ANALYSIIS OF NEW
W FBO DEV
VELOPMEN
NT AT
CHATTAN
NOOGA METROPOL
M
LITAN AIR
RPORT
Preepared For:
Chattanoogaans for Fairr Aviation
P.O. Box 223, 71
11 Signal Moountain Road
d Chattan
nooga, TN 377405
Preepared By:
Min
nneapolis Offiice: 50 S 6th Sttreet, Suite 13770, Minneapoliis, MN 55402
Ph
hone: 612-335--8888; Fax: 61 2-334-3022
Seattle Offfice: 2723 California Ave SW
W, Seattle, WA
A 98116
Ph
hone: 425-392--7482; Fax: 4225-392-7330
January 6, 2011
Chattanoogans for Fair
F Aviatio
on
P.O. Box
x 223, 711 Siignal Mounttain Road
Chattano
ooga, TN 374
405
CT:
SUBJEC
FBO Developmen
D
nt Analysis Report
R
Chattaanooga Metrropolitan Airrport – Loveell Field
1001 Airport
A
Road
Chattaanooga, TN 37421
Marqu
uette File # 10032
1
Dear Sirss/Madams;
In accord
dance with your
y
request, we are prov
viding an anaalysis of a neew FBO devvelopment att the
Chattano
ooga Metropo
olitan Airport (Lovell Fiield-CHA) inn Chattanoooga, Tennessee. The
primary conclusions
c
are;
T prospectiive future geeneral aviatio
on business at CHA doees not supporrt developmeent
1. The
of a second faacility.
2. The
T fuel priciing currently
y in place on
n the field at FBO-1 is abbsolutely maarket
co
ompetitive; which
w
is adm
mirable in viiew of the fuuel flow feess imposed byy CMAA, whhich
arre the highesst in the regiion.
T use of pu
ublic funds to
o develop th
he facility is a public policy questionn; but no cappital
3. The
iss “free” and this would subject
s
the in
nvestment too a question w
whether the funds are beeing
pu
ut to highestt and best pu
ublic use. It is
i probable tthat the FBO
O-2 (as refereenced hereinn)
will
w produce a negative cash flow duee to certain ccompetitive issues exploored herein, tthus
crreating the potential
p
for a long term problem.
hattanooga Metropolitan
M
n Airport Auuthority (CM
MAA) RFP ittself describees
4. Finally the Ch
th
he managem
ment agreemeent as simply
y that; thus, oownership riisks will conntinue to resiide in
CMAA
C
purviiew, along with
w all financial responsiibilities for tthat FBO-2. In view of
prrojected opeerating deficiits this is esp
pecially relevvant.
dvise with an
ny questionss.
Please ad
MARQU
UETTE ADV
VISORS Louis W. Frillman
Presidentt
Minneapolis Office: 50 South Sixth
h Street, Suite 1370, Minneap
apolis, MN 554402
Ph
hone: 612-335--8888; Fax: 6112-334-3022
Seattle Officce: 2723 Califo
ornia Avenue S
SW, Seattle, W
WA 98116
Ph
hone: 425-392--7482; Fax: 4225-392-7330
TABLE OF CONTENTS
EXECUTIVE SUMMARY…………………………………………………………………….. ..
I-IV
SCOPE OF THE ANALYSIS .......................................................................................................
1
REGIONAL CHARACTERISTICS ............................................................................................
2
Demographic Profile .................................................................................................................
Economy ....................................................................................................................................
Higher Education ......................................................................................................................
Health Care ...............................................................................................................................
Culture, Attractions, Recreation .............................................................................................
Transportation ..........................................................................................................................
Chattanooga Metropolitan Airport .........................................................................................
3
4
8
8
8
9
11
COMPETITIVE AIRPORT ANALYSIS ....................................................................................
13
COMPETITIVE ANALYSIS .......................................................................................................
28
Demand for FBO Services at CHA .........................................................................................
a. General Aviation and Military Operations and Fuel Demand .........................................
b. Airline Operations and Fuel Demand .................................................................................
c. Demand for Aircraft Hangar & Support Space .................................................................
d. Demand for Aircraft Maintenance Services.......................................................................
e. Demand Indicated by Operational Levels at Comparable Airports ................................
28
32
33
34
35
35
Scenario 1, 2, & 3 ......................................................................................................................
Fuel Pricing ...............................................................................................................................
Capital Funds and “Freeness” .................................................................................................
Management ..............................................................................................................................
38
41
43
45
SUMMARY.....................................................................................................................................
46
ADDENDA
ARGI Analysis of FBO-2
Marquette Advisors Aviation Qualifications
RFP CHA 2010
Chattanooga Metropolitan Airport
Lovell Field
Executive Summary
Executive Summary 1. In the following report, Marquette Advisors assesses the CHA market to establish the
facts either supporting or not supporting a second FBO (“FBO-2”);
a. Support offered in the 2007 Master Plan has been invalidated by major demand
reductions during the intervening years. There is no evidence that nearby plant additions
will add to demand for FBO services.
b. As we say in the report, though the cost to construct FBO-2 is being funded by State
funds, startup and operating costs will likely result in cash losses of approximately $3 mil
by the 5th year of operations, hence there is no financial justification, in fact just the
opposite.
c. Pricing for fuel and hangar space offered by the existing FBO (“TAC Air”) is competitive
with surrounding airports, with 80% of general aviation aircraft arriving at CHA
purchasing fuel (“Capture Ratio”), hence there is no factual support to CMAA’s or
others’ assertions that fuel prices are too high. Two private hangar operations, both with
their own fuel supply, already provide on-field competition.
d. FBO-2 promises to offer needed supply of hangar space However, yet 25% of the
existing hangar storage at CHA currently stands vacant and represents years of supply for
new tenants at CHA. Put simply, FBO-2 will add to the supply problem, not solve it.
e. Airlines servicing CHA are becoming more demanding, including demands for cheaper
fueling services that would require the FBO to subsidize the airline, hence not acceptable
to TAC Air, and offering no financial incentive for FBO-2.
2. CMAA is under intense pressure to ensure CHA operates as a self-sufficient airport,
while TAC Air sees its CHA operation being threatened by a publically-funded
competitor in a declining market. The controversy, now in its 6th year, has caused
distortions and a mis-focus that need to be clarified and redirected;
a. CHA, like most US airports, is heavily subsidized by Federal grants of land and funds.
CMAA is charged with abiding by FAA guidelines attached to such grants, and otherwise
collecting revenues at least equal to operating costs, so that the airport is financially selfsufficient. Like comparable airports, CMAA has struggled to maintain such financial
self-sufficiency, mainly due to cost-cutting and service reductions by commercial
airlines.
b. TAC Air’s CHA operation is privately-held, has no access to grants of any kind, and
seeks to make a fair return on capital invested in its facility, equipment, and staff. TAC
Air has struggled at CHA based on industry-wide declines in general aviation activity and
decline in profit margins.
c. Both CMAA and TAC Air face increasing competitive forces affecting Airport and FBO
operations respectively. Both face the reality that prices charged must be competitive,
but at the same time profit margins have to be such to achieve financial goals. There is
nothing to suggest either is driving business away from CHA by demanding above
market pricing, rather the decline in airport activity which is wholly consistent with
industry trends;
Marquette Advisors
Page I
Chattanooga Metropolitan Airport
Lovell Field
Executive Summary
i. CMAA fuel flowage fees appear high, but only add 6 to 8 cents above the norm for
GA fuel,
ii. Pricing by TAC Air is proven in the following report to be completely market
competitive. This is counter to several unsupported claims to the contrary. The
only verified complaint has been from an airline demanding below-cost pricing for
fueling services. TAC Air and CMAA declined to supply what was effectively a
subsidy.
d. Operating an airport like CHA places emphasis on building and maintaining runways and
taxiways, obtaining grant dollars, and securing 3rd parties to conduct operations all
around the airport. Operating an FBO, like TAC Air, requires direct contact with
hundreds of customers, and constant attention to customer service and operational safety
standards and associated training, all in an intensely competitive environment. Access to
CMAA executives is not immediate and decisions have a bureaucratic time dimension,
whereas TAC Air management is expected to respond to customer questions and issues
on a real time basis. These fundamental differences are simply inherent, and have caused
the vast majority of US airports to focus airport staffs on airport operations, and welcome
private companies to operate FBOs.
e. The demand for FBO services at CHA was 35% higher in 2006, when CMAA invited all
interested parties to fund, construct and operate a second FBO. At the time GA activity
was growing strongly, and thus FBO companies were aggressively seeking such
expansion opportunities, but only if the cost of the facility could be justified by market
size and potential market share. The fact that no FBO companies submitted an
acceptable proposal to operate a FBO at that time, can only mean that experienced FBO
operators simply saw little or no return at CHA. Given the poor growth curve for
operational demand at CHA (-1.6% a year over 30 years), this should be no surprise.
f. There was no information released in 2006 by CMAA or any of the FBO companies to
either support or not support CMAA’s claim that substantial profit was possible by a
second FBO. This, of course, would be absolute support for CMAA’s efforts since it
would mean progress of CMAA towards self-sufficiency, but there was silence on the
issue. It is clear that the lack of response, then, by any substantive FBO company can
only mean it was not perceived as feasible.
g. Assuming for a moment that CMAA, in 2006, wasn’t motivated by the second FBO
making a profit, then what was the reason for the push for FBO-2?
i. Maybe to push prices down to stimulate the market? But GA customers were
showing their satisfaction with a verified 80% capture rate at TAC Air with all
hangars 100% full. Further, our investigation shows that lower prices by themselves
will not stimulate demand.
ii. Maybe to offer services ignored by the current FBO? None listed in the 2006 RFP
that TAC Air wasn’t already supplying.
Marquette Advisors
Page II
Chattanooga Metropolitan Airport
Lovell Field
Executive Summary
iii. Maybe to accelerate additional hangar space? But TAC Air was making proposals
to build new hangars, only to be rejected by CMAA. Such improvements represent
a real commitment by the FBO as the hangars ultimately are given (or revert) to the
airport, and all the while the FBO is paying lease amounts for the underlying
ground.
iv. Maybe to offer below-cost fueling services to airlines, thereby attracting new
service through an effective subsidy? If true, CMAA could have offered direct
subsidies to airlines, not to be expected from TAC Air.
h. At about the same time, CMAA pointed to the 2007 Master Plan as calling for numerous
FBO facilities to support predicted strong and steady growth in demand for hangars, fuel
and other FBO services. The precipitous decline in the US economy caught everyone by
surprise, and simply invalidated those predictions. By every measure, US airport activity
declined at breathtaking rates, requiring painful pull backs by airport and FBO companies
alike.
i. Inexplicably, CMAA has decided, in 2010, to proceed with its own funding of FBO-2,
inviting FBO companies to provide management services, this in the face of disastrous
declines in demand for FBO services and severe pressure on profit margins throughout
the industry. As in 2006, CMAA claims FBO-2 will contribute substantial profit, yet no
projection or any other detailed support has been offered. Instead, CMAA is asking FBO
companies to provide projections for FBO-2 in order to secure the management contract.
Since those projections are likely to be optimistic and CMAA has never advanced
support for claims of profitability, we evaluated this with the help of industry experts.
We were surprised at the small size of the market especially after the declines in 2008
and 2009. We learned that there could be a projected cash loss of approximately $3
million during the first 5 years of operation in FBO-2. Again, we assessed other potential
reasons for CMAA pushing for FBO-2;
i. Since the State has agreed to fund construction of the facility, maybe FBO-2 has a
cost advantage and can produce substantial profit? Net cash losses are projected at
approximately $3 million during first 5 years, hence CMAA is likely to have to find
funding sources instead.
ii. Maybe to offer services not currently available? No, in fact a Part 145 Repair
Station, required by minimum standards, is absent.
iii. Maybe to push down prices and stimulate the market? TAC Air fuel prices are
competitive with comparable airports, with an 80% capture ratio offering further
factual support. Hangar rates are substantially below new construction rates.
iv. FBO-2 offers needed 12,000 sf of hangar space? Available hangar space stands
currently at 50,000 sf, at rates nowhere near that required by new construction,
hence new space is not justified.
v. Offer airlines below cost fueling services? We assume CMAA can do this, but how
can this justify an entire FBO-2 facility?
Marquette Advisors
Page III
Chattanooga Metropolitan Airport
Lovell Field
Executive Summary
j. The FAA does not require on-field competition for FBO services as part of CMAA
accepting Federal grants.
3. Implications of CMAA constructing and operating FBO-2, assuming State funding
of facility;
a. CMAA will be forced to fund substantial cash losses, while competing for FBO
business in a limited market against a well-managed national FBO company.
Expertise of a respected 3rd party management company is likely to help
somewhat, though will not mitigate financial risk for CMAA. The management
agreement clearly places financial responsibility on CMAA.
b. Current prices are competitive, and an already high capture ratio indicates little
market stimulation is possible for GA business. Airline activity and related
fueling demand is likely to decline, and is already priced near cost, hence steady
decreases can be expected here instead of stimulation.
c. FBO-2 will be forced to offer hangar space at far below new construction rates,
further deteriorating an over-supplied hangar market currently 25% vacant.
d. TAC Air will suffer further financial losses, and will be forced to find ways to cut
costs, presumably including staff reductions, cutbacks of services or additional
charges for services, and fewer improvements to existing facilities.
e. Per CHA minimum standards, FBO-2 will be forced to add a Part 145 Repair
Station, adding more supply of aircraft maintenance services to an already oversupplied market, likely resulting in one or more airport business failures.
4. Alternatives to FBO-2;
a. CMAA and airport businesses cooperate in a regional marketing program to bring
tenants to the airport,
b. CMAA proposes a 3rd party to develop private hangars when demand returns,
c. CMAA lowers fuel flowage fee to competitive level,
d. CMAA offers airlines fueling incentives through partnership with TAC Air.
The following report details our analysis and conclusions. It is clear that development of FBO-2
has flaws and risks that have not been considered by CMAA, and will further aggravate an
already difficult business condition at CHA. Marquette Advisors
Page IV
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Scope of the Analysis
Marquette Advisors has been retained to provide Chattanoogans for Fair Aviation with an
overview of the proposed second FBO facility (“FBO-2”) being developed at Chattanooga
Metropolitan Airport-Lovell Field (“CHA”) by the Chattanooga Metropolitan Airport Authority
(“CMAA”). Specifically, Marquette has been asked to opine on whether or not FBO-2, now
under construction, is market justified; with specific focus being brought to questions identified.
That airport;





Encompasses 950 acres
Has two active runways, 7,400’ and 5,475’ with ILS systems
Is served by one commercial terminal, with four active commercial carriers providing
flights to major hub airports in the southeast and Midwest (Detroit-DTW). Those carriers
are Delta, Allegiant, American, and US Air. There are multiple flights a day to Charlotte
and Atlanta, with one per day each to Detroit and Dallas. Allegiant transits to Florida.
Inbound flights have similar characteristics.
Is served currently by one Fixed Base Operator, TAC Air.
Currently, CMAA has begun construction of FBO-2, to be owned by CMAA.
We have been asked to provide context to the following questions;




Whether or not sufficient future business exists to support FBO-2 at Chattanooga Airport.
Whether or not fuel prices are too high as alleged by varied parties to CMAA due to the
single FBO operator status of TAC Air.
Whether or not the fact that a grant providing access to capital to construct FBO-2 makes
the facility “free”, or is an incentive to build because of the nature of the grant.
Whether the fact that a manager is being retained to oversee FBO-2 reduces the risk to
CMAA short and long term.
The answers to these core questions are complex. We believe that they are guided, though, by
several undisputed facts;

The business atmosphere for General Aviation (“GA”) traffic nationally has been
negatively affected by the Great Recession. The FAA projects total business aviation hours
flown is negative both for 2007-2008 and 2009-2010. The GA traffic diminution since
completion of the 2007 CMAA Master Plan Update is particularly severe at CHA across all
categories.

The diminution in commercial air travel availabilities in Chattanooga is the direct result of
the close proximity of CHA to Nashville and Atlanta. General business recovery will not
substantially alter that basic competitive situation. It is not likely that, over time,
commercial air traffic will improve substantially as customers continue to drive to
Nashville and Atlanta due to their close proximity to CHA, and the cost-pricing advantages
offered by those two hub airports.
Marquette Advisors
Page 1
Chattano
ooga Metropo
olitan Airport
Lovell Fiield

FBO Devellopment Anaalysis
Priccing for fueel at GA facilities is direectly impactted by the trraffic at saidd field combbined
witth the comp
petitive land
dscape. It wiill be demoonstrated thaat traffic hass as much oof an
imp
pact, though
h, than on-field competiition. Nashvville is a cleaar example, with the hiighest
fueeling prices in the region
n with 2 FBO
Os on-field.
Our analy
ysis follows.
REGION
NAL CHAR
RACTERISTICS
Location
n
The Chaattanooga Metropolitan
M
n Statisticall Area is located inn southern Tennessee. The
Chattano
ooga MSA, as
a defined by
y the United
d States Censsus Bureau, is comprised of six couunties,
including
g three in southeast Tennessee
T
(H
Hamilton, M
Marion, andd Sequatchiie) and threee in
northwesst Georgia (Catoosa, Dade,
D
and Walker).
W
Thhe MSA iss anchored by the Citty of
Chattano
ooga. Chattaanooga is thee fourth-larg
gest city in T
Tennessee (aafter Memphhis, Nashville and
Knoxvillle. Below is a map show
wing the Chaattanooga MS
SA.
Chatta
anooga Metropolitan Statistical Arrea
Marquettte Advisors
Page 2
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Chattanooga is about 100 miles northwest of Atlanta, GA, 120 miles southwest of Knoxville,
TN, about 135 miles southeast of Nashville, and approximately 148 miles northeast of
Birmingham. Chattanooga abuts the Georgia border, and the region is at the junction of three
major interstate highways, I-24, I-75, and I-59.
Demographic Profile
Presented below is a summary of population and household growth estimates, as well as
household income data for the Chattanooga MSA. Current year estimates and five-year
projections are from ESRI Business Information Solutions, a nationally-recognized econometric
forecasting firm.
The Chattanooga MSA has an estimated population of 527,743 residents in 2010, up from
476,531 in 2000. Between 2010 and 2015, the population base is projected to increase to 550,725
residents, while the household base expands from 212,335 to 222,492.
Chattanooga MSA
Dem ographic Profile
Population
2000
476,531
2010 (estimated)
527,743
2015 (projected)
550,725
2010 - 2015 Annual Rate
0.86%
Households
2000
189,607
2010 (estimated)
212,335
2015 (Projected)
222,492
2010 - 2015 Annual Rate
0.94%
Median Household Incom e
2000
$37,300
2010 (estimated)
$48,378
2015 (Projected)
$54,659
Sources: US Census Bureau; ESRI Business Information Solutions
The metro area’s median household income is estimated at $48,378 in 2010, up from $37,300 in
2000. By 2015, the median household income is projected to be $54,659.
The table on the following page shows population estimates and growth trends for Chattanooga
and several other MSA’s throughout the broader region. Chattanooga’s projected growth rate, at
0.9% per year between 2010 and 2015 (4,596 persons/year) is modest compared to the other
metro areas shown. Atlanta is the closest and fastest growing metro area in the region, projected
to grow by nearly 2.0% annually over the next five years. Atlanta is the closest largest City to
Chattanooga and has an estimated 2010 metro population of just over 5.6 million people.
Marquette Advisors
Page 3
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Nashville is also one of the fastest-growing metro areas in the region, projected to grow by an
average of more than 30,000 persons per year between 2010 and 2015, reflecting a 1.9% annual
growth rate. Greenville-Spartanburg is projected to add more than 14,000 persons per year over
the next five years, which equates to a 1.5% annual growth rate.
Various Metropolitan Statistical Areas - Chattanooga, TN
Population Growth Trends, 2000-2015
Annual Growth Rates
Metro Areas
Chattanooga, TN
Atlanta, GA
Greenville Spartanburg, SC
Knoxville, TN
Nashville, TN
Asheville, NC
Birmingham, AL
Huntsville, AL
U.S. Census
2000
Estimate
2010
Forecast
2015
476,531
4,247,981
813,731
616,079
1,311,789
369,171
1,052,238
342,376
527,743
5,611,180
934,095
702,744
1,608,074
420,918
1,133,874
407,958
550,725
6,180,206
1,004,415
747,883
1,762,326
444,059
1,172,302
446,143
2000 to 2010
Number
Percent
2010 to 2015
Number
Percent
5,121
136,320
12,036
8,667
29,629
5,175
8,164
6,558
4,596
113,805
14,064
9,028
30,850
4,628
7,686
7,637
1.1%
3.2%
1.5%
1.4%
2.3%
1.4%
0.8%
1.9%
0.9%
2.0%
1.5%
1.3%
1.9%
1.1%
0.7%
1.9%
Source: ESRI
Economy
Chattanooga's economy is well established and diverse. Notable businesses with headquarters in
Chattanooga include Access America Transport, BlueCross BlueShield of Tennessee, CBL &
Associates, The Chattanooga Bakery, Chattem, Coker Tire, Covenant Transport, Double Cola,
Gordon Biersch Brewery Restaurant Group, Krystal, Litespeed, Miller & Martin, Olan Mills,
Inc., Republic Parking System, Retro Television Network (RTN), Rock/Creek, Tricycle Inc.,
Unum, and Tennessee Valley Authority (TVA). The city also hosts large branch offices of
Cigna, AT&T, T-Mobile USA and UBS.
Notable companies that have manufacturing or distribution facilities in the city include Alstom,
BASF, DuPont, Invista, Komatsu, Rock-Tenn, Domtar Corp., Norfolk Southern, Alco Chemical,
Colonial Pipeline and Buzzi Unicem. The William Wrigley Jr. Company has a prominent
presence in Chattanooga, now the sole production facility for Altoids breath mint products.
There is also a Vulcan Materials quarry located just northeast of the Lovell Field runway.
In July of 2008, Volkswagen Group of America announced plans to build its new production
facility in Chattanooga. The $1 billion plant, due to open in 2011, will serve as the group's North
American manufacturing headquarters. The plant is the first for Volkswagen since the 1988
closure of New Stanton, Pennsylvania's auto plant. The first stage of construction is designed to
provide annual capacity for the complete production of 150,000 automobiles, including bodyproduction, paint-shop and assembly operations. It is estimated that the plant will employ more
than 2,000 workers. In selecting a US headquarters, VW reportedly short-listed 25 sites,
including Chattanooga. According to Volkswagen CEO, Martin Winterkorn, VW chose
Chattanooga “because it outperforms (though only slightly) the next-best candidate sites in
Marquette Advisors
Page 4
Chattano
ooga Metropo
olitan Airport
Lovell Fiield
FBO Devellopment Anaalysis
terms, most
m
notably
y, of providing an ex
xisting infraastructure off componennts supplierrs, of
disposing
g over a quaalified workfforce and of the availabiility of arounnd 550 hectaares of develloped
property with direct transport
t
con
nnections.”1
The City
y’s largest em
mployer is the Tennesseee Valley Auuthority (TV
VA). They have their ppower
operation
ns located in
n Downtown Chattanoog
ga and emplooy several thhousand empployees.
L
Statistics (BLS) reported
r
thatt the unemplloyment ratee for Chattannooga
The U.S.. Bureau of Labor
fell 0.5 percentage
p
points
p
in Sep
ptember 201
10 to 8.3%. The unemployment ratee in Chattannooga
peaked in
i June 200
09 at 10.9%
%, and has since decllined by a full 2.6 peercentage pooints.
Unemplo
oyment in Chattanooga
C
remains well
w below T
Tennessee aand Nationaal unemployyment
rates, as shown below
w.
Unemplo
oyment Rate
U.S.
Tennesseee
Chattano
ooga
Seeptember 2010
9.6%
9.4%
8.3%
Chaange, 30 dayss
0.0
-0.2
-0.5
Channge, 1 yr.
-0.2
-1.4
-1.2
The grap
ph below sho
ows employ
yment by ind
dustry for thhe Chattanoooga MSA. The table oon the
following
g page show
ws estimated current emp
ployment byy industry forr Chattanoogga in compaarison
with seveeral other meetro areas in the broaderr region.
1
VW preess release.
Marquettte Advisors
Page 5
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Approximately 44% of the Chattanooga workforce is employed within the Services sector.
Manufacturing accounts for 13.2% of regional employment, while Retail Trade accounts for
11.3% of employment in Chattanooga. Total employment is estimated at 235,000 workers in
Chattanooga in 2010, compared to 336,000 in Knoxville, 399,000 in Greenville-Spartanburg,
188,000 in Huntsville, 738,000 in Nashville, 446,000 in Birmingham, and 191,000 in Asheville.
