Chattanooga Municipal Airport, TAC Air have 'pending agreement,' official says

Chattanooga Municipal Airport, TAC Air have 'pending agreement,' official says

January 3rd, 2014 by Mike Pare in Business Around the Region

The new Wilson Air Center, located on the west side of the runway at the Chattanooga Municipal Airport, is the airport authority's own fixed base operator.

Photo by John Rawlston/Times Free Press.

General aviation operator TAC Air has a "pending agreement" to sell its extensive hangar and office space at Lovell Field to the Airport Authority, potentially signaling an end to a four-year-old dispute.

David Edwards, marketing director for Texarkana, Texas-based TAC Air, said Thursday that while an agreement is pending, the deal hasn't been finalized.

"We're working until we have a closing or something final," he said, adding that it's "business as usual" for the company that supplies fuel, hangar space and other services to private aircraft at the airport.

Airport spokesman Albert Waterhouse said the Authority remains in discussions with TAC, which is one of the nation's largest fixed-base operators.

"There has been nothing finalized and we continue to be in discussions with TAC Air so at this point it would be inappropriate to address this issue," he said in an email.

Edwards declined further comment on the matter when asked about the timetable to finalize a deal or whether its employees have been told about the pending agreement.

TAC and airport officials have battled since 2010 when Lovell Field officials announced the construction of the competing general aviation terminal. The $10 million project, funded in large measure by federal and state grants, was aimed at attracting corporate tenants and personal aircraft.

Last month, following a closed session during a meeting of the Authority's Finance Committee, an airport official said the two parties were talking.

Since then, however, some have questioned a deal.

City Councilman Larry Grohn said that if TAC Air leaves, that could leave the airport with just Wilson Air, which manages the new terminal for the airport.

"I've got a difficult time with the Airport Authority saying they established their own FBO...because they wanted competition at the airport," he said. "Now they want to buy out the competition."

Airport officials said users had complained about high fuel costs and a lack of service by TAC Air, and that the private company had not addressed those concerns during more than three years before the new facilities were announced.

But TAC Air officials have said the airport was unfairly competing with a private company and trying to force it to leave when it built the terminal for Wilson Air to operate. TAC officials noted that the airport raised parking and landing fees to support the financial shortfalls at the new Wilson Air facility.

TAC Air parent Truman Arnold Cos. has about 180,000 square feet of space with an appraised value of some $7 million at the airport, according to appraisals by Hamilton County' property assessor. TAC Air came to the airport in 2002 after buying locally based Krystal Aviation.

The airport-owned terminal, run by Wilson Air on the west side of the main runway, has been a money loser so far. Projected losses this year will put the total amount of red ink since opening at an estimated $1.31 million, according to the airport.

But airport officials said the losses are narrowing and it is on track to make a profit in the future.

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