By James Pilcher
The Cincinnati Enquirer

HEBRON - The Cincinnati/Northern Kentucky International Airport ran its third straight budget shortfall in 2003, nearly $800,000 on a $90 million-plus budget.

The unaudited results, released Monday to the Kenton County Airport Board, are the first time since the early 1970s that the airport has reported such shortfalls between what it budgeted and what it actually took in.

Still, the 2003 shortfall of $792,805 was much smaller than the $3.3 million recorded in 2001.

This time, airport officials say, it was caused by the war with Iraq - which led to airlines cutting flights for two months - and heavy snow at the beginning of 2003. That compares with the previous two years, which can be directly tied to both the Comair pilots' strike of 2001 and the Sept. 11 terror attacks.

"Sometimes you get hit by things you just can't plan for," said Shiela Hammons, the airport's finance director.

The airport never truly runs a deficit, because it must balance its budget either through refunding surpluses to the airlines that use it and either charging those airlines or the airport's own surplus fund for deficits.

To meet legal requirements set out in bond agreements, the airport must charge 25 percent more than it actually needs. Those charges feed the surplus fund.

That account currently stands at $16.6 million, and has been used to cover the difference between revenues and expenses for the last three years, since financially struggling airlines such as Delta Air Lines are in no position to pay such shortfalls.

Airport officials added that the continuing shift from larger planes to smaller regional jets here at Delta's second largest hub is not causing the trend of shortfalls.

Landing fees, which make up a good chunk of airport revenue, are collected by weight of the plane. Delta has been shifting more passengers away from larger jets and onto smaller, more economical regional jets flown by Erlanger-based subsidiary Comair and other regional carriers.

But Hammons says the airport plans for this shift every year - it hiked landing fees by nearly 10 cents per 1,000 pounds for this year's $92.9 million budget.

The Iraq war caused all airlines to cut flights nationally for two months. And the airport spent $1 million more than planned on snow removal in January and February 2003.

Still, the total number of passengers rose to pre-Sept. 11 levels for the first time, and the airport's expenses were well below what was actually budgeted.

"But that still was not enough to offset the revenue shortfalls," Hammons said.

Airport officials say they have budgeted more carefully in recent years to ensure they don't wind up with too large of surpluses. That's so they don't hold onto money that financially struggling airlines could use now.

"Obviously, it was a lot more fun in the old days of surpluses, but now we have to be a lot more stringent in this current reality," airport board chairman John Domaschko said.

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E-mail jpilcher@enquirer.com