The Chattanooga Metropolitan Airport Authority’s decision to subsidize a new general aviation facility managed by Wilson Air with $5 million in taxpayer funds violates CMAA’s agreement with federal officials regarding use of grant money obtained by the local agency, a competitor of the government-subsidized business said in a complaint filed with the Federal Aviation Administration.
Officials at TAC Air, a division of Truman Arnold Companies, said they had hoped it would be possible to work out an agreement with the airport which would allow it to compete “on a more level playing field” with the new company, but they were unable to do so.
“At a time when government should be keenly focused on using limited funds for the highest and best use, the CMAA spent approximately $5 million to duplicate services already being provided by the private sector,” TAC Air vice president and chief operating officer Christian Sasfai said. “This money could have been spent on safety initiatives or other airport infrastructure that would have benefitted the traveling public.”
Further, the TAC official contended, the $5 million already invested is not the only taxpayer money that will be spent on the Wilson Air-managed business since “. . . beyond the initial construction and start-up costs, the CMAA will have the added burden of funding operating losses incurred by the FBO.”
The airport authority now predicts that the new business will sustain a $250,000 operating loss in its first year of operation, "a total that has grown significantly from the time the project was announced to grand opening,” TAC representatives said.
TAC Air – which was recently selected for the second time by readers of Professional Pilot magazine as the “Best Large FBO Chain” – intends to continue providing top quality service to general aviation customers in this area, company officials said.
“TAC Air has invested millions of dollars in Chattanooga,” vice president Sasfai said. “Our goal has always been to provide quick turns, competitive prices and award-winning service for the general aviation customer. However, we’ve also kept a focus on our team that is simply one of the best in the nation.”
“We are committed to protecting the jobs of 30 Chattanoogans, our customer base and our capital investment,” he vowed.
The full text of a press release issued by TAC Air reads as follows:
Today TAC Air, a division of Truman Arnold Companies, filed a Part 16 Complaint against the Chattanooga Metropolitan Airport Authority (CMAA) with the Office of the Chief Counsel, of the Federal Aviation Administration. TAC Air held off filing this Complaint in the hope that the CMAA would act in good faith to create a more level playing field and provide a mechanism for the two FBOs to compete based on free market
principles, arm's length contracts, and pricing determined by costs and
expenses that an FBO would ordinarily incur on a day-to-day basis.
The issues raised in the Part 16 Complaint are based on certain Assurances agreed to by the CMAA in return for federal funding ("Grant Assurances"), which include Assurance 22(g) which states: "In the event that the Sponsor exercises any of the rights and privileges referred to in this assurance, the services involved will be provided on the same conditions as would apply to the furnishing of such services by commercial service providers under
these provisions."
In addition, TAC Air has raised the issue of whether the CMAA will follow
its own dictate in its Minimum Standards which provides that "(A)ll property which is developed as a result of investment by the Airport Authority will be leased in order to provide a reasonable rate of return for the public monies invested...."
These issues are complex and it is expected that the FAA will carefully
evaluate both TAC Air's and the CMAA's positions in this matter and issue a fair and equitable decision.
TAC Air is disappointed that the CMAA would not address this matter without
FAA intervention, but believes the Part 16 Complaint will be a valuable
process for both Chattanooga and the entire aviation industry. TAC Air
remains a strong supporter of Chattanooga Metropolitan Airport , the
Airport's based aircraft, airlines and the flying public.