General Business

Port Authority Releases Dismal Financial Results

COVID-19 Related Volume Decline Causes Single Worst Quarter on Record

Today, the Port Authority of New York and New Jersey released its six-month financial results which revealed an approximately $777 million decline in revenues through June 30, 2020 as compared to the agency’s budget, with additional losses against 2020 Budget expected through the balance of the year. Since the full force of the Covid-19 crisis started in March, the agency’s revenue loss has averaged $240 million per month as compared to budget. Based on these results, together with the forward-looking forecasts, the Port Authority continues to project a $3 billion loss in revenues for the 24-month period ending March 2022.

“Due to the global pandemic, Port Authority revenues were down nearly $800 million just through June of this year – an unprecedented number for this agency,” said Chairman Kevin O’Toole. “This region has been hard hit by the pandemic, and the Port Authority was not immune. Without federal assistance, the Port Authority and the region will be forced to feel the weight of this loss for years to come.”

“The Port Authority’s second quarter financial performance is the worst downturn in the Port Authority’s recent history – perhaps in its entire history, and certainly since World War II,” said Executive Director, Rick Cotton. “This decline was completely driven by revenue losses resulting from the precipitous decline in volumes at the agency’s facilities across the region. We continue to tirelessly advocate for federal aid to offset the damage that the revenue loss will inflict on the agency’s Capital Plan.”

Throughout the Covid-19 crisis, the Port Authority has kept all of its facilities open and operating to get necessary food, fuel, and medical supplies into the region and to get essential workers safely to their jobs and back home. But the drop in activity at those facilities is staggering.

At the nadir of the crisis in mid-April 2020, airport traffic had fallen over 98 percent from that same period in 2019; PATH commuter rail ridership dropped 94 percent; on the bridges and at the tunnels auto traffic declined by 64 percent and truck traffic by 36 percent. This collapse in traveler volume continues to produce enormous revenue declines for the agency, with current estimates showing the Port Authority will have a reduction in revenue of approximately $3 billion due to the coronavirus crisis. The outlook for the aviation sector has worsened in recent weeks given the explosion of Covid-19 cases across the country and the impact on air travel.

Staff have identified roughly $200 million in operating savings from the 2020 Budget. The Port Authority continues to examine operating costs including potential incremental costs necessary to address Covid-19 operating protocols as activity increases.

As a result of these losses, the Port Authority has called on the federal government to provide the agency with $3 billion in direct financial assistance to avoid the impact of sharp revenue losses to the agency’s critically important capital construction projects.

To access more business news, visit NJB News Now.

Related Articles: