Owning and operating a small airport?

[JC-Flyer]

I'm doing a little day dreaming and I was wondering if anyone would have a clue as to what would be required to own and operate a small airport?

I'm talking about a small GA, non-control towered, airport.

As a business, what sort of costs are involved and what sort of income can be expected.

I figure insurance must be expensive but not a clue as to how much.
General maintenance and upkeep would also add to the bills.
Property taxes are probably up there.

Tie downs and hangar fees would bring a monthly income to pay the loan.
Fuel service and leasing of a A&P facility would bring in some income as well.

Open up a place to eat and it could draw the hundred dollar hamburger crowd on the weekends.

What other ways do they draw income?

I realize it probably would not make anyone wealthy especially in this day and age of a shrinking GA market place.

It just seems like something I would love to do since I love being around airports and planes.

Anyone have any clues on this sort of stuff?

 

[AdamZ]

John, I guess it really depends on what area of the country you want to operate the airport. I am sure Ed Frederick or Brad Frederick will chime in here. Ed and his family resurected a small GA Airport in the UP of Michigan and Operate the field. I don't think Ed or his dad Brad ( who is also on this board) will disagree when I say it is more a labor or love than profit.

 

[wabower]

I'm doing a little day dreaming and I was wondering if anyone would have a clue as to what would be required to own and operate a small airport?

I'm talking about a small GA, non-control towered, airport.

As a business, what sort of costs are involved and what sort of income can be expected.

I figure insurance must be expensive but not a clue as to how much.
General maintenance and upkeep would also add to the bills.
Property taxes are probably up there.

Tie downs and hangar fees would bring a monthly income to pay the loan.
Fuel service and leasing of a A&P facility would bring in some income as well.

Open up a place to eat and it could draw the hundred dollar hamburger crowd on the weekends.

What other ways do they draw income?

I realize it probably would not make anyone wealthy especially in this day and age of a shrinking GA market place.

It just seems like something I would love to do since I love being around airports and planes.

Anyone have any clues on this sort of stuff?

No, but based on the financial assumptions above, it's pretty clear who doesn't.

 

[weilke]

There are a number of privately owned public use airports in Maryland. I don't think any of them do it for the riches it brings. They are around because at some point in the distant past the land was cheap enough to make this viable and because there is still someone willing to enslave himself to the airport to keep it running.

 

[JC-Flyer]

No, but based on the financial assumptions above, it's pretty clear who doesn't.

Let me in on the joke.

I wasn't really interested in insults.

There's a small airport for sale for approx 1.5 million. Sounded reasonable with the number of filled hangars, ties downs, and service center.

Obviously there are a lot big expenses but also ways to earn income. I am just trying to find out what those might be.

I definitely can think of many other higher-potential businesses to invest in. But not many that I would love as much as this.

As mentioned, this is dream material. Just shooting the breeze. Not looking for a flame war or anything.

 

[wabower]

Ask them to provide historic numbers from which you can develop a pro-forma. That should answer any questions about the joke.

Let me in on the joke.

I wasn't really interested in insults.

There's a small airport for sale for approx 1.5 million. Sounded reasonable with the number of filled hangars, ties downs, and service center.

Obviously there are a lot big expenses but also ways to earn income. I am just trying to find out what those might be.

I definitely can think of many other higher-potential businesses to invest in. But not many that I would love as much as this.

As mentioned, this is dream material. Just shooting the breeze. Not looking for a flame war or anything.

 

[Geico266]

There is an old saying; "If you want to make a small forutune in aviation, start with a large one."

Author unknown and BK.

 

[Brad Erichsen]

This is also my dream job. Has Ed Fred already discussed this in other threads? I would love to hear about their experiences with the airport.

I lived on a private airport when I was a kid that had previously been a WWII era airforce base. It used to be in the middle-of-nowhere but the city has now sprawled and grown around the airport so I think it ended up not being a bad investment for the owners. It now has some big aviation companies there. (It did take 25 years however...)

 

[JC-Flyer]

I figure the hangar rents and tie-downs alone would generate 12-15k per month.
There are two independent repair facilities on site that lease their space.
Haven't clue what they might pay. Figure a few thousand per month.

Perhaps this could cover the loan.

