North Little Rock Mayor Joe Smith is halting work on North Little Rock’s $3 million airport expansion as the coronavirus pandemic pushes the private aviation industry into a revenue tailspin.
“Right now with all the economic uncertainty, I’ve made the decision to put the construction project on hold until prospects are more clear for our corporate citizens at the airport,” the mayor told Arkansas Business last week, confessing that he hadn’t yet relayed his full decision even to Airport Manager Clay Rogers.
The hard choice came after business travel bans knocked the bottom out for jet charters and other private flyers. Lance Creamer, owner and founder of Jett Aircraft in Fayetteville, said that after a few quick charters ferrying stranded Arkansans home, his business dried up completely.
“We’re dead in the water; have been since March 1, and all through April,” said Creamer, who laughed bitterly when asked what the pandemic has done to his bottom line. “I’m 59 and I’ve never seen anything like this. I’ve been through pullbacks and slowdowns, but nothing like this. 9/11 wasn’t even close.”
Businesses have restricted flights by employees, and private excursions are off as would-be flyers shelter in place, Creamer said. “It’s like wiping out 11 years of work every month we’re down.”
That sort of misery led Smith to think twice about keeping to the schedule of the North Little Rock project, even though money has been raised and appropriated, and will be available when airport businesses stabilize. “But right now no planes are flying at all,” the mayor said. “The timing seems inappropriate for us to build the FBO.”
The mayor had planned a new 5,900-SF fixed-base operation building, or FBO, at the airport on Remount Road north of Indian Hills, as well as a new 10,400-SF corporate hangar to accommodate a half-dozen more corporate planes. Hangars dating back to World War II were due for replacement near the two runways, which accommodate about 56,000 takeoffs and landings a year in normal times.
Traffic Down Statewide
Hydco Inc. of North Little Rock remains the contractor for the project whenever it’s restarted. Alan New of Taggart Architects in North Little Rock is overseeing designs. “Now we’re just waiting for the economy to improve,” Smith said.
The North Little Rock Municipal Airport, opened in 1960, is home to about 20 corporate jets and two FBOs, North Little Rock Jet Center and Barrett Aviation, which have seen operations plummet since March.
Other private aviation hubs across the state report significant plunges in flight operations, including Rogers Executive Airport, where Manager David Krutsch said some recreational flights and business flights continue, but at a fraction of their normal pace. Summer Fallen, airport services manager at Drake Field in Fayetteville reports that business traffic has “dramatically dropped.”
Glen Barentine, airport director at Hot Springs Memorial Field, said that for weeks he’d seen only a few flights by local private pilots, but then a surge on a beautiful Monday, April 20. “We think between the great weather and people being really ready to fly, everyone came out,” Barentine said. “We still haven’t seen large turbos or jet traffic [since the pandemic’s effects set in], but we hope that in time they too will be back.” Johnathan Estes, manager of South Arkansas Regional Airport in El Dorado, said his jet fuel sales were off by nearly a third, and that jet charter operations have fallen off to nothing. “We haven’t had a charter since the start of this, basically. We’ve had one flight total, rather than one or two a day.”
Several top Little Rock private aviation companies, including Central Flying Service and TAC Air, did not respond to repeated requests for comment.
On the bright side, Krutsch said, the lull in flights freed up time for his staff to work on improving the Rogers airfield. In North Little Rock, where a year ago Smith was calling airport modernization a long-overdue fix for a subpar city amenity, he’s now prepared to wait until businesses at the airport “are stable and ready.”
Several of those companies clamored last year for revamping the 800-acre airport, including Bruce Oakley Inc., the trucking company led by Dennis Oakley; Maverick Transportation, led by CEO Steve Williams; and the Ashley Co., owned by Rick Ashley. Those three companies are responsible for at least 3,000 jobs, the mayor said.
But Smith said it’s a bad time for the city to seek grant money from the Arkansas Department of Commerce’s Division of Aeronautics, which derives revenue from aviation fuel sales. “The state aeronautics board’s capability to do grants now is pretty low.”
Last year, the Aeronautics Division computed that the North Little Rock airport provides an economic impact of nearly $16 million, including 152 jobs with an annual payroll of $6.2 million. The airport also leases buildings to several enterprises, including the North Little Rock Electric Department and Central Arkansas Water.
Ken Jenkins, a Dallas aviation consultant and former American Airlines crisis response leader, said that private aviation trade groups made a strong appeal to be included along with commercial airlines in the coronavirus relief package, or CARES Act, passed by Congress last month.
“The private industry was not forgotten in the CARES Act, thanks to lobbying by a number of trade organizations, including the National Business Aviation Association of Washington,” Jenkins said. Jet-charter companies and others in the general aviation sector could be in line for part of a $50 billion mix of grants and loans in the relief bill, which also offers a tax holiday through the end of the year to every non-airline company flying airplanes.
In pushing to be included for aid, a consortium of private aviation groups had reminded lawmakers in a letter last month that the industry was part of the 2001 federal relief package after the terror attacks of September 2001. The general aviation business supports 1.2 million jobs and commands $247 billion in economic impact, said the letter, whose backers included the Aircraft Owners & Pilots Association, the Helicopter Association International and the National Air Transportation Association.
“Across the country, thousands of small and mid-size businesses generate $77 billion in labor income that pays the bills for families and supports communities throughout the country,” the letter said.
But Creamer, the Fayetteville jet charter executive, said Jett Aircraft has not been able to secure any relief money, even though it’s keeping its staff of about 10 on the job. “This situation’s not tough; it’s ridiculous.”
Jenkins said the coronavirus crisis is a one-two punch for business jet travel, with hot-spot destinations taboo and businesses keeping employees home even as their own revenue losses require leaner budgets on luxuries like high-end travel. “Companies not doing well don’t have the expendable income they once had for private jets. They might not have the financial resources to fly as often, so it’s a double-edged sword.”
Aviation fuel prices are one silver lining in the gloomy skies, Jenkins said. “With the recent oil price collapse, aviation fuel prices, jet fuel is really low. So that’s an opportunity for both the airlines and private aviation to hedge fuel costs.”
Barentine, the Hot Springs airport director, agreed. “Over the past few weeks our 100LL sales were well under 100 gallons a day,” he said, describing the low-lead aviation fuel that powers piston-engine aircraft, “but Monday we sold over 900 gallons. “At these low fuel prices, I can see people taking advantage and flying more, once they are allowed to visit other cities.”
But dark clouds over the whole aviation industry aren’t likely to lift soon, at least not completely.
“Certainly people are hoping for an uptick by the end of the year,” Jenkins said, “but on the commercial aviation side, traffic has already slowed pretty much through mid-June, and a full return to operational flights in commercial and private flying is not likely until a coronavirus vaccine is found.”
If no cure or vaccine is found soon, “all bets are off,” Jenkins said. “It’s a very hard one to predict.”