Aviation Business Journal 1st Quarter 2013 - 37

Epps Aviation

Continued from page 35

Bird’s eye view of Epps’ 21 acres consisting of terminal, 8 hangars, ramp, and t-hangars.

business due to the economy and
the very competitive pricing in the
industry,” Epps said. “In fact, there
are some operators who will price at a
loss in order to keep revenue coming
in.” However, despite the depressed
market conditions, Epps said that
her company has no plans to exit the
charter market anytime soon.
“For a company like ours, it’s
difficult to get out of charter because
we love flying and have been doing
it for so long!” Epps exclaimed. “We
have a lot of great customers that
rely on it. And, charter often leads
to aircraft sales because there are
customers who eventually decide to
buy their own aircraft rather than
continue to charter having seen the
benefits of general aviation.”
In fact, aircraft sales, Epps
explained, are viewed as a potential
growth business, at least in the
long term. “It will be an emerging

opportunity at some point because we
have an aging general aviation fleet
that will need replacement,” Epps
noted. “However, I don’t see aircraft
sales growing at any great pace until
the economy gets better. It’s harder
now for people to get the financing
needed to buy an aircraft — new or
used — coupled with what seems to
be a lack of interest among business
people to invest capital in airplanes.”
This, she noted, has a “trickledown” effect on the general aviation
services industry. “That’s because
when people buy airplanes,” she
explained, “they will be purchasing
fuel and other services from providers
like us. When they are not, then the
aviation services business suffers.”
Along this line, she pointed out
that there are more hurdles facing
general aviation than a sluggish
economy — some of which could have
a devastating impact on its future.

“One is the IRS, which wants to
impose a federal excise tax on the fees
charged by management companies
to aircraft owners even when they
fly the actual owners of the aircraft
they manage and in spite of the
fact that a tax is already collected
from their charter customers,” she
explained. “This has the potential to
jeopardize leaseback opportunities
and put many aircraft management
firms at risk of losing business
because there will be owners who will
conclude that, with the additional
tax burden, outsourcing their aircraft
management will be too costly.”
Also raising concerns, said Epps,
is a disturbing trend involving airport
leases.
“What we are seeing is a move
toward shorter term leases at higher
rents,” she said. “When you’re dealing
with a short-term lease, it becomes
very difficult to justify an investment
in the infrastructure of your business.
Along with that, the airports are
looking for more revenue generation
opportunities. In some cases, that
has focused on taking a percentage of
fuel sales — instead of a fuel flowage
fee — which can result in unrealistic
pricing that could drive customers
away. The governments own the
airports, and their efforts should be
on the runways, taxiways, towers, and
security and leave the retail business
of fuel, hangar, tie-down, and aviation
opportunities to private enterprise.”
Equally uncertain is the proposed
application of airport user fees
on general aviation aircraft. On
September 12, 2012, Epps, who
was appointed to the NATA Board
of Directors in April 2011 and
Continued on page 39

Aviation Business Journal | 1st Quarter 2013

Aviation Business Journal 1st Quarter 2013

Table of Contents for the Digital Edition of Aviation Business Journal 1st Quarter 2013