Why Aren’t More Hangars Being Built?

Aircraft owners have a lot of strong opinions, but one of the most consistent is the frustration over the lack of hangar space at airports all over the U.S.

In every FBO and field that I’ve visited over the past year, I ask if there is any available hangar space. In all cases, the airport managers have mentioned a hangar waiting list that has dozens of names deep, while outside tiedown space is universally available.

While having hangar space is more expensive, there are many advantages to having an airplane stored in a hangar over being tied down on the ramp. Among them are security, keeping the airplane out of the elements, having a place for storage of tools and maintenance items, and just peace of mind.

My questions are not born out of an immediate desire to find new hangar space, but more of an intellectual curiosity in trying to understand how big of an issue the lack of hangar space really is. In fact, I’m mostly interested in the problem from an economic point of view.

If there is massive demand for hangar space, why hasn’t some innovative entrepreneur or tech disrupter attempted to solve this problem?

As I’ve dug into the problem, I’ve learned a lot of the challenge has to do with the difficulty in dealing with airports. Most airports are owned and run by local governments, which means any decision will require some type of public oversight. That oversight extends to any decision that the airport would make that’s different from what’s already been approved. If the airport wants to develop land that it owns or spend any money on capital improvements, it must get approval from the local government.

Because of the way democracies work, this requires public hearings and filings for public records. The reality is that it’s a lot of work and requires a lot of back-door politics. The process can take months or even years.

The other reality is that most people outside the aviation community view general aviation airports as a nuisance and have a “not in my backyard” (NIMBY) approach to airport expansion. The perception for many is that the local airport is to serve millionaires and their luxury “millionaire class aircraft.”

What people often miss is that the vast majority of GA airports cater to small, single-engine aircraft. Turboprops and jets are only about 10 percent of the total national fleet. Strictly experimental aircraft—as a category—is larger than the combined fleet numbers of the “millionaire class” aircraft.

When dealing with the public, it is hard for local politicians to be viewed as catering to the rich. This means any project around the airport that is controversial is likely to be met with a lot of hesitation among airport and public officials. If the airport is requesting expansion or development and the area is already confined or close to non-aviation structures, it is likely to receive some pushback. Those opposed to the airport’s expansion plans will try to suggest that local politicians are just catering to the rich.

Other concerns like heightened safety, emission, and noise concerns are far more grounded in fact. Most airplanes are relatively noisy and produce carbon emissions, regardless of their size. There is also a higher chance of an accident happening near an airport. Except for aviation enthusiasts, most people given the choice between living near an airport or not would choose the latter.

Combine this with how many local airports are financially structured and you get the sense that there isn’t a lot of money for additional development. Generally, airports generate revenue from taxes, fees, and maybe profit from fuel and concessions. Those fees are set by committee or government rules and often fixed through policy or law. In many cases, the airport keeps the revenues it generates.

But in some cases, the revenue is not kept by the airport, but rather remitted to the government to be used for other purposes. The airport, however, receives funding for operations from the budget. This makes it difficult for an airport to make the kind of investments needed to support expanded services like more hangars.

So, if the airport isn’t able to make the investment, then why aren’t private investors taking advantage of that opportunity? This is where it gets tricky. A number of airports that I spoke with said they had land available for construction should someone want to build a hangar. On the surface, that seems like an opening for a real estate investor. After all, industrial real estate is one of the hottest investments in the world right now.

A developer could go and buy up land around the airport and throw a bunch of hangars around the country and make a fortune—an aviation version of the game of Monopoly. But, many airports actually disincentivize investment by structuring hangar construction as land leases. Effectively, it means that a builder can develop the space, lease it from the airport authority, and after 20 years, the investment goes back to the airport. This makes it incredibly difficult for developers to finance and discourages a lot of investors from trying.

While all of this is frustrating for airplane owners, it also holds the general aviation industry back. Airplanes are expensive. For most owners, their airplane is the most expensive thing they own outside their homes. They’ve spent a lot of money and the last thing they want to do is leave it outside, exposed to the elements and other hazards.

What we really need is a venture-backed startup to find a way to solve all these issues and challenge the airport authorities the way Uber challenged the taxi industry. Unfortunately, short of building a network of private airports across the country, that doesn’t appear likely.