After months of wrangling, Beaufort County has dropped plans to charge landing fees at the Hilton Head Island Airport.
Instead, it will collect a larger percentage of fuel sales to raise revenues.
The County Council on Monday approved an increase in fuel surcharges collected from the company that provides flight support for private pilots. The surcharge will not affect commercial carriers.
Signature Flight Support opposed the landing fee, which was proposed to make the airport more self-sufficient. The company said it was willing to find alternatives to give more money back to the county.
A landing fee would have driven off business at a time when air traffic has declined because of the struggling economy and Delta Air Lines' departure from Hilton Head in 2010, the company has said.
The S.C. Aeronautics Commission also said the landing fee could reduce airport use and hurt the island and state economies.
Signature pays the county 3 percent on all retail fuel sales for general aviation at the airport. Under the new agreement, the county will collect 6 percent this year and next. In 2014, the surcharge will increase to 7 percent, then 8 percent in 2016 and 9 percent when the runway is lengthened to 5,000 feet, which is expected to happen in two to three years.
The company also agreed to lower from 25 percent to 15 percent the fee it collects for managing rentals of county-owned hangars.
Councilman Rick Caporale, the council's liaison to the county Airports Board -- which endorsed the revisions -- said the new agreement would bring in more revenue than landing fees would have and it won't discourage pilots from flying to Hilton Head. He also said the landing fee would have required spending on equipment to log landings and could have cost the airport grants from the S.C. Aeronautics Commission.
"Signature deserves a lot of credit for coming to the table when they did not have to," Caporale said. "Same with the airport board for pushing for this."
The county expected to collect about $100,000 from the landing fee, compared to an extra $134,000 this year and next year with the higher fuel surcharge.
Revenues would rise by another $40,000 in 2014 and 2016, based on current fuel sales. If less fuel is sold, those figures would drop.
Airports director Paul Andres said the extra money will help the airport pay for operations. Although it made money the past three years when not factoring in depreciation, airport officials say maintenance and needed items have been deferred to balance the budget.
"It's going to help the financial bottom line of the airport, but we still have a lot of financial liabilities on the books," Andres said. "This is one step."
Council last month also approved a $4.50-per-ticket fee for departing commercial passengers at Hilton Head. The county expects to collect about $2.7 million over 10 years, according to forecasts based on current passenger counts.
The new passenger fee would take effect this spring and expire in 2022, if the Federal Aviation Administration approves it, Andres said. It would be used to repay the county about $1.5 million for prior airport construction. The rest would cover the county's share of the proposed extension of the runway to 5,400 feet and renovating the commercial terminal.
The airport charged a $3 passenger fee from 2000 to 2007, collecting about $1.4 million. The money was used to buy land for the air traffic control tower and general-aviation development.
Follow reporter Tom Barton at twitter.com/EyeOnHiltonHead.
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