The Star Beacon; Ashtabula, Ohio

Local News

February 16, 2011

County airport flying high in debt

Facility set to lose $100K this year

JEFFERSON — The Ashtabula County Airport will lose more than $100,000 this year, 27 percent more than in 2010, prompting county commissioners to ask some hard questions about the airport’s value as an “economic development tool.”

Dave Price, Airport Authority president, met with commissioners in a work session Tuesday morning to present the authority’s 2011 budget. The overview projects a gross profit of $160,380 and expenses of $263,799, for a $103,419 loss. The county’s general fund will have to bear that loss in order to keep the airport open.

Commissioners, weary of having to prop up the airport year after year, are starting to question the facility’s value and long-term viability.

“The county government needs to be run like a business, and this is a business that is losing money,” Board of Commissioners Daniel Claypool said. “I don’t see any alternatives being offered.”

Closing the airport is not a viable option because the authority has received millions of dollars in assistance from the Federal Aviation Administration over the years, and that money would have to be repaid. Further, the authority has debt on new hangars that still has to be repaid, about $90,000 annually. There are no buyers for the facility, and the authority has been unable to find a company willing to manage the airport in return for whatever profits could be returned.

Meanwhile, demand for airport services has fallen with the recession, and Price does not anticipate a rebound, especially in general aviation. He said fuel sales to general-aviation customers — those who fly as a hobby or transportation alternative — dropped 45 percent last year, when compared to the 10-year average of fuel sales.

Airports make their money by renting hangar space and selling aviation fuel. Price said there are 65 registered aircraft owners in the county, and after removing those who fly out of “farm fields,” the airport has the hangar business for virtually all of those aircraft.

“As a hobby, this is pretty expensive,” Price said. “It’s all done with marginal dollars. … Those used to be something that was left over (after paying a family’s living expenses).”

Commercial aviation — the corporate jets owned by county companies or that bring corporate executives to visit the county — is an undependable but lucrative source of business, especially if the pilot purchases fuel at the airport. The facility also charges the jets $100 landing fees.

This income comes at the expense of maintaining a longer runway and meeting FAA standards for commercial aircraft operations. Thanks to poor visibility and icing issues at the county airport this winter, local corporate clients MFG and Delta Railroad Construction have relocated their jets to Youngstown Regional Airport until local conditions improve, Price said.

Corporate jets from KraftMaid, Love’s, Save-A-Lot and other firms with a presence in the county use the airport, but Price said there’s nothing the authority can do to increase that traffic. He said the executive whose jet lands in Erie, Pa., and drives into this county to look at a prospective site will pass a couple of industrial parks in Erie County before he or she crosses the state line to see what this county has to offer.

“We can drive the customers away (through poor service/ maintenance), but we can’t attract them,” Price said.

During the discussion Tuesday, Claypool asked Price if perhaps it’s time the county scale back the airport’s operation so it no longer serves commercial aircraft. He said while the conventional wisdom has been that the airport is an economic development tool, he doubts if it has swayed any decisions regarding locating a new plant or retail outlet here.

Price said doing so would strip the airport of an important revenue stream while keeping fixed costs, like the hangar debt and insurance. Given the state of general aviation, he said it would be impossible to hang the airport’s future on that alone.

Commissioners told Price he needs to look for new revenue sources that can reduce the projected loss. One possible source is the 200 acres of land that the authority has offered for farming. In the past, the airport received no income from that land, but this year it is being offered on a competitive-bid basis.

The airport has one full-time, one part-time and a seasonal employee. Price said that with the budget and staffing the airport has, the operation will have to be pared back to just five days a week, even before attempting to cut another $23,000 or more from the projected loss.

“It does not look like seven days a week is feasible,” Price said.

 

Text Only
Local News
Community Calendar
Loading…
Events by eviesays.com
House Ads
AP Video