Friday, August 16, 2013

Judge hears arguments in airport dispute: Company is trying to stop Wilkes-Barre/Scranton International (KAVP) from bringing in new operator

SCRANTON — Lawyers for the Wilkes-Barre/Scranton International Airport on Wednesday tried to convince a judge to deny a request by Saker Aviation — the airport’s fixed base operator — for a preliminary injunction to prevent the airport from awarding the FBO contract to a different company until a dispute over Saker’s contract can be decided at trial.

Saker Aviation, which has a lease contract with the airport to provide ground services such as the fueling and maintenance of aircraft, sued Luzerne and Lackawanna counties and the bi-county board that oversees the airport after that board voted in July to negotiate a contract with another FBO — Aviation Technologies.

Saker is seeking unspecified monetary damages, claiming that the board breached its contract by not allowing Saker to extend its 10-year contract, which expires Aug. 31, another five years and match terms offered by Aviation Technologies.

Airport Executive Director Barry Centini was first to testify before Lackawanna County Senior Judge Peter J. O’Brien, answering questions first from Saker attorney Brett A. Datto and then from airport attorney Nick Kravitz.

Centini said talks with Saker officials about extending the contract began in July 2012 and continued through March. He said he told Saker CEO Ron Ricciardi on March 18 that airport officials decided to seek proposals from other companies because “we were looking at a longer-term agreement and wanted to see who else was out there.”

Asked about a clause in Saker’s contract guaranteeing that no airport facilities would be offered for fixed based operations to a third party without first offering them to Saker on the same terms and conditions, Centini said that section referred to operations during the 10-year term of the lease if the airport wanted to bring in another company to operate at the same time.

Responding to questions from Kravitz, Centini said federal law prohibits the airport from offering a company exclusive rights to operate there. He also said the airport would have to close down if no FBO was in place on Sept. 1.

Saker Aviation CEO Ron Ricciardi testified that, in layman’s terms, the contract clause in question guarantees Saker the right of first refusal to terms of a contract proposed by any another FBO company.

Ricciardi also said that if Saker was not allowed to extend the contract, the jobs of about 35 local people would be terminated and his publicly traded company would suffer irreparable harm and lose business opportunity and market advantage. He said Saker is the FBO at two other airports, and Wilkes-Barre/Scranton is the site of the company’s corporate headquarters. He also said if the judge granted a preliminary injunction, Saker was “ready, willing and able” to continue operating as FBO until the contract dispute was decided at trial.

After the hearing, Datto said testimony made it clear that the airport violated two terms of Saker’s contract. Kravitz said allowing Saker right of first refusal to any other company’s proposal would violate federal anti-exclusivity regulations.

O’Brien said he would take the matter under advisement and issue a ruling forthwith.

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