Sky Harbor Airport Hangar Construction Bid Analysis Essay

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OverviewCustomer: Town of Leesburg VirginiaRFP Number – 100710-FY19-12Location: Town of Leesburg, Virginia. 25 West Market Street, Leesburg, VA 20176Product or Service: Hangar Land Lease at the Leesburg Executive AirportWith this proposal the town of Leesburg, Virginia is looking to solicit proposals to build, finance, maintain, and operate an aircraft hangar facility at the Leesburg Executive airport. Here, the proposal reviewed is from Sky Harbor Group LLC, which is newly formed publicly traded entity. The company went public on Jan 25, 2022 and is looking to create the first nationwide network of home-based solutions for private aviation aircraft. The company is looking to establish a location in Leesburg Virginia as a means of offering private hangar solutions for private jet operators within the immediate market. The proposal will look to establish a “Home Based Solution” for private jet operators where they have unparallel and unmatched access to their aircraft. The company will look to create an addition runway, 10, 28-foot private jet hangars, along with other amenities such as offices, kitchens, and bathrooms within each location. Image 1 below depicts the location of the hangars on the Leesburg airport.Image 1 – Proposed Location of Hangars at Leesburg Executive AirportDue to their recent IPO in the capital markets, the company shows a very strong financial position and balance sheet in which to construct the aircraft hangars. The bid looks to leverage the new acquired capital to demonstrate it ability to construct the hangars while maintaining an strong cash and liquidity position. The bid also establishes Sky Harbors past track record of constructing similar facilities for other municipalities around the country. Prior to the bid, Sky Harbor has established similar facilities is six different locations around the United States. These locations include Miami, Denver, Houston, Nashville, Phoenix, and Dallas. Each of these locations require very similar specifications as the Leesburg RFP, which provides much more credibility to the organization overall.The bid also includes a timeframe from Sky Harbor in which it will complete the hangars. Here, hangar construction and land development typically take around 12 to 18 months to complete. Again, as the hangar format is the same at multiple locations around the country, the company has very strong clarity as to the input costs associated with each construction material. Here, the bid indicates the average construction cost of each hangar in detail. Impressively, the company has noted in the bid that it has very little change orders associated with construction of the facility due in part to its past history of construction. With a strong financial background, a track records of successful development, and clarity into individual unit costs, the company increases the likelihood of successful completion of the hangar development.The bid also notes the strong track record of the Sky Harbor management team. The found and CEO Tal Keinan is a former pilot in the Israeli military. He has also had successful stints in investment banking. The CFO Francisco Gonzalez has a two-decade history of leadership at Goldman Sachs. He is particularly adept at real estate and infrastructure financing. In addition to these two individuals, the company has a very strong and leadership team with many decades of experience operating a public company within the aerospace infrastructure field.Finally, the bid concludes with a summary of future develop potential as it relates to the aerospace sector. For example, the bid notes that the hangars will fitting to accommodate the emergence of electric aviation and the emergence of drones. These forward-looking perspective makes the bid even more attractive to the Leesburg municipality.Background Statement and Scope of Work: Your analysis will need to include an assessment of what is needed and perhaps why it is needed. Each of these two sections will be 3-5 pagesAs it relates to the assessment of what is needed, the town Leesburg, Virginia needs a company with expertise in hangar development to help the municipality accommodate the growing demand for private aviation. Private aviation, due in a part to the pandemic is growing exponentially. As the COVID-19 pandemic illustrated, flying within close proximity to one another creates an adverse circumstance for all parties involved.

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Here, individuals are often exposed to harmful diseases and viruses that could adversely impact their health. Likewise the overall flying experience is becoming much more burdensome for Long wait times, flight delays, very tight sitting quarters, and unruly passengers all create a bad flying experience. As a result, businesses, corporations, governments, and high net worth clients are turning to private aviation as the solution. Here, private aviation provides many benefits without all of the negatives elements that occur with commercial aviation. For one, private aviation provides the shortest time to “Wheels Up” in the industry. By owning their own aircraft, businesses can quickly travel without incurring many of the flight delays associated with commercial flying. In addition, private airlines can better protect business travelers and high net worth individuals from COVID-19 and other airborne disease that can easily transferred on a commercial flight. Finally, for those that travel frequently, it can be much more convenient to quickly travel on the executives terms as oppose to finding a commercial flight that may not align with…

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…their employees and municipalities around the country (Jerome, 1992).Next, contractor logs and permit logs are required to ensure that construction is being complete in a high quality and acceptable manner to both the municipality and Sky Harbor. In this instance, contractor quality ensures that the overall quality of the hangars is maintained and little corrective action will be required in the future to fix faulty workmanship. These resources are important as they are vital to the overall success or failure of the project. Strong, highly qualified contactors can perform work at a much more efficient and higher quality pace. They require minimal change orders, have expertise in their given trade, and render services in a professional manner. This ultimately lowers the likelihood of delays associated with mismanagement. Permits and permit logs are critical to ensure that Sky Harbor is complying with all the applicable rules and regulation within the city of Leesburg. This include prompt payment of all applicable fees, renewing of permits when required, and keeping all associated backup in an easily accessible area. Construction plans and approvals are important as they provide direction as to how the facility and hangars will be constructed. In this instance the construction plans are simple as each hangar will be built to the same specifications. Likewise, the runway will also be constructed in a very simple fashion as it simple a straight line of pavement and striping (Hagen, 1989).Management Plan: Provide a summary of the management plan along with your analysisAgain, the management plan for the construction of the hangars is simple and straight forward. First, the plan is to secure adequate financing to fund the construction of the project. Here, the company Sky Harbor raised equity capital through an IPO prior to submitting their bid. Due to the recent IPO and the accommodative market pricing, the company was able to raise overall $100 million in equity capital to fund the construction of a nationwide network of hangars. Next, the plan is to secure pricing mechanism to ensure that costs remain in line with expectations. Here, the management plan looks to source each unit require for construction so that at the management level, each individual has full clarity as to each unit cost. The plan then looks to attract and retain competent local contractor to build and construction the hangars. The management plans look to vet all contractors to make sure they are competent, reputable and have all the necessary skills required to complete the project. Finally the management plan will look to continue review and oversee the construction of the hangars through weekly….....

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