Marquette Advisors
Page 6
Employment by Industry (2010)
Various Metro Areas - Chattanooga, TN
Chattanooga
Industry:
Metro
1,415
Agriculture & Mining
15,798
Construction
31,124
Manufacturing
8,488
Wholesale Trade
26,644
Retail Trade
14,855
Transportation & Utilities
2,829
Information
20,278
Finance, Insurance & Real Estate
104,691
Services
9,667
Public Administration
235,791
Total
Source: ESRI
%
0.6%
6.7%
13.2%
3.6%
11.3%
6.3%
1.2%
8.6%
44.4%
4.1%
100.0%
Atlanta
Metro
9,403
176,309
164,555
89,330
270,341
155,152
84,628
190,414
1,107,221
103,435
2,350,787
%
0.4%
7.5%
7.0%
3.8%
11.5%
6.6%
3.6%
8.1%
47.1%
4.4%
100.0%
Greenville
Spartanburg
1,997
33,555
74,700
14,381
48,735
16,378
11,185
22,370
164,980
11,185
399,467
%
0.5%
8.4%
18.7%
3.6%
12.2%
4.1%
2.8%
5.6%
41.3%
2.8%
100.0%
Knoxville
Metro
2,358
22,232
30,316
13,474
43,453
16,169
5,053
19,200
169,097
15,495
336,846
%
0.7%
6.6%
9.0%
4.0%
12.9%
4.8%
1.5%
5.7%
50.2%
4.6%
100.0%
Nashville
Metro
5,908
54,649
71,634
33,971
85,666
34,709
20,678
57,603
336,017
37,663
738,498
%
0.8%
7.4%
9.7%
4.6%
11.6%
4.7%
2.8%
7.8%
45.5%
5.1%
100.0%
Asheville
Metro
2,294
17,015
21,221
6,309
22,368
6,309
3,250
8,794
95,970
7,647
191,176
%
1.2%
8.9%
11.1%
3.3%
11.7%
3.3%
1.7%
4.6%
50.2%
4.0%
100.0%
Birmingham
Metro
6,697
29,913
37,503
18,751
52,236
24,109
10,269
41,521
208,052
17,412
446,464
%
1.5%
6.7%
8.4%
4.2%
11.7%
5.4%
2.3%
9.3%
46.6%
3.9%
100.0%
Huntsville
Metro
1,130
10,358
27,874
4,520
20,340
5,838
3,013
8,098
90,401
16,762
188,335
%
0.6%
5.5%
14.8%
2.4%
10.8%
3.1%
1.6%
4.3%
48.0%
8.9%
100.0%
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Higher Education
Chattanooga is home to several institutions of higher learning. UT-Chattanooga is the second
largest campus of the University of Tennessee System, with a student population of over 10,000,
according to University enrollment statistics. Chattanooga State Community College is a twoyear community college with a total undergraduate enrollment of roughly 11,000 students.
Chattanooga also features a branch of the University of Tennessee’s College of Medicine
through an affiliation with Erlanger Health System. Covenant College, a private liberal arts
college operated by the Presbyterian Church in America, is located in Lookout Mountain,
Georgia, and has a student population of about 1,000. Southern Adventist University is located in
the suburb of Collegedale, Tennessee, and enrolls roughly 3,000 students.
Health Care
Chattanooga has three hospital systems. Erlanger Hospital is a non-profit academic teaching
center affiliated with the University of Tennessee's College of Medicine, as noted above. This is
the region’s main trauma center. Erlanger Hospital treats approximately 250,000 people every
year, according to the hospital’s published statistics. In 2008, Erlanger was named one of the
nation's "Top 100 teaching hospitals for cardiovascular care" by Thomson Reuters.
Parkridge Hospital is located east of downtown Chattanooga and is run by Tri-Star Health. TriStar also operates Parkridge East Medical Center in nearby East Ridge. Also located downtown
is Memorial Hospital, which is operated by Catholic Health Initiatives. In 2004, Memorial was
named one of the "Top 100 teaching hospitals" by Solucient Top Hospitals.
Culture, Attractions and Recreation
Chattanooga features several significant attractions known throughout the U.S. and beyond, the
most notable of which is the Tennessee Aquarium. Downtown Chattanooga features the Creative
Discovery Museum, a hands-on children's museum dedicated to science, art, and music, as well
as Hunter Museum of American Art, which was recently expanded. The Tennessee Riverwalk,
an approximately 13-mile long trail running alongside the river in downtown, is popular with
both locals and tourists. The Chattanooga Zoo at Warner Park is located a short distance from
the downtown area.
There are a number of well known museums in and around Chattanooga, including the Hunter
Museum of American Art, the Chattanooga History Center, the National Medal of Honor
Museum, the Houston Museum, the Bessie Smith Cultural Center, as well as the International
Towing and Recovery Hall of Fame and Museum. The Tennessee Valley Railroad Museum is
the largest operating historic railroad in the South.
Across the river from downtown is the “North Shore District,” spanning from the Olgiati Bridge
to the west and Veterans Bridge to the east. Several buildings in the district have been renovated
Marquette Advisors
Page 8
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
recently and the area draws locals and tourists to locally owned independent boutiques and
restaurants, plus attractions along the Chattanooga Riverpark system, including Coolidge Park
and Renaissance Park. Chattanooga's only floating hotel, the Delta Queen, is a unique attraction
alongside the North Shore, and is docked at Coolidge Park.
Chattanooga has a well established network of parks and scenic attractions. The red-and-black
painted "See Rock City" barns in the southeastern portion of the region are remnants of a nowclassic Americana tourism campaign to attract visitors to the Rock City tourist attraction in
nearby Lookout Mountain, Georgia. The mountain is also the site of Ruby Falls and Craven's
House. The Lookout Mountain Incline Railway is a steep funicular railway that rises from the
St. Elmo Historic District to the top of the mountain. There, passengers can visit the National
Park Service's Point Park and the Battles for Chattanooga Museum, which houses a diorama that
details the Battle of Chattanooga.
Natural attractions such as the Raccoon Mountain Reservoir and Raccoon Mountain Caverns, as
well as the Chattanooga Nature Center and Botanical Garden feature a number of outdoor
recreational activities. Other arboretums include Bonny Oaks Arboretum, Cherokee Arboretum
at Audubon Acres and Cherokee Trail Arboretum. The Ocoee River also provides opportunities
for rafting, kayaking, camping and hiking, and is located in Polk County, which is about a 1.5
hour drive from Chattanooga.
Transportation
Highways
Chattanooga is often referred to as the gateway city to the Deep South. It is situated about 100
miles northwest of Atlanta, GA, 120 miles southwest of Knoxville, TN, about 135 miles
southeast of Nashville, and approximately 148 miles northeast of Birmingham. Chattanooga
abuts the Georgia border, and the region is at the junction of three major interstate highways, I24, I-75, and I-59. The region’s highway network is illustrated by the maps on the following
page.
Marquette Advisors
Page 9
Chattano
ooga Metropo
olitan Airport
Lovell Fiield
FBO Devellopment Anaalysis
Regio
onal Contexxt
Metropolitan
M
n Highway Network
Marquettte Advisors
Pagge 10
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Public Transit
Chattanooga is served by the Chattanooga Area Regional Transportation Authority (CARTA), a
publicly-run bus company. CARTA operates 17 routes throughout the region, including a free
electric shuttle service in the downtown area.
Chattanooga Metropolitan Airport (CHA)
The Chattanooga Metropolitan Airport (“CHA”), (a.k.a. Lovell Field) offers non-stop service to
various domestic destinations. CHA is located approximately five miles east of Downtown
Chattanooga. The airport comprises 950 acres and features two asphalt runways, the longest of
which is 7,400 feet. General aviation is serviced by TAC Air. CHA features a single concourse,
with commercial air service being provided by carriers as follows:
Airline
Destination(s)
Allegiant
American Eagle
Delta Connection
U.S. Airways Express
Orlando and Tampa
Chicago (O’Hare), Dallas/Ft. Worth
Memphis & Atlanta
Charlotte, Washington D.C. (Reagan Nat’l)\
An aerial photo of the airport is provided on the following page. A detailed analysis of airport
facilities and operations is provided later in the report.
Marquette Advisors
Page 11
Chattano
ooga Metropo
olitan Airport
Lovell Fiield
Marquettte Advisors
FBO Devellopment Anaalysis
Pagge 12
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Competitive Airports Analysis
In order to assess the various aspects of the questions raised, we have completed a survey of
varied fields in order to determine what market circumstances would indicate, at other
competitive fields.
We have selected six locations as competitive airports for purposes of this analysis. The selected
airports were so chosen for:





Distance to Chattanooga, or
Size compared to Chattanooga, or
Competitive FBO structure, or
Population and or employment compared to Chattanooga, or
Some combination of all features
The airports included in this survey were;







Knoxville, TN
Atlanta, GA
Nashville, TN
Greenville-Spartanburg, SC
Asheville, NC
Birmingham, AL
Huntsville, AL
Contained on the following pages is a summary of the various facts exhibited at each of the
selected competitive airports.
Marquette Advisors
Page 13
Lovell Field Airport – Chattanooga, TN
Airport Name:
Location:
Lovell Field Airport
1001 Airport Road,
Chattanooga, TN 37421
Code:
CHA
Metro Area Population (2010): 527,743
Employment (2010):
235,791
# of Based Aircrafts:
96
# of Runways
2
Max Runway Length (Feet)
7,400
# of GA Operations (Annual): 28,392
FBO's on Airport:
1
Operations per FBO:
28,392
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$5.43
AVGAS
$5.42
Dekalb Peachtree Airport – Atlanta, GA
Airport Name:
Location:
Dekalb Peachtree Airport
2000 Airport Road, Atlanta GA
30341
Code:
PDK
Metro Area Population (2010): 5,611,180
Employment (2010):
2,350,787
# of Based Aircrafts:
447
# of Runways
4
Max Runway Length (Feet)
6,001
# of GA Operations (Annual): 144,373
FBO's on Airport:
3
Operations per FBO:
48,124
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$5.40-$6.00
AVGAS
$5.86-$6.69
Nashville International Airport – Nashville, TN
Airport Name:
Location:
Nashville International Airport
One Terminal Drive Suite 501,
Nashville, TN 37214
Code:
BNA
Metro Area Population (2010): 1,608,074
Employment (2010):
738,498
# of Based Aircrafts:
110
# of Runways
4
Max Runway Length (Feet)
11,030
# of GA Operations (Annual): 27,357
FBO's on Airport:
2
Operations per FBO:
13,679
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$6.22
AVGAS
$6.99
John C Tune Airport – Nashville, TN
Airport Name:
Location:
John C Tune Airport
110 Tune Airport Drive,
Nashville, TN 37209
Code:
JWN
Metro Area Population (2010): 1,608,074
Employment (2010):
738,498
# of Based Aircrafts:
117
# of Runways
1
Max Runway Length (Feet)
5,500
# of GA Operations (Annual): 72,270
FBO's on Airport:
1
Operations per FBO:
72,270
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$5.19
AVGAS
$5.49
Mcghee Tyson Airport – Alcoa, TN
Airport Name:
Location:
McGhee Tyson Airport
2055 Alcoa Highway, Alcoa,
TN 37701
Code:
TYS
Metro Area Population (2010): 702,744
Employment (2010):
336,846
# of Based Aircrafts:
173
# of Runways
2
Max Runway Length (Feet)
9,005
# of GA Operations (Annual): 40,369
FBO's on Airport:
1
Operations per FBO:
40,369
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$5.72
AVGAS
$5.38
Downtown Island Airport – Knoxville, TN
Airport Name:
Location:
Downtown Island Airport
2701 Spence Place, Knoxville,
TN 37920
Code:
DKX
Metro Area Population (2010): 702,744
Employment (2010):
336,846
# of Based Aircrafts:
102
# of Runways
1
Max Runway Length (Feet)
3,499
# of GA Operations (Annual): 82,490
FBO's on Airport:
1
Operations per FBO:
82,490
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$3.92
AVGAS
$4.73
Greenville Spartanburg International Airport – Greer, SC
Airport Name:
Location:
Greenville Spartanburg Airport
# 2000 GSP Dr Ste 1, Greer,
SC 29651
Code:
GSP
Metro Area Population (2010): 934,095
Employment (2010):
399,467
# of Based Aircrafts:
15
# of Runways
1
Max Runway Length (Feet)
11,000
# of GA Operations (Annual): 9,900
FBO's on Airport:
1
Operations per FBO:
9,900
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$5.18
AVGAS
$5.06
Greenville Downtown Airport – Greenville, SC
Airport Name:
Location:
Greenville Downtown Airport
100 Tower Drive, Greenville,
SC 29607
Code:
GMU
Metro Area Population (2010): 934,095
Employment (2010):
399,467
# of Based Aircrafts:
228
# of Runways
2
Max Runway Length (Feet)
5,393
# of GA Operations (Annual): 38,043
FBO's on Airport:
1
Operations per FBO:
38,043
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$5.07
AVGAS
N/A
South Carolina Technology & Aviation Center – Greenville, SC
South Carolina Technology &
Aviation Center
Location:
2 Exchange Street, Greenville,
SC 29605
Code:
GYH
Metro Area Population (2010): 934,095
Employment (2010):
399,467
# of Based Aircrafts:
67
# of Runways
1
Max Runway Length (Feet)
8,000
# of GA Operations (Annual): 17,199
FBO's on Airport:
3
Operations per FBO:
5,733
Total Fuel Volume (Gallons): 1,700,000
Jet A
Fuel Prices (Per Gallon):
$4.49
AVGAS
$5.12
Airport Name:
Hardwick Field Airport – Cleveland, TN
Airport Name:
Location:
Hardwick Field Airport
405 Airport Road Cleveland, Tn
37311
Code:
HDI
Metro Area Population (2010): 527,743
Employment (2010):
235,791
# of Based Aircrafts:
31
# of Runways
1
Max Runway Length (Feet)
3,300
# of GA Operations (Annual): 12,045
FBO's on Airport:
1
Operations per FBO:
12,045
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
N/A
AVGAS
$4.84
Asheville Regional Airport – Asheville, NC
Airport Name:
Location:
Asheville Regional Airport
61 Terminal Drive, Suite 1,
Fletcher, NC 28732
Code:
AVL
Metro Area Population (2010): 420,918
Employment (2010):
191,176
# of Based Aircrafts:
124
# of Runways
1
Max Runway Length (Feet)
8,001
# of GA Operations (Annual): 42,204
FBO's on Airport:
1
Operations per FBO:
42,204
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$5.53
AVGAS
$5.60
Huntsville International Airport – Huntsville, AL
Airport Name:
Location:
Huntsville International Airport
1000 Glenn Hearn Blvd,
Huntsville, AL 35824
Code:
HSV
Metro Area Population (2010): 407,958
Employment (2010):
188,335
# of Based Aircrafts:
89
# of Runways
2
Max Runway Length (Feet)
12,600
# of GA Operations (Annual): 22,237
FBO's on Airport:
1
Operations per FBO:
22,237
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$6.23
AVGAS
$5.40
Birmingham-Shuttlesworth International Airport –
Birmingham, AL
Airport Name:
Location:
Birmingham-Shuttleworth Airport
5900 Messer Airport Highway,
Birmingham, AL 35212
Code:
BHM
Metro Area Population (2010): 1,133,874
Employment (2010):
446,464
# of Based Aircrafts:
247
# of Runways
2
Max Runway Length (Feet)
12,002
# of GA Operations (Annual): 41,167
FBO's on Airport:
1
Operations per FBO:
41,167
Total Fuel Volume (Gallons):
Jet A
Fuel Prices (Per Gallon):
$5.69
AVGAS
$5.99
List of Airports in Various Cities
December 2010
General Aviation
# of
Runways
Max Runway
Length (Ft)
Jet A Fuel $
(Per Gallon)
AVGAS Fuel $
(Per Gallon)
Total Operations
(Annual)
FBO's
GA
Operations
per FBO
Area/Name
Code
# of Based
Aircraft
Chattanooga, TN
Lovell Field Airport (TAC Air)
CHA
96
2
7,400
$5.43
$5.42
28,392
1
28,392
PDK
447
4
6,001
$5.40
$6.00
$5.75
$5.86
$6.69
$6.26
144,373
3
48,124
BNA
110
4
11,030
2
13,679
117
1
5,500
$6.99
$6.89
$5.49
27,357
JWN
$6.22
$6.17
$5.19
72,270
1
72,270
TYS
DKX
173
102
2
1
9,005
3,499
$5.72
$3.92
$5.38
$4.73
40,369
82,490
1
1
40,369
82,490
GSP
GMU
GYH
15
228
67
1
2
1
11,000
5,393
8,000
$5.18
$5.07
$4.49
$4.69
$5.25
$5.06
N/A
$5.12
$5.09
N/A
9,900
38,043
17,199
1
1
3
9,900
38,043
5,733
HDI
31
1
3,300
N/A
$4.84
12,045
1
12,045
AVL
124
1
8,001
$5.53
$5.69
$5.60
$5.85
42,204
2
21,102
Huntsville, AL
Huntsville International Airport (Signature Flight Support)
HSV
89
2
12,600
$6.23
$5.40
22,237
1
22,237
Birmingham, AL
Birmingham-Shuttlesworth International Airport (Atlantic Aviation)
BHM
247
2
12,002
$5.69
$5.99
41,167
1
41,167
Atlanta, GA
Dekalb Peachtree Airport (Epps Aviation)
Signature Flight Support FBO
Atlantic Aviation
Nashville, TN
Nashville International Airport (Atlantic Aviation FBO)
Signature Flight Support FBO
John C. Tune Airport (Corporate Flight Mgmt FBO)
Knoxville, TN
Mc Ghee Tyson Airport (TAC Air)
Downtown Island Airport FBO
Greenville, SC
Greenville Spartanburg International Airport (Stevens Aviation)
Greenville Downtown Airport (Greenville Jet Center)
South Carolina Technology & Aviation Center (AvServe)
Donaldson Jet Center FBO
Stevens Aviation FBO
Cleveland, TN
Hardwick Field Airport (Crystal Air FBO)
Asheville, NC
Asheville Regional Airport (Landmark Aviation)
Odyssey Aviation FBO
Source: Marquette Advisors
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Competitive Analysis
This survey identifies a number of characteristics which directly impacts the questions raised.
Those questions, again, are as follows;




Whether or not sufficient future business exists to support a second FBO at Chattanooga
Airport.
Whether or not fuel prices are too high as alleged due to the single FBO operator status of
TAC Air.
Whether or not the fact that a grant is providing access to capital to construct the second
FBO facility (FBO-2) makes the facility “free”, and thus, containing less financial
exposure.
Whether the fact that a manager is being retained to oversee the facility reduces the risk to
CMAA short and long term.
Demand for FBO Services at CHA
Various Metropolitan Statistical Areas - Chattanooga, TN
Population Growth Trends, 2000-2015
Annual Growth Rates
Metro Areas
Chattanooga, TN
Atlanta, GA
Greenville Spartanburg, SC
Knoxville, TN
Nashville, TN
Asheville, NC
Birmingham, AL
Huntsville, AL
U.S. Census
2000
Estimate
2010
Forecast
2015
476,531
4,247,981
813,731
616,079
1,311,789
369,171
1,052,238
342,376
527,743
5,611,180
934,095
702,744
1,608,074
420,918
1,133,874
407,958
550,725
6,180,206
1,004,415
747,883
1,762,326
444,059
1,172,302
446,143
2000 to 2010
Number
Percent
2010 to 2015
Number
Percent
5,121
136,320
12,036
8,667
29,629
5,175
8,164
6,558
4,596
113,805
14,064
9,028
30,850
4,628
7,686
7,637
1.1%
3.2%
1.5%
1.4%
2.3%
1.4%
0.8%
1.9%
0.9%
2.0%
1.5%
1.3%
1.9%
1.1%
0.7%
1.9%
Source: ESRI
Marquette Advisors
Page 28
Employment by In
ndustry (2010)
Various Metro Arreas - Chattanooga, TN
hattanooga
Ch
Industry:
Metro
1,415
Agriculture & Minning
15,798
Construction
31,124
Manufacturing
8,488
Wholesale Trade
26,644
Retail Trade
14,855
Transportation & Utilities
2,829
Information
20,278
Finance, Insurancce & Real Estate
104,691
Services
9,667
Public Administraation
235,791
Total
Source: ESRI
%
0.6%
6.7%
13.2%
3.6%
11.3%
6.3%
1.2%
8.6%
44.4%
4.1%
100.0%
Atlanta
Metro
9,403
176,309
164,555
89,330
270,341
155,152
84,628
190,414
1,107,221
103,435
2,350,787
%
0.4%
7.5%
7.0%
3.8%
11.5%
6.6%
3.6%
8.1%
47.1%
4.4%
100.0%
Greenville
Spartanburg
1,997
33,555
74,700
14,381
48,735
16,378
11,185
22,370
164,980
11,185
399,467
%
%
0.5%
8.4%
%
18.7%
%
3.6%
%
12.2%
%
4.1%
%
2.8%
%
5.6%
%
41.3%
%
2.8%
%
100.0%
%
Knoxville
Metro
2,358
22,232
30,316
13,474
43,453
16,169
5,053
19,200
169,097
15,495
336,846
%
0.7%
%
6.6%
%
9.0%
%
4.0%
%
12.9%
%
4.8%
%
1.5%
%
5.7%
%
50.2%
%
4.6%
%
100.0%
%
Nashville
Metro
5,908
54,649
71,634
33,971
85,666
34,709
20,678
57,603
336,017
37,663
738,498
%
0.88%
7.44%
9.77%
4.66%
11.66%
4.77%
2.88%
7.88%
45.55%
5.11%
100..0%
Asheville
Metro
2,294
17,015
21,221
6,309
22,368
6,309
3,250
8,794
95,970
7,647
191,176
%
1.22%
8.99%
11.1%
3.33%
11.7%
3.33%
1.77%
4.6%
50.2%
4.00%
1000.0%
Birmingham
Metro
6,697
29,913
37,503
18,751
52,236
24,109
10,269
41,521
208,052
17,412
446,464
%
1.5%
6.7%
8.4%
4.2%
11.7%
5.4%
2.3%
9.3%
46.6%
3.9%
100.0%
Huntsville
Metro
1,130
10,358
27,874
4,520
20,340
5,838
3,013
8,098
90,401
16,762
188,335
%
0.6%
5.5%
14.8%
2.4%
10.8%
3.1%
1.6%
4.3%
48.0%
8.9%
100.0%
Comparative Analysis of Competitive Airports
December 2010
South
Carolina
Downtown Greenville
Technology
Birmingham- Chattanooga Chattanooga
Chattanooga
Dekalb
Peachtree Nashville John C. Mc Ghee
Island
Spartanburg Greenville &Aviation Hardwick Asheville Huntsville Shuttlesworth
Current
2012 Projected 2011ActualTwo
Airport International Tune
Tyson
Airport
International Downtown
Center
Field
Regional International International (Lovell Field) (Single FBO)
FBO's)
Code
PDK
BNA
JWN
TYS
DKX
GSP
GMU
GYH
HDI
AVL
HSV
BHM
CHA
CHA
CHA
Operations GA
48,124
13,679
72,270
40,369
82,490
9,900
38,043
5,733
12,045
21,102
22,237
41,167
28,392
47,000
29,000
FBO'S Onfield
3
2
1
1
1
1
1
3
1
2
1
1
1
1
2
16,041
6,840
72,270
40,369
82,490
9,900
38,043
1,911
12,045
10,551
22,237
41,167
28,392
47,000
14,500
447
110
117
173
102
15
228
67
31
124
89
247
96
122
122
Operations Per FBO
# of Based Aircraft
Source: Marquette Advisors
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
The projected annual growth rate for both population and employment is at the lower end of the
scale for the Chattanooga market area as compared to the other competitive markets.
Annualized operations at the competitive airports follow this trend. We include on the following
page the summary of factors that have been considered in determining the availability of future
airport business as indicated by the competitive analysis.
