For years, general aviation customers at Chattanooga Metropolitan Airport (CHA) longed for new service providers to help drive down higher-than-average fuel prices and hangar costs on the south Tennessee field.
A lack of competition led to inflated expenses for commercial tenants as well, notes CHA President and Chief Executive Officer Terry Hart. Prior to joining the airport five years ago, Hart spent 25 years in the airline industry.
"Not having competition has a tendency for higher fares, and the people here did not like that," he explains. There were also reports of "less-than-desirable service."
"Service is always relative to what people think," Hart acknowledges. "But it's pretty evident when you see competition move in - no matter what it might be - (and then) everyone wants to step up their service levels."
So the airport stepped up to move in some competition, while also taking the opportunity to control new construction at the airport. CHA built and financed $5 million worth of improvements to its general aviation area, including a 9,000-square-foot general aviation terminal, a 12,000-square-foot hangar and a fuel farm on the airport's west side. Fully 90% of the project costs were covered by a grant from the Tennessee Department of Transportation; the airport picked up the remaining 10%. This is the first phase of $10 million of new general aviation facilities planned at the airport.
The new terminal offers many of the same services and products as TACAir, a fixed-base operator (FBO) on the opposite side of the runway with a lease that runs through 2032.
Project: General Aviation Facility
Location: Chattanooga (TN) Metropolitan Airport
Cost: $5 million
Funding: 90% State Aviation Grants; 10% Airport Funds
Terminal: 9,000 sq. ft.
Hangar: 12,000 sq. ft.
Ramp/Apron: 182 ft. x 1,150 ft.
Fuel Farm: 20,000 gal. Jet A-2; 12,000 gal. Avgas
Fuel Flowage Fee: 13 cents/gal.
Operator: Wilson Air Center
Construction: 10 mos.
Architect: Allen & Hoshall
Engineer/Project Manager: Allen & Hoshall
General Contractor: Morgan/Paris Construction
2011 Operations: 26,811
Of Note: Year-to-date operations are up 13% vs. 2011
Annual Fuel Sales: Approximately 2 million gal.
Environmental Achievements: Terminal achieved platinum certification from U.S. Green Building Council; hangar received Gold.
Phase 2 Consultant: Airport Business Solutions
After issuing a request for proposals, CHA selected Wilson Air Center to operate its new facility under a five-year lease agreement, with one option to renew. This is the operator's fourth location.
Hart says the airport administration considered a variety of ways to bring in an additional FBO, including having an operator build out the FBO and operate it under a long-term lease. "We just felt that this arrangement gave us the best opportunity to respond to what the customers wanted," he explains.
Given its similar agreement with the Charlotte (NC) Douglas International Airport, Wilson Air Center didn't hesitate submitting a proposal to CHA, reports company vice president Dave Ivey. "We also have several locations under the traditional concession agreement, and we have seen great success operating in both structures," explains Ivey.
Economic Growth Fuels Expansion
A need for additional hangars to support current and future demand was one of the findings during the airport's master planning process in 2009. The arrival of a Volkswagen assembly facility and other new businesses has triggered significant economic growth and development in the Chattanooga region, Hart explains. "It was evident that we needed to get the infrastructure in place to support the economic growth," he says. "The airport is here to support the community."
CHA administration considers its FBO the front door to the community. "You want to be able to have a nice facility with competitive prices at your front door when business leaders come to your town," relates Hart.
Economic growth is part of what attracted Wilson Air to CHA. The company was impressed that the area was expanding, even in the midst of the global recession several years ago, notes Ivey. "We see great potential for the region at large, and specifically for the aviation sector in Chattanooga," he says.
While the airport's decision to finance and build the project has not been without opposition, Hart emphasizes that the airport's primary goal was to meet customer needs and support the growth occurring in the region. "We recognize it's a controversial project and it was a bold decision for the leadership to make," Hart acknowledges. "But we know it was the right decision - the right thing for our organization, the right thing for users of the airfield and the right thing for the community - as evident today. Users on the airfield are paying less and getting better service, and that's the most important thing."
The new FBO, which opened last year in August, "has done exactly what we expected," Hart reports. Competition has lowered the price of fuel and tenant hangar rates. Air carriers are experiencing lower into-plane fees, and service levels have improved across the airport, he adds. Airport administrators estimate that the price of fuel is approximately $1 less per gallon than it was before the new FBO opened. "And that's not just market fluctuation," Hart specifies.
"All the users on the airfield are benefiting from this, as competition usually does that," he says. "When competition comes into place, everybody steps up their level."
In addition, operations at CHA are up 13% from the same period last year, and Hart expects that trend to continue as the economy continues to improve.
Since the opening of the new FBO, the airport sought assistance from Airport Business Solutions regarding more general aviation expansion, including the construction of additional hangars.
The company researched demand and facilities at the airport and counseled CHA to proceed with the rest of its plans. Phase 2, which is scheduled to be complete by mid-2013, will include a 20,000-square-foot hangar and approximately 10,000 square feet of office space.
Airport Business Solutions' study showed that market rates for rent are currently well below market averages, Hart relates. "[The new FBO] is having an impact," he adds.
"We recognize that the growth is there, and it's going to continue to be there," Hart relates. "People want new facilities at competitive rates and that's the reason we're going forward with our Phase 2."
Construction & Operation
A 25-foot hill was removed to prepare for the development of the airfield's west side. The dirt was relocated to a south portion of the airfield, where it filled in ravines. The same area is also now home to a one-megawatt solar farm.
"The facility is built to meet the needs and requests of the community: first-class facilities at competitive prices," says Hart. Inside the terminal, users find an open and spacious floorplan with plenty of windows to allow for natural light and a view of the airfield. The design of conference facilities, a pilot lounge and quiet rooms was influenced by feedback from pilots and other airport users, notes Hart.
With the facilities complete, Wilson Air President Bob Wilson recalls the airport giving the FBO one objective: Take care of the customer. "And that's what we do," says Wilson. "It's great for us to have the support from the airport authority as we work to ensure that we provide a new business front door to the Chattanooga community."
Wilson readily credits the airport's role in the venture: "Not every airport understands the importance of general aviation and corporate aviation; this one does. And that understanding is reflected in their financial commitment to the success of this operation."
A Commitment to Green
Sustainability was an important aspect of the recent general aviation expansion at Chattanooga Metropolitan Airport (CHA), says President and Chief Executive Officer Terry Hart. As such, its new facility is the first FBO terminal in the world to achieve Leadership in Energy and Environmental Design (LEED) platinum status from the U.S. Green Building Council. Its hangar achieved gold status.
Some of the green aspects include:
Over the last 40 years, the city of Chattanooga has worked to transform itself from one of the most polluted cities in the nation to one of the cleanest. "And we share that same vision," says Hart.
Read more about other sustainability initiatives at CHA in the Special Runway & Ramp edition of Airport Improvement magazine in October.