Impact of the 2002 games

Impact of the 2002 games

Flight restrictions limit economic boost for operators in, around SLC

By John Boyce, Contributing Editor

April 2002

Many general aviation businesses in the Salt Lake City area report that the XIX Winter Olympic Games proved to be a slippery slope to near disaster. Others report some spike in business activity, but only one FBO reports having the kind of success that you might expect from such an important event.

Impact on Business - A Constitutional Question

Martin O'Loughlin isn't a rabble rouser. He recently retired after 20 years as a naval aviator and during that time took seriously his oath to uphold and defend the U.S. Constitution. Now he wants the Constitution to protect him.

O'Loughlin is the president and CEO of Great Western Aviation with six locations in and around Salt Lake City. A major portion of his business comes from flight training; in fact, his is the largest flight school in Utah and the only Part 141 flight school in the state.

During the recent Salt Lake Winter Olympics, the federal government in the form of the FAA commanded all flight school and all VFR flight operations within the 45-nautical mile security perimeter around Salt Lake to cease and desist for the duration of the Games.

Five of O'Loughlin's facilities were inside the 45-mile Olympic Ring Airspace (ORA), meaning his flight schools and his 65 rental aircraft were grounded for 17 days with the concomitant loss of revenue. That, O'Loughlin thinks, violates a clause in the 5th Amendment which states that the government shall not take private property without just compensation.

"To me that was a a very clear-cut seizure of business," O'Loughlin says, "and I understand it. It was probably lawful, it was probably in the common interest, so to speak. But I think it should be compensated.

"I would like to do it in an artful way, rather than be a rabble rouser and making it sound as if it's all over money, because a larger chunk of money was lost through all the decisions of a lot of private individuals (fliers buying fuel elsewhere) but this is a constitutional issue. If the government, in their pursuit of homeland security, is going to make decisions like this then they need to be aware of some of the costs...."

O'Loughlin points out that a lot of money was made during the Olympics but there is very little recognition of the costs to people and businesses. "...I just want some awareness on the part of the American people that there is a lot of money being made but there is a lot of cost being borne.
"We were the only business that I can think of where the federal government told us we couldn't operate. We have 65 aircraft for rental; they couldn't operate...."

O'Loughlin has not decided on just how to go about pressing his claim for compensation.

The remarks from fixed base operators in the vicinity of the Games ran the gamut from "It really was a disaster," from Greg Dilley, president of Ogden Jet Center in Ogden, UT, to "We were running from 6 a.m. to midnight and sometimes into the middle of the night," from Mike LaSalle, business manager at Star West Aviation in Evanston, WY.

Dilley estimates his business lost over $1 million during the Olympics while LaSalle reports that he sold some 135,000 gallons of jet fuel in an operation that "normally in February I might pump 4,000 gallons of jet fuel."

Apart from Star West, most of the 17 FBOs contacted for this article at 12 airports in Utah, Wyoming, Colorado, Nevada, and Idaho report that, regardless of the level of activity, business didn't increase as much as they expected. Jim Buswell, president of Colorado Jet Center in Colorado Springs, makes the point about expectations when he says, "Obviously, we had a fairly substantial increase in business for that two-week period, but it wasn't anywhere near what they anticipated it would be."

The reasons for lower levels of traffic than expected and the uneven nature of the economic success across the aviation region are attributable directly to the tight security restrictions imposed on general aviation by the federal government during the 17 days of the Games.

The FAA, in conjunction with the FBI, the Secret Service, and a variety of security agencies at the state and federal level, set up a 45-nautical mile security perimeter around Salt Lake City, known as Olympic Ring Airspace (ORA). Within that perimeter just six airports were designated to accept GA aircraft.

The six perimeter airports included: Salt Lake International, Ogden Municipal, Provo Municipal, Heber City Municipal, Salt Lake Municipal No. 2, and Bountiful Skypark (rotorcraft only). To fly into one of the six airports, general aviation aircraft had to go through an extensive security check in one of four designated Gateway Airports in Colorado Springs, CO; Boise, ID; Grand Junction, CO; and Las Vegas, NV.

Additionally, flight crews and passengers had to undergo a criminal background check before being allowed to fly from a Gateway into the security perimeter. Flight crews, in addition to filing a flight plan, were required to adhere to a tight reservation and flight schedule or run the risk of losing the right to enter the ORA.

"They (government) pretty much set it up so that airline traffic could come and go and general aviation couldn't," Dilley says. "We had everything booked and everyone canceled. We didn't even get our regular stuff (traffic)."

A Wyoming Winner
LaSalle's Star West was the surprise winner in the entire GA Olympic saga. LaSalle says that he had over 500 aircraft land during the Olympics and "I'll bet 450 of them were jets," he says. "Normally, in February we're looking at 300 to 400 operations and that includes flight training."

