Competition on airport’s horizon

Updating the rules and standards for businesses at the Eagle County Regional Airport will make the Federal Aviation Administration feel better, but it could make life tougher for the airport’s private aviation operator.The Vail Valley Jet Center could see competition for fuel sales, as well as hangar and ramp rentals, if the county approves a new set of standards for doing business at the airport.Jet Center President Bryan Burns says the jet center isn’t trying to keep competition out of the airport, but the county’s timing is premature. It should be all business, he says, not just making changes the FAA hasn’t yet mandated.”We’re trying to get the county commissioners and the airport manager to treat this like a prudent business deal,” says Burns.The county’s minimum standards have been in place in the airport since 1986, and for the past four or five years the county has been approached regularly by companies who want a piece of the airport’s growing private aviation pie. That would come in the form of a second Fixed Base Operation, or FBO, selling fuel and providing hangar space and other services for private jets, aviation’s version of a livery stable.”The county has reasonably been telling people we need to finish the minimum standards and the airport’s master plan,” says Eagle County Attorney Tom Moorhead. “When we have those documents in place we’ll move ahead with a second FBO. The people who are seeking a second FBO have been patient.”While the FAA has not ordered the county to update its airport standards, Moorhead says, the agency does expect the county to keep a close eye on operations in which it has invested. The feds, in fact, have pumped almost $26 million into the airport over the past few years to upgrade the runway and other facilities.”We need to move forward on this,” says Eagle County Commissioner Tom Stone. “If we don’t move forward, we will soon be compelled to do so by a court.”At least four companies have expressed interest in running a FBO at the airport. Burns says they’d better be in it for the long haul.In the past few years, the airport’s annual fuel sales have increased from 1.2 million gallons to 3 million gallons, at a cost of about $3 per gallon, says Greg Mahana, aviation manager of High Tech Aircraft Corp., a potential FBO operator. The county charges a fee of 8 cents a gallon, as well a sales tax.With 12 percent annual growth in fuel sales, he says, they’re not dividing the pie.”You can grow the pie,” says Mahana.Mahana says the Jet Center’s hangar facilities won’t handle all the current traffic. High Tech Aircraft’s $30 million Gulfstream jet, for example, has to be parked at the Rifle airport, he say<with Garfield County collecting the $10,000 it costs to care for the jet and its staff.Burns disagrees. The Jet Center runs at 85 percent capacity only 15 percent of the time, he says, and only eight times this year has the Jet Center been unable to accommodate every request it’s received for hangar space. He likened rushing into a second FBO to building a church for Easter.”The Vail Valley Jet Center is meeting customer demands and has adequate hangar space,” says Burns.Even at about 12 percent annual growth in private aviation, Burns says, the airport is four to five years from being able to support two operations.”Four to five years is a reasonable target date because, historically, if the trends continue and the growth moves in the same direction, that would allow potentially two providers to be financially healthy,” Burns says. “Right now, the timing of a second FBO it is very premature. It comes down to timing and a high level of standards.”The current airport standards have been in place since 1986, when the Vail Valley Jet Center was originally launched by former Vail Resorts owner George Gillett. Since 1988, the Eagle County has been in an on-again-off-again effort to upgrade the airport’s standards.Burns said that under those 1986 standards, the Jet Center had to immediately invest $3.1 million to meet that criteria. In the last 15 years, $18 million more has been invested in the company.To launch an FBO, operators will have to lease at least six acres from the county and invest at least $5 million to build the required facilities, according to Paul Meyers of Aviation Management Consultant Group, one of the companies interested in running a second FBO at the airport.”Vail is a world-class resort, and this is the same as a Motel 6 being built next to a Ritz Carlton,” said Burns. “The Vail Valley Jet Center is a Ritz Carlton. The Vail Valley’s private aviation customers are not a Motel 6 clientele. … The Vail Valley Jet Center is not trying to inhibit competition at the airport.”