General Aviation: Issues and Opportunities Reno‐Tahoe Airport Authority
PREPARED FOR Reno‐Tahoe Airport Authority PREPARED BY InterVISTAS Consulting LLC 12 August 2014
Executive Summary
The intent of the project was to support the efforts of the Reno‐Tahoe Airport Authority (RTAA) with its strategic priority to optimize general aviation (GA) activity at Reno‐Tahoe International Airport (RNO) and Reno Stead Airport (RTS). Specifically, the project was to examine GA activity at both airports, identify service needs, identify opportunities to address those needs, and support RTAA’s GA strategy development.
InterVISTAS’ project team (“the team” or “the project team”) worked with RTAA staff, interviewed tenants, developed and analyzed a survey of GA tenants at both airports, and benchmarked the RTAA sites against other selected airports in the Western U.S. with an emphasis on fuel and hangar developments. In addition, the project team examined the developing Unmanned Aircraft System (UAS) industry and related Findings in Brief
Background
. The GA community represents all aviation activity not associated with military, cargo and passenger carriers. This is a diverse community that uses aviation for a wide range of recreational, business and social purposes.
. Throughout the U.S., the GA community has suffered from a variety of economic events in the last decade, most notably the national recession and an increase in fuel prices. Data from the Federal Aviation Administration (FAA) starkly reveal a significant drop in GA activity ‐ especially among piston fixed wing aircraft. (However, hours flown by jet and turbo prop aircraft have increased.) National data also show that the number of licensed pilots has decreased. Nevada's GA activity has declined more steeply than national averages. In Nevada, the number of active aircraft declined by 33% (compared to 6% nationally).
Survey of GA Tenants to Identify Service Needs
. The project team developed a survey that was sent by email from RTAA staff to approximately 200 GA‐related tenants at both RNO and RTS. The survey instrument was pre‐tested prior to sending it to potential respondents. A total of 68 surveys were completed (a 34% response rate). The survey revealed that the GA communities at RNO
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and RTS and the business and recreational components of each have distinct profiles and needs.
o Most of those respondents (n=45, or 79%) came from individuals who identified RTS as their base location. Of the RTS respondents, 85% indicated that they principally flew for recreational rather than business reasons. RTS‐ based respondents reported flying on average 8.4 hours per month.
o Of the RNO respondents, 68% indicated that they flew principally for business purposes. RNO‐based respondents reported flying on average 15.3 hours per month.
. Hangars. The survey of GA tenants at both airports revealed an interest in additional hangars. Of those responding who identified RTS as their base, 100% indicated an interest in additional hangars. However, when asked if they would be willing to pay more for new or improved hangars, 18 out of 33 RTS respondents (54%) said that they would not. RNO‐based respondents were slightly less likely to be willing to pay more for new hangars; 10 out of 17 RNO respondents (almost 60%) said that they would not be willing to pay more.
. Fuel. The issue of most interest to the RNO tenants who responded was a desire for expanded fuel options. All 16 RNO‐based respondents indicated an interest in expanded fuel options. In addition, 14 of the 16 RNO respondents (or 88%) also identified having a choice of fixed base operators (FBO) as a desire. (A fixed‐base operator can generally be defined as a commercial entity providing aeronautical services such as fueling, maintenance, storage, ground and flight instruction, etc., to the public.)
o Self‐fuel option at RNO. Respondents who identified RNO as their base airport were asked if they would utilize a self‐serve AvGas facility if it were available there. Of the 18 RNO users that responded, 12 (67%) said they would use the facility exclusively, and five (28%) said that they would use it occasionally. One‐ third of RTS users also indicated that they would use it occasionally.
. Communications from the RTAA. The project team asked about the extent to which they believed that the RTAA communicated clearly and effectively with the GA community. Slightly less than a majority of respondents (26 out of 55, or 47%) reported that the RTAA communicated openly and effectively with the local GA community. However, 18 out of 55 (or 33%) felt that the communication was ineffective.
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o RNO users tended to find the communication more effective than RTS users (60% of RNO users viewed the communication as effective vs. 43% of RTS users).
o Similarly, business flyers tended to find the communication more effective than recreational flyers (53% of business flyers viewed the communication as effective vs. 45% of recreational flyers).
. Leasing Process. Respondents generally regarded the leasing process with RTAA as somewhat difficult and lengthy as opposed to being quick and easy. Of the 42 total responses, 18 (43%) regarded with process as difficult versus 12 (29%) who found it relatively easy. More than 50% of respondents who identify themselves as recreational flyers and more than 50% of flyers based at RTS felt that the leasing process was long and difficult. Business flyers and those based at RNO were less likely to be as critical of the process.
. Benchmarking. To develop contextual Benchmark Airports Examined information about the services available at Eight airports were chosen for comparison RNO and RTS, we examined services available with RNO: at other airports in the western U.S. These "comparator" or "benchmark" airports are . Albuquerque International Sunport . shown in the figure. Boise International Airport . Colorado Springs International Airport . According to benchmarking analysis and . Fresno Yosemite International Airport interviews with fuel providers, approximately . Oakland International Airport one million gallons of jet fuel or AvGas sold . Palm Springs International Airport annually is required to sustainably support . San Jose International . Spokane International Airport each Fixed Base Operator (FBO).
. At the benchmark airports, on average, there Four airports were chosen for comparison with RTS: is one local FBO for every 75 based aircraft. However, there is some variation accounting . Elko Regional Airports for unique local circumstances. . Fallon Municipal Airport . Silver Springs Airport . All of the airport comparators use cost‐ . Winnemucca Municipal Airport recovery principles to develop lease properties.
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. Unmanned Aerial Systems (UAS). The integration of UAS into local airport operations is just beginning. As is well known in the Reno‐Sparks area, RTS is one of the FAA designated test sites for generating research on how best to integrate UAS into controlled airspace. The FAA only recently granted authorization for a UAS company to begin testing in Nevada. Those flight operations will occur at another airport rather than RTS.
. UAS companies have expressed widely differing views on the goods or services they might want or need from airports. Ease of access is an important consideration as to where UAS companies conduct their testing.
. The larger UAS firms ‐ for example, Boeing/lnsitu, Yamaha, or Lockheed ‐ are more interested in airport infrastructure and amenities than are smaller firms. In the case of larger firms, airports may be able to offer or provide certain elements of infrastructure ‐ for example, hangar space, high‐capacity/high‐speed communications for data acquisition, power, and water/sewer.
. There are likely synergies between the UAS industry and some of the maintenance, repair and overhaul (MRO) companies targeted by the Nevada tax abatement initiative, in consideration of the skills and expertise required for both.
. Other FAA‐approved UAS test sites would not disclose what they were offering to UAS firms in terms of goods or services, nor would they discuss any set of prices that they were setting for access to the test ranges.
Conclusions and Recommendations
Based on these findings, the following conclusions and recommendations are made regarding RTAA's airports and GA activity.
o Increased and competitive aviation fuel sales. There is no compelling evidence that RNO is an outlier by having only one FBO. Most of its benchmark airports examined have a second FBO, but with one exception, they also have more based aircraft. Taking into account the number of based aircraft, only one comparator (Palm Springs) has a second FBO. The other two (San Jose and Spokane) have one FBO. RNO has higher than average fuel prices, but the evidence does not support a strong conclusion that a second FBO alone makes a difference in fuel price. Moreover, the price charged by RNO's FBO is below the average charged by
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the same company (Atlantic) at the other benchmarked locations where it also operates. For RTS, all of its comparators have only one fuel provider. It has the lowest fuel price of its benchmark airports, so there is no reason to seek a second FBO on the basis of adding competition to bring down the cost of fuel.
The evidence suggests that until RNO's based aircraft reaches 175, recruiting a second FBO would likely be extremely difficult.
o GA hangar space. The survey indicates that there is interest in aircraft parking at the airports. What is not completely clear is the extent of any potential unmet demand for additional hangars at both airports. The research team was told that the RTAA does not have a "waiting list" of aircraft owners seeking hangar space at RTS, and there are currently hangars being advertised for sale there. RNO also has some existing hangar availability.
The project team recommends that the Airport Authority consider making land available for development of new hangar facilities at both airports. Private developers can assess the condition of the market and respond accordingly.
o Improved and simplified airport business process. Given the high costs of developing new facilities, RTAA may wish to consider working with the RTS hangar operators, or if necessary, enforcing any lease provisions so that non‐aviation uses of hangars ends and space is made available for aircraft parking. The project team recommends that Airport Authority consider making land available for development of new hangar facilities at both airports. Private developers can assess the condition of the market and respond accordingly.
o Improved tenant perceptions of communications between the RTAA and tenants. As summarized above, the surveys and interviews indicated that while about half of respondents indicated that the RTAA did an effective job in communicating with tenants; one‐third said that they viewed communications as ineffective. The GA community at RTS is slightly less
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positive on RTAA's communications efforts than the GA community at RNO. Our recommendation is that RTAA continue its efforts to reach out to the general aviation operators and community at both airports. Scheduling regular "listening sessions" at which RTAA staff could be sure that all tenants are aware of developments at the airports or at the RTAA would be a good first step, with email summaries of the sessions provided to those who could not attend. This could be especially useful, considering the UAS developments coming at RTS. The GA community is diverse, spread out and in some cases have no direct relationship with RTAA, as operators may only interface as tenants of private firms.
o Successfully obtaining the abatement of the tax on aviation parts. The gap assessment identified a major competitiveness issue due to the State's sales tax on aircraft parts. Aircraft are highly mobile and owner/operators are able to have maintenance done at a wide range of locations. Because of this, most states in the U.S. either exempt aircraft parts from sales taxes or provide abatement of such taxes. Nevada is one of the few jurisdictions without exemption or abatement, and in particular, all of its surrounding states have exemption/jurisdiction.
Our recommendation is that the State of Nevada should address this competitiveness issue that is costing jobs and reducing service levels at the State's airports. We understand that the RTAA already strongly supports aviation parts taxation abatement. It is recommended that this be continued.
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Table of Contents
Executive Summary ...... i 1 Introduction and Background ...... 1 1.1 Objectives...... 1 1.2 GA Trends ...... 2 1.3 The Sites ...... 6 2 Tenant Survey ...... 10 2.1 Interviews ...... 10 2.2 The Survey ...... 10 2.3 Profiles of RTAA’s GA Respondents ...... 11 2.4 Survey Responses ...... 13 3 Airport Benchmarking ...... 25 3.1 Comparator Airports ...... 25 3.2 FBOs ...... 28 3.3 Fuel Prices ...... 31 3.4 Hangars ...... 37 4 Gap Analysis ...... 40 4.1 Infrastructure ...... 40 4.2 Services ...... 41 4.3 Tenant Relations ...... 41 4.4 Nevada Aviation Taxes ...... 42 5 Opportunities ...... 43 5.1 Infrastructure ...... 43 5.2 Services ...... 44 5.3 Tenant Relations ...... 46 5.4 Taxes ...... 47 6 Unmanned Aircraft Systems: Background, Developments, Implications for RTAA 48 6.1 Background ...... 48 6.2 UAS Developments ...... 54 6.3 Implications for RTAA for UAS Operations at RTS ...... 57 7 Findings and Conclusions ...... 60 7.1 Findings ...... 60 7.2 Recommended Measures ...... 61 Appendix A: GA Community Survey ...... 64 Appendix B: Survey Results ...... 74 Appendix C: General Comments from Responses Provided on Survey ...... 90 Appendix D: List of Abbreviations ...... 93
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1 Introduction and Background
1.1 Objectives The intent of the project is to support the Reno‐Tahoe Airport Authority's (RTAA) efforts in achieving its strategic priority to optimize general aviation (GA) activity at Reno‐Tahoe International Airport and Reno‐Stead Airport. Specifically, the project is to examine GA activity at both airports, identify service needs, identify opportunities to address those needs, and support RTAA's GA strategy development. Figure 1‐1 provides a graphic summarization of the project and its key elements.
Figure 1‐1: Project Overview
GA is defined as all aviation that is not military or scheduled commercial airlines. GA aircraft range from two‐seat training aircraft and utility helicopters to intercontinental business jets flying. GA includes a wide variety of activities including recreation, business, corporate, instructional, aerial application, aerial observation, external load, medevac, sightseeing and other aviation. GA airports support a number of important aeronautical functions. These range from emergency preparedness and response to the direct transportation of people and freight and commercial applications such as agricultural spraying, aerial surveying, and energy exploration.
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The project team researched trends in GA activity in both the U.S. and Nevada. The team worked with the RTAA staff, interviewed tenants at both airports, developed and analyzed a survey for airport tenants, and benchmarked the services offered at RTAA sites against those provided at other selected airports in the Western U.S. Based on these steps, the team completed a gap analysis, assessed potential opportunities to seek additional services at both airports, and based on the gaps, developed options to advance the RTAA's GA strategy. 1.2 GA Trends For the past several years, GA traffic has been declining in both the U.S. in general and Nevada in particular. In part, this is attributable to the recent recession and the continued impact of increased fuel costs. However, a recent analysis of GA activity in the U.S. also highlighted that other factors – including the general aging of the pilot population, lack of free time and high costs vis‐à‐vis stagnant personal income‐‐ are constraining GA activity and future growth.1
The recent decline in GA activity is part of a longer term reduction. Since at least 1980, overall general aviation hours flown in the U.S. have been declining. This is especially noticeable with piston aircraft traffic. Nevertheless, some GA sectors are growing. Turbo prop and jet traffic, which are often used for business rather than recreational purposes, have increased.
1 Kamala I. Shetty and R. John Hansman, “Current and Historical Trends in General Aviation in the United States,” thesis for a master’s degree at MIT, 2012, p.76.
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Figure 1‐2: U.S. GA Hours Flown by Engine Type
Source: General Aviation Manufacturers Association (GAMA) based on FAA data
Hours flown have decreased along with the number of active aircraft and licensed pilots, as described by Figure 1‐3. Since 2000, the number of active GA/Air Taxi aircraft in the U.S. has decreased by 10 percent and the number of people holding private pilot licenses has dropped by approximately 25%.2
2 According to the FAA, air taxis represent approximately 3% of these aircraft.
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Figure 1‐3: Changes in GA Activity, Various Metrics, 2000 vs. 2012
Measure 2000 2012 Change %
Number of active GA/air taxi aircraft 183,276 165,257 ‐18,019 ‐9.8%
Hours flown 26,127 19,357 ‐6,770 ‐26.0%
Number of licensed private pilots 251,561 188,001 ‐63,560 ‐25.3%
Note: number shown for active aircraft and hours flown includes piston, turboprop, and jet airplanes but excludes rotorcraft, balloons, dirigible, and gliders. As of July 2014, data for 2013 were not yet available from the FAA. Source: GAMA.
The change in piston aircraft activity is highlighted by the decrease in the amount of fuel purchased. Figure 1‐4 illustrates the change in U.S. GA fuel consumption by engine type. According to data from the FAA, in 2012 general aviation consumed 1.49 billion gallons of jet fuel and 0.21 billion gallons of AvGas. Piston aircraft use of fuel ("AvGas") declined significantly since 2000 while fuel use by turboprop and business jets increased.
