Anthony Birritteri NEW JERSEY BUSINESS
The Value of General Aviation
November 24, 2014
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  • Disgruntled passengers fighting for legroom, terror threats, security breaches, emotionally unstable passengers and flight attendants … these are just some of the reasons why flights on commercial airlines are either delayed or diverted. From June 2013 to June 2014, approximately 14,903 flights were diverted by US airlines, according to an Associated Press analysis of US Department of Transportation reports. On average, that’s 41 flights per day. For business travelers, these diversions can have enormous impacts on companies’ bottom lines.

    “This is when general aviation becomes critical,” says Tom Gomez, airport manager of Essex County Airport, Fairfield. “Imagine flying into Newark Liberty International Airport because you have to sign an important $2-billion business contract, and your flight is diverted because airlines now detour you for every little thing.”

    It is fortunate, then, that business travelers in New Jersey can access some 45 general aviation airports within the Garden State’s borders and, to a large extent, divert the diversions. At these facilities, whether publicly or privately owned, a company can charter a flight from a fixed-based operator to a destination of choice, or keep their own private aircraft onsite and readily available for employees.

    By definition, general aviation refers to all civil aviation operations other than commercial scheduled air service. It is more than just what is usually thought of as a rich man’s hobby, when the weekend pilot dons his ascot and sunglasses and flies to Cape Cod for the weekend in his Cessna or Piper Cub. In fact, general aviation encompasses smaller aircraft and helicopters that are used for a variety of purposes such as flight training, agriculture (think crop dusting and seeding), surveillance, patrol, border control, photography, construction, search and rescue, fire spotting, etc.

    It is an industry that employs 1.2 million people nationwide and has an economic impact of $150 billion, according to the General Aviation Manufacturers Association. In the US, there are an estimated 209,000 GA aircraft flying to 5,000 US airports according to GAMA.

    In New Jersey, GA provides approximately 18,000 aviation-dependent jobs, with an estimated payroll of $624 million, according to data posted on the New Jersey Aviation Association’s (NJAA) website. The industry’s overall economic impact is estimated at $1.7 billion. Among the GA airports in the state that provide the biggest economic impact, are: Teterboro ($259.7 million), Trenton-Mercer ($277 million), Morristown Municipal ($163 million), Millville Municipal ($185.5 million), Essex County ($62 million) and Allaire ($29.9 million).

    An Aviation Industry with Land Issues

    The industry’s heyday was from the 1970s to early 1980s. Arlene Feldman, president of the NJAA, recalls there were some 67 privately-owned, public-use GA airports in New Jersey when she was aviation director for the state, a post within the Department of Transportation, from 1982 to 1985 (she was also an FAA regional administrator for 20 years). The drop in numbers, she explains, is due to variety of issues, including next-generation family members not interested in taking over the business and the high cost of property taxes.

    Frank Steinberg, founder and principle of Somerville-based Steinberg Law, LCC, and president of the Mid-Atlantic Aviation Coalition (MAAC), explains that many GA airports in the state are privately owned, while in other states they tend to be government owned and supported. “Go to Ohio or North Carolina, for example, and you will see GA systems that are publicly funded, often on a county-by-county basis,” he says. “Meanwhile, in New Jersey, developers are looking to buy land and these airports are big areas of open space.” For the next-generation owners, “it just becomes easier to take a substantial buyout from a developer.”

    In related news, both the NJAA and MAAC are watching the eminent domain case between Readington Township and Solberg Airport. Being heard at press-time by the State Superior Court (vicinage 13 – Somerset, Hunterdon and Warren counties), Steinberg says that if the court rules in favor of the township acquiring the land, it would set a precedent for any municipality wanting to close an airport through condemnation. While the specifics of the case are intricate, with both sides and their respective attorneys providing detailed arguments, the township wants to acquire the 700-acre airport because it needs open space. The lawyer representing Readington, James Rhatican of Wolff Sampson, said in opening statements that the Solberg family is not able to maintain the financial viability of the airport and that it could operate the facility with a little more than 100 acres. The attorney for the Solberg’s, Lawrence Orloff of Orloff,

    Lowenbach, Stifelman & Siegel, argued that the township was using the open space action as a pretext for taking control of the airport, and that the town had adopted a hostile position towards the airport as early as the 1990s.

