Sunday, August 04, 2013

Airline, in letter, says it may leave Easterwood Field Airport (KCLL) if fees are raised under privatization

One of only two commercial airlines servicing Easterwood Airport has threatened to cut back or eliminate service to the Brazos Valley if Texas A&M University continues forward with an outsourcing proposal.

The CEO and regional vice president of American Eagle co-authored a June 26 letter to Texas A&M University President R. Bowen Loftin, College Station Mayor Nancy Berry and Bryan Mayor Jason Bienski. In the letter, Dan Garton and Dale Morris express concerns that landing and rental fees at Easterwood could rise if the airport is privatized.

They said they are not opposed to privatization, but that it would raise "major concerns" about American's ability to provide the area's only commercial flights to the Dallas/Fort Worth International Airport. American Eagle is a regional provider of flights for industry giant American Airlines.

"Our profit margins are small at airfields the size of Easterwood and if a third party elevates their fees to make a profit, it could force

American Airlines to cut services or possibly even cancel service," states the letter, which was obtained by The Eagle through open record requests to both cities. "We are only addressing this issue because there are very few airports in the U.S. that are truly privatized or outsourced to a third party vendor."

The strongly-worded letter was sent to the officials as the A&M System weighs a proposal to outsource airport management and fixed-base operator services at Easterwood, such as fueling, hangaring, parking and aircraft maintenance. For years, local politicians have tried to lure a third airline, such as Delta, to the area, and the loss of a provider would seemingly be a blow to the airport, which has seen its traffic grow following the university's lucrative move to the Southeastern Conference. Furthermore, local officials worry the loss of the airline could hamper the economic growth of the Biocorridor, the Texas Triangle Park or the College Station Medical District.

According to the Federal Aviation Administration, Easterwood is the only university-owned and operated airport in Texas. It is also the only airport with commercial flights located in between the state's large metropolitan areas.

Airport officials maintain that Easterwood is self-sustaining. It does not receive funding from Texas A&M and nearly half of its $6 million annual budget comes from fuel sales.

System and university officials have cited complaints about customer service at the airport and have expressed interest in adding amenities and attracting additional airlines.

The airport's other commercial flight provider, United Airlines, provides the area's only flights to Houston. When contacted by The Eagle, a United spokeswoman said the company was unaware of proposed outsourcing, but that its officials would now be "closely monitoring the situation."

Exploring privatization

Texas A&M University and System officials issued requests for qualifications to run the airport in October 2012. A source close to the situation said a committee composed of system and university officials selected Astin Limited, based in Bryan-College Station, to operate the airport management and FBO services in May, and that the decision on whether to grant the contracts has been in the hands of Loftin since that time. University spokesman Shane Hinckley previously said Loftin did not have a timeline for making a decision, and that the university administrators had reviewed the committee's recommendations but wanted more questions answered.

It is not guaranteed that a private company would raise the fees of American or United. The Eagle has also obtained an Aug. 1 letter from John Clanton, CEO of Astin Limited, to Phillip Ray, the system's chief business development officer. In the letter, Clanton, whose company was recommended to run the airport, rebuffs concerns that costs for the airlines would increase.

He states that his company would not benefit from increased fees and that greater fees would counter his goals for the airport. Increased airline fees reduce overall revenue, Clanton wrote, and he said he has no motive for increasing airline costs.

"Each element of our proposal is designed to increase passenger enplanements [passengers boarding an aircraft] and ultimately increase the number of carriers serving the community," Clanton wrote. "Increasing costs to the airline diminishes the chances of achieving that goal."

Clanton, a Bryan resident, is the former founder and former CEO of Trajen FBOs, a private company that managed fixed-base operator services at 21 airports in 11 states until it was sold in 2006 to Atlantic Aviation for $338 million. Clanton has since founded the Fibertown Data Center in Downtown Bryan, the area's only ultra-high-speed Internet zone, and he bought College Station-based Lynntech, a scientific research and development company that focuses on water, energy and health innovations.

When asked about the American Eagle letter, Clanton told The Eagle that the idea of increased costs for the airlines seemed ludicrous.

"I don't see how [privatizing Easterwood] would create an increase in cost for the airlines," Clanton said.

After being contacted by The Eagle about the letter, System Chancellor John Sharp reached out to American Airlines, according to a system spokesman. Sharp, through the spokesman, said that a friend at American Airlines claimed an Easterwood official requested the airline officials pen a negative letter about the outsourcing. The spokesman declined to identify the airport official or the airline officials.

Easterwood Airport Director John Happ declined to comment on the outsourcing or the letters, but did respond to the chancellor's claim.

"I haven't asked anybody to write letters," Happ said.

Garton and Morris with American Eagle did not return a request for comment about the letter. An American Airlines spokesman said he could not comment on the proposed outsourcing or the chancellor's claims. He said the letter speaks for itself.

Still, the letter has raised concern among local public officials.

Asset to community

Berry called the airport a community resource.

"I think it's critical to the community for airline service to continue," Berry said. "It's a major transportation hub and I want to see it operate with the current airlines and if possible add an additional airline."

Bienski said that he had not read the letter, and expressed concern that it was obtained by The Eagle.

Brazos County Judge Duane Peters did not receive a copy of the letter, but was aware of its contents. He shared American's concerns about the outsourcing. Peters, who is leading the county through the fashioning of its 2013-2014 budget, said subsidization of the airport could be in jeopardy if it is privatized.

The county, the city of Bryan and Texas A&M each pay $65,000 annually to fund the College Station fire personnel who make up the Aircraft Rescue and Fire Fighting unit, or ARFF. The ARFF is housed at the College Station fire station located at the airport, and remains there 24/7 to provide fire coverage.

Peters, similar to Berry, described Easterwood as a community asset.

"I think the hope has always been we might be able to get more flights out of here," Peters said. "I think the loss of flights would affect the university more than everybody else, but there are a lot of people who use Easterwood to fly out. I would be real concerned about [the proposed outsourcing]."

Peters said the university was free to outsource the airport, but said that he didn't know if it would be appropriate for the county to spend taxpayer dollars to support the private venture.

"I really don't know what's going on, but if it is outsourced to a private company I'm not sure the county needs to continue to fund the amount of money we've been funding," Peters said.

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