Statesville Council agrees to purchase Statesville Flying Service for $5.44 million

Posted at 9:39 PM on Jan 14, 2019


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The Statesville City Council voted 5-4 Monday night to enter into a contract to purchase Statesville Flying Service (SFS), the long-time Fixed Base Operator (FBO) at the Statesville Regional Airport.

This action comes following the recommendations of a 2017 Airport Marketing Study, which endorsed further study on the advantages of a city-operated airport.

“This is a mutually-agreed upon action,” City Manager Ron Smith said in a news release. “We have enjoyed our relationship with Statesville Flying Service and are grateful for the professional manner in which they have operated the airport as the FBO for 40 years.”

In a split vote, council members Steve Johnson, Doris Allison, C.O. Johnson and John Staford voted to approve the purchase.

Council members Roy West, Michael Johnson, Keith Williams and William Morgan voted against it.

Mayor Costi Kutteh cast the tie-breaking vote, resulting in approval of the sale.

Michael Johnson, who said he would support paying $4.8 million for SFS, and Morgan both said the sale price was too high.

Statesville Flying Service (SFS) was started in 1978 by Phil Hazel. His son, Thomas, currently serves as president of the company.

SFS provides aircraft maintenance, fuel and oil, short- and long-term hangar space, and other airport services. SFS leases land from the City on which it has built and operated a terminal building and 100,000-square-feet of hangar space.

"Of course, we have mixed emotions to be leaving this business after 40 years,” Thomas Hazel said in a news release. “I’m very proud of my father and the role he’s played since 1978, building this airport from a small facility for private pilots to a thriving regional airport serving NASCAR teams, Lowe’s Home Improvement, and a variety of aviation service providers. We’re extremely grateful for the employees and customers who joined us along the way.

“We wish the City of Statesville the best of luck in this endeavor. The City will benefit financially by operating the FBO and will have better control of one of its biggest assets, the Statesville Regional Airport. They will also be able to leverage state and federal funding to which a privately-held FBO has no access," Hazel added.

The $5.444 million purchase price includes eight hangars, as well as the terminal building.

Council voted to use fund balance to purchase the SFO, and will revisit financing and reimbursement options at an upcoming meeting. It is expected that the City will recoup its investment primarily through hangar space rentals and fuel revenue.

With a take-over date of February 1, Airport Manager John Ferguson and Smith said the transition of staff and operations will cause minimal disruption at the airport. The current FBO staff will remain in their positions and will become city employees.

Ferguson will take on more responsibilities of the day-to-day operations.

There are a number of large infrastructure expansion projects occurring at the airport, most of them funded through FAA grants. Plans to construct a connector road and additional taxiways, and the ability for corporations to build more hangar space are also in the works, according to Ferguson.

A recent Economic Impact Study commissioned by the North Carolina Department of Transportation shows that the Statesville Regional Airport has a $134.5 million economic impact to the community.

“This action (purchasing SFS) is not uncommon in the airport management industry. I am excited to be continuing the professional service started by the Hazels and I look forward to developing the airport to its fullest potential,” said Ferguson. “We have a lot of opportunity to grow the airport.”

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