Denver International Airport has asked its biggest contractors to reduce their billing rates by 5 percent to help airlines struggling with high fuel prices.
DIA aviation manager Kim Day sent letters July 14 to 97 companies with contracts worth at least $250,000 each, asking them to make the cuts.
“We are reviewing our entire cost structure to find possible savings that will reduce the fees charged to airlines,” Day wrote.
“We are asking all of our contractors to reduce their billing rates to the airport by 5% until the price of oil returns to a rational level. All of the savings realized will flow to the airlines,” she wrote.
DIA spokesman Chuck Cannon said the reductions are voluntary. He said he did not know if any contractors had responded.
One contractor who received the letter called it “absurd.”
“We’re already out there on a competitive basis, and our costs are going up, so how can we give anything back? It just doesn’t make sense,” said Joe Bosco, owner of Bosco Constructors Inc. of Arapahoe County.
“If we took 5 percent off our contracts, that’s our profit,” he said. “It seems absurd.”
Bosco’s company recently completed work on airport bathrooms and ceilings that is worth $4.5 million to $6 million, he said.
DIA officials say the airport itself is in strong financial shape. But as airlines trim their flight schedules this fall, airport revenue and income will decline.
This year, DIA has earned net operating income of about $80 million, which it split with airlines operating at the airport. A 15 percent decline in flights and passenger traffic could reduce that number significantly.
Denver-based Frontier Airlines, the second- busiest carrier at DIA, is in bankruptcy protection.
Greg Griffin: 303-954-1241 or ggriffin@denverpost.com