We note that CMAA’s Master Plan is based on FBO business levels and trends as of 2007, as
follows;
SUMMARY OF THE SELECTED FORECAST
Description
2007
2012
2017
2022
2027
Annual Enplanements
296,083
306,500
352,500
401,800
457,900
Commercial Passenger Annual Operations
20,270
20,900
21,600
22,300
24,700
114
122
131
140
151
44,164
10,973
1,520
78,651
116,270
47,000
10,640
1,830
80,300
122,700
50,100
10,320
2,200
84,200
131,400
53,400
10,000
2,660
88,400
140,700
57,000
9,700
3,200
93,000
151,000
8,861
10,678
12,867
15,504
18,683
Based Aircraft
Total General Aviation Operations
Total Military Operations
Total Air Cargo Operations
Total Operations
Instrument Operations
Total Short Tons of Air Cargo
Source: Chattanooga Metropolitan Airport Authority Master Plan Update
Given the severe economic decline which began in 2008, and is only now abating, any demand
analysis created prior to that time is likely to yield unrealistically high estimates of the level of
demand for FBO services, such as those in the 2007 Master Plan. That is because the estimates
and projections were based on what we now know was a historic high in terms of aviation traffic,
and therefore, is of little use in supporting a case for FBO-2. Unfortunately, that is the exact
platform (apparently) used by CMAA to support the development of FBO-2.
Marquette Advisors has conducted detailed assessments of actual demand levels for FBO
services based on verifiable, and current, facts relative to the following FBO revenue sources;
a) General Aviation and Military Operations and Fuel Demand
b) Airline Operations and Fuel Demand
c) Demand for Aircraft Hangar and Support Space
d) Demand for Aircraft Maintenance Services
e) Demand Indicated by Operational Levels at Comparable Airports
Current trends in airport metrics most relevant to demand for FBO services are shown in the
table below and discussed in turn in more detail;
Marquette Advisors
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Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
FBO Services Demand Metrics (CHA)
Air Carrier
Operations
Freight &
Other
FBO Customers
Gallons
Operations
Gallons
Total
Operations
Operations
Gallons
2006
9,153
1,700,000
34,627
2,470,000
1,951
45,731
4,170,000
2007
11,552
2,150,000
31,909
2,270,000
1,768
45,229
4,420,000
2008
11,786
2,200,000
30,211
2,150,000
1,743
43,740
4,350,000
2009
12,640
2,350,000
23,451
1,670,000
860
36,951
4,020,000
11,812
2,200,000
25,271
2010
2
Source: FAA ETMSC Data , ARGI Estimates
1,800,000
880
37,963
4,000,000
a.
General Aviation and Military Operations and Fuel Demand
A typical FBO derives the majority of its gross profit from the sale of fuel to general
aviation and military aircraft (“FBO Customers’). Such activity, shown to be growing
strongly in the CMAA Master Plan, has instead declined by 27% since 2006, as shown
below;
General Aviation and Military Demand for FBO Services
40,000
Operations
Gallons
35,000
3,000,000
2,500,000
30,000
2,000,000
25,000
1,500,000
20,000
1,000,000
15,000
500,000
10,000
‐
5,000
2006
2007
2008
2009
2010
Source: FAA ETMSC Data, ARGI Estimates
2
FAA ETMSC data is derived from flight plan data providing better operational counts and delineation of air carrier
operations. Local VFR operations are not included in these counts, providing more accurate metrics for measuring
the activity at CHA most affecting the level of demand for FBO services.
Marquette Advisors
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Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Another indication of demand for FBO services is the number of aircraft based at the
airport as reported annually by CMAA. Instead of the steady increases projected in
CMAA’s Master Plan, the number of based aircraft at CHA stands currently at 96, down
16% since the 2007 Master Plan.
Claims have been made in the 2007 Master Plan relating to nearby manufacturing plant
additions resulting in a surge of demand for FBO services, which appear to be part of the
basis for overstatements of demand.
Marquette Advisors has assessed comparable airports having experienced similar plant
additions and found that there is little or no basis for such claims. Specifically the BMW
plant built at Greenville has had no discernible impact on operational volumes.
Interviews with local operators reveal an addition of approximately 1 additional flight per
quarter. This is not surprising as the impact of technology and communications has
reduced travel needs across the US.
In addition, several nearby airports appear to be ahead of CHA in attracting aviation
activities, which could mean regional demand for FBO services will continue to be
diverted to various nearby airports. The new airfield at Cleveland, TN, will add to rather
than diminish the very competitive situation CHA now finds itself in. The assertion,
made publicly, that CHA must add facilities to maintain competition seems to ignore
these multiple and layered problems. Declining air traffic and increased competition from
nearby airports will not be resolved by adding facilities that will augment the existing
difficulties.
It has been alleged that the current, sole FBO (TAC Air) at CHA has set fuel prices above
the market, thereby causing all or part of the decline in demand for FBO services,
specifically fuel sales. Marquette conducted a detailed assessment of current fuel pricing
practices at CHA as compared to a number of surrounding airports and found no evidence
that pricing strategies have caused the precipitous decline in operations and fuel sales at
CHA. The simple fact that 80% of aircraft arriving on the FBO ramp choose to buy fuel
at TAC Air indicates a very competitive fuel pricing program, hence it is hard to
understand or substantiate claims of the opposite. The facts surrounding TAC Air’s price
competitiveness are detailed in the next section.
b.
Airline Operations and Fuel Demand
A secondary source of revenue for an FBO at CHA is gallons of fuel delivered to airline
aircraft, almost always on an “intoplane” basis, whereby the FBO first stores then
delivers fuel owned by the airline into the aircraft. Such airline operations have increased
by 30% since 2006, as shown below;
Marquette Advisors
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Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Airline Demand for FBO Services
14,000
Operations
2,500,000
Gallons
13,000
2,000,000
12,000
11,000
1,500,000
10,000
9,000
1,000,000
8,000
7,000
500,000
6,000
5,000
‐
2006
2007
2008
2009
2010
Source: FAA ETMSC Data, ARGI Estimates
Given the increasing presence of discount carriers offering service from surrounding
airports (like Southwest’s move into ATL), airline activity at CHA is likely to continue at
current levels or decline somewhat, which again contradicts CMAA’s 2007 Master Plan.
Further, Marquette understands the site for FBO-2 does not currently provide access for
fuel trucks to the airline ramp; hence it is unclear whether FBO-2 could compete
effectively for such business. Assuming CMAA is willing to invest additional capital in
the required access road, FBO-2 would be competing for a steady or declining demand
for airline-related services.
c.
Demand for Aircraft Hangar and Support Space
We interviewed the management of TAC Air, owner and operator of the existing FBO.
TAC Air is currently operating with 25% vacancy in its own hangars, this compared to
such space being 100% occupied in 2006 and 2007. In raw terms, there is 3 times as
much space available at TAC as the FBO-2 will contain when done.
Marquette estimates TAC Air has space available for an additional 18 aircraft based at
CHA before the available space is occupied (from the current 96 back to 114 reported in
2007), which means there is sufficient supply of space for years at TAC Air alone.
Marquette has also learned that an existing private hangar operation (“Jones Airway
Services”) is being vacated and is available for sale. Once vacated, the Jones Airway
Services facility will offer 20,000 sf of hangar space and 20,000 sf of office and shop
space, with an included fuel farm. It is obvious that this space will compete for users that
TAC and FBO-2 would otherwise be attempting to capture to fill their substantial
vacancies.
Marquette Advisors
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Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Therefore, there is approximately 50,000 sf of hangar space currently available at CHA,
representing many years of supply of space for any aircraft moving to CHA, and more
than 4 times the hangar space at FBO-2. This is in stark contrast to the CMAA 2007
Master Plan suggesting a short term demand for numerous additional hangars, which
presumably is being relied upon to support FBO-2.
As demonstrated by their 2006 proposal, TAC Air has offered to build additional
hangars, only to be turned down by CMAA. Hence CMAA appears to be restricting
adding the very space they are using to justify FBO-2, while there is clear evidence that
demand for the additional space simply does not exist.
In addition, CHA minimum standards require a Part 145 Repair Station be a part of FBO2, and given the limited hangar space and space requirements for aircraft repair, it is
unclear if any substantial space will be left over to offer as aircraft storage hangar space.
d.
Demand for Aircraft Maintenance Services
Marquette Advisors is aware of numerous airports comparable to CHA that cannot attract
a Part 145 Repair Station due to many independent shops failing and the larger aircraft
maintenance companies growing larger at current locations. TAC Air provides such
services at CHA through a tenant, in accordance with CMAA minimum standards.
Similarly, FBO-2 will be required to provide such services.
Per our assessment of the market, there is not sufficient demand for an additional aircraft
maintenance operation, and there is a substantial risk of spreading the existing demand to
the point that current providers will be forced out of business.
e.
Demand Indicated by Operational Levels at Comparable Airports
Our prior competitive analysis contains seven markets and thirteen airports. The current
range of annual operations per FBO in this analysis is 5,733 at the low end to 82,000+ at
the upper end. The average is 22,293, which is approximately 23,000 operations per FBO
per year.
From the previous table, we observe that the following operational projections were made
in the Master Plan in 2007;
Projected Future General Aviation Demand (From CMAA Master Plan Chart 3-47):


2012 Projected GA Operations- 47,000
2022 Projected GA Operations- 57,000
Current GA traffic, however, is currently 28,500 operations annually, or 39% below what
was projected. That is at significant variance with the operational projections set forth in
the 2007 Master Plan. In addition, the projections contained in that Master Plan reflect an
approximate 1%+ average annual traffic growth rate, which is significantly higher than
Marquette Advisors
Page 35
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
what has been experienced at CHA historically (-1.6% over 30+ years). Hence it is clear
the Plan is simply not a proper basis for expanding GA facilities, requiring major funding
from State and local sources.
Under any realistic scenario, it can be assumed that a FBO owned by the CMAA will
attempt to be market competitive at a minimum; at a worst case, given the public
statements that fuel pricing is “too high” (proven wrong in further analysis) it can be
safely assumed that downward pressure will be imposed on fuel prices, thus causing price
reduction to below market, and margin diminution in the new FBO-2, and causing the
same reductions in the existing FBO’s prices as they are forced to meet onfield
competition.
TAC Air has a capture rate (meaning number of planes arriving at the FBO ramp to the
number they fuel) of approximately 80%, meaning they provide fuel to 4 out of 5 planes
that transit their facilities. From a practical standpoint, TAC Air is a well-run operation,
with numerous national contracts and other ties to customers. FBO-2 will be fighting an
uphill battle for market share, and would be doing very well to capture a 20% to 33%
share over a 5-yr time horizon. There is simply insufficient business to support 2 FBOs as
proven by the business analysis set forth previously, augmented by the lack of response
to the March 2006 FBO RFP unsuccessfully promoted by CMAA.
The scenarios shown below are optimistic in light of these facts.
In the FBO business, the number of operations available to a given FBO determines
profitability. FBOs make money from;




Fueling aircraft
Maintenance & related activities
Multiple other related charges
Storage of based aircraft
All of this is derived from GA operational traffic that exists on a given field. The traffic is
related primarily to the services available, population, employment, and other market
features including number of regionally competitive airports.
We have calculated the number of operations per FBO for Chattanooga under three
scenarios;
1. Assuming that the existing FBO keeps 80% of existing and projected market
share
2. Assuming that the existing FBO keeps 75% of existing and projected market
share
3. Assuming that the existing FBO keeps 66% of existing and projected market
share
Marquette Advisors
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Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
We have assumed a 1.5% average annual growth rate based on current GA volumes. That
results in significantly lower GA volumes which differ considerable from the Master Plan
original projections, but since they are actual are considered determinative.
Scenario 1
2012 Share (29,500)
23,500 operations available for FBO-1 (80% share)
6,000 operations available for FBO-2 (20% share)
2022 Share (34,000)
27,200 operations available for FBO-1 (80% share)
6,800 operations available for FBO-2 (20% share)
Scenario 2
2012 Share (29,500)
22,100 operations available for FBO-1 (75% share)
7,400 operations available for FBO-2 (25% share)
2022 Share (34,000)
25,500 operations available for FBO-1 (75% share)
8,500 operations available for FBO-2 (25% share)
Scenario 3
2012 Share (29,500)
19,500 operations available for FBO-1 (66% share)
10,000 operations available for FBO-2 (33% share)
2022 Share (34,000)
22,500 operations available for FBO-1 (66% share)
11.500 operations available for FBO-2 (33% share)
Marquette Advisors
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Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Scenario 1 (80% Share) ‐ FBO‐1/TAC‐AIR
Blue = Current Operations, Red = Projected
40,000
35,000
30,000
34,000
29,500
27,200
23,500
25,000
20,000
15,000
10,000
5,000
0
2012
2012
2022
2022
Scenario 2 (75% Share) ‐ FBO‐1/TAC‐AIR
Blue = Current Operations, Red = Projected
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
34,000
29,500
2012
Marquette Advisors
25,500
22,100
2012
2022
2022
Page 38
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Scenario 3 (66% Share) ‐ FBO‐1/TAC‐AIR
Blue = Current Operations, Red = Projected
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
34,000
29,500
2012
Marquette Advisors
22,500
19,500
2012
2022
2022
Page 39
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Under any of the above scenarios, it can be seen that the opening of FBO-2 will simply place
both facilities under incredible strain and pressure as the business available will be divided
between the two facilities, based on how each approach pricing on fuel, and levels of customer
service provided. The fact is that FBO-2 will find it difficult to compete based both on its size
(12,000sf vs. 100,000sf+) and that TAC Air has established operating characteristics.
The availability of current or expected GA operations at CHA is not sufficient to provide a
level of business demand to support FBO-2. Nor will such business demand exist in the
future (2022 or beyond) as presented in the airport’s own Master Plan. All third party
demographics and employment growth statistics support this conclusion as well.
In each scenario, each facility will thus be only able to penetrate what business exists onfield, or as will exist in this slow growth airport. The current and projected future business
does not warrant construction of a second FBO at CHA.
Further, the opening and operation of FBO-2 presents real risk of cash losses for FBO-2 as
it likely will be at a competitive disadvantage with the existing FBO (TAC Air); which, in
turn, will present problems for TAC Air as negative cash flow for one operator tends to
have a negative impact on other competitors as well, both covered in more detail in the next
section.
Fuel Pricing
Many factors affect fuel pricing in the General Aviation environment. Some would argue that
onfield competition drives pricing strategies. That simplistic view is wrong, as easily observed.
Others might argue that prices are too high, but it is axiomatic that fuel users often think prices
are too high. This natural attitude is more accentuated as the aviation fueling environment has
been dramatically impacted in this last business cycle; with oil inflation causing over 100%
increases in fuel.
Volume of air traffic is a primary determinant of fuel pricing, and ease of airfield options within
nearby flying distance also plays into the pricing matrix. An FBO also has to pay the airport a
fuel flowage fee out of the profit derived from fuel pricing. Such fuel flowage is typically 4 to 7
cents per gallon, but CMAA demands more than twice this amount at 13 cents per gallon.
TAC Air’s competition for fueling is not only a competing FBO at CHA, but FBOs all across the
country as well as corporate operators themselves. As the efficiency of aircraft has increased
over the years, it has become quite common for aircraft to not fuel every time they stop. By
‘tankering’ from the location(s) that provide an aircraft owner/operator with the most benefit –
including corporate self-fueling – competition is created between every point at which an aircraft
stops.
Instead of relying on unsupported statements and innuendo, a factual analysis starts with current
prices as compared to competitive airports, as shown below:
Marquette Advisors
Page 40
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Fuel Prices at Various Airports
December 2010
Area/Name
Chattanooga, TN
Lovell Field Airport (Subject)
Code
Jet A Fuel $
(Per Gallon)
AVGAS Fuel $
(Per Gallon)
CHA
$5.43
$5.42
Atlanta, GA
Dekalb Peachtree Airport
PDK
$5.40-$6.00
$5.86-$6.69
Nashville, TN
Nashville International Airport
BNA
$6.17-$6.22
$6.89-$6.99
John C. Tune Airport
JWN
$5.19
$5.49
Knoxville, TN
Mc Ghee Tyson Airport
Downtown Island Airport FBO
TYS
DKX
$5.72
$3.92
$5.38
$4.73
Greenville, SC
Greenville Spartanburg International Airport
Greenville Downtown Airport
South Carolina Technology & Aviation Center
GSP
GMU
GYH
$5.18
$5.07
$4.49-$5.25
$5.06
N/A
$5.09-$5.12
Cleveland, TN
Hardwick Field Airport
HDI
N/A
$4.84
Asheville, NC
Asheville Regional Airport
AVL
$5.53-$5.69
$5.60-$5.85
Huntsville, AL
Huntsville International Airport
HSV
$6.23
$5.40
Birmingham, AL
Birmingham-Shuttlesworth International Airport
BHM
$5.69
$5.99
Source: Marquette Advisors
Pricing tends to be market determined. For example, Nashville is the second largest nearby
population, has the larger employment, has significantly higher annual GA traffic (Combined
market of 86,000 GA operations) and has the highest market pricing for fuel, approaching $7.00
per gallon for Jet A. One can see that of the airports below, the fuel pricing at Chattanooga
compares as follows;
Marquette Advisors
Page 41
Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Fuel Prices at Airports w/ 40,000+ GA Operations
December 2010
Area/Name
Chattanooga, TN
Lovell Field Airport (Subject)
Code
Jet A Fuel $
(Per Gallon)
AVGAS Fuel $
(Per Gallon)
CHA
$5.43
$5.42
Atlanta, GA
Dekalb Peachtree Airport
PDK
$5.40-$6.00
$5.86-$6.69
Nashville, TN
Nashville International Airport
John C. Tune Airport
BNA
JWN
$6.17-$6.22
$5.19
$6.89-$6.99
$5.49
Knoxville, TN
Mc Ghee Tyson Airport
Downtown Island Airport FBO
TYS
DKX
$5.72
$3.92
$5.38
$4.73
Greenville, SC
Greenville Spartanburg International Airport
Greenville Downtown Airport
South Carolina Technology & Aviation Center
GSP
GMU
GYH
$5.18
$5.07
$4.49-$5.25
$5.06
N/A
$5.09-$5.12
Asheville, NC
Asheville Regional Airport
AVL
$5.53-$5.69
$5.60-$5.85
Birmingham, AL
Birmingham-Shuttlesworth International Airport
BHM
$5.69
$5.99
Source: Marquette Advisors
The only conclusion that can be reached is obvious; fuel pricing at the existing FBO is market
competitive and obviously fits within the matrix of fuel pricing available at differing prices on
different fields similar in regional location and size. Adding a multi-million dollar and second
FBO facility, based on unfounded claims of above-market pricing at CHA, in the face of these
facts, makes no sense; financial or otherwise.
Capital Funds and “Freeness”
It has been suggested that the availability of airport grant funds from the State Aeronautical Fund
is effectively free, and thus this low cost aspect of the capital structure is a reason for
construction and development of the FBO-2.
There are multiple aspects to this; first, the view that capital is free, and second, the view that
free money is a reason to do anything. The third issue relates to a prior RFP process and its
result. Last, the operating burdens CMAA will assume has to be considered.
All capital has a cost. The source of the capital in the aeronautical fund is related to fees and
charges at all Tennessee airports; and thus is, in a real sense, publicly derived. The fact that any
one airport is able to derive access to any measure of funds, at no interest charge, construing that
the money thus is “free” flies in the face of the public interest.
Marquette Advisors
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Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
Second, development is a difficult and competitive business. The ownership and operation of
Fixed Base Operator facilities has become even more so over the past 5-10 years. The
construction and development of a facility with low or no cost capital effectively puts said
developer in a completely cost advantageous position.
The fact that a public entity would choose to do so, as in this case, is a public policy question.
The third issue is that when a similar RFP was issued in 2006, but with CMAA asking for private
development funding and ownership, there was no effective positive response. One respondee
said in a letter dated May 9, 2006,
“Based upon analysis of the Chattanooga general aviation market, TAC Air does not believe
sufficient demand exists to support a second FBO at the Airport”
Obviously, in a situation where there are two competitive facilities, one faced with amortizing
capital and one not, it makes competing very difficult.
An example follows;
FBO-1
Cost $5,000,000
Borrowings; $4,000,000
Loan Rate; 8%
Payment; $400,000
FBO-2
Cost $5,000,000
Borrowings; $0
Loan Rate; 0
Payment; 0
Simply put in the above example, FBO 1 has to create a profit margin of $400,000 before any
corporate profit can be driven to the bottom line.
The last and most pertinent issue is that if FBO-2 is in fact opened, the facility’s ability to
compete to a level that will make it viable economically is in question. Implications for FBO-2,
and for CMAA, are severe, since a small share in a small market will likely result in cash losses.
At Marquette’s request, Aviation Resource Group International (“ARGI”) estimates that FBO-2,
at a realistic business capture rate, will lose between $2.6 million and $3.2 million during the
first 5 years of operation3. This projected loss is not surprising given the fact that the planned
3
Aviation Resource Group International (ARGI) is a widely recognized aviation consultant. ARGI has prepared a
budget forecast for FBO-2 under three scenarios; with FBO-2 capturing 20%, 25%, and 33% of the existing and
projected business onfield. The results are problematic for FBO-2. Under any of the three scenarios, ARGI estimates
that FBO-2 could sustain annual operating losses of ($150,000) to ($300,000) annually by the 5th year of operations,
before startup capital expenditures and related overhead costs.
Marquette Advisors
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Chattanooga Metropolitan Airport
Lovell Field
FBO Development Analysis
facility will have difficulties competing for the reasons stated but is a clear alarm bell for the
FBO-2 and its future prospects. The implications for TAC Air will certainly include reduced
operating profit, leading one to ask how either FBO will afford the ongoing capital investment
needed in any FBO operation annually.
FBO-2 has more basic issues; the overhead necessary to run a FBO is out of scale with the size
of the planned facility at 12,000 sf. TAC Air has 100,000 sf of hangar and maintenance area,
and that obviously renders the existing FBO more competitive with available space. Given that a
fair assumption is that no one intentionally loses money, TAC Air’s standing vacancy at 25% is
more than twice the area now being constructed for FBO-2. And another 40,000 sf is currently
available as Jones Airway Services is available as previously stated. Finally, there is no present
internal road network for fuel trucks to transit from the airline road to the new FBO-2 site,
leading one to ask how that issue will be resolved to provide ease of service for fueling to and
from FBO-2.
The prior economic, demographic, and aviation analysis clearly demonstrate there is not
sufficient demand to justify FBO-2.
From a market perspective, nothing in life is free. Creation of this facility, in the face of the
likely business diminution to both FBO’s at the end of this process, will negatively impact both
the existing FBO and FBO-2. The grant nature of the funds at the end of that process does not
offset that negative business impact on the existing FBO, nor will it create nor contribute to
additional air traffic. It is simply unclear why, in the face of these facts, CMAA would use
public funds to accomplish what the private market rejected in 2006-at the height of the GA
market, since this action will not create business in a market already price competitive; rather
FBO-2 will take business away from a existing business with a long term commitment to the
CHA Airport, and likely encounter substantial financial exposure above and beyond the
expenditure of the public grant monies.
Management
Under the RFP included in the Addenda, it is readily observable that the contract calls for the
airport to carry ownership risks inherent in that ownership. Pricing margins, administration,
payroll, and other features all will be the responsibility of the CMAA.
For example, we cite the following;
“Section 4.03 - Agreement for Proposed Services
 The Successful Proposer will be required to enter into an Agreement to
provide the FBO Management Services at the Airport. A specimen form of the
Agreement will be provided at the Pre-Proposal Conference.
 The new general aviation facilities to be developed by the CMAA and
operated by the Operator are depicted on Exhibit “E”.
Marquette Advisors
Page 44
Chattanooga Metropolitan Airport
Lovell Field

FBO Development Analysis
Each proposer must outline all revenues and expenses, including its proposed
management fee for each of the five (5) Contract Years of the Term of the
Agreement.”
The above paragraph specifically states that CMAA will deposit to the FBO operating account
sufficient funds to maintain operations, without regard to revenues. This clearly places the entire
financial burden squarely on the CMAA.
Thus, the idea that the management agreement will remove the ownership burden from CMAA is
not the case, as the CMAA required agreement as referenced above, will require CMAA to
finance operations as needed. And we expect additional funding, in the form of operating losses,
are likely to be required given the operational difficulties and competitive forces in place at
CHA.
Summary
The development of FBO-2 is underway at CHA. Unfortunately, it appears that the varied
possibilities that might have been considered to craft a moderated solution to CMAA concerns
were not undertaken.
The prospective future general aviation business at CHA, does not support development of a
second facility.
