OCIA’s 2011 operations indicate an improving economy

Operations at the Oakland County International Airport (OCIA) in Waterford Township may not be exempt from the strains of the economy or fluctuating fuel costs, but for the first time since 2000, the decline in 2011 airport operations figures wasn’t as drastic as in years past. Given the nominal decrease in airport operations last year, officials are beginning to see the very modest decline as a bellwether of an economy finally turning the corner.

Unofficial figures for 2011 indicate that airport take-off and landing traffic was down only 0.2 percent from 2010, when it was pegged at 119,581.

“The rebound is because the business, corporate and air freight traffic is up, but private flying remains depressed,” said Oakland County Director of Central Services J. David VanderVeen.

In 2009, airport take-off and landing traffic totaled 144,678. Yet still those numbers were better than operations in 2008, when they dropped a record-breaking 19.8 percent from 2007′s 202,345 total operations.

According to tower control statistics, take-offs and landings began trending downward beginning in 2000 and fell abysmally in 2001, attributable to the 9/11 terrorist attacks on the World Trade Center and the Pentagon.

The downward trend began in 2001 when the airport reported 283,369 take-offs and landings compared to the 337,219 seen in 2000, a sharp decline of 15.97 percent. From that point on, numbers have fluctuated.

In 2002, the airport recorded 277,616 take-offs and landings, a drop of 2.03 percent from 2001. In 2003, the airport reported 276,153 take-offs and landings, a drop of only 0.53 percent from 2002. However, in 2004, operations totaled 243,395, down 11.86 percent. In 2005, the airport reported 207,757 operations maneuvers. In 2006, the airport recorded 202,973 total operations, or 2.3 percent less than the 2005 figure.

From September 2001 until December 2005, the airport averaged 20,746 operations per month. Though the terrorist attacks were a factor in the decline immediately following 9/11, VanderVeen said that the largest influence in the decline was primarily Michigan’s lagging economy.

“The figures reflect the fact that the state of Michigan was in the economic doldrums,” VanderVeen said.

After 9/11, the cost of insurance and aviation fuel also escalated.

The rise in fuel costs over the last decade has compounded air traffic declines. Aviation fuel costs go up at about the same rate that regular gasoline prices rise, VanderVeen said. However, there are far fewer gallons of aviation fuel produced, so the price is much higher than regular gasoline.

The sale of aviation jet fuel, which is generally used by business and corporate aircraft, had been rising steadily since 2001, when almost 10.4 million gallons of aviation jet fuel were sold at the airport. By 2005, that number had increased to 13.25 million gallons — a 27.6-percent boost from 2001.

However, as recently as 2009, there was a total of nearly 6.74 million gallons of aviation gas and jet fuel sold. In 2010, that number rose to just over 9 million gallons of fuel combined.

In 2011, the figure rose to about 9.86 million gallons, an increase of 9.6 percent.

“You may ask, ‘How can traffic be down and fuel sales be up?’ But 96.2 percent (of fuel sales) was jet fuel, which means that business, corporate and air freight traffic is on the uptick, but the discretionary flyer is not. There is a direct correlation between the fuel you sell and air traffic,” VanderVeen said.

The OCIA primarily serves southeast Michigan and Oakland County. It’s designated as a general aviation reliever airport serving individuals, businesses and industries in Oakland County; but also the state, and the nation.

More than 150 corporations base aircraft at the OCIA, and many house several aircraft at the airport located off of M-59 between Airport and Williams Lake roads. Over 800 aircraft are based at the airport, and are valued in excess of $200 million. The facility is self-supporting.

“The airport operates with federal and state grants and airport revenues,” VanderVeen said. “It doesn’t operate at the the expense of the general taxpayer nor does the taxpayer support the improvements there.”

The OCIA remains listed as the second-busiest airport in Michigan, with corporate and business flights remaining relatively steady.

“Private flying or discretionary flying stays depressed, but according to the fuel sales, business flying is up,” VanderVeen said.

Instructional flying sessions and program numbers that have been down over the past several years don’t contribute as much to airport operations as they had in the past.

“We have three flight schools left now and it’s not as large a component in the amount of air traffic as it used to be,” VanderVeen said. “The recession took its toll in flight training.”

Given the drop off of flight schools, DCT Aviation and Flight 101 are moving to the forefront and trying to drum up business through innovative practices.

“Business is pretty good,” said Flight 101 instructor Chris Holton. “I have 10 students in my schedule, so it’s full and there are five other instructors that are all busy.”

Flight 101 has been in existence since the 1969. It, like DCT Aviation, provides pilot-certified training for students to obtain their instructor licenses.

Between 80 and 90 percent of Flight 101′s customers enroll to fly recreationally, whereas 10 percent are seeking lessons to fly professionally, according to Holton.

Unlike many flight schools, Flight 101 has a strategy that mitigates climbing fuel prices.

“We get our fuel at a discounted rate because we lease office space to a fuel company,” Holton said. “We’re in a better situation than most and haven’t had to up our prices.”

DCT Aviation opened over 40 years ago, but moved into the OCIA four years ago. Recently, the business added a pilot lounge to its floor plan. DCT Aviation Business Development Director Michael Khakham also purchased two additional planes in 2011. Now it houses seven planes: a six-seater Cherokee; an Arrow 2, a retractable gear plane with a 200-horsepower engine; a Warrior with a 160-horsepower engine; a primary plane for training; and three Archers, each with 180-horsepower engines.

“We bought a plane with a glass panel instead of steam gauges,” Khakham explained.

DCT Aviation’s customer base is comprised of students, businesses, those seeking professional licensure and those who want to learn to fly recreationally.

