Cincinnati Int’l Assumes Operation of Local University Airport

Early this year, Cincinnati/Northern Kentucky International Airport (CVG) struck a noteworthy deal to manage and operate Miami University Airport (OXD), a quiet general aviation airfield located about an hour north of CVG in Oxford, OH.

Per the five-year agreement, CVG will lease OXD for $84,000 per year and take over revenue streams such as aircraft fueling, aircraft parking and hangar rental. Additionally, Miami University will pay CVG $120,000 per year to operate the airport. The general aviation airport is said to log about 20 flights per day, mostly from recreational fliers and private planes operated by families of university students. Its 4,011-foot asphalt runway and partial parallel taxiway also support law/drug enforcement flights, military practice approaches, and powerline inspections by Duke Energy.

Mindy Kershner, senior manager of Communications and Community Affairs for CVG, describes the agreement as mutually beneficial. CVG gains the opportunity to expand its existing footprint in general aviation; and the university gets out of the airport management business and maintains its full focus on educating students.

“They found themselves at a decision point of whether to maintain the airport or pursue other developments,” Kershner notes.

When Miami University first approached CVG to discuss the situation in summer 2019, it had sold its King Air and was not staffing OXD but was spending about $125,000 annually to maintain the airport. In essence, the university felt it was not in a good position to manage or grow operations at OXD, and CVG saw potential in the fledgling airfield. Executives at the larger commercial airport were not only intrigued by the chance to serve traditional weekend fliers, they also saw opportunities to explore more avant-garde markets such as drones and vertical-launch aircraft.

“When we look forward to the future of aviation, we thought about if we were positioned to capitalize on growth in the general aviation markets,” says Scott Gibbons, vice president of Business Administration for CVG.

“There was a long period of due diligence that we went through to understand what we were getting into and what it would take to operate the airport,” he adds.

After nearly two years of analysis and examination, CVG was ready to commit. The two organizations signed an operating agreement in January 2021, and FAA approved the arrangement in March 2021. The original five-year lease and operating contract can be extended every five years for a total of 30 years; the university retains ownership of OXD and associated 300 acres of land.

Candace McGraw, chief executive of CVG, expressed enthusiasm about the arrangement in a press release issued shortly after the deal was penned. “Over the last several years, the CVG team has been focused on growing and diversifying the airport business,” said McGraw. “I could not be more pleased with this partnership with Miami University and the opportunity to manage the OXD Airport. CVG will bring our airport business know-how to handle the day-to-day affairs of OXD. Our staff will learn a great deal about general aviation airport management that will complement our core business of owning and operating CVG Airport.”

Gregory Crawford, president of the university, was similarly optimistic: “By partnering with CVG, Miami is tapping into unparalleled expertise and knowledge to improve airport services and benefit the entire region.”

Greater Possibilities

McGraw specifies that CVG’s core business will continue to be owning and operating CVG, which served more than 9 million commercial passengers in 2019 and handled more than 1.5 million tons of cargo in 2020. While the commercial airport already serves general aviation customers via its fixed base operator, most are corporate aircraft. Traffic at OXD is predominantly from recreational pilots.

As CVG executives weighed the pros and cons of operating a stand-alone general aviation facility, they considered how it aligned with the airport’s strategic plan. CVG’s vision is to be the catalyst that transforms the region, and its mission is to redefine and elevate the role of an airport. One of the five key objectives in its strategic plan is to leverage ventures, partnerships and collaborations to benefit CVG and the entire region. The agreement with Miami University is precisely what CVG envisioned when crafting that strategic objective. As the project team assessed each benefit of the partnership, it realized there were even greater possibilities for OXD.

“We plan to staff the airport with a full-time airport manager, and more staff resources from CVG will be committed to making our management of OXD successful,” McGraw told the Oxford Observer back in February. “We don’t expect to see a huge uptick in airport activity — it will remain a general aviation airport. However, CVG believes we can optimize the fundamentals of this airport’s business.”

After taking over management of OXD, the CVG team delved deep into all aspects of the general aviation airport’s operations, business and facilities. Currently, personnel are determining what areas need the most attention as they move forward operating the airport.

“We saw this as an opportunity to get in and learn about general aviation and leverage the site for the future of aviation,” Gibbons explains. The CVG leadership team is also able to develop its personnel in ways that might not have been possible prior to entering the operating agreement, he adds.

While still in the early stages of this partnership, CVG has already based one employee at OXD.  Gibbons reports that he is gaining valuable operations and leadership experience. Looking ahead, Gibbons foresees additional opportunities to engage CVG and university staff in aviation-related business and innovation.

For instance, the facilities at OXD provide a more flexible space for CVG to work with startup companies interested in testing their products in an airport environment. Sometimes, such activity can prove too intrusive at larger commercial airports like CVG.

“There’s a lot of thinking around how to get people, goods and cargo from urban to rural areas,” notes Kershner. “Small general aviation airports, like OXD, are perfect for this and crucial to making advancements in these areas.”

McGraw says that, over time, OXD may serve as a laboratory for aviation innovation—a place to explore the synergies around advancing drone technology, airspace management and increased air mobility. There has even been talk about projects with NASA.

Looking Ahead

Miami University and CVG both foresee the new airport operating agreement fostering additional partnerships and mutual benefits in the future.

“This long-term commitment to OXD airport will create more avenues for collaboration between CVG professionals and Miami’s faculty, and more opportunities for our students in terms of potential projects and internships,” said Crawford in a press release.

Kershner notes that strong educational partnerships with Miami University and other colleges and universities in the area dovetail with CVG’s ongoing research and development initiatives. Such collaborations can produce revenue for the airport and schools, she adds.

As airport personnel explore ways to increase traffic and revenue at OXD, federal funding is an important part of the equation. Currently, there are four general aviation aircraft based at the airport. But if the CVG team can increase that number to 10, OXD could qualify for FAA Airport Improvement Program non-primary entitlement funding of up to $150,000 per year. Naturally, this would be a major boost for the small facility.

As CVG continues to settle in managing OXD, the near-term goal is capitalizing on its strengths.

“The airport was underutilized,” Gibbons comments. “Our first year is focused on stabilizing the airport, its expenses, the facilities and assessing the infrastructure, which means we’re still developing what the revenue potential is and exploring that.”

In exploring new revenue opportunities many airports look within their infrastructure or land use for growth potential, but CVG took an unconventional approach in their agreement with Miami University. They are using their core business, strategic goals and the future of aviation innovation as their path forward.

“We are a commercial airport operator, but we’re using our knowledge not only for the operational expertise but for our business growth as well,” Gibbons concludes.