published Saturday, January 22nd, 2011

Late salvo in Lovell flight Group says study predicts loss from rival fixed-base operator

  • photo
    Contributed Rendering General aviation facilities such as depicted in this rendering are going up at Chattanooga Metropolitan Airport.

A group opposing new general aviation and fixed-based operations at Chattanooga's airport says a study indicates the facilities would lose up to $3 million over five years.

But a Lovell Field official disputed the figure, saying the proposed operator of the facilities is projecting positive cash flows over the period.

"Wilson Air, who won the project, has projected a profit," said airport spokeswoman Christina Siebold in an e-mail. "The four proposals we received from four credible [fixed-based operator] firms all indicated that the five-year projection was profitable."

Chattanoogans for Fair Aviation said the study by Marquette Advisors of Minneapolis shows that future general aviation business at the airport does not support a new terminal and hangar space.

Pete O'Hare, a spokesman for the group, said in a letter to airport officials that they should consider stopping the project on which construction has already begun.

Such as course of action is better, he said, "than commit to years of financial loss."

government funding

Last summer, city and airport officials unveiled plans to build $10 million in facilities. Those include a 9,000-square-foot general aviation terminal and office complex on 8 acres on the west side of the main runway, opposite existing facilities run by FBO Tac Air.

Airport President Mike Landguth said the state will pay 90 percent of the cost while the airport will pay for the rest out of its operations budget. Also, some $3 million in federal stimulus money was used to pave an aircraft parking area at the site.

Most of the facilities will serve general aviation flights and pilots, but a new fueling operation will appeal to the airlines by lowering their costs, said Landguth.

As of Friday at the airport construction site, workers had already laid the terminal's concrete floor, put up exterior wall framing and some of the roof.

critic's bill of particulars

The study funded by Chattanoogans for Fair Aviation said that while airport plans call for a 12,000-square-foor hangar facility, 25 percent of existing hangar storage is vacant and represents years of supply for new tenants.

The study also said that existing fuel and hangar space pricing is competitive with surrounding airports.

But, Siebold said the airport's master plan has projected growth in general aviation and recommended preparing for it.

"A second FBO was part of that recommendation to accommodate future demand," she said.

On the question regarding the use of public funds to develop the facility, airport officials agree it's a public policy question, Siebold said.

"The Federal Aviation Administration has determined that Chattanooga Metropolitan Airport Authority acted consistent with all policies in developing competition on the Chattanooga airport," she said.

However, David Edwards of existing FBO operator Tac Air said the study and the company believe market conditions don't support a second FBO.

"It's not good for anybody," he said.

Edwards said it's not too late to stop the project.

"It would have been optimal if it had not started ... but it's better to stop it now than look back in five years and they've lost $3 million if the numbers in the study turn out to be true," he said.

Contact staff writer Mike Pare at mpare@timesfreepress.com or 423-757-6318.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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mladd said...

Whatever. Maybe its not good for Tac Air, but everyone else who flies non-carrier flights out of CHA can't wait for the new terminal. Poor service, un-maintained hangers, over priced services and fuel. We can't wait for some competition on the airfield.

January 22, 2011 at 7:22 p.m.
tntoak said...

At this point nobody knows for sure how much (if any) profit this new FBO will generate. However, as more companies like Volkswagen, Amazon, etc. move into the area, the need to support private aircraft will increase as well. The addition of a fueling center will probably have the biggest positive impact, as it will lower costs for general aviation aircraft flying into and out of Chattanooga.

January 23, 2011 at 12:20 a.m.
jpo3136 said...

Head out to Smyrna and look at the airport. Compare to our airport. The cities with large industrial facilities have much larger airports than we do. It supports the increased needs of flying large quantities of cargo.

People, compared to cargo, is a relatively light and thin load. What's more profitable? A planeload of commuter passengers? Or a planeload of equal volume, filled with parts and items? It's clear: cargo is more profitable.

Dense, heavy planeloads of cargo will need more maintenance and more room to safely operate because of their increased inertia.

Maybe the cost projections of a 3 million dollar loss would be correct in limited circumstances; but, who's to say that the second airport terminal would be used just the same as the first?

Next, think about the idea that what everyone's saying is true; and, ask ourselves, why would we want to put a completely separate facility on the opposite, near Chattanooga Creek side of the runway? This plan is telling us they want their own airport buildings, but share the runway.

Notice that the second terminal building is being described as being built on the road to Air Cargo. Last time I picked up air cargo was years ago, but it was at a wooden shack with wire pens holding the mailed luggage. Hardly suitable for mass trucking of serious cargo.

Someone wants their own airport. Who could that be?

January 24, 2011 at 9:01 a.m.
StayInTouch said...

Bottom line is, why is the government risking our tax dollars on a business venture? Had the risk been worth the possible return, private industry would have produced an interested party to the Airport's RFQ. To me, Government is there to provide infrastructure; business is there to balance risk/reward. Projected revenues are being based on a perceived increase in traffic that may or may not become reality. Definitely a risk.

Have we ceased to believe in the private enterprise, capitalistic government that has built our country? Will we instead let government elbow out private industry? We either remain vigilant or we let them do this one small business at a time.

January 25, 2011 at 10:45 a.m.
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