NBAA-BACE Session Explores Alternative Revenue Streams for GA Airports

Oct. 23, 2019

Across the country, airport managers are exploring opportunities to supplement revenue by attracting new businesses to their facilities. At the “Are General Aviation Airports Open for Business?” education session held Wednesday at the 2019 NBAA Business Aviation Convention & Exhibition (NBAA-BACE), attendees heard about ways to bridge the gap between airports seeking financial sustainability and companies that may find them a perfect fit for their operations, including those that may not be related to aviation.

“Airports grow because of partners – they need your help,” said moderator Damon Smith of the airport planning and development consultancy firm Mead & Hunt, who discussed common misunderstandings about airport funding.

Funding for airports comes from a variety of sources, including federal, state and local funds and landing or fuel taxes. They often take advantage of airport improvement grants (AIP) from the FAA as well; however, AIP funds may only be applied to airside improvements like runways, taxiways and ramps. They also represent just one-tenth of the $35 billion of eligible investment that FAA says is needed for airports through 2023.

Increasingly, airports have offset this disparity by entering into public-private partnerships to develop unused airport land for aviation tenants, as well as non-aviation uses such as offices, mechanical and industrial tenants, and transportation and logistics companies.

“A lot of airports are completely leveraged out into the future and they have no opportunity to seek new bonds,” said T.J Schulz, president of the Airports Consultancy Council. “At the same time, businesses are looking to make their footprint bigger. They should consider doing that at an airport, even if their company is not related to [aviation].”

Matthew Johnson, airport operations supervisor for Scottsdale Airport (SDL) in Arizona, noted that development of the “airpark” around the periphery of his busy single-runway facility has enabled SDL to become the third-largest economic center in the state. “It’s a big vast area with lots of growth and development going on, and it’s working out really well,” he said.

Mead & Hunt consultant Mitchell Hooper recommended that airport managers looking to explore such options should incorporate that vision into their master planning process, “to help inform airport sponsors about what types of facilities are needed by the market and what sort of infrastructure is needed to be successful.”

“The master plan will ultimately turn into a capital project plan where some of these investments will be directed toward… projects that are eligible for funding or private developments,” he added. “It’s not a marketing or a business plan, but it figures out what needs to be built on the airport to support future demand.”

Panelists agreed that outreach to current airport tenants, local leaders and the surrounding community is also essential for helping airports to develop underutilized areas, and in breaking down barriers to support growth of their community airport and surrounding land.