Figure 1‐4: Change in GA fuel consumption by engine type, 2000‐2012 (millions of gallons)
Fuel consumed by type of engine Type of fuel
Single Multi Engine Engine Turbo‐ Business Total Piston Piston prop Jets AvGas Jet Change
Net difference ‐74.2 ‐56.6 14.4 495.5 ‐133.8 577.1 443.3
% change ‐37% ‐52% 8% 67% ‐40% 59% 34%
Source: GAMA. Note that data for 2013 are not yet available from the FAA.
The FAA’s overall long‐term forecast for GA hours flown in the U.S. is for slow, but positive, growth of between now and 2034.3 That overall figure, however, masks important differences
3 FAA Aerospace Forecasts FY 2014‐2034, Table 29.
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within the GA community. Total forecast piston aircraft hours are forecasted to continue falling during the period 2013‐2034 (‐0.4%); and total forecast fixed‐wing piston hours are expected to fall even more at ‐0.6%. However, total forecast turbine hours are positive at 3.2%
1.2.1 Nevada GA Trends In recent years, Nevada GA activity has declined more steeply than national averages. Figure 1‐ 5 describes trends in GA active aircraft and hours flown in the U.S. and Nevada. The first two rows show how the number of active GA aircraft in the U.S. and Nevada changed over time. Between 2004 and 2012, total active GA aircraft throughout the entire U.S. declined by 5%; in Nevada, the number of active GA aircraft declined by 26%. The other rows compare how the hours flown in each have declined over the same period. Hours flown nationally and by Nevada GA aircraft have dropped by similar percentages.
Figure 1‐5: GA Activity in the U.S. and Nevada, 2006‐2012
2004 2005 2006 2007 2008 2009 2010 2012 # % NV Active 3,033 2,990 3,374 3,512 3,093 2,022 2,030 2,246 ‐787 ‐26% Aircraft US Active 219.4 224.4 221.9 231.6 228.7 223.9 223.4 209.0 ‐10.4 ‐5% Aircraft (000s) NV GA Hours 372 413 625 573 377 276 343 319 ‐53 ‐14% Flown US Hours 28.1 27.0 27.7 27.9 26.0 23.8 24.8 24.4 ‐3.7 ‐13% Flown (000s)
Source: GAMA based on FAA data. Note: Data for 2013 were not available at this time. Validated data for 2011 is unavailable from the FAA. These trends are reflected in the changes in fuel volumes purchased. At RTAA's two airports, between fiscal years 2004/05 and 2012/13, both AvGas and jet fuel volumes have declined by approximately 25.0% and 25.4% respectively ‐ roughly in line with the number of active aircraft in the state. Over the same period in the U.S., AvGas sales declined by 23.2% while jet fuel sales increased by 31.0%.4
4 GAMA and RTAA data.
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1.3 The Sites This study considers both of the RTAA’s airports. Reno‐Tahoe International Airport (RNO) is the main commercial airport in the region; it served over 3.4 million passengers in 2013. Reno Stead Airport (RTS) is 11 miles north of Reno’s urban core, off U.S. 395.
1.3.1 Reno‐Tahoe International Airport (RNO) Reno‐Tahoe International Airport is the largest airport in northern Nevada and one of the major GA facilities in the state. The airport has three runways: Runway 16R/34L is 11,002', runway 16L/34R is 9,000', and the cross runway (7/25) is 6,102'. RNO has approximately 120 based aircraft, and handles approximately 130 GA movements per day.5 The primary area of GA activity is in the northeast quadrant of the airport, and a secondly area is in the southwest quadrant, just south of the crosswind runway.
Although RNO is principally known for hosting commercial operations, it also has an active GA community with several major tenants. These are Atlantic Aviation (the fixed base operator, or FBO) and three maintenance facilities. Reno Flying Service, Inc., Western Jet Aviation, and Dassault Aviation Service Center offer aviation maintenance services at RNO. Dassault's Reno facility, for example, is a 40,000 square foot center that offers scheduled and unscheduled maintenance and inspections up to and including "C" checks.
5 RTAA
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Figure 1‐6: RNO Looking East
Source: Google Earth
Atlantic Aviation, the RNO FBO operator, recently completed construction of a new facility worth over $9 million. The facility includes a 13,000‐square‐foot terminal and approximately 28,000 square feet of attached hangar, capable of housing large business jets such as the Gulfstream G650, Bombardier Global Express Dassault Falcon 7X. Atlantic sells jet fuel and AvGas and manages 73 hangar leases at the airport. Atlantic offers an AvGas discount to tenants. Atlantic also offers mobile refueling of AvGas for the cost of the fuel plus a $25 service fee.
The Airport Land Use Plan adopted in 2013 identified the east side of the airport primarily for general aviation development. To support the Land Use Plan, the RTAA has a variety of development options currently available, including Airport East (50 acres) and Southeast (25 acres) for general aviation development. Both sites have airside and landside access. In addition to the development opportunities, the RTAA is also planning to rehabilitate Taxiway C, which supports the general aviation area on the east side of the airport.
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1.3.2 Reno‐Stead Airport RTS is a 5,000 acre GA facility that features a 9,000' and a 7,600' runway, upgraded runway lighting, and a new terminal building. RTS has approximately 100 tenants, including an FBO, the Nevada Army National Guard, a Bureau of Land Management air tanker base, and the Reno Air Racing Association, which hosts the National Championship Air Races. There are also three flight schools at RTS. Figure 1‐7 shows RTS, with the GA hangars on the south end of the site. The new Freedom Flight Terminal has administrative offices, an emergency operations center, and a pilot's lounge.
Figure 1‐7: RTS Looking North
Source: Google Earth
The FBO at RTS is Aviation Classics Ltd., which offers jet fuel and AvGas, maintenance and avionic support for the GA community. It is also positioning to offer maintenance support to the developing UAS industry.
There are 148 aircraft hangars at RTS, including t‐hangars and small and large conventional hangars, along with aircraft tie‐down spaces that are leased to individuals and companies to accommodate storage and maintenance of private aircraft. All existing hangars are located in proximity to the aircraft parking apron and have direct access to Taxiway A. The RTAA has
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constructed taxi‐lanes on the southwest side of the airfield specifically for the development of additional aircraft storage hangars by a private developer based on demand.
The FAA includes RTS in its current National Plan of Integrated Airport Systems (NPIAS) as one of 3,355 (3,330 existing and 25 proposed) that have been identified as essential to the national airport transportation system. RTS is one of the 268 airports in the country designated as a reliever airport ‐ that is, a "high activity" general aviation airport that provides general aviation with alternatives to nearby commercial airports where their presence might cause additional delay. (RTS, Carson, and Las Vegas Henderson are the only Reliever Airports in Nevada.) Reliever airports provide pilots with attractive alternatives to using more congested airports that feature commercial air service. They also provide general aviation access to the surrounding area. To be eligible for reliever designation, these airports must be open to the public, have 100 or more based aircraft, or have 25,000 annual itinerant operations. According to FAA's current NPIAS, the 268 reliever airports have an average of 184 based aircraft.
FAA's 2012 report on GA airports6 divided the general aviation airports into four categories based on existing activity measures such as the number and types of based aircraft (i.e., aircraft that are stored at an airport), as well as the volume and types of flights. The four new categories are national, regional, local, and basic. RTS is categorized as a "local" airport. Local airports supplement communities by providing access to primarily intrastate and some interstate markets. These airports accommodate small businesses, flight training, emergency service, charter passenger service, cargo operations, and personal flying activities. They typically accommodate smaller general aviation aircraft, mostly single‐engine propeller and some multi‐engine aircraft.
In December 2013, the FAA also designated RTS as a test range for unmanned aircraft systems (UAS). The RTAA plans to host UAS testing in the northwest quadrant of the airport. To prepare for potential industry changes, the RTAA has issued a Request for Qualifications (RFQ) for development at the airport. The Airport Authority is seeking development partners for approximately 3,500 acres of aeronautical and non‐aeronautical land.
6 Federal Aviation Administration, General Aviation Airports, A National Asset, May 2012.
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2 Tenant Survey
2.1 Interviews
. To understand site issues and opportunities, project team members conducted on‐site interviews with a variety of local businesses and tenants related to GA activity at Reno‐ Tahoe International and Stead airports. Businesses and organizations interviewed included FBOs, airport user groups and individuals businesses.
In these conversations, the tenants raised a number of issues, including:
. The GA population is aging and GA activity is declining; . Business aviation and aviation businesses are important contributors to the airports; . Diversity is key to the success of GA sites and businesses; . Attracting GA pilots and businesses is very competitive for airports; . RTAA must consult with GA tenants openly and courteously; . GA pilots think the RTAA’s leasing process is difficult; . The cost of fuel at RNO is a matter of concern to the GA community; . Many GA users at RNO want or need to be close to the city center for business reasons; and . UAS activity is viewed as a regional opportunity.
These initial discussions helped guide the development of the tenant survey. 2.2 The Survey All GA‐related tenants at RNO and RTS were surveyed for this project. The survey was developed with input from airport authority staff and was pretested with tenants from both RNO and RTS. The survey was distributed via email by RTAA staff to approximately 200 individuals in May 2014.7 Tenants were given the options of mailing in, handing in, faxing, emailing and responding on‐line to the survey. A copy of the survey is provided in Appendix A, and details of the survey responses are provided in Appendix B.
7 The survey was distributed by RTAA staff to ensure the confidentiality of tenants. This approach did not allow InterVISTAS to follow up with those who do not respond to encourage responses. All RTAA respondents were sent follow up reminders to submit the survey, and that the survey would be treated confidentially.
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2.3 Profiles of RTAA’s GA Respondents From the 200 surveys distributed, 68 unique responses were received, a 34% response rate. This is considered high and an indicator of the interest respondents showed in participating. Not all respondents responded to every question. Although 68 individuals responded in total, the question with the highest response rate received 65 responses. One question received only 26 responses.
The majority of respondents (79%) were from Stead; 21% indicated that RNO was their base airport. The majority of respondents (68%) classified their principal reason for flying as recreational, with 32% reporting that they flew primarily for business purposes.
Figure 2‐1: Survey Respondents by Airport
RNO 21% (18 responses)
RTS 79% (45 responses)
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Figure 2‐2: Primary Activity of Respondents
Business 32% (19 responses)
Recreation 68% (40 responses)
A breakdown of business and recreational respondents by airport is shown in Figure 2‐3 below. The prime activity of the majority of respondents at RTS is recreational (85% of RTS respondents). At RNO, the majority of respondents regard themselves as business flyers (68%).
Figure 2‐3: Primary Purpose of Activity
RNO Business (13 response)
RTS Recreation RNO Recreation (34 responses) (6 responses)
RTS Business (6 responses)
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Monthly hours of flying. On average, respondents flew over 10 hours per month. RNO business flyers flew 17.5 hours per month, more than any other grouping. Business flyers averaged almost twice the monthly hours of flying that recreational pilots flew – 15.7 hours vs. 8.2 hours.
Figure 2‐4: Average Hours of Flying by RTAA Tenants
Local flying. Respondents reported that on average, about one‐third of their flying was within 25 miles of the airport. Recreational flyers tended to stay relatively close to their airports – on average, 46% of the recreational flying was within 25 miles. Not surprisingly, relatively little business flying is considered local. And because the vast majority of RTS respondents are recreational flyers, they also tend to stay nearby, whereas RNO flyers do not.
Engines. Virtually all respondents operate aircraft with piston engine (94%). We received responses from one turbo prop and one jet operator. We generally suppress the specifics of their responses to avoid compromising their anonymity. 2.4 Survey Responses Annual spending. The vast majority of respondents spent less than $49,000 annually on aircraft ownership (e.g., maintenance, financing, and insurance). Business flyers were more likely to spend more than recreational flyers, who almost unanimously spend $49,000 or less. Five of the six respondents who have annual expenses of over $49,000 annual aircraft expenses flew primarily for business purposes.
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Figure 2‐5: Average annual spending related to aircraft ownership
RNO RNO RTS RTS business recreation business recreation Total %
$0‐49,000 9 5 4 33 51 89.5
$50,000 – 99,000 3 1 4 7.0
$100,000 – 249,000 1 1 1.8
$250,000 ‐ $500,000 1 1 1.8
Over $500,000 0 ‐
Total Responses 13 5 5 34 57 100.0
Note: Totals do not sum to 100.0 due to rounding.
Purchasing fuel away from RTAA airports. Over 60% of respondents (35 out of 57 responding) regularly purchased fuel away from RTAA airports. Among the 18 respondents who identified themselves as business flyers, 13 (72%) reported purchasing fuel away from RTAA airports. This is not entirely unexpected, considering the nature of their flying (i.e., non‐local). Over half of recreational flyers also reported purchasing fuel away from RTAA airports, with all five RNO recreational flyers reported doing so.
Respondents identified roughly 20 airports where they regularly purchased fuel. Of the 27 respondents who mentioned specific airports where they purchased fuel, the most commonly‐ mentioned airport was Carson City (12 respondents), followed by Silver Springs (11 respondents), Yerington (7 respondents), Truckee (4 respondents), and Minden (3 respondents).8 (See Figure 2‐6. A detailed list of the airports that respondents identified can be found in Appendix B, under question 10.)
8 At the time of this report’s writing, self‐serve AvGas prices at Carson City were $0.36 per gallon cheaper than at RTS ($5.75/gal) and almost $2/gal cheaper than the (full service, undiscounted) listed price at RNO ($7.24/gal).
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Figure 2‐6: Purchasing Fuel and Services Away from RTAA Airports
RNO RNO RTS RTS business recreation business recreation Total
Yes 10 5 3 17 35
No 3 2 17 22
Total Responses 13 5 5 34 57
Services purchased away from RTAA airports. Twenty‐six respondents indicated that they purchase maintenance, repair, or other services away from RNO or RTS, with many indicating that they purchase more than one service. The majority of RNO business respondents (9 out of 13) said they had purchased services away from the community, most frequently MRO and avionics services. Of the services that recreational flyers identified, more reported that they purchased MRO, avionics, and painting services.9
9 In a separate report prepared for the RTAA, InterVISTAS reported that MRO‐related services in Nevada may be 5% more expensive than similar services offered in other neighboring states because Nevada imposes taxes on aviation parts and property while other states do not. Because of the high cost of some of these repairs, having the work done in out‐of‐state locations can often save the consumer considerable amounts.
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Figure 2‐7: Services Purchased Away from RTAA Airports
RNO RNO RTS RTS Total business recreation business recreation
Maintenance, repair and overhaul 9 3 1 8 21 Avionics 7 1 1 5 14 Painting 2 4 6 Interior/upholstery 2 1 3 Framework/fabrication 1 1 2 Total Responses 11 3 2 10 26 Note: The total number of responses does not equal the total number of responders because some individuals indicated that they purchased more than one service away from RTAA airports.
The average spending of respondents away from RTAA sites varied. Average annual spending for the nine RNO business respondents was over $16,000 with a high of $60,000. As shown below, the average spent by the largest category of flyers – RTS recreational flyers – was slightly over $1,100.
