Because the Personal Plane Fleet Grows, Hangar Availability Dwindles

There’s a saying within the aviation enterprise that in the event you’ve seen one airport…you’ve seen one airport. There could also be fact in that axiom, however not once you’re speaking a few scarcity of hangar house among the many prime 200 or so airports frequented by enterprise aviation passengers. The issue is just not new to the business, but it surely has turn out to be extra acute over time for a number of causes, the primary being merely that giant markets have a tendency to draw giant quantities of enterprise plane.

“The issue is individuals wish to be in Los Angeles, Teterboro, Miami, DFW—they wish to be in particular locations,” mentioned Milo Zonka, vice chairman of actual property with Florida-based FBO operator and hangar developer Sheltair. “Florida, normally, is certainly constrained—all the things from Miami, Fort Lauderdale, Naples, Orlando, Tampa, Jacksonville is full. In fact, we’re actually speaking about these hangars that may accommodate something. If you’re scrounging for a 16- to 18-foot hangar for a light-weight jet, you may be capable of discover one thing in a secondary market.”

One other issue is the longevity of enterprise jets. The age of the enterprise jet fleet has elevated as plane that previously would have been put out to pasture have gained new worth within the post-Covid personal aviation increase. “There’s a lot demand for personal jets now that even when you’ve got a 30-year-old jet that in any other case would have been retired, so long as it’s protected and airworthy, it is sensible to maintain it in service,” mentioned Tal Keinan, CEO of personal hangar developer Sky Harbour. “There’s additionally a know-how part. Jets get higher over time and stay longer over time, which speaks to a swelling inhabitants.”

Whereas plane are lingering longer, the jet inhabitants continues to develop as OEMs meet the demand with new plane that will even compete for the present hangar house. Final yr noticed 712 enterprise jet deliveries worldwide, with the U.S. accounting for practically 70 p.c of the market or greater than 400 new plane. Sheltair’s Zonka defined the maths: “You’re taking 400 airplanes and the typical [hangar space needed] between gentle, mid, and enormous jets is 5,000 sq. ft every, you might be speaking two million sq. ft of hangars that need to be constructed simply to accommodate what got here off the road,” he mentioned. “Even if you’re solely speaking 1,000,000 sq. ft, that’s thirty-three 30,000-square-foot hangars, and there are most likely solely 10 or 15 being constructed for the time being.” Given present development costs, Zonka estimates the fee for every at roughly $9 million. “However you might be dropping $9 million 30 instances simply to accommodate this yr’s deliveries, after which it’s a must to do it once more subsequent yr.”

Greater and Greater

The plane themselves will be the largest issue. “There’s a drive towards bigger plane and bigger hangars in order that places strain on the place these plane stay and go,” mentioned David Finest, Jet Aviation’s senior v-p of regional operations for the Americas. “We wish to construct amenities which might be related right this moment, but additionally for the longer term.”

In 1996, the biggest plane in Bombardier’s product lineup was the Challenger 604, which has a floor footprint of 4,485 sq ft. That yr, the Canadian airframer launched the World Categorical as its new flagship. The long-range enterprise jet greater than doubled the 604’s footprint at 9,400 sq ft. “That was solely 27 years in the past, which within the span of aviation infrastructure isn’t a really very long time once you have a look at 35-year [FBO] leases,” famous Doug Wilson, president and senior associate of business consultancy FBO Companions. Since that point, Bombardier has delivered greater than 800 legacy Globals, equating to greater than 7.5 million sq ft of hangar house for simply that kind. It has since delivered no less than 100 of the follow-on World 7500, which is even bigger with a footprint of 11,648 sq ft. Gulfstream has seen related plane evolution. In 1996, its GIV-SP took up 6,942 sq ft of hangar house whereas right this moment’s G650 is greater than 3,000 sq ft bigger at 10,000 sq ft. Dassault’s under-development Falcon 10X shall be even bigger at 12,100 sq ft. 

Because the Personal Plane Fleet Grows, Hangar Availability Dwindles

Banyan Air Service operates multiple million sq ft of hangar house at Fort Lauderdale Government Airport, however that’s nonetheless not sufficient to fulfill the big demand, particularly for right this moment’s rising fleet of ultra-long-range enterprise jets. (Photograph: Curt Epstein)

Peak vs Footprint

However it isn’t simply their footprints which might be a priority concerning these plane however their heights as nicely, with the newest ultra-long-range enterprise jets requiring door heights of 28 ft. Whereas that has turn out to be an ordinary today within the high-traffic areas of the Northeast, Florida, Texas, and California, elsewhere they’re nonetheless usually the exception.

