These days, hangar space at airports is at a premium, often creating long waitlists. While the way these waitlists are managed varies widely, there are several key strategies that can help airports understand true demand versus perceived demand for hangars.
Airport hangar inventories continue to decline or remain relatively flat, while the demand for these vital facilities continues to rise. Very few new hangars are being built. The time has never been better for airports to evaluate their hangar management strategies. If you ask most aircraft owners about finding a hangar for their aircraft at their local airport, you will most likely hear about waitlists, costs, lack of availability to build their own hangars, no new hangars being considered, etc. Hangar inventory nationwide is ageing. Many were built under less stringent and complex building codes. Regulation and associated cost to repair and maintain these older structures can be a huge challenge—many struggle to find solutions to simply replace a 30- or 40-year-old hangar roof while finding a way to recover replacement costs in rents.
In addition, aircraft fleet mixes are changing. Newer, large-cabin business jet aircraft with winglets and tail antennas, sometimes exceeding 28 feet in height, along with longer wingspans of new piston aircraft like Cirrus and Diamond, are now commonplace at airports. These taller aircraft with longer wingspans many times will not fit into the legacy aircraft hangars designed for the aircraft of yesteryear, such as Beechjets and Lears, extending time they must spend on a waitlist.
All these factors and more have put us where we are today. While the aviation industry looks for answers and solutions to these problems, what can we do in the meantime?
One baseline practice is to optimize the use of existing hangars. Hangar demand and even the health of an airport is often measured by the number of aircraft waiting to get a hangar. Most hangar waitlists show a somewhat inflated view of true demand. Part of the issue revolves around what I call True Hangar Waitlist Demand vs. Perceived Hangar Waitlist Demand.
- True Hangar Waitlist Demand – Aircraft owner would lease a hangar with an airworthy aircraft today if offered.
- Perceived Hangar Waitlist Demand – On the waitlist but would pass on a hangar lease if offered today or be non-responsive to your offer.
The question for an airport manager to ask is, “What type of demand do I really have?” vs. “What are users and aircraft owners reporting?” Airport hangar waitlists are the tool of choice to manage this demand.
Managing your waitlist and finding true demand
These 10 best practices, learned in the trenches of hangar lease management, may help optimize hangar stock and pinpoint true demand.
- Use it or lose it. Check that there is a minimum occupation requirement for number of nights in a given year to lease a hangar. You may find certain hangars are leased by an aircraft owner, but the aircraft may only spend a few nights a year in the hangar. This is especially common in resort communities with a lot of second homes. You can point those folks to overnight hangars or the local fixed base operator (FBO). Your lease agreement may need an annual occupancy requirement. You could add something like a 30-day or 90-day in a calendar year occupancy by the N-number on the lease. There are various ways to verify overnight visits.
- Require annual inspections and insurance. Airport sponsors can require that an aircraft occupying a hangar be airworthy and insured, whether it is a public or private hangar. Aircraft that never fly do not buy fuel and do not frequent your local repair station, which does not help the airport. Some aviators like to hold on to their aircraft for various purposes, including nostalgia or a feeling of staying in the game. If they know their aircraft must have an annual inspection and be insured, that may be just enough for them to give up their hangar.
- Have a healthy non-refundable deposit. Managing your waitlist represents considerable time and expense. Do not return the deposit if aviators take themselves off the list. Do allow them to apply their deposit to first month’s rent. $250 to $1000 deposits are not uncommon. Use a one-page Hangar Deposit Agreement. One airport in Oregon requires one year’s rent in advance. This will weed out some of the lookie-loos. However, if aircraft owners know their deposit is non-refundable, do not expect a call or notice when they no longer desire the hangar.
- Sanitize your waitlist. At least annually, call your waitlisters to see if they are still serious about the hangar. Ask questions such as: Would you be ready to take a hangar today? Have you acquired the aircraft anticipated for the hangar? These can help gauge true demand. If they do not respond to your email or phone inquiry, send them a letter. If there still is no response, remove them from the list. Check that your deposit agreement (as discussed in #3 above) gives you the ability to do this.
