Island Market

May 8, 2002

Island Market

It's not New York City; so why does Long Island Jet Center have 3 FBOs?

By John F. Infanger, Editorial Director

May 2002

Leonel Rivera, left, general manager at LIJC Republic Airport; and Bill McShane, president
Long Island Jet Center's three FBOs: Islip (left); Westhampton Beach (center); and Farmingdale

'You're late - that's $50,000'

Earlier this year, Islip's Mac-Arthur Airport was hot news, putting in place a $50,000 charge, not fine, for aircraft landing between 11:30 p.m. and 6:30 a.m. In short order, FAA began a review which led to the order being rescinded.

"The FAA stepped up and made a little bit of an issue with it," says Bill McShane of the Long Island Jet Center. The ordinance was passed in response to citizens' complaints. There is already a $1,000 fine for Stage 2s landing overnight.

"There were many operators who stopped operating during those hours," he explains. "They didn't want to be the test case."

RONKONKOMA, NY - William McShane is quick to point out that Long Island is its own market, and on a different scale than the neighboring New York metro. It is a classic mix of corporates and pistons, with airlines (Southwest) playing a role here at MacArthur Airport. Nearby Republic Airport is close enough to the city to make an effort to compete with White Plains. And Westhampton Beach (on the far east end) is, of course, seasonal. Long Island Jet Center has the "market" covered, says McShane, a native.

"When I think of Long Island, I think of Long Island," he explains. That is, it's not "the city."

"We were a defense driven economy for many years. When Grumman left it was devastating." The defense presence is why sleepy Westhampton has a 9,000-foot runway and 5,000-foot crosswind.

"All three of these airports on Long Island," the 42-year old LIJC president says, "not one of them independently does a good job of being a strong general aviation airport. We recognized that Islip [MacArthur] wasn't growing dramatically with bizjets and flight training or other GA. In order to make a viable goal of hitting that market, we needed to tie into Republic Airport [via acquisition].

"What we need to do now is take that and tie it into the existing business, so that we're able to cut our costs fairly significantly in administering the business - by having only one general manager at each location and handling everything else here corporately.

"I personally see Repub

lic Airport as the business jet airport for Long Island. It will become a mini-Teterboro. There is no question in my mind that we are going to see a significant amount of bizjet growth at that airport over the next five years."

Situated in Farmingdale northeast of New York City, Republic Airport is managed under private contract (AMPORTS) and owned by the state. Long Island Jet Center in 1998 acquired the leasehold of the former Beechcraft East, including 120,000 feet of office/hangar space; 18 acres, manages another eight acres (tiedowns), and first right of refusal on 25 acres of development; the original airport tower; two active flight school tenants; and the recently opened American Air Power Museum for which LIJC is providing space.

Republic will also be the closest airport to this summer's PGA U.S. Open, McShane points out, and he looks to bring new exposure to the capabilities of the airport, which is up to corporate standards airside.

LIJC didn't begin operating at Republic until late 1999, due to legal wrangling with another FBO and the airport. While absorbing the Republic FBO, the Jet Center's personnel demands were coming from Mac-Arthur, being impacted by "the South-west effect." The FBO pumps all airline fuel at MacArthur - some 11 million gallons a year. "We were on a pace to do 14 million until it dropped off dramatically last fall," says McShane.

Regarding fuel, McShane says itinerant corporates account for less than half a million gallons airport-wide at Islip. "We've seen very little growth with business jet traffic. In fact, flight training and the rest of general aviation have been quite flat for 19 years, though we have seen some growth with flight departments," he says. That leaves Republic the target for growth, says McShane, particularly as White Plains and Teterboro come under increasing neighborhood scrutiny.

The primary focus at Long Island Jet Center now, says McShane, is building a new terminal complex at Republic. The company is also getting ready to build a new terminal at the Francis S. Gabreski Airport in West-hampton Beach. Owned by Suffolk County, the airport is home to the Air National Guard and is an alternate landing site for the Space Shuttle. "We go like gangbusters out there from late June to September. In winter, we're lucky to see two or three airplanes a week," says McShane.

The Long Island Jet Center had total revenues of some $10 million for the three locations in 2001, according to McShane. He foresees 10 percent growth in 2002, a drop from the 15 percent average of the past five years, he says.

At Islip, growth will come as the air carriers rebound. Besides Southwest, MacArthur is served by Delta Express; American Eagle; U.S. Airways; Continental; Commute Air; Comair; and ASA. The FBO also does the baggage handling for Comair, ASA, and Delta Express.

Westhampton will grow at a pace with local - and aggressive, says McShane - development efforts. But it will remain a summer airport.

That leaves Republic, and possible acquisitions. "We've looked at several locations, all in the Northeast," explains McShane. "But it's customer-led growth we looking for.

"I could see the Long Island Jet Center having five or six FBOs. What we're focused on now is maximizing the potential of what we have."