Figure 2‐8: Average Annual Spending on Maintenance
RNO RNO RTS RTS business recreation business recreation Average response $16,191 $6,250 $43 $1,117 High $60,000 $3,000 $85 $5,000 Low $90 $250 $0 $0 Total Responses 9 3 2 18
New Services Tenants Would Like to Have. Respondents from RNO and RTS provided comments on what services they felt were needed at the airports. These are summarized in
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Figure 2‐9 and Figure 2‐10, respectively. At RNO, options supported by more than 50% of respondents were:
1. Expanded fuel service options; 2. Choice of FBO; and 3. Additional hangars.
Of RNO’s 13 business flyers, 100% indicated that they would like expanded fuel service options, and 11 out of the 13 (or 85%) indicated that they would like to see a second FBO.
Figure 2‐9: Services Needed at RNO According to Survey Respondents
# of Rank Service responses % Business Recreation 1 Expanded fuel service options 16 100% 13 3 2 Choice of FBO 14 88% 11 3 3 Additional hangars 11 65% 7 3 4 Avionics 7 41% 6 1 5 Other maintenance 4 24% 3 1 8 Pull out / put away services 3 18% 3 0 6 Tie downs 2 12% 2 0 7 Painting 1 6% 1 0 9 Interior / upholstery 1 6% 1 0 10 Framework / fabrication ‐‐‐ ‐
Among RTS flyers, 25 respondents indicated that they would like to see additional service options available at the airport. Those supported by more than 50% of the respondents were:
1. Additional hangars; and 2. Painting.
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Figure 2‐10: Services Needed at RTS According to Survey Respondents
# of Rank Service responses % Business Recreation 1 Additional hangars 25 100% 2 23 2 Painting 13 52% 2 11 3 Expanded fuel service options 11 44% 2 9 4 Interior / upholstery 11 44% 2 9 5 Other maintenance 8 32% 1 7 6 Choice of FBO 7 28% 2 5 7 Framework / fabrication 4 16% 1 3 8 Avionics 3 12% 1 2 9 Pull out / put away services 1 4% 0 1 10 Tie downs 1 4% 0 1
Recalling that most respondents from RTS were recreational flyers (34 total RTS flyers), over two‐thirds indicated a need for additional hangars, and one‐third (13 out of 34) felt the airport needed painting services or expanded fuel options.
Several respondents offered comments on services that they would like at RTS. Half of the 18 comments from RTS recreational flyers indicated some desire for food service at the airport. (See Appendix B, question 18.)
New or Improved Hangars. Additional hangars raided high in both RNO and RTS lists. Respondents were asked if they would be willing to pay higher rates for new and enhanced hangars. (The nature or extent of those improvements or enhancements to the hangars was not defined.)
A slight majority (27 out of 49 respondents, or 55%) said that they would not be willing to pay for new or improved hangars. This was more pronounced among business respondents. Of the 16 business flyers responding, 10 (63%) were not willing to pay more. Of the recreation flyers, 52% (17 out of 33 responding) indicated that they were not willing to pay higher rates for new and enhanced hangars. Respondents from each airport showed a similar unwillingness to pay for new or improved hangars: 56% of RNO flyers (9 of 16) and 55% of RTS flyers (18 of 33) were not willing to pay more.
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Figure 2‐11: Willingness to Pay Higher Rates for New/Enhanced Hangars
RNO RNO RTS RTS business recreation business recreation Total % of total Yes 6 1 0 15 22 45% No 6 3 4 14 27 55% Total Responses 12 4 4 29 49 100%
Of those who said they would be willing to pay more, the vast majority (14 out of 20, or 70%) were only willing to pay up to 10% additional. The other 30% were willing to pay 11‐25% more.
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Figure 2‐12: Scale of Higher Rates for New/Enhanced Hangars
RNO RNO RTS RTS business recreation business recreation Total % of total 1‐10% 3 0 0 11 14 70% 11‐25% 3 0 0 3 6 30% 25‐50% 0 0 0 0 0 ‐ More than 50% 0 0 0 0 0 ‐ Total Responses 6 0 0 14 20 100% Note: Not all of those that indicated that they were willing to pay more (see Table 2‐7) then also indicated how much more they would be willing to pay.
Self‐serve AvGas at RNO. Respondents who identified RNO as their base airport were asked if they would utilize a self‐serve AvGas facility if it were available. Of the 18 RNO users that responded to the question, 12 (67%) said they would use the facility exclusively, and five (28%) said that they would use it occasionally. Of the 13 RNO business flyers, 9 (69%) said that they would use it exclusively. In addition, even though they were based elsewhere, 30 RTS flyers were attracted to the idea of a self‐service facility at RNO and said they would use an AvGas facility there exclusively or occasionally.
Figure 2‐13 Use of self‐serve RNO AvGas Facility
RNO RNO RNO RTS RTS RTS RTAA business recreation total business recreation total total Exclusively 9 3 12 1 2 3 15 Occasionally 4 1 5 10 10 15 Rarely or never 1 1 1 16 17 18 Total Responses 13 5 18 2 28 30 48
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Respondents expressed some willingness to pay for the cost to develop such a service. Of all respondents, 26 out of 39 (67%) indicated that they were willing to pay the cost of the facility plus 10% or more. Of the 17 RNO respondents, 14 said they would pay cost plus 10%, two said cost plus 25%. RTS respondents were less willing to pay. Most RTS respondents (12 out of 22, or 55%) indicated that they were only willing to pay the cost of the facility, although 45% (10 of the 22) said they would accept cost plus 10%.
Figure 2‐14: Willing to Pay for Self‐Serve AvGas Facility
RNO RNO RNO RTS RTS RTS RTAA business recreation total business recreation total total Cost Only 1 1 1 11 12 13 Cost plus 10% 10 4 14 1 8 9 23 Cost plus 25% 2 2 ‐ 2 Cost plus higher ‐ 1 1 1 margin Total Responses 12 4 17 2 21 22 39
Open and Effective Communication with the RTAA. The respondents were asked "to what extent do you believe that the RTAA communicates openly and effectively with the local GA community?"
In general, nearly two‐thirds of the respondents were neutral or positive about the extent to which RTAA communicates openly and effectively. See Figure 2‐15. Although less than a majority of respondents (26 out of 55, or 47%) reported that the RTAA communicated openly and effectively with the local GA community, another 20% (11 out of 55 responding) were essentially neutral on the question. Roughly one‐third of respondents (18 out of 55, or 33%) were less positive on RTAA's communication with the GA community.
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Figure 2‐15: Extent to Which RTAA Communicates Openly and Effectively with the GA Community
16
14
12
10 respondents
8 of
6
Number 4
2
0 Very ineffectively Undecided Very effectively
There are a number of differences between business and recreational flyers, and between users of RNO and RTS in how they view communications with the RTAA.
‐ The group that believed that RTAA communicated more effectively than any other group was RNO users generally: 9 out of 15 respondents (60%) reported that RTAA communicated effectively with the GA community. On the other hand, an even one‐ third of RNO respondents (5 out of 15) believed that the communication was ineffective.
o RTS users were slightly less positive on the RTAA’s communications. Out of 40 RTS respondents, 17 (43%) found it effective. Again, roughly one‐third (13 out of 40) found it ineffective. Of the RTS users, 20% were undecided.
‐ Business flyers tend to regard the communication as slightly more effective than recreational flyers. Nine out of 17 business flyers (53%) reported the communication as effective with 35% (6 out of 17) finding it ineffective.
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‐ Recreational flyers were slightly less likely to see the communication as effective, 17 out of 38 (45%) reporting so. Again, approximately one‐third (12/38, or 32%) found it ineffective.
Figure 2‐16: Extent to Which RTAA Communicates Openly and Effectively with the GA Community
RNO RNO RTS RTS business recreation business recreation Total % Little or no extent 4 2 6 12 22% 1 5 6 11% Undecided 1 1 9 11 20% 6 1 8 15 27% Great extent 1 1 2 7 11 20% Total Responses 12 3 5 35 55 100%
RTAA Leasing Process. Respondents generally regarded the leasing process with RTAA as somewhat difficult and lengthy as opposed to being quick and easy. The responses are summarized in Figure 2‐17. Of the 42 total responses, 18 (43%) regarded the process as difficult, versus 12 (29%) who found it relatively easy. Over half (52%) of RTS respondents found the process difficult. The same percentage of all recreational users believed the process to be difficult.
Business flyers tend to not feel as negative about the process; 29% (5 out of 17) found the process difficult, and 35% (6 out of 17) found it relatively easy. Flyers based at RNO have similar perspectives; 27% (4 out of 15) found it relatively difficult, and 40% (6 out of 15) found it relatively easy.
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Figure 2‐17: Experience with the RTAA Leasing Process
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3 Airport Benchmarking
To support this project, 12 benchmark airports were chosen to compare with RNO and RTS. The intent was to understand how the RTAA airports compare with comparable airports in the Western U.S. 3.1 Comparator Airports Eight airports were chosen for comparison with RNO. These were:
. Albuquerque International Sunport . Boise International Airport . Colorado Springs International Airport . Fresno Yosemite International Airport . Oakland International Airport . Palm Springs International Airport . San Jose International . Spokane International Airport
The following four airports were chosen for comparison with RTS:
. Elko Regional Airport . Fallon Municipal Airport . Silver Springs Airport . Winnemucca Municipal Airport
For this project, we compared the experience of these 12 airports against RNO and RTS along several different dimensions including based aircraft,10 FBOs, fuel, services, competitors, and challenges. We contacted each airport, sent surveys, and gathered and analyzed available public information for each airport. Not all airports responded to our requests for information.
The comparator airports cover a significant range of aircraft and passenger activity, as shown in Figure 3‐1. The airports range in terms of annual passengers from Oakland, 36th largest in the
10 The FAA defines a “based aircraft” as one that is operational & air worthy, which is typically based at a facility for a majority of the year.
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U.S. to Fresno Yosemite, 106th largest. The metro populations vary from 2.6 million to 425,000 (Reno has the smallest). The per capital income varies from a high of almost $38,000 to a low of approximately $26,000. Reno International is the 65th largest in 2013 based on FAA’s preliminary passenger enplanement data, although its metropolitan population is the smallest of the 12 areas compared.
Figure 3‐1: Airport Comparators, Ranked by Scheduled Passengers
Scheduled Metro Per Capita Field Passengers Scheduled Population Personal Based (000s) Flights (000s) Income Aircraft 2013 2013 2012 2012 2012 Oakland International Airport 240 9,354 54,598 2,634 $57,533 (OAK) San Jose International (SJC) 8,330 44,172 1,894 $65,679 123 Albuquerque International 164 4,943 34,277 902 $36,272 Sunport (ABQ) Reno‐Tahoe International 114 3,350 20,634 434 $43,317 Airport (RNO) Spokane International Airport 67 2,826 21,092 532 $36,918 (GEG) Boise International Airport (BOI) 2,610 18,698 638 $35,354 242 Palm Springs International (PSP) * 1,498 12,112 45 $36,627 84 Colorado Springs International 284 1,293 11,778 668 $40,980 Airport (COS) Fresno Yosemite International 170 1,225 13,288 948 $34,074 (FAT) Sources: U.S. Bureau of Transportation Statistics, U.S. Bureau of Economic Analysis, and City of Palm Springs, CA. Per capital income is based on Metropolitan Statistical Areas (MSAs). * Palm Springs is included in the much larger Los Angeles – Riverside Co. MSA, which is not relevant to this discussion. Palm Springs is located in the Coachella Valley – which includes several resort communities, including Palm Desert, Indian Wells, La Quinta, Rancho Mirage and others – and had an estimated population of 347,000 in 2010. Figure cited for per capita personal income is for Palm Springs in 2010.
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Data on GA activity at airports are available from the FAA and Airnav.com. Two GA based measures available for all airports were number of FBOs and field based aircraft. However, neither of those sources provides information on the volume of fuel sold. That information can only be obtained from the airports.11 The available public information also does not indicate whether the field‐based GA aircraft are piston, turboprop, jet, rotorcraft, or other.
The four airports chosen to compare with Stead are all smaller sites that lack commercial passenger service (with the exception of Elko, which had an estimated 19,500 passenger enplanements in 2013).
Figure 3‐2: Comparator RTS Airports
Field Based Benchmark Airports Aircraft Reno Stead Airport (RTS) 111 Elko Regional Airport (EKO) 75 Winnemucca Municipal Airport (WMC) 34 Fallon Municipal Airport (FLX) 28 Silver Springs Airport (SPZ) 16 Sources: AirNav
Not surprisingly, there is a direct relationship between field based aircraft and annual aircraft movements, as summarized in Figure 3‐3. The number of field based aircraft is shown along the Y axis and the number of annual aircraft operations is on the X axis. The relationship is roughly 150 based aircraft per 60,000 annual GA/air Taxi aircraft movements.
11 Some of the businesses identified as FBOs do not have publicly listed fuel prices.
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Figure 3‐3: Field based aircraft versus local and itinerant GA operations (including air taxis)
300
250 COS OAK BOI 200
ABQ FAT 150 RNO SJC RTS 100 EKO PSP GEG 50 FLX WMC 0 SPZ 0 20000 40000 60000 80000 100000 120000
Source: Airport IQ 5010 based on FAA statistics, and AirNav Note: ABQ, Albuquerque International Sunport; BOI, Boise International Airport; COS, Colorado Springs International Airport; EKO, Elko Regional Airport; FAT, Fresno Yosemite International Airport; FLX, Fallon Municipal Airport; GEG, Spokane International Airport; OAK, Oakland International Airport; PSP, Palm Springs International; SJC, San Jose International Airport; SPZ, Silver Springs Airport; WMC, Winnemucca Municipal Airport.
3.2 FBOs A fixed‐base operator (FBO) is a commercial business granted the right by the airport sponsor to operate on an airport and provide aeronautical services such as fueling, hangaring, tie‐down and parking, aircraft rental, aircraft maintenance, flight instruction, etc. FBOs may offer a full range of those services or only a single service or two, such as selling fuel and hangaring. At some smaller airports, FBO services may be provided by the airport itself (usually publicly‐ owned) rather than by a private commercial business.
The number of FBOs at an airport is an indicator of the overall level of demand for those services, especially how much fuel the site sells. Anecdotally, we have been told that the number of FBOs at an airport is related to the volume of fuel sales, and that it takes approximately 1 million gallons of fuel sold to support an FBO. In other words, for an airport to
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support two FBOs, 2 million gallons of fuel sales are needed. (This ignores the issue of the FBOs’ profitability, which is not publically‐available information.) Beyond that, there is no commonly‐ recognized or straightforward guidance on the number of FBOS and airport can support.
However, there does appear to be a relatively strong relationship between the number of based aircraft and the number of FBOs present.12 Figure 3‐4 shows the RNO benchmark airports and their based aircraft ranked by the number of FBOs at the site. Boise has both more based aircraft and more FBOs (four) than any other. Colorado Springs and Fresno both have three FBOs. All others – including the largest airports by passenger activity (OAK and SJC) – have one or two.
