Mixing it up

ODENTON, MD — Formerly a United States Army airfield, Tipton Aiport opened for public use in 1999, and has been growing ever since, relates airport manager Michael Wassel. With plans to extend the airport’s recently renovated lone runway, Wassel expects operations to change from a primary mix of recreational general aviation activity to more of the business type by offering convenience to the same market served by Baltimore Washington International (BWI). Meanwhile, Tipton tenant Ultra Aviation sheds light on the aircraft sales market.

Located in Central Maryland and bordered by Fort George G. Meade, the National Security Agency, and the Patuxent National Wildlife Refuge, Tipton Airport is equidistant between Baltimore, Washington D.C., Annapolis, and Columbia. Comments airport manager Michael Wassel, “Tipton was intended by FAA to be a GA reliever for BWI; that’s sort of the niche we see ourselves in. Between D.C. and Baltimore, we are the biggest of the GA airports.”

Wassel spent several years in the Air Force before becoming part of the management staff at Reagan National for some 12 years. He has been managing Tipton for ten years now, commenting, “The first winter the airport was open back in ‘99, we had three aircraft based here; the trend has definitely been upward since.” Tipton now bases some 120 aircraft.

In the late ‘90s, Anne Arundel County presented legislation that was passed by the state to create the Tipton Airport Authority, the operating entity of the airport. “We are basically a public corporation; we are not a county agency, we are an entity of the county government,” explains Wassel.

In terms of the benefits of having an airport authority, Wassel says, “It sort of puts you in the middle of the public sector and the private sector. It forces us to run like a business.” The authority is a nine-member board consisting of county residents.

Improving operations
Tenants on the field include One World Aero, a flight school; Tipton Aircraft Services, which handles maintenance; Ultra Aviation, an aircraft sales and acquisition company; Fort Meade Flying Activity; MedSTAR, an air ambulance operation; U.S. Helicopters, a news agency; and the county police.

The airport is the field’s only fixed base operator, offering both 100LL and jet-A in a self-service capacity.

All of the facilities currently on the field were inherited from the Army, remarks Wassel. Early on, he adds, “We were in the Military Airports Program, which was a special funding pot the FAA used to have to help move former military facilities into civilian use; we used some of that funding to renovate some of the hangars. “The county also initially gave us some money to improve some of the hangars.

“In Ultra Aviation’s case, the facility leased is one of the better hangars we have in terms of improvements; we renovated that through rental credits with Ultra.

“Biggest thing we have done so far is in improving the operation we have,” remarks Wassel. “With FAA funding, we have resurfaced the runway and the taxiway, we conducted a major ramp repair last year, and added a medium-intensity runway lighting system.”

Going forward, Wassel’s next goal is to add 1,200 feet to the east end of the runway, expanding it to 4,200 feet. “We are capable of serving a King Air 200 — that’s our standard aircraft,” he says. “But a 4200-foot runway puts us in the realm of being able to serve more of the business travelers who are flying turboprops.

“We have some of those King Airs coming in here now, so we are not going to change the size of the aircraft coming here, it will just change the mix a little bit. What we offer then is a lower cost alternative to BWI [which sits eight miles north of Tipton Airport].”

Tipton weathered the economic downturn pretty well, explains Wassel. The airport sold 232,000 gallons of fuel in 2008, and 216,000 gallons in 2009. Last year’s annual revenue totaled $1.5 million; there is a total of 110,388 square feet of hangar space on the field.

Ultra Aviation
“The airport, from its infancy, was a lot for the county to take on, and it’s evolved quite a bit,” says Ultra Aviation founder and owner Keith Martinich, who has been at the Tipton facility since 2004. “Tipton offers a great alternative, even to Gaithersburg, and the airport is located a mile and a half from an Amtrak station,” he adds.

Ultra Aviation is a full-service aircraft asset management and aviation-consulting firm specializing in the distribution, marketing, and sale of new and previously owned personal and business aircraft. The company can buy aircraft for inventory, perform aircraft appraisals, and offer aviation insurance.

Ultra owned an aircraft dealership, formally Columbia Aircraft, from late 2004 until the manufacturer was purchased by Cessna in 2007. The company provided sales for Columbia, and then Cessna, for the Mid-Atlantic region as well as the Northeast U.S. and up into Canada, explains Martinich. “We were the exclusive dealer and distributor of the Columbia 350 and 400 product lines,” he relates.

Analyzing the market
Martinich has been in the aircraft industry for 18 years, and has been flying as a commercial pilot for 23 years with more than 7,000 hours of total time.

He remarks, “We have found that the market on new aircraft has certainly tapered off … it’s probably corrected by as much as 55 percent from its high in 2006. In the pre-owned markets, we have always worked with late model aircraft; that’s been a primary focus in both buying those aircraft, acquiring them for owners, and then inventorying them and selling them.”

Martinich says there is still some downward pressure as the markets continue to be soft. “I am seeing some firming of the late-model piston high-performance aircraft markets,” he adds.

“There still remains some unsold dealer inventory from 2008 and 2009. These aircraft do put some pressure on the late-model aircraft that are continually coming into the marketplace.”

One particular bright spot in the industry, relates Martinich, is in the international marketplace. “Since the third quarter of ‘09, we’ve worked with quite a few international buyers to help them locate aircraft here in the U.S.,” he says. “Some of those active countries include Brazil, France, Germany, and Italy.

“Part of that has to do with favorable currency exchange rates. We also have a wide selection of aircraft to choose from in the U.S.” Another factor; the cost to transport the aircraft internationally has decreased because of the increased availability of ferry pilots, says Martinich.

However, aircraft inventory levels remain high; Martinich calls it “unprecedented.”

In terms of financing availability, Martinich comments, “If you have cash, you can definitely drive the deal. If your credit score has a six in front of it, it’s very difficult for me to achieve financing for you. The days when we saw 5 or 10 percent down on an airplane no longer exist. Buyer’s have to expect to be able to put down 15, 20, maybe even 25 percent, plus the ability to show liquidity in their balance sheet. Banks want to see relationship banking, meaning they want you to move personal funds into their bank to extend the relationship.

“Some lenders don’t want to look at some of the turbine aircraft that are older than 12-15 years; they have become very restrictive on what they will lend on. Considering aircraft that are under $100,000 — lenders for that type have definitely scaled down; it’s harder to get financing for those older aircraft.

“The jet market ... the $2-4 million range, again it has become very compressed. There are a lot of aircraft available that now fall into that market value.

“I think this is going to be a continual slow climb out of this low.”

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