Inside the Fence

July 23, 2009

Outtakes from a couple of recent interviews ... or, some thoughts on airports and their tenants ...

At recent meetings in Washington and Philadelphia, the opportunity to interview two notable airport managers arose. At the NATA FBO/Air Charter annual meeting, Gary Schmidt (page 21) was given the association’s airport partnership award. At the annual AAAE meeting, John Duval (page 10) was named incoming chair. Following are some thoughts that didn’t make the interviews.

Schmidt heads up the reliever airport system for Minneapolis-St. Paul’s Metropolitan Airport Commission (MAC). He is charged with the task of making the relievers self-sufficient.

Relates Schmidt, “We knew it would be very difficult, and we had a task force that we set up for a year. The idea was to see what improvements we could make to the reliever airports to see how they could become self-sufficient.

“And the agreement was, we wouldn’t pay for our capital projects; we would continue to get grant monies and take the local share from concession revenues at Minneapolis. But all the operating expenses would be paid for by our own revenues.

“We also said that if necessary we would impose a surcharge on all the tenants. If in any one year our revenue did not cover our operating expenses, the commission would have the right to impose a surcharge the following year. In the model out to 2020, we didn’t see any need to impose a surcharge.

“Here’s the model: in the first few years, we have a surplus. That just goes into our bank, and in the out years we’re projecting that the expenses may go up and some of our capital costs that we do have to incur will go up, and that will cover those capital costs.

“So, it does not go back into the MAC general fund; it stays in a reliever fund to help offset any need for a surcharge.”

Duval oversees the Beverly (MA) Municipal airport, after retiring from a career with the Massachusetts Port Authority/Boston Logan. He has a lone FBO at his airport.

“A very good one — North Atlantic Aviation,” says Duval. “Pretty much 60 percent of the revenue for the airport comes from that one tenant. There’s certainly not enough business for another full-service FBO.”

And how is his FBO doing?

“We ask him that every month. He essentially tells us that it’s not good but he’s going to survive. In the last couple of months the tone has been more optimistic. We’ll work with him from the airport commission point of view to make sure he does well.”

As a newcomer to the general aviation airport arena, has he considered getting into the FBO business?

Answers Duval, “That’s an interesting question because I talked to a couple of people this week who said that if you don’t run the FBO yourself you can’t make any money at a GA airport. Those thoughts ran through my head for a few minutes, and then I decided I don’t want the hassle.”

Thanks for reading.