Then I am wondering if there is a max. number of hangars and tie-downs that the FAA would allow at a non-towered airport like this. If more could be added, that would help. Metal T-hangars must go up quickly at a reasonable cost.

Provide a nice place to eat and maybe that would cover the maintenance costs.

There are probably a lot of other taxes, insurance, expenses and fees that I am clueless about.

There is still a lot of unused land. Perhaps subdivide into a few airport homes or rentals units.

...dream, dream, dream...

 

[The Old Man]

John, if you have enough stroke to swing it, you can present yourself to the current owners as a serious buyer. When you do that, they should gladly furnish you with their current audited operating statements and such other data as will present their case.

Dreaming out loud here is only mental masturbation. Get some real data on THAT "opportunity", study it and then come back. we will all be glad to talk about it then.

 

[JC-Flyer]

John, if you have enough stroke to swing it, you can present yourself to the current owners as a serious buyer. When you do that, they should gladly furnish you with their current audited operating statements and such other data as will present their case.

Dreaming out loud here is only mental masturbation. Get some real data on THAT "opportunity", study it and then come back. we will all be glad to talk about it then.

Yes, agreed.

I sent the agent an inquiry yesterday and was told they would send me some info on Monday.

Until then I figured I'd see if anyone on here had any sort experience at this and what it would take. What are some of the problems.

Also, wondering what sort of regulations the FAA might have in terms of number of aircraft allowed to park and operate.

 

[wabower]

Most land deals sound good the day the check clears. The 25 years of upkeep, taxes, etc. are then forgotten, but the returns are usually about the same as the CD rates (back when banks offered them.)

This is also my dream job. Has Ed Fred already discussed this in other threads? I would love to hear about their experiences with the airport.

I lived on a private airport when I was a kid that had previously been a WWII era airforce base. It used to be in the middle-of-nowhere but the city has now sprawled and grown around the airport so I think it ended up not being a bad investment for the owners. It now has some big aviation companies there. (It did take 25 years however...)

 

[murphey]

Contact a lawyer who specializes in aviation
Contact a lawyer who specializes in commercial real estate
Contact AOPA
Contact EAA

Construct a reasonable business plan based on the discussions with the above 4 entities. Make sure you have worst-case assumptions.

Take a good, long look at the numbers. Are you comfortable with them?

completely ignorant of all matters like this, I would assume liability insurance would be a huge chunk.

what part of the country is this airport?

 

[Exocetid]

I think you need to think of this plan in the same way one might think of a Bed and Breakfast purchase. Some couples dream of this sort of thing as a way to escape the frenzy of high-stress jobs and living in the city--but then come to find out that it isn't easy eking out a living while living the dream.

Your success will depend on attracting the GA crowd and most likely the weekender, fair weather flyers. If your 'port is on a major route and you could offer bargain 100LL to the IFR/long range GA crowd, you could attract some steady business there.

A good restaurant and an attraction would be something you would want to have, or at least offer a courtesy shuttle to.

If you had a mechanic or shop on premises that did specialized annuals (aerobatic A/C, certain vintage planes, etc.) that could be a steady draw for you as well.

It's a great dream and doable, but it will be work.

 

[wabower]

Why would you talk to any kind of lawyer at this point? What you really need to know is if you can throw a half-mill equity at the deal to get a loan.

Contact a lawyer who specializes in aviation
Contact a lawyer who specializes in commercial real estate
Contact AOPA
Contact EAA

Construct a reasonable business plan based on the discussions with the above 4 entities. Make sure you have worst-case assumptions.

Take a good, long look at the numbers. Are you comfortable with them?

completely ignorant of all matters like this, I would assume liability insurance would be a huge chunk.

what part of the country is this airport?

 

[murphey]

Why would you talk to any kind of lawyer at this point? What you really need to know is if you can throw a half-mill equity at the deal to get a loan.

Because I got the impression the OP can find the $0.5M. So the next step is to determine the level of comfort in throwing the half mil into this.

 

[weilke]

-- 1 Medevac helicopter stationed at your field that fills up twice a day is going to do more for the viability of your project than the hamburger crowd. The chopper is going to be there on a foggy tuesday in february and help you to make your insurance payment when the cheep hamburger crowd is still 3 months away.

-- looking at what it costs to lease warehouse space otherwise, hangars don't sound like a great deal from an income perspective.

