Cut in business jet use pinches airport
Mar 02, 2009
By Rick Rothacker
Amid a recession and increased scrutiny of corporate expenses, Charlotte's once soaring private aviation scene is losing some altitude.
As some companies sell jets and fly less, they're laying off pilots, guzzling less jet fuel and looking to shed hangar space at Charlotte/Douglas International Airport.
"I think you're going to see a lot of rightsizing" among companies that use the airport, said aviation director Jerry Orr. "It's not as much in vogue to have corporate aircraft."
The most high-profile changes are at big banks with fleets based at the airport. After buying Wachovia Corp., Wells Fargo & Co. has closed the former Charlotte-based bank's Hawkaire aviation subsidiary and plans to sell five planes. Charlotte-based Bank of America Corp. is selling three planes and a helicopter.
Bank of America, Wells and other banks that have received government aid are under particular pressure to eliminate expenses perceived as unnecessary. Other companies also are looking to cut costs because of the slumping economy, and the overall pullback has hit airports, jet manufacturers and workers around the country.
To be sure, not all firms are shedding their fleets. Charlotte-area companies such as Duke Energy Corp., Lowe's Cos., Goodrich Corp. and Family Dollar Stores Inc. are keeping planes, saying they efficiently connect executives to operations around the country. Some, though, are flying less.
At Charlotte/Douglas, most corporate jets use the private terminal that is operated by Wilson Air Center under a contract with the airport. The airport doesn't charge private planes landing fees but makes money selling fuel and hangar space.
Federal statistics show a significant decline in flying. In November and December, the Charlotte airport had 4,226 general aviation takeoffs and landings - down 25 percent from the same period a year earlier. The
1,982 December takeoffs and landings were the fewest of any month this decade.
Fewer flights means lower fuel sales.
After peaking at more than 5.6million gallons in 2007, the Charlotte airport sold fewer than 4.7 million gallons to private aircraft last year - a nearly 17 percent decline.
The drop was even steeper last month, when the 299,200 gallons sold was down more than 29 percent.
With fuel sales slumping, Wilson Air is cutting costs, said Vince Papke, general manager. Employment is down about 23 percent from the middle of
2007 to 58 positions, through attrition. The airport is also curbing hangar construction.
"We're buckling down on expenses the best we can," Papke said.
Big banks cut back
At Charlotte/Douglas, the big banks have traditionally had the biggest fleets. They have their own hangars and buy their own fuel.
Now they're paring operations. After selling three planes, Bank of America will keep five jets - four Gulfstreams and one Dassault Falcon - "to support the needs of the business and the growth of the company,"
spokesman Scott Silvestri said.
The bank employs pilots, flight attendants and other staff based in the largest private hangar space at the airport - 122,630 square feet leased for $139,665 per year.
In the recent downsizing, Bank of America has cut at least six employees, according to a source familiar with the situation. Silvestri declined to comment on reductions, saying the bank has an "appropriate aviation department staff" to meet FAA guidelines, safety, maintenance and legal requirements.
Amid increased scrutiny of corporate jet use, Bank of America chief executive Ken Lewis took the train to a congressional hearing last month. But he took a company plane to a meeting last week at the New York attorney general's office, spurring a fresh round of criticism.
After shuttering Hawkaire, Wells Fargo will base its three remaining planes in its headquarters city of San Francisco, said spokeswoman Mary Eshet. She declined to comment on any flight crew cuts, but Orr said he heard the company laid off about 20 pilots in Charlotte.
Wachovia owns three hangars on leased land, and Orr said airport officials have asked how long it plans to keep planes in Charlotte.
Wachovia pays $216,013 annually on a lease that extends to 2018.
The airport also is watching another company that cut back its fleet a few years ago. Coca-Cola Bottling Co. Consolidated, a Charlotte-based soft drink distributor, has one jet at the airport, down from two planes and a helicopter a few years ago, said spokesman Lauren Steele.
Coke Consolidated's lease with the airport is for $604,557 a year and expires this year, and Orr said the company could decide to downsize its hangar. Steele couldn't be reached for comment on the company's hangar.
Other companies have kept their fleets intact, although some are flying less. Mooresville-based home improvement retailer Lowe's has five jets and plans to trade in two for newer models this year, spokeswoman Chris Ahearn said.
The Statesville-based planes remain necessary at a company with nationwide operations and ongoing expansion in Canada and Mexico, she said. Still, air travel is down by 25 percent as Lowe's looks to cut expenses.
Charlotte-area hospitals also are still using planes and helicopters to transport patients and transplant organs.
Winston-Salem-based Novant Health, which operates Presbyterian Healthcare in Charlotte, contracts 40 percent of a small propeller plane, which helps connect with locations in rural areas without commercial air service, said spokeswoman Marcia Meredith.
Charlotte's Carolinas HealthCare System owns five aircraft - three helicopters used for transporting seriously injured or ill patients and two planes used primarily for long-distance medical transport or organ retrieval, said spokesman Kevin McCarthy. In 2008, business trips also accounted for about 6 percent of 1,865 total flight hours on the planes, he said.
"The economic downturn has not affected our use of these aircraft,"
McCarthy said, "since they support two of our key missions to the community."
No Plane No Gain: Sampling of 2010 Coverage
Since the launch of the No Plane No Gain advocacy campaign, a concerted effort has been made to deliver the message about the importance of business aviation through national and local news outlets. This sampling of national and local television coverage in 2010, highlights the campaign's effectiveness in communicating the industry's importance.
NBAA's Bolen on Fox Business Network
Click here to see Ed Bolen, President and CEO of NBAA, in an interview on Fox Business Network
NBAA's Bolen on DC's Newschannel 8
In an interview with Newschannel 8, Bolen explains that "... business aviation is prudent, cost-effective, and oftentimes, the only way to get where you're going."