Tupelo Regional looks to privatize its FBO

By Dennis Seid/NEMS Daily Journal

TUPELO – Tupelo Regional Airport is looking for a private company to run the operations of its fixed base operator, Tupelo Aviation Unlimited.
The FBO provides services such as fueling, aircraft rental, hangar rental, tie-downs and parking.
Airport Executive Director Josh Abramson said the airport is asking for proposals from private firms interested in running the day-to-day operations of TAU. The airport would retain the assets of the FBO, however.
He said the airport would cut costs by privatizing Tupelo Aviation Unlimited, which the authority created in 2007 after it bought out two former FBOs.
“For the first time since the buyout, Tupelo Aviation Unlimited actually made money for the airport in 2011,” Abramson said. “However the Tupelo Airport Authority and I feel a private entity can run that operation more efficient than a government entity.”
With a private company taking over, the airport would pay the firm a fixed fee to cover its staffing and management fees. It also would set a certain percentage of the profit for the company.
Abramson said new general aviation policies at the airport have helped it see “large growth” in 2011 with the addition of Universal Asset Management – an airplane recycling and leasing company – and Airline Maintenance Service, a company that will provide maintenance work for light turbine and turboprop planes.
The deadline for proposals is Feb. 10. A special committee appointed by the airport board will make its selection.
Abramson said the goal is for the airport to exit the FBO business within five years.
Tupelo Regional began running its own FBO in 2007, following a buyout of Southernaire and Tupelo Aero.
In 2005, the companies balked at the airport’s decision to begin selling self-serve aviation fuel. The FBO owners filed a petition when the airport said it intended to buy a fuel truck and build a fuel farm to supply Delta Air Lines. They claimed the airport was attempting to directly compete with them.
The authority attempted to buy out the FBOs in 2006, but at least one offer was refused. The board later agreed in 2007 to buy the FBOs for $1.5 million, and the lawsuit was dropped.
To pay for the buyouts, the airport borrowed the money from the city on a 15-year note paying 4 percent interest. The airport and the authority then renamed the FBOs Tupelo Aviation Unlimited.
It operates as a separate business from the airport, but reports its operations to the authority.

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