Airport Master Plan 2012 - City of Waterville

2) Airport FBO and Additional Airport Services. Securing a reputable FBO has the potential to
significantly stabilize quantitative and qualitative aspects of the Airport. The Airport and the City
should solicit the services of a Fixed Base Operator (FBO) for WVL through an Request for Proposal
(RFP) process. This will help the following:
Revenues and Expenses: From 2006 to 2010 positive cash flow to the City resulting from the
operation of the FBO has varied. Operating the FBO resulted in its highest surplus of $36,681.14 in
2008 and largest deficit of $52,533.73 in 2007. Over the course of these five years, the FBO has
averaged an annual profit of less than $600.00. However, losses have increased since 2008 with a
significant deficit recorded in 2010.
The average annual FBO expenses of approximately $285,000 will be substantially borne by the new
FBO. Revenues from the lease of facilities, fuel flowage and/or percent of gross receipts will provide
a steadier stream of revenue for the City. Recognizing that the Airport may need to offer incentives to
attract an appropriate FBO that will provide competitive services, the ultimate amount of revenue
derived from a lease with the FBO will be a function of procurement and contract negotiations
between the FBO and the City.
Transferring FBO services to a private entity will be a key component to providing the City a positive
cash flow on a regular basis. Considerations should be made to the following:
Fuel Flowage: Based on 2010 fuel volume and a fuel flowage fee of $0.05 per gallon the City
could expect nearly $2,600 in annual revenue. However, the adoption of a brand name FBO
required to provide a minimum level of services could result in much higher fuel volumes and
revenues associated with fuel flowage fees.
FBO Rent Incentives: Since FBO’s generally pay rent equal to less than 5% of gross annual
sales, it is recommended that the Airport provide incentives to attract a well known FBO and
examine FBO revenues after the first year of business to determine reasonable land and building
rates. Typical of airports of similar size and function, the Airport should consider a scaled
structure based on annual gross sales which would result in an increase of revenue to the City as
FBO revenues grow.
Land and Building Lease: While subject to negotiation and appraisal, the rental of the existing
terminal, hangar and apron areas would net positive cash flow to the City on a regular basis.
Should the City decide to rent the building and apron area on a square footage basis, an apron
rent of $.25/S.F. would yield approximately $6,000 annually, and building rent of $5.00/S.F.
would yield nearly $65,000 annually. However, as the previous bullet suggests, the City may
choose to incentivize potential FBO operators by offering a segmented fee structure based on a
percentage of annual gross FBO sales.
Additional Airport Services: As part of the FBO selection process, the qualitative services of WVL
can be improved by requiring the FBO to offer the full suite of FBO services to alleviate jet
diversions to nearby airports that offer these services (based on anecdotal information gained
throughout the Master Plan process). This will help to further attract and provide the potential for
increased activity at WVL ultimately helping the FBO to succeed as well as WVL in general.
The City of Waterville Maine
Implementation and Financial Plan – Page 8-17
Airport Solutions Group, LLC & The Louis Berger Group, Inc. December 2011