Figure 3‐4: Commercial Service Comparator Airports Ranked by FBOs
Field Based Benchmark Airport Aircraft FBOs Boise International Airport 264 4 Colorado Springs International Airport 230 3 Fresno Yosemite International 174 3 Oakland International Airport 239 2 Albuquerque International Sunport 172 2 Palm Springs International 84 2 San Jose International 133 1 Reno‐Tahoe International Airport 122 1 Spokane International Airport 54 1 Sources: Bureau of Transportation Statistics, AirNav
12 The statistical correlation between the number of FBOs and the number of based aircraft for the benchmarked air ports with commercial service was 0.73. This was higher than the correlation between the number of FBOs and the combined total of local plus itinerant GA operations reported at these airports, 0.64..
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A comparison of the sites against which RTS is benchmarked is provided in Figure 3‐5. All of the airports have fuel sellers, although Silver Springs does not sell jet fuel. Elko and Silver Springs both have plans for infrastructure expansion to support GA traffic. Airports are described as having an FBO if they have a facility or business that sells fuel and provides maintenance services.
Figure 3‐5: Comparator RTS Airports Ranked by FBOs
Field Based Benchmark Airports Aircraft FBOs AvGas Jet A Reno Stead Airport (RTS) 111 1 Y Y Elko Regional Airport (EKO) 75 1 Y Y Winnemucca Municipal Airport (WMC) 34 1 Y Y Fallon Municipal Airport (FLX) 28 1 Y Y Silver Springs Airport (SPZ) 16 ‐ Y N Sources: AirNav and interviews Note: Silver Springs has fuel and a pilot lounge.
Assuming that more based aircraft lead to increased annual flying time and therefore increased fuel sales, Figure 3‐6 describes the relationship between based aircraft and the number of FBOs. In this figure, the vertical axis shows the number of FBOs at a site, and the horizontal axis represents the number of aircraft based at a site. The scale of an airport's mark on the graph represents how many annual scheduled passengers the airport has: the larger the circle, the more scheduled passengers. It also serves as a rough indicator of the population base near the airport. The "X" marks indicate the small airports that serve as benchmarks for RTS.
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Figure 3‐6: Based Aircraft and FBOs
5
BOI 4
COS 3 FAT FBOs of PSP 2 EKO SPZ Number OAK GEG ABQ
1 SJC RNO RTS 0 FLX WMC 0 50 100 150 200 250 300 Number of Based Aircraft Note: ABQ, Albuquerque International Sunport; BOI, Boise International Airport; COS, Colorado Springs International Airport; EKO, Elko Regional Airport; FAT, Fresno Yosemite International Airport; FLX, Fallon Municipal Airport; GEG, Spokane International Airport; OAK, Oakland International Airport; PSP, Palm Springs International; SJC, San Jose International Airport; SPZ, Silver Springs Airport; WMC, Winnemucca Municipal Airport.
The trend line shows that the general relationship between FBOs and based aircraft: the more aircraft, the more FBOs. Most airports lie close to the trend line on the figure, including RNO and RTS. The trend is roughly 1 FBO per 75 based aircraft. Among the airports with less than 150 based aircraft, PSP is an obvious outlier. We believe that PSP supports two FBOs despite the lower number of based aircraft because of unique aspects of that resort market that generate a relatively large volume of itinerant GA jet traffic. 3.3 Fuel Prices Prices for AvGas and jet fuel vary considerably both regionally and nationally. As shown in Figure 3‐7 and Figure 3‐8, the price for AvGas just in the Western Pacific region varied from $4.95 to $8.55 over the last month, and the price for jet fuel A varied from $4.00 to $8.19. Nationally, prices varied even more. (Maximum national prices are typically found in Alaska.)
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Figure 3‐7: U.S. AvGas (100LL) Fuel Prices, 19 May to 14 June, 2014
Total FBOs selling Prices for AvGas Region * FBOs AvGas Avg Min Max Nationwide 3,601 3,508 $5.99 $4.40 $11.21 Northwest Mountain 378 373 $6.03 $4.75 $8.26 Southwest 556 548 $5.65 $4.40 $8.34 Western‐Pacific 351 331 $6.12 $4.95 $8.55 Source: AirNav.com, June 14, 2014 Note *: Regions shown are defined by the FAA. Northwest Mountain Region includes the states of CO, ID, MT, OR, UT, WA, and WY. Southwest Region includes the states of AR, LA, NM, OK, and TX. Western Pacific Region includes the states of NV, CA, AZ, and HI.
Figure 3‐8: U.S. Jet A Fuel Prices, 19 May to 14 June, 2014
Total FBOs selling Prices for Jet A Region FBOs Jet A Avg Min Max Nationwide 3,601 2,504 $5.45 $3.79 $9.51 Northwest Mountain 378 258 $5.39 $3.91 $7.94 Southwest 556 398 $5.25 $3.87 $7.91 Western‐Pacific 351 251 $5.60 $4.00 $8.19 Source: AirNav.com, June 14, 2014 Note *: Regions shown are defined by the FAA. Northwest Mountain Region includes the states of CO, ID, MT, OR, UT, WA, and WY. Southwest Region includes the states of AR, LA, NM, OK, and TX. Western Pacific Region includes the states of NV, CA, AZ, and HI.
Fuel prices were examined at the comparator airports to understand the range of pricing amongst comparators. Figure 3‐9 shows the lowest to highest AvGas prices amongst the 20 FBOs listed on June 23, 2014. The lowest price – which was found to be at Reno Stead ‐‐ was 6% below the Western‐Pacific region average of $6.12, and the highest price – at Oakland’s Landmark FBO facility ‐‐ was 31% over the regional average.
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Figure 3‐9: AvGas Fuel Prices Amongst Comparators, June 23, 2014, Ranked by Percentage Difference From Regional Averages
$ per % difference from Airport State Provider gallon regional avg. Reno Stead NV Aviation Classics 5.75 ‐6% Boise International Airport ID Jackson Jet Centre 5.85 ‐3% Winnemucca NV Winnemucca Air Service 5.92 ‐3% Boise International Airport ID Turbo Air 5.96 ‐1% Elko Regional NV El Aero Air Services 5.96 ‐3% Fallon Muni NV Fallon Automotive 5.99 ‐2% Colorado Springs CO Colorado Jet Centre 6.04 0% Colorado Springs CO Cutter 6.04 0% Fresno Yosemite International CA Signature 6.20 1% Fresno Yosemite International CA Corporate Aircraft 6.27 3% Albuquerque International Sunport NM Bode Aero 6.45 5% Boise International Airport ID Western Aircraft 6.81 13% Spokane International Airport WA XN Air 6.97 16% Albuquerque International Sunport NM Cutter 6.98 14% San Jose International CA Atlantic 7.05 15% Albuquerque International Sunport NM Atlantic 7.06 15% Reno‐Tahoe International NV Atlantic 7.09 15% Oakland International Airport CA Kaiser Air 7.85 28% Palm Springs International CA Atlantic 7.94 30% Palm Springs International CA Signature 7.95 30% Oakland International Airport CA Landmark 8.00 31% Source: InterVISTAS analysis of data from AirNav.com. Note: Percentage differences were calculated off of the regional average where the airport is located, not necessarily off of the Western Pacific region (which includes Nevada).
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Figure 3‐10 shows prices for Jet A at the benchmark airports and compares that to the regional averages. The greatest negative percentage difference in local price of Jet A from regional average – again found at Reno Stead ‐‐ was up to 6% below the Western‐Pacific region average of $5.60, and the highest price was 41% over the regional average.
Figure 3‐10: Jet A Fuel Prices Amongst Comparators, June 14, 2014, Ranked by Percentage Difference From Regional Averages
$ per % difference from Airport State Provider gallon regional avg. Reno Stead NV Aviation Classics 5.24 ‐6% Colorado Springs CO Colorado Jet Centre 5.23 ‐3% Colorado Springs CO Cutter 5.36 ‐1% Winnemucca NV Winnemucca Air Service 5.65 1% Elko Regional NV El Aero Air Services 5.76 3% Oakland International Airport CA Kaiser Air 5.86 5% Fallon Muni NV Fallon Automotive 5.89 5% Boise International Airport ID Turbo Air 5.75 7% Boise International Airport ID Jackson Jet Centre 5.77 7% Fresno Yosemite International CA Signature 5.99 7% Fresno Yosemite International CA Corporate Aircraft 5.99 7% Boise International Airport ID Western Aircraft 5.82 8% Oakland International Airport CA Landmark 6.06 8% Albuquerque International Sunport NM Bode Aero 5.87 12% Albuquerque International Sunport NM Cutter 5.99 14% Albuquerque International Sunport NM Atlantic 6.38 22% Reno‐Tahoe International NV Atlantic 6.82 22% San Jose International CA Atlantic 7.13 27% Spokane International Airport WA XN Air 7.15 33% Palm Springs International CA Signature 7.78 39% Palm Springs International CA Atlantic 7.8 41% Source: InterVISTAS analysis of data from AirNav.com. Note: Percentage differences were calculated off of the regional average where the airport is located, not necessarily off of the Western Pacific region (which includes Nevada).
In Figure 3‐11, we compare the prices of Jet A with the number of FBOs at an airport to provide a high‐level analysis of the effect of local competition on prices. The figure plots the prices offered by each of the FBOs at the benchmark airports against the number of FBOs at the
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airport. In the highest level of summary, the plot supports the expected inverse relationship ‐ the more FBOs at a site, the more likely prices will be lower. But the figure shows many outlier data points. For example, one of the lowest cost FBOs is the only FBO at the airport (Stead in this case). On the other hand, the two highest cost FBOs are at an airport with two FBOs. The RNO price is in the middle of the range.
Figure 3‐11: Jet A Fuel Prices Range, Comparator Airports, June 14, 2014
9
8
7
gallon 6
per
5
$s 4
3
2
1
0 012345
Number of FBOs
Part of the difference in fuel prices might be due to differences in state taxes that apply to aviation fuel. We obtained information from the National Business Aviation Association (NBAA) on state and local taxes that apply to fuel. Figure 3‐12 below summarizes the applicable state and local taxes that apply to AvGas and Jet A in each of the states where the benchmark airports are located. States and localities differ not only in the level of taxes applied per gallon of fuel, but also in whether or not sales taxes also apply. After analyzing the fuel prices for each of the facilities shown at the benchmark airports, it appears that applicable sales and excise taxes account for roughly half of the variation in prices. Other factors that can affect fuel prices offered to consumers include the price of crude oil, fuel flowage fees, labor costs, an FBO’s
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fixed costs, the business’s internal rate of return objectives, and the extent of competition in the immediate area.
Figure 3‐12: Differences in State and Local Excise Taxes Applicable to Aviation Fuel
Tax on AvGas Tax on Jet A State per gallon per gallon California /1 $0.18 $0.02 Colorado /2 $0.06 $0.04 Idaho $0.07 $0.06 Nevada $0.10 $0.05 New Mexico /3 $0.17 $0.00 Washington /4 $0.11 $0.11 Source: National Business Aviation Association Notes: 1: California also imposes a 7.25% sales tax on jet fuel. 2: Colorado also imposes a 2.9% sales tax on jet fuel. 3: New Mexico imposes a sales tax of between 5.125% and 8.6875% on jet fuel. 4: Washington imposes a state sales tax of 6.5% on both AvGas and jet fuel. Counties can impose an additional 0.5% ‐ 3.0% local tax.
Our research suggests there is no compelling benchmarking evidence that RTAA is out of line in terms of the number of FBOs for its numbers of based aircraft, though itinerants may choose to fly to lower cost sites than RNO to refuel. For local flyers, Atlantic offers a discount that reduces the price of fuel by 75 cents per gallon if the aircraft is fueled on the Atlantic apron. However, for an itinerant flying a business jet from the Midwest, the operator might be able to save up to $1,500 by fueling at Colorado Springs rather than RNO.13
Some airport authorities in the U.S. have established FBOs to compete with on‐site concessionaire FBOs citing the need for competition. Example airports include Southwest Florida International Airport and Lovell Field Airport in Chattanooga, TN. In the Florida case, the owner of the existing FBO filed a legal challenge in the U.S. District Court in 2011 against his
13 This assumes the jet burns 280 gallons per hour for a 3 hour flight.
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landlord, the county airport. The FBO claimed that the county‐owned airport used nearly $40 million in federal and state grants to renovate an airport‐owned FBO at nearby Page Field to draw traffic away from his business. The suit remains undecided as of this writing.
In the Chattanooga example, after the airport authority attempted to address users’ complaints about fuel prices by opening a second FBO at the field, the owner of the existing FBO filed a complaint with the FAA. The incumbent FBO alleged that the new competitor is effectively subsidized, due to the airport's having built the facility, and that this creates unfair competition. In November 2013, two years after the complaint was filed, FAA ruled in the airport's favor. However, there are questions about the losses that the new FBO is generating, and whether it remains financially viable.
3.4 Hangars In the last decade, a number of long‐term leases at RTAA airports have expired. At the time they ended, tenants may have expected the terms to be rolled over (i.e., not changed), even if the rents had not been increased in many years. When the airport authority suggested raising the rents, some observers at the airports referred to this as “price gouging.”
The Transportation Research Board (TRB) manages the Airport Cooperative Research Program which produces reports on airport programs and practices. Report 47 is a “Guidebook for Developing and Leasing Airport Property.”14 It provides guidance on leasing airport property in the modern context. In all financial dealings for airports, a significant consideration is ensuring that they remain able to receive federal funding. In identifying priorities, the report noted:
While it is important to consider the benefits to the community, the developer, and ultimately the tenant in the lease arrangement, it is important to remember that the financial sustainability of the airport is the primary goal.15 [emphasis added]
Faced with increasing challenges to their revenue streams from airline activity, many U.S. airports are seeking to utilize their land and facilities and diversify their revenue sources.
14 Transportation Research Board, Guidebook for Developing and Leasing Airport Property, ACRP Report 47, 2011. 15 Ibid., p. 68.
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The airport comparators offer a combination of hangar rentals and leases and property leases for hangars. While the terms vary, all of the airport comparators are acting in these relationships on a cost‐recovery basis because the economic pressures and regulatory requirements upon them.
The Project Team attempted to obtain detailed information from each of the benchmark airports on the number of tie‐downs and hangars, number occupied, and rental rates. Only four airports reported relevant information to us but different and largely partial information, so it is difficult to compare.
For example, the facilities that Oakland International offers include the following
. 59 hangars built/owned/operated on leased airport property; . 93 tie own spaces; 69 (74%) are vacant; . 39 leasable port‐owned new T‐Hangars (37, or 95% are occupied); . 43 older T‐Hangars (100% occupied); and . Ramp spaces for privately‐owned hangars (98% occupied).
San Jose International offers:
. 46 T‐hangars owned by the airport; . 8 large hangars owned by land lessees; and . 80 tie downs.
In addition, Signature Aviation is building a new FBO at the airport.
