Chattanooga Airport, TAC Air spar over aviation center

Chattanooga Airport, TAC Air spar over aviation center

June 18th, 2013 by Mike Pare in Business Around the Region

Chattanooga's new general aviation terminal, WIlson Air, is the first national airport to receive a LEED Platinum certification.

Photo by Dan Henry/Times Free Press.

AIRPORT AVIATION CENTER

$650,000 - First-year loss

$450,000 - Projected current-year loss

$214,000 - Forecast loss for upcoming budget year

$1.31 million - Three-year total

Source: Chattanooga Airport

Terry Hart, president and CEO of Chattanooga Airport

Photo by Contributed Photo/Times Free Press.

Chattanooga Airport and TAC Air officials skirmished Monday after airport officials said their general aviation center will lose about $450,000 in the budget year that ends June 30.

The airport-owned center, which is operated by Wilson Air, is forecast to cut its losses next year to $214,000, said Terry Hart, the airport's chief executive. In its first three years, the center is projected to lose more than $1.3 million, but Hart said such losses are typical for new businesses.

"We've said many times ... that it would take multiple years to make this work," Hart said. "It's going in the right direction."

Airport officials have said the center should see a profit within five years.

"I think we're right on schedule," Hart said.

However, the head of TAC Air, which runs a competing general aviation center at Lovell Field, said local residents are helping to pay for the losses at the Wilson Air facility through higher user fees.

Pam McAllister, general manager in Chattanooga for the private company based in Texarkana, Texas, said parking and landing fees were raised last year to support the airport center's shortfalls.

"Technically, our local residents are helping to pay for the losses" at the Wilson Air center, she said.

But Hart said user fees are paid by those who use the airport. He also said service has improved for general aviation customers at the airport since the new center opened on the west side of the main runway.

Still, McAllister said that such fees go into the general fund, which is "in essence carrying the losses" for the airport's center.

"I do believe local residents are being taxed in this endeavor," she said, adding that she thinks airlines pass on increased expenses at the airport to their customers through higher ticket prices.

Airport board members Monday approved Lovell Field's new budget, which includes an increase in terminal rent for the airlines, rental car companies and others. The rental rate will increase next January by 11.2 percent from $26.91 to $29.92 per square foot.

The flare-up Monday is the latest round in three years of fighting between the airport and TAC Air over the new aviation center that generally services smaller private planes.

In mid-2010, airport officials unveiled plans to build up to $10 million in new facilities for corporate tenants and personal aircraft. State grants are slated to pay for about 90 percent of the cost of the facilities while the airport covers the remainder, officials have said.

Airport officials said the new aviation center was needed because of complaints about TAC Air.

TAC Air has said that the airport is trying to shut down its business in Chattanooga and using taxpayer money to do so.

Hart said construction of a second hangar for the airport's general aviation center is slated to be completed later this year. He said the first hangar is full, and the second will help drive down the financial losses.

Hart also said general aviation operations increased in 2012 at the airport. Through May of this year, general aviation operations, including military, air taxi and others, are down about 7 percent, airport figures show.

Memphis-based Wilson Air has a five-year contract to run the aviation center. Its management fee is rising from $150,000 to $200,000 in the upcoming year, where it is to stay until year five, according to the airport.

Dan Jacobson, the Airport Authority's chairman, said the losses at the Wilson Air center are falling. He said parking fees were raised last year so they would be market rate.

"Things are picking up," he said, adding that the airport is investing in other aspects at the facility such as air cargo and in the commercial terminal.

Airport board member Moses Freeman said work is underway to improve Lovell Field without asking the city or Hamilton County for money.

"That should be the point we always make," he said.

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