In 2011, DCT Aviation graduated about 25 students who earned their pilot license, a rise from last year’s 15 students. In 2009, nine graduated, whereas in 2008 only four obtained their pilot license.

DCT Aviation tries to keep up with the times technologically as a means of attracting new students.

“We have glass panel simulators with a worldwide database of airports, GPS capability and log time toward getting their pilot rating,” Khakham said.

Integrated training consists of class time on the ground and flight time.

“It’s more efficient if put together,” Khakham said. “This way they get muscle memory and the scanning down for better efficiency.”

While the business is turning a nominal profit, Khakham said the rise in fuel costs is a strain on the business.

“Fuel was up quite a bit in the summer and now again it’s going back up,” he said. “Earlier this summer fuel rose to $6 a gallon, so that’s bound to have a huge impact.”

Despite the escalating fuel costs, DCT Aviation tries to be innovative by holding seminars every weekend during the winter, from now through March. The business has not resorted to hiking their prices.

“We’re not going to raise our rates just because of the economy. We don’t want to deter people from flying,” Khakham said. “We’re just riding out the economy and just surviving for better days like everyone else.”

The OCIA features paved runways and taxiways, effective lighting, and taxiway identification and approaches for its 6,520-foot instrument runway. It provides charter contract passenger service, air freight operations, fuel services and maintenance, as well as the entire range of aircraft services.

Moreover, there are new and used aircraft sales operations, flight training schools, and a Federal Aviation Administration-staffed control tower complete with air traffic control services including Tower Advisory Radar.

And recently, the airport upgraded its terminal building to a more eco-friendly one, since the previous terminal was outdated from a functional standpoint.

“This year we completed the LED terminal building and it is the first in the state, if not the nation, of its kind,” VanderVeen said. “It shows we are good stewards of the environment and when people land here it leaves an impression of a professional community.”

The cutting-edge, eco-friendly terminal incorporates wind turbine, solar and voltaic power generating technology to offset traditional electrical power use; LED interior lamps; geothermal heating and cooling; an electric vehicle charging station; and bio-swell rain gardens for landscape irrigation.

The building was constructed using recycled content when possible.

Other new amenities in the building footprint include airport offices, a U.S. Customs Service office, and a private meeting/telecommunications room to accommodate about 80 people.

The new terminal was built on the same site as the airport’s former terminal building. Although smaller in terms of square footage — approximately 13,500 square feet instead of 17,000 — space has been used more efficiently.

The terminal is heralded as one of the first of its kind in the country for a general aviation airport. The OCIA is the 16th-busiest general aviation airport in the U.S. and the second-busiest airport in the state, behind only Detroit Metropolitan Airport.

Costs for the green terminal project were about $5.5 million. Approximately $1 million was provided by the Federal Aviation Administration (FAA), while $1 million was obtained through a U.S. Department of Energy grant, with the balance covered by the Oakland County Airport Fund, which has been saving for several years to pay for the terminal and other capital improvements.

The OCIA, originally named Pontiac Airport, came to fruition after the city of Pontiac purchased 160 acres of land in 1928. An additional 80 acres were acquired within a year and construction of the first hangar began in 1930.

Oakland County acquired the 482-acre airport from Pontiac in 1967 in exchange for the Old Masonic Temple building in downtown Pontiac at Saginaw and Lafayette streets. At the recommendation of Oakland County Executive L. Brooks Patterson, on March 7, 1996 the Oakland County Board of Commissioners renamed the facility the Oakland County International Airport.

Over the years, the airport has expanded into a 751-acre facility by tacking on east runways, additional clear zones, and buying up properties on the north side.

It is home to a trio of runways, with the longest being 6,520 feet that was completed several years ago when William Lake Road was realligned. Approximately $2 million in federal grant money was used to fund an expansion of the airport’s north-south runway, as well as improvements to a runway safety area.

The end result of the north-south runway expansion was a cross-wind runway increased in length from 1,800 feet to about 2,600 feet. Additionally, the runway was widened from 50 feet to 75 feet. To make the north-south runway longer, existing hangars on the far northeast side of the airport were torn down and new hangars were constructed in the north-central portion of the airport property. The expansion of the safety area provided more room for aircraft to take-off with heavier fuel loads.

“Before we were limited and 727s and others couldn’t fly non-stop to destinations, so when we extended the runway now they can fly to Mexico, the west coast, Europe and Asia non-stop,” VanderVeen said. “In a global economy, that extension was very important to conduct commerce with Oakland County and the rest of the world. Every Fortune 500 company goes in and out of our airport every year.”

The OCIA can accommodate some newer, larger aircraft, including the Boeing 727 and 737, Air Bus 319-320 and DC-9. In 2000, the FAA mandated that aircraft weighing more than 75,000 pounds must use a Stage 3 engine, which is quieter than Lear jets and Gulf Stream corporate jets.

Millions of dollars have been doled out for renovations and developing an airport master plan that delineates improvements over a 20-year period that began in 1992.

Over the last 11 years, a $38.3 million comprehensive noise reduction program was implemented that identified 552 houses in the area of the airport for added sound insulation. The project also provides for sound-proof window replacement and installation of air conditioning when necessary.

In conjunction with the noise insulation project, a ground run-up enclosure went into service in 2004 that reduced noise by over 90 percent, according to VanderVeen.

Now that the noise program has been completed, a study must be conducted every five years to comply with an FAA mandate.

“We are updating noise contours to see if anything additional needs to be addressed. If noise increases, we must fix that, but it has decreased due to quieter engines coming into service and secondly, we’ve been in the economic doldrums and that affects flying,” VanderVeen said. “Airports are a pretty good barometer of the local economy.”