Elko Regional has:
. 52 hangars built by lessees; and . 25 tie‐downs
Rates are also generally set by appraisal of market value. Boise increased its hangar lease rates in October 2013. T‐hangars rent for between $213 and $267 per month, and shade hangars are $127 per month. Another example is San Jose, which reappraised the value of its GA properties
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in 2011.16 San Jose set the value of its hangars based on a survey of the “market value” of similar space at other nearby airports, and arranged to revise the monthly rates annually based on changes in the Consumer Price Index for the Bay Area. In Fresno, the fees associated with activities at both Fresno Yosemite International Airport and Fresno Chandler Executive Airport were most recently revised in June 2014 and reflected increase from prior rates. In 2010, for example, the monthly fee for a T‐hanger at Chandler Executive Airport was $240. In 2014, it was raised to $245. The fee for a shade hangar at Chandler was $95/month, although the airport director is authorized to negotiate the shade hangar rental user fees “if it is determined to be beneficial to the City of Fresno.”17
16 2 May 2011, City of San Jose, Memo: Airport Operations Program and Fee Adjustments. http://www3.sanjoseca.gov/clerk/Agenda/20110524/20110524_0601.pdf 17 City of Fresno Mater Fee Schedule for Airports, 2014, accessible at http://www.fresno.gov/Government/DepartmentDirectory/Finance/Budget/MasterFeeSchedul e/CurrentFisscalTableofContents.htm
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4 Gap Analysis
A gap analysis defines the situation at the RTAA airports and compares it against what GA clients are seeking and what is offered at other benchmarked airports. The “gap” is the difference between what users seek and what other airports similarly situated provide, and what Reno’s airports offer. 4.1 Infrastructure Airside Systems. Airside infrastructure gaps are a common complaint at GA airports. The airside systems of the RTAA’s two airports are more than adequate for GA needs. Runway length, taxiway width, and other infrastructure issues were not raised. No issues were raised about airside infrastructure.
Hangars. In contrast, while there is no gap with respect to airside infrastructure, there is a potential issue with hangar infrastructure. The survey of tenants at RNO and RTS identified additional hangar access as high priorities. This would suggest but not necessarily demonstrate unequivocally that there is unmet demand for hangar space. Information from the RTAA staff indicates that there is some available hangar space at RNO. At RTS, indications are that all of the hangars are presently occupied (at the time of this report). However, there are two hangars listed at RTS that are available for sale.
The majority of the hangars at RTS are developed and owned by independent parties. RTAA issues ground lease agreement for each hangar. The ground lease agreements allows independent parties to rent hangar space to others (i.e. sublease) with RTAA approval. By indicating interest in hangars in the survey, aircraft owner/operators that base their aircraft at RTS may be hoping to gain an ability to develop and own rather than rent a hangar. Some comments on the survey support that interpretation. Some aircraft owners would like the opportunity to build their own hangars.
Based on the fact that there are hangars vacant now at RNO suggest that, at least at this point in time, there is some imbalance between the supply of available hangars and demand. According to information from RTAA staff, there are 10 hangars available now at RNO, with another 15 possibly available in the future (pending improvements to the ramp surface in that area). There may be (as yet unrealized) demand for larger box hangars, but that would be coming from individuals currently outside the region.
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A survey of flyers at RNO and RTS cannot quantify the extent to which individuals, companies, or organizations who do not currently base their aircraft at either of those airports would be willing to move their aircraft to either RNO or RTS if the availability of hangars was greater. 4.2 Services Additional FBOs and Fuel Options. Additional FBOs and/or fuel options are a stated desire at both airports by the GA respondents to the survey, and thus the gap analysis flags this as an issue.
Each airport has one FBO. The interviews and surveys identified a desire by some tenants for an additional FBO at each airport, and/or for additional fueling options, specifically a card lock self‐ fueling facility for aviation gas.
Other Aviation Services. Businesses interviewed and tenant respondents would like to see additional maintenance and repair services for GA aircraft at RTAA airports. The types of new services desired include avionics, painting, and interior/upholstery. These services are important parts of maintenance and overhaul activities, and if a tax abatement program is implemented by the state, we would expect that the demand for these services would increase even more than the current survey results suggest. Thus, the proposed state tax abatement would support satisfying ‐ but not necessarily remedy ‐‐ the current gap in services available. 4.3 Tenant Relations Communications. In the survey, close to a majority of respondents indicated that the RTAA did an effective or very effective job in communicating with tenants. However, a significant minority said that they viewed communications as ineffective or very ineffective.
In recent years, the RTAA has taken steps to improve its communications with the GA community by adding an RTAA GA representative at each airport. This study itself is part of an approach to communicate more directly with the GA community. Both during the interview and in some of the comment sections of returned surveys, several members of the GA community acknowledged that these were positive steps.
Leasing. Through interviews and the survey, tenants identified the leasing process as an issue. Tenants desired that it be simplified. Leases are typically long term, and thus it is understandable the RTAA enters into leases carefully. Nevertheless, the gap analysis suggests that reviewing the existing processes might be worthwhile, with a goal of simplifying doing business with RTAA wherever possible.
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4.4 Nevada Aviation Taxes Aviation Parts Taxation: A major finding in the gap analysis deals with taxation. State taxation of aviation parts inhibits related economic activity at the RTAA's two airports.
Taxation of aviation parts in Nevada is an important issue since all the surrounding states exempt aviation parts or provide abatements. The mobility of aircraft means that states with high taxes on aviation parts will lose sales of parts, and more importantly of aviation maintenance services, to low tax jurisdictions and their airports will have low customer satisfaction in this regard. Because aviation maintenance jobs are typically at wages well above average, there are important negative economic impact consequences from the tax policy.
A partial state tax abatement of aviation parts could make maintenance, repair and overhaul business at the RTAA's two airports more price competitive and could result in increased activity. In doing so, it would also make airports more effective in meeting the needs of their tenants. Abatement would make RNO and RTS more attractive to general aviation and would support more based aircraft at the sites.
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5 Opportunities
This section uses the findings of the gap analysis to investigate opportunities that RTAA may wish to consider. 5.1 Infrastructure Hangars. Hangar availability was identified as a gap. We consider two potential actions that might be pursued to address the issue.
1. Improve aircraft parking availability within existing facilities.
One respondent indicated that some existing hangar space at RTS is currently being used for non‐aviation purposes, such as storage of automobiles. While non‐aviation uses may be a means for the hangar operator to generate revenue when facilities are underutilized, the lease to allow development of the facilities was granted specifically for aviation uses. Given that there is a perceived shortage of aircraft parking at the airports, and given the high costs of developing new facilities (with the subsequently higher leasing rates), RTAA may wish to investigate whether this is an isolated comment or whether there is an issue. If the latter, RTAA may wish to work with the hangar owner or if necessary, enforcing lease provisions so that non‐aviation uses of hangars ends and space is made available for aircraft parking.
2. Enable private sector development of new facilities, where economically justifiable.
Some older hangars have been demolished at RNO and there has been a net reduction in aircraft parking space. Some of those interviewed recommended a policy that would require the airport to ensure that there is no net reduction in aircraft hangar space. While this may be attractive to some tenants, the underlying economics of land development, hangar construction, and hangar management and operation must not be ignored. Removing old facilities that have reached the end of their productive lives is a prudent business practice in any industry. Replacement must be guided by economics. The private sector is capable of assessing the market opportunity and viability of new hangars.
Replacement depends on whether users are willing and able to pay the full costs of new facilities. The RTAA provides land, via ground leases, but it is private sector developers/operators that build the facilities. They must be able to earn a reasonable
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return on their investments via the rents their tenants pay. The RTAA can influence the economics of development via the ground lease rate, but it must be allowed to earn income from the land. This will also further assist the airport in meeting the FAA’s requirement that airports become as financially self‐sufficient and self‐sustaining as possible. An airport authority generally needs to consider leasing from a long term point of view. A ground lease today at low rates for 40 years might not be justifiable given potential future needs of the airport in later years of the lease.
Ground lease rates are an issue, especially at RTS. Our understanding is that many of the current lease rates have not been indexed for inflation, and thus no longer compensate RTAA in alignment with inflation and market conditions. For example, at lease rate fixed 40 years ago in 1974 at $100 has the buying power today of only $21, a loss of more than three‐quarters of the lease value. Not only does this erode the revenue of RTAA, it also distorts market conditions.
Our recommendation is that the RTAA make land available for development of new hangar facilities at both airports. Private developers can assess the condition of the market and respond accordingly 5.2 Services Additional FBOs and Fuel Options. The gap analysis identified that many aircraft operators would like to have additional fuel options, including additional FBOs and/or a card lock self‐ service aviation gas fuelling option.
Our review indicated that the price of fuel at RTS is among the lowest at benchmarked airports. For RNO, the stated price of fuel is high relative to the average of the benchmarking airports, but the FBO offers a discount for operators based at the airport, provided they bring their aircraft to the FBO's ramp. With this discount, the fuel price at RNO is at approximately the regional benchmarking average. Itinerant operators may pay the higher price, although some of them may qualify for discounts based on their relationship with the FBO. Our survey did not cover itinerants so we have no specific knowledge of the degree to which they may be affected.
Based on interviews and our industry knowledge, a reasonable rule of thumb is that approximately one million gallons per year is required to support a sustainable fuel operation. To be clear, this means that approximately two million gallons per year would be the requirement to support two FBOs at an airport. Some fueling providers operate at lesser
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volumes, although typically as part of a combined business. The RTS FBO operated at less than 250,000 gallons annually of Jet A and AvGas in 2013. The RNO FBO sold approximately 1.6 million gallons of Jet A and 93,000 gallons of AvGas in 2013. Both FBOs have leases with the RTAA and operate their own equipment.
Our benchmarking investigation indicated that there is no compelling case for a second FBO at either of the two airports. Any new FBO would have to make a major investment in its own equipment and facilities. However, fuel volumes are insufficient to support the second FBO.
A self‐fueling facility has been raised as a potential alternative. Such a facility would require a private developer who would need to sell sufficient volumes of fuel at a price sufficient to provide a reasonable return. In the survey, respondents were asked if they would support paying more than cost for the development of an AvGas facility at RNO. Of the 19 RNO‐based respondents, 14 indicated a willingness to pay costs plus 10%, and two indicated that they would be willing to pay cost plus 25%. (One was willing only to pay the cost of development without any additional return.) Whether such a facility could generate sufficient volumes of fuel sales, and whether the returns that the survey respondents reported would be sufficient to attract the investment necessary would be matters for a developer to consider.
Our recommendation is that RTAA might consider exploring the possibility of an independent card lock fuel system for AvGas sales at RNO. It would first need to determine whether this is possible within the financial and legal agreements with the existing FBO, or whether the FBO would be interested in developing the facility, possibly as a more cost effective replacement for its existing aviation gas services. Absent interest by the FBO, the concept would likely need a proponent, such as a flying club, to take on the initiative, sign a lease agreement and finance the required capital investments. Thus the next step would be to enter into discussions with interested tenants and groups to assess whether any organization would be interested in undertaking the initiative, including financing. They would be responsible for conducting their own analyses of expected return on investment.18
Aviation Services. The previous chapter described how GA stakeholders would like to see some additional maintenance and repair services for aircraft. These include avionics, painting, and interior/upholstery. As discussed earlier, the provision of these services depends on an expanded maintenance, repair and overhaul level of activity and these are dependent on reforming the State of Nevada's taxation policy on aircraft parts.
18 As of this writing, the RTAA is preparing a RFQ to solicit interest for these services.
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Our recommendations are first and foremost to achieve the proposed revision to the State's aviation‐related taxes. Without relief from those taxes, we suspect that existing service providers will continue operating at basically their existing levels of service, and will continue to lose work to out‐of‐state competitors. Second, RTAA might work with its existing tenants as to whether they are interested or capable of increasing the range of aviation services they provide at the two airports in the short term, and what the options would be for doing so both with and without tax relief. Absent interest, RTAA could then pursue a marketing program to create awareness in the MRO community of the opportunity at Reno area airports and seek to secure one or more new MRO tenants, especially in the services where there are gaps, such as a painting shop, interior/upholstery, and avionics. 5.3 Tenant Relations Communications. The surveys and interviews indicated that while close to a majority of respondents indicated that the RTAA did an effective or very effective job in communicating with tenants, a significant minority said that they viewed communications as ineffective. We note that recently, the RTAA has increased its communications with the GA community, in part by adding an RTAA GA representative at each airport, and that this study itself is part of an approach to communicate more directly with the GA community. Nevertheless, there continues to be a perception, at least by some, of ineffective communications by RTAA. Our recommendation is that RTAA continue its efforts to reach out to the general aviation operators and community at both airports. The GA community is diverse, spread out and in some cases have no direct relationship with RTAA, as operators may only interface as tenants of private firms.
Leasing. Through interviews and the survey, tenants also identified the leasing process as an issue. Certainly among recreational flyers, there is a desire that it be simplified. However, as discussed in Chapter 4, leases are typically long term, and it is understandable that RTAA enters into leases carefully. Future development of RTAA lands for aviation use can be affected by today’s leases and new long‐term leases should not be entered into lightly.
Our recommendation is that RTAA continue to be guided in its leasing process by its fiscal responsibility to the future users of the airport. However, we also recommend that it reexamine its process of whether there are opportunities for simplification and/or removal of steps applicable for large leases that do not add value or protection for smaller, especially short‐term leases. This would not only improve customer relationships, it would reduce RTAA’s own costs.
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5.4 Taxes The gap assessment identified a major competitive issue due the State’s sales tax on aircraft parts. Aircraft are highly mobile and owner/operators are able to have maintenance done at a wide range of locations. Because of this, most states in the western U.S. either exempt aircraft parts from sales taxes or provide abatement of such taxes. Nevada is one of the few jurisdictions without exemption or abatement. All of Nevada's bordering states offer exemptions.
This lack of competitiveness affects RTAA in at least two ways. First, its tenants lose business that otherwise could take place in the state. This reduces jobs and regional economic impacts, and it also eventually affects the lease rates RTAA will be able to earn. Second, by undermining larger scale maintenance activity at RTAA's airports, economics do not favor the development of a wider range of maintenance and overhaul services (e.g., painting). This reduces customer satisfaction of the airport's users, again with a loss of economic impact to other states with more competitive tax environments.
Our recommendation is that the State of Nevada should address this issue that is costing jobs and reducing service levels at the State's airports. We understand that the RTAA already strongly supports aviation parts taxation abatement. It is recommended that this be continued.
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6 Unmanned Aircraft Systems: Background, Developments, Implications for RTAA
6.1 Background Unmanned Aircraft Systems (UASs, sometimes commonly referred to as Unmanned Aerial Vehicles – UAVs ‐‐ or “drones.”) are arguably the newest major development in commercial and civil aviation.
The FAA defines an Unmanned Aircraft (UA) as a device used or intended to be used for flight in the air that has no onboard pilot. This device excludes missiles, weapons, or exploding warheads, but includes all classes of airplanes, helicopters, airships, and powered‐lift aircraft without an onboard pilot. UA do not include traditional balloons, rockets, tethered aircraft and un‐powered gliders.
Until recently, UAS mainly supported public operations, such as military and border security operations. The list of potential civil and commercial uses is now rapidly expanding to encompass a broad range of other activities, including aerial photography, surveying land and crops, communications and broadcast, monitoring forest fires and environmental conditions, and protecting critical infrastructures. UAS provide new ways for commercial enterprises (civil operations) and public operators to enhance some of our nation’s aviation operations through increased operational efficiency and decreased costs.
UAS create unique challenges to the aviation industry, however. For years, the number of UAS operating in the U.S. was quite small. As the number of UAS increases, FAA is challenged to develop a structured approach to their safe and efficient integration into the national controlled airspace.