The fuel pricing currently in place on the field offered by TAC Air is absolutely market
competitive; which is admirable in view of the fuel flow fees imposed by CMAA, which are the
highest in the region
The September 2010 CMAA RFP describes the management agreement as simply that; thus all
ownership risks will continue to reside in CMAA purview, which is especially important in light
of the projected operating deficits for FBO-2 for the foreseeable future.
The use of public funds to develop the facility is a public policy question; but no capital is “free”
and this will subject the investment to a question whether the funds are being put to highest and
best public use. It puts direct financial exposure on CMAA; in a situation where it is readily
observable that CHA does not have sufficient excess business to support two FBO operations at
profitable levels.
Finally, this does not answer a relevant question; if FBO-2 fails financially, what will the State
funding mechanism response be to the next CMAA request even in a case where there may
perfectly valid safety or technical assistance requests?
Marquette Advisors
Page 45
ADDENDA
ARGI ANALYSIS
CHA FBO-2: 5th Yr Projection
20% Mkt Share
Recast
% of Dept
Sales
25% Mkt Share
Recast
% of Dept
Sales
33% Mkt Share
Recast
% of Dept
Sales
(assumes no G&A or Land Rent expense)
Fuel Sales
Jet A
Avgas
IntoPlane Fees
Military (DESC)
Total Fuel Revenue
Cost of Sales
Gross Profit
2,112,000
95,000
39,600
76,620
2,323,220
1,837,420
485,800
90.9%
4.1%
1.7%
3.3%
100.0%
79.1%
20.9%
2,640,000
118,750
49,500
95,775
2,904,025
2,296,775
607,250
90.9%
4.1%
1.7%
3.3%
100.0%
79.1%
20.9%
3,440,000
130,200
51,310
119,823
3,741,333
3,039,883
701,450
91.9%
3.5%
1.4%
3.2%
100.0%
81.3%
18.7%
Facility Sales
Hangar Rental
Office Rental
Facility Fees
Total Facility Revenue
Cost of Sales
Gross Profit
82,600
20,832
87,144
190,576
0
190,576
43.3%
10.9%
45.7%
100.0%
0.0%
100.0%
82,600
20,832
108,930
212,362
0
212,362
38.9%
9.8%
51.3%
100.0%
0.0%
100.0%
82,600
20,832
119,823
223,255
0
223,255
37.0%
9.3%
53.7%
100.0%
0.0%
100.0%
Other Line Sales
Car Rental
Catering
Pilot Supplies
Misc. Income
Other Line Revenue
Cost of Sales
Gross Profit
21,450
18,558
19,983
73,854
133,845
31,014
102,831
16.0%
13.9%
14.9%
55.2%
100.0%
23.2%
76.8%
21,450
18,558
19,983
73,854
133,845
31,014
102,831
16.0%
13.9%
14.9%
55.2%
100.0%
23.2%
76.8%
21,450
18,558
19,983
73,854
133,845
31,014
102,831
16.0%
13.9%
14.9%
55.2%
100.0%
23.2%
76.8%
Line Services Revenue Summary
Fuel
F ilit
Facility
Other Line
Total Line Services Revenue
Portion of Total Revenue
Cost of Sales
Gross Profit
2,323,220
190,576
190 576
133,845
2,647,641
100.0%
1,868,434
779,207
87.7%
7.2%
2%
5.1%
100.0%
-70.6%
29.4%
2,904,025
212 362
212,362
133,845
3,250,232
100.0%
2,327,789
922,443
89.3%
6 %
6.5%
4.1%
100.0%
-71.6%
28.4%
3,741,333
223 255
223,255
133,845
4,098,433
100.0%
3,070,897
1,027,536
91.3%
5.4%
4%
3.3%
100.0%
-74.9%
25.1%
Operating Expense
Faciliites Operations
Shop Expense
Payroll & Benefits
Operating Lease
Repair & Maintenance (Facility)
Utilities
Telephone
Vehicle Expense
Vehicle Repair & Maintenance
Fuel Farm Expense
Credit Card Fees
Line Damage
Depreciation
Advertising & Promotion
Interest
Insurance
Other Operating Expense
Department Expense
40,716
5,934
485,000
0
16,719
27,963
4,926
181,104
47,763
10,209
42,119
4,875
0
22,908
0
121,344
75,000
1,086,580
1.5%
0.2%
18.3%
0.0%
0.6%
1.1%
0.2%
6.8%
1.8%
0.4%
1.6%
0.2%
0.0%
0.9%
0.0%
4.6%
2.8%
41.0%
40,716
5,934
525,000
0
16,719
27,963
4,926
181,104
47,763
10,209
52,649
4,875
0
22,908
0
121,344
75,000
1,137,110
1.3%
0.2%
16.2%
0.0%
0.5%
0.9%
0.2%
5.6%
1.5%
0.3%
1.6%
0.1%
0.0%
0.7%
0.0%
3.7%
2.3%
35.0%
40,716
5,934
575,000
0
16,719
27,963
4,926
181,104
47,763
10,209
63,178
4,875
0
22,908
0
121,344
75,000
1,197,639
1.0%
0.1%
14.0%
0.0%
0.4%
0.7%
0.1%
4.4%
1.2%
0.2%
1.5%
0.1%
0.0%
0.6%
0.0%
3.0%
1.8%
29.2%
-307,373
-11.6%
-214,667
-6.6%
-170,103
-4.2%
Department Profit (EBITDA Basis)
Over 5 years of start up:
(1,536,864)
(1,073,333)
(850,516)
Aviation Resource Group International 2010
MARQUETTE ADVISORS
QUALIFICATIONS
The Aviation Group
The Aviation Group
………………………………………
Profit pressures in the airline and airport industry have increased as the availability of federal funds has been
reduced, and corporate profits have eroded. As a results, airline and airport managements are increasingly
emphasizing the profitable utilization of on-site and peripheral real estate, both improved and unimproved.
Marquette Advisors’ Aviation Group has wide experience in developing solutions to real estate-based problems
involving real property located on or near major or minor hub facilities, as well as Fixed Base Operations. We
provide a full range of services in several areas of expertise, to both corporate and institutional clients.
AIRPORT RELOCATION
We have extensive experience in issues surrounding the potential relocation of major international airports,
including valuation impact analysis experience examining site alternatives as large as 50,000 acres.
MAIN BASE OPERATIONS
Our Experience includes valuation analysis of corporate airline facilities such as administrative offices,
maintenance hangars and operations serving Stage II and Stage III aircraft, as well as jet engine test cell
facilities. We provide a variety of valuation and counseling services for Fixed Base Operator (FBO) facilities,
related to leasehold and land valuation issues. We regularly are exposed to transactions on an industry-wide
basis, allowing us to maintain a large base of working data.
FLIGHT SIMULATOR FACILITIES
We have extensive experience in the analysis of both real estate and business interests in flight simulator
facilities. Built for training pilots for major airlines from around the world, these are technologically advanced
and integrated facilities requiring sophisticated real estate analytical skills.
AIRPORT ENVIRONMENTAL ISSUES
We recognize national experts on issues involved in evaluating the impact of airport environments on adjoining
land uses. We recently conducted a landmark counseling and valuation impact study involving 5,000 house
sales in a major market, and have been retained as an expert consultant on similar issues on a national basis.
AIRPORT EXPANSION VALUATION PROJECT
Marquette Advisors has developed a sophisticated system for managing the issues involved in acquiring
contiguous properties for airport expansion. Our capabilities include managing and integrating personnel with
data to achieve a managed and supported program involving literally thousands of pieces of data, enabling us to
manage an acquisition program of almost any magnitude, virtually anywhere in the world.
LEASE NEGOTIATIONS
We have extensive experience in the renegotiation of leases for major maintenance and hangar facilities at
major hub airports. Our services include lease analysis, negotiating strategies, and documentation of positions
through a variety of report types.
RETAIL MERCHANDISING
GVA Marquette Advisors provides complete development services in designing and executing airport profit
center strategies, now a focus of major and minor hubs around the U.S.
Our Clients benefit from working with professionals who have an intimate understanding of airport
management and economies, combined with a high degree of retail real estate expertise. From financial
analysis and financing structures to current knowledge of the newest retail trends, we can assist managements in
finding successful solutions for profitable retail development within the unique envelope of airport terminal
environments.
AIRPORT AND LAND ACQUISITION / RELOCATION
As recognized experts in public use of eminent domain for land acquisition and relocation projects, we can and
have managed the valuation process for properties located near major international airports.
………………………………………
Solving Aviation-Related Real Estate
Problems for Clients Worldwide
We provide innovative strategies for enhancing the value and profitability of your real property assets.
Facilities Management Consulting
Land Use Programming
Strategic Consulting for Property Interest Enhancement
Aviation Land Use Advisory Services
Lease Negotiation, Marketing and Strategies
Traditional Valuation Services
Value-Related Noise Impact Consulting
Airport Environmental Valuation
Airport Terminal Retail Redevelopment, Management & Leasing Strategies
Airport Expansion Valuation, Acquisition and Consulting
Property Acquisition Strategies
Facilities Development Consulting and Construction Management
Peripheral Site Development Strategies
The Only Name in Aviation Real Estate Consulting
Minneapolis: 50 South Sixth Street / Suite 1370 / Minneapolis, MN 55402 / 612-335-8888 / Fax 612-334-3022
Seattle: 2723 California Avenue SW / Seattle, WA 98116 / 425-392-7482 / Fax 425-392-7330
Minneapolis Office:
50 South Sixth Street, Suite 1370 / Minneapolis, MN 55402
Phone: 612.335.8888 / Fax: 612.334.3022
Seattle Office:
2723 California Av NW, Seattle, WA 98116
Phone: 425.392.7482 / Fax: 425.392.7330
www.marquetteadvisors.com
PROFESSIONAL QUALIFICATIONS OF
LOUIS W. FRILLMAN
President
MARQUETTE ADVISORS
Louis W. Frillman has been engaged in the real estate business nationwide since March 1975.
During this time, he has developed skills in all areas of real estate practice including the acquisition,
disposition, asset management, leasing, sale, financing, and valuation of industrial, commercial, and
residential properties, including all major types of income-producing real estate. Currently, Mr.
Frillman is President of Marquette Advisors, a national commercial real estate consulting firm
with a Aviation Specialty Group practice.
The Aviation Group is a specialty practice group operating within Marquette. The Aviation Group
specializes in real estate and financial consulting in all areas of the aviation business having to do
with property interests in an aviation setting. The Aviation Group has completed hundreds of
assignments on airports of all sizes including work on virtually all types of improvements: Hangars,
FBO’s, Maintenance Bases, Flight Simulator Facilities, Terminals, Concourses, and Retailing
within terminal environments. Marquette’s Aviation Group is a recognized expert in value
enhancement strategies in all aviation environments.
The Aviation Group has completed rate and charge studies, financial projections for large airfields,
and valuations of virtually all property interests both whole and fractional within all aviation
settings. The Aviation Group is a nationally recognized expert in aviation real property interests and
has been active in that environment for over 20 years.
The Aviation Group has been active in the American Association of Airport Executives, Airports
Council International, and The Airports Consultants Council. Marquette is regularly involved with
projects involving the FAA and FAA jurisdictional issues.
Mr. Frillman formerly was Executive Vice President of Marquette Partners, a 490 employee firm
that managed and oversaw 45 million sf of investment properties of all types, including regional and
community shopping centers nationwide, office properties and industrial investment portfolios.
In 1973, Mr. Frillman graduated from the College of St. Thomas with a Bachelor of Arts Degree in
Finance. He has completed both initial and ongoing educational coursework
Mr. Frillman has lectured and taught real estate valuation for the University of St. Thomas and has
been a guest lecturer at numerous continuing education seminars for the Law Board, NAIOP,
American Society of Real Estate Counselors, and NACORE He has been a guest lecturer for the
FAA as a qualified expert in aviation real property analysis.
PROFESSIONAL QUALIFICATIONS OF LOUIS W. FRILLMAN - Continued
Mr. Frillman is a member of the American Society of Real Estate Counselors, the real estate
counseling affiliate of the National Association of Realtors. He is an elected member of the
Appraisal Institute, has served on the MAI Demonstration Appraisal Reports Committee nationally,
and was a member of the Board of Directors for the local Institute Chapter as well as on the local
admissions committee. He has also served as Chairman of the Candidate Guidance Committee.
He is an invited member of both the Real Estate Counselors (CRE) and Lambda Alpha, the
international Land Economics Fraternity.
Finally, he is a qualified Fellow of the Royal Institution of Chartered Surveyors, the most highly
recognized professional real estate association in the world, based in London.
His charitable activities include eight years as director of Catholic Charities for the Elderly and
served that board as development coordinator of Marian Center, a skilled care and assisted living
care facility. He and his wife Carol are social and political activists. He is currently a Director of See
Your Impact, and The Unity Fund.
He has completed counseling assignments dealing with significant decisions regarding real property
utilized for real estate tax petitions, market feasibility and absorption analysis studies, valuations
and disposition of major business properties, and investment analyses for acquisition of property by
major pension accounts. In addition, he has provided counsel to real estate buyers, sellers, investors
and lenders concerning virtually all types of real estate.
Currently, he resides at 1661 Harbor Av SW, Unit 401, Seattle Washington. He and his wife
maintain a pied’ a tierre at 459 Portland in St. Paul, Minnesota. Mr. Frillman is married to the
former Carol A. Motsinger, and has four children.
CHA RFP 2010
CHATTANOOGA METROPOLITAN AIRPORT AUTHORITY
REQUEST FOR PROPOSALS
to provide
FIXED BASE OPERATOR MANAGEMENT SERVICES
at the
CHATTANOOGA METROPOLITAN AIRPORT
September 24, 2010
TABLE OF CONTENTS
I.
NOTICE AND REQUEST FOR PROPOSALS ...................................................................... 1
II.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
2.18
2.19
DEFINITIONS.................................................................................................................... 2
Addendum ........................................................................................................................... 2
Agreement ........................................................................................................................... 2
Aircraft Maintenance Services............................................................................................ 2
CMAA................................................................................................................................. 2
Commencement Date .......................................................................................................... 2
Contract Documents............................................................................................................ 2
Contract Year ...................................................................................................................... 2
Expiration Date ................................................................................................................... 2
FBO Services ...................................................................................................................... 2
Management Services ......................................................................................................... 3
FBO Management Consulting Services .............................................................................. 3
Operator .............................................................................................................................. 3
Pre-Proposal Conference .................................................................................................... 3
President.............................................................................................................................. 3
Principal .............................................................................................................................. 3
Proposal............................................................................................................................... 3
Proposal Closing Time ........................................................................................................ 3
Successful Proposer ............................................................................................................ 4
Term .................................................................................................................................... 4
III.
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
BACKGROUND ................................................................................................................ 4
Airport Information............................................................................................................. 4
Existing Fixed Base Operator ............................................................................................. 4
Existing General Aviation Facilities ................................................................................... 5
Historical General Aviation Activity .................................................................................. 6
New CMAA FBO Facilities................................................................................................ 7
FBO Services Management Operational Structure ............................................................. 8
Compliance with Minimum Standards ............................................................................... 9
Proposer’s Business Plan .................................................................................................... 9
Background Is Context Only ............................................................................................ 10
IV.
4.1
4.2
A.
B.
C.
D.
4.3
4.4
4.5
INSTRUCTIONS TO PROPOSERS & PROPOSAL REQUIREMENTS ...................... 10
Important Dates................................................................................................................. 10
Selection Criterion ............................................................................................................ 10
Proposer’s Competency, Experience and Business Plan .............................................. 11
Proposer’s Commitment to Service .............................................................................. 11
Management Fee ........................................................................................................... 11
Proper Completion of Proposal Forms ......................................................................... 11
Agreement for Proposed Services..................................................................................... 11
Time and Place to Submit Proposals ................................................................................ 11
Pre-Proposal Conference .................................................................................................. 11
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
i
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
Proposal Scope and Form ................................................................................................. 12
Withdrawal of a Proposal.................................................................................................. 12
Fidelity Bond .................................................................................................................... 12
Acknowledgment .............................................................................................................. 13
Addenda ............................................................................................................................ 13
Award of an Agreement .................................................................................................... 13
Annulment of Award ........................................................................................................ 14
Attorney-in-Fact................................................................................................................ 14
Disqualification of Proposals ............................................................................................ 14
Irregularities ...................................................................................................................... 14
Waiver ............................................................................................................................... 14
EXHIBIT A PROPOSAL FORM ................................................................................................. 15
EXHIBIT B QUALIFICATION FORM ...................................................................................... 20
EXHIBIT C ACKNOWLEDGMENT OF PROPOSER............................................................... 24
EXHIBIT D FIDELITY BOND FORM ....................................................................................... 27
EXHIBIT E GENERAL AVIATION AREA .............................................................................. 30
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
ii
CHATTANOOGA METROPOLITAN AIRPORT AUTHORITY
CHATTANOOGA METROPOLITAN AIRPORT
REQUEST FOR PROPOSALS
to provide
FIXED BASE OPERATOR MANAGEMENT SERVICES
September 24, 2010
I.
NOTICE AND REQUEST FOR PROPOSALS
Notice is hereby given that the Chattanooga Metropolitan Airport Authority, hereinafter
referred to as “CMAA,” pursuant to this Request For Proposals (“RFP”) will accept sealed
Proposals from interested and qualified parties wishing to provide Fixed Base Operator
Management Services (“FBO Services”) at the Chattanooga Metropolitan Airport (“Airport”),
from and at facilities to be provided by the CMAA, as described in Table III-6 herein, for a
period of five (5) years. Sealed Proposals must be delivered to the office of the President,
Chattanooga Metropolitan Airport, 1001 Airport Road, Suite 14, Chattanooga, TN 37421, no
later than 4:00 P.M. local time on November 12, 2010. After completion of the review process,
the CMAA intends to enter into a management agreement (“Agreement”) with one proposer who
has demonstrated to the satisfaction of the CMAA, in its absolute and sole discretion, that it: is
qualified to provide such FBO Services for the CMAA; has conducted a thorough and rigorous
assessment of the market for the FBO Services at the Airport; has a business plan capable of
execution; and, will provide the best combination of FBO Services to air carrier, general, and
corporate aviation at the Airport and financial consideration to the CMAA. Note: Proposers or
potential proposers are prohibited from contacting any member of the CMAA or any
employee of the Airport. Any and all questions or requests for clarification must be
submitted in accordance with Section 4.10 herein. Failure to adhere to this requirement
may be deemed grounds for disqualification.
The CMAA reserves the right to reject any and all Proposals, waive any formalities of
this RFP and to accept the Proposal, which it deems, in its sole and absolute discretion, to be the
most advantageous to the public and to the CMAA. If the CMAA accepts any Proposal pursuant
to this RFP, an Agreement will be tendered to the selected proposer for execution that
incorporates the provisions of this RFP and the successful Proposal, including any amendments
or differences negotiated by and acceptable to both the Successful Proposer (hereinafter defined)
and the CMAA.
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
1
All Proposals shall become the property of the CMAA.
II.
DEFINITIONS
The following words, terms and phrases, whenever used in this RFP, shall have the
meanings respectively ascribed to them in this Section. The following definitions shall be
equally applicable to both the singular and plural forms of any of the terms defined below:
2.1
“Addendum” shall mean any interpretation, revision or addition to this RFP
which may be issued in the form of a written Addendum by the CMAA.
2.2
“Agreement” shall mean an agreement by which the CMAA contracts to obtain
Management Services from an Operator pursuant to this RFP and by which the Operator agrees
to provide the Management Services to the CMAA.
2.3
“Aircraft Maintenance Services” shall mean aircraft services consisting of
maintenance and repair services and/or modification and fabrication services to aircraft at the
Airport.
2.4
“CMAA” shall mean the Chattanooga Metropolitan Airport Authority.
2.5
“Commencement Date” shall mean approximately July 1, 2011.
2.6
“Contract Documents” shall mean this RFP, the Proposal Forms,
Acknowledgment of Proposer, and the Fidelity Bond and all other documents required to be
submitted by a proposer.
2.7
“Contract Year” shall mean each twelve (12) month period during the Term of
the Agreement beginning on the Commencement Date of the Agreement or any anniversary
thereof during the Term and ending on the Expiration Date of the Agreement.
2.8
“Expiration Date” shall mean June 30, 2016, date for which the Agreement will
expire.
2.9
“FBO Services” shall mean all of the following services which shall be
provided twenty-four (24) hours per day for every day during the term of the Agreement:
(a) Flight line servicing, including sale and into-plane delivery of aviation fuels,
lubricants and other petroleum products;
(b) Arrival guidance and ramp service for general aviation aircraft users;
(c) Apron servicing of general aviation aircraft, including ramp assistance, battery
charges, compressed air, oxygen, de-icing, itinerant aircraft parking, catering, storage and
tie-down, etc.;
(d) Executive terminal service, including telephone facilities, on-premises snack
facilities, flight planning assistance, flight service station, Unicom, conference and office
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
2
facilities, pilot and customer lounges and other services and facilities in the executive
terminal, as directed by the President from time to time;
(e) Emergency service to disabled aircraft on the Airport with the capability to tow, or
otherwise transport and remove disabled aircraft up to 12,500 pounds gross weight from
the operational area of the Airport;
(f) Monitoring, collecting, recording, remitting and reporting to the CMAA any and all
revenues generated by the delivery of the FBO Services including landing fees, ramp
service fees, fuel sales and service, special service fees, executive terminal fees and
receipts, hangar rentals and charges and any other income, receipts and revenues;
(g) Direct telephone services to nearest FAA Flight Service Station;
(h) Courtesy van service to the main passenger terminal and restaurants and hotels within
a five to ten mile radius of the Airport; and
(i) Into-plane fuel service for commercial air carriers operating at the Airport at the
passenger terminal building, the air cargo aprons and other locations on the Airport where
into-plane fueling is needed from time to time; and
2.10 “Management Services” shall mean the provision and management of FBO
Services at the Airport on behalf of the CMAA.
2.11 “FBO Management Consulting Services” shall mean the on-call consulting
services which the CMAA may seek from the Successful proposer prior to the execution of the
of the Agreement and the Commencement Date thereof.
2.12 “Operator” shall mean the entity selected by the CMAA with respect to this
RFP which has executed an Agreement to provide the Management Services.
2.13 “Pre-Proposal Conference” shall mean a meeting by representatives of all
interested parties and the President or designee to be held in a location and at a time and date
established hereunder.
2.14 “President” shall mean the President and CEO of the CMAA and the individual
appointed by the CMAA to manage the daily operation of the Airport.
2.15 “Principal” shall mean a person or firm named in a Proposal as principal or
officer and having an interest in the Proposal and the Agreement to be entered into and executed
by the Proposer.
2.16 “Proposal” shall mean the required Contract Documents submitted by a
proposer in a manner and at a time and place pursuant to this RFP.
2.17 “Proposal Closing Time” shall mean the time and date established hereunder
after which no Proposal will be accepted.
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
3
2.18 “Successful Proposer” shall mean a proposer to which the CMAA offers to
award the right to provide the Management Services at the Airport.
2.19 “Term” shall be a period of five years beginning on the Commencement Date of
the Agreement and ending on the Expiration Date of the Agreement.
III.
BACKGROUND
3.1
Airport Information
The CMAA is the owner and operator of the Chattanooga Metropolitan Airport. The
Airport is located on approximately 1,000 acres of land, located six miles from downtown
Chattanooga. Existing facilities include the airfield, the passenger terminal building, automobile
parking facilities, rental car ready/return parking and service facilities, Airport maintenance
facilities, general aviation facilities, aviation leased facilities, aircraft rescue and fire fighting
(ARFF) facilities and fueling facilities.
The airfield consists of two runways, a taxiway system and navigational aids. The
primary runway is Runway 2-20, which has a length of 7,400 feet and a width of 150 feet. The
crosswind runway is Runway 15-33, which has a length of 5,575 feet and a width of 150 feet.
The commercial passenger terminal building was redeveloped in the early 1990’s and
offers a modern, well-appointed and well maintained facility. The ground level accommodates
the ticketing lobby, office and operations space for airlines that currently serve the Airport;
baggage claim facilities, rental car counter space along with other operational space. The
Airport’s general aviation facilities are located in two areas and comprise various buildings,
hangars and apron space. All existing general aviation facilities at the Airport are primarily
located east of Runway 2-20 and north of Runway 15-33 and include the executive
terminal/hangar facilities, as identified in Table III-1.
