By Mike Koshmrl, from Jackson Hole News&Guide, 6/7/17
Private aircraft owners will soon have more options for buying jet fuel and renting hangar space at Jackson Hole Airport.
An application submitted by Wyoming Jet Center has spurred the airport’s board to find a second fixed-base operation to vie with Jackson Hole Aviation, a business that hasn’t had a competitor in decades. The decision to go with two FBOs was made at the airport’s May board meeting. Because of Federal Aviation Administration rules, there was not much choice in the matter, Director Jim Elwood said.
“We’re being forced down this road by FAA regulations,” Elwood said. “The FAA, as we understand it, is very clear in saying that competition needs to be accommodated and should be accommodated.”
Wyoming Jet Center will not receive the business opportunity outright.
Instead, in the weeks ahead airport staff will develop a request for proposals that will allow companies from around the country to bid for the chance to do business in Jackson Hole.
“Given the number of additional inquiries on top of the one we received from Wyoming Jet Center, we thought it would be prudent to go out for bid,” Elwood said. “We’re trying to determine the exact level of interest.”
Jackson Hole Aviation fought the prospect of facing competition, delivering a short presentation to the airport’s board. General Manager Matt Wright said in an interview that having two fixed-based operations was a “failed experiment of the past.”
“I understand where the airport’s coming from, but obviously we’d like to protect our business,” Wright said. “We think that adding a second FBO creates serious safety issues. Maybe more importantly, there’s the increases in aircraft movement and the corresponding noise that it would create.”
“We’re not anticipating this impacting the volume or numbers of aircraft coming and going from the airport,” he said. “The quantity of aircraft that have interest in coming into Jackson is finite. … They’re not going to turn it into a fuel stop.”
Wyoming Jet Center’s Greg Herrick, a seasonal West Bank resident, was pleased with the board’s decision, though he would have preferred that his application be processed without facing competing bids.
“Competition is a good thing,” Herrick said. “It improves capacity at the airport for handling general aviation traffic, which will enhance safety, we believe. There’s also the economics that competition brings to the table.
“The fuel prices are among the highest in the Rocky Mountains right now,” he said, “and we think a little competition is going to bring those prices down.”
An economic analysis Herrick presented to the airport’s board contended that the jet fuel prices have suffered because of a monopoly. The price per gallon of Jet-A fuel, $6.66 recently, was $1.56 more than Driggs, Idaho, and $2.41 more than Alpine, according to Wyoming Jet Center.
“From our analysis in 2016, there were 1.8 million gallons, roughly, of Jet-A pumped for general aviation aircraft,” Herrick said. “We projected the gross profit margin on that to be well over $8 million. The airport received $219,220 of that, and the national park that leased the land received $3,218.
“$3,200 versus $8 million,” he said.
Jackson Hole Aviation’s Wright said its prices are comparable to those at other resort airports.
But “egregious” is the word the president of an advocacy group for small plane owners used to describe the current price of Jackson Hole Airport’s jet fuel.
“If you had two or three FBOs servicing the airport, you’d probably see fuel prices in the $3 to $4 range,” Aircraft Owners and Pilots Association President Mark Baker said. “I applaud the Jackson Hole Airport board for taking the initiative and understanding what it means to bring more people to your town and experience the great outdoors there by making it fair.”
Baker said he fields many complaints about Jackson Hole Aviation’s fuel prices and fees from his membership.
“Jackson Hole is one of the top-20 complaint areas,” he said.
Herrick’s pitch included a commitment to giving 15 percent of revenue from aircraft parking fees back to the airport. Revenue sharing, he said, should also be included with “handling fees” that fixed-based operators like Jackson Hole Aviation assess to aircraft owners who do not fuel up at the airport.
A new facility for a competing fixed-base operation would likely be located just north of Jackson Hole Aviation’s building, Elwood said. The new business, he said, won’t be able to operate until next year, after an enlarged fuel farm is built on the premises.
Article in Jackson Hole News&Guide
Source: Jackson Hole News&Guide
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