Airport Business

DEC 2017 - JAN 2018

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34 airportbusiness December 2017/January 2018 By Curt Castagna AIRPORT GURU T he A i r p or t C o op e rat ive Research Program (ACRP), which is funded by the Federal Aviation Administration (FAA) and under- takes research in a variety of aviation subject areas, defines airport sus- tainability as practices that ensure: • Protection of the environment, including conservation of natural resources • Social progress that recognizes the needs of all stakeholders • Maintenance of high and stable levels of economic growth and employment There is no simple formula for achieving airport sustainability, as each facility has a unique operating environment, business structure, governance and market. Airport management face challenges in meeting user needs for maintenance, modernization, budgeting, security, grant assurances and local political and community initiatives. This discussion is designed to encour- age visionary thinking from airport, business and community leaders and airport users, on how to collabora- tively achieve a robust airport that supports both economic develop- ment and public access to aviation. NAVIGATING THE PATH TO SELF-SUFFICIENCY When it comes to maintaining the economic health of an airport, it is crucial to understand its unique operating environment. In broad terms, general aviation airports must comply with a host of federal regula- tions and requirements, while nav- igating local market forces and eco- nomic and environmental pressures. General aviation airports tra- ditionally generate revenue from lease rates, fees and charges col- lected from tenants and users who provide a broad range of aeronautical services to the aviation community including: aircraft sales and acqui- sitions, fuel, aircraft ground support, passenger and crew services, aircraft parking and storage, on-demand air charter, aircraft rental, flight training, aircraft maintenance and overhaul facilities, parts sales, and business aircraft and fractional ownership fleet management. Development at general aviation airports often takes the shape of pub- lic-private partnerships, modeling the discussions currently underway at the nation's commercial service airports. For example, an airport sponsor enters into a type of pub- lic-private partnership with a fixed based operator (FBO) that provides airport users with a wide range of aeronautical services. In return, the airport sponsor receives a fee for the land and the community receives the economic benefit, with mini- mal risk for the business enterprise that is created. An increased num- ber of airports are also entering into agreements with private companies that provide renewable energy sourc- es, such as solar panel installations, that can diversify revenue streams, reduce energy costs and benefit the environment. A third revenue stream comes from specialty companies that serve aviation-related segments of the economy. Corporate and gener- al aviation services are augmented by an array of mixed-use facilities, including business parks and indus- trial centers, which make airports a powerful economic engine. Finally, public-use airports ben- efit from grants provided by the FAA for vital infrastructure proj- ects. Eligibility for these Airport Improvement (AIP) funds is based on the airport's ability to maintain a level and competitive playing field for leaseholders engaged in aeronauti- cal activities. To maintain its grant assurances, airport sponsors are responsible for ensuring its tenants provide services at fair, reasonable and non-discriminatory prices. COMPETITION, NOT REGULATION, CREATES HEALTHY AIRPORTS At some airports corporate aviation accounts for a disproportionate share of revenue generated compared to smaller general aviation aircraft. How do airports achieve economic sustainability while maintaining a healthy mix of jet, propeller and heli- copter operations? A proper mix of operations and aircraft cannot be achieved through increased federal regulation or mar- ket manipulation. Rather, airports must aggressively work to imple- ment policies that maintain balance among the needs of diverse airport users, while extending the benefits of aviation to the local community. F or managers of general aviation airports across the nation, the definition of sustainability is as diverse as the stakeholders whom they serve. However, most contend that maintaining both economic viability and social responsibility are vital to maintaining a healthy airport. Is Your Airport Healthy? As the economics of business aviation show, sustainability is not achieved through heightened regulation or market manipulation.

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