The air traffic control tower is located east of the cargo area on the southeast portion of
the airfield and operates from 6:00 a.m. to 11:50 p.m. Eastern. The facility is served by an
Airport Surveillance Radar (ASR) and provides air traffic control services to those aircraft
approaching, departing and traversing the Airport’s Class C airspace. The Airport is an origin
and destination airport, classified as a non- hub under FAA enplanement criteria, is served by
commercial passenger and cargo airlines. The Airport is the only primary commercial service
airport located in the six county Chattanooga Metropolitan Statistical Area.
3.2
Existing Fixed Base Operator
Services to general aviation aircraft at the Airport are currently provided by one existing
FBO. The CMAA is issuing this RFP because it wishes to bring competition to the FBO services
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provided at the Airport and to do so through a Management Services Agreement rather than a
concession agreement.
3.3
Existing General Aviation Facilities
The existing general aviation facilities at the Airport are depicted on the drawings
attached to this RFP as Exhibit “E” and include the following:
• One fully furnished and equipped FBO facility with an executive terminal/hangar
facility and associated automobile parking, itinerant and tie-down aprons, maintenance
hangars, storage hangars and fuel farms, with JetA and AvGas storage tanks. The FBO
fuel farms’ tanks and capacities are identified on Table III-2;
• 23 T- Hangars, and 10 bulk storage hangars; and,
• Corporate flight departments for numerous companies located in the Chattanooga area.
Table III-1
Chattanooga Metropolitan Airport
Existing Fixed Base Operator Executive Terminal/Hangar Space
Space Description
Square Feet
HANGAR BUILDING
Hangar Floor
Hangar Office/Storage/Shop
136,723 s.f.
52,220 s.f.
Total Hangar Floor
188,943 s.f.
EXECUTIVE TERMINAL
Terminal Lobby/Admin/Office Space
9,386 s.f.
Terminal Hangar Space
26,024 s.f.
Total Executive Terminal
35,410 s.f.
Table III-2
Chattanooga Metropolitan Airport
Existing Airport Fuel Farm Tanks and Capacity
Tank Type
AvGas
JetA
JetA
Quantity
Gal Capacity
Total Gal Capacity
1
2
2
15,000
15,000
20,000
15,000
30,000
40,000
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3.4
Historical General Aviation Activity
The following general aviation information is offered to help inform proposers,
experienced in the general aviation industry, estimate the general aviation market at the Airport.
Tables III-3 and III-3.1 detail the historical aircraft operations by type at the Airport for
the last five (5) calendar years.
Table III-3
Chattanooga Metropolitan Airport
Historical Itinerant Aircraft Operations
Type of
Operation
Air Carrier
2004
5,225
2005
5,006
2006
4,066
2007
3,687
2008
3,955
AAGR
-6.73%
Air Taxi
18,129
18,429
18,184
18,479
18,970
1.14%
GA
40,301
37,400
37,349
36,016
31,494
-5.98%
Military
7,809
9,184
7,661
7,246
7,243
-1.86%
Airport
Total
71,464
70,019
67,260
65,428
61,662
-3.62%
Source: Terminal Area Forecast (“TAF”)
Table III-3.1
Chattanooga Metropolitan Airport
Historical Local Aircraft Operations
Type
Civil
Military
Total
2004
2005
2006
2007
2008
17,140
6,810
23,950
13,455
8,638
22,093
9,305
5,102
14,407
9,467
3,756
13,223
9,138
3,859
12,997
AAGR
-14.55%
-13.24%
-14.17%
Source: Terminal Area Forecast (“TAF”)
In Calendar Year 2008 there were 31,494 general aviation aircraft operations at the
Airport. Table III-4 identifies the number of general aviation aircraft based at the Airport. As
noted, there are presently 114 such aircraft based at the Airport.
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Table III-4
Chattanooga Metropolitan Airport
Based Aircraft
Single Engine
36
Multi Engine
16
Fixed Wing Turbo
61
Helicopter
1
Total
114
In evaluating the potential general aviation market at the Airport, prospective proposers
may also wish to consider fuel volume/sales and FBO revenue information. Table III-5
identifies fuel sales in gallons and dollars for calendar years 2006 through 2009.
Table III-5
Chattanooga Metropolitan Airport
Historical Fuel Sales
Fiscal Year
2006
2007
2008
2009
AVGAS
Gallons
Sales
169,660
$659,645
148,524
653,585
110,995
580,313
100,353
417,557
JET A
Gallons
Sales
3,182,337 $8,398,404
3,455,152
9,595,790
2,994,599
9,685,679
3,060,415
6,116,530
Additionally, Table III-6 identifies the hangar and aircraft storage facilities that will be
managed under the Agreement. Rates for the new facilities will be approved by the CMAA and
will be subject to change from time to time.
3.5
New CMAA FBO Facilities
The new general aviation facilities to be developed by the CMAA and operated by the
Operator are set forth in Table III-6.
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Table III-6
Chattanooga Metropolitan Airport
Facilities to be Managed under FBO Services Management Agreement
New FBO:
• 1 – 9,000 sq. ft. Terminal
• 1 – 12,000 sq. ft. Hangar
• 1 – Ramp 182’ X 1,200’
• 3 – Taxiway Connectors
• 30 – Aircraft Parking on ramp
• 66 - Vehicle Parking Spaces
• 6 – Future Hangars developed as needed for total 80,000 sq. ft.
• 53 - Vehicle Parking Spaces expanded as needed for a total of 160
• 12 acres
New FBO Fuel Farm:
• 2 – 20,000 gallon Jet A storage tanks;
• 1 – 12,000 gallon AvGas storage tank
3.6
FBO Services Management Operational Structure
Prior to the execution and commencement of the Agreement, the CMAA anticipates
receiving FBO Management Consulting Services from the Successful Proposer. Upon the
Commencement Date of the Agreement, the Operator will provide FBO Services described
herein or as may otherwise, from time to time, be directed by the President, for a fixed level of
compensation plus a percentage of net income. The CMAA will approve the prices for the FBO
Services, provide the facilities from which the Operator will operate and fund approved expenses
associated with operating under the Agreement. Operator will report and remit all revenues
generated from the provision and management of the FBO Services to the CMAA in a prescribed
time frame and manner and the CMAA will fund approved expenses under the Agreement, also
in a prescribed time frame and manner.
Operator shall annually provide a recommended operating budget, which shall be used by
the CMAA and Operator as a means of monitoring and controlling revenues and expenses of
Operator and to measure performance under the Agreement. The annual operating budget will
be subject to CMAA approval as will unbudgeted, extraordinary expenditures that arise during
the course of each budget year and changes in employee expenses, including, but not limited to,
wages and headcount.
Operator shall bill the agreed upon annual management fee in equal monthly installments
through a request for payment, accompanied by the corresponding monthly financial statements
and year-to-date financial statements showing actual year-to-date performance against budget.
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Any compensation due Operator based on a negotiated percentage of net income will be
reconciled and paid within three (3) months of the end of each year under the Agreement.
Under the Agreement, the CMAA will provide the facilities from which Operator will
operate and the facilities which Operator will manage and lease.
Under the Agreement, the Operator will sell fuel on a retail basis on behalf of the CMAA
to general aviation and commercial aircraft operators at the Airport, including any corporate
tenants who wish to purchase fuel, cargo airlines and passenger airlines. Operator will
requisition fuel for delivery to the fuel farm and withdraw such fuel from the farm to be pumped
by Operator into the aircraft of various CMAA customers including airlines and other
commercial and private aircraft operators who select Operator to fuel their aircraft.
The CMAA will provide the facilities, furniture and fixtures necessary to operate the
Management Services. The CMAA will also provide maintenance on the buildings, hangars,
aprons and improvements comprising the FBO facilities, including the fuel system, as well as all
utilities and janitorial services. All of CMAA’s expenses associated with the Management
Services will be included in the calculation of the FBO’s operating surplus. Operator will
provide all machinery and equipment, including maintenance, snow removal, and foreign object
debris removal as required for the FBO facilities. Operator will also provide its necessary
communications.
Under the Agreement, the CMAA will have early termination rights upon notice to the
Operator.
3.7
Compliance with Minimum Standards
The Successful Proposer will be required to satisfy the Airport’s Minimum Standards for
Full Service Fixed Base Operators and Specialty Service Operators at Lovell Field to the extent
applicable to the FBO Services including, without limiting the generality hereof, obtaining all
necessary licenses and certificates required to conduct the FBO Services. The Minimum
Standards are available on the CMAA’s website:
www.chattairport.com/airport_authority.min.standards.htm.
3.8
Proposer’s Business Plan
The CMAA expects that any financially qualified proposer will have conducted a
thorough market analysis and will have a business plan and pro forma financial forecasts in
support of its decision to submit a Proposal. Such business plan and financial pro forma must be
submitted with the Proposal and the CMAA will consider the merits of such information in
deciding whether a particular proposer is qualified to manage the FBO at the Airport.
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3.9
Background is Context Only
This background section is provided to set the context in which the CMAA will consider
the selection of an Operator. The details of the Proposal process, the selection process and the
Specimen Agreement, are set forth with particularity in the following sections of this RFP and
the exhibits hereto. Proposers must refer to the entirety of this RFP and the exhibits hereto for
detailed instructions to guide them in conforming to the RFP requirements and selection process.
IV.
INSTRUCTIONS TO PROPOSERS & PROPOSAL REQUIREMENTS
An Agreement may be awarded, and proposers shall submit Proposals, subject to the
following guidelines, limitations, terms and conditions:
4.1
1.
2.
Important Dates
Public Advertisement
Pre-Proposal Conference
3.
Last Date for Proposal Withdrawal
4.
Proposal Closing Time
5.
6.
Anticipated Award Date
Commencement Date
September 24, 2010
October 8, 2010
10:00 A.M. Local Time
November 12, 2010
3:59 P.M. Local Time
November 12, 2010
4:00 P.M. Local Time
December 20, 2010
July 1, 2011
4.2
Selection Criterion
An award will be made by the CMAA to the Proposer which demonstrates, in the sole
and absolute discretion of the CMAA, that it is financially responsible, has adequate
qualifications to provide the Management Services and that has made the best overall proposal to
the CMAA. IN DETERMINING THE QUALIFICATIONS OF A PROPOSER THE CMAA
WILL PLACE EMPHASIS ON THE PROPOSER’S EXPERIENCE AND ON THE QUALITY
OF THE PROPOSER’S MARKET ANALYSIS, BUSINESS PLAN AND FINANCIAL PRO
FORMA, ALL OF WHICH MUST BE INCLUDED WITH THE PROPOSAL.
All proposers must provide the information on the required Qualification Form attached
as Exhibit “B” to this RFP. If the proposer is a joint venture or partnership, the Qualification
Form must be submitted separately for each participant in the joint venture or partnership except
that the submission of financial information may be limited to the assets of the joint venture or
partnership if so indicated at the discretion of the proposer.
The CMAA reserves the right, in its sole discretion, to reject any or all Proposals.
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The following criteria will be used by the CMAA, in its sole discretion, in evaluating the
Proposals submitted.
A.
Proposer’s Competency, Experience and Business Plan
Proposer must be financially responsible, have the necessary qualifications and a sound
business plan for delivering the Management Services. The business plan must include a five
year projection of revenues, expenses, management fee and revenue to the CMAA for each
Contract Year, with the first Contract Year commencing on the Commencement Date.
B.
Proposer’s Commitment to Service
Proposer’s commitment to service as outlined in its Proposal as well as proposer’s
general reputation for service in the industry.
C.
Management Fee
The amount of proposer’s management fee for providing the Proposed Services each for
Contract Year of the Term of the Agreement as set forth in the Proposal.
D.
Proper Completion of Proposal Forms
CMAA will assume that the thoroughness and professional manner with which proposer
prepares and completes the RFP is an indication of the manner in which proposer may approach
its performance under the Agreement.
4.3
Agreement for Proposed Services
The Successful Proposer will be required to enter into an Agreement to provide the FBO
Management Services at the Airport. A specimen form of the Agreement will be provided at the
Pre-Proposal Conference.
The new general aviation facilities to be developed by the CMAA and operated by the
Operator are depicted on Exhibit “E”.
Each proposer must outline all revenues and expenses, including its proposed
management fee for each of the five (5) Contract Years of the Term of the Agreement.
4.4
Time and Place to Submit Proposals
Attached as Exhibit “A” is the Proposal Form, as Exhibit “B” is the Qualification Form,
and as Exhibit “C” is the Acknowledgment of Proposer, all of which will comprise the Proposal
and which must be received at the office of the President, Chattanooga Metropolitan Airport
Authority, Chattanooga Metropolitan Airport, 1001 Airport Road, Suite 14, Chattanooga, TN
37421, no later than 4:00 P.M. local time on November 12, 2010 at which time and place all
Proposals will be opened.
4.5
Pre-Proposal Conference
A Pre-Proposal Conference will be held in the Airport’s administration offices located on
the second level of the commercial passenger terminal building at 10:00 A.M. local time on
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October 8, 2010. The Pre-Proposal Conference will include a review of the Contract
Documents, a question and answer period and a familiarization site visit. Parties interested in
submitting Proposals are encouraged to attend this conference.
4.6
Proposal Scope and Form
Proposals submitted pursuant to this RFP shall be sealed, with the envelope or cover
marked “PROPOSAL FOR FBO MANAGEMENT SERVICES”, together with proposer’s
name and return address. All Proposals and all Contract Documents will become the property of
the CMAA and shall not be returned unless a written request to withdraw is received prior to
4:00 P.M. local time on November 12, 2010 (Proposal Closing Time).
The Proposal must be submitted on an exact reproduction of the Proposal Form attached
hereto as Exhibit “A”, including any revised or additional Proposal Forms supplied by Addenda
which may be issued, in three (3) counterparts in a manner easily reproducible.
In submitting the Proposal Form, the proposer should note that distinctions are made in
the form of execution and supporting information required depending upon whether the proposer
is an individual, partnership, joint venture, limited liability company or corporation. The
proposer, in supplying the information required, must execute the appropriate form according to
the type of business form proposer has adopted.
Submission of a Proposal shall constitute authorization for the CMAA and its
representatives and agents to make such copies of the Proposal or portions thereof and to
distribute such copies as may be necessary or desirable to carry out the CMAA’s objectives.
4.7
Withdrawal of a Proposal
No Proposal may be withdrawn after it is filed unless the proposer makes a request by
letter and such request is received prior to the Proposal Closing Time. No Proposal may be
withdrawn after the scheduled Proposal Closing Time for a period of ninety (90) days. The
CMAA reserves the right to reject any or all Proposals.
4.8
Fidelity Bond
Each Successful Proposer must furnish the CMAA with a Fidelity Bond to protect
CMAA from misfeasance and malfeasance by the proposer including all terms and conditions of
the Agreement, identical to the form in Exhibit “D”, duly executed by the proposer as Principal
and having as surety thereon a surety company satisfactory to the CMAA. The initial Fidelity
Bond shall be in an amount equal to 50% of the Successful Proposer’s first years’ pro forma
gross revenues and will be annually renewable for an amount equal to 50% of the previous year’s
gross revenues for each of the succeeding Contract years.
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4.9
Acknowledgment
Proposer shall thoroughly examine and become familiar with this RFP, the Proposal
Form, Specimen Agreement and all related documents comprising the Contract Documents.
Submission of a Proposal shall constitute an acknowledgment that the proposer has thoroughly
examined and is familiar with all Contract Documents. The failure or the neglect of a proposer
to receive or examine any Contract Document shall in no way relieve proposer from any
obligation with respect to the Proposal or the obligations that result from making a successful
Proposal. No claim based upon lack of knowledge or understanding of any Contract Document
or its contents shall be allowed.
4.10 Addenda
Every request for interpretation as to the meaning of any provision of any of the Contract
Documents shall be made (i) either at the Pre-Proposal Conference described in Section 4.5
hereof, or (ii) in writing and delivered to the office of the President, Chattanooga Metropolitan
Airport, 1001 Airport Road, Suite 14, Chattanooga, TN 37421, and must be received nine (9)
calendar days or more prior to Proposal Closing Time. Every interpretation made to proposers
will be made in the form of a written Addendum which if issued will be sent by electronic mail
(e-mail), facsimile transmission or certified mail to all parties to whom the RFP has been issued,
but not later than five (5) calendar days prior to the date fixed for the Proposal Closing Time. If
any proposer fails to acknowledge receipt of any such Addendum indicated in the Proposal
Form, the Proposal will nevertheless be construed as though the Addendum had been received
and acknowledged and submission of a Proposal shall constitute acknowledgment of receipt of
the same. Only an interpretation or correction stated in a written Addendum shall be official.
THE CMAA WILL NOT BE RESPONSIBLE FOR ANY ORAL ADDENDA OR
REPRESENTATIONS.
4.11 Award of an Agreement
The Successful Proposer will be notified by the CMAA that it has been selected by the
CMAA as the FBO Services Manager subject to perfection and execution of the Agreement. No
Agreement shall be binding upon the CMAA until the same has been approved by the CMAA
Board of Commissioners; the Agreement has been signed by the Airport President and Board
Chairman and delivered to the Successful Proposer. Until the Agreement has been so executed
and delivered, the Selected Proposer shall have a vested right to be awarded an Agreement and
the CMAA shall have no obligations hereunder but shall be entitled to amend or abandon any
relationship contemplated by any of the Contract Documents. The CMAA reserves the right to
cancel the award of any Agreement without liability to the CMAA at any time before the
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aforesaid approval by the CMAA and the execution and delivery of Contract Documents by the
CMAA pursuant thereto.
4.12 Annulment of Award
Failure on the part of any Successful Proposer to comply with the requirements of the
foregoing within the time specified shall, in the sole discretion of the CMAA, be just cause for
the annulment of any award to such proposer. In such event the CMAA may elect either to
accept another Proposal or to reject all other pending Proposals with respect to which an
Agreement has not been then awarded.
4.13 Attorney-in-Fact
Any party signing as attorney-in-fact on the Fidelity Bond required herein must file a
certified copy of his power of attorney with the bond. All bonds must be counter signed by a
resident Tennessee agent of the surety with proof of agency attached thereto.
4.14 Disqualification of Proposals
Without in any way limiting the CMAA’s right in its discretion to reject any or all
Proposals, proposers are advised that any of the following may be considered as sufficient cause
for the disqualification of a proposer and the rejection of a Proposal:
(i) submission of more than one Proposal hereunder by an individual, joint venture,
partnership, limited liability company or a corporation under the same or different names.
For the purposes of this subparagraph, firms, partnerships or corporations under common
control may be considered to be the same entity;
(ii) evidence of collusion among proposers;
(iii) the proposer being in arrears on any existing contract with the CMAA;
(iv) the proposer being in litigation with the CMAA;
(v) the proposer having defaulted on a previous contract with the CMAA; or
(vi) any other cause which, in the CMAA’s judgment and sole discretion, is sufficient to
justify disqualification of proposer or the rejection of its Proposal.
4.15 Irregularities
Proposals will be considered irregular and may be rejected for omission, alterations of
form, additions not called for, conditions, limitations, unauthorized alternate Proposals or other
irregularities of any kind.
4.16 Waiver
The CMAA in its sole discretion reserves the right to waive any informalities or
irregularities of Proposals, to request clarification of information submitted in any Proposal, to
request additional information from any proposer, or to further negotiate any Proposals.
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EXHIBIT A
PROPOSAL FORM
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EXHIBIT A
PROPOSAL FORM
Request for Proposals for FBO Management Services
Chattanooga Metropolitan Airport
President
Chattanooga Metropolitan Airport Authority
Chattanooga Metropolitan Airport
1001 Airport Road, Suite 14
Chattanooga, Tennessee 37421
Submitted:______________________________
(Date)
By:____________________________________
(Firm Name)
Gentlemen:
The undersigned Proposer hereby submits this Proposal to provide Fixed Based Operator
Management Services (“Management Services”) at Chattanooga Metropolitan Airport
(“Airport”). Proposer hereby declares that the only person or persons interested in this Proposal
as Principal or Principals is or are named herein and that no person other than herein mentioned
has any interest in this Proposal or in the Agreement to be entered into; that this Proposal is made
without consultation with any other person, company or parties making a Proposal; and that it is
in all respects fair and submitted in good faith without collusion or fraud. Proposer represents to
the Chattanooga Metropolitan Airport Authority (“CMAA”) that, except as may be disclosed
below hereto, no CMAA member, officer, employee or agent of the CMAA either has or will
have any interest, either directly or indirectly, in the business of the Proposer in its operations
under the Agreement, and that no such person shall have any such interest at any time during the
term of the Agreement, should it be awarded to Proposer.
I.
Terms and Conditions of Proposal
Proposer proposes to provide the Management Services at the Airport in the manner and
for the Management Fee described below pursuant to the terms and conditions of a Management
Agreement to be agreed upon and executed by Proposer and CMAA.
A.
Manner and Method of Operation
(Here describe the manner and method proposed to provide the FBO Services. Be
detailed and specific - describe exactly how Proposer plans to provide the services to
meet the varying FBO requirements of users at the Airport; how flight line servicing,
aircraft guidance apron servicing, etc. will be performed; what services will be available
in the executive terminals; emergency services; how sales will be monitored, collected
and safeguarded until remitted to CMAA; how courtesy van services will be provided;
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September 24, 2010
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what information will be required of the customer and how it will be recorded and
processed; what marketing activities will be designed to support the operational
objectives outlines in the business plan; what additional services will be offered and
what additional facilities, if any, will be required. In short, describe the proposed
operation in sufficient detail that the CMAA may have a full understanding of the
methods and procedures you propose be employed in providing the FBO Services. You
may submit this on separate pages including diagrams and photographs if necessary,
desirable or appropriate to illustrate matters referred to or described therein. Also
include any other information or material relevant to the proposed operation such as
advertising or public information programs Proposer would recommend.)
B.
Proposed Staffing
(Here describe the number and types of employees Proposer proposes to employ in
providing the FBO Services including the activities, function, compensation levels and
benefits applicable to each.)
C.
Proposed Pricing for FBO Management Services
(Here attach table setting forth the proposed pricing CMAA should charge for the
required types of services to be provided. Proposer should describe suggested prices for
all of the required services used in preparing its business plan.)
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D.
Projection of Revenues and Expenses
(Here attach table, in the format shown below, of projected revenues, budgeted expenses
and proposed management fees for the five 12 month periods commencing July 1, 2011
and ending June 30, 2016.)
Year 1
Year 2
Year 3
Year 4
Year 5
TOTAL
Projected Gross
Revenue*
Fuel Sales
Into-Plane
Flight Line
Hangar Rentals
Other
Budgeted Expenses*
Associated CMAA Expenses
Management Fee**
Operating Surplus
Percentage of Net
Incentive Fee***
Net Revenues to CMAA
____________________________
* Provide detailed information supporting these projections, including types of services
projected, total revenues projected, compensation, the total amount of reimbursable expenses
proposed including the total wage and salary expense pursuant to the estimated staffing
requirement stated in Paragraph B above. Attach a detailed schedule with a line item for each
element of revenue and expenditure.
** Describe as fixed fee, variable or both. For any variable component of the management fee,
describe the basis for the fee and separately identify and quantify for each pro forma year the
factors upon which the variable fee is based.
***Negotiated percent of annual operating surplus under each year of the Agreement.
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Confirmation of Proposal
Name of Proposer:
________________________________
(SEAL)
By (signature of person authorized to bind proposer):
________________________________
Name and title of person authorized to bind Proposer:
________________________________
Chattanooga Metropolitan Airport
September 24, 2010
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EXHIBIT B
QUALIFICATION FORM
Chattanooga Metropolitan Airport
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EXHIBIT B
QUALIFICATION FORM
Request for Proposals for FBO Management Services
Chattanooga Metropolitan Airport
______________________________________________________________[name of affiant],
first being duly sworn, deposes and says:
1.
I am authorized to give this Affidavit on behalf of ______________________
_______________________________________________________ hereinafter referred to as
the “Proposer”.
(Insert name of Proposer unless Proposer is an individual, in which case, “myself”, and (unless
Affiant is an individual) attach a copy of the relevant authorization to execute the qualification
affidavit, e.g., partnership agreement or certified copy of corporate resolution.)
2.
The Proposer has met all requirements necessary to fully authorize it to provide
the Management Services and operate its business as required by this RFP in the State of
Tennessee.
(Attach here, as an exhibit to this Qualification Form, Proposer’s Market Analysis, Business
Plan and Financial Pro Forma.)
3.
The Proposer has the following experience:
(Attach as many pages as necessary to fully state experience.)
4.
For reference purposes, the Proposer has provided the Proposed Services at the
following airports (include dates, the term of agreements, names and telephone numbers of
contact persons):
(State here and attach as many pages as necessary to fully provide detailed information for each
reference.)
1.
