Times Do Change

Oct. 29, 2012
Today we see many airports, desperate for more revenue, taking over fuel sales

Airport buildings — now there’s a subject that covers a multitude of complexities. It involves FBOs, maintenance shops, mortgages, liens, minimum standards, tenants, risks, liabilities and opportunities — not to mention bitter arguments and perhaps a bit of chicanery on both sides of the fence.

Back in the olden days, many airports offered long leases to FBOs. It gave FBOs time to invest in improvements and provided airports with a steady stream of income far into the future which helped sell airport bonds. On the other hand, if the airport city grew a lot, the airport was tied to a lease that brought in rents at pre-growth prices. Over time, that tended to shorten FBO leases.

When airborne drug running was popular, I worked with a good-sized FBO that became a bit suspicious about one hangar customer. The hangar was padlocked, the customer was secretive, and we began to wonder what was going on — as the country song said — “Behind Closed Doors.”

Aha! A smaller side door was hinged on the outside. I removed the hinge bolts, went inside, and found maps of the Caribbean, life vests, drums of gasoline complete with hand pumps, and one airplane with all but the pilot’s seat removed. “Hmm,” I wondered. “Whatcha reckon this means?"

Our ‘big’ boss — a gutsy man — invited the Tenant in and explained politely that we had a need for that hangar. Tenant stated that he had a lease and he could sue. Boss leaned back and said, “Yes, you could, but we don’t think you want all that publicity.” Boss and Tenant sat there looking at each other for awhile, then Tenant marched out of the office. He vacated the hangar very shortly thereafter.

I’ve seen leases lost or not renewed because the airport didn’t feel it was being treated fairly by the tenant. I’ve also seen tenants who wanted to sell but felt locked in by the airport lease. On smaller airports, the airport and FBO sometimes got along well for years, as long as the FBO was barely hanging on. When times got better, the airport might push the FBO aside.

Tri-Cities Regional Airport (TRI) in northeastTennessee is in the process of changing to airport-authority ownership and management. One big consideration in such a case is that the airport ownership is thus transferred to the authority.

It is hard for the owners to believe that this is to their benefit. On the other hand, airport property — if the airport has ever received federal support — can’t be sold for any use other than as an airport. You can’t sell it to a real estate developer, for example. Over many years TRI has worked through all the pros and cons and is on the road to the new authority.

Times do change. There was a time when the FBO provided flight training, maintenance, charter, aircraft sales, and fuel sales. Minimum standards protected the FBO because they kept the airport from leasing to a second FBO that only wanted to sell fuel. That has changed over the years as the profit potential of many of those services dropped, and/or as larger airports no longer wanted the mixture of flight training and airline traffic. Today we see many airports — desperate for more revenue — taking over the fuel sales.

I’ll bet my comic-book collection there’ll be more change in the next few decades. We probably can’t even foresee what’s coming down the line.

About the Author

Ralph Hood | Certified Speaking Professional

Ralph Hood is a Certified Speaking Professional who has addressed aviation groups throughout North America. A pilot since 1969, he's insured and sold airplanes at retail and distributor levels and taught aviation management for Southern Illinois University.

Ralph Hood is also an award-winning columnist (he writes for several publications), a salesman and sales manager (he sold airplanes, for crying out loud!), a teacher (he taught college-level aviation management) and a professional public speaker who has entertained and enlightened audiences from Hawaii to Spain, and from Fairbanks to Puerto Rico.

  • Certified Speaking Professional (CSP), National Speakers Association
  • Past member, National Ethics Committee, National Speakers Association
  • Past president of Alabama Speakers Association
  • Member, Alabama Aviation Hall of Fame
  • Past National Marketing Mentor, AOPA Project Pilot