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EAA Sees Blue Skies Ahead After Weathering 2020 Storm
By Barbara A. Schmitz
July 29, 2021 – EAA survived 2020 in solid financial shape, despite not being able to hold a fly-in convention last year due to COVID-19. At EAA’s Annual Meeting on Wednesday, EAA Treasurer Stuart Auerbach said fiscal year 2021, which ended February 2021, was a challenging year. But he said EAA managers and the board believe the organization weathered the impact of the pandemic reasonably well and that their financial position remains solid. But in early 2020, things didn’t look as promising.
“Just as the year began, EAA was faced with the sudden need to navigate the unknowns of the COVID pandemic,” Auerbach said. Programs and activities were placed on hold, staffing adjustments were made, and by early May, it was clear that the annual convention would be canceled. EAA staff began implementing a contingency plan to save almost all uncommitted costs of AirVenture and to implement a virtual event.
“Financially, the loss of AirVenture net income had a devastating impact on the organization’s finance performance in FY 2021,” Auerbach said. But support from donors and investment yields helped to offset operating losses.
Total income in FY 2021 totaled $28.8 million, down $24.4 million or 48.9 percent from FY 2020. However, investments increased to $8.8 million, up $6.8 million or 340 percent, from FY 2020. EAA’s operating income was $20 million in FY 2021, down $31.2 million or 60.9 percent, from FY 2020, mainly due to no income from AirVenture. Donations were also down $2.2 million in FY 2021, to $9 million. “Much of this decline is a result of the cancellation of The Gathering, our annual fundraising gala held during AirVenture,” Auerbach said.
The remaining $11 million in other income sources in FY 2021 came mainly from memberships and subscriptions, advertising, and merchandise sales.
EAA membership decreased by 6.9 percent to 224,975 during FY 2021, likely due to the loss of renewals and new joins that occur during AirVenture. However, recent membership campaigns have recovered a considerable portion of that loss. EAA CEO and chairman of the board Jack J. Pelton said total membership is now at 240,651. “So membership is back and stronger than ever,” he said.
EAA incurred $28 million in operating expenses in FY 2021, down $17.6 million or 38.6 percent from FY 2020, as many EAA programs were either canceled, curtailed, or delivered online. AirVenture costs were $3.8 million, down $9.7 million from the year before as EAA only incurred fixed costs for such things as insurance and depreciation, as well as staff costs invested in planning for the 2020 event.
Auerbach said some of EAA’s expenses were offset by a loan through the federal Paycheck Protection Program, as EAA was awarded $2.4 million in funds. The loan was forgiven early in FY 2022.
The overall result for FY 2021 was an increase in net assets of $800,000, or almost 1 percent. At fiscal year-end, EAA had total assets of more than $116.5 million, a substantial portion that was liquid and available to cover debt repayment, the operating reserve requirement, and investment in furthering the organization’s mission over time.
“EAA’s financial reserve position was key in absorbing the impact of AirVenture 2020’s cancelation and curtailed operations of fiscal 2021,”Auerbach said. Auerbach said EAA held off on significant capital purchases due to the uncertain economic impact of the pandemic. Capital spending was targeted to AirVenture site development and safety. In addition, EAA acquired land on the south end of the site, he said, with plans to ultimately relocate the ultralight Fun Fly Zone.
Pelton said it is sobering to see what the organization has been through financially. “But it’s been rewarding to know that we managed through the storm. The team worked hard to stick to our strategic plan and to have reserves and keep us financially solid, even without AirVenture 2020.”
Pelton said he was also proud that EAA continued to deliver to its members — through publications, webinars, and so on — and never lost contact throughout the pandemic. “While we may have kept a calm presence, we were paddling feverishly under water while trying to keep calm.”
However, Pelton said he wasn’t too worried going into this week because he knew the event only happens because of its 5,000-plus volunteers. They’re committed, and they’re here. I promise EAA will be strong, vibrant, and making a difference well into the future.”
In Other Business
Jack J. Pelton, EAA CEO and chairman of the board, presented the Chairman’s Award to Bob Wilson and the Freedom of Flight Award to Jerry Gregoire and Redbird. Six Class A board of directors members were reelected to three-year terms: Pelton, Eric Gurley, Darren Pleasance, Dan Schwinn, Lou Seno, and Alan Shackleton.
Pelton said EAA had estimated that attendance at AirVenture 2021 would be 30 percent smaller than the record attendance of 2019. But based on numbers to date, the numbers are clearly going to meet the 2019 record.
By Wednesday, 12,000 aircraft were on the grounds, and not one airplane had been turned away.