Drake Field sees a profit 10 years after airlines fly
Posted on Tuesday, October 28, 2008
FAYETTEVILLE — Drake Field is on course to make a yearly profit for the first time since it lost its commercial airlines to Northwest Arkansas Regional Airport in 1999.
“The airport is actually doing fairly well for an airport that lost its airlines,” said Ray Boudreaux, who has been general manager of Drake Field since 2002. “The airport completely lost its mission.... It took a little effort to get things going.”
That effort included five new hangars, two flight schools, a restaurant, a hair salon, a florist and the Greenland post office, which leases space in the airport’s terminal.
The area’s smaller airports had to adapt after the regional airport opened in Highfill in 1998, but none so much as Drake Field, which lost all five of its commercial airlines and saw income nosedive from $ 974, 570 in 1998 to a net loss of $ 124, 341 a year later. The Fayetteville airport was the only one in Northwest Arkansas that had commercial air service before the regional airport opened.
Many thought the completion of the airport in Highfill would be the death knell for Drake. “Everybody was really at a loss as to what to do, including the airport board,” said James Nicholson, Drake Field’s financial coordinator. Some proposals after the 1999 exodus included turning the airport into a drag strip, corn maze or hockey rink. But the Federal Aviation Administration had too much invested in the 631-acre facility. So, the commercial airport became a general aviation airport. The number of flights in and out of Drake Field dropped from 55, 778 in 1998 to 21, 761 in 2000, but was back up to 48, 042 in 2006. Flights dipped to 36, 802 in 2007 as the economy hit turbulence and companies cut back on charter service. Through September of this year, the airport had 26, 222 flights.
Today, it’s more than just an airport.
Nicholson describes the new Drake Field as “a community,” a mixed-use redevelopment complete with two not-forprofit museums, the Arkansas Air Museum and the Ozark Military Museum.
It’s a landmark year for Drake Field, also known as Fayetteville Executive Airport. For the first nine months of 2008, Drake Field had operating revenue of $ 529, 224 and expenses of $ 518, 997, for a gain of $ 10, 227. Nicholson said he expects the profitable trend to continue through year’s end.
“That’s the first year we’ve actually been above the line in our operating revenue and expenses since the airlines left,” Nicholson said, “so we’re making progress.”
In 1998, the last year five commercial airlines operated from Drake Field, the airport had a net profit of $ 974, 570. That year, the parking lot was the primary revenue generator, bringing in $ 763, 002. A year later, the parking lot brought in only $ 39, 682.
When the airlines left in 1999, Drake Field had about $ 5 million in savings. The city has used that money for capital improvements, such as hangar construction. Nicholson said about $ 617, 000 of that savings remains.
“Since it was a commercial airport, it really didn’t need to have any of those facilities,” Nicholson said. As a general aviation airport, Drake Field needs hangars that can be rented.
Now, most of Drake’s revenue comes from hangar rental. Projections for 2009 show revenue of $ 173, 329 for rental of the 80 units in eight T-hangars, $ 160, 532 for corporate hangar rental and $ 67, 290 for rental of the terminal building, Nicholson said. The fixed-base operator, Million Air, will pay about $ 100, 000 to rent two large corporate hangars and terminal space, as well as paying about $ 40, 000 as a portion of fuel sales. The 6, 006-foot runway can accommodate a Boeing 737 and often does when charter flights come into town for Razorback football games. “We’ve still got a long ways to go,” Boudreaux said. “Having an airport in your community has a huge economic impact. It’s a wonderful asset for us.”
SPRINGDALE AIRPORT James Smith, manager of Springdale Municipal Airport, said the opening of the regional airport “didn’t really affect us.” Since then, some business has migrated from the Springdale airport to Highfill, but the airport seems to have been more affected by an increase in operating expenses, because it went from part-time to full-time control tower operations.
Some freight businesses, including Federal Express and United Parcel Service, moved from the 166-acre Springdale airport to Highfill around 2003, Smith said. Tyson Inc. moved some of its charter flight business to Highfill, but rival poultry company George’s Inc. still keeps its fleet based in Springdale.
Bottom-line operating income has declined slightly over the past nine years. The Springdale airport had operating income of $ 34, 221 in 1998. Last year, it had a net operating loss of $ 9, 960. During that time, operating expenses jumped by 50 percent from $ 191, 492 to $ 288, 189. But hangar revenue also increased, by 45 percent from $ 128, 615 to $ 186, 815. “We kept adding hangars, so that pushed the hangar revenue up,” said Wyman Morgan, administrator and financial services director for Springdale. Also, Morgan noted, the number of flights coming into and out of the Springdale airport has increased from 24, 994 to 27, 439 since 1999.
ROGERS AIRPORT “As far as I am aware, XNA has not had a major impact on Rogers,” said David Krutsch, manager of Rogers Municipal Airport, Carter Field. “We have a different niche and market that we’re serving with our corporate general aviation services.” Wal-Mart Stores Inc., the world’s largest retailer, keeps a fleet of 30-35 jets at Carter Field, said Jerry Hudlow, Rogers’ chief financial officer. The airport also is a port of entry for air traffic from outside the United States. Flights from Europe, Asia, South America and Canada regularly land at Carter Field, Krutsch said. The airport had an operating loss of $ 83, 810 last year, but Hudlow said that’s because the city has to put up some money to receive state and federal grants that pay for things like runway construction. “We can stand to lose $ 80, 000 a year to get $ 20 million,” Hudlow said, referring to the amount of money the airport has received in grants over the past decade.
BENTONVILLE AIRPORT The municipal airport in Bentonville primarily serves Wal-Mart vendors and local pilots. It’s only two miles from Wal-Mart’s headquarters, and the air traffic over Bentonville isn’t nearly as heavy as it is at Highfill.
“We don’t need a tower,” said Mike Bender, public works director for the city of Bentonville. “We’re a real small general aviation airport. We serve a different niche. We don’t have big planes, just your small Cessnas — four-, six-seat planes, that kind of thing.” Thaden Field “won’t pay for itself. We use city funds to help,” Bender said. The airport’s net operating loss has grown from $ 5, 649 in 2000 to $ 40, 426 in 2007, said Denise Land, Bentonville’s finance director. When asked how many flights come into and out of the Bentonville airport, Dave Powell, owner of Summit Aviation LLC, the airport’s fixed-based operator, said, “We’re an airport without a tower. Who’s counting ?”
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