Star West's big advantage over FBOs inside the ORA was location. Situated in the southwest corner of Wyoming, Evanston is just just five miles outside the ORA. That meant that Star West's customers could get relatively close (50- to 75-minute drive) to any Olympic venue and they didn't have to go through the rigorous security procedures mandated for GA flyers into the Olympic ring.

Star West anticipated some extra traffic, so LaSalle was somewhat prepared. However, the number of fractional jets is what set him back on his heels until he adjusted.

"I'd been taking ramp reservations and I was trying to keep track of who was coming in," LaSalle says. "I'd set up Avis, Hertz, and Enterprise rental cars to bring cars over from Rock Springs. We knew to expect quite a bit, but what got us was the fractional guys. We expected the private charter operators, but we didn't get much advance notice out of the fractionals. They more or less just showed up. Once we got by the first couple of days and got used to the flow, we were able to handle it."

Fuel Sales Reports
Regarding fuel sales, the FBOs at the Gateway airports reported good sales. Buswell in Colorado Springs says he sold 75,000 gallons more than usual. Greg Laabs, vice president of operations at West Star Aviation in Grand Junction, CO, estimates he was getting 12 to 30 aircraft a day through his facility and reports a 25 percent increase for the Olympic period.

Timberline Aviation of Grand Junction had no increase in fuel sales to GA aircraft but did report an increase in fueling military aircraft. Says marketing director Alicia Salazar, "I have no clue about their involvement with the Olympics."

A similar trend developed at Boise and Las Vegas. Dennis Edwards, general manager of Boise Executive Terminal, says, "A lot of fractionals were coming through here. We did get some business that way. We're so close (to Salt Lake) that we didn't think there would be a lot of services required, but there were some. I can say we benefited from it but not in a huge way."

Geoff Heck, area general manager for Signature Flight Support in Las Vegas and Palm Springs, says that the Las Vegas location had "pretty steady business. We did have a spike during those two weeks but in Las Vegas there are conventions going on all the time so it's tough to tell that the spike came from the Olympics."

The FAA reports that Grand Junction had 296 aircraft cleared for Salt Lake in the 17 days, followed by Las Vegas with 258, Colorado Springs with 216, and Boise with 148. The majority of those 918 aircraft went into Salt Lake International, apparently, because none of the FBOs at the other designated four fixed wing airports reported any significant increase in sales.

Greg Petersen, president of Wasatch Air Services in Heber City, which is some 35 miles from Salt Lake City, says that he had two Part 135 or Part 121 jets a day at his location and sold "reasonable amounts of fuel to those guys, but the people who would have come for the Olympics either went to Evanston or didn't come at all. It will be a net decrease in business from last year to this year."

Russ Cannon, general manager at the Salt Lake Jet Center at International, reports increased fuel sales but thinks it was much less than expected because he suspects the Gateway airports lowered their fuel prices to get the business. "They had an opportunity and they took advantage of it," he says, "so by the time the planes got here we couldn't put much on them. We didn't do nearly the amount of fuel had there been no Gateway airports."

The FBOs in the ORA who suffered the most in the security scenario were those who relied on flight schools and tenant flying for a major portion of their revenue. That included Dilley at Ogden; Petersen and Martin O'Loughlin, who together operate the biggest flight school operation in Utah at five locations inside the ORA and one outside; David Coates, general manager at Sunrise Aviation (previously Keystone Aviation) at Salt Lake Municipal No. 2; and Bill Haberstock, CEO at Million Air Salt Lake City and the operator of two remote locations in Provo and the Municipal No. 2 which have flight training.

The situation has O'Loughlin, a retired naval pilot, investigating a U.S. government violation of the 5th Amendment, which states in part, that the government shall not take private property for public use without just compensation. (See related story.)

For Coates, "the rules and regulations, for all intents and purposes, shut this airport down.... My personal feeling is that the system was designed to push (people) towards the major airlines."

Picking up the theme, Petersen says, "It was terrible. We were completely out of the GA business, basically. Our company locations inside the 45-nautical mile bubble were completely shut down." He further points out that it was the second time in six months since September 11 that the Salt Lake area GA operations had been shut down.

"We lost a ton of revenue,'' Petersen says. "There are going to be locations that showed zero (revenue). It's going to break some people. They (government) shut down aviation for the second time in six months."

It appeared that Alpine Air, a Provo-based cargo carrier, was going to have a lot of difficulty doing its business, but a week before the Olympics the company was issued a waiver to fly in and out of the ORA.

"We expected four of our flights to be affected," says CEO Gene Mallette, "meaning we would have to go to outlying airports and truck our cargo and mail. It was going to create a logistics nightmare."