TAC Air Seeks Federal Probe

Sept. 13, 2011
Grants used at Chattanooga at issue

A company that sells aviation fuel and leases hangar space at Chattanooga Metropolitan Airport wants a federal investigation into federal grants the airport used for a rival service.

In a letter to the Chattanooga City Council and other public officials, TAC Air said that unfair competition was created when the airport built and recently started running a new fixed-base operation at Lovell Field.

"TAC Air welcomes competition as long as the same rules apply to everyone," said Greg Arnold, chief executive of Truman Arnold Cos. "I am asking for your consideration to intervene in this situation to ensure a 'level playing field' exists for all FBO operators at Chattanooga Metropolitan Airport."

The airport's chief executive declined immediate comment, saying it appears that issues raised by TAC Air will be resolved through the FAA's "routine administrative proceeding."

Airport chief Mike Landguth said it will give the FAA an opportunity to "once again review the questions raised in this letter and issue their findings before we make any public statements.

"In the meantime, we will continue working with all of our airport partners to provide the highest level of service and competitive pricing for our customers," he said in a statement.

Kathleen Bergen, an FAA spokeswoman, said Monday the FAA is aware of TAC Air's concerns about the airport.

However, she said, the FAA does not have a formal complaint from TAC Air and is not conducting an investigation.

Last month, the airport officially opened a $5 million general aviation terminal and hangar. A state grant paid for about 90 percent of the cost while the airport took care of the rest out of its operations budget. Also, about $3 million in federal stimulus money was used to pave an aircraft parking area at the site.

Airport and city officials said the operations, managed by Wilson Air, will help give Lovell Field a facility that's needed to better compete for general aviation business.

But in the letter sent to U.S. Rep. Chuck Fleischmann, R-Chattanooga, and U.S. Sens. Bob Corker and Lamar Alexander, both R-Tennessee, TAC Air cites activity by the airport that's "not only improper but unethical."

The Texarkana, Texas-based company said Chattanooga's airport has created an environment where a private business must now compete with a government-owned and subsidized facility.

For example, Arnold said TAC Air had tried to offer self-service aviation gas to airport users, but Landguth denied the request based on a lack of minimum standards to govern the operations. Arnold said the new aircraft service operated by Wilson Air includes a self-service fuel facility.

"So instead of allowing private business to fund these projects, Mr. Landguth convinced his board that it would make more sense to utilize public dollars for these projects, putting taxpayers at risk," the TAC Air CEO said.

Arnold said Memphis-based Wilson Air has not indicated it will provide aircraft maintenance services, which he claimed is a violation of the airport's minimum standards.

"Shortly after the management contract was signed with Wilson, Mr. Landguth issued a proposed set of changes to the airport's minimum standards," Arnold said, adding that the requirement to provide aircraft maintenance was eliminated.

Arnold said the move is an attempt to accommodate the Airport Authority's new general aviation facility "with total disregard for the established minimum standards and FAA policy and procedure."

He also mentions a bill introduced by U.S. Rep. John Duncan Jr., R-Tenn., in April that would establish a general policy for the federal government to rely on commercial sources to supply products and services it needs.

"TAC Air supports this legislation to prevent situations like what has happened at Chattanooga from happening at any other airport," Arnold said.

TAC Air said 30 percent of its hangar space is now empty and the addition of the new Wilson Air terminal "will only serve to flood the market with unneeded capacity."

Patrick Newton, communications director for Rep. Duncan, said Duncan has introduced the Freedom from Government Competition Act in previous Congresses going back to the 1990s and it was not done because of any specific issue at the Chattanooga airport.

David Edwards, TAC Air's marketing director, said the Duncan legislation is "on point."

"It's no different from what we've been saying from day one that this is an issue of government versus the free market," he said.

Contact Mike Pare at [email protected] or 423-757-6318.