As Keinan defined, “You’ve acquired loads of hangars—particularly within the higher-end places such because the New York space—which have 28-foot-high doorways however a lot of the put in base within the nation is 24 ft and down as a result of when these hangars had been constructed 30 to 40 years in the past, that may have accommodated the tallest enterprise jets.” He calculates that since 2010, there was an 81 p.c improve within the sq. footage of plane with a tail top of greater than 24 ft for a complete of 16.6 million sq ft. “Again within the late Nineteen Eighties, your ultimate hangar might need been 10,000 sq. ft and it met your GIIIs and GIVs of the day, however right this moment that very same hangar might be at a minimal of 15,000 sq. ft as a great, given the scale of the plane,” mentioned Curt Castagna, president and CEO of the Nationwide Air Transportation Affiliation (NATA) in addition to head of hangar developer and operator Aeroplex Group Companions. “Relying on the kind of operations you might be having, that means Half 91 vs 135, your ultimate hangar is likely to be 30,000 sq ft-plus to accommodate nesting of a number of airplanes.”

He famous that within the Los Angeles space alone, corporations have added greater than half 1,000,000 sq. ft of hangar house over the previous a number of years, all of which is now totally occupied. “I feel you’ll be able to say demand is certainly outstripping provide within the main metropolitan areas, after which within the secondary markets, there is likely to be a little bit little bit of capability, simply not the proper capability, the 28-foot-high doorways,” Zonka advised AIN. “We’re full in each location and it’s a mad dance in South Florida, for instance. It’s a day by day seek for plane which might be both new to the proprietor or the proprietor is relocating.”

Provided that stage of demand, one would think about new hangars can be sprouting like mushrooms. A part of nearly each lease award or renewal is a capital infrastructure requirement by the airport. Multimillion-dollar investments akin to hangars are sometimes made early on within the lease to supply the longest time potential to amortize the prices.

“I feel what’s vital to comprehend is hangar improvement goes in cycles with the bottom leases and the economic system, and so I might say within the late Nineteen Eighties and early Nineteen Nineties there have been numerous 30-year leases that went into play for airport developments across the nation,” mentioned Castagna. “Now we’re coming full circle once more 30-something years later the place numerous these developments are coming as much as the place they’re reverting again to airports.”

These airport sponsors can select to supply the present FBOs a lease renewal, put the property up for a request-for-proposal contest to draw different operators, or just select to take over the operation itself. “If you consider it within the context of the lease cycle, if an FBO constructed hangars with a lease that they acquired in, say, 2000, they’ve already exhausted 22 years on their lease, and there are solely one other 10 or so years left,” Wilson advised AIN. “Are they going to spend money on a model new 28-foot-door hangar when the airport gained’t essentially give them an extension to amortize it?”

House Obtainable

FBOs are constructing hangars after they deem it fiscally prudent to take action, however in lots of circumstances discovering locations to place these hangars is an issue. “The entire different drawback once you begin speaking to airports like Teterboro is that they don’t have any land left,” mentioned Zonka. “They’re working out of filth.”

That has triggered plane operators to hunt out secondary and probably tertiary airports in additional crowded areas. Clay Lacy Aviation is constructing an FBO that includes a quartet of 40,000-sq-ft hangars at Connecticut’s Waterbury-Oxford Airport (KOXC). “There’s been numerous dialogue about new hangars being in-built White Plains, new hangars being in-built Teterboro, and different airports within the surrounding space, however that is actually occurring,” mentioned David “Buddy” Blackburn, Clay Lacy’s senior v-p for its KOXC FBO operations. “The buildings are going up, in order that’s an enormous deal for the Northeast for certain.”

At these airports the place improvement (or redevelopment) is feasible, hangar operators are encountering extra headwinds ensuing from the Covid-induced modifications within the economic system. “We completed a hangar within the Los Angeles space in 2018 that between hangar, workplace, and terminal house was roughly 45,000 sq. ft, and that hangar was about $7.2 million,” Castagna advised AIN. “That hangar across the center of 2022 might need been round $11 million to $13 million simply due to the development prices—metal and labor and the opposite pressures on the mission—which all go into the metric of evaluating the return on funding and the lease time period.”

