TAC Air Consolidates GMU FBO, Prepares for Subsidized Competition at CHA
/TEXARKANA, TX November 18, 2010 – TAC Air recently sold its Greenville, South Carolina (GMU) FBO operation to Greenville Jet Center. A smooth transition of operations occurred on October 29th. Terms of the sale were not released.
According to TAC Air VP & COO Christian Sasfai, the move reflects a growing trend in general aviation FBO services, stating “consolidation has become a necessary component of today’s aviation services industry in order to provide high quality, low cost products and services to aircraft owners and operators.” Meanwhile, TAC Air is actively pursuing several acquisition opportunities. According to Sasfai, “We’re simply reallocating our resources to where the greatest opportunities are. We expect to make our next acquisition announcement in early 2011, with more to follow.”
The other 12 TAC Air FBOs will continue to operate as usual. However, Sasfai is quick to point out the GMU consolidation is another example of market trends. He predicts the sponsors of regional airports such as Chattanooga Metropolitan (CHA) who plan to add government funded FBOs where market consolidations have already occurred will be “disappointed” in the outcome. “Adding a government subsidized FBO where the free market has already undergone consolidation makes absolutely no sense.” When asked about the future of TAC Air at CHA, Sasfai replied “TAC Air has invested millions of dollars into Chattanooga and provides more than 30 jobs. There is very little difference between CHA and GMU in that aviation support services can be provided more cost effectively by a single provider; over saturating markets such as CHA and GMU with service providers typically results in higher prices – not lower prices – as each operator struggles to cover its fixed costs. TAC Air is fully committed to the CHA market and will continue to operate and do everything we can to protect the jobs of our Chattanooga associates.”
According to a November 17th article in the Chattanooga Times Free Press, Wilson Air Center, Rectrix Commercial Aviation, Hawthorne Corp, and Express Airport Services responded to the Chattanooga airport’s request for proposals to operate the airport’s FBO and additional hangar space. Details of the proposals have not been made public by the airport.
The Chattanooga Metropolitan Airport Authority (CMAA) abruptly cancelled its November monthly meeting. The CMAA’s meeting originally scheduled for Monday, November 15th would have been the first after the November 12th deadline for submitting responses to the RFP for management of the airport’s new facilities. The airport has drawn criticism for awarding the construction contract and starting work on the FBO facilities before finding a firm to manage them. In 2006 the Chattanooga airport issued an RFP for opening a 2nd FBO but was not able to find a qualified respondent.
Leaders at the Chattanooga Metropolitan Airport Authority note the need for a second FBO as a means to provide competition for fueling and aviation services, as well as offices and hangars to accommodate private and corporate aircraft. When asked about jet fuel prices, TAC Air Chattanooga general manager Pam McAllister stated, “We have to keep our prices competitive because we compete with the fuel prices at airports incoming flights originate from. We’ve been doing this since before we were aware of the airport’s plan to build its own FBO.” A survey of major Tennessee airport retail jet fuel prices confirms McAllister’s assessment. On July 20, the week prior to the airport’s FBO announcement, TAC Air’s Chattanooga price was $5.07 a gallon, while other surrounding prices ranged from a high of $5.93 at Nashville to $4.91 at McKellar-Spikes airport in Jackson. Today those prices are $6.24 at Nashville and $4.60 at Jackson, with TAC Air Chattanooga coming in at $5.34. McAllister points out that when you compare the five major airports in Tennessee, it’s interesting that the lowest fuel prices are at airports with one privately owned and operated FBO, and 2 of the 3 highest prices are at airports with more than one FBO on the same airfield.
For more information on TAC Air, log on to www.tacair.com
About Truman Arnold Companies
Truman Arnold Companies (TAC) is a Texarkana, Texas-based company founded by Truman Arnold in 1964 as a branded petroleum jobber. Today, TAC is a leading regional petroleum marketing company, offering customers a variety of services through its network of petroleum terminals and aviation Fixed Base Operations (FBO) facilities. The private company has more than 400 associates with fuel volume exceeding 2 billion gallons annually.
TAC Air currently has fixed-based operations with more than 300 associates in 12 cities: Amarillo, TX (AMA), Chattanooga, TN (CHA), Denver, CO (APA), Fort Smith, AR (FSM), Hartford, CT (BDL), Knoxville, TN (TYS), Lexington, KY (LEX), Omaha, NE (OMA), Raleigh-Durham, NC (RDU), Shreveport, LA (SHV), St. Louis, MO (SUS) and Texarkana, AR (TXK). TAC Air was recognized in Professional Pilot magazine as “#1 U.S. FBO Chain” and ranked as one of the top private companies in the United States by Forbes magazine. To learn more about Truman Arnold Companies, log on to www.trumanarnoldcompanies.com.