Tupelo Ends Lawsuit by Buying its 2 FBOS for $1.5M

Apr. 3 -- TUPELO, Miss. -- A lawsuit accusing Tupelo Regional Airport with unfair competition may now be moot, with two companies involved in the suit now under the airport's supervision.

On Friday, Southernaire Inc. and Tupelo Aero Inc. finalized their deals with the Tupelo Airport Authority, which bought the fixed based operators, or FBOs, for $1.5 million.

The FBOs sell fuel and provide maintenance and service to aircraft.

The turn of events comes two years after the FBOs filed a petition to stop the airport from buying a fuel truck and building a fuel farm to supply Delta Air Lines' regional carrier, Delta Connection/ASA.

Southernaire owner Barbara Crossley and Tupelo Aero's Aubie Pearman complained that the airport was attempting to directly compete with their businesses.

With the airport authority now in charge, the newly merged FBOs have been renamed Tupelo Aviation Unlimited.

The airport borrowed the money from the city on a 15-year note paying 4 percent interest.

Terry Anderson, Tupelo Regional's executive director, said the FBO consolidation hits on all the business buzzwords such as "economies of scale" and "span of control."

"This is revenue that will come back to the airport, which in turn can be put back into the airport," he said.

As a government entity, the airport cannot turn a profit, using the money it receives only for maintenance and operations expenses, as well as any capital expenditures.

"This is an opportunity to provide even more self-sustainability, which is good for the taxpayers," Anderson said of the deal.

In fuel charges alone last year, Southernaire generated nearly $37,000 while Tupelo Aero generated more than $23,000, selling fuel to the air service providers, the military and others.

The airport will begin renovating the old Tupelo Aero maintenance facility, and other improvements will come along. For now, the FBO operations have been consolidated into the old Southernaire facility.

And with the acquisition, the airport hopes to become the region's center of aviation for general, corporate and commercial use.

"The bottom line is we can enhance our aviation services, offer a broader spectrum of services and improve the safety and security of the airport," Anderson said.

Tupelo Aviation Unlimited will operate as a separate business from Tupelo Regional, but will report its operations back to the airport authority much as the former FBOs did.

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