultimately result in much bigger savings .
In May 2020 , the airport received $ 49.9 million from the federal government through the Coronavirus Aid , Relief , and Economic Security Act . Sylvia Ambrogio , the deputy director of finance and administration of SCAS , directed $ 34.5 million to “ defease ” two bonds . “ This is like paying down your mortgage ,” Nichol says , “ but it doesn ’ t just pay debt service , which includes interest , it reduces your principal . So for two fiscal years , we completely eliminated a significant portion of our debt .”
The defeasance eliminated the combined principal of two bonds , which would have come due in fiscal years 2021 and ’ 22 , for a total savings of $ 17.8 million per year . It reduced the interest associated with that principal as well by $ 1.65 million and $ 800,000 , respectively , according to SCAS spokesperson Samantha Mott .
Nichol says she ’ s happy that the savings , plus the remaining $ 15.4 million in CARES Act money , allowed the airport to avoid staff layoffs and furloughs , and she does not anticipate that either will be necessary in the near future . The airport also gave rent breaks to its major tenants , none of whom were forced to close , and deferred the annual minimum payments it ordinarily charges concessionaires . Nichol is eager to get back to work on the ambitious initiatives she launched when she took her job . She points out that the forced break triggered by the pandemic was , in one important way , a blessing in disguise .
“ COVID has been horrendous . All of us have suffered losses , including me ,” she says . “ But the silver lining for us is that it has given us breathing room so that we can now plan our needed facilities in a logical way and phase development more than we were going to be able to .”
Nichol is referring to a project she worked on throughout her first 18 months on the job , the SMF Master Plan 2020 Update , which looks out to 2041 and envisions significant continued growth for the airport .
Always aiming high
The ambition that Nichol brings to her job seems to fit the airport ’ s legacy .
56 comstocksmag . com | April 2021