FAYETTEVILLE — Drake Field administrators will hire employees and buy equipment when the city takes over full operation of the city airport.
City Council members voted unanimously Tuesday to sever ties with Million Air Fayetteville, the fixed-base operator that has provided services since 2005 at Fayetteville Executive Airport.
Despite pleas from owners of two companies who have expressed interest in replacing Million Air, aldermen also approved a $1.8 million adjustment to the airport’s 2013 budget, reflecting new revenue and expense projections associated with the takeover.
At A Glance
What Is A Fixed-Base Operator?
A fixed-base operator is a company based at an airport that sells fuel, parks aircraft and provides flight planning, concierge, catering and ground transportation services for pilots, crew and passengers.
Source: Staff Report
Million Air repeatedly has been late paying rent and remitting fuel fees.
Terry Gulley, Transportation Services director, said the company ran out of fuel twice in the past three months. A pilot for the Louisiana State University women’s basketball team had to fly to Northwest Arkansas Regional Airport to refuel and return to Drake Field to pick up the team.
“We cannot have that,” said Justin Tennant, Ward 3 alderman. “That is unbelievable to me.”
Million Air’s contract ends March 15. Ray Boudreaux, airport director, said he hopes the company will stay until then, and the city will take over the next day.
The transition comes with substantial costs for an airport that has struggled to make ends meet since commercial airlines left for XNA in the late 1990s.
Tuesday’s budget revision set aside $217,000 in salaries and benefits for four full-time and three part-time employees and more than $1.3 million in fuel purchases from a yet-to-be-named bulk provider. Airport officials anticipate spending $98,000 on one-time capital expenses, including a belt loader, boarding stairs, a golf cart and tow bars.
Boudreaux predicted the city would earn a roughly $35,000 annual profit by taking on fuel sales rather than collecting a fixed fee per gallon from a private operator. At that rate, it would take less than three years to repay upfront capital costs. Boudreaux said profit would be reinvested as repair and renovation are needed.
“You want to try to generate as much revenue as you can, so there’s never a requirement for the taxpayer to pay for having this airport,” Boudreaux said.
Like the water and sewer and solid waste money, the airport operates as a self-contained enterprise fund, meaning it must cover all expenses with money it generates without support from the general fund.
Dave Powell, an owner of Summit Aviation, the fixed-base operator for the Springdale and Bentonville municipal airports, and Taylor Scott, managing member of Fly Arkansas, the fixed-base operator for airports in Boone and Baxter counties, urged City Council members Tuesday to let their companies bid to replace Million Air.
Both said their companies have experience taking on airport operations on short notice.
Scott asked aldermen to consider letting his company fill in temporarily while city officials put together requests for formal bids from other businesses.
“We really have had no opportunity to make a proposal to the city,” Powell said. “All we’re after is a fair shake.”
Powell, in a Jan. 25 letter, said city officials would be taking on a significant investment for a minimal gain by moving fixed-base operator services in-house.
Boudreaux said city officials thought they were doing the right thing when they approved a contract with Million Air eight years ago.
“We felt like it was time to bring in a professional fixed-base operator to see if we could go to the next level,” Boudreaux said. “That really did not happen.
“The business did not grow as much as we thought it might have. Now that we’ve tried a professional FBO, it’s time for us to give it a try.”
Bob Nickle, Airport Board chairman, told aldermen Tuesday he is confident city officials can do as good of a job as a private provider.
“A year from now ... we’ll evaluate things,” Nickle said. “If we made a mistake, maybe we have to go out and do a (request for proposals) and get some other operator in here.”