Florida FBO Sues Airport Authority

 - August 31, 2011, 7:40 AM

Amid allegations of public funds being used by an airport authority to compete against a privately owned FBO, Southwest Florida International Airport-based FBO and MRO services provider PrivateSky Aviation has sued its landlord, the Lee County Port Authority (LCPA). In its complaint filed with the U.S. District Court, PrivateSky claims that LCPA’s newly remodeled Page Field Aviation Center–which was scheduled to open at the end of August at nearby general aviation-only Page Field (FMY)–was funded (at least partially) with government grants given to the authority through its status as a special district of the State of Florida. As a result, the lawsuit claims, LCPA will carry little or no debt service for the construction of the newly renovated FBO, giving it an unfair operating advantage over privately owned PrivateSky, which as the sole GA services provider at Southwest Florida International Airport (RSW) must pay a percentage of its revenue to the Authority, thus further reducing its ability to compete.

“From what we calculate, so far they used up to $40 million in grant money to compete directly against our FBO, and we don’t think that’s right,” said PrivateSky chairman and CEO Vincent Wolanin, citing what he believes to be many improvements the LCPA made at FMY over the past several years. A statement in the airport’s capital improvement plan summary provided by Wolanin lists several projects, including the design and construction of the new GA terminal and associated landside facilities, which was to total $15 million including $200,000 in federal grants and nearly $12 million in state grants. The remaining approximately $3 million was to come from local sources.

In its latest update on the project, the LCPA–which has operated the FBO at FMY since 1996–lists the total estimated cost of the new facility at a little more than $16 million, with $169,380 coming from FAA grants, approximately $8 million from state department of transportation grants, nearly $7 million from internal funding, and $500,000 from other sources. When contacted regarding the lawsuit, an LCPA spokeswoman said the agency would not comment on any pending litigation.

Wolanin believes the new facility will enable the LCPA to undercut his hangar rental and fuel prices and draw customers the approximately seven miles to Page Field (which according to a recent economic impact statement from the Florida DOT generates $94.5 million annually to the local economy, as opposed to $3.8 billion for RSW). Ultimately, he believes the LCPA is attempting to drive him out of business at RSW, so the Authority can take over as the FBO operator there as well. “By pushing us out the door, they [can] take over and charge whatever they want to charge.” His suit requests “injunctive relief and unspecified damages.” He said, “We are seeking for the judge to give us a decision that levels the playing field. We have no problem with them competing against us, but compete against us fairly.”

The lawsuit has attracted the attention of the National Air Transportation Association. “NATA and its membership are concerned about the rising trend of local government landlords using federal and state grant funding to subsidize the construction of commercial entities designed to compete with their existing tenants,” the association said in a release. “It is our hope that this lawsuit will act as a catalyst to encourage the LCPA to engage in discussions with PrivateSky that acknowledge the possible unfair competitive advantage the authority has by funding the construction of a competing facility at Page Field with federal and state grant money.”