These rising prices are certainly enjoying a job within the selections to launch development, in response to some corporations. “We’ve acquired half a billion {dollars} in tasks which might be on our books proper now that we wish to flip filth on,” Zonka mentioned. “[But] they’re in markets that may’t help the lease as a result of the development is so costly.” Castagna added that due to the rising prices, the top consumer goes to bear the burden in markets the place the present rents are so low that it’s robust for FBOs to make financially sustainable developments.

Sky Harbour, a hangar advanced builder and operator with amenities in Houston and Nashville, just lately opened its third location, at Miami Opa-locka Government Airport. Among the many three amenities, it has introduced practically 400,000 sq ft of high-end hangar house on-line, with an additional 300,000 sq ft of plane shelter to open by the top of this yr in Denver and Phoenix, adopted in early 2024 by 170,000 sq ft within the Dallas space. In line with CEO Keinan, the corporate plans to develop tens of millions of sq. ft of recent capability. It has vertically built-in, manufacturing its personal hangar elements to hurry development and higher management its provide chain, but it too has been affected by the latest value will increase in metal and labor, which affect the rents which might be finally charged as corporations search to make again their investments.

Ready Time

“Anytime you construct a hangar, it by no means occurs in a single day,” mentioned Chuck Suma, COO of the Million Air FBO chain. “It’s often a 12- to 18-month mission to get to the purpose the place you set the shovel within the floor, so we’ve needed to observe prices as we go alongside and ensure we’re continuously updating our pricing buildings so we perceive what the whole price of the construct is.” He added that pricing on development supplies akin to metal can range relying on when the order is positioned. “We sometimes do a hard and fast agency value for contractors on the time we ink the deal so as soon as we get to the allowing stage then you understand precisely what your closing prices are.”

“Towards the constraints of infrastructure improvement due to lease phrases and clearly the fee, we’ve got seen the market responding with increased per-square-foot charges and a higher deal with the actual property as a perform of the FBO enterprise,” mentioned Wilson. “That was thrown into probably the most distinction throughout Covid.” On April 13, 2020, enterprise aviation reached its low level, off by 75 p.c from its regular exercise. “However just about each based mostly tenant paid their lease as a result of it’s actually laborious to get a hangar when you’ve misplaced your spot,” Wilson added.

One other change wrought by Covid was the will by high-net-worth individuals to retreat from crowded city areas to extra rural places that sometimes didn’t see a lot enterprise plane visitors and lacked the infrastructure to accommodate it. “Ten years in the past, in the event you had mentioned ‘Bozeman, Montana,’ we might have mentioned, ‘The place’s that?’” quipped Finest. “Now we’re placing a 40,000-sq-ft hangar there and we’ve acquired sturdy demand from our prospects to be there.”

Million Air’s Suma described it as a change in patterns, the place prospects at the moment are heading to those trip locations sooner than they used to and staying longer as nicely. “There’s nonetheless the resort visitors, however numerous what we’re seeing with the big plane coming in are the individuals who personal houses there.” 

FBO Partners Hangar IT software

The Hangar IT program helps hangar keepers handle hangar house and allot occupancy extra effectively based mostly on the footprint of the plane. (Photograph: FBO Companions)

Making the Most of What You’ve Obtained

To assist in giving FBOs the most effective use of their restricted hangar sources, FBO Companions has developed Hangar IT, a software program program designed to permit hangar keepers to swiftly and precisely decide their hangar house availability at any given second. At its most elementary, this system permits FBOs to enter all their tenant contracts right into a database the place the system can robotically flag ending leases for renewals and/or pricing changes. The system feeds these alerts to the corporate’s accounting system for additional motion.

The second perform determines probably the most correct occupancy within the operator’s hangars. “That’s carried out by capturing all of your present tenants out of your lease documentation,” defined FBO Companions president and managing associate Doug Wilson. “These tail numbers go into the system, which robotically acknowledges the precise plane kind and assigns the proper sq. footage to the plane.” Via a characteristic known as “Roll Name,” plane will be assigned to one of many FBO’s hangars. Every time line service technicians enter that hangar to maneuver an plane, they’ll scan a QR code on the door, which can deliver up the hangar roster. They are going to then enter the tail variety of the plane they’re shifting, and this system will robotically deduct the correct quantity of house within the hangar and calculate the extent of occupancy, thus permitting the FBO to right away understand how a lot house it could supply to transient plane. Wilson famous that the system is in beta testing with an eye fixed towards full launch later this yr.

A 3rd perform, as soon as the patent–pending program positive factors market acceptance, shall be a market the place hangar operators can publish their vacant house, permitting flight departments to order and pay for assured transient hangar house forward of time reasonably than merely being positioned on a ready checklist.

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