The Airport Option

In January 2008, the Fort Wayne-Allen County Airport Authority took over the FBO operation at Smith Field in Indiana, a general aviation airport, offering all the necessary ground handling and fueling operations for its flight operations.

The action came after the current provider decided business was no longer viable. “They were seeing the downturn in the economy, and it was a situation where we worked with them through a transition period that said at such and such a date we’ll take it over,” says Torrance Richardson, executive director of airports, Fort Wayne-Allen County Airport Authority.

Richardson says the takeover was ultimately seamless, and now the operation employs six staff members for the handling of the flights at the general aviation airport.

But now, Richardson says, a business plan is being formulated for the consideration of providing ground handling services at nearby Fort Wayne International Airport. He says an initial recommendation will likely be made to the Board by the end of the year. “We’re putting together what we think would be an appropriate business plan and it’s probably out of that business plan going to be the decision whether we would go forward and do this or not.”

He adds, “One of the benefits that we’ll be trying to highlight in our business plan is the ability to retain some of the existing relationships and customers, as well bring in new ones, because we can then control the pricing.

“The questions at the end of the day are going to be ‘Can we do this better than somebody else? Can we be successful at it? Can we provide the customer service at the price points that it’s going to take to make this a viable operational entity going forward for us?’”

The Larger Picture
And those are some of the questions more and more of the smaller airports are asking, according to Bruce Carter, director of Quad Cities International Airport in Moline, Ill., and chairman of the AAAE Aviation Ground Service Association.

The AGSA was formed three years ago with an eight-member board of directors. The association has since grown to about 50 members.

And Quad Cities International Airport has undergone its own service transformation. The airport established a separate LLC, QCIA Airport Services, for fueling in 2003. It has since expanded, and most recently has taken on the ground handling for AirTran for three daily flights to Atlanta and four weekly flights to Orlando.

The operation for the national carrier has not been profitable. In fact, Carter says, the airport has taken a small loss on the operation. But, he says, the increase in revenue from parking, rental cars and concessions has outweighed the cost of providing the ground handling services.

And that’s what some smaller airports must consider in the current economic environment: If the major investments in such areas as equipment, employees, insurance and training will eventually balance with the benefit of air service retention.

“I think the only option they have is to bite the bullet and try to save the airlines money by getting into the ground handling,” Carter says.

Abraham Lincoln Capital Airport in Springfield, Ill., has also taken the initiative to provide airline services – and like QCIA, it has taken a loss on the operation.

“Our initial intent when we got into this business was not necessarily as a business venture or to make money or exploit an opportunity, but to provide us a way to survive in a very competitive Central Illinois market,” says Mark Hanna, executive director of Abraham Lincoln Capital Airport. “Potentially, if we did not have this, it could have put some of our regular daily scheduled service in jeopardy.”

It began providing ground handling services for what was then American Connection in 2005. It transitioned over to American Eagle and now primarily services its twice-daily flights to Chicago.

It also services large charters that come into the airport and Direct Air.