-- The FAA doesn't regulate the number of planes at a field. They do care about things like obstacle planes, pavement condition and contaminants in your fuel.

-- How is your airport zoned ? Does it require a conditional use permit (which you may have to apply for anew if the place changes ownership) ?

-- What kind of water/sewer does your airport have. Would it support a food-service establishment ?

-- 90+% of non-franchise restaurants fail in the first 5 years after opening. I have seen quite successful on-airport restaurants, they all lived off the local crowd (e.g. lunch-business from a nearby office park) with the occasional pilot thrown in. Relying on fly-in customers for a restaurant sounds ambitious.

-- Fuel sales make money, but only if you are cheap. Who are your competitors ? Again, 1 Navajo lab-shuttle that fills up from your tank every day is going to be more of a factor than a hamburger runner wo puts 8Gal into his 172 three sundays in a season.

-- The only people I have ever met who made serious money in GA are A&Ps and folks who sold new aircraft when new aircraft where still being sold.

 

[ladyaviator]

<LI style="MARGIN-TOP: 0px; COLOR: #00386b; PADDING-TOP: 0px">Missouri airport up for sale to highest bidder
The Festus Memorial Airport in Jefferson County, Mo., is up for sale by the city of Festus. Bidders have until April 14 to submit bids for the 100-acre property, which has an estimated market value of $3.5 million. The dual-runway airport opened in 1941 and includes five buildings. American City Business Journals/St. Louis (4/9)

 

[flyersfan31]

No, but based on the financial assumptions above, it's pretty clear who doesn't.

Be nice. We've all had that dream. :smile:

Factor into any calculations the fact that 80% of all pilots are cheap SOB's who pay bills 3 months late if they pay them at all. If you're interested you can talk to Tom Dougherty at Wings who could bend your ear all day with crappy pilot stories (he owns the FBO). Something about owning a plane that makes some people think they shouldn't have to pay for anything else.

 

[wabower]

And what qualifications do you think a lawyer has to provide that analysis?

Because I got the impression the OP can find the $0.5M. So the next step is to determine the level of comfort in throwing the half mil into this.

 

[Everskyward]

Factor into any calculations the fact that 80% of all pilots are cheap SOB's who pay bills 3 months late if they pay them at all. If you're interested you can talk to Tom Dougherty at Wings who could bend your ear all day with crappy pilot stories (he owns the FBO). Something about owning a plane that makes some people think they shouldn't have to pay for anything else.

Remember all the threads you've seen here complaining about facility fees, even very modest ones.

I don't think I would count on a lot of small airplane visitors unless there is some sort of attraction nearby. How is the weather there? If you have a lot of marginal weather that can discourage pleasure traffic too. I'm sure I've mentioned that I've sometimes sat at an airport the whole day and been the only airplane movement. That happened a couple weeks ago when we diverted into a small airport because our normal destination (which is also a small airport) was below minimums. The FBO guy tried to talk me into buying fuel but we had taken a lot of fuel from home because of the questionable weather. I said that we couldn't buy fuel but we would be up to paying a facility fee. He had to call the guy at the other airport to ask what he should charge.

Really, I think these some of these airports only survive because of money from the state, the county or the city. Ironically this small airport with very little traffic has a huge new hangar and FBO paid for by the county. There were three small airplanes in that hangar which he said was big enough for a G-550, maybe even two or three of them.

 

[JC-Flyer]

-- 1 Medevac helicopter stationed at your field that fills up twice a day is going to do more for the viability of your project than the hamburger crowd. The chopper is going to be there on a foggy tuesday in february and help you to make your insurance payment when the cheep hamburger crowd is still 3 months away.

-- looking at what it costs to lease warehouse space otherwise, hangars don't sound like a great deal from an income perspective.

-- The FAA doesn't regulate the number of planes at a field. They do care about things like obstacle planes, pavement condition and contaminants in your fuel.

-- How is your airport zoned ? Does it require a conditional use permit (which you may have to apply for anew if the place changes ownership) ?

-- What kind of water/sewer does your airport have. Would it support a food-service establishment ?