2.
3.
4.
5.
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5.
The following is a listing of all public, commercial or general aviation service
airports at which Proposer has had a services contract terminated either voluntarily or
involuntarily prior to the expiration of its term during the past five (5) years, together with an
explanation of the reasons for termination and the name and telephone number of a person
associated with any such airport who may be contacted for verification:
(Here state all relevant information and attach as many pages as necessary to fully explain the
situation; if “none”, be sure to so state.)
6.
The following is a listing of all lawsuits that have arisen with Airports pertaining
to fee payments, rental payments and/or performance between Proposer and such Airports during
the past five (5) years.
(Here state all relevant information and attach as many pages as necessary to fully explain the
situation; if “none”, be sure to so state.)
7.
The Proposer has had the following bonds or sureties canceled or forfeited during
the past five (5) years, including the name of the bonding company, date, amount of bond and
reason for the cancellation or forfeiture.
(Here state all relevant information and attach as many pages as necessary to fully explain the
situation; if “none”, be sure to so state.)
8.
If the Proposer has been declared bankrupt or declared itself bankrupt, state the
facts below including the date of declaration and the court.
(Here state all relevant information and attach as many pages as necessary to fully explain the
situation; if “none”, be sure to so state.)
9.
Give names and addresses of at least three (3) credit references and three (3)
professional references:
(State three (3) credit references and three (3) professional references here and attach as many
pages as necessary to state information including addresses, contact persons and phone numbers
for each reference.)
Credit References:
1.
2.
3.
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
22
Professional References:
1.
2.
3.
10.
Attached hereto is Proposer’s current financial statement and balance sheet.
_________________________________________
Signature of Affiant
Sworn to and subscribed before me
this _______ day of ____________________, 2010
___________________________________________
Notary Public
My Commission Expires: ______________________
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
23
EXHIBIT C
ACKNOWLEDGMENT OF PROPOSER
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
24
EXHIBIT C
ACKNOWLEDGMENT OF PROPOSER
Request for Proposals for FBO Management Services
Chattanooga Metropolitan Airport
The submission of this Proposal is the duly authorized act of the Proposer and the
undersigned is duly authorized and designated to execute this Proposal.
DISCLOSURE OF INTEREST OF ANY CMAA MEMBER, OFFICER, EMPLOYEE OR
AGENT OF CMAA:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________________
The Proposer further declares that it has examined the RFP and the Contract Documents
relative to the Agreement, and the Fidelity Bond Form, and has read all of the Addenda furnished
prior to the opening of the Proposals, as acknowledged below, and that Proposer has satisfied
himself relative to the Agreement to be awarded.
Acknowledgment is hereby made of receipt of the following Addenda (identified by
number) since issuance of the RFP.
Addendum No.____________
Addendum No.____________
Addendum No.____________
Addendum No.____________
Date____________
Date____________
Date____________
Date____________
The Proposer hereby submits by enclosure the Qualification Form and supporting
information required by the RFP and certifies that all information so submitted is both accurate
and complete.
It is understood that the Successful Proposer will be given written notice by certified mail
if it is awarded an Agreement for the privilege to provide the Management Services at the
Airport based upon its Proposal. Such notification shall include two (2) copies of the
Agreement, together with a statement of the insurance coverage required by the CMAA.
Proposer agrees to fully execute and deliver two (2) copies of the Agreement, a Fidelity
Performance and Payment Bond in the form attached to the RFP, and certificates evidencing all
insurance coverage required under the Agreement together with satisfactory proof of execution
within sixty (60) days of the date of mailing stated in the notice.
If any of the language or information in its Proposal conflicts with the RFP or any of the
documents furnished with the RFP, the language of the RFP or of the applicable document shall
govern.
The Proposer further agrees that, in the event the Agreement is awarded to the Proposer
and he/she fails to comply with all of the requirements of the preceding paragraphs, as
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
25
applicable, he/she will be in default hereunder and subject to damages for the CMAA’s costs
associated with this RFP.
NAME OF PROPOSER: _________________________________________ (SEAL)
BY: _________________________________________
Typed Name and Title: _________________________________________
This _____ day of _____________________, 2010.
Witnessed by:
____________________________________
Signature of Witness
____________________________________
Typed or printed name of witness
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
26
EXHIBIT D
FIDELITY BOND FORM
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
27
EXHIBIT D
FIDELITY BOND
Request for Proposals for FBO Management Services
Chattanooga Metropolitan Airport Authority
STATE OF TENNESSEE
COUNTY OF HAMILTON
)
)
)
FIDELITY BOND
KNOW ALL MEN BY THESE PRESENTS, that we, _____________________
______________________________________, as Principal, and ____________________
______________________________________ licensed to do business in the State of Tennessee,
as Surety, are held and firmly bound unto the Chattanooga Metropolitan Airport Authority, for a
period of five (5) years, in the full and just sum of ____________($______) in lawful money of
the United States, for the payment of which sum well and truly made, the Principal and Surety
bind themselves, their heirs, executors, administrators, successors and assigns, jointly and
severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION IS SUCH, that whereas by certain
Agreement by and between the Principal and CMAA dated ___________________________,
2010, and in consideration of the fees, charges, covenants and agreements contained therein to be
paid and performed by the Principal, the Principal has obligated itself to deliver to CMAA the
Management Services at the Chattanooga Metropolitan Airport as more fully described in said
Agreement for a term as set forth in said Agreement, a copy of which is attached hereto, which
Agreement is made a part hereof and incorporated herein by reference thereto. This bond shall
be renewed annually in an amount equal to 50% of the gross revenues generated from the
provision of the Management Services in the immediately preceding Contract year throughout
the initial term of the Agreement and any extensions thereof.
NOW THEREFORE, if Principal, its executors, administrators, successors and assigns
shall promptly and faithfully perform the Agreement, according to the terms, stipulations or
conditions thereof, and shall remit to CMAA, all fees and other sums required by it to be paid, in
exchange for its Management Fee, and all loss and damage (including reasonable attorney’s fees)
which the CMAA may sustain by reason of any failure or default on the part of the Principal,
then this obligation shall become null and void; otherwise it shall remain in full force and effect.
PROVIDED, HOWEVER, that no suit, action or proceeding by reason of any default
whatever shall be brought on this bond after two (2) years from the day on which the term of the
Agreement expires.
AND PROVIDED, that any amendments which may be made in the terms of the
Agreement or any forbearance on the part of either the CMAA or the Principal to the other shall
not in any way release the Principal and the Surety or Sureties, or either or any of them, their
heirs, executors, administrators, successors or assigns from their liability hereunder, notice to the
Surety or Sureties of any such amendment or forbearance being hereby waived.
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
28
IN WITNESS WHEREOF, the above bound parties have executed this instrument
under their several seals, this ________ day of ___________________, 2010, the name and
corporate seal of each corporate party being hereto affixed and these presents duly signed by its
undersigned representative, pursuant to authority of its governing body.
In the Presence of:
______________________________________
______________________________________
___________________________________
Principal
___________________________________
Address
If Corporation, affix seal
and attestation:
___________________________________
Surety
Attest By:________________________________
______________________________________
(Seal) Address
Chattanooga Metropolitan Airport
September 24, 2010
___________________________________
Request for Proposals
Fixed Base Operator Management Services
29
EXHIBIT E
GENERAL AVIATION AREA
Chattanooga Metropolitan Airport
September 24, 2010
Request for Proposals
Fixed Base Operator Management Services
30
CHATTANOOGA METROPOLITAN AIRPORT AUTHORITY
REQUEST FOR PROPOSAL
for
FIXED BASED OPERATOR MANAGEMENT SERVICES
at the
CHATTANOOGA METROPOLITAN AIRPORT
ADDENDUM NO. 2
October 20, 2010
This is Addendum No. 2 to the Request for Proposals for FBO Management Services issued by
the CMAA on September 24, 2010. On October 8th the CMAA held a Pre-Proposal Conference
at the Airport and answered questions from those present. It has also received written questions
regarding the Airport, the RFP and the existing FBO. Listed below are statements, questions and
answers which collectively amend the RFP.
1.
The CMAA has received numerous questions regarding the existing FBO. It has supplied
in the RFP the information in its possession that is germane to the RFP and has no other
information that it wished to provide through the RFP or addenda thereto. Proposers are
expected to be actively engaged in the general aviation and FBO business and are expected to
rely upon their own assessment of the market for FBO services at the new FBO in formulation
their proposals.
2.
All proposers should identify and include the cost of the fidelity bond in its five year
pro forma.
3.
Who provides supplies?
The FBO Operator will be required to “procure” all equipment, supplies and materials
and provide the CMAA with a budget of expenses to be approved by the President.
4.
Please provide the dimensions of the hangar and its bay door.
The hangar is 100’ wide by 120’ deep by 36’ high. The door is 84’ wide by 28’ high.
5.
Can the successful proposer operate a charter business outside its management
agreement?
Proposers should identify completely the nature and the details of any business that it
wishes to operate on the Airport at the same time it is serving as FBO manager. The CMAA
may or may not permit such business to be conducted, but if it does it will be pursuant to a
separate agreement and will be subject to the CMAA’s standard commercial requirements and
minimum standards for airport businesses.
6.
Please provide an electronic copy of the Airport’s ALP.
The CMAA ALP in included in the Airport’s must recent master plan update and is
accessible at http://www.chattairport.com/downloads/Master_Plan_Final_vers_1.0.pdf
7.
Please provide a copy of the draft management agreement.
Attached.
8.
What type of fire suppression equipment will be used?
The FBO Terminal Building will have a sprinkler system; the first hanger will not
have a fire suppression system and the hangars will have a firewall between them. The
maintenance hangar will have a foam suppression system.
9.
What route will be used to access the Terminal from the new FBO site.
The CMAA will provide a practical means for providing into-plane services to the
airlines.
10.
Please provide weight bearing capacity of new FBO ramp area.
The ramp is built to support Group II and Group III aircraft.
11.
Will the new ramp area have tie-downs installed and will the ramp be lighted?
The ramp will not have tie-downs installed. The apron does have edgelights on ramp
with some exterior lighting on the building.
12.
Paragraph 3.6 states “…under the new agreement, the CMAA will provide facilities from
which Operator will operate and the facilities which Operator will manage and lease…” Will
there be a “lease” charges assessed to the P&L of the Operator for the property?
The phrase “manage and lease” refers to those facilities that are owned by CMAA, but
leased to third parties, such as hangars. The FBO manager will oversee the management and
leasing of these CMAA facilities. This is a management agreement and the operator will not
be charged a lease fee or rental.
13.
Paragraph 3.6 further provides that all machinery and equipment shall be provided by
Operator. This is in conflict with the statement made that the CMAA will pay for all expenses
associated with the management and provision of FBO services. Please clarify.
Any equipment required of operator shall be included in operator’s operating expense
and capital expense budget which is to be submitted to CMAA for approval.
14.
May the operator select the name for the FBO?
No.
15.
Do based tenants (corporate hangars) have self-fueling rights?
In accordance with Federal law and FAA policy, the CMAA does not prohibit selffueling.
16.
Does the CMAA have a fuel flowage fee?
Yes.
17.
Will the successful proposer have the ability to specify furnishings for the new FBO
Terminal.
Suggestions and recommendations will be entertained.
19.
Please provide a copy of the sign-in sheet from the Pre-Proposal Conference.
Attached.
GENERAL AVIATION FACILITIES MANAGEMENT AGREEMENT
between
CHATTANOOGA METROPOLITAN AIRPORT AUTHORITY
and
____________________________________________
at
CHATTANOOGA METROPOLITAN AIRPORT
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.01 “Contract Year”
1.02 “Agreement”
1.03 “Airport”
1.04 “Allowable Operating Expenses”
1.05 “Annual Budget”
1.06 “Capital Request”
1.07 “CMAA”
2
1.08 “CMAA’s Investment”
2
1.09 “Commencement Date”
1.10 “President”
1.11 “Effective Date”
1.12 “Operator Offices”
1.13 “Final Budget”
1.14 “Financial Summary”
1.15 “Fiscal Year”
1.16 “General Manager”
1.17 “Incentive Fee”
1.18 “Operating Revenues”
1.19 “Management Fee”
1.20 “Non-reimbursable Expenses”
1.21 “Operator”
1.22 “Operator’s Equipment”
1.23 “Operating Surplus”
1.24 “Procedures Manual”
1.25 “Quarterly Review”
1.26 “Terminal”
1.27 “Termination Date”
1.28 “Uncontrollable Expenses”
1
1
1
1
2
2
2
2
2
2
2
3
3
3
3
3
3
4
4
4
4
4
4
4
4
4
4
ARTICLE II
TERM, FACILITIES and GENERAL PROVISIONS
2.01 Term.
2.02 Renewal Term.
4
4
5
ARTICLE III
SERVICES
3.01 Services.
3.02
3.03
5
5
5
8
No Other Services.
Chattanooga Metropolitan Airport Authority
FBO Services Management Agreement
i
ARTICLE IVFINANCIAL ARRANGEMENTS
4.01 Fee Basis.
4.02 Collection and Deposit of Operating Revenues.
4.03 Payment of Allowable Operating Expenses.
4.04 Reimbursement for Uncontrollable Expenses.
4.05 Annual Accountings; Quarterly Reviews.
8
8
8
8
8
9
ARTICLE V
BUDGET AND REPORTS
5.01 Annual Operating Budget.
5.02 Financial Summary Reports.
5.03 Annual Audit.
5.04 Other Reports.
5.05 Waiver of Reporting Procedures.
9
9
10
10
10
10
ARTICLE VI OPERATING EXPENSES
6.01 Allowable Operating Expenses.
6.02 Start-Up Costs.
6.03 Reconciliation of Uncollectible Credit Charges.
6.04 Financial Procedures Manual.
6.05 Non-reimbursable Expenses.
6.06 Cash Losses.
6.07 Prompt Payment.
10
10
10
10
10
10
12
12
ARTICLE VII
COMPENSATION TO OPERATOR
7.01 Management and Consultant Fee.
7.02 Incentive Fee.
12
12
12
ARTICLE VIII
PERSONNEL
8.01 General Manager.
8.02 Personnel Standards.
8.03 Employment Procedures Manual.
8.04 Compliance With Airport Security Requirements.
8.05 Right to Search.
8.06 AOA - Driver Training.
8.07 Drug-Free Workplace.
8.08 Relationship of Parties.
8.09 Employee Relations Expenses.
12
12
13
13
13
13
14
14
15
15
ARTICLE IX
SPECIAL PROVISIONS
9.01 Standards of Operations.
15
15
Chattanooga Metropolitan Airport Authority
FBO Services Management Agreement
ii
9.02
9.03
9.04
9.05
9.06
9.07
9.08
9.09
9.10
Policy and Procedures Manual.
Customer Charges.
Commodities and Equipment.
Employee Parking.
Injury or Damage.
Property and Equipment Record-keeping.
Complaints.
Permits and Licenses.
CMAA’s Right to Audit.
17
15
16
16
16
16
16
16
17
ARTICLE X
MAINTENANCE OF FACILITIES
10.01 Cleaning of Facilities.
10.02 Garbage and Trash Disposal.
10.03 Maintenance of Utilities.
10.04 Maintenance and Repair.
10.05 Alterations and Signs.
17
17
17
17
17
18
ARTICLE XI
INDEMNIFICATION
18
ARTICLE XII
INSURANCE
12.01 Insurance.
12.02 Workers' Compensation and Employer's Liability Insurance.
12.03 Employee Honesty Fidelity Bond.
12.04 Operator’s Fidelity Bond.
18
18
19
19
20
ARTICLE XIII
ASSIGNMENT
20
ARTICLE XIV
DEFAULT BY OPERATOR
14.01 Event of Default.
14.02 Effect of Default By Operator/Termination.
20
20
21
ARTICLE XV
TERMINATION
15.01 Right of Operator to Terminate.
15.02 Effect of Default by CMAA.
15.03 Termination by President or Operator Without Cause.
ARTICLE XVI
DAMAGE OR DESTRUCTION TO FACILITIES
Chattanooga Metropolitan Airport Authority
21
21
22
22
22
FBO Services Management Agreement
iii
ARTICLE XVII
EQUAL EMPLOYMENT OPPORTUNITY, NON-DISCRIMINATION,
PUBLIC USE AND FEDERAL GRANTS
23
17.01 Equal Employment Opportunity.
23
17.02 Federal Grants and Public Use.
23
17.03 Non-Discrimination.
23
17.04 Modifications to Comply with Federal Laws, Regulations, or Agreements. 24
17.05 Subordination to Federal Statute.
24
ARTICLE XVIII
RULES AND REGULATIONS
24
ARTICLE XIX
GENERAL PROVISIONS
19.01 No Warranties or Inducements.
19.02 Waiver of Claim.
19.03 Non-Waivers.
19.04 Situs and Service of Process.
19.05 Force Majeure.
19.06 Agreement Binding Upon Successors.
19.07 Time of Essence.
19.08 Applicable Law.
19.09 Operator’s Dealings With CMAA.
19.10 Notices, Consents and Approval.
19.11 Independent Contractor.
19.12 Interpretation.
19.13 Entire Agreement.
19.14 Amendments.
24
24
25
25
25
25
25
26
26
26
26
26
26
27
27
Chattanooga Metropolitan Airport Authority
FBO Services Management Agreement
iv
CHATTANOOGA METROPOLITAN AIRPORT
GENERAL AVIATION FACILITIES MANAGEMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the Effective Date, by and between
the CHATTANOOGA METROPOLITAN AIRPORT AUTHORITY (“CMAA”), and
___________________, a ______________(llc, corp, llp, etc) organized and existing under the
laws of the State of ___________________ (“Operator”),
WITNESSETH
that, WHEREAS, the CMAA is owner and operator of the Chattanooga Metropolitan
Airport, situated in Hamilton County, Tennessee; and
WHEREAS, the CMAA wishes to employ an experienced, competent general aviation
services provider to manage and operate certain Airport general aviation and Fixed Base
Operator (“FBO”) facilities (hereinafter collectively “GA Facilities”) at the Airport and as
identified on attached Exhibit “A” hereto; and accordingly, has solicited, received and evaluated
proposals from such providers; and
WHEREAS, Operator has represented to the CMAA that it is authorized, capable and
qualified to manage and operate said GA Facilities and has proposed to do so; and
WHEREAS, CMAA has selected Operator as the proposer it wishes to so engage and
CMAA and Operator have mutually agreed to the terms and conditions of Operator’s
employment by CMAA in said capacity and CMAA and Operator wish to set forth such terms
and conditions in this Agreement;
NOW, THEREFORE, in consideration of the premises, the terms and conditions
hereinafter contained and set forth, CMAA and Operator hereby mutually agree as follows:
ARTICLE I
DEFINITIONS
The following words, terms and phrases whenever used in this Agreement shall have the
meanings respectively ascribed to them below:
1.01 “Agreement” shall mean this General Aviation Facilities Management
Agreement.
1.02 “Airport” shall mean the Chattanooga Metropolitan Airport.
1.03 “Allowable Operating Expenses” shall mean those approved expenses arising
from the management and operation of the GA Facilities as more particularly defined in Section
Chattanooga Metropolitan Airport Authority
FBO Services Management Agreement
1
6.01. Allowable Operating Expenses shall be segregated into those amounts approved for
automatic reimbursement by CMAA (“Regularly Recurring Expenses”) and those amounts
requiring requisition by Operator (“Non-recurring Expenses”). Both Regularly Recurring
Expenses and Non-Recurring Expenses shall be identified in the Annual Budget.
1.04 “Annual Budget” shall mean the annual budget for operating and managing the
GA Facilities submitted by the Operator to the President for a Contract Year. The Budget shall
include a detailed projection of Operating Revenues and Allowable Operating Expenses for such
Contract Year accompanied by the assumptions used to develop the Annual Budget.
1.05 “Capital Request” shall mean the list of capital expenditures proposed by the
Operator to the President for the next subsequent Contract Year. The Capital Request shall
contain Operator’s requirements for GA Facilities and equipment costing over $1,000 per item.
1.06 “CMAA” shall mean the Chattanooga Metropolitan Airport Authority.
1.07 “CMAA’s Investment” shall mean the cost to the CMAA for the construction,
purchase and installation of the finishes, furnishings and equipment required to complete and
outfit any improvement to or enlargement of the Facilities made by the CMAA.
1.08 “Commencement Date” shall mean approximately July 1, 2011.
1.09 “Contract Year” shall mean each twelve (12) month period during the Term of
the Agreement beginning on the Commencement Date of the Agreement or any anniversary
thereof during the Term and ending on the Expiration Date of the Agreement.
1.10 “Effective Date” shall mean the date this Agreement is last executed by the
parties hereto at which time this Agreement shall be effective for all purposes.
1.12 “Final Budget” shall mean the Annual Budget that is approved by the President
for a particular Fiscal Year. Any changes or revisions to the Final Budget may only be made
following the written approval of President.
1.14 “Financial Summary” shall mean financial summary report prepared monthly
by Operator detailing the prior month’s financial performance from operating the GA Facilities.
In addition to performance for the current month, the Financial Summary will also include the
year-to-date information.
1.15 “Fiscal Year” shall mean the CMAA’s twelve month Contract Year upon which
the Commencement Date begins, each July 1 and ends on June 30 of the next successive
calendar year.
1.16 “General Manager” shall mean the employee of the Operator as it may
designate from time to time, approved by the President, which shall not be unreasonably
withheld, assigned to exercise the duties and responsibilities of Operator under this Agreement.
1.17 “Incentive Fee” shall mean ___% of Operating Surplus for each Contract Year.
Chattanooga Metropolitan Airport Authority
FBO Services Management Agreement
2
Notwithstanding anything contained in this Agreement to the contrary or otherwise, in
calculating Operator’s Incentive Fee, the CMAA shall charge against Operating Revenues, all
Allowable Operating Expenses and Uncontrollable Expenses to determine Operating Surplus.
Provided further however, no charge shall be made therefrom nor taken for expense of, or
depreciation on any GA Facilities existing or in the future, on any improvements thereto. Cost of
capital equipment purchased and provided to Operator for operation of the GA Facilities will be
permitted charges against Operating Revenues for purposes hereof; provided, however, any such
items which have a reasonably agreed upon useful life of less than one year shall be charged in
the Contract Year in which they are purchased, respectively, and, any such items with a
reasonably agreed upon useful life of greater than one year shall be charged against and
amortized over their reasonably agreed upon useful life, respectively.
1.19 “Management Fee” shall mean the fixed amount paid or to be paid to Operator
per Contract Year as set forth in Section 7.01 for the services rendered under this Agreement.
1.20 “Non-reimbursable Expenses” shall mean those expenses normally considered
as general, administrative and other similar expenses of Operator as more particularly detailed in
Section 6.05 for which Operator shall not receive reimbursement by CMAA.
1.18 “Operating Revenues” shall mean all revenues of CMAA attributable to the GA
Facilities as more particularly defined in Article IV. Operating Revenues shall include all
monies received or receivable by Operator in connection with this Agreement, including, but not
limited to, fuel sales receipts, ramp fees, landing fees collected for CMAA by Operator, hangar
rentals, valet parking and other parking receipts collected from customers regardless of when or
where the transactions are made or the services are rendered, and whether on a cash or credit
basis. Operating Revenues shall not include gratuities paid to Operator’s employees by GA
Facilities customers.
1.19 “Operator Offices” shall mean the facilities made available to the Operator for
its use in managing and operating the GA Facilities. The Facilities upon the Effective Date are
described on Exhibit “A” hereto, title to which is and shall remain in CMAA.
1.20 “Operator” shall mean _________Name of Operator here_________.
1.21 “Operator’s Equipment” shall mean the supplies and equipment needed to
operate the GA Facilities supplied, paid for and installed by the Operator.
1.22 “Operating Surplus” shall mean the excess of Operating Revenues over
Allowable Operating Expenses and Uncontrollable Expenses during a Contract Year.
1.23 “President” shall mean the CMAA’s President or his duly authorized designee,
acting on behalf of the CMAA under this Agreement.
1.24 “Procedures Manual” shall mean the Financial Procedures Manual required
Chattanooga Metropolitan Airport Authority
FBO Services Management Agreement
3
pursuant to Section 6.04, the Employment Procedures Manual required pursuant to Section 8.03
and the Policy and Procedures Manual required pursuant to Section 9.02. Such manuals shall be
submitted to the President for approval prior to the Commencement Date. Such manuals shall be
amended upon the reasonable direction of the President and may be amended upon the request of
Operator with the approval of the President, which shall not be unreasonably withheld. Operator
will supply the President with any such revisions or modifications of the Procedures Manual as
soon as practicable once updates are made.
