A second FBO for the Fernandina Beach Municipal Airport?

Submitted by

Suanne Z. Thamm, Reporter News Analyst

Fernandina Beach Municipal Airport

At the October 16, 2012 regular Fernandina Beach City Commission (FBCC) meeting, Brian Echard, principal of 8 Flags Aviation (8FA), presented a proposal to add a second fixed base operation (FBO) to the city airport.  Currently, McGill Aviation is the sole airport FBO.   Echard, a private businessman and resident of Fernandina Beach since 2002, is a private pilot with two owned aircraft based at the city airport and personal knowledge of FBO operations around the country.  He has worked for the past year with aviation consulting companies to provide industry-specific data and research on the demand and feasibility of a new FBO at the city airport.  Commissioners listened to his proposal seeking a 20-year lease and agreed to schedule a workshop to discuss it in more detail prior to taking a position.

Echard’s goal is to provide first class aviation services to both local and visiting aviators.  His company would provide direct revenues to the city airport through increased fuel sales and ancillary services, as well as long-term land and hangar lease payments.  Revenues would represent a significant increase over current airport income and provides additional funding for other airport initiatives.

Echard said that 8FA will create 8 new jobs initially in the city, actively market the city and the airport for increased activity through aviation-related associations and travel organizations, provide a new and modern FBO, and work to recover flight activity and fuel sales that have been lost in recent years.

Projected annual revenues to the city from land lease, hangar lease and other fees start at $61,825 in Year 1, rising to $83,425 in Year 5.  Revenues over the 20-year land lease are anticipated at $2.4M.

Most of the costs for infrastructure, site development and parking will be assumed by 8FA.  The company will also build the new FBO at its own expense in the north terminal area on the Airport Master Plan that is already designated for aeronautical development.  This site, according to Echard, does not conflict with city plans to build an emergency operations and welcome center on the east side of the airport.

8FA has engaged a professional aviation management firm, ABS Aviation, to assist with management and start up.

Echard presented a project timeline showing that 8FA has been working since January to meet all pertinent regulations, determine economic viability and develop plans.  He has met individually with City Manager Joe Gerrity and four commissioners.  Vice Mayor Jeffrey Bunch declined to meet with him.  He has submitted to the city a commercial lease and operating permit application in addition to a business plan.  He hopes to complete negotiations on key terms and conditions in November and move ahead with final permitting and development in January.

Michael Hodges of ABS Aviation presented the FBCC with information regarding Federal Aviation Authority (FAA) rules and policy on allowing FBOs to operate at the airport.  Hodges stated that FAA Grant Assurances #22 and #23 require the city to make airport services available to any qualified party on “fair and reasonable terms without unjust discrimination” and prohibits the exclusive right of any party to provide aeronautical services to the public.  He also cited FAA Airport Compliance Manual Order 5190.6B, Chapter 9:  Unjust Discrimination between Aeronautical Users:

If adequate space is available on the airport and the sponsor is not already providing identical aeronautical services, Grant Assurance 22, Economic Nondiscrimination, requires the sponsor [e.g., the City of Fernandina Beach] to negotiate in good faith and on reasonable terms with prospective aeronautical service providers.

Hodges added that the FAA interprets the willingness of a prospective provider to lease space and invest in facilities as sufficient evidence of a public need for those services.  In such a situation, the FAA does not accept a sponsor’s claim of insufficient business activity as a valid reason to restrict the prospective provider access to the airport.

Hodges laid out 6 specific concerns raised by the city manager and addressed each one, ranging from site selection, coordination with current leases and trends to requirements of the current airport master plan and the airport layout plan, business plan and the appropriate procurement process to permit an additional FBO.

Following the 20-minute presentation, Mayor Arlene Filkoff asked City Manager Gerrity about the next steps.  He suggested that a workshop be held after November 1.  Commissioner Tim Poynter asked that City Attorney Tammi Bach have enough time to research and answer legal questions in connection with adding a second FBO.  No other commissioner asked questions or made comments at that time.

There was no public input taken during or following the 8FA presentation, although several individuals had come to the meeting to speak on this topic.  Vice Mayor Jeffrey Bunch strongly objected to taking such input, and both Commissioners Charlie Corbett and Sarah Pelican agreed with him.

At the end of the meeting during commissioner comments Vice Mayor Bunch expressed his displeasure at what he characterized as 8FA’s “gun to the head” approach on this issue.  He suggested that before the workshop the commissioners should read the FAA Airport Compliance Manual, specifically chapter 8, which addresses denials of FBO requests.

October 17, 2012 1:07  p.m.

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rod beck
rod beck (@guest_1890)
11 years ago

Here’s another classic example of a over zealous aviation entrepeneur who THINKS a second or additional FBO (Fixed Base Operation) with a limited market to began with MAY succeed. All this accomplishes is dividing the current market share by TWO. It will NOT increase total demand signaficantly to justify “two cats eating from the same dish”. The ultimate result will put each operator in a desperate competitive war for the aviation consumers business be it recreational or corporate. History will show, that a principal cause of FBO failures is over satuation at GA airports – over supply for a very limited demand – case in point; Reno, NV and Essex County, NJ. Although the FAA clearly states that when funds are allocated to any county or municipal airport project, exclusive FBO “rights” are forbidden. But the addition of FBO’s often merely guarantees failure of one or both given the high “break even” points or fixed costs characteristic of the aviation industry. And frankly, any aviation consulting firm that demonstrates a second FBO is justified may be ultilzing faulty demographics or market resach methologies. I would suggest the Airport Board consult the American Association of Airport Executive and the NATA for an evaluation and input before a final agreement with “8FA” is finalized. Although I commend Mr. Erhards noble efforts, however, as an aviation business consultant, I would advise that this project is a best, extremly financially risky.