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Posted: October 16, 2009 12:30 a.m.

FBO decision still not reached

The Covington City Council had an airport work session Thursday, but an hour and a half later no consensus had been reached on the airport’s future.

For the past month, the council has debated who should operate the airport and how it should be developed in the future. Currently, the city contracts with Dixie Jet Services to operate the airport – provide fuel, airplane maintenance and storage and customer service to pilots and passengers. This contract has existed since 1994, but at the Oct. 5 council meeting, Mayor Kim Carter asked the city council to consider early termination.

"A lot of communities hire fixed-base operators, but that model is a bit antiquated. We put it into place (originally) because the city couldn’t afford to run the airport by itself," Carter said in a public speech Wednesday.

Dixie Jet Owner Bob Riddell disagreed saying an FBO is still a popular model, and according to a study where airport customers ranked the 40 best FBOs, only one was city-operated.

Corporate Pilot Russ Darby, who has also worked for Dixie Jet, said he’s traveled to airports around the Southeast and he hasn’t seen much difference between the quality of city-run and private FBOs. He said from his experience, Dixie Jet offers all the services pilots and corporate customers need.

The city council made a motion to terminate the contract at the last meeting, but a vote was never taken, because there was a disagreement between City Attorney Ed Crudup and Dixie Jet Attorney Craig Oakes about how much the city would have to reimburse Dixie Jet for early termination.

According to the contract, the city would have to pay Dixie Jet a portion of the original $527,000 investment Dixie Jet made to build the shell of the main office building. However, Riddell said over the past eight years, the time he has owned Dixie Jet, he has invested around $2.5 million into the airport, including $16,000 for a parking lot, $16,500 to refurbish a trailer that houses a flight school, $25,000 to add a self-service fuel farm that allows for 24-hour service, $38,000 for a courtesy car for passengers and pilots and $1.6 million to renovate the main office building and hangar. Dixie Jet has also brought in rent-a-car services, flight schools and added more hangars and customers.

Crudup said that according to the contract, invoices for all improvements were supposed to have been sent to the city within a certain time period after being built, and because they weren’t, those improvements don’t have to be reimbursed. Riddell said Oakes was not able to attend Thursday’s meeting, because he had only a day’s notice, so no progress was made on that front Thursday. Council members were confused and frustrated by that development, however, the council decided to discuss early termination again at its next regular work session on Monday.

The council also discussed the possibility of forming an airport authority and all parties seemed to agree it was a good idea. The advantages of forming an authority are that airport experts could be brought in to oversee the airport, eliminating the burden on the council and the city manager, who is also the airport manager. A non-elected authority also removes any political motives from the future of the airport.

Because authorities are independent entities, there is always some concern about turning control over to them. However, authorities are formed and given their powers by the city council, so the city can decide how much power to assign. Even if an authority was formed, the airport would still belong to the city itself.

Riddell said he would support an authority, because it would also relieve a lot of responsibility from the FBO and would be able to focus more on growing business, which is good for everyone.

However, Riddell said he believed the issues of growing the airport and running the airport were separate, and regardless of whether an authority was formed an FBO would be the best choice to operate the airport.

He said very few of his customers ever have complaints about his service, and it has taken him eight years to develop a strong, experienced airport team.

In an earlier interview on Monday, Riddell said he feels the city has been purposely trying to drive him out of business.

He said that some of his tenants are running flight school and mechanic operations, which are illegal because they’re unlicensed and because the airport contract gives him exclusive right to operate a business on the land he rents.

However, at the Thursday meeting, city officials said that was a matter between Dixie Jet and its tenants, but Horton said if Dixie Jet brings evidence to the city, planning inspectors can force those people to shut down or get business licenses.

Riddell said the more costly problem has been the numerous construction delays in the past few years. When the airport is closed or about to be closed, Dixie Jet makes no money. Riddell has had to take out hundreds of thousands of dollars in loans to cover losses.

The 2007 runway expansion lasted nine months and cost them $650,000 in revenue. Now the runway rehabilitation, which Riddell said should have been done at the same time as the expansion, has basically closed business since it was announced to start in May.

With the recent rain and newly found soil problems, construction is being delayed, and the one being hurt financially is Dixie Jet. Riddell said the city has always refused to provide any reimbursements, even though other cities do help their FBO. Dixie Jet has gone from 12 to two employees with this latest closing, but Riddell said he won’t back down.

"We called it a shot across the bow when they talked about putting an FBO on the other side of the airport, but now they’ve declared war," Riddell said. "If they think we’ll roll over and die they got another think coming. This is personal, very personal."

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