Bergstrom Aviation ponders its bills as fuel business collapses, flight school stays shuttered
As Malin Bergstrom ponders the future of the aviation business her father Karl started in 1971, she is worried.
The coronavirus pandemic all but froze travel, which hammered the Pasco business. It reported a 90 percent drop in fuel sales to airlines.
It closed its flight school when Gov. Jay Inslee issued the Stay Home, Stay Healthy order to slow the spread of the new virus that causes the deadly COVID-19. Demand for maintenance services fell too.
Bergstrom Aviation is open, considered an essential business under the stay-home order. But “essential” does not pay the bills.
The loss of business is dramatic, Bergstrom said. The company employed 33 in 2016, the year she took over and the first year its payroll topped $1 million.
The company contracts to fuel commercial planes. That means keeping employees at work to handle the task when asked.
“If you only fuel one airplane a day and you have people from 4 a.m. to 8 p.m., it’s not going to pay the bills,” she said.
Buck Taft, the airport’s manager, confirmed flying schedules are off. Alaska, Delta and United must keep five flights a day on their schedule after taking CARES (Coronavirus Aid Relief and Economic Security) Act funding. But flights get canceled. Allegiant Air must keep three flights on its schedule.
Few planes are taking off and when they do, it is with four to 15 passengers, Taft said.
Bergstrom reduced her payroll, putting employees on standby so they could qualify for unemployment insurance benefits while being available to work if necessary. She hoped to restart the flight school on May 5—a day after the governor’s order was set to expire, but Inslee extended the order through the end of May.
Her application for a loan from the Paycheck Protection Program was approved. The Coronavirus Aid Relief and Economic Security Act program is supposed to support small business with forgivable loans if they retain employees after the pandemic.
She knows she is fortunate.
In Washington, 88,570 PPP loans have been approved from the $660 billion authorized by Congress in the $2.2 trillion CARES Act.
“I’m trying to be humble and sensitive to the other small businesses out there that did the exact same thing we did and did not get funding,” she said.
The Port of Pasco acknowledged the financial challenges its airport tenants, including Bergstrom Aviation, are facing. In April, it agreed to defer up to three months of rent payments to the end of the year. The Port of Kennewick agreed to defer rent for hospitality-related tenants. The Port of Benton considered deferring rent for one of its Prosser tenants when it met May 13, after the deadline for this publication.
Bergstrom helped start the discussion when she asked the port to consider waiving rent. Following fellow ports who opted to defer rather than waive rent, Pasco chose only to delay payment, not forgive it.
Bergstrom understood the reasoning behind the move. It is against Washington law to make a gift of public funds. But it would have been the right thing to do in an emergency, she said.
“I don’t want to look a gift horse in the mouth, but that doesn’t do any good. We don’t have the revenue coming in,” she said. “Deferral is a Band-Aid that isn’t going to solve our problems.”