FBO Closing!

Maverick

Maverick

Line Up and Wait
Joined
Apr 2, 2005
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636
Location
St. Clair Shores, MI
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Display name:
Jean
There is an FBO at my home airport (PHN) that appears to be closing due to competition from a government entity. St. Clair County Airport (PHN) in Michigan is owned by the county of St. Clair. About a year ago the county announced that they were going into the business of selling fuel in hopes that the fuel sales would help offset the costs of operating the airport.

At the time there was only one FBO on the field, an FBO that had been there for quite a long time. There really isn't enough traffic at this airport to support two FBOs and the established business was forced to scale back when the county started competing with them. They have struggled to stay in business in spite of the competition but it looks like they are now closing.

The county has been selling fuel at lower prices than the FBO can afford especially considering that the FBO has to pay a fuel flow fee to the county for every gallon of fuel that they sell.

Now I'm all for competition but should a government entity go into business in competition with an established business that is actually a tenant of the county? Should they use public funds to finance their startup? Should the county be competing against a business while requiring that business to pay the county a percentage of their fuel sales?

The FBO has been a full service business but has had to scale back and now it looks like they are going to be leaving all together. The county cannot offer the same level of service that the FBO did so, in my opinion, the local aviation community is going to suffer the loss of the services that the FBO had been providing.

I contacted AOPA last year trying to find out if it was even legal for the county to do what they did. Apparently there is nothing in the law that says they can't. Anyone have any thoughts about this?

Jeannie
 
I've heard about that stuff happening. Its not right at all, but I guess it must be legal.

I don't like what the city/county can get away with at airports.
 
Maverick said:
There is an FBO at my home airport (PHN) that appears to be closing due to competition from a government entity. St. Clair County Airport (PHN) in Michigan is owned by the county of St. Clair. About a year ago the county announced that they were going into the business of selling fuel in hopes that the fuel sales would help offset the costs of operating the airport.

At the time there was only one FBO on the field, an FBO that had been there for quite a long time. There really isn't enough traffic at this airport to support two FBOs and the established business was forced to scale back when the county started competing with them. They have struggled to stay in business in spite of the competition but it looks like they are now closing.

The county has been selling fuel at lower prices than the FBO can afford especially considering that the FBO has to pay a fuel flow fee to the county for every gallon of fuel that they sell.

Now I'm all for competition but should a government entity go into business in competition with an established business that is actually a tenant of the county? Should they use public funds to finance their startup? Should the county be competing against a business while requiring that business to pay the county a percentage of their fuel sales?

The FBO has been a full service business but has had to scale back and now it looks like they are going to be leaving all together. The county cannot offer the same level of service that the FBO did so, in my opinion, the local aviation community is going to suffer the loss of the services that the FBO had been providing.

I contacted AOPA last year trying to find out if it was even legal for the county to do what they did. Apparently there is nothing in the law that says they can't. Anyone have any thoughts about this?

Jeannie
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Do you have an ASN representative for your airport? They will have a copy of the MDOT grant assurances and can work with AOPA (John Collins) to interpret what is going on at PHN. I have a copy of ours but they are confusing so I leave it to the experts.

As I recall there is a provision for the airport sponsor to sell fuel, but again I would check with the airport support network rep.

Tom
 
tom. said:
Do you have an ASN representative for your airport?
Tom
Click to expand...

I have no idea if there is an ASN Rep or who that would be. I've never even heard the term until now. Any idea how I could find out?
 
ejensen said:
http://www.aopa.org/members/forms/asn/mgetv.html

Airport ID:PHNAirport:St. Clair County InternationalState:MIVolunteer Name:MICHAEL WOODLEYAOPA Members may this volunteer.
Click to expand...

Thanks! I'll look into this but I went through this with AOPA last year and they said there was nothing they could see that would prevent the county from competing with the FBO.

The big problem I see here is that the airport will loose a full service FBO and end up with the county selling fuel only and doing it during limited hours of operation. I did some flying yesterday and when I finished I called for fuel. I was surprised when the FBO told me that they were no longer selling fuel. When I called the airport office I was told that they were done for the day. This was at 6pm. The FBO was always open during daylight hours.
 
Maverick said:
Thanks! I'll look into this but I went through this with AOPA last year and they said there was nothing they could see that would prevent the county from competing with the FBO.

The big problem I see here is that the airport will loose a full service FBO and end up with the county selling fuel only and doing it during limited hours of operation. I did some flying yesterday and when I finished I called for fuel. I was surprised when the FBO told me that they were no longer selling fuel. When I called the airport office I was told that they were done for the day. This was at 6pm. The FBO was always open during daylight hours.
Click to expand...

Your rep will have access to additional info on this (or you can PM me). There's self-serve at 77G (Marlette) if you're out that way and it's late.
 
I don't like it either but seems to be legal. Seems a poor decision on the county's part. They could probably make as much or more with less headache with well structured leases. I've seen it else where and while the gas and line service might be ok, there is seldom much else unless the airport is big/busy.
 
Jean, I'm with all others who have posted, this really does stink. My opinion, and that's all it is, is that government should not compete with private industry.
Now, another sad part of this is this...now that the FBO has terminated fuel sales, watch what happens to the price of fuel in the upcoming weeks. I'd bet the ranch you will see a major increase in price :mad: :hairraise:
 
Who cares, it's just a bunch of rich pilots anyway.


Right?
 
It sounds at though you are looking to fight this. I am not taking sides here but make sure you understand what the counties argument is going to be. They are going to say that they are providing a better service to the public and the pilots. They are offering cheaper gas and funneling profit back into the airport.

As you raise you issue make sure you can counter those claims. You need to see if the amount of maney coming back into the airport is more or less than what the FBO was bringing in. While the gas may be cheaper look to see what services are lost, reduced hours, etc. You can always go to the airport authority or county board and raise a question about this action, get them to justify it. Invite the newspaper to that meeting along with other pilots if they feel the same as you.
 
Jean:

Scott is right on here. If you don't know the history, there could be something that could completely blind side you. Same for the county's motivation. We had a situation here at Addison where there were all sorts of claims and counter claims when a management came up for renewal. Not something one should just jump into.

I flew through Mobile last weekend and was just heart-broken to see Million Air closed. They were wonderful to me on previous stops. Great couteousy car; very friendly; and fixed an alternator for me. The competitor never was that hospitable. They do provide service, but completely different attitude.

Sometimes we hate to see these changes, but need to understand them if we're going to get involved.

Dave
 
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