The past few years at Van Nuys Airport have seen an exodus of small airplane operators and double-digit declines in air traffic.
But the past few months have brought a miniboom, with three new tenants signing leases at Van Nuys as private-jet travel begins to take off.
It’s not only a signal that business people are starting to travel more as they recover from the recession, but also an indication that flight companies see opportunity for growth at Van Nuys.
“We feel good enough about the opportunity at Van Nuys to go ahead and make the plunge and commit to a hangar,” said Steve Lassetter, president of Sun Air Jets, a Camarillo company that is expanding into Van Nuys. “It is certainly the business airport for Southern California. Just being there is a big part of our growth.”
Along with Sun Air, which signed a lease at Van Nuys this month, new airport tenants include Chicago-based aircraft insurer Jet Support Services Inc., which leased office space this month, and NetJets, a Columbus, Ohio, fractional jet company owned by Warren Buffett’s Berkshire Hathaway Inc. NetJets said in September that it would lease a terminal building under construction at the airport.
Those leases indicate Van Nuys is continuing to transition from a home for mostly small propeller plans to a hub for business travel – something that airport owner Los Angeles World Airports, a department of the city, has been promoting.
“I think it’s the fruits of the last 18 months or so of business development by the airport,” said Curt Castagna, president of the Van Nuys Airport Association, which represents airport tenants. “We’re excited about the possibilities.”
Market shift
Van Nuys was once the nation’s busiest noncommercial airport, with more than 600,000 takeoffs and landings by private jets and small propeller planes.
Those numbers dove through the last decade; the airport is on pace this year to have fewer than 300,000 takeoffs and landings. That’s mostly because owners of propeller planes have either given up on flying or have moved to airports where tie-down rates are cheaper, said Ron Wood, president of the Valley Economic Alliance.
Private and business jet traffic grew through most of the last decade, then tanked during the recession. The airport reported that about one-third less jet fuel was delivered to the airport in 2009 than in 2007.
Last year and this year have seen some improvement. Last year, jet fuel deliveries were up 6.2 percent over 2009. Growth has been slower this year at 2.5 percent through September, but airport officials and aviation companies are upbeat.
Sun Air has a 121,000-square-foot hangar at the Camarillo Airport, where it owns three jets and manages five corporate jets. The company, a charter provider and aircraft manager, is expanding into Van Nuys because it sees demand there.
It was a new client’s desire specifically to have its Gulfstream jet housed at Van Nuys that gave the company the final push to sign a five-year lease at the airport, Lassetter said.
Sun Air’s 21,000-square-foot Van Nuys hangar has room for perhaps five jets, depending on aircraft size. But for now, there is just one. Lassetter said that will give the company room to grow.
“We’re cautiously optimistic, with an underline under ‘cautiously,’” he said.
Sun Air has already moved in, but NetJets, which sells shares in private jets, will have to wait until the summer to start using its new Van Nuys Terminal.
Maguire Aviation, a fixed-base operator started by L.A. real estate businessman Robert Maguire and one of the largest leaseholders at Van Nuys, is building the 10,000-square-foot terminal and leasing it to NetJets.
NetJets already flies in and out of Van Nuys and uses Maguire Aviation’s terminal facilities, but the new terminal “will be customized for NetJets and provide our customers with exceptional service and amenities at one of their most popular destinations,” a NetJets spokesman said in a statement announcing the lease.
Promotional efforts
More than in the past, airport leaders are trying to sell the airport as a private-jet hub, although weekend flyers of propeller craft are still welcome.
In October, for the first time, Airport Manager Jess Romo attended the National Business Aviation Association’s annual conference in Las Vegas.
Romo said the airport’s presence at the industry conference “sends a message to tenants that it’s not just up to them to expand their businesses. We will either rise or drop together.”
That message seems to be getting through. Lou Seno, chief executive of JSSI, said he, too, is confident about expanding into Van Nuys.
The company offers a kind of pay-as-you-go insurance plan covering scheduled and emergency maintenance for jets. Jet owners or managers pay JSSI a fee per flight hour, and JSSI schedules, oversees and pays for maintenance when needed.
JSSI is subleasing office space from Pentastar Aviation, a fuel and maintenance provider at Van Nuys. The company has hired a technical adviser and is recruiting a vice president of operations.
Seno said JSSI manages about 60 jets in California, but wants to double that over the next 18 months. The company carefully tracks flight hours of private jets and reports that hours are up in Southern California and nationwide.
“We think it’s really time to plant a much bigger flag in California,” he said.
That and other leases are all good signs, not only for Van Nuys but for private and business aviation in general, said Brian Foley, a private aviation analyst in Sparta, N.J.
“JSSI is a very sophisticated company,” Foley said. “They definitely feel the pulse of the industry and how it’s doing. If they have confidence in going ahead and setting up some new offices, that could bode well for the rest of the industry.”