1.25 “Quarterly Review” shall mean the meeting held at least quarterly between
President and Operator to discuss Operator’s operating and financial performance hereunder.
Quarterly Reviews will be used as a forum to discuss matters which may include, but are not
limited to, changes in operating procedures and conditions, capital, leasehold or equipment
needs, customer service, rates and other subjects pertaining to Operator’s performance
hereunder.
1.26 “Terminal” shall mean the passenger terminal building at the Airport.
1.27 “Termination Date” shall mean the date upon which the Agreement is
terminated by scheduled expiration or otherwise.
1.28 “Uncontrollable Expenses” shall mean the amount of the expenditures incurred
by Operator for or in connection with the GA Facilities and the operation thereof by Operator,
agreed to by the President, which are not Allowable Operating Expenses included in the Final
Budget.
ARTICLE II
TERM, FACILITIES and GENERAL PROVISIONS
2.01 Term. CMAA hereby employs Operator, and Operator hereby agrees, to manage
and operate the GA Facilities at the Airport for a term (“Initial Term”) beginning on the
Effective Date and expiring June 30, 2016, unless otherwise terminated as provided for herein.
2.02 Renewal Term. The CMAA reserves the option to extend the Initial Term of
this Agreement upon the same, or other mutually acceptable terms and conditions, for an
additional five 5 years (“Renewal Term”) upon giving Operator written notice thereof no later
than one-hundred eighty (180) days prior to the expiration of the Initial Term. Operator shall
have the right to accept or decline same by giving CMAA written notice no later than thirty days
following receipt of CMAA’s said written notice to Operator to extend said Initial Term.
ARTICLE III
SERVICES
3.01 Services. Operator shall do all usual and customary things necessary to manage
and operate the GA Facilities in a responsible manner and with the intention of providing a high
Chattanooga Metropolitan Airport Authority
FBO Services Management Agreement
4
degree of customer service and satisfaction reasonably acceptable to the President. Operator will
be responsible for proper staffing for its activities hereunder, including without limitation, hiring
and directing the activities of the employees it will use in its operations hereunder; disbursing
Allowable Operating Expenses; controlling of costs and expenditures; and collection stewardship
and accounting for all its receipts, cash or otherwise, from its management and operations of the
GA Facilities at the Airport. Operator shall execute and perform its duties as manager and
Operator of the GA Facilities for CMAA in accordance with the terms and conditions contained
in this Agreement. Further, Operator acknowledges that CMAA does not possess expertise in
FBO operations and CMAA intends for Operator to manage and direct the FBO Services for the
benefit of CMAA according to accepted sound general aviation business practice.
3.02 Operator’s management and operation of the GA Facilities shall also include
management of all services usually and customarily provided by full service FBO’s at non-hub
airports; including without limitation, the following, which shall be provided -__________ (__)
hours per day for every day during the Agreement term:
(i)
Flight line servicing, including sale and into-plane delivery of aviation fuels,
lubricants and other petroleum products;
(ii)
Arrival guidance and ramp service for general aviation aircraft users;
(iii) Apron servicing of general aviation aircraft, including ramp assistance, de-icing,
itinerant aircraft parking, catering, storage and tie-down, etc;
(iv)
Executive terminal service, including telephone facilities, on-premises snack
facilities, flight planning assistance, flight service station, Unicom, conference and office
facilities, pilot and customer lounges and other services and facilities as reasonably
directed by the President from time to time and in accordance with Operator’s approved
budget from time to time;
(v)
Emergency service to disabled aircraft on the Airport with the capability to tow
disabled aircraft from the operational area of the Airport;
(vi)
Monitoring, collecting, recording, remitting and reporting to the CMAA any and
all revenues Operator receives that are generated by Operator’s management and
operation of the GA Facilities, including landing fees, ramp service fees, fuel sales and
service, special service fees, hangar rentals and charges and any other income, receipts
and revenues;
(vii) Direct, toll free, telephone services to nearest FAA Flight Service Station;
(viii) Courtesy van service to the main passenger terminal and restaurants and hotels
within a _____ mile radius of the Airport and courtesy cars for loan to crew members for
limited local transportation;
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(ix)
Into-plane fuel service for commercial air carriers operating at the Airport at the
passenger terminal building, the air cargo aprons and other locations on the Airport where
into-plane fueling is needed from time to time;
(x)
Marshaling (parking) of aircraft;
(xi)
Providing baggage handling services for general aviation and other non-scheduled
aircraft and for airline aircraft as requested;
(xii) Tow in and out of aircraft;
(xiii) Full service ground handling of general aviation and airline aircraft as requested
in accordance with the NATA Safety 1st Training Curriculum;
(xiv) Aircraft cleaning services;
(xv) Aircraft deicing services;
(xvi) Power starts as requested;
(xvii) Waste disposal, both solid and liquid, in compliance with federal, state and local
environmental rules and regulations;
(xviii) On-Airport courtesy passenger transportation between Airport destinations at the
request of patrons;
(xix) Managing CMAA’s GA facilities FBO fuel farm, including ordering fuel
therefore, withdrawing fuel for resale to FBO customers, account for fuel received and
withdrawn, take normal and customary measures to protect against fuel contamination,
leaks and spills, and generally exercise in a professional and customary manner such
responsibilities generally inherent in the operation and custodial care of such aviation fuel
facilities;
(xx) Operate fuel tender trucks provided to it by the CMAA and be responsible for
maintaining and repairing or securing the maintenance and repair of said trucks, and take
such reasonable actions to operate said trucks correctly and in accordance with the
manufacturer’s specifications, and applicable rules, laws, regulations relative thereto;
(xxi) Manage the leasing of aircraft storage space in hangars on the GA Facilities as
reflected on attached Exhibit “A”. Additionally, accept and process request for hangar
and tie-down space and administer the assignment of such spaces in accordance with
requirements of the President. Operator will collect rentals for said spaces on behalf of
CMAA;
(xxii) Provide for general operation and maintenance of GA Facilities, such as cleaning,
re-lamping, changing filters, minor repairs, etc.; provided however, Operator shall refer
any heavy or material maintenance and/or repair of any of the GA Facilities to the
President for its prompt attention. Provided however, Operator will be responsible for
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maintaining or providing for maintenance and/or repair of all rolling stock in its custody
on the Airport;
(xxiii) Operator and its employees will at all times relative to the GA Facilities conduct
themselves professionally and in accordance and compliance with applicable rules,
regulations, laws and good practices relative to handling of aviation fuels and aircraft;
(xxiv) Make recommendations, from time to time, to the President relative to pricing for
any materials, commodities, or services on GA Facilities, keeping in mind competition,
demand and profitability to the CMAA;
(xxv) Consult with and make recommendations, from time to time, to the President
relative to capital improvements and/or enlargements to enhance the quality of the GA
Facilities and/or services of Operator;
(xxvi) Order such aviation fuel, lubricants, supplies and other items of inventory for
resale by Operator from vendors selected and/or approved, from time to time, by
President, all of which shall be purchased and paid for by CMAA; and
(xxvii) Operator will procure such supplies and services for managing and operating the
GA Facilities from such small business enterprise(s) as may be designated, from time to
time, by President.
3.03 No Other Services. Operator shall provide no other services to CMAA other
than as authorized and agreed to pursuant to this Agreement and agrees that it will engage in no
other business activities on or in connection with the Airport, whether as principal or otherwise,
without the express written approval of the President, which shall not be unreasonably withheld.
ARTICLE IV
FINANCIAL ARRANGEMENTS
4.01 Fee Basis. Operator shall manage and operate the GA Facilities for a
Management Fee plus an Incentive Fee as defined in Article VII hereof.
4.02 Collection and Deposit of Operating Revenues. Operator shall use reasonable
efforts to collect all Operating Revenues and applicable sales taxes and shall deposit such
collections to the account of the CMAA. CMAA shall establish and maintain a bank account in
CMAA’s name (“GA Facilities Account”) in a local banking institution into which account
Operator shall cause to be deposited all daily Operating Revenues collected from its operations
hereunder. Operating Revenues shall include the gross amount of all sales, plus all applicable
sales taxes and other taxes collected by Operator. Operator will remit applicable taxes to the
proper taxing authority on behalf of the CMAA as provided for in Section 4.03. CMAA shall
provide Operator timely information on daily activity in the GA Facilities Account so Operator
may provide CMAA with Financial Summary Reports as required by Section 5.02.
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4.03 Payment of Allowable Operating Expenses. Operator shall establish and
maintain a bank account in its own name (“Operating Account”) for the purpose of disbursing
payments on behalf of the CMAA for Allowable Operating Expenses. On or before
Commencement Date, CMAA shall cause to be deposited to the Operating Account an initial
advance to Operator of an amount equal to two months of Allowable Operating Expenses
provided for in the Final Budget for the first Contract Year. On or before the first day of each
and every consecutive month following the Commencement Date during the Term hereof,
CMAA shall cause to be deposited in the Operating Account (i) an amount equal to the monthly
pro rata amount of the Allowable Operating Expenses of the Final Budget for the Contract Year
for which such deposit is made, (ii) an amount equal to all sales taxes and other taxes deposited
in the GA Facilities Account for the previous month to be remitted to the proper taxing authority
on behalf of the CMAA, and (iii) advances requested by Operator from time to time to cover
working capital needs so that there is an adequate balance in the Operating Account to pay
invoices as they become due.
4.04 Reimbursement for Uncontrollable Expenses. CMAA acknowledges that
Operator may incur Uncontrollable Expenses during one or more Contract Years. Should
Operator anticipate or incur any Uncontrollable Expenses it will promptly notify the President
and meet with the President as soon as reasonably possible to explore means to avoid or mitigate
the amount of such Uncontrollable Expenses. The President shall in good faith promptly
consider the circumstances causative of the Uncontrollable Expenses and to the extent the
Operator reasonably establishes that said Uncontrollable Expenses were not the result of willful,
wanton, intentional acts (excepting intentional acts deemed necessary by the Operator to prevent
danger to life or damage to property), gross negligence of Operator or matters beyond Operator’s
control, he shall authorize and make the prompt payment thereof, or reimbursement of such
Uncontrollable Expenses to Operating Account, as the case may be.
4.05 Annual Accountings; Quarterly Reviews. Operator shall measure and report
its performance and the results of its operations of the GA Facilities for each Contract Year
during the term of this Agreement. Operator shall give its report on such performance, including
its statement of Operating Revenues, Allowable Expenses and Operating Surplus for the periods
being reported on, no less frequently than Quarterly ("Quarterly Review") with the last such
Quarterly Review after the close of each Contract Year covering the entire Contract Year (such
fourth Quarterly Review being referred to herein as the “Annual Accounting”). The Annual
Accounting shall set forth the Gross Revenues, Allowable Expenses and Uncontrollable
Expenses and Operating Surplus for the operations of the FBO Services managed under this
Agreement for the entire Contract Year.
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ARTICLE V
BUDGET AND REPORTS
5.01 Annual Operating Budget. Each year during the term hereof, and no later than
March 15 of such year, Operator shall submit for President’s approval a recommended Annual
Budget for the next subsequent Contract Year. In addition Operator shall supply President with
its Capital Request for the corresponding Contract Year. Within thirty (30) days of receipt of the
Annual Budget and Capital Request from Operator, President will either accept or reject the
Annual Budget and Capital Request, or propose modifications thereto. CMAA realizes that there
could be material changes in market conditions between the date that the Annual Budget is
developed and the time it goes into effect. If there are such material circumstances which impact
market conditions and/or passenger traffic, President and Operator will work together to revise
the Annual Budget and Capital Request so that they accurately reflect any changes which may
have occurred after the date that the Annual Budget and Capital Request was developed. Annual
Budget and Capital Request whether or not modified will become the Final Budget no later than
July 1 of the next Fiscal Year.
During Quarterly Reviews conducted by the President, Operator will have the
opportunity to discuss and propose amendments to the Final Budget necessitated by material
fluctuations in market conditions not contemplated in the Annual Budget; such changes, if any,
may only be made following the written approval of President, which shall not be unreasonably
withheld.
In the event of a disagreement between the parties with regard to any item in the Annual
Budget and/or Capital Request, President’s decision with respect to such item shall be final.
5.02 Financial Summary Reports. As soon as practical but no later than ____ (___)
days following the end of each month, Operator shall prepare a Financial Summary which details
the prior month’s financial performance in terms of Gross Revenues, Allowable Expenses,
Uncontrollable Expenses and Operating Surplus. The Financial Summary shall be in a format
reasonably acceptable to the President. Operator and President will discuss Operator’s financial
and operational performance as reflected in the Financial Summaries during Quarterly Reviews
and the Annual Accountings.
5.03 Annual Audit. Upon reasonable prior written notice to Operator, the President
shall have the discretion to conduct a full audit of Operator’s books at CMAA’s expense, relative
to Operator’s management and operation of the GA Facilities, and in a manner so as not to
unreasonably interfere with Operator’s management of the GA Facilities.
5.04 Other Reports. Operator shall also provide any additional information and
reports regarding its operations hereunder that the President may reasonably require.
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5.05 Waiver of Reporting Procedures. President may waive any of the provisions of
this Article V by written notice to Operator and without waiver of any other of CMAA’s rights
hereunder.
ARTICLE VI
OPERATING EXPENSES
6.01 Allowable Operating Expenses. Operator, on behalf of the CMAA, shall pay
all Allowable Operating Expenses and working capital requirements pursuant to Section 4.03
hereof. Allowable Operating Expenses shall mean those expenses arising from operation of the
GA Facilities, including but not limited to, material costs, inventory costs, payroll and related
expenses, uncollectable items, utilities, bonds, insurance as reflected in 12.01 hereafter,
maintenance, repair, sales taxes and any other taxes on purchases, and such other operating
expenses approved by President or described in the approved Final Budget (as amended from
time to time). The cost of aviation fuels and lubricants and such other expenses shall at all times
be and remain the sole obligation of the CMAA.
Allowable Operating Expenses, notwithstanding anything contained herein to the
contrary, shall exclude sales taxes collected by Operator pursuant to 4.02, and shall be net of any
and all discounts and allowances earned and/or realized by Operator as a result of doing business
at the Airport. Expenses not approved by the President as part of an Approved Budget or as
Uncontrollable Expenses shall not be an obligation of CMAA.
6.02 Start-Up Costs. Prior to commencement of operations by Operator, certain
start-up costs were anticipated by Operator such as, but not limited to, training, inventory,
manual preparation, overtime and turnover. Operator shall submit to President for his approval a
budget in advance of any expenditures for such start-up costs. Such start up costs shall be paid
to Operator within thirty days following receipt by CMAA of Operator’s invoice verifying such
costs have been incurred.
6.03 Reconciliation of Uncollectible Credit Charges. For each Contract Year,
Operator shall prepare an itemized listing for dishonored checks and uncollectible credit card
charges which shall be supported by photocopies of each check and credit card charge claimed
(charge-back). In addition, Operator shall provide a written explanation of the reason the charge
is uncollectible. Any material charge-backs which resulted from the intentional or negligent
failure of Operator to apply the procedural controls prescribed contained in its Policies and
Procedures Manual shall be deemed caused by Operator and set off against Operator’s
Management Fee.
6.04 Financial Procedures Manual. Operator shall prepare and provide the
President with a Financial Procedures Manual (“Manual”) which sets forth, among other things,
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procedures for the processing of revenues and disbursements. The Manual shall include internal
accounting procedures and auditing controls reasonably requested by the President. Operating
Revenues shall be deposited and receivables shall be processed in accordance with the
procedures and controls contained the Financial Procedures Manual. Also, unless otherwise
specifically addressed in this Article VI, invoices for authorized costs incurred in operations
controlled by Operator, including payroll, shall be processed in accordance with the normal
procedures and controls contained in its Financial Procedures Manual.
6.05 Non-reimbursable Expenses. Unless otherwise approved as part of the Final
Budget or specifically authorized in writing by President, Operator shall not be reimbursed for
Non-reimbursable Expenses of the following like and kind:
A.
Corporate overhead and cost allocations;
B.
Legal fees not incurred in the course of Operator’s management and operational
duties or obligations hereunder;
C.
Charitable and political contributions;
D.
Travel and entertainment except where required as a part of approved operating
and marketing costs;
E.
Corporate public relations, gifts, dues and memberships;
F.
Any penalties, assessments or fines issued by any court or authorized government
entity or agency, unless such results from the direct action or inaction of CMAA or
incurred in the course of Operator’s management and operational duties and obligations
hereunder.
6.06 Cash Losses. Operator shall act as custodian of and safeguard until deposited
with CMAA all cash and other receipts of CMAA with respect to the GA Facilities. All cash
losses, including cash losses arising out of the criminal acts of officers, employees or agents of
Operator, shall be the responsibility of Operator. Any cash losses caused by a criminal act must
be supported by copies of filed police reports.
6.07 Prompt Payment. Provided there has been no delay or default by CMAA in
making necessary funds available to it, Operator shall make prompt and timely payment of all its
obligations arising out of this Agreement so as to maximize the potential for available discounts
and commissions. All discounts, allowances, premiums and commissions paid or received
hereunder shall be to the credit and benefit of CMAA. Operator shall pay from its own funds
any penalty, fine or like assessment resulting from any intentional or grossly negligent late
payment of any such obligation hereunder; provided Operator has not been delayed in receipt of
authorization to pay such obligation by action, breach or inaction of CMAA.
ARTICLE VII
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COMPENSATION TO OPERATOR
7.01 Management and Consultant Fee. Operator shall be paid a fixed Management
Fee (“Management Fee”) of ______________ per Contract Year, provided that if the initial
Contract Year is less or greater than twelve months the Management Fee for such Contract Year
shall be pro rata increased or decreased, as the case may be. The Management Fee shall paid
monthly in advance by CMAA by check in monthly installments of $_______________.
7.02 Incentive Fee. As additional consideration for managing and operating the GA
Facilities as required herein, and to give Operator the incentive to exercise its best efforts to
maximize Operating Surplus, CMAA shall pay Operator an Incentive Fee within thirty days
following the Annual Accounting following completion of each Contract Year.
ARTICLE VIII
PERSONNEL
8.01 General Manager. Operator shall hire and assign a full-time General Manager
in accordance with 1.16 hereof. Said General Manager shall only be employed by Operator
pursuant to this Agreement, shall be assigned and employed full time to manage the GA
Facilities for Operator and CMAA, and shall maintain an office designated by Operator in the
Operator Offices. The General Manager candidate shall be selected by Operator and approved
by the President, which approval shall not be unreasonably delayed or withheld. Whenever the
General Manager is absent or off the premises, he/she shall remain in contact by cell phone
(unless prevented due to technical difficulties or reasons beyond Manager’s control) and, in
instances of extended absence or vacation, a duly authorized alternate manager shall be
temporarily designated by Operator to act in his/her place until the General Manager returns to
the premises. The General Manager shall not be permanently reassigned by Operator from the
Airport without the consent of the President, which shall not be unreasonably withheld.
Provided, however, nothing herein shall be deemed to prohibit Operator from replacing General
Manager at any time, with or without cause, and submitting such replacement General Manager
for the President’s reasonable approval.
8.02 Personnel Standards. Operator shall instruct its employees to appear clean,
neat, well-groomed and professional on the job at all times and discharge their duties in a
cooperative, courteous and efficient manner. Operator shall require all its personnel except nonpublic contact and managerial employees to wear uniforms approved by the President and shall
display visibly on their person at all times while on duty, a distinctive name tag identifying the
individual by name as an employee of Operator and, if appropriate, displaying an employee
number or title.
8.03 Employment Procedures Manual. Operator will provide the President with a
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copy of its Employee Procedures Manual, which Operator shall adopt and apply to its
performance hereunder. Operator shall also, at all times during the term of this Agreement,
enforce and comply with all applicable lawful requirements relative to Operator’s employment
practices.
8.04 Compliance With Airport Security Requirements. Operator acknowledges
that CMAA is subject to various and changing requirements imposed by the Department of
Homeland Security, the Department of Transportation and Federal and State laws. Operator
agrees that it will cooperate with President and cognizant regulatory and law enforcement
officials to develop and implement a security program covering the operation of the GA
Facilities that will be agreeable to such agencies and authorities and that it will execute such
approved plan(s) to the best of its ability.
8.05 Right to Search. It is understood that CMAA has a strong interest in
maintaining good Airport security and intends to implement increased security measures for
companies having access to the Air Operations Area (“AOA”) of the Airport. Operator agrees
that its vehicles, cargo, goods and other personal property are subject to being searched when
entering or leaving the AOA. Operator further agrees, when reasonably required by President,
that it shall not authorize any employee requiring regular access to the AOA as part of his/her
regular duties, to enter the AOA unless and until such employee has executed a written consent
to search in form reasonably acceptable to President.
It is further agreed that President has the right to prohibit an individual, agent or
employee of Operator from entering the AOA based upon facts which would lead a person of
reasonable prudence to believe that such individual might be inclined to engage in theft, cargo
tampering, aircraft sabotage or other unlawful activities. Operator acknowledges and
understands that these provisions are for the protection of all users of the AOA and are intended
to reduce the incidence of thefts, cargo tampering, aircraft sabotage and other unlawful activities.
8.06 AOA - Driver Training. Any Operator designated employee operating a motor
vehicle on the AOA, must successfully complete an AOA Driving Training Course conducted
periodically by President and hold a current and valid driver’s license. The privilege of any such
Operator designated employee to operate a motor vehicle on the AOA may be withdrawn by
President because of violation of AOA rules or loss of said designated employee’s driver’s
license. Notwithstanding anything contained herein to the contrary or otherwise, said AOA
Driving Training Course requirement is hereby waived for any such Operator designated
employee that has previously successfully completed said AOA Driving Training Course and has
not has such privilege revoked by President.
8.07 Drug-Free Workplace. Operator will require a Drug-Free Workplace by:
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A.
Publishing a statement notifying employees that the unlawful manufacture,
distribution, dispensing, possession or use of controlled substance is prohibited on the
GA Facilities and specifying the actions that will be taken against employees for
violation of such prohibition.
B.
Notifying the employee in the statement required by Paragraph A that, as a
condition of employment, the employee will:
(1)
Abide by the terms of the statement; and
(2)
Notify the employer of any criminal drug statute conviction for a violation
occurring in the workplace no later than five (5) days after such conviction.
C.
Notifying President within ten (10) days after receiving notice under
Subparagraph B(2) from any employee or otherwise receiving actual notice of such
conviction.
D.
Taking one of the following actions within thirty (30) days of receiving notice
under Subparagraph B(2) with respect to any employee who is so convicted:
(1)
Taking appropriate lawful personnel action against such employee up to
and including termination; or
(2)
Requiring, as may be lawfully permitted, such employee to participate
satisfactorily in a drug abuse assistance or rehabilitation program approved for
such purposes by a federal, state or local Health Law Enforcement or other
appropriate agency.
E.
Making a good faith effort to continue to maintain a Drug-Free Workplace
through implementation of Paragraphs A through D.
8.08 Relationship of Parties. Officers, agents and employees of Operator shall not
be deemed to be employees of CMAA for any purpose whatsoever.
8.09 Employee Relations Expenses. Operator shall not be reimbursed by CMAA for
any legal or other services with respect to employee relations matters applicable solely to
employees of Operator and resulting solely from its actions, unless prior written approval is
granted by President.
ARTICLE IX
SPECIAL PROVISIONS
9.01 Standards of Operations. Operator will operate the GA Facilities in a manner
consistent with the reasonable, uniform and lawful standards established by President. President
shall have the reasonable right to require Operator to adjust the prices of all GA Facilities
Services provided or sold by Operator hereunder, request changes to staffing and operations
procedures employed by Operator hereunder so as to improve customer service and to also make
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specific changes to service levels.
9.02 Policy and Procedures Manual. In addition to the Financial Procedures Manual
required pursuant to Section 6.04 and the Employment Procedures Manual required pursuant to
Section 8.03, Operator shall develop with the approval of President a Policy and Procedures
Manual(s) describing its operations hereunder. President intends that these manuals will at least
cover the following:
A.
Courtesy policies governing the treatment of customers and the handling of
complaints;
B.
Refund policies;
C.
Employee Training;
D.
Procedures related to point of sale equipment and systems including, but not
limited to, those related to cashiers and servers, back office support, and integration with
Operator’s corporate systems and procedures;
E.
Credit card and check acceptance and denial procedures;
F.
Fuel purchase, storage, dispensing and sale procedures;
G.
