Are TOL/TDZ Privatization Talks Realistic?

Discussing Great Lakes Aviation

Are TOL/TDZ Privatization Talks Realistic?

A local (family) investment group ran by Dock Treece under the name Treece Investment Advisory Corp., along with his sons Dock David and Ben, have made public they are nearing the end of a study on taking over the operations of both Toledo Express Airport and Toledo Executive Airport. The facilities are currently owned by the City of Toledo, though reside outside city limits, and are operated by the Toledo Lucas County Port Authority through a lease that expires in 2023.

So far very few details are public right now and exactly how they will operate the airport or work with existing tenants. None of the investment team has any experience owning or operating an airport. Dock Treece has claimed (in a Toledo Free Press article) that he has “over 30 years” experience around aviation. No details have been released on exactly what that experience is. This site has been critical of the Port Authority membership for some time due to lack of aviation experience, especially on the Airport Committee, and has concerns when it comes to holding the proper experience to run the operation.

In the Free Press article they do disclose that there will be at least two new corporate entities created for the airport operation – Toledo Airport Operations Company and Toledo Airport Facilities Company. Specifics aren’t available on what each which do, but it can be assumed one will be a building and land management firm and the other the actual operator of the facilities.

Politically they did run into a slight snag as the Toledo Blade prepared an article painting the picture that this group wanted to by-pass city council through this agreement, but the Treece group denounced it. Outgoing Mayor Bell and incoming Mayor Collins are both on record for appeared open to considering the proposal, but are guarded in their comments.

There are some hints of what their plan would include. According to the Free Press, the Treeces have talked to or expect to pursue “defense contractors, plane refurbishers, maintenance facilities, refueling stations, pilot training programs, and a school that wants to start an aviation program” (Toledo Free Press). They’ve also specifically outlined fuel farms and working to reduce the number of them onsite and consolidate operations. These are all great targets and should be pursued, but the specific mention of the fuel farms should be concerning to some. These are typically owned by the FBOs or large operators (like BAX in the past) and any consolidation is going negatively hurt the FBOs that survive off of fuel sales.

With all that said, so far in the US you can count on one hand the number of privatized airport operations with commercial service – Branson and San Juan. Several airports have looked into it, several have been in the past but no longer are.  So that is definitely showing just how realistic it is for such an operation to be privatized is.  The other issue is the fact that the airport (like most) has received significant amount of federal aid when it comes to run rehab and other upgrades. This means that any profit generated by the airport could not be removed from the facility without FAA approval. There is no indication that the Treeces have even looked into this part of the operation.

It is not a big secret that the airport operations are a drag on the Port Authority’s bottom line and have been subsidized by the more profitable Toledo Seaport. At this point however, it is way too early to justify any level of support to the idea being presented by the Treeces. More details need to be provided and the hard questions answered when it comes to impacts on the incumbent businesses that support the airports and impacts on FAA funding.

The take away from this is that the discussion is out there about fixing a broken situation. The Port Authority would likely be willing to get the airport budget off their financial sheets to improve their numbers, however this doesn’t mean privatization is the way to go. The goal in this plan, and all plans going forward, should be to great a focused independent entity for the airport operations. So far not enough is public knowledge of the Treece plan to evaluate appropriately. Based on what is known at this point, the best option may be to use the knowledge gained in this process and begin the task of setting up a regional airport authority to take control of both TOL and TDZ. Ideally a public entity would reduce the risk of issues with the FAA and also be focused on addressing the concerns of existing tenants that are growing louder by the day.

– David