As DOT’s UAS Comprehensive Plan19 points out, there are three basic elements of the strategy that will eventually allow for the routine and safe operation of UAS in the domestic skies:
. incremental advances in research and development (including test ranges);
. rulemaking (including operational approval and airworthiness standards); and
19 Joint Planning and Development Office, Unmanned Aircraft Systems (UAS) Comprehensive Plan: A Report on the Nation’s UAS Path Forward, Sept. 2013.
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. development of UAS‐related technologies.
The U.S. has the largest and most complex domestic airspace in the world along with an enviable safety record. Keeping that airspace safe and efficient with the development and adoption of UAS requires success with each of those three elements.
6.1.1 Understanding UAS It is important to understand that a UAS is less of a single object than a collection of components, each of which is critical for the operation of the aerial unit. The key components are the aerial platform itself (the UAV), the ground station, and the communications relay.
Each of those major elements also can include multiple subcomponents as part of the value chain. The aircraft itself includes five major components:
. The airframe . The propulsion system . The flight control computer or system . The precision navigation system . The sense & avoid system
Some argue that the most important element of a UAS is the payload, which is specific to the mission of the UAS itself. The purpose of a UAS is deliver or collect data usually in a dull, dirty or dangerous environment. The payload is the element of the whole UAS that accomplishes that task, mission, or objective. The vehicle itself does not deliver the message or the data: it merely gets the payload to the best location. The payload can include highly sophisticated, complex, expensive components, such as electro‐optical sensing systems and scanners, infrared systems, radars, communications relays, or environmental sensors. Thus, it is the payload that determines the payback or the economic gains. Figure 6‐1 illustrates the major components.
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Figure 6‐1: Components of a UAS
Source: U.S. Government Accountability Office, Unmanned Aircraft Systems: Measuring Progress and Addressing Potential Privacy Concerns Would Facilitate Integration into the National Airspace System, GAO‐12‐981, September 2012.
UAVs come in all shapes and sizes and performance capabilities. They may have a wingspan as large as a Boeing 737 or smaller than a remote‐controlled model aircraft. Many are rotorcraft. In Nevada, most of the interest, at least initially, is in what the FAA defines as “small UAS” (or sUAS) – weighing 55 lbs. or less. These platforms are relatively cheap and inexpensive.
6.1.2 The FAA’s Role with UAS Safety is the FAA's top mission, and the agency maintains the world's safest aviation system. As a provider of air traffic control services, the FAA also must ensure the safety and efficiency of the nation’s entire airspace.
The FAA first authorized use of unmanned aircraft in the National Airspace System (NAS) in 1990. Since then, the agency has authorized limited use of UAS for missions in the public interest, such as firefighting, disaster relief, search and rescue, law enforcement, border patrol, military training and testing and evaluation. UAS perform border and port surveillance by the Department of Homeland Security, help with scientific research and environmental monitoring
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by NASA and NOAA, support public safety by law enforcement agencies, help state universities conduct research, and support various other missions for public (government) entities.
The FAA allows UAS to fly in the NAS under very controlled conditions. Operations potentially range from ground level to above 50,000 feet, depending on the specific type of aircraft. However, UAS operations are currently not authorized in Class B airspace, which exists over major urban areas and contains the highest density of manned aircraft.
There are currently two ways to get FAA approval to operate a UAS. They vary depending on whether the aircraft would be a public aircraft or a civil aircraft. In general, a public aircraft is one that is only for the United States government or owned and operated by the government of a state (including public universities), the District of Columbia, or a territory or possession of the U. S. or a political subdivision. Civil aircraft means other than a public aircraft.
Public UAS
Public entities that want to fly a UAS in civil airspace can obtain a "Certificate of Waiver or Authorization (COA)." A COA is issued with limitations and provisions that mitigate the increased risks resulting from the use of uncertified technology. Common uses today include law enforcement, firefighting, border patrol, disaster relief, search and rescue, military training, and other government operational missions.
The COA allows an operator to use a defined block of airspace and includes special provisions unique to the proposed operation. For instance, a COA may require flying only under Visual Flight Rules (VFR) and/or only during daylight hours. COAs usually are issued for a specific period—up to two years in many cases.
Civil UAS
The only way that civil operators of unmanned aircraft are allowed to access the NAS is by obtaining a special airworthiness certificate in the experimental category. This certificate requires specific, proven capabilities to enable operations at a constrained level. FAA reviews each application for approval on a case‐by‐case basis, allowing it to define a limited level of access and set specific risk mitigations that ensure the safety and efficiency of the NAS. The use of special airworthiness certificates for UAS is similar to their use for manned aircraft. Experimental certificate regulations preclude carrying people or property for compensation or hire, but do allow operations for research and development, flight and sales demonstrations and crew training.
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6.1.3 Nevada Test Sites Under the 2012 FAA Modernization and Reform Act, Congress directed the FAA to take a series of actions to accelerate the integration of UAS into the NAS. Among other actions, the Act required FAA to establish a program to integrate UAS at six test sites. The test sites are a critical element in the FAA developing a thorough understanding of how UAS can be integrated into the NAS. As part of the test range agreements, the FAA will be collecting information that will help inform future rulemaking activities and other policy decisions related to safety, privacy, and economic growth. FAA selected those sites in December 2013.
The test sites provide locations for UAS companies to gain full type certification and airworthiness approval of their designs. Companies will be able to operate their aircraft essentially under the scrutiny and approval of the FAA. They will be able to accumulate the hours and experience needed to obtain the certification required for commercial use ‐ after the FAA establishes design and operational standards
The State of Nevada was among the six test sites selected nationwide. In Nevada, the FAA's project objectives concentrate on UAS standards and operations as well as operator standards and certification requirements. The research will examine how air traffic control procedures will evolve with the introduction of UAS into the civil environment and how these aircraft will be integrated with air traffic control systems. Within Nevada, Reno‐Stead Airport is one of several identified base locations, along with Fallon, Boulder City, and Desert Rock.
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6.1.4 UAS, Reno‐Stead, and the GA Community The RTAA has identified the undeveloped northern portion of Reno Stead for UAS testing. An aerial photo of the area is shown in Figure6‐2. Access to the test area will be controlled. Firms testing in the area may not need to enter the airfield near the existing terminal facility.
Figure 6‐2: Stead Testing Area
UAS developments at RTS could affect the GA community there in a number of ways, so how this unfolds will be of interest to current and possibly future tenants. Once UAS tests get underway (anticipated in the Fall of 2014), anyone flying in the vicinity will be notified via a Notice to Airmen (NOTAM), although the early testing is only expected in Class D airspace. In addition, the hope is that increasing UAS activity in the area will attract more aviation‐related activity (e.g., maintenance and engineering), which may strengthen the overall regional aviation community.
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6.2 UAS Developments 6.2.1 FAA is Months Behind its Regulatory Timeframes The FAA Reauthorization Act of 2012 established a deadline of Dec. 31, 2015 for the FAA to develop and implement operational and certification requirements for public UAS in national airspace.
As summarized below in Figure 6‐3, as of June 2014, the FAA is months behind in its rulemaking effort for the operation of small UASs in the NAS. These regulations would address the classification of small unmanned aircraft, certification of their pilots and visual observers, registration, approval of operations, and operational limits in order to increase the safety and efficiency of the national aerospace system.
Figure 6‐3: Schedule for FAA Regulatory Development for Small UAS
Source: Report on DOT Significant Rulemakings, June 2014.
In April 2014, a consortium of aviation and aerospace organizations sent a letter to the FAA administrator asking that the process be sped up.20 The FAA’s history in meeting its planned
20 Signatories included not just aviation organizations (i.e., AUVSI, the American Institute of Aeronautics and Astronautics, the Air Traffic Control Association, the Aircraft Owners and Pilots Association, Airports Council International‐North America, the American Association of Airport Executives, the General Aviation Manufacturers Association) but a range of other interests that are expected to benefit from UASs, such as the American Society of Agronomy, the Airborne
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schedule on this rulemaking does not inspire confidence that it will meet the January 2015 revised deadline. This will further delay the expansion of UAS testing within the U.S.
6.2.2 FAA Approvals for COAs at Test Sites Only Recently Began On June 9, Nevada received authorization from the FAA for its first test flights through a COA. The FAA granted the State of Nevada team a two‐year COA to use an In situ ScanEagle at the Desert Rock Airport located in Mercury, NV. Desert Rock Airport, owned and operated by the Department of Energy, is a private airport and not for general use. The ScanEagle will fly at or below 3,000 feet, monitored by a visual observer and mission commander. The COA authorizes the use of a UAV for a first responder exercise in which the UAS will be “eyes on scene” during a mock emergency exercise. Initial flights will verify that a UAS can operate safely at the airport.
Although the Nevada announcement was not the first for the test sites, it closely followed only two other test sites in becoming operational.
. In April, 2014, The FAA announced that the first of six test sites chosen to perform UAS research was operational. The North Dakota Department of Commerce team received a COA to begin using a Draganflyer X4ES sUAS at its test site. The main goal of this site’s initial operations is to show that UAS can check soil quality and the status of crops in support of North Dakota State University/Extension Service precision agriculture research studies. Precision agriculture is one of many industries that represent areas for significant economic opportunity and UAS‐industry expansion.
. In May 2014, the FAA announced that the University of Alaska’s test site was the second of six to become operational. The University of Alaska Fairbanks received a COA authorizing flights by an Aeryon Scout sUAS for animal surveys at its Pan‐Pacific UAS Test Range Complex in Fairbanks. The main purpose of the Alaskan wildlife operation is to show how a UAS can accurately locate, identify, and count large wild animals, such as caribou, reindeer, musk ox and bear for survey operations requested by the state of Alaska.
. Earlier in June, the FAA issued a COA to AeroVironment allowing the company to fly its Puma AE UAS for energy company BP in Alaska, the first time the agency has approved a
law Enforcement Association, the Crop Science Society of America, the American Soybean Association, the National Association of Realtors, the National Press Photographers Association, and the national Sheriffs’ Association.
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commercial UAS operation over land. The operation started on June 8. (In July 2013, the FAA issued type certificates in the restricted category to the Boeing Insitu ScanEagle X200 and AeroVironment Puma AE to use the aircraft for commercial purposes. That application was over water. “Type certificates” indicate an approval of airworthiness. The “restricted” category allows type certification of an airframe for a specific purpose, in this case aerial surveillance.)
. Also in June, FAA announced that the Texas A&M University–Corpus Christi UAS test site is the fourth of six to become operational. The FAA granted a two‐year COA to use an AAAI RS‐16 UAS. The RS‐16 weighs approximately 85 pounds and has a wingspan of almost 13 feet. This research will concentrate on multiple areas including safety of operations and data gathering in authorized airspace, UAS airworthiness standards, command and control link technologies, human‐factors issue for UAS control‐station layout, and detect‐and‐avoid technologies. The site’s specific UAS projects include preservation and restoration of the ocean and ocean wetlands along the Padre Island National Seashore; research in advance of approaching tropical depressions; support to law enforcement in the Padre Island National Seashore; and providing metrics and lessons learned from these flights to the FAA.
The two other test sites – in the Mid‐Atlantic (Virginia Tech University) and New York’s Griffiss International Airport – have not yet received approval from the FAA to begin operations as of June 23, 2014.
In addition, the FAA has launched its search for a Center of Excellence (COE) for Unmanned Aircraft Systems. The COE is intended to complement the activity at the test sites. According to the FAA, center which should include a university and industry partners, will conduct a variety of research that will augment the work being done by the six UAS test sites and by the FAA’s technical center in New Jersey. The COE will be responsible for seven research areas, including air traffic control interoperability, airport ground operations, control and communication, detect and avoid, human factors, spectrum management, and UAS pilot training and certification, including other UAS crew members. Exactly how the new COE will interact with the six UAS test sites that the FAA selected will be determined once the Coe team is in place and develops its detailed research plans. The FAA expects any flight testing the COE wants to perform will occur at one or more of the test sites. It is to be operational by September 2015.
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 56
6.3 Implications for RTAA for UAS Operations at RTS The research team interviewed representatives with nearly 40 firms associated with UAS, ranging from large multi‐national companies that integrate all components into a complete system (e.g., Yamaha) and large firms that build major subcomponents (e.g., Curtiss‐Wright) to small firms that fabricate carbon fiber platforms (e.g., Indy Composite Works), companies that build imaging and sensor technology (e.g., FLIR Systems, Inc.), those that build engines and propulsion technology (e.g., NWUAV), and those that specialize in communications and software (e.g., Airware). A sample of the industry sectors of the UAS companies with whom the research team met is shown in Figure 6‐4.
Figure 6‐4: Examples of UAS Sectors or Elements Interviewed
Note: Sectors defined by the AUVSI.
We note that there are likely some synergies between some of the UAS sectors identified above and the potential for developing or expanding some business activity supported by the
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 57
proposed partial tax abatement on aviation parts and property. To the extent that the partial tax abatement supports the development of additional aircraft maintenance, repair, and overhaul work in the state, it would also add to the state’s capacity to support the UAS industry with skilled technical workforce.
The major themes from our interviews with UAS firms are summarized below:
Ease of Access. Several of the UAS companies interviewed were located or established relatively close to one of these test sites already, and that physical proximity was influencing their decisions on where they might consider going to test. That seemed to be true because most of these UAS platforms are relatively small – they could fit in an SUV or small trailer, so the companies would be driving to the test sites. Unless there was a specific mission that could be dependent on the environment or location of one of the test sites (e.g., agricultural testing in North Dakota), the test site that was easiest to drive to appeared to be the one the companies first mentioned.
Industry Segmentation. The UAS industry can generally be segmented into smaller start‐up companies and larger established firms like Boeing’s Insitu. In our discussions with smaller companies, they uniformly noted that they need little from an airport in terms of goods or services. These firms tend to be small enough that they are “self‐contained.” They felt that they could do their testing from a trailer. The larger firms – for example, Boeing/Insitu, Yamaha, or Lockheed – are more interested in airport infrastructure and amenities.
Large company requirements. In those cases, airports may need to be able to offer or provide certain elements of infrastructure – hangar space, high‐capacity/high‐speed communications for data acquisition, power, water/sewer, and physical facilities (e.g., office space). These firms may also need to host or entertain clients and elements of their supply chain, so community amenities may be a consideration (although that is outside the airport’s control). Access to technical support from local universities may also be a contributing factor.
One implication from the discussion with the large companies was that they perceive the testing opportunities as a “buyers’ market.” They may be interested in testing at any or all of the FAA‐designated test sites. Because of their size and the possibility that they might establish a physical presence in a location, they are in a position of allowing test sites to compete for their business.
These firms also emphasized an interest in the extent to which states or regions were generally “business friendly.” This includes the regulatory and tax environment, according to Forbes magazine. As has been noted earlier in this report, the proposed partial tax abatement on
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 58
aviation parts and property – which may also apply to UAS companies or component manufacturers – would contribute to Nevada’s business‐friendly stature.
6.3.1 Offerings at Other Test Sites The team also interviewed officials with each of the other test sites to gain information on their interactions with UAS companies. We specifically sought information on the type of goods and services that the test sites were offering the UAS companies and what the UAS companies sought from the test sites.