- Right-size the aircraft for the hangar, when possible. Airports with a mix of hangar sizes, such as varying T-hangar sizes vs. box/executive hangars, should work hard to manage expectations with tenants. The plane should go in the most appropriately sized hangar for that specific airframe. Check that your lease agreements give you the ability to move a tenant from one hangar to another. Try not to put smaller aircraft in larger hangars. This sounds simple, but many times aircraft owners will request specific hangars to be next door to a buddy or a preferred location on the airport. While accommodating these requests is great, this can also extend your waitlist. A Cirrus or Diamond needs a 40- to 42-foot-wide hangar door. Hangars this size are typically limited at many airports. At the same time, it is not uncommon to see a RV10 or Cessna 172 with shorter wingspans in these larger hangars, taking up this valuable space. Instead, you should move the RV 10 to a smaller hangar. This is bound to be unpopular with the tenants, especially if they have gotten cozy in the hangar, but if they know when they sign their lease they may be moved, it can go a long way to maximize your inventory.
- Manage non-aviation storage. You’re right! Easier said than done. This can be hard to accomplish, it but needs to be done if you have long waitlists. If you have private hangars built on public, grant-obligated airport property, check that they are storing airworthy aircraft in those hangars. Sometimes these hangars become cheap places to store boats and RVs, or to operate a personal business. Non-aviation storage, in many cases, is the only reason tenants are hanging on to a hangar, especially for airports that do not have an annual and/or insurance requirement. The plane may never fly, but their Christmas decorations and their jet skis are safe—and are likely stored at a discount over a commercial self-storage facility. You likely will create a few openings if you encourage these folks to move on. Routine and consistent application and enforcement is key to successfully managing non-aviation storage.
- Be careful with multiple aircraft in one hangar. If you have a long wait list for large box/executive hangars, do not allow pilots to place themselves on the waitlist for these hangars unless they have an aircraft that qualifies by size for that hangar and hangar door (long wingspan or tall tail height). Some pilots commonly seek an executive/box hangar for their collection of small aircraft. It makes sense that they want to consolidate their collection, but it will have the effect of shortening your T-hangar waitlist and extending your executive/box hangar waitlist, which are typically at a premium.
- No line jumping—unless there is a public/community benefit. Some airports allow family and friends to “take over” a hangar lease. This will not help your waitlist. Outside of a spouse or child, it is advisable stay away from that. However, if allowing line jumping enhances public safety, this may be an exception. Similarly, it may be beneficial to allow line jumping for aircraft from a commercial charter or another company that offers services to the general public. Creating a waitlist policy that reflects the direction you hope to take your airport will help you capitalize on potential opportunities to enhance services to your greater community.
- Charge market rents. Too many hangar rents are artificially low at airports with long waitlists. Raising rents can be painful, especially for tenants who have had lower costs for a long time. As you adjust rents to market rates, that will likely clear some space on the waitlist. With the nation’s aging hangar inventory, rents are a key element to determine true demand. Older hangars are typically rented at a discount with no plan or margin for replacement. This gets pilots used to artificially low rents. Pilots need to understand what the true cost is of providing these services. Built-in margins for repair and replacement need to be included in rents. Artificially low rents may be the single largest factor in discouraging private investment in hangars at your airport.
- Prepare for economic downturns. A recession could turn your waitlist upside down. You can put lots of effort and prep into a plan to create new hangar space only to have tough economic times blow up those plans. During the Great Recession, waitlists at some airports evaporated as folks divested themselves from aircraft. Typically, T-hangar waitlist are more susceptible to vacancy during a recession then box/executive hangars.
If your fixed-based operator (FBO) is managing airport-owned hangars or you have other types of public private partnerships operating or managing hangars on airport property, you can require these provisions to be a part of their management practices. Any hangar, whether privately or publicly owned on airport property obligated by grant assurances, is subject to the FAA Policy on Use of Hangars at Obligated Airports. By enforcing standards, you may encourage these folks to sell the hangar to someone who needs it for an aircraft.
Building new hangars and increasing hangar inventory at airports continues to be a difficult nut to crack—reversion clauses, low priority for FAA funding, and lack of interest from the private sector, among other things, have created dynamic issues with hangar availability at airports. With very few hangars under construction and really no new airports being built these days, more creative and smarter approaches to managing existing hangar facilities offer greater value to users and healthy revenues for the airport.
What strategies work for you at your airport? Or which of the above would you like to try to see where it takes you? I’d love to hear from you!