A New Potential
Redefining airport, FBO roles has Eagle County poised for growth
By Bryan Burns, president, Vail Valley Jet Center (left), and Jim Elwood, Eagle County Regional Airport manager
EAGLE, CO — The FBO operated the airline terminal. The county went into competition with a second terminal and a ten-year contract with American Airlines. A lawsuit ensued; meanwhile, the FBO filed for bankruptcy. That was the mid-90s. Today, new FBO owners, a new president, and an airport manager hired in 1996 are working in unison to help the Eagle County Regional Airport reach its full potential.
Fixed base operators don’t frequently
operate the airline terminal as well, at least not one which serves four
airlines flying 757s and BAE-146s. But it did at Eagle County Regional
Airport near Vail in an unusual arrangement under which the county sponsor
focused its resources on airfield infrastructure and the FBO constructed
and operated the terminal.
In 1989, it’s reported that some 277 airline passengers came through the Eagle County airport. In February, the airport celebrated handling its 2 millionth passenger. Much has changed besides passenger growth in the interim, with a new investment team behind the FBO, the airport taking over all airline operations, and a management team of a pair of 42-year-olds who today are frequently seen together at aviation conventions promoting their airport and its proximity to some of the world’s top ski resorts.
Jim Elwood came on board as airport manager in 1996, moving from the airport in Pueblo, CO. Burns arrived one year ago, coming from Washington Reagan National Airport, where he was general manager of the Signature Flight Support FBO.
Explains Elwood, "Our goals are so similar; it really has turned out to be a strong relationship. We want to make this the premier mountain airport in the country. If we’re both working toward that same objective, we’ll get a lot more accomplished."
Says Burns, "My goal when I came here was to rebuild the foundation that had cracked. This is all part of rebuilding a very deteriorated relationship, creating a partnership."
Fast Facts: Vail Valley Jet Center
- Annual Revenues: $12 million
- Annual Fuel:
- Retail Jet-A: 2.8 million gals.
- Avgas: 60,000 gals.
- Defense Fuel Contracts: 120,000 gals.
- No. of Employees: 52
- Leasehold: 15 acres
The Airline History
Eagle County Regional serves the Vail Valley and its nearby ski resorts at Vail, Breckenridge, Keystone, Beaver Creek, and Copper Mountain. It is also an alternative airport for Aspen, where they measure snowfall in feet rather than inches as in Eagle. Folklore has it that the native Americans called this place the "hole in the sky" because of the weather variance from the adjacent mountains.
As the ski resorts grew, however, the airport remained a piston-aircraft facility until the mid-1980s, when the county began to seriously consider improving the airfield infrastructure.
Says Elwood, "In the early ’80s, when the community approached FAA about building a new runway, the FAA people literally fell out of their chairs laughing. A community in the middle of the Central Rockies — why a big-time runway? "
In 1988, George Gillett, owner of developer Vail Associates, took over the fixed base operation. Soon thereafter, the county and FBO entered into an agreement for the new airline terminal to be built and for the FBO to operate it. According to Burns, the FBO’s involvement with the terminal was primarily administration and maintenance. Airlines, rental car companies, ground transport, and concessionaires had leases with the FBO which in turn has the master leasehold with the airport. The tenants either staffed the terminal positions or subcontracted them out. The airlines, says Burns, continue to provide their own personnel for station management.
Says Elwood, "The original deal between the county and the FBO states that at some point the county plans to get into the commercial airline side." Meanwhile, the airport was continuing to run a deficit, and in the mid-90s the county decided to make the airport self-sufficient. Officials saw the airlines as the ticket to a positive bottom line, and decided to construct a second terminal and entered into a 10-year agreement with American Airlines. The other carriers remained with the FBO’s terminal.
"The Jet Center offered American Airlines five years of totally free rent, but I think that they could see that there was going to come a day when it wasn’t to their advantage. So, they made a decision to go with the county and they’ve enjoyed this new facility for five years.