Promotional and group discounts and allowance policies; and
H.
Facilities maintenance and cleanliness programs.
9.03 Customer Charges. Except as may otherwise be specifically authorized in
writing by President, Operator shall charge all customers of the GA Facilities, the fees or prices
for goods and services approved or established by President. Promotional or group discounts
and allowances polices shall be authorized in writing by President.
9.04 Commodities and Equipment. Operator shall provide and maintain a sufficient
supply of expendable commodities and supplies and provide all furnishings, fixtures and
equipment authorized in the Annual Operating Budget or authorized in writing by President with
title to same being vested in CMAA upon delivery to the Airport or installation at the Facilities.
9.05 Employee Parking. President shall provide identification for use of the
Employee Parking Lot on the Airport for all authorized employees of Operator. A list of current
employees will be furnished by Operator to President on a monthly basis.
9.06 Injury or Damage. In the event of any injury to any person or loss or damage to
any property on the GA Facilities, Operator shall promptly notify President and as reasonably
soon as available, furnish copies of relevant reports in connection therewith.
9.07 Property and Equipment Record-keeping. On or before the Commencement
Date, on or before the last day of each Fiscal Year, if requested by the President, and on or
before the termination of this Agreement, President and Operator will cause an inventory to be
taken listing all items of property and equipment belonging to CMAA and having a normal
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useful life in excess of one year made available by CMAA to Operator to be used in the
operation of the GA Facilities or otherwise purchased with CMAA funds for use hereunder.
Operator shall establish appropriate controls, subject to review and approval by President, to
prevent pilferage, thefts, disappearances or other losses of property from inventory. Operator
throughout the term of this Agreement shall maintain a current and up-to-date capital inventory
listing and regularly advise President, in writing, of all additions to or deletion from the
inventory.
9.08 Complaints. Operator shall respond promptly, and professionally to all
complaints made to it relative to the GA Facilities. All such complaints and the appropriate
responses shall be made available to the President upon request. In the event the complaint is
regarding public health or injury, the President must be given notice of the complaint and its
nature as promptly as possible under the circumstances. Decisions regarding partial or full
refunds in response to complaints shall be made only by the General Manager or his/her
designee.
9.09 Permits and Licenses. Operator shall obtain, pay for, and maintain on a current
basis, all permits and licenses as required for its operation hereunder including any permits and
licenses required for the sale of motor fuels. The cost of such permits and licenses shall be an
Allowable Operating Expense.
9.10 CMAA’s Right to Audit. In addition to the Annual Audit provided for under
Section 5.03, CMAA’s auditors (internal and external) shall have the right during Term hereof,
without limitation, at all reasonable times during normal business hours, to audit, check, inspect
and review all operating procedures of Operator hereunder and all books of account, records,
financial reports, financial statements, operating statements, inventory records, copies of federal
income and state sales tax returns, work papers and supporting documents relating solely to
operations of Operator hereunder relative to the GA Facilities, and other pertinent information as
may be determined to be needed or desirable by CMAA. Provided, however, any such audit
shall be solely at CMAA’s expense, following reasonable advance written notice to Operator,
and carried out in such manner as shall not unreasonably interfere with Operator’s normal
business and operations hereunder.
ARTICLE X
MAINTENANCE OF FACILITIES
10.01 Cleaning of Facilities. In accordance with its approved budget, Operator shall
cause the GA Facilities to be maintained and kept clean at all times. If the Facilities are not so
properly maintained (normal wear and tear excepted) and kept clean, in the reasonable opinion of
President, Operator will be so advised and shall take immediate corrective action.
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10.02 Garbage and Trash Disposal. In accordance with its approved budget,
Operator shall cause to be removed from the GA Facilities all garbage, trash and refuse of any
nature whatsoever which might accumulate and arise from the operations hereunder.
Accordingly, such garbage, trash and refuse shall be stored and disposed of only in the manner
approved by President.
10.03 Maintenance of Utilities. CMAA shall at all times operate and maintain in good
working order all the components of the electrical distribution, air conditioning, ventilating, fire
protection, hot and cold water, and industrial and sanitary sewage systems and facilities within
the boundaries of the GA Facilities.
10.04 Maintenance and Repair. CMAA shall at all times maintain, repair and keep in
good condition, the interior of the GA Facilities and shall promptly make all repairs required in
and about the GA Facilities including, but not limited to, painting, doors, windows, fixtures,
furnishings, appurtenances, replacement of light bulbs, ballasts and tubes and the replacement of
all broken glass, which repairs shall be in quality and class equal to or better than the original
work to preserve the same in good order and condition, subject to ordinary wear and tear. Any
repairs required solely as a result of the intentional or wanton act, gross negligence or willful
misconduct of Operator or its employees shall be at Operator’s Expense.
10.05 Alterations and Signs. Operator shall not structurally alter the GA Facilities in
any way whatsoever, erect any signs nor consent to any advertising on GA Facilities without
prior written approval from President.
ARTICLE XI
INDEMNIFICATION
Operator shall indemnify and save CMAA harmless from any and all claims, liability,
losses and causes of actions which may directly or indirectly arise solely out of any fraud,
intentional or wanton act, or gross negligence of Operator under this Agreement and shall pay all
claims and losses of any nature in connection therewith, shall defend all suits related thereto, in
the name of CMAA, when applicable, including appellate proceedings, and shall pay all costs,
judgments, and reasonable attorney fees which may issue therefrom; provided, however, that
nothing herein shall be construed to require Operator to indemnify CMAA against liability
resulting solely from the negligence of CMAA or arising solely out of the construction
completed by the CMAA. The provisions of this Article shall survive the expiration or early
termination of this Agreement.
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ARTICLE XII
INSURANCE
12.01 Insurance. Operator shall maintain in force with a financially responsible
insurance company authorized to do business in the State of Tennessee the following minimum
insurance:
Comprehensive General Liability
$ 50,000,000
Personal Injury
$ 25,000,000
Each Occurrence
$ 50,000,000
Aircraft Legal Liability
N/A
Contractual Liability
$ 50,000,000
Product & Completed Operations
$ 50,000,000
Premises Legal Liability
$ 50,000,000
Medical Expense Limit
$
3,000
Host Liquor Liability
$ 25,000,000
Hangars Keepers Liability
$ 20,000,000
Comprehensive Auto Liability
$ 1,000,000
Work Comp
5000/5000/5000
Non-Owned Aircraft Liability
$ 50,000,000
Pollution
$ 1,000,000
The general liability insurance required hereunder shall include CMAA as additional insured.
Such insurance policy shall include contractual liability coverage for the indemnification
obligation contained in Article XI above, products hazard coverage, and broad form property
coverage. A certificate or certificates evidencing such insurance coverage shall be filed with
President at least thirty (30) days prior to the commencement date or at such other time as may
be required by President and said certificate or certificates shall provide that such insurance
coverage will not be canceled, reduced or the coverage materially changed without at least thirty
(30) days prior written notice to President. At least thirty (30) days prior to the expiration of any
such policy, a certificate showing that such insurance coverage has been renewed or extended
shall be filed with President. If such coverage is canceled, reduced or materially changed,
Operator shall, within fifteen (15) days after receipt of written notice from President of such
cancellation, reduction or adverse material change or coverage, file with President a certificate
showing that the required insurance has been reinstated or provided through another insurance
company or companies.
12.02 Workers' Compensation and Employer's Liability Insurance. Operator shall
maintain workers’ compensation and employer’s liability insurance in the amounts and form
required by the laws of the State of Tennessee. Operator shall furnish a certificate of said
insurance to President certifying that President will be given thirty (30) days written notice of
non-renewal, cancellation or other material change.
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12.03 Employee Honesty Fidelity Bond. Operator shall maintain in force with a
financially responsible company authorized to do business in the State of Tennessee a fidelity
and employee dishonesty type of bond. Each Operator employee shall be bonded to cover
$5,000. Such bond shall include CMAA as a named insured. Unless President agrees otherwise,
certificate(s) evidencing such coverage shall be filed with President within thirty (30) days after
each employee is hired. Such certificates shall provide that coverage will not be canceled,
reduced or materially changed without at least thirty (30) days prior written notice to President.
At least thirty (30) days prior to the expiration of any such coverage, a certificate showing that
such coverage has been renewed or extended shall be filed with President. If such coverage is
canceled, reduced or materially changed, Operator shall, within fifteen (15) days after receipt of
written notice from President of such cancellation, reduction or adverse material change or
coverage, file with President a certificate showing that the required coverage has been reinstated
or provided through another company or companies.
12.04 Operator’s Fidelity Bond. Prior to the Commencement Date, Operator shall
provide and file with President a Fidelity Bond from a surety company licensed in the State of
Tennessee and satisfactory to President in his reasonable discretion. The bond shall be on a form
approved by the President and in an amount equal to fifty percent (50%) of the current Contract
Year’s budgeted Operating Revenues or $_________________whichever is greater. The
foregoing procedure will be repeated for each Contract Year of the Term and any extensions
thereof. Not less than sixty days (60) days prior to the expiration date for any such Bond,
Operator shall provide and file with President a renewal or replacement Bond in the required
amount and on a form approved by the President.
ARTICLE XIII
ASSIGNMENT
Operator shall not assign, transfer, pledge or otherwise encumber this Agreement or any
of the rights, privileges and obligations of Operator hereunder without the specific written, prior
approval of President, which approval may be granted or denied at the sole discretion of the
President.
Since the experience and key managerial personnel of Operator were material
considerations to CMAA in the entering into of this Agreement, Operator shall not take any
action to materially transfer or change the ownership (excluding transfers by and among the
______________________ or owners thereof) of Operator without the prior written approval of
President, which approval may be granted or denied at the sole discretion of the President.
ARTICLE XIV
DEFAULT BY OPERATOR
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14.01 Event of Default. Provided CMAA is not then in default under the terms of this
Agreement, the happening of any one or more of the following listed events and the expiration of
any notice and cure period herein provided (which events, upon such expiration, are hereinafter
referred to singularly as “Event of Default” and plurally as “Events of Default”) shall constitute a
breach of this Agreement on the part of Operator, namely:
A.
The filing by, on behalf of, or against Operator of any petition or pleading to
declare Operator bankrupt, voluntary or involuntary, under any bankruptcy act or law,
which is not dismissed within ninety (90) days after the date of filing;
B.
The commencement in any court or tribunal of any proceeding, voluntary or
involuntary, to declare Operator insolvent or unable to pay its debts, which is not
dismissed within ninety (90) days after the date of filing;
C.
The failure of Operator to pay any amount payable under this Agreement within
thirty (30) days after written notice by President that the same is due and payable unless
Operator elects to contest same in appropriate judicial proceedings;
D.
The failure in any material respect of Operator to perform, fully and promptly,
any act required of it under the terms of this Agreement, or otherwise to comply with any
term or provision hereof within the shorter of (i) the time specifically required, or (ii)
thirty (30) days after written notice by President to Operator to do so, unless such default
cannot be cured within such period and Operator has in good faith commenced and is
prosecuting the cure thereof in which case Operator shall have a reasonable extension of
such period in order to cure such default;
E.
The appointment by any court or under any law of a receiver, trustee, or other
custodian of the property, assets or business of Operator who is not dismissed within
ninety (90) days after the date of appointment;
F.
The assignment by Operator of all or any part of its property or assets for the
benefit of creditors;
G.
Abandonment by Operator of the Facilities for a period of 24 hours or longer
except for a reason beyond the control of Operator.
14.02 Effect of Default By Operator/Termination. Upon the happening of any Event
of Default as defined in Section 14.01 above, President shall have the right to terminate this
Agreement by written notice to Operator, which termination shall be effective as of the date of
said notice. Upon such termination Operator shall promptly cease operating the GA Facilities
and shall remove and cause to be removed all of its employees from the GA Facilities. Operator
shall provide a full accounting for all property and monies of CMAA and shall surrender the GA
Facilities and all CMAA’s property therein in good order and condition, normal wear and tear
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excepted. All amounts due and payable between the parties shall then become immediately due
and payable.
ARTICLE XV
TERMINATION
15.01 Right of Operator to Terminate. Operator may terminate this Agreement and
all of its obligations hereunder at any time that Operator is not in default hereunder, by giving
ninety (90) days advance written notice to be served as hereinafter provided upon or after the
happening of any one of the following events (which are hereinafter referred to singularly as an
“Event of Default” and plurally as “Events of Default”):
A.
The inability of Operator to use the Facilities for a period in excess of thirty (30)
days because of the issuance of any order, rule or regulation by the United States of
America or an instrumentality thereof preventing Operator from operating the GA
Facilities for cause or causes not constituting a default under this Agreement;
B.
The assumption by the United States of America or an instrumentality thereof of
the operation, control or use of the Airport or any substantial part thereof in such a
manner as to substantially restrict Operator for a period of at least thirty (30) days from
operating the GA Facilities;
C.
The issuance by any court of competent jurisdiction of an injunction restraining
the use by Operator of the Airport or the GA Facilities if said injunction shall remain in
force for more than thirty (30)days; or
D.
The failure in any material respect of CMAA to perform, fully and promptly, any
act required of it under the terms of this Agreement within the shorter of (i) the time
specifically provided or (ii) thirty (30) days after written notice by Operator to President
to do so unless such default cannot be cured within such period and the CMAA in good
faith commenced and is prosecuting the cure thereof in which case CMAA shall have a
reasonable extension of time in order to cure said default.
E.
The failure of CMAA or President to pay or fund any amount or perform any act
under this Agreement within thirty (30) days after written notice by Operator that the
same is due and payable, or as otherwise required, as the case may be.
15.02 Effect of Default by CMAA. Upon the termination of this Agreement pursuant
to Section 15.01 above, CMAA shall pay Operator all amounts due and payable under this
Agreement through the date of termination.
15.03 Termination by President or Operator Without Cause. Any other provision
of this Agreement to the contrary notwithstanding, President or Operator shall have the right to
terminate this Agreement without cause upon one-hundred eighty (180) days notice to the other.
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In the event of such termination by CMAA, CMAA shall pay Operator all amounts due and
payable under this Agreement through the date of termination.
ARTICLE XVI
DAMAGE OR DESTRUCTION TO FACILITIES
If the Facilities are destroyed or so damaged as to be rendered unfit or unusable for the
use and purpose for which this Agreement is granted, without fault on the part of Operator or its
employees or agents, either party shall have the option without further liability to the other party,
upon five (5) days notice in writing, to terminate the remainder of this Agreement.
ARTICLE XVII
EQUAL EMPLOYMENT OPPORTUNITY, NON-DISCRIMINATION,
PUBLIC USE AND FEDERAL GRANTS
17.01 Equal Employment Opportunity. Operator assures that no person shall on the
grounds of race, creed, color, national origin or sex be excluded from participating in any
employment activities of Operator at the airport pursuant to applicable law. Operator assures
that no person shall be excluded on these grounds from participating in or receiving the services
or benefits of any program or activity covered by applicable law.
17.02 Federal Grants and Public Use. The parties acknowledge that the Airport will
be operated as a public airport subject to the provisions of the Federal Aviation Act of 1958 and
grant agreements between CMAA and the federal government containing assurances
guaranteeing the public use of the Airport so that this Agreement shall be not construed to grant
or authorize the granting of an exclusive right within the meaning of Section 308 of the Federal
Aviation Act of 1958, 49 U.S.C.A. Section 1349 (a). CMAA reserves the right to further
develop or improve, as it sees fit, the Terminal, the Airport, its landing area and taxiways, and to
construct other airports in its sole discretion. This Agreement shall be subordinate to the
provisions of any existing or future agreement between CMAA and the United States of America
including instrumentalities thereof relative to the operation or maintenance of the Airport, the
execution of which has been or may be required as a condition precedent to the expenditure of
federal funds.
17.03 Non-Discrimination. Operator for itself, its successors and assigns, as part of
the consideration hereof, does hereby covenant and agree that:
A.
Operator shall not exclude any person from participation in, deny the benefit of,
or otherwise subject any person to discrimination in the use of the GA Facilities because
of his or her race, color, creed, religion, gender or national origin.
B.
In the construction of any improvements on, over or under the Airport and the
furnishing of services thereat, Operator shall not exclude any person from participation
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in, or deny the benefits of, such construction or service, or otherwise subject any person
to discrimination, because of his or her race, color, creed, religion, gender or national
origin.
C.
Operator will manage and operate the GA Facilities in compliance with all other
requirements imposed by or pursuant to 49 CFR Part 21, as said regulations now or
hereafter provide.
17.04 Modifications to Comply with Federal Laws, Regulations, or Agreements.
Should the United States of America or any instrumentality thereof having CMAA to do so
require that any provision of this Agreement that is in violation of any federal law or regulation
or any provision of an existing grant agreement between CMAA and the United States of
America or any instrumentality thereof, be changed or deleted, or should any such change or
deletion be required in order for the Airport either to continue as a part of the national airport
plan or to retain its eligibility to participate in federal financial assistance programs, CMAA may
give Operator notice that it elects that any such change or deletion be made. Operator shall then
elect either to consent to any such change or deletion or to cancel the remaining term of this
Agreement. Such election shall be made in writing and delivered to President within thirty (30)
days of the date President gave notice to Operator of its election that any such change or deletion
be made.
17.05 Subordination to Federal Statute. It is understood and agreed between the
parties hereto that this Agreement shall be subject and subordinate to the provisions of any
existing or future agreement between the CMAA and the United States of America relative to the
ownership, operation or maintenance of the Airport, the execution of which has been or may be
required by the provisions of the Federal Airport Act of 1946, as amended, or any future act
affecting the operation or maintenance of the Airport; provided, however, that CMAA use its
best efforts to cause any such agreement to include provisions protecting and preserving the
rights of Operator in and to the GA Facilities and improvements thereof.
ARTICLE XVIII
RULES AND REGULATIONS
Notwithstanding anything to the contrary contained herein, Operator shall comply with
the Ordinances and the Rules and Regulations of CMAA with respect to the Airport, as the same
may be amended from time to time, all additional laws, ordinances, regulations and rules of the
federal, state and county governments, and any and all plans and programs developed in
compliance therewith which are applicable to its operations or activities under this Agreement.
ARTICLE XIX
GENERAL PROVISIONS
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19.01 No Warranties or Inducements. By executing this Agreement, Operator
acknowledges that CMAA does not warrant the validity of any information that may have been
furnished to Operator concerning the volume of Operating Revenues likely to be received from
operation of the GA Facilities and that CMAA has not intended to provide or warrant any
forecast of future passenger volumes or Operating Revenues; that such information as CMAA
has furnished with respect to these and other matters has been intended merely as one source of
information available for consideration by Operator which Operator has been encouraged to
verify through its own investigation; that in these negotiations, Operator has relied upon its own
resources as to all of these matters and that it has not relied upon any inducements or forecasts of
CMAA. Similarly, Operator does not warrant any budget matters or items it makes to CMAA
and/or President.
19.02 Waiver of Claim. Operator and CMAA, respectively, hereby waive any claim
either may have against the other, their respective officials, officers, agents or employees for loss
of anticipated profits caused by any suit or proceeding directly or indirectly attacking the validity
of this Agreement or any part thereof or by any judgment or award in any suit or proceeding
declaring this Agreement null, void or voidable or delaying the same or any part hereof.
19.03 Non-Waivers. Every provision herein imposing an obligation upon CMAA or
Operator is a material inducement and consideration for the execution of this Agreement. No
waiver by CMAA or Operator of any of the terms, covenants or conditions of this Agreement, or
noncompliance therewith, shall be deemed or taken as a waiver at any time thereafter of the same
or any other term, covenant or condition herein contained, nor of the strict and prompt
performance thereof. No delay, failure or omission of CMAA to re-enter the Facilities or to
exercise any right, power, privilege or option arising from any default, or subsequent acceptance
of fees then or thereafter accrued shall impair any such right, power privilege or option or be
construed to be a waiver of any such default or acquiescence therein. No notice by CMAA or
Operator shall be required to restore or revive time as being of the essence hereof after waiver by
CMAA or Operator of default in one or more instances.
19.04 Situs and Service of Process. Operator agrees all actions or proceedings arising
directly or indirectly from this Agreement shall be litigated only in courts having situs within the
State of Tennessee and Operator hereby consents to the jurisdiction of any local, state or federal
court located within the County of Hamilton, Tennessee and consents that all such service or
process shall be personally made by service on Operator at the Operator Offices.
19.05 Force Majeure. Neither party hereto shall be liable to the other for any failure,
delay or interruption in the performance of any of the terms, covenants, or conditions of this
Agreement due to causes beyond the control of that party including, but not limited to, strikes,
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boycotts, labor disputes, shortages of materials, acts of God, acts of the public enemy, acts of
superior governmental authority, weather conditions, floods, riots, rebellion, sabotage or other
circumstances for which such party is not responsible or which are not in its power to control.
19.06 Agreement Binding Upon Successors. Subject to the limitation on assignment
of Operator’s rights under this Agreement, the Agreement shall be binding upon and shall inure
to the benefit of the successors and assigns of the parties hereto.
19.07 Time of Essence. Time is expressly agreed to be of the essence of this
Agreement.
19.08 Applicable Law. This Agreement and every question arising hereunder shall be
construed or determined according to the laws of the State of Tennessee.
19.09 Operator’s Dealings With CMAA. Whenever in this Agreement Operator is
required or permitted to obtain the approval of, consult with, give notice to, or otherwise deal
with CMAA, Operator shall deal with CMAA’s authorized representative and, unless or until
CMAA shall give Operator written notice to the contrary, CMAA’s authorized representative
shall be President.
19.10 Notices, Consents and Approval.
A.
All notices, consents and approvals required or authorized by this Agreement to
be given by or on behalf of either party to the other shall be in writing and signed by a
duly designated representative of the party by or on whose behalf they are given and shall
be deemed given at the time a registered or certified letter properly addressed, postage
prepaid, is deposited in any United States post office.
B.
Notice to CMAA shall be addressed to and delivered to the office of CMAA at:
Attention:
President
Chattanooga Metropolitan Airport Authority
either by registered or certified mail, postage prepaid, or at such other office as it may hereafter
designate by notice to Operator in writing.
C.
Notice to Operator shall be addressed to and delivered to Operator at Operator
Offices with a copy to:
Attention:
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either by hand or by registered or certified mail, postage prepaid.
19.11 Independent Contractor. The parties hereto agree that Operator is an
independent contractor and not subject to direction or control of CMAA except as specified in
this Agreement, and except by general rules and regulations adopted for the control and
regulation of the Airport and its facilities.
19.12 Interpretation. The language of this Agreement shall be construed according to
its fair meaning and not strictly for or against either CMAA or Operator. The section headings
appearing herein are for the convenience of the parties and shall not be deemed to govern, limit,
modify or in any manner affect the scope, meaning or intent of the provisions of this Agreement.
If any provision of this Agreement is determined to be void by any court of competent
jurisdiction, then such determination shall not affect any other provision of this Agreement and
all such other provisions shall remain in full force and effect and it is the intention of the parties
hereto that if any provision of this Agreement is capable of two constructions, one of which
would render the provision void and the other of which would render the provision valid, then
the provision shall have the meaning which renders it valid.
19.13 Entire Agreement. The provisions of this Agreement contain the entire
understanding between the parties hereto with respect to the subject matter hereof and said
Agreement may not be changed, altered or modified in any manner except by written amendment
fully executed by both CMAA and Operator.
19.14 Amendments. This Agreement may only be modified or amended by a written
instrument executed by CMAA and Operator.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be duly
executed, in duplicate, with all the formalities required by law.
ATTEST:
CHATTANOOGA METROPOLITAN
AIRPORT AUTHORITY
_____________________________
CMAA Clerk
By: ________________________
President
ATTEST:
____________________________
_____________________________
By: _________________________
[Title]
Chattanooga Metropolitan Airport Authority
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CHATTANOOGA METROPOLITAN AIRPORT AUTHORITY
REQUEST FOR PROPOSAL
for
FIXED BASED OPERATOR MANAGEMENT SERVICES
at the
CHATTANOOGA METROPOLITAN AIRPORT
ADDENDUM NO. 3
October 22, 2010
This is Addendum No. 3 to the Request for Proposals for FBO Management Services issued by
the CMAA on September 24, 2010.
1.
The CMAA has learned of a company claiming to build and open a Maintenance
Refurbishment Operation (“MRO”) on the Chattanooga Metropolitan Airport. Be advised that
the CMAA has not solicited any bids or proposals relating to a MRO and that the only valid
solicitation is the Request for Proposals for Fixed Based Operator Management Services dated
September 24, 2010.