Christmas Came Early to the Aviation Industry

Miki Barnes
December 18, 2020

To access information about Paycheck Protection Program (PPP) loan disbursements discussed below, visit the ProPublica Tracking Tool site as well as the Small Business Administration (SBA) PPP database. In addition, this CNN report provides detailed information on PPP funding by industry and sector.

Please note that according to the SBA, "recipients who receive under $2 million are not subject to a full review by the SBA to ensure eligibility and compliance with PPP program requirements." This provision leaves the public with limited knowledge about how disbursement amounts below $2 million are spent and does not insure that the money went to employees on the payroll of the applicant.

Bear in mind that for most Americans, awards of $150,000 to $2 million would go a long way toward rent, mortgage payments, groceries, child care, automotive expenses, utilities, college tuition, educational costs, medical bills, and accumulated debt. With that sum of money, many could buy fancy homes with swimming pools, tennis courts and RVs parked in the driveway. For this reason, any company that applies for and receives PPP handouts should be subject to full SBA review and transparent public accountability, regardless of the amount awarded.

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During these extraordinarily difficult times when many Americans are struggling to keep food on the table, care for their families and educate their children at home, a growing number of people live in fear of eviction. Some grapple with significant financial losses as a result of unemployment, while others wonder if their cars and and homes might be repossessed due to the inability to make payments.

In the midst of this unprecedented crisis, wealthy aviation flight training schools and owners of private jets, helicopters, and fixed wing aircraft and businesses lobbied to insure that they would benefit from the entrenched "corporate socialism" policies that have long characterized the U.S. aviation industry. In some instances small airports received enough bailout money to cover their costs for the next 25 to 50 years.

In addition to the $25 billion in payroll support for commercial airline employees and another $25 billion for airline loans and the air cargo industry, Congress allocated $10 billion in aid to commercial and general aviation airports, a program that has triggered controversy due to the inequitable distribution of funds. Significant disparities and irregularities have emerged over the formula used to justify these handouts.

As if this were not enough, aviation businesses also received Paycheck Protection Program (PPP) funds. The enormous amount of money lavished on the aviation sector appears to be part of a well-orchestrated industry and government strategy designed to consolidate money in the hands of airport and aviation businesses while everyone else goes without.

Commercial airports provide scheduled airline passenger service, while general aviation facilities primarily serve flight training schools, jet owners, and private pilots. As of 2019 there were 664,565 certified pilots in the U.S. This figure includes recreational, student and private pilots as well as flight instructors. Of this number, 92% were men. These pilots, who are the primary users of the 20,000 general aviation airports in this country, comprise less than 1/4 of one percent of the population, yet they are major beneficiaries of CARES Act funding.

Unfortunately, the generosity displayed by the U.S. government towards airports and the aviation industry does not extend to the greater population. In fact, Congress, after doling out billions to the aviation sector, finds the prospect of issuing a second round of $1200 stimulus checks to be an insurmountable task.

Pandemic Relief - Financial Windfall for Hillsboro Airport Tenants

Flight Training Schools Receive Millions in PPP Funds

According to a CNN Politics report, U.S. flight training schools received $30.7 million in Paycheck Protection Program (PPP) funds. The loans for the companies discussed below were approved in April of 2020. Two of the recipients are based at the Hillsboro Airport.

Both companies claimed to be essential services and, based on that spurious claim, continued to provide flight instruction throughout the pandemic. In fact, Federal Aviation Administration FAA Master Records reflect an increase in operations at HIO over the 12 months ending July 13, 2020. This confirms that Hillsboro Aero Academy (HAA) and ATP employees were working throughout. Certainly people in the community, routinely bombarded by the noise and pollution generated by flight training activity, can attest to these ongoing activities. The question that then arises is why these companies applied for and were granted PPP funds.

Unlike restaurants, medical facilities, gyms, salons and other businesses that were forced to close or reduce staffing and hours of service to stop the spread of the virus, HAA and ATP have continued to operate.

