General aviation (GA) airports are in a tough spot--between a rock and a hard place, as people like to say. They are being tasked with striking a perfect balance among aviation activity and non-aeronautical revenue in order to survive. The future is definitely not doom and gloom, however. GA airport directors around the country are securing modern and creative revenue streams, while still relying on old-fashioned common sense to flourish.
A Matter of Perspective
“A general aviation airport is really a real estate development that has runways as an amenity,” says Mike Willingham, executive director at Sebring Airport Authority. Willingham has been in his current position for 22 years, and says he has always viewed airport property as a platform for economic development. This previous banking and commercial real estate professional brings a unique, and successful, attitude to his role. Sebring Regional Airport is host to 2,000 acres and nearly 500 full-time non-airport jobs.
Willingham explains airport directors must be willing to shift their perspective, coming to work every day looking for new opportunity and facing every challenge as a traditional business deal. “In the end, that’s what matters,” he says. “If you can make a business case for it that makes sense, you can sell it. I believe that with all my heart.”
Todd McNamee, director of airports at California’s County of Ventura, agrees. He oversees two facilities, Oxnard Airport and Camarillo Airport. Oxnard is used exclusively for aviation, while Camarillo (an old U.S. Air Force base) boasts an entire business park with renovated barracks serving as offices. Revenue from the business park provides 35 percent of his department’s annual income. “It’s huge,” he notes. “You have to step away from just the revenue source, look to community involvement and create partnerships.”
GA airports are learning to re-examine their way of thinking, and looking to other industries is key in this mindset shift. Willingham says the Urban Land Institute, for example, is an excellent resource. These conferences bring in industry leaders, discussing topics such as real estate development and enhancing revenue, to name a few.
Robert Olislagers is considered a leader in the topic of non-aeronautical revenue, and also serves as the executive director of Centennial Airport. He agrees airports should be operated as businesses, recognizing not every airport will be self-sufficient. Olislagers likens them to libraries or parks, which provide an important service to the community but the ROI is delivered intangibly. However, even libraries must be mindful of their fiduciary responsibility and do everything possible to be self-sustaining, he says. “When the businesses are successful, we are successful,” Olislagers remarks in regard to airport-based revenue streams.
Show Them The Money
“You gotta get the money; you gotta get the money,” says Mike Van Wie. This industry leader has been at the DeKalb Peachtree Airport for 11 years and is a retired U.S Navy veteran. There are two restaurants, county facilities, storage facilities, two car lots and a business park on this airport’s land. He says there was great demand for the property when he entered into these lease agreements. “That’s not the case in many, many areas,” he explains, and adds that he is actually almost out of land.
McNamee agrees that demand is lower than before. He inherited much of what exists at the Ventura County airports, but in 13 years he has found new ways to bring an influx of green. The airport leases space to a variety of county agencies, educational institutions, including a branch of the Embry–Riddle Aeronautical University. He says one of the challenges GA airports face, however, is long-term land leases with reversion clauses. The benefit to the airport is that any improvements revert to the land owner at the conclusion. The bad news is many businesses are finding lower land prices and interest rates with complete ownership of land and improvements elsewhere in this softer commercial real estate market.
Money can be found in revenue, but also savings. Both Olislagers and Willingham say running a tight crew is part of their airports’ overall financial stability and successful growth. Each director outsources tasks which minimize overhead inventory and staff costs. Willingham explains he has always run Sebring through the “Yellow Pages Test,” and as a result employs five full-time people, versus the 20 he began with two decades ago.
“If you can look up the needed goods and services within the Yellow Pages, you need take a really strong look and decide whether you need to keep it in-house or should contract it out,” he says. Both agree this tactic allows them to spend more when necessary, and to contract the business when the monetary pipeline slows. Willingham says this makes his organization very nimble.
Partnerships Pay Off
“Once you’ve lost credibility, you’ve lost it all,” Van Wie says. All these directors agree on this crucial fact.
“It’s important for people to see you’re doing a good job, working hard and trying to make the community a better place to live and work,” Willingham says. He explains when an airport director does that, a lot of support shows up that might not have otherwise.
Willingham says his most important job is making sure the commissioners and airport authority board are educated on what he’s doing and why. Even if the idea fails, which he says has happened, they want to see that their GA airport is fresh, evolving and changing with the times. “You have to be willing to forget what you know, and learn again, then forget what you know, and learn again,” he says.
Van Wie laughs and says he appreciates when his name doesn’t come up in the annual budget talks. He cautions airport directors about over promising and under delivering. He says vision and goals are important, but they must be realistic and communicable.
Olislagers’ current focus is to transform the existing transactional relationships to strategic partnership with businesses, both on and off the airport.
McNamee has done well at this, by developing influential partnerships with renowned educational institutions. This has drawn a unique blend of people to the Camarillo location. He also recently applied to become one of the FAA’s six test sites for unmanned aircraft in hopes of creating new jobs and economic benefits. From high school students to major flight schools, he says it’s important to also foster the next generation of aviation enthusiasts. This is essential to the long-term sustainability of GA airports and the industry in general.
Capitalizing On Creativity
Olislagers says creativity has everything to do with running a successful GA airport. “We are not just an airport; we connect people, places and products,” he says. Centennial Airport has a long history of creative thinking, which Olislagers explains diversifies its economic basket of non-aviation enterprises. The airport hosts a golf course, driving range, pro shops, two ice hockey rinks, a hotel and a kart racing tack. There are also three restaurants on the property.
The almost 4,000 feet of abandoned runway at Camarillo has been a big payoff for McNamee’s mission. It is routinely used for car testing, rally car events, filming and public safety training, to the tune of $100,000/year in revenue. McNamee also has found success in marketing cell phone towers around the airport, and even on the beacon. The leasing company is responsible for changing the bulbs and cleaning the lenses, a bonus for this GA airport.
The most prominent attraction at Sebring is the Sebring International Raceway, a well-known landmark and host of large events, as well as car tuning and testing. The raceway has a 139-room hotel near it, a big amenity to a small GA airport, says Willingham. The entire airport is a foreign trade zone, including the fuel farm.
He quotes Albert Einstein: “If at first the idea is not absurd, then there is no hope for it.” Willingham says this is true in the approach GA airports must use for acquiring revenue. He says he has been allowed to operate in an environment which is overseen by entrepreneurial minds, but also demands creativity and risk. He acknowledges there have been misses along the way, but stresses they were only a hiccup in the overall growth of the airport.
“We’ve come a long way, but that didn’t happen by accident,” he concludes, affirming the significance of an astute business mindset, cultivating relationships and seeking creativity. While there are substantial costs to running a GA airport, there is also equally substantial room for revenue opportunity.