    According to NJAA’s Feldman, “This is a battle we have all gotten involved with. If Readington Township were to get the airport, other airports around the country would be faced with the same issue … and that’s scary.”

    Gaining Altitude

    Steinberg says the industry took a hit immediately after the terrorist attacks of 9-11 and then again during the Great Recession. However, as a pilot and owner of a Piper Cherokee 180 single-engine plane who flies out of Alexandria Airport in Hunterdon County, he sees increased activity. “A few years back, there was a time when I’d be at the airport and not see a plane take off or land for a couple of hours. Now I am seeing more movement,” he says.

    At Essex County Airport, which is a public facility owned and operated by the Essex County Improvement Authority, Gomez says flight movement in 2013 was approximately 97,000. This is significantly down from 200,000 movements prior to 9-11. The recession also was a major factor contributing to the movement decline. “The price of fuel, which is double the price per gallon of regular automobile gasoline, plus insurance and maintenance costs, etc., all forced the weekend flyers to disappear,” he says. Essex County maintained its viability during this time because it is located between Morristown and Teterboro airports. “When things got expensive at those facilities, flyers had a more economical alternative in Essex,” he says.

    Gomez is quick to add that flight movement is down because much of the training these days is done on flight simulators compared to the past when a student would get to sit in a cockpit and take to the air with an instructor earlier in his or her education, rather than later.

    Essex County airport is self-sustaining and operates on a budget of $4.4 million. It receives a matching grant from the FAA, which is used for common areas at the facility. According to Gomez, “Every dime produced by the airport is reinvested into the airport.”

    The facility rests on 280 acres, 40 percent of which is either open grass fields or wooded areas. Eighty to eighty-five percent of its business is comprised of individual aircraft owners (who pay for hangar, maintenance and fuel fees) and flight training. Aircraft owners who need to store their airplanes in indoor hangars at the facility pay a monthly fee of $2,000. Outdoor parking at a tie-down is $200 a month. Ten to fifteen percent of its business is corporate utilization.

    Gomez proudly boasts that the airport has 247 aircraft on site, making it the biggest group of small, single-engine and twin-engine planes in the state.

    Some of the companies at the airport include: Air Bound Aviation (the fixed-base operator); Century Air, Air Fleet Training Systems and Fischer Aviation, all flight training schools; C&W Aero Services; Del Helicopter Services; and Zip Aviation Helicopter Services.

    Andrew Ferguson, head of Air Bound, reports that his charter business is up 5 percent from the prior year. Most of the corporate users who charter his planes (a fleet of four corporate jets) fly within a 1,000-mile radius. The average cost of a round-trip charter is between $6,000 and $7,000, but Ferguson says for a company that needs to fly seven to eight executives and bring them home on the same day, the costs are comparable to paying for first class seats on a major airline jet and arranging for overnight hotel rooms. “It’s the time savings that’s tremendous,” he says.

    A Time Saver

    That is the gist of GA for businesspeople: Time saved. “If a CEO needs to fly at any given time and goes via the airlines, he has to wait in line, go through security … all those things we are faced with when flying commercially,” Feldman says. “If that executive had a corporate aircraft, whether owned by the company or leased, he doesn’t have to go through that. He goes to the GA airport, loads up the plane, takes off, goes to where he has to go and even comes back on the same day. With an airline, that is next to impossible.”

    Commenting on the value of the GA system, MAAC’s Steinberg says the state’s small airports, in and of themselves, “are significant businesses that are part of the national transportation system.”

    Gomez adds, “We fill the gap in the transportation infrastructure not served by the major airlines.”

    A comment by Gomez that hits home regarding the value of general aviation and flight training, is this: “In order to become an airline pilot, you have to go to the local airport and learn how to fly. That is the first step in the aviation industry. … In order for you to sit in the cockpit of a 747 or the space shuttle, you first have to step into the cockpit of a Cessna 172 Skyhawk.”

    Like the mythological phoenix that rises from its ashes and takes to the skies, so is a GA industry that is being reborn in the aftermath of 9-11 and the Great Recession.