These sites would not disclose what they were offering to UAS firms in terms of goods or services, nor would they discuss any set of prices that they were setting for access to the test ranges.
The U.S. Transportation Research Board’s Airports Cooperative Research Program (ACRP) is currently funding a project that is intended to serve as a primer to assist airports of all types and sizes and their stakeholders in gaining an understanding of UAS and their potential use and impact on airports.21 Among the many topics the report is supposed to consider are:
. Costs and benefits to airports . Air Traffic Control (ATC) operations and coordination . Training of airport personnel or airport certification needed . Communications and any spectrum related issues . Regulatory [e.g., COA, and Federal Aviation Regulations (FARs)] . Airport/UAS compatibility . Facility requirements . Security and access control . Grant assurances . Environmental impacts . Land use compatibility . Economic development . Lessons learned from existing airports (public use and military) with UAS activity
The report was expected to be completed in early June 2014. According to the ACRP staff contact, the project has been extended to November 2014.
21 http://apps.trb.org/cmsfeed/TRBNetProjectDisplay.asp?ProjectID=3443
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7 Findings and Conclusions
7.1 Findings The following findings emerged from the project analysis:
1. The GA community represents all aviation activity not associated with military, cargo and passenger carriers. This is a diverse community which uses aviation for a wide range of recreational, business and social purposes. The tenant survey shows that the GA communities at RNO and RTS and the business and recreational components of each have distinct profiles and needs.
2. The GA community has suffered from a variety of economic events in the last decade, including recession and a major increase in fuel prices. GA hours flown in Nevada dropped almost 50% between 2006 and 2012. Nationally, GA piston hours flown have been declining, while jet and turbo prop activity has increased.
3. At RNO, all survey respondents said they wanted expanded fuel options.
4. At RTS, a majority of survey respondents indicated the site needed more hangar space.
5. Nearly a majority of tenants at both airports believe the RTAA does an effective job of communicating with them, although a significant minority feels otherwise.
6. In response to the question “What has been your experience with the RTAA leasing process?” 43% said it was difficult and lengthy, and 29% were undecided.
7. Based on interviews with fuel providers as well as benchmarking analysis, approximately one million gallons of Jet A or AvGas sold annually is required to sustainably support each FBO. In addition, roughly 75 based aircraft are a minimum for every FBO at an airport.
8. Our research suggests there is no compelling benchmarking evidence that RTAA is out of line with western U.S. comparator airports in terms of the number of FBOs, given the number of based aircraft.
9. All of the airport comparators use cost‐recovery principles to develop lease properties.
10. Ease of access is an important consideration as to where UAS companies conduct their testing.
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11. The larger UAS firms, for example, Boeing/Insitu, Yamaha, or Lockheed, are more interested in airport infrastructure and amenities than are smaller firms. In the case of larger firms, airports may be able to offer or provide certain elements of infrastructure – for example, hangar space, high‐capacity/high‐speed communications for data acquisition, power, water/sewer.
12. There are likely synergies between the UAS industry and some of the maintenance, repair and overhaul (MRO) companies targeted by the tax abatement initiative.
13. Other FAA‐approved UAS test sites would not disclose what they were offering to UAS firms in terms of goods or services, nor would they discuss any set of prices that they were setting for access to the test ranges. 7.2 Recommended Measures Conclusions and Recommendations
Based on these findings, the following conclusions and recommendations are made regarding RTAA airports and GA activity.
o Increased and competitive aviation fuel sales. There is no compelling evidence that RNO is an outlier by having only one FBO. Most of its peer airports examined have a second FBO, but with one exception, they also have more based aircraft. In RNO’s range of based aircraft, only one comparator (Palm Springs) has a second FBO. The other two have one FBO. RNO has higher than average fuel prices, but the evidence does not support a strong conclusion that a second FBO alone makes a difference in fuel price.
For RTS, almost all of its comparators have only one fuel provider. It has the lowest fuel comparators of its peers so there is no reason to seek a second FBO.
The evidence suggests that when RNO grows its based aircraft towards 175 and higher, it might be time to seek a second FBO.
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 61
o GA hangar space. Given that there is a shortage of aircraft parking at the airports, and given the high costs of developing new facilities, RTAA may wish to consider working with the hangar operators, or if necessary, enforcing any lease provisions so that non‐aviation uses in hangars ends and space is made available for aircraft parking.
Whether additional hangar space is created depends on whether current and potential future users are willing to pay for new facilities. RTAA can provide land, via ground leases, but private sector developers/operators that build facilities must be able to earn a reasonable return on their investments. RTAA can influence the economics of development via the lease rate, but it must also be allowed to earn income from the land. The airport has a responsibility to become as financially self‐sufficient as possible.
Our recommendation is that the RTAA make land available for development of new hangar facilities at both airports. Private developers can assess the condition of the market and responding accordingly.
o Improved and simplified airport business processes. Through interviews and the survey, tenants identified the leasing process as an issue. Tenants desired that it be simplified. Leases are typically long term, and thus it is understandable the RTAA enters into leases carefully. Nevertheless, the gap analysis suggests that reviewing the existing processes might be worthwhile, with a goal of simplifying doing business with RTAA wherever possible.
o Improved tenant perceptions of communications between the airport authority and tenants. The surveys and interviews indicated that while close to a majority of respondents indicated that the RTAA did an effective or very effective job in communicating with tenants, a significant minority said that they viewed communications as ineffective. Our recommendation is that RTAA continue its efforts to reach out to the general aviation operators and community at both airports. The GA community is diverse, spread out and in some cases have no direct relationship with RTAA, as operators may only interface as tenants of private firms.
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o Successfully obtaining the abatement of the tax on aviation parts. The gap assessment identified a major competitiveness issue due the State’s sales tax on aircraft parts. Aircraft are highly mobile and owner/operators are able to have maintenance done at a wide range of locations. Because of this, most states in the U.S. either exempt aircraft parts from sales taxes or provide abatement of such taxes. Nevada is one of the few jurisdictions without exemption or abatement, and in particular, all of its surrounding states have exemption/jurisdiction.
Our recommendation is that the State of Nevada should address this competitiveness issue that is costing jobs and reducing service levels at the State’s airports. We understand that the RTAA already strongly supports aviation parts taxation abatement. It is recommended that this be continued.
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 63
Appendix A: GA Community Survey
The survey sent to tenants is provided on the following pages. An on‐line version was also provided which varied slightly in appearance but included the same questions.
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 64
General Aviation (GA) services and infrastructure are critical to the success of the Reno‐Tahoe International Airport (RNO) and Reno‐Stead Airport (RTS), and contribute to the quality of life in the region and its economic vitality. It is a strategic priority of the Reno‐Tahoe Airport Authority (RTAA) to optimize GA operations and services at both RNO and RTS. The RTAA also wants to encourage business development to support a thriving GA community.
The RTAA has retained InterVISTAS Consulting to more thoroughly understand the needs of the region’s GA community as a step toward developing a blueprint for enhancing GA activity.
Your cooperation in completing this short questionnaire is critical to achieving these objectives. Thank you for taking the time to complete this questionnaire.
Please complete this survey electronically by indicating your answers directly in the form.
Q1. Activity
Please indicate your airport‐related activity. “GA Tenant” refers to any individual, corporation, or organization that operates out of either RNO or RTS and/or stores one or more aircraft at either airport, in a hangar or at a tie‐down.
1. GA Tenant (Check type of aircraft, circle number of aircraft that you or your firm owns and operates at RNO or RTS)
A. Piston 1 2 3 4 5 or more
B. Turboprop 1 2 3 4 5 or more
C. Jet 1 2 3 4 5 or more
2. Fixed Base Operator
3. Maintenance, repair and overhaul
4. Aviation Related Training
5. Other: ______
Comments ______
______
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Q2. RTAA Airport Use
Please indicate the airport at which you are principally (over 50%) active:
Reno Stead Airport
Reno‐Tahoe International Airport
Comments ______
______
Q3. Flying Hours of Aircraft
Please estimate how many hours your aircraft(s) fly per month on average.
A. Piston ______hours
B. Turboprop ______hours
C. Jet ______hours
Q3(a): Approximately what percentage of total flying hours is local (flights within 25 nautical miles of the originating airport)? ___ %
Q3(b): What is your primary reason for flying?
A. Recreation
B. Business
Comments ______
______
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 66
Q4. Seasonality
Please identify when your aircraft is based at your principal airport.
Year round Jan‐Mar Apr‐Jun Jul‐Sep Oct‐Dec
If you do move your aircraft seasonally, why do you move it?
______
______
Q5. Annual GA Operating Expenses
Please indicate your average annual aviation‐related spending on fuel, hangar rental and maintenance. Exclude expenses relating to aircraft ownership (e.g., financing, insurance).
$0 –$49,000
$50,000 ‐ $99,000
$100,000–$249,000
$250,000– $500,000
over $500,000
Comments ______
______
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 67
Q6. Competing Site Use
Do you purchase fuel or services at other airports on a regular, annual basis?
Yes
No [skip to Q7]
Q6(a): Please indicate if you regularly purchase any of the following goods or services at another airport, and indicate the airport where you obtain those goods or services.
1. Fuel Airport(s) ______
% of annual fuel purchased away from RNO ______%
% of annual fuel purchased away from RTS ______%
2. Services Airport(s) ______
Avionics
Painting
Interior/upholstery
Framework/fabrication
Maintenance, repair and overhaul
Other: ______
Q6(b): Approximate average annual spending on those goods/services purchased away from RNO $______
Approximate average annual spending on those goods/services purchased away from RTS $______
Comments ______
______
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Q7. Need for New or Improved GA‐Related Services
The Board of the RTAA has made optimizing GA activity a strategic priority. Please check up to three (3) new or improved services you believe are most needed by the GA community at RNO or RTS. (Select three or fewer choices)
RNO RTS
1 Facilities and Services Additional hangars (box, T‐hangars, shade) If yes, answer Q7(a) Tie‐downs
2 Improved/expanded commercial maintenance/repair services, such as Avionics Painting Interior/upholstery Framework/fabrication Other maintenance, repair and overhaul Other ______
3 Choice of FBO
5 Pull out / put away services
6 Expanded food service
7 Other ______
8 None. I’m satisfied with the facilities and services at the airport. [skip to Q8]
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Q7(a): Willingness to Pay for New/Improved Hangars
If new or enhanced hangars were available at RNO or RTS, would you be willing to pay more to use them?
Yes
No [skip to Q9]
Q7(b): How much more would you be willing to pay?
RNO RTS
1‐10% 11‐25% 26‐50% More than 50%
Comments ______
Q8. Self‐serve fuel option:
If there were a self‐serve Avgas facility at RNO, please indicate how you might use it?
I would use it exclusively
I would use it occasionally
I would use it rarely or never
The cost to develop, operate, and maintain such a facility would need to be recovered. If you chose to purchase fuel using this facility, what would you reasonably expect to pay?
cost only
cost plus 10%
cost plus 25%
cost plus higher margin
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 70
Q9. Offerings Provided at Other Airports
RTAA is interested to gather your opinions on GA services at other airports that you believe are noteworthy or exemplary. Based on your experience, what do other airports offer in infrastructure and services that the RTAA should consider?
1. Amenities/Infrastructure
[explain / example] ______
Airport where this is available ______
2. Services
[explain / example] ______
Airport where this is available ______
3. More favorable fee or lease structure
[explain] ______
Airport where this is available ______
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 71
Q10. Effectiveness of Communications from RTAA to the GA Community
To what extent do you believe that the RTAA communicates openly and effectively with the local GA community?
1 – very ineffective / not openly
2 somewhat ineffectively
3 ‐‐ undecided
4 – somewhat effectively
5 ‐‐ very effectively and openly
Comments ______
______
Q11. Executing or Renewing Leases
Q10(a): What has been your experience with the RTAA leasing process? (Please circle response that most accurately reflects your experience, where 1 = quick and easy, 5 = difficult and lengthy).
1 2 3 4 5
Q10(b): What steps could the RTAA take to improve the leasing process?
______
______
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Q12. Suggestions/Comments
Please provide any other suggestions or comments you have for the RTAA to improve GA services at its airports.
______
______
______
GA Services Study Participation
In order to help the RTAA better understand opportunities for optimizing GA services at both RTS and RNO, would you be willing to discuss your ideas in more detail in a phone interview?
Yes
No
If your answer is yes, please provide contact information where you can be reached:
Name______
Position______
Phone______
Email______
Thank you for your assistance in completing this survey. The survey can be returned by email or fax: Email: [email protected] Fax: 1‐604‐717‐1818, Attention: Rob Beynon
If you have any questions, please call Steve Martin at 202‐688‐2220.
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 73
Appendix B: Survey Results
Detail on the questions and responses if provided on the following pages.
Q1. Please indicate your airport‐related activity. “GA Tenant” refers to any individual, corporation, or organization that operates out of either RNO or RTS and/or stores one or more aircraft at either airport, in a hangar or at a tie‐down.
# %
Piston, GA Tenant 57 87.69
Turboprop, GA Tenant
Jet, GA Tenant
Fixed Base Operator 1 1.54
Maintenance, repair and overhaul
Aviation related training 1 1.54
Other 6 9.23
TOTAL 65
Note: We received one response from a jet operator and one from a turboprop that we are suppressing to ensure their confidentiality.
Comments
Kit aircraft...work in progress
Itinerant
Itinerant
Non‐aviation business
Government
Landlord
Itinerant
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 74
Q2. Please indicate the airport at which you are principally (over 50%) active:
N %
RNO business 13 22.0%
RNO recreation 6 10.2%
RTS business 6 10.2%
RTS recreation 34 57.6%
TOTAL 59
Note: some answers given did not answer question
Comments
Of vital importance to my business
We use the hangar as our office as it lends itself to rapid deployment of our aircraft to construction sites in Eastern Nevada
I'm "active" but not currently flying.
based at another airport
Q3. Flying Hours of Aircraft ‐‐ Please estimate how many hours your aircraft(s) fly per month on average.
RNO RNO RTS RTS TOTALS business recreation business recreation
Responses 13 6 6 34 59
Piston responses 13 6 6 34 59
Average Hours 17.5 10.5 11.8 7.8
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 75
Note: One business respondent flew a jet and one flew a turboprop. Their sites have not been identified to ensure confidentiality of the survey responses.
Q4. Approximately what percentage of total flying hours is local (flights within 25 nautical miles of the originating airport)?
RNO RNO RTS RTS TOTALS business recreation business recreation
Responses 12 6 6 34 58
Average local flying time (%) 10.3% 53.3% 4.5% 44.3%
High 35% 90% 10% 100%
Low 1% 10% 1% 0%
Q5. What is your primary reason for flying?
RNO RNO RTS RTS business recreation business recreation Total
Responses 13 6 6 34 59
% of responses 22.0% 10.2% 10.2% 57.6% 100%
Comments
both
and recreation
And training
SAR / Reno Air Race plane
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 76
Q6. Seasonality Please identify when your aircraft is based at your principal airport.
