FBO appeals to city council
Freedom Aviation raises concern as it seeks former competitor’s lease
Aviation — Freedom Aviation makes use of the newly acquired assets from Virginia Aviation. Photo credit: Leah Seavers
In an attempt to enable business growth, Freedom Aviation, a fixed-based operator (FBO) and a subsidiary of Liberty University, is seeking to secure long-term rights in a lease at the Lynchburg Regional Airport, a move that has created some controversy.
Freedom Aviation provides fuel, flight instruction, hangar space, maintenance, charter and other services to general aviation users at the Lynchburg Airport. Since the end of June when Freedom Aviation purchased Virginia Aviation, the other FBO on the airfield, Freedom has been trying to secure Virginia Aviation’s existing lease with the city. FBOs are unique in that the majority of their value lies in the leased facilities they control.
In 2013, the City of Lynchburg imposed a stipulation that if Virginia Aviation were ever sold, its lease with the city would terminate rather than transfer to the buyer. Freedom Aviation made an appeal to the stipulation to which the city agreed to continue the lease on a month-by-month basis until a decision can
be made.
According to Mark Courtney, manager of the Lynchburg Regional Airport, the merger of the two FBOs has created some controversy within the general aviation community and city leaders. Concerns exist over Liberty’s School of Aeronautics receiving potentially preferential treatment over other customers, the forcing of general aviation off the Airport and Freedom Aviation becoming a monopoly since there would be no other operators to provide competition.
“The (Lynchburg Airport) commission is trying to move towards reconciling all of that,” Courtney said. “There seems to be some consensus building that the School of Aeronautics needs to be treated separately as an entity on this airport from Freedom Aviation as an FBO, making the distinction that both at the same time are owned by Liberty University.”
Freedom Aviation President Dave Young says that Freedom has the best interests of the general aviation community as its goal. While Young clarifies that Freedom does want to serve the School of Aeronautics, its business model is to support anyone and everyone who is involved in aviation enterprises.
“I personally disagree with the concern about a monopoly,” Young said. “For one, in our business model we are going to be governed by several forces that won’t allow us to be a monopoly. We are governed by the price of fuel generally within a certain mile radius. Another reason we would not raise fuel or hangar rental prices is because we don’t want to lose any of our current customers.”
Courtney said the FBOs being separate provided local competition.
“From the Airport’s perspective, these two FBOs were providing a healthy competitive environment, which is fine if there is enough business to support it,” Young said. “It became apparent to the owner of Virginia Aviation that this kind of competitive environment was, to some extent, presenting a challenge for him in having a profitable business.”
“We reached a point where the owner of Virginia Aviation, from our perspective, found it in his best interest to sell his company,” Young said. “When we purchased Virginia Aviation, we had full knowledge that we really purchased the assets of the company, with full expectation that we work with the city over the various aspects of the lease which include facilities, fuel management and management of what we call the general aviation terminal.”
Young believes that the merged FBO operations provide a catalyst for increasing customers, economic development and bringing in new business. He also believes that the merger will enhance regional competition. According to Young, Freedom Aviation has offered to partner with the city to develop a Maintenance Repair and Overhaul facility plan. This was the number one recommendation in the 2013 Job Development study commissioned by the Lynchburg Office of Economic Development.
“I think the synergy that has been created by the merger of these two companies strengthens the overall position not only of Freedom but of the airport and the future of the airport,” Young said. “Each company had its own strengths. There were specific functions that Virginia Aviation could perform and there were specific functions that Freedom Aviation could perform, but neither of us could perform all of them. Now that both are under one umbrella, we can satisfy a wider array of customers as well as the existing customers more effectively. It provides a basis for growth that didn’t exist previously.”
According to Lynchburg City Manager Kimball Payne, if the lease was transferred to Freedom Aviation, then it would be the first time that all of the facilities for general aviation would be controlled by one private business.
However, Young said that the majority of airports in the U.S. are served by a single FBO and that a single FBO model can work at Lynchburg as it did
for years.
Payne said that all options are being considered to ensure that the city leaders decide what works best for the most people.
“There are concerns about what (the merger) would do to the revenue streams that would come to the city,” Payne said. “On the other hand, Freedom Aviation folks have argued that being a bigger organization, they could raise the level of professionalism, raise the level of quality and they could make the Airport more competitive on a regional level. And clearly I think Freedom has the financial capability to build new facilities on the Airport, which could mean more hangar space (and) more service for the general aviation community.”
Courtney pointed out that while the airport commission’s advice is heavily considered, the final decision on how the lease is resolved rests with city council.
“With the general aviation concerns and input and a nine-member commission, it’s really quite a lot to work through all of this, especially when we explore all of the alternatives,” Courtney said. “There are issues in what’s in the best interest of Freedom Aviation and also issues of what’s in the public interest. I think we are making progress, but it’s slow progress.”
Young agreed that concerns of the general aviation public must be considered. However, he is also concerned about the future of the airport.
“With the continued reduction of regional airline service, I believe that the commission should be considering the devastating impact to the airport should Lynchburg lose commercial air service,” Young said.
Young continues to emphasize to the airport commission and city council the importance of partnering in strategic planning for the future of the airport, as well as taking advantage of the resources Freedom Aviation can offer, to support capital investment for improving existing infrastructure and constructing new facilities for the benefit of general aviation, and increased revenue to the city.