Curt Epstein AIN ONLINE
Hobby’s FBO Flock to Grow
November 2, 2014
  • Share
  • The City Council of Houston, Texas, last month voted overwhelmingly in favor of a 40-year lease for a new FBO at William P. Hobby Airport, one of business aviation’s busiest destinations and currently home to five service providers. Black Forest Ventures, which opened a new Galaxy FBO at nearby Lone Star Executive Airport earlier this year, plans to break ground early next year on its $20 million facility of the same name at Hobby. The new FBO will provide a 20,000-sq-ft terminal and a pair of 38,000-sq-ft hangars each capable of holding aircraft up to the size of a G650.

    Black Forest says it had to find more shelter on the field after filling its existing 20,000-sq-ft hangar with large-cabin jets under the management of Wing Aviation, its Part 135 operation. The company decided to expand and join the FBO club at the airport, which currently pumps a combined 1.2 million gallons of fuel a month. “Most of the time you hear about small FBOs being acquired by large conglomerates,” said Black Forest Ventures president Dirk Laukien. “We are going against that trend.” Project Opposition

    During consultation with the airport authorities, the current FBOs (Atlantic, Jet Aviation, Million Air, Signature and Wilson Air), likely mindful of losing fuel revenues from Wing Aviation’s 15 managed aircraft at Hobby, sought the insertion of special conditions in the new FBO’s lease. Some suggested that the Galaxy FBO–if allowed to proceed–would exist mainly to serve the Wing Aviation business and argued that, with its hangars full of its own managed aircraft, the Galaxy facility would be able to undercut the other FBOs on fuel pricing.

    It was perhaps such arguments that prompted the National Air Transportation Association (NATA) to weigh in on the debate. The association sent a letter to Houston’s Mayor and city council opposing the proposed lease and asking the city, in the interests of creating “a level playing field,” to insert a provision that at least one of the new Galaxy hangars be reserved for the exclusive use of third-party customers. Such a restriction does not appear in the other FBOs’ leases at Hobby, according to the Houston Airport System’s commercial development office. Failure to include such a provision, NATA suggested, would “be creating an unequal level of competition among FBOs at the airport, a clear violation of FAA grant assurances.”

    NATA’s letter also called for additional language in the proffered lease to accelerate “the amount and tempo of investment made by the new entrant.” NATA proposed that Black Forest (which is also a NATA member) be on the hook to spend at least $17 million to improve its 19-acre leasehold during the first seven years of the lease and another $5 million before year 24 of the agreement. According to Houston Airport officials, those terms exceed those of the other leaseholders.

    “As the owner of an aviation company, as a 30-year pilot, I am appalled by NATA’s attempt to squash a competitor at the benefit of the other members,” Laukien told AIN. “Here we have five FBOs that have ganged up against a smaller local business to prevent us from expanding and securing a lease from the city, similar to all the leases that they currently have.”

    One thing for certain is that the airport will be seeing considerable private aviation development. Earlier this year, Million Air opened its new $15 million headquarters/flagship FBO there, and Atlantic Aviation expects to break ground soon on the $18 million replacement for its current complex. Wilson Air expects to follow suit on a new facility, which will triple the size of its terminal, and a recently built hangar takes its storage space to 110,000 sq ft. Jet Aviation recently added 30,000 sq ft of tenant hangars and is slated to refurbish its 85,000-sq-ft clear-span hangar. Signature Flight Support is said to be planning to renovate its facility as well.