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General Aviation Airport Funding Strategies

General Aviation Airport Funding Strategies. FAA Center of excellence for General Aviation Research (CGAR) Keith Bagot, Project Manager Massoud Bazargan, PI. Overview. GA airports will not be able to fund their planned development (Source: GAO Testimony, 2003)

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General Aviation Airport Funding Strategies

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  1. General Aviation Airport Funding Strategies FAA Center of excellence for General Aviation Research (CGAR) Keith Bagot, Project ManagerMassoud Bazargan, PI

  2. Overview • GA airports will not be able to fund their planned development (Source: GAO Testimony, 2003) • How can GA airports attract funding? • Are there any innovative financing techniques available for GA airports?

  3. Overview GA Airports Open to Public 4,508 • GA airports included in National Plan of Integrated Airport System: •  10 based aircraft •  20 miles from another NPIAS airport NPIAS GA Airports Public Ownership – 2,420 Private Ownership - 138 None-NPIAS GA Airports (Local Service Airports) 1,950

  4. Overview (Cont.)

  5. Phase I • Mailed to 2,288 GA airport managers from 8 FAA regions • 588 competed questionnaires (25.7% response rate)

  6. Sample Characteristics

  7. Subsidized and Non-subsidized Operational Definitions Non-subsidized GA Airport - Airport with ability to generate adequate revenue to cover all normal expenses for its operation, administration, and maintenance, and for the local share of federal and/or state funded capital improvement projects (matching funds) Subsidized GA Airport - All others

  8. Subsidized or Not

  9. Percent of Non-Subsidized Airports by FAA Region

  10. Importance of Revenue Sources

  11. Phase II • Analysis of best practices employed by managers of self-sustaining GA airports. • Specific Revenue Generators examined • Hangars • Fuel • Non-aeronautical revenues

  12. Process for Phase II • 45 GA airport managers were interviewed. • 6 European GA airport managers were also interviewed.

  13. Process for Phase II • Designed a new questionnaire. • Survey sent to 126 GA Airports Managers • Received usable results from 66 respondents.

  14. Self-Sustaining Airports

  15. Airport Governance

  16. Locations of GA airports

  17. Characteristics of real estate development near the airport

  18. New initiatives to increase revenue during the past 10 years

  19. T-Hangars

  20. Number of T-hangars at GA Airports

  21. Operation of T-Hangars at GA Airports

  22. Views of GA Airport Managers on Outsourcing T-Hangar Operations

  23. Deposit required for a customer to be on the T-hangar waiting list

  24. Corporate and Maintenance Hangars

  25. Corporate hangars at GA airports

  26. Corporate hangar operation at GA airports

  27. Do you see a a strong need for corporate hangars in the area around the airport?

  28. Do you regularly evaluate hangars rental rate ?

  29. T-Hangar Construction

  30. Hangar Construction • Becoming increasingly more expensive: • materials • labor • safety and environmental regulations at federal, state and local levels • GA airport mangers typically not comfortable with outsourcing construction of hangars.

  31. Hangar Construction • Construction of T-hangars recently eligible for AIP (Airport Improvement Program) – lowest priority. • Few states provide support for low priority projects (FL, CA, TX).

  32. Hangar Construction • Holland SheltAir • Full service FBO owns and operates corporate hangars and T-hangars in FL and NY.

  33. Hangar Construction • Unique Example: • Each T-hangar : $24,000/unit • Decide to build 40 = total cost of $960,000. • FDOT provides up to 80% grant (20% matching from the airport) • Airport share: $192,000 • Developer steps in – pays Airport share in return for a 30-year ground lease. • Developer pays 7% for the FDOT share investment ($53,760)

  34. Revenues and Expenses

  35. Economic Benefit of Third-Party Construction of T-hangars • Airport receives $72,926 from the airport investment fee and ground lease. • Airport’s marketability increases due to new hangar facilities. • Airport incurs no operational or maintenance expenses. • At end of lease period, airport assumes control and collects all revenues for itself .

  36. Fueling

  37. Economic Benefits of Self-Service Fueling System • Fuel sales reported as the second best source of revenue. • Revenue generated through fuel sales and/or Fuel Flowage Fee (FFF).

  38. Fuel Sales at GA Airports(subsidized & non-subsidized) Majority of GA Airports handle fuel sales through one FBO

  39. Economic Benefits of Self-Service Fueling System • Available 24 hours a day, 7 days a week • Added convenience increases marketability of airport

  40. Availability and Operation of Self Service Fueling System Availability Operation

  41. Should the Airport handle the operation of fueling system?

  42. Do you regularly adjust Fuel Flowage Fee?

  43. Level of competition for fuel sales from adjacent GA airports

  44. Constraints to Installation of Self-Service Fueling System • Can be prohibitively expensive to purchase and install ($150,000+) • Must have sufficient GA traffic to be economically feasible (minimum of approximately 25,000 gallons sold per year) • Maintenance, operations and depreciation costs must be taken into account

  45. Non-AeronauticalRevenue Sources

  46. Creative Land Use Development • Business Parks • Golf course • Vehicle parking • Car dealers • Rental car agencies • Campground/RV parking • Agricultural Lease

  47. Creative Land Use Developments • Mineral rights • Field sports • Special activities and events catering to both aviation and non-aeronautical interests (car shows, auto sales, expositions)

  48. Combined strategiesLocation

  49. Combined strategiesReal-Estate Development

  50. Combined strategiesT-Hangar competition

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