RNO RNO RTS RTS recreation TOTALS business recreation business
Year round 13 6 4 32 55
Jan‐Mar 1 1
Apr‐Jun 1 1
Jul – Sep 1
Oct‐Dec
TOTALS 13 6 7* 32 57
One respondent gave two answers
Comments
March‐ Sept
I have a tenant and rent out my hangar
Office in Hanger and equipment in other Hanger
Q7. Annual GA Operating Expenses ‐‐ Please indicate your average annual aviation‐related spending on fuel, hangar rental and maintenance. Exclude expenses relating to aircraft ownership (e.g., financing, insurance).
RNO RNO RTS RTS Total business recreation business recreation
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 77
$0‐49,000 9 5 4 33 51
$50,000 – 99,000 3 1 4
$100,000 – 249,000 1 1
$250,000 ‐ $500,000 1 1
Over $500,000
TOTALS 13 5 5 34 57
Q8. Competing Site ‐‐ Do you purchase fuel or services at other airports on a regular, annual basis?
RNO RNO RTS RTS Total business recreation business recreation
Yes 10 5 3 17 35
No 3 2 17 22
Total Responses 13 5 5 34
Q9. Please indicate if you regularly purchase fuel at another airport.
RNO RNO RTS RTS business recreation business recreation
% of annual fuel purchased away 56.8% 59% 20% 76.7% from RNO (average of responses)
% of annual fuel purchased away 82.1% 50% 33.% from RTS (average of responses)
Total Responses 11 5 3 26
Note: The responses to this question are confusing because tenants provided responses for both airports in many cases. It appears that the question was confusing and it is therefore
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difficult to interpret these responses. For example, on one hand many respondents said they did not purchase 100% of their fuel at the airport they were not based at, but many respondents gave a percentage that they bought away from each airport.
Q10. If you answered yes to question 9, please indicate the airport where you obtained fuel.
Truckee, Yerington and Silver Springs
My destination airport whatever that might be. Last one was KHII.
Minden, Truckee
Carson City, Minden
KFUL, KSCK, KSNA, KCRQ,KCNO
Stead
043, 041
EKO SPZ
Yerington, Lovelock
TRM
KBOI, KUGT, KPGA
Wherever I fly to
multiple sites
varies, we spend about one half of our time in Montana and we buy fuel there and other places when on trips
CXP, SPZ, auto fuel
various
Locally" KSPZ, KCXP, Yerrington, Truckee Also buy gas in California and other states when travelling further
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 79
CXP, SPZ,O43
BAM
Carson, Fresno, Sacramento, Auburn
Any airport that is less expensive fuel the RNO
Carson City, Silver Springs
KTRK, KCXP, KSPZ,
PAO, SJC PMD VCB, VCV, WVI
BAM,CPX,HTH,LOL,MEV,SPZ,WMC,O43,AUN,O02,AAT
KRTS, KCXP, KLOL,
Chico
KCXP, KSPZ
Carson City, Truckee, Yerington, Silver Springs. All are substantially less expensive than KRNO, OR KRTS
O43, MeV, spz
RGB
Q11. Please indicate if you regularly purchase any of the following goods or services at another airport.
RNO RNO RTS RTS Total business recreation business recreation
Avionics 7 1 1 5 14
Painting 2 4 6
Interior/upholstery 2 1 3
Framework/fabrication 1 1 2
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Maintenance, repair and 9 3 1 8 21 overhaul
Other
TOTALS* 19 4 6 17 46
* Respondents gave multiple answers and columns therefore do not add to total respondents.
Comments
inspection
charts
meals
O43, mev
Q12. Approximate average annual spending on those goods/services purchased away from
RNO RNO RTS RTS business recreation business recreation
Total Responses 9 3 2 18
Average response $16,191 $6,250 $43 $1,117
High $60,000 $3,000 $85 $5,000
Low $90 $250 $0 $0
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 81
Q13. Please check up to three (3) new or improved services you believe are most needed by the GA community at RNO or RTS. (Select three or fewer choices)
RNO RNO RTS RTS Total business recreation business recreation
Additional hangars 7 3 2 23 35
Tie downs 2 0 0 1 3
Avionics 6 1 1 2 10
Painting 1 0 2 11 14
Interior/upholstery 1 0 2 9 12
Framework/fabrication 0 0 1 3 4
Other maintenance 3 1 1 7 12
Choice of FBO 11 3 2 5 21
Pull out / put away services 3 0 0 1 4
Expanded fuel service options 13 4 2 9 28
TOTALS* 47 12 13 71 143
*Respondents provided multiple answers so columns do not total.
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Q14. If new or enhanced hangars were available at RNO or RTS, would you be willing to pay more to use them?
RNO RNO RTS RTS Total business recreation business recreation
Yes 6 1 0 15 22
No 6 3 4 14 27
TOTALS 12 4 4 29
Q15. If you answered yes to 14, how much more would you be willing to pay?
RNO RNO RTS RTS Total business recreation business recreation
1‐10% 3 0 0 11 14
11‐25% 3 0 0 3 6
25‐50% 0 0 0 0
More than 50% 0 0 0 0
TOTALS 6 0 0 14
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Q16. If there were a self‐serve Avgas facility at RNO, please indicate how you might use it?
RNO RNO RTS RTS Total business recreation business recreation
Exclusively 9 3 1 2 15
Occasionally 4 1 10 15
Rarely or never 1 1 16 18
Total Responses 13 5 2 28 48
Q17. The cost to develop, operate, and maintain such a facility would need to be recovered. If you chose to purchase fuel using this facility, what would you reasonably expect to pay?
RNO RNO RTS RTS Total business recreation business recreation
Total Responses 12 4 2 21
Cost Only 1 1 11 13
Cost plus 10% 10 4 1 8 23
Cost plus 25% 2 2
Cost plus higher margin 1 1
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Q18. Based on your experience, what do other airports offer in infrastructure and services that the RTAA should consider?
RNO RNO RTS RTS business recreation business recreation
Total Responses 9 0 3 14
Comments
RNO Business
multiple repair and accessory shops. KCRO, KSCK, KMYF
flight training. Palo Alto.
self‐service fuel. 043, RTS, MEV, 041.
Nevada County
Non FBO parking and access
Choice of FBO
Avionics. KCRQ, KSCK, KMYF, KCNO
multiple FBOs. FAT, VGT, RDD, OAK, CCR, CXP, STS.
competitive fuel pricing, KUGT
RNO Recreation
None
RTS Business
KVGT staffed GA terminal with rental car on field, follow‐me, cart from airplane to terminal
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 85
Million air at LGB and VCV
KOGT multiple maintenance options
Due to RTS remote location, must improve access and logistic at the airport
more favorable lease structure
RTS Recreation
Restaurant. Minden
sufficient hanger space should be the norm, not exemplary. Restaurant on the field seems little to ask and draws business on weekends. Prescott, AZ airport is significantly smaller and has a restaurant. Pilot store such as you might find at Flabob or Gillespie field in San Diego
Food on site, courtesy cars, more rental car options, perhaps more than one FBO option, short term hangar rental e.g. KGEU, KMYF, KSBA, KPRB, KMHR
We need more hangars to dry more tenants to support our only FBO
loaner airport car
Restaurant such as Minden
Restaurant‐Minden
Cafe at Stead. Mindon, Red Bluff.
Food
24 hour fuel
Restaurant
Walk‐to food, cheaper fuel
Restaurant
Twenty‐year lease renewal. Carson City and many other airports
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 86
Private owned Hangar Stead
no fees
Again, Stead is dead. You need to greatly expand the hangar and sites available to create a vibrant economy. Right now, with the decline in Pilot population Stead is in a death spiral.
There are several that issue 50 year leases for hangars.
Q19 To what extent do you believe that the RTAA communicates openly and effectively with the local GA community?
RNO RNO RTS RTS Total business recreation business recreation
Very ineffective 4 2 6 12
Somewhat ineffectively 1 5 6
Undecided 1 1 9 11
Somewhat effectively 6 1 8 15
Very effectively 1 1 2 7 16
Total Responses 12 3 5 35
Note: “answered” includes those who left comments only
Comments
RNO Business
None
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 87
RNO Recreation
Communication with and interest in GA has improved with the new administration.
Currently the RTAA is doing a great job. previously ‐ not so good
I am an RTAG member which is my primary source [of information]. I hear almost nothing from RTAA.
RTS Business
NorCal Approach/Departure, Tower, and Ground are supportive of light aircraft GA. The RTAA by its actions have made it apparent that RNO does not want GA light aircraft. That's not a problem. Stead is a great pilot controlled airfield. It could use another FBO with maintenance and a double point self‐serve fuel island. The new terminal building looks nice.
Newsletter and details about activities on the ramp are excellent.
RTS Recreation
When the Meiser Hangar leases were extended, it was done without the input of other hangar owners. Now the Authority will say they have a precedent when other leases run out. The feeling expressed by RTAA is that GA should be financially pushed out of Stead as well as Reno.
Very poorly managed from the top down. Your business model consists of high fees and low service. Your airport manager at KRTS doesn't understand who he works for.. i.e., the CUSTOMER who are the tenants and pilots who operate at KRTS.
After all...GA was run out of RNO in pursuit of the big bucks.
Slow to act
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 88
Q20. What has been your experience with the RTAA leasing process?
RNO RNO RTS RTS Total business recreation business recreation
1 ‐ Difficult and Lengthy 3 1 6 10
2 – Lengthy 1 7 8
3 ‐ Undecided 4 1 2 5 12
4 – Easy 4 2 6
5 ‐ Quick and Easy 1 1 1 3 6
Total responses 13 2 4 23 42
Q21. Please provide any other suggestions or comments you have for the RTAA to improve GA services at its airports.
(see Appendix C)
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 89
Appendix C: General Comments from Responses Provided on Survey
These comments are also provided below Q21.
I have never renewed a lease but the perception among my hangar owner acquaintances is "it is not going to happen." The transfer from the previous owner went very quickly without a hitch, and the staff was open and easy to deal with.
Would have purchased a hangar but have not because a lease at RTS is only for the land. There is no guarantee that a current lease will be renewed. Why spend up to $100,000 on a hangar if you might be forced to tear it down and move it within 7 years?
provide draft of proposed lease when new leases are proposed
Promote competition by attracting another FBO for GA. I think an appropriate path is exemplified by what is going on at KSNA & KSCK. But I recognize KRNO is different in its geographic and economic characteristics.
Reduce complexity / language of T‐hangar lease
RNO needs more services for the hangar tenants like fuel on site, clean bathrooms and a facility rather than prowling around in a deserted FBO.
Stop the unjustified practice of annual hangar rent increases. KRNO property values have not increased each year during the past six years. The hangar electrical systems ‐ the 110 volt electrical system is antiquated and unable to meet winter demand for pre‐heart piston engines.
The lease is way too long to rent a T hangar and should be streamlined. RTAA tried to lease me a parcel and did not disclose it was land locked until months later. When trying to recover our expenses to develop this parcel, RTAA said to sue them or go away.
1. They promised we could set up an automatic charge to a credit card for the monthly rent but that has never happened. 2. How about someone calling the tenants every 6 months or so to ask how things are going and if there is anything the RTAA can do to improve the rental experience? 3. A self‐serve fuel island is LONG overdue
Repair hangars (doors) and pavement.
Fuel competition
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 90
Fix taxiway crack seams!
Fill expansion cracks at KRTS taxiways and ramps
Main complaint at RTS: numerous hangars not occupied by aircraft in apparent violation of lease agreement. My hangar was previously used as an auto repair shop. Hangar next to me now is used by commercial land surveyor for storage. There are numerous examples.
Standardize lease. Listen to the users and tenants
Overall I'm very pleased with "our" airports. My only real complaint is RNO has priced themselves out of my budget for flying. RTS ‐MEV‐CXP are all much cheaper for fuel, hangars, etc.
Build more hangers. Stead should be more business friendly‐‐no reason that place isn't a hub of activity
Make KRTS a destination by adding on airport food options and regular fly‐ins. As it is now, everyone based at KRTS is always flying elsewhere for breakfast, lunch, activities.
RTAA was a partner with GA 20 years ago when I was on the Board of Trustees. Now, that has changed and short leases with unhappy endings have proven that the partnership has ended. An increasing number of smaller GA airplanes can use Auto Gas. A refueling opportunity at Stead would be well used.
Realize who is the CUSTOMER and who you work for! KTRK had poor management for years and drove off many of the CUSTOMERS and now they have vacant hangars. You don't look at the users and tenants at KRTS as valued customers, but instead you look at them as being the problem! YOU have lost sight of who you serve and that you run an airport. Why run an airport if you don't value the customers? YOU have focused on yourselves and what you need to do to keep your job(s) and you only serve yourselves which is poor business in any business. The Reno Tahoe Airport Authority is focused only on $ and that is the bottom line for you folks. You are running a business and you have forgot that it is all about the customer just as the management of KTRK lost sight of who is the customer, however, it seems KTRK has possibly figured it out and may be making some positive changes up there.
Fuel prices at RNO have to be competitive with the local area. Think 100 nm radius. Access for GA to the terminal (food, shopping and passenger pick up / drop off. I realize security would be an obstacle.
Lease land to people that want to build their own hangar
You guys do a great job :) I flew off Stead for years, now I rent my hangar to a tenant.
Today, I have no contact with RTAA leasing.....I pay my bill and am left alone as long as my
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 91
Hangar Insurance policy is not misplaced. When that happens, why don't you just call vs sending me a $ 10 certified letter? Jeez ‐ save the money....that letter business ‐ that's how Bob White ran things. I am glad he is gone.
Runway and ramp at Stead are getting rough due to wide expansion cracks. Use of a crack sealer that would better fill and maintain the filled condition of the cracks.
Self‐serve fuel option, possibly a second FBO, better hangers and/or better maintained existing hangers, reasonable hanger rents, more maintenance, avionics and other repair services are needed. I just had a $20,000 repair I gas to take to shop in Carson because no one could do it in Reno. Also if I want to upgrade my avionics the plane has to go elsewhere.
We don't utilize hangars or have anything to do with aviation. We are the Go Kart track. Thank you for extending our lease. The kids are very thankful.
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 92
Appendix D: List of Abbreviations
FAA Federal Aviation Administration
FBO Fixed base operator, a commercial entity providing aeronautical services such as fueling, maintenance, storage, ground and flight instruction, etc., to the public.
GA General Aviation. Aviation activities that are not considered commercial or military flights. Includes recreational, business, air taxi, and public non‐ military flights.
MRO Maintenance, repair, and overhaul services provided for aircraft or UAS.
RNO Reno‐Tahoe International Airport
RTAA Reno‐Tahoe Airport Authority
RTS Reno Stead Airport
UAS Unmanned Aircraft Systems. Fixed‐wing aircraft or rotorcraft without an onboard pilot. Used in both public (military, law enforcement) and civil (all other uses) operations.
sUSA “Small Unmanned Aircraft Systems”, defined by having mass of less than 55 lbs.
August 12, 2014 CONFIDENTIAL Reno-Tahoe Airport Authority: General Aviation Development Strategy 93
Prepared by InterVISTAS Consulting LLC 1150 Connecticut Avenue, NW Suite 601 Washington, DC 20036
Tel: +1‐202‐688‐2220 Fax: +1‐202‐688‐2225 www.InterVISTAS.com