Sinking revenues may force Massport to slash jobs at Logan

By Frank Phillips, Globe Staff, 10/4/2001

The Massachusetts Port Authority, faced with plunging revenues at Logan
International Airport since the Sept. 11 terrorist attacks, plans to lay off
at least 15 percent of its 1,200-person workforce and severely cut ongoing
projects, two authority sources said yesterday.

According to a financial plan obtained by the Globe, Massport officials now
predict Logan's revenues this year will drop at least $41 million, and
perhaps as much as $71 million, because of a dramatic reduction in aviation
activity.

Massport's seven-member board will hold an emergency closed-door session
next week to determine how to start slashing the $245 million operating
budget.

''The events of September 11th have had a profound effect on Massport's
finances,'' the recovery plan states, detailing the financial troubles that
have suddenly engulfed the embattled authority, which also operates the Port
of Boston. The document has been distributed to board members and the
investment community, which holds the authority's bonds.

The plan offers a number of options for the board to consider, but authority
officials say the scope of the cuts could be broad, and layoffs - the first
in the agency's history - appear almost certain.

Another option the board will consider is delaying the planned reopening of
a revamped Terminal A.

''Everything is on the table,'' said one of the Massport sources.

The plan would cut at least 15 percent of the work force, or about 180 jobs.
The private sector at Logan - from airlines to rental car companies to
concession operators - has already laid off 930 of its 16,000 workers at
Logan.

The financial crunch comes as the airport faces huge capital costs to
improve security following the terrorist attacks on the World Trade Center
and the Pentagon. The installation of cameras and other measures are planned
in the areas the authority controls.

The eventual price tag is still unclear because federal aviation officials
have yet to finalize long-term security requirements, and it is not certain
what federal assistance may be available for the improvements.

The fiscal plan also proposes revenue increases to offset the losses. That
would include parking fees and leases and rents to airlines, rental car
agencies, cargo operators, and concessions, but no details were provided.

The fiscal problems add another burden to Massport, which has become the
focus of news media and public scrutiny since Sept. 11. The two jets that
slammed into the World Trade Center flew from Logan.

Critics have attacked the agency as a patronage dumping ground, and this
week, Acting Governor Jane Swift reassigned its security chief, Joseph
Lawless. A career State Police officer, Lawless had been head of former
Governor William F. Weld's security detail before Weld appointed him head of
security at Logan in 1993.

With the mounting financial problems, the authority may face new pressure to
broom some of its political appointees, who collect generous salaries but,
in some cases, have only vaguely defined responsibilities.

The financial strains will force Massport to rearrange its priorities and
pull back on its commitments to stave off more serious problems. The public
campaign touting regional airports to divert some travelers from Logan is in
doubt - not only because it costs Massport $500,000 annually in promotion
costs, but also because Logan badly needs those passengers to return.

Agency sources said the authority will likely reduce its $1 million annual
commitment to operate and promote Worcester Airport, leaving that struggling
facility in a precarious position. Massport took over the airport as part of
a major initiative during the Cellucci administration, and has used the
facility to showcase the regionalization effort.

The financial crunch will have no direct impact on Massport's controversial
push for a new runway at Logan, but the politically volatile issue, which
was expected to heat up this fall and winter, is now on the back burner, a
Massport source said.

Massport had expected a decision from the Federal Aviation Administration on
the runway this fall, and planned to go to court to seek the lifting of an
injunction that prevented the expansion. Some close to the process believe
the impact of the terrorist attacks, and the changes they will force in
Massport's structure and focus, will spell an end to the runway proposal.

''It's dead as a doornail,'' said a Massport source who is involved in
promoting the runway.

This story ran on page A1 of the Boston Globe on 10/4/2001.
© Copyright 2001 Globe Newspaper Company
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