"The county negotiated a ten-year, $750,000 a year annual rent contract, and it was a guaranteed rent."
(An interesting aside: When the airport built its facility it was designated Terminal A. The FBO’s terminal, which had had no designator, was relegated to Terminal B.)
The county set up a separate corporation for collecting revenues and managing the budget in the black, and Elwood serves as president of the corporation. When the terminal is paid for, it reverts back to the county, according to Elwood.
The American agreement was the catalyst for the county to float bonds to finance the $9 million terminal, which it constructed in 110 days. The FBO sued to stop the county, and what had begun as a partnership to upgrade the airport’s service capabilities began to deteriorate rapidly.
Subsequently, Vail Associates filed for bankruptcy, and the Jet Center was sold to investors who either lived in Vail or had second homes there. Jim Allen, chairman and managing partner for the Jet Center, says the first order of business was to set the stage for a new environment.
"Before our group bought it," he explains, "I had meetings with the county and I told them that if we were the successful bidders the lawsuit would be dropped, and if they wanted to buy our airline business we’d be happy to sell it to them, which is what happened."
Earlier this year, the agreement was finalized for the county to purchase the airline and related businesses from the Jet Center for $4.25 million, with the FBO retaining the leasehold on Terminal B. The county, meanwhile, is moving quickly to expand Terminal A to accommodate the carriers, and recently signed a 10-year agreement with United to use the facility.
OBSTACLE TO GROWTH: SLOT CONTROLS
In 1996, the Colorado Aeronau-tics Division studied the economic impacts of its airports and determined that Eagle County Regional generated some $300 million annually and some 6,000 jobs. Everyone interviewed for this article is in agreement that the impact is far greater today, and there is much more potential. First, however, the facility must overcome a big-airport problem: slot controls.
Explains Elwood, "Denver Center controls the airspace outside of Eagle tower. Because of the mountains and the proximity of Aspen and other towns, and the peak demand that happens during ski season, it has chosen to limit capacity. When we have IFR weather the flow drops to four to six arrivals per hour. That’s a component of the initial approach fix; we lose radar contact with Center at about 10,000 feet, so the entire approach must be operated under non-radar environment criteria.
"We are pushing very, very hard to have airport surveillance radar installed at Eagle to help us with those capacity issues. The governor’s office has come out in support for the radar, and the Colorado DOT has listed it as a top project."
The airport has seen some $27 million in capital improvements in the past decade, and the runway now stands at 8,000 x 150 ft. Elwood hopes to soon begin expansion to add another 1,000 feet of runway.
Comments the Jet Center’s Allen, "I think Eagle County, with a 1,000-ft. runway expansion and the likely addition of radar, will make Vail a much more important destination for commercial and business aviation."
Finding Employees in a Resort Market
Vail Valley Jet Center president Bryan Burns relates that getting quality employees may be difficult nationwide, but it can be even more so in a resort area.
According to Burns, there are basically
two types of recruits in the Vail market: young people who are chilling
on their parents’ ticket while deciding on a career; and, "free
spirit" middle-agers who may be working at a bar or restaurant. Their
common bond: a passion for skiing.
As a result, the cornerstone of a healthy employee benefits package is the Jet Center’s ski pass. The FBO pays for the pass to local ski resorts up front, and employees pay for it via payroll deductions.
"On top of that," explains Burns, "we throw in an end-of-season bonus. We’ve got part-time guys who are eligible for $650 if they stay through the middle of April. Full-time employees will get $950."
Another incentive program, tied to the overall safety program Burns has implemented, puts $10,000 into a pool. If the FBO gets through the ski season without any major hangar rash, including workmans’ compensation claims, the pools is split among the employees at year’s end.
The FBO also offers to all employees:
• health club memberships;
• health, dental, and vision insurance;
• a 401-K retirement plan;
• a continuing education subsidy.