... of the airport community,” is how Jim Hopkins, VP with Landmark Aviation, characterizes the status of the one-time heated debate over lease lengths going on this summer between FBOs and airports. “We now have the opportunity to make progress moving forward,” he added, following a session during this week’s annual conference of the Airports Council International-North America in San Diego.
The session, titled “Fixed Base Operators and Airports – Strategies for a More Successful Partnership”, featured FBOs, two attorneys, and Bruce Frallic, A.A.E., director of the Gulfport-Biloxi International Airport. Frallic and his FBO, Million Air, were the subject of the July cover story in airport business magazine on how the two entities worked together to revitalize the airport’s general aviation facilities after being wiped out by a hurricane.
As the moderator David N. Edwards, Jr., president/CEO of the Greenville-Spartanburg International Airport pressed the group on how far-reaching the problem is, it became clear that it isn’t quite as threatening as once portrayed. Explains Jeff Ross, CEO of the Ross Aviation chain of FBOs, “We suddenly became aware of perhaps a trend” of airports offering unreasonable short-term lease lengths while seeking significant facility investments. Were it to continue to expand, he adds, it could inhibit investment. “This is a conduit from airports to capital investment,” explains Ross.
To be honest, having been integrally involved in the discussion since May, I was surprised how this issue was appearing to be more and more a case of much ado about little. In general, it’s an accepted fact that for an FBO to make a multi-million dollar investment in a facility it requires a long-term lease to amortize that investment – usually benchmarked at 20 years or more. But considering that the major FBO chains and some independents formed a coalition along with NATA to heighten the issue, to the point of threatening Congressional action, the San Diego session seemed to be more of a stepping back.
Perhaps that’s progress, and the point. ACI-NA’s Deborah McElroy pretty much echoed Hopkins’ sentiment following the meeting, saying that she thought the dialog presented was helpful for the audience, primarily made up of airport managers.
There may be a bigger lesson here: Next time airports or FBOs knock on the other’s trade association door due to what is perceived as a major problem, that door will open to at the very least a dialog. If that’s the case, all the effort may have been worth it.
Thanks for reading. jfi
