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LOSING MONEY

Originally, Airport Authority officials did not expect that the second FBO would lose $317,000 halfway through its first year of operation (August through November 2011, according to the most recently released reports).

According to a proposal that Wilson Air submitted to Airport Authority officials in 2010 (when they were considering which company would compete against TAC Air), the company expected to lose exactly $108,413 in all of year one. The company would start generating profits in its second year of operation and beyond, at least according to its proposal.

"The $317,000 that they have lost in the first five months does not include their startup costs of over $1 million," McAllister said.

"If it continues going at the pace it's going right now, at the end of the first year in operation, it stands to lose three-quarters of a million dollars."

Despite the financial loss, Siebold said the second FBO is providing much needed competition in the Chattanooga area to private planes in need of fuel.

In the exclusive video, she said the following:

"Our number one goal in this endeavor was to make sure that we introduce competition on the airfield and lower the fuel prices here at the airport. We believe it's been hugely successful, and I think the numbers reflect that."

"It's great to see that you have fuel prices that are much more competitive. An offshoot of the competition that has been added to the market is that it will take us a little bit longer to reach profitability."

According to airnav.com, a website used by many aviation professionals to determine which airport offers the best fuel prices, this is not necessarily the case, at least as of March 23 of this year.

According to the web site, fuel prices at the two FBOs in Chattanooga remain lower than they are at Tennessee's two largest airports (in Nashville and Memphis, both of which have two private FBOs). Tennessee Watchdog investigated TAC Air's fuel prices in Chattanooga in 2010, when it had no competition, and reported similar findings.

Now that TAC Air has a government-subsidized competitor in Chattanooga, full-service fuel at TAC Air is less expensive than what Wilson Air charges.

Wilson Air officials have denied Tennessee Watchdog's request for comment, but, in a flier, company officials accuse TAC Air of spreading misinformation about their FBO, claiming that fuel prices have gone down as a result of the competition.

Siebold referred all further questions to April Cameron, the airport's vice president of finance.

Cameron agreed to answer a variety of questions concerning the need for new hangar space. She also agreed to answer whether airport officials could furnish proof that they always believed the second FBO would lose money during its first five years of operation. Cameron would only answer those questions via e-mail. She has thus far not responded.

HANGAR SPACE?

McAllister has a question for the Tennessee Aeronautics Commission, one that nobody will thus far answer.

"Why would the state of Tennessee turn around and give them (the Chattanooga Airport Authority) $5 million to invest in another hangar when we have about 40,000 square feet of empty (hangar) space right now that I can't fill?"

B.J. Doughty, spokeswoman for the Tennessee Aeronautics Commission, told Tennessee Watchdog that Commission members listen to requests for grant money and review project proposals.

Their duties, however, do not include confirming that what Airport Authority officials said was true when they requested the grant money.

"The due diligence for local needs is done by those with first-hand knowledge -- the airport sponsor or manager.  The Aeronautics Commission may ask questions for clarification. They do not routinely become involved in independent audit or investigation beyond that scope," Doughty said.

Aeronautics Commission member Jim Berry is a Chattanooga businessman. He has a potential conflict of interest as it pertains to Wilson Air.

According to the Aug. 11, 2011 edition of the Chattanooga Times Free Press, Berry was Wilson Air's first hangar tenant after it opened last summer. That means Berry used his position as a public servant to allocate taxpayer money to a company he later used for personal reasons.

Berry did not respond to any of Tennessee Watchdog's questions about the matter.

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