• $2.22 million in PPP monies went to Hillsboro Aero Academy (HAA) to fund its international flight training business. HAA, owned by out of state investment firms Graycliff Partners and Renovus Capital, is managed by Max Lyons. Per the SBA, "Based on standard PPP eligibility rules, HILLSBORO AERO ACADEMY, LLC's total 2019 payroll expenses were approximately $10.64M in order to qualify for the PPP loan amount received. Based on their reported 180 jobs retained, this equals an estimated average yearly compensation of $59,125 per employee." Taxpayers, who are footing the bill, should have access to the nature of the positions claimed including job titles, pay scales, full and part-time status, benefited vs. non-benefited, etc. Student pilots sometimes work as hourly flight instructors to accrue hours towards their certification. It is unclear how much of the money went to subsidizing jobs for foreign pilots who are in the country temporarily to earn a pilot's license. The details of this arrangement should be fully disclosed in an open public forum.
• $2.7 million went to ATP. Per the SBA, "Based on standard PPP eligibility rules, ATP PROFESSIONALS, INC.'s total 2019 payroll expenses were approximately $12.95M in order to qualify for the PPP loan amount received on their reported 206 jobs retained, this equals an estimated average yearly compensation of $62,868 per employee." ATP provides flight training at other U.S. airports as well. Though ATP's address is 251 Little Falls Drive in Wilmington, Delaware 19808, it does not offer flight training there. ATP should be required to disclose where its pilots originate from - within the U.S. or outside the country. If from outside the U.S., what are their countries of origin? If from outside Oregon but within the U.S., what states are they from? How many ATP students are receiving training at the Hillsboro Airport at any given time and how many of the 206 reported jobs are in Oregon? Like HAA, this business has continued to engage in flight training activity throughout the pandemic.

Hillsboro Airport Charter Companies Rack Up $6.87 Million in PPP funds

In addition to the flight training schools, four other HIO tenants were approved for PPP funding. According to the SBA, "Nationwide, 928 businesses in the 'Other Airport Operations' industry received a total of $126,066,881.00 in PPP loans." These companies cater in large part to a minuscule fraction of the one percent, a high end, affluent clientele who can afford to charter or buy private jets, helicopters and/or other aircraft. The PPP allotments for Aero Air and Hillsboro Aviation came from this fund.

"Other Airport Operations" PPP Fund

• $3.4 million went to Aero Air LLC. This company offers private charter, aircraft sales, maintenance, and hangar services and also profits from the sale of jet fuel and leaded avgas. Per the SBA, "Based on standard PPP eligibility rules, AERO AIR, LLC's total 2019 payroll expenses were approximately $16.34M in order to qualify for the PPP loan amount received. Based on their reported 204 jobs retained, this equals an estimated average yearly compensation of $80,089 per employee."
• $1.5 million was awarded to Hillsboro Aviation, a company owned by Max Lyons, to fund its private charter, aircraft sales, and maintenance business. Hillsboro Aviation also profits from the sale of jet fuel and leaded avgas. Per the SBA, "Based on standard PPP eligibility rules, HILLSBORO AVIATION INC's total 2019 payroll expenses were approximately $7.27M in order to qualify for the PPP loan amount received. Based on their reported 83 jobs retained, this equals an estimated average yearly compensation of $87,580 per employee."

"Other Support Activities for Air Transportation" PPP Fund

• Yet another PPP category for high end aviation businesses is called "Other Support Activities for Air Transportation." According to the SBA, "There are a total of 1,940 Other Support Activities for Air Transportation across the country that received PPP loans. They recorded and average of $185,922 per loan." Global Aviation received $1.57 million from this fund. According to the company website, "Worldwide jet charter is our specialty and Global Aviation's service will exceed expectations. Our luxurious full-service facility offers 96,000 sq. ft. of heated hangar, contract fueling, gourmet catering, sleep room and pilot lounge..." Per the SBA, "Based on standard PPP eligibility rules, GLOBAL AVIATION INC's total 2019 payroll expenses were approximately $7.55M in order to qualify for the PPP loan amount received. Because the 72 jobs reported are not enough to account for the loan range received, per-employee payrolls cannot be estimated."

"Special Needs Transportation" PPP Fund

• Premier Jets received $443,652 through a fund called "Special Needs Transportation." This HIO tenant provides charter, cargo and medical flights. Per the SBA, "Based on standard PPP eligibility rules, PREMIER JETS, INC.'s total 2019 payroll expenses were approximately $2.13M in order to qualify for the PPP loan amount received. Based on their reported 29 jobs retained, this equals an estimated average yearly compensation of $73,432 per employee."

$17 million in PPP Disbursements to Oregon Aviation Manufacturing and Parts Sector

Per the SBA, "Nationwide, 433 businesses in the "Aircraft Manufacturing" industry received a total of $144,828,076.00 in PPP loans." Three Oregon business benefited from disbursements totaling more than $3.5 million from this funding category.

