New Facility Improving Operations at Chattanooga Airport

Airport president and CEO Terry Hart offers another perspective


Chattanooga, TN, March 13, 2012 - Competition always comes at a price, even at the Chattanooga Airport. Our detractors are trying to convince our community that the price citizens have paid was the cost of building the new LEED-certified fixed-base operator. In reality, no taxpayer dollars were used for the new facilities. But we would argue that the community has already paid a significant price for the Jack of competition the airport was experiencing.

 

For years, the airlines serving Chattanooga's travelers were forced to use the one and only fuel service provider at the airport, often at unreasonably high prices. As a result, when airlines examined their costs to serve Chattanooga, we often ranked higher than many of our competitors, putting us in jeopardy to Jose air service. We all have paid a high price due to the monopoly that TAC Air enjoyed until just a few months ago, making Chattanooga a tenuous proposition for the airlines and our passengers.

 

Chattanooga Airport passengers, private pilots and airlines asked the Airport Authority and the city of Chattanooga to find solutions. TAC Air had an opportunity to be part of the solution. The price they paid for choosing not to be part of it is competition.

 

Here are but a few of the positive changes competition has brought to our customers:

  • Fuel savings up to a dollar per gallon
  • Reduced hangar rental fees
  • A choice between brand new hangar facilities or existing hangars that are now better maintained as a result of the new competition
  • Lower prices to the airlines, making Chattanooga more attractive for air service expansion.

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It is true that the new FBO has lost more money in its first six months of operation than originally anticipated. That is because competition is working. Fuel prices at the airport have dropped so remarkably that the primary source of revenue for the two FBOs has also dropped. Moreover, it is rare to find a new business that does not lose money during the startup phase until it gets established.

 

Still, that temporary loss is covered by significantly increased net operating revenues in other areas of the airport and is a small price to pay for saving corporate pilots, general aviators, airlines and cargo carriers an estimated $1.5 million in the first year alone.

 

TAC Air and its disinformation campaign partners are telling taxpayers they are bearing the cost of building the new FBO. In fact, Chattanooga Airport built the new FBO facilities with state airport grants funded solely from aviation fuel taxes, not through general taxpayer funds. Only those who bought aviation fuel in Tennessee paid for it. However, we all benefit.

 

Not a penny of taxpayer money was used on the new FBO. But when TAC Air's facilities, including hangars, t-hangars, fuel farms and aircraft parking ramps were built decades ago, it was in large part through city and state taxpayer dollars. The truth is that Chattanooga Airport has not received general taxpayer dollars since 1985 when Chattanooga ceded ownership of the airport to the Airport Authority. So it is ironic that TAC Air now complains about government funding, when many of the facilities they occupy were built with government funds. They sure didn't complain when they signed the lucrative agreements to manage those facilities many years ago.

 

Airports like ours that receive no taxpayer subsidies must develop innovative partnerships to improve our facilities, attract commercial service and generate a positive cash flow. Just as Chattanooga and Hamilton County offered incentives to attract new businesses and thousands of jobs to our community, so must the airport invest time and resources to bring positive change for the benefit of our customers. Our customers ask for low fares and quality service, which can only be provided with competition. So we partner with our airlines - by offering discounts and other incentives to bring their planes to Chattanooga and give our passengers the competition and level of service they demand. In the same way, we cannot turn a blind eye to our customers ' requests for competition elsewhere at the airport.

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