Saturday, October 12, 2013

South Jersey: Small airports become hubs for new business as flights decline -- Cape May County (KWWD), Millville Municipal (KMIV), Woodbine Municipal (KOBI), Hammonton Municipal (N81)

Fewer planes are taking off at municipal and county airports these days, thanks to the long economic downturn and high aviation fuel prices.

But small businesses such as T-shirt printers, breweries, car dealers and equipment renovators are taking off there, and bolstering the bottom line. Other small airports have discounted fuel, or are in talks with educational facilities about hosting air traffic control classes.

“The trend nationally is down for recreational flying,” said Stephen Williams, a pilot and director of airports for the Delaware River and Bay Authority, which runs Cape May County and Millville municipal airports. “New pilot starts, and the health of flight schools, are down because of the cost of fuel and ownership. My own flight activity is down as a recreational flyer.”

With fewer people becoming pilots, the aging of existing pilots and many grounded planes for sale, airports just don’t have as much traditional, aviation-related business. They have had to adapt to the new reality by being flexible and open to new ways of funding operations.

At both DRBA airports in the region, land and building leases are up due to local demand for small business work space, Williams said.

Cape May Brewing Co. has flourished since 2011 at Cape May Airport. It started with one employee, produced 60 barrels of beer a year (a barrel is 31 gallons) and was open four hours a week for tours. This year it has 10 year-round employees, produces 1,500 barrels of beer and is open six days a week and hosting 500 to 1,000 people a day, said co-owner Ryan Krill, 31. He started the business with his father, Bob Krill, of Chadds Ford, Pa., and college friend Chris Henke, of Avalon.

The brewery grew from 1,500 square feet to 5,000 square feet in 2012, and 7,500 square feet this year, and Ryan Krill, of Avalon. It expects to increase production to 2,500 barrels next year.

Another local microbrewery, Glasstown Brewing Co., will open soon at Millville Airport, said DRBA spokesman James Salmon. It’s co-owned by general contractor Justin Arenberg and environmental consultant Paul Simmons, both of Millville.

Both airfields also have popular museums attached to them, which bring in large numbers of visitors: The Naval Air Station Wildwood Museum and the Millville Army Airfield Museum.

Becoming a private pilot is a big commitment, and requires an outlay of $8,000 to $10,000 and many hours of flight time, said Dave Dempsey, owner of Aerial Skyventures flight school, based at Woodbine Municipal Airport.

Then there’s the cost every time a pilot goes up.

“A general aviation airplane will burn 10 to 15 gallons an hour,” said Jeff Doran, of Woodbine, a longtime pilot and retired police officer who flies himself to jobs throughout the Northeast for an emergency communications firm. “That’s $60 to $100 per hour, just to start the engine,” with aviation fuel at more than $6 per gallon.

After falling in the midst of the recession, land and building lease revenue had rebounded in Millville by three years ago, helped by the 2010 addition of the Boeing Chinook CH-47 helicopter modification center, according to DRBA reports. The center modifies new helicopters for the Army, which recently extended its contract through April 2014, according to Robert Algarotti of Boeing.

Cape May Airport’s lease income fell similarly, but by 2011 had surpassed 2007 figures, the DRBA reports show.

At the same time, the DRBA estimates landings and takeoffs have fallen from a high of about 50,000 per year at each airport before the recession, to about 35,000 this year, Williams said. (General aviation airports don’t have towers so don’t keep exact records, but must estimate activity.)

Jet use hasn’t decreased as much as regular small plane use, said Clarence Crawley of FlightLevel Cape May, LLC, the independent fixed base operator at Cape May Airport. That may indicate the highest-income flyers are less affected by the downturn than others. FlightLevel has been the operator there since May, but Crawley has worked for two other operators at the airport going back to pre-recession years, he said.

Income from fuel sales fell in the heart of the recession, rebounded for a while, but have been trending down again in the last few years as prices have spiked, DRBA reports show. At Millville the fuel fall-off was drastic in 2009, and has never approached pre-recession levels, because of the loss of the Millville Jet Center, which had provided charter jets.

Woodbine Municipal Airport tries to offer the lowest fuel prices within a 50-mile radius, said maintenance manager Wayne Rumble, of Marmora.

“The big thing in aviation is the cost of fuel,” he said. So Woodbine offers self-service and discounted prices, in the hopes of drawing in flyers for a fuel stop. They can research prices on, he said.

The airport is home to about 75 planes, including a jet and two ultralights. Thirty small hangars are rented out, and there are about 20 people on a wait list, down a bit from years past, he said.

“People are selling airplanes. (The pilots) are getting older, and not as many young people are coming in,” said the 81-year-old Rumble, a pilot since 1950, who still flies and just gave up teaching flying. At least two pilots there are in their 90s, he said.

The value of small planes is dropping significantly, he said, with more for sale in publications like Trade A Plane.

Rumble said he bought his 1967 single-engine plane in 2004 for $58,000 and would have a hard time today getting $38,000 for it, even though it’s been well maintained. When he bought it, he expected to get about $68,000 for it after 10 years, he said.

The Woodbine Port Authority, which runs the 700-acre Woodbine Municipal Airport, looked at how much land could be used for non-aviation activity, said Woodbine Mayor Bill Pikolycky. Officials decided to split off 75 acres fronting Route 550 to create a business park, he said.

Gentilini Chevrolet is building a $5 million facility there, and two other businesses are in negotiations to move there, Pikolycky said.

Hammonton Municipal Airport has been able to increase its income over the past several years, from about $35,000 a year to $72,000 last year, said Town Administrator Jerry Barberio. Its fixed base operator, Staraero Partners Group, shares fuel sales with the town and brings in planes for maintenance and repair; and a non-aviation equipment reseller called Equipment Xchange LLC rents space, Barberio said.

Hammonton is also in talks with Atlantic Cape Community College to host classes for an air traffic control tower associates degree the school wants to offer. Atlantic Cape would have to build a tower, and purchase a radar simulation suite, since the airport doesn’t have one now, said Atlantic County Freeholder James Bertino, who lives in Hammonton and favors the idea.

“It would give ACCC a model program,” Bertino said, adding talks are ongoing.

About 20 planes are tied down at Hammonton, at $50 each per month, since a 2008 expansion, Barberio said. Previously 12 to 15 were based there. The airport has the capacity to handle 35 planes.

There have been problems. The town had an agreement with Dan Haug of Hangar Corp. of America, of Spring House, Pa., to build a $700,000 to $900,000 hangar for the State Police's SouthStar Aeromedical Helicopter, based there since December 2011. HCA would own the building and lease it to the State Police, while paying $2,000 a year to lease the land from the town.

But HCA stopped construction after working on the foundation, due to financial and other difficulties, Barberio said. A new contractor will complete the project, but it is already months behind schedule.

The town makes $3,500 a month leasing an existing hangar to the State Police, Barberio said. It has another renter lined up for when the Medivac helicopter goes to the newer, larger hangar.

The town plans to add 10 T-hangars to the facility so small planes can be protected from the elements, and a new taxiway from the hangars to the runway. The town hopes to have it complete in 2017 or 2018, he said.

It would be 90 percent funded by the federal government through the FAA, he said, if the town gets expected grants. The hangars would then generate at least $150 to $200 a month, per hangar, he said.

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