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Commission recommends 5% cap on airline rates and charges
Summary
At its May 20 meeting the Santa Barbara Airport Commission recommended approval of a negotiated 5% increase in airline rates and charges for FY27, citing passenger growth and a desire to avoid pricing carriers out; the recommendation passed unanimously and will be forwarded for further approval.
The Santa Barbara Airport Commission voted May 20 to recommend a negotiated 5% increase in airline rates and charges for fiscal 2027, saying the cap was intended to preserve airline service while addressing rising costs.
Business manager Jonathan Abad presented the proposed rates and charges, telling the commission that a straight cost-recovery calculation would have produced roughly a 10% increase but the airport and its signatory airlines agreed to cap the adjustment at 5%. "Again, it's a 5% increase from the prior year," Abad said, and he described passenger growth and several capital pressures that motivated the budget assumptions.
The budget materials Abad cited showed 1,480,000 passengers last year (a 4.4% increase year over year) and pointed to major near-term capital needs including terminal improvements, taxiway rehabilitation and JetBridge repairs. Abad said the planned long-term parking project is expected to yield about $1,000,000 in net annual revenue once complete, which will help the airports finances.
Director Hastert framed the 5% cap as a partnership decision with carriers: "By working with our airline partners, capping it at the 5% ... recognizes some of the short one-time changes that we have going on that will hopefully reduce the expenses in the future," he said, arguing the cap reduces the risk of losing service.
Commissioners pressed staff on specific drivers behind the request, including pavement wear from larger aircraft, PFAS testing and remediation costs, and the operational impacts of a recent sinkhole that required temporary barricades. Abad said some projects are FAA-funded Airport Improvement Program work while others will be funded through airport enterprise funds and targeted capital transfers.
A motion to recommend approval of the presented airline rates and charges passed unanimously on the record. The commission's recommendation will be forwarded for any additional city-level approvals required by the procurement and budget process.
The commission also approved the consent calendar and other agenda items earlier in the session; the recommendation on rates is advisory pending any additional city action.
