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

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

January 22nd, 2011 by Mike Pare in Businesstopstory

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.