published Tuesday, August 14th, 2012

Chattanooga Airport projects $1.1 million loss for general aviation center

Line technician Joey Hartsell fuels an airplane at the Wilson Air Center, located on the west side of the runway at the Chattanooga Municipal Airport. Wilson Air Center is the airport authority's own fixed-base operator.
Line technician Joey Hartsell fuels an airplane at the Wilson Air Center, located on the west side of the runway at the Chattanooga Municipal Airport. Wilson Air Center is the airport authority's own fixed-base operator.
Photo by John Rawlston.
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BY THE NUMBERS

$450,000: Airport general aviation center's projected loss for this budget year

$655,000: Center's preliminary loss in the past year

$1.5 million: Amount that airport officials estimate Lovell Field users saved through increased competition in the past budget year

Source: Chattanooga Airport

The Chattanooga Airport is now projecting a loss of more than $1.1 million over the first two years of operation for its general aviation center.

The first year's preliminary loss of $655,000 was more than twice the original forecast for the facility that provides fuel, hangar space and other services for corporate aircraft, according to officials.

For the budget year that started July 1, the airport is projecting a loss of $450,000 for the facility, which opened in August 2011 as the Wilson Air Center. It's owned by the Airport Authority but managed by Memphis-based Wilson Air.

However, the airport's chief said that, overall, small-aircraft activity is up sharply and fuel prices are down in the past year. He attributed that to competition provided by the center, known as a fixed-base operator.

"The introduction of this second [fixed-base operator] has already reduced the cost of fuel by $1 per gallon, as well as the cost of hangar rents and airline services," airport CEO Terry Hart said in an email.

Much of the first-year loss was because of lower fuel prices, he said.

The center should see a profit within five years, the CEO said.

"As with any start-up business, it will be a few years before the operation turns a profit," Hart said. "But it is important to remember that this operation was primarily developed in response to customer demand."

But the head of the other fixed-base operator at the airport, Tac Air, said the projected loss this year of $450,000 is likely understated.

"I'm surprised they're projecting that small a loss," said Pam McAllister, general manager in Chattanooga for the private company, based in Texarkana, Texas. "I don't see anything changing that the losses would be less than now."

She also questioned the need for another hangar at the Wilson Air Center, which the airport has proposed building in the next year.

McAllister said Tac Air's hangar space is only 62 percent full.

"They say everything is based on growth," she said. "Where's the growth coming from?"

Airport officials said the second hangar is needed because the first is already full. Earlier this year, airport officials agreed to spend $424,000 for planning related to potential construction of the second hangar. A $5 million state grant already is in hand, with the airport having to chip in about $555,555.

Hart said the second hangar would meet demand and bring in added revenue.But McAllister said all the airport has done is take business away from Tac Air, which leases space at Lovell Field, to fill the first hangar.

"All they've done to fill the hangar is come after my customers," she said.

She has said the airport is trying to drive out Tac Air, which has operated in Chattanooga for about a decade, and is using public funds in large measure to do it.

In mid-2010, airport officials unveiled plans to build up to $10 million in facilities for corporate tenants and personal aircraft on the west side of the main runway, opposite the commercial airline passenger terminal. State government is slated to pay for about 90 percent of the cost of the facilities while the airport covers the remainder.

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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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