B U S I N E S S & C O M M E R C I A L
36 | BU S INE S S A I R P O RT INT E RNAT I ONA L A P R I L 2 0 2 0
“Airports seek private
partners because they
can earn profit and
take the money out of
the airport”
Peter Kirsch, attorney at law firm Kaplan
Kirsch Rockwell
Doing your homework
While there is an abundance of land ready to
lease at business airports around the world,
the airports themselves need to do their
homework to better understand the traffic
coming in and out of their region and why they
are visiting.
“Most airports can only make more money
if their tenants make more money. As the
airport’s businesses are more profitable, they
can raise rental rates,” says Bryan Del Monte,
president at The Aviation Agency.
“We use ADS-B data to look into the traffic
at our clients’ airports. When you cross
reference that data with the jet registration
information, you start to get a picture of why
the customer is coming to you.
“With this knowledge, you can work out
what you can give them at your airport in the
form of real estate partners.”
Customer research, figuring out how to
engage passengers, and having discussions
with partners on what to do and how to expand
are important aspects to consider. After that
initial research is complete, airports can be
more focused with their approach. Without
understanding an airport’s market proposition,
it’s difficult to prove its value to potential
business partners.
Airports are mostly located
away from most travelers’ final
destinations because of their
large size and issues around
the noise from aircraft. Being
located on the outskirts of
urban areas, business airports often have a surplus of land,
which can be used to make extra revenue.
The potential for profitable partnerships with external
businesses is almost endless, with aeronautical and nonaeronautical
companies both possible tenants.
“In the USA, general aviation airports have long thought
of their real estate simply as land to separate them from
their neighbors. They haven’t really considered the land as
an income-producing asset,” says Peter Kirsch, attorney at
law firm Kaplan Kirsch Rockwell. Kirsch has been involved in
the development of airport infrastructure for over 30 years.
“That attitude has changed in recent years as airports
have realized their aeronautical users can benefit from a
subsidy from non-aeronautical developers.
“It’s a recent phenomenon and there is
a range of revenue producing enterprises.
Examples include farmland and crops to
office buildings and hotels. It really is a case
of how much real estate the airport has, rather
than the limits of people’s creativity.”
Solar farms, movie theaters and golf
courses are all other possibilities.
Travel-related businesses often prove the most
profitable. But a successful development at a
business and general aviation airport doesn’t
have to be associated with the airport’s
business itself.
Location is key
Like any sort of real estate-orientated
transaction, the location of the airport is key.
Transactions are much like a private sector
real estate development and are
dependent on the market and the
opportunities at a location. Often, a
company will do everything it can to
lease land at an airport if its location
is suited to its operational, or even an
individual’s needs.
“At a very large general aviation airport
in Denver, one of the largest providers of cable TV
communications in the world wanted to build a new
headquarters office,” says Kirsch. “It’s CEO really liked his
private jet and wanted to keep it near the office. They built
their corporate office adjacent to the airport so he could
take an elevator straight down to his jet.”
A bespoke approach to the business of real estate is
what entices clients to use certain airports. This also applies
to those passengers who are looking for a fast, low-key
arrival and departure.
“A lot of recording artists come to Flying Cloud Airport
in Minnesota, because the late-singer Prince’s Paisley Park
Above left: Sheltair opened
a US$55 million FBO hangar
complex at Republic Airport in
New York
Above right: Sheltair is building
a new FBO at Colorado’s
Rocky Mountain Metropolitan
Airport