Airport faces financial hurdles stemming from decrease in fuel sales, loss of entitlement funds

Katie Kuba
March 30, 2021

BUCKHANNON – The Upshur County Regional Airport is facing financial challenges for the next two years, but the president of the Buckhannon-Upshur Airport Authority believes the Airport Authority can right the ship – or the planes – by 2022.

The issue came to light during the City of Buckhannon’s and Upshur County Commission’s budgeting meetings earlier this month, when Airport Authority Secretary Brian Huffman appeared before both governmental bodies to ask for an additional $20,000 from each entity for the current fiscal year – i.e., the one ending June 30, 2021 – and the following fiscal year, which runs from July 1, 2021 through June 30, 2022. Huffman also said the Airport Authority also lost $150,000 per year in entitlement funds from the Federal Aviation Administration for the current and following fiscal years due to dipping under the number of aircrafts required to be based out of the airport.

However, Buckhannon-Upshur Airport Authority President Tom O’Neill said he doesn’t believe those setbacks will affect the long-term functioning of the airport, which should be able to recover financially by FY 2023, which begins July 1, 2022.

In requesting the additional funds, the airport authority cited the COVID-19 pandemic’s detrimental effect on general aviation, and ultimately, on fuel sales.

At council’s March 18 meeting, Huffman said the airport authority’s budget had “taken a major hit” as fuel sales plummeted.

“We’ve seen a significant decrease in aircraft operations at the airport and that, of course, results in a loss of fuel revenue,” he said. Huffman did add that the Airport Authority received a $20,000 grant through the FAA in 2020 and hopes to receive an additional $9,000 in funding through the same program in 2021.

“We’re certainly hoping that the aviation industry will see some additional relief, but again, the bottom line we are projecting for this current fiscal year of 2021 is a little over $40k deficit,” Huffman told council. He said that in FY 22, the Airport Authority has projected just over a $39,000 deficit in revenue.

“We do have some funds available to us that we’ve been able to stockpile over the previous years, but that has been injected and utilized to help offset this deficit,” he said. “Those carryover funds have helped us stay up and running.”

Huffman said the airport authority additionally lost $150,000 for the current and upcoming fiscal years in what’s called entitlement funding because the Upshur Regional Airport lost two aircrafts that were based out of airport.

“Unbeknownst to us, we ended up losing two of our based aircrafts due to that fact that they were deregistered or declassified by the FAA, and we were not notified – we weren’t aware of that,” he explained to council. “There’s a threshold we have to achieve in order to be eligible for what’s called the entitlement from the FAA which is $150,000 a year, so we’re losing it for FY 21 and FY 22, and we’re not looking to see any entitlement from the FAA until FY 23, so again, we’re here to request assistance.”

On Monday, O’Neill said there was no doubt that the pandemic significantly lowered people’s use of general aviation, and, in turn, fuel sales.

He expanded Huffman’s remarks, saying that the FAA requires airports of certain sizes to have a minimum of 10 based aircrafts, meaning primarily housed and stored at hangars in the airport.

“We dropped below 10 to eight, so if we come back up, we will get that entitlement funding back,” O’Neill said. “We are confident that the next time around, we will have the required number of aircrafts based at the airport. We just need to bridge the gap until we get there, and I don’t think this is going to have any significant effect on our airport’s operations.”

The BUAA is working on increasing its tenants already, and O’Neill said a lease agreement effective April 1 had been signed by and executed with a new tenant.

While the $150,000 annual entitlement allows considerable leeway as to how those funds are used, the primary deficit the airport is facing is rooted in decreased fuel sales revenue, O’Neill noted.

During council’s meeting with Huffman, he said when the entitlement money hopefully returns in FY 2023, it could be used to construct additional hangars, and that in turn could attract more home-based aircrafts.

“That’s why we feel that it’s a priority to get more hangars up there, which would lead to more based aircraft, more operations, more hangar leases, and then, to more fuel (sales),” Huffman said.

At council’s meeting, councilman CJ Rylands pointed out that $8 million in the new American Rescue Plan was earmarked for West Virginia airports.

“Is that an option for you to get some relief there in the latest COVID bill?” Rylands asked, and Huffman replied that although the airport authority was “hopeful” it will receive a portion of those funds, specific guidance as to who can acquire the funds and when they will be available has not yet been provided.

Huffman said BUAA’s carryover money is “a savings account, basically, that’s getting drained” and could dry up by the end of June 2021.

Rylands complimented the airport’s recent enhancements.

“The new terminal is really nice, and it’s an important asset. I support increasing this for this current year,” he said.

Councilman David Thomas also said he supported increasing the city’s contribution to the airport from $15,000 to a total of $35,000 for FY 21.

“I would support the first year, and then let’s see how things unfold with the [American Rescue Plan]” regarding FY 2022 allocations, Rylands said.

Thomas made a motion to contribute an additional $20,000 to the BUAA for the current fiscal year, which was seconded by Rylands before passing unanimously.

The county commission gave its normal annual amount — $20,000 — to the airport for FY 22 but is holding off on making further allocations until they have more information about the American Rescue Plan.

Upshur County Administrator Carrie Wallace said the commission usually contributes $20,000 per year to the Buckhannon-Upshur Airport Authority and allocated the same amount in its FY 22 budget. Commissioners opted to wait to see how much funding the airport might receive from the ARP before increasing their allotment.

“The commission explained that [the airport authority] would likely be entitled to receive forthcoming APR (American Rescue Plan) funds,” Wallace explained Monday, “so they postponed making a decision on the additional allocation until guidance is received.”