Friday, March 10, 2006

Airport fends off site criticism

Consultants dispute Fenton's numbers

Express Staff Writer

Ketchum real estate executive Dick Fenton returned to familiar territory Tuesday night by again questioning the accuracy of financial figures supporting construction of a new airport to replace the Hailey airport.

Fenton told the Friedman Memorial Airport Authority that revenues and expenses for the proposed airport, which would open in 2016, are "optimistic" and not supported by trends from Friedman Memorial Airport's current operations.

Disputing justification for a new airport has been an ongoing crusade of Fenton's. It began while he was a member of the citizen site selection committee studying whether and where a new airport should be built.

He and two fellow committee members representing Ketchum and Sun Valley interests, Sun Valley Resort General Manager Wally Huffman and onetime Ketchum City Council member Maurice Charlat, argued during more than a year of meetings that a distant airport would discourage travelers and airline service and lead to "economic disaster" for the area. They also asserted that consultants' data supporting the need was questionable and, at one time, suggested Friedman should be retained and expanded to meet safety concerns of the Federal Aviation Administration rather than be relocated.

Fenton was the only site committee member to appear Tuesday to question a financial feasibility study sent by the Airport Authority to all Blaine County members of the site committee and asking for comment.

As part of his presentation, Fenton disputed the "magnitude" of financial "assumptions" projecting increased revenues and increased airline passengers at a new airport. The new airport is tentatively planned for a site just inside the Blaine County line, south of Timmerman Hill and east of state Highway 75, in an area designated as site No. 10.

But Bryan Elliott, senior aviation consultant to the firm of Mead & Hunt, countered, pointing out, for example, that the $2.64 per-passenger fee now paid to Friedman by SkyWest Airlines and Horizon Air is far lower than $5 paid at comparable airports and will be raised at the new airport. Auto parking rates also would be adjusted upwards.

Elliott continued checking off increased revenue sources, including that a new airport with an advanced weather landing system would eliminate many flight cancellations and diversions and thus increase passenger flow over the norm at Friedman.

Added service by other airlines would be another factor, he said.

Airport Manager Rick Baird also expressed "confidence" in the financial projections, but said he and staff would review some of the numbers.

Fenton then raised another issue—subsidies to airlines to offset possible losses.

"We have to have a reasonable business plan of how we'd fund revenue guarantees." Fenton said "We don't want to find ourselves with the airport open (and) worst fears confirmed and lose traffic without a mechanism to fund" minimum revenue guarantees.

However, Friedman attorney Barry Luboviski pointed out to Fenton that minimum revenue guarantees are a community responsibility, not the airport's. The Sun Valley and Ketchum business community now ante up several hundred thousand dollars a year to a fund to cover potential losses for Horizon flights from California.

Mead & Hunt consultant Tom Schnetzer, who has engaged Fenton in data disputes, repeated a previous argument—that the costs of airline operations are too volatile year-to-year to forecast financial conditions 10 years in the future.

Elliott added that "hard cash going out the door (from airport budgets) isn't looked on favorably by the FAA."

In other matters:

  • Baird said he was studying requests to expand one hangar and perhaps build a new one prior to opening of a new airport. Friedman now has 26 hangars and five rows of smaller T-hangars with capacity for 10 aircraft each.
  • If piles of snow haven't melted by late April, Baird said he would consider moving snow now piled between the runway and taxiways back onto the runway during an April 24-May10 airport closing for runway improvement work.
  • Baird said the Transportation Security Administration and Friedman are trying to solve TSA's shortfall payment for airport police, which Baird said is costing Friedman $1,300 more per month than it's reimbursed.
  • Authority Chairwoman Martha Burke reported that in a February meeting FAA regional officials left no doubt "they're ready to go" on a new airport.
  • Authority member Dr. Ron Fairfax said the airport would need to "be fairly aggressive about getting more airlines and passengers" into a new field.
  • Authority member Len Harlig, chair of a hangar lease committee, unveiled a proposed new 10-year lease plan for hangar owners. It is $1.50 per square foot per year for hangars under 2,000 square feet, rising to $2; hangars of 2,000 to 3,000 square feet would be leased at $3, rising to $4 per square foot; and rates for hangars of more than 3,000 square feet would be $4.50 and increasing to $6. All rates would be adjusted based on the Consumer Price Index.
  • Engineering consultant Toothman-Orton was awarded a new five-year consulting contract. The firm has provided engineering consultation for 10 years.

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