City of Conway to Manage New Airport

by Kate Knable  on Monday, Dec. 10, 2012 12:00 am  

The city of Conway recently chose to change its municipal airport management model from the fixed-based operating agreement with a private company that the city has used in the past.

When the city opens its new airport in 2014, that freshly constructed airport will be managed by a city department because of a City Council decision late last month, Mayor Tab Townsell said.

Under the existing fixed-based operating agreement with Conway Aviation Services, the city pays the company $22,314 yearly in management fees. Conway Aviation in turn leases the airport from the city for $28,314 per year. Conway Aviation also pays the city a fee of 5 cents per gallon of aviation fuel it sells.

Because Conway is constructing a new $30 million airport, the city would have to buy out the remaining 25 years of its 50-year agreement with Conway Aviation when transitioning to the new airport property, whether it continued with a private management company or not, Townsell said.

The buyout would be part of the transition in 2014 to the new facilities, which are under construction on 400 acres at the southwest edge of Conway.

Currently, the city has little knowledge of the existing airport’s profitability.

“We don’t really know how valuable a new airport is to a potential manager,” Townsell said. “The feeling among our advisory committee … is the best way to control customer service is to run the airport ourselves.”

The city will be able to return to the fixed-based operator model after running the airport for a few years, if it so chooses, once it gets a better idea of “what revenue streams and net revenue we’ll see at our airport,” he said.

Conway is also considering what to do with the old airport property, which must be sold due to federal funding it has received, according to Brad Lacy, CEO and president of the Conway Chamber of Commerce. Proceeds of the sale must be used toward construction of the new airport, he said.

 

 

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