-- 90+% of non-franchise restaurants fail in the first 5 years after opening. I have seen quite successful on-airport restaurants, they all lived off the local crowd (e.g. lunch-business from a nearby office park) with the occasional pilot thrown in. Relying on fly-in customers for a restaurant sounds ambitious.

-- Fuel sales make money, but only if you are cheap. Who are your competitors ? Again, 1 Navajo lab-shuttle that fills up from your tank every day is going to be more of a factor than a hamburger runner wo puts 8Gal into his 172 three sundays in a season.

-- The only people I have ever met who made serious money in GA are A&Ps and folks who sold new aircraft when new aircraft where still being sold.

You made a lot of good points and hit on a lot of things to think about.

There's a class delta airport 10 miles away that would probably get all the good commercial accounts.

This one has more country charm and is why I thought it would do better for the weekend crowd.

I found out that there are 4 private FBO's on their own property but pay usage fees to the airport.

There is a lot of potential for improvement, but with the size of the loan it might make it a bit risky if any of the repair shops go out of business or if hangars become vacated.

The other part of me is saying this could be near some sort of bottom in the market of aviation. When things look the bleakest, is when it is time to buy.

Then again, things could go bad for longer than one has money to pump into it.

I have to sign a confidentiality form in order to view the tax records. (Which possibly may not give the total picture.)

I was mistaken when I thought the property was 170 acres. Only 70 of it is for sale for the $1.5 M.

The remaining 100 acres of vacant land which is on the opposite side of the runway, is $800K. This could be developed into an air park or what ever. But that is much more money than I could think about at this time. If it was developed it would provide customers for fuel, food, and usage fees.

It gives me something to daydream about if anything.

 

[brcase]

Just some random thoughts on it.

I believe some states provide some liablity relief to private airports that are open to the public. This probably makes insurance cheaper.

Many airports lease the land and let private owners build their own hanger. Usually at the end of the lease or if the lease is prematurely terminated the airport gets the land back along with any hanger/improvements done to it.

Brian

 

[Steve Foley]

The airport I used to fly out of was privately owned. The owner is a CFI and A&P/IA. He gives flight instruction as a way to bring in more long-term business. Turn people into pilots and they end up spending all their money. Be there to catch as much as you can. There are 25 planes on the field, and he ends up doing the annuals and maintenance for most of them. He's also collecting tie-down fees, hangar rental, as well as fuel sales. He gets a better deal on fuel if he times it with the airport next door. He's certainly working for a living, but he's doing what he loves.

The tricky part is that he inherited the airport from his grandfather, so has no mortgage, except for the improvements he's made.

 

[weilke]

There's a class delta airport 10 miles away that would probably get all the good commercial accounts.

If you don't compete for them, yes.

Is everyone deliriously happy there ? What is the fuel price ? Is there a call-out fee for after-hours arrivals ?

This one has more country charm and is why I thought it would do better for the weekend crowd.

Does it have instrument approaches ? Does it have enough runway length to get a WAAS approach ?

I found out that there are 4 private FBO's on their own property but pay usage fees to the airport.

I suspect that they are not all full-service FBOs, more likely a couple of maintenance shops as well.

How are those agreements structured. Are you buying the entity that holds those fee agreements or are you buying the real-estate and you will have to enter into new agreeements.

There is a lot of potential for improvement, but with the size of the loan it might make it a bit risky if any of the repair shops go out of business or if hangars become vacated.

The only way that is going to happen is if you drive them out of business by taking away their fuel-sale revenue or if you do things that cheese-off the owners of the based aircraft.

The other part of me is saying this could be near some sort of bottom in the market of aviation. When things look the bleakest, is when it is time to buy.

That assumes that there is a bottom. The people who thought there was a bottom in the market in the early 80s had to wait 20 years for the rebound.

I have to sign a confidentiality form in order to view the tax records. (Which possibly may not give the total picture.)

Lol, unless someone purposefully worked the books for a sale, you would expect that they lie-down the income side in tax records. With the turmoil in aviation, looking at recent years may not be helpful.

The remaining 100 acres of vacant land which is on the opposite side of the runway, is $800K. This could be developed into an air park or what ever. But that is much more money than I could think about at this time. If it was developed it would provide customers for fuel, food, and usage fees.

Of course, the more interesting parcel is not part of the deal. Does that land have development potential (is there a county land-use plan, what does it specify for that parcel).