During a special called meeting held Tuesday, the Greenville City Council voted unanimously to authorize an application for Fiscal Year 2022 Federal Aviation Administration (FAA) Airport Improvement grant in the amount of $800,250.
The grant requires a 2.5% match in the amount of $20,006.25 for Runway 18L/36R Crack Seal and Marking Project.
“This project is slated to address some cracking that has begun in the runway. None of the cracks are out of spec right now or render the runway unusable, but we want to get ahead of them before they get out of spec,” Airport Director Sam Washington explained.
He added the project would entail going in, cleaning out and sealing all of the cracks that have formed in order to keep the runway in good shape and prevent existing cracks from worsening or “developing any further.”
The council also voted to officially enter into agreement with Corporate Flight Management, Inc., doing business as Contour Airlines, for air carrier service as well as rental of terminal and ramp space commencing Oct. 1, 2021 and terminating Sept. 30 2025.
While all aspects of the terminal and ramp space agreement with Contour seemed to be in order after Washington made the necessary adjustments and updates for the current consumer price index, there was one significant “loose end” to tie as it pertained to the air carrier service agreement.
“The one area that there were some questions about was the fixed-base operator (FBO). Since Contour will not be utilizing the FBO for fueling service, that is going to have a significant impact on the bottom line of the FBO to the tune of about $140,000 for lost revenue for the FBO in fuel sales,” Washington informed. “With the changes that we have in the terminal lease agreement, those additional charges will compensate for a little over $40,000 of that loss, but there is a difference of about $60,000 or so that we will have to figure something out as to how we would cover that.”
A full service FBO is essentially a facility that provides FBO Services, including selling aircraft fuel and pumping fuel into aircraft.
Washington noted the suggestion of the FBO’s management firm — Airline Maintenance Service (AMS) — which was to ask Contour to take on some additional fees to cover a portion of the loss in the form of an overnight fee of $200 and also, a “fuel on board” fee estimated at $150 per landing.
“Basically what that does is let the FBO be in such a position that if Contour comes in and they need any service, they get number one priority over anybody else, but again, the challenge there is Contour has already stated they won’t need to buy fuel from Greenville because their aircraft can carry enough fuel that they can get it cheaper in Nashville and Dallas,” he told the council, “even cheaper than we can buy it for the FBO.”
Washington also noted the challenge in justifying such as Tupelo does not charge Contour an overnight fee.
With Contour Airlines CEO Matt Chaifetz adamant about the lack of rationality in paying for services he will have no use for, the council had a decision to make.
“Do we want to ask Contour to take on some additional fees to help offset that other $64,000 or so potential loss? Or, do we want to just go with what’s in the agreement and develop a plan to help cover that in the days to come,” Washington posed. “If the council is ready to accept the agreement as is, then we can go ahead and move forward with that and then AMS and I will have to get together and start putting together some planning on how to help address that potential $60,000 plus shortfall.”
Mayor Errick Simmons recommended the latter and the sentiments of the council members were like so as they voted unanimously to accept the agreement as is and figure out alternative methods to offset the potential FBO revenue loss.