• EPIC Aircraft LLC in Bend $3.5 million. Per the SBA, "Based on their reported 322 jobs retained, this equals an estimated average yearly compensation of $52,143 per employee."
• Aerometal International Inc. in Aurora $282,810. No job count reported.
• Flighthouse Engineering LLC in Portland $253,600. Per SBA, "LLC's total 2019 payroll expenses were approximately $1.22M in order to qualify for the PPP loan amount received. Based on their reported 13 jobs retained, this equals an estimated average yearly compensation of $93,637 per employee."

The SBA further stated, "Nationwide, 841 businesses in the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' industry received a total of $453,528,343.00 in PPP loans." Six Oregon aviation companies received disbursements from this pool.

• Portland based Erickson Inc. was awarded $10 million. Per the SBA, "Unlike most businesses, ERICKSON INCORPORATED did not report the number of jobs retained by their receipt of the Paycheck Protection Loan, so per-employee payrolls cannot be estimated."
• Van's Aircraft, which has an Aurora, Oregon, address but often flies out of the Hillsboro Airport and other Washington County locations, received $1.02 million. Like Erickson Inc., this company did not report the number of jobs retained.
• Aero Investment Strategies in Warren, which received $492,590, also chose not to provide a jobs retained number.

The other recipients were:

• Usher Precision Manufacturing in Forest Grove received $694,862. Per the SBA, "Based on standard PPP eligibility rules, USHER PRECISION MANUFACTURING INC's total 2019 payroll expenses were approximately $3.34M in order to qualify for the PPP loan amount received. Based on their reported 51 jobs retained, this equals an estimated average yearly compensation of $65,399 per employee."
• Mac Industries Inc. in Eugene received $191,405. Per the SBA, "Based on standard PPP eligibility rules, MAC INDUSTRIES, INC's total 2019 payroll expenses were approximately $918,744 in order to qualify for the PPP loan amount received. Based on their reported 16 jobs retained, this equals an estimated average yearly compensation of $57,422 per employee."
• Precise Flight Inc. in Bend received $428,872. Per SBA, "Based on standard PPP eligibility rules, PRECISE FLIGHT, INC.'s total 2019 payroll expenses were approximately $2.06M in order to qualify for the PPP loan amount received. Based on their reported 25 jobs retained, this equals an estimated average yearly compensation of $82,343 per employee."

Public Deserves Transparency

Since the American people are footing the bill for airline and aviation business bailouts, full transparency on the part of the beneficiaries is in order. Towards that end all recipients should be required to make public their responses to the following questions.

How much of CARES Act disbursements received went to executives and upper management?

How much went to out-of-state investors?

Regarding the jobs each company claims to have retained with its PPP money:

What is the name and pay scale of each job title?

How many of the jobs are full time, benefited positions?

How many are part-time positions? Of that number, how many pay benefits?

How many are short term temporary positions? How many are hourly?

How many of the positions are held by local residents?

How many of the positions were given to overseas students who are in the country on a temporary basis for flight training? Please identify the countries these pilots originate from as well as the number of pilots from each individual country. How much are they paid based on job title? Do they receive benefits?

How many of the positions were given to out of state students who are in Oregon on a temporary basis for flight training? Please provide information on the number of students from each state. How much are they paid based on job title?

How many of the positions were given to PCC students? How many of these students were from overseas? How many from out of state? How many from the local community? How much were these students, who are already receiving public educational dollars via property taxes, paid based on position held?

Closing Remarks

An exploration of the PPP database funding disbursements reveals that high end aviation businesses profited from this pandemic through the numerous funding categories provided by the federal government, funds that in large part funneled money into the aviation sector, including $25 billion for commercial airlines, $25 billion for air freight, and $10 billion for airports. On top of all that, PPP money was set aside in a number of other categories including, but not limited to, "Flight Training," "Other Airport Operations Organizations," "Other Support Activities for Air Transportation," "Aircraft Manufacturing," "Other Aircraft Parts and Auxiliary Equipment Manufacturing" and "Special Needs Transportation," to name a few.

To put it mildly, this represents an obscene and indefensible outlay of public monies on an industry that serves a extremely small sliver of the population, at a time when a vast number of poor and middle income people are struggling to stay afloat.

The aviation industry should be required to provide a full and very public accounting of how this money was spent. In addition, the federal government owes the people of this country a detailed explanation as to why it so richly rewarded a wealthy few, while dismissing and quite literally turning its back on the genuine and compelling needs of the vast majority of its people.