Is there room for two service providers at North Bend Municipal Airport, literally and figuratively? Two hours of debate at the Coos County Airport District's meeting on Thursday morning failed to produce an answer acceptable to all involved.

The owner of Coos Aviation, an airfield operator for more than a decade, called the entry of a competitor a recipe for safety risks and financial problems. But two members of a Florence aviation and emergency airlift company defended their right to do business in North Bend - offering services similar to Coos Aviation's, mere yards away.

The argument over whether two companies can or should - or must - coexist at the North Bend airport is becoming public as the newcomer, Ocean Air Aviation, prepares to roll out its pilot services in as little as three months. At stake are the rights to provide "fixed-base operations," or FBOs, a range of services from refueling, airplane maintenance and flight instruction to pilot services such as a lounge, catering and booking for hotel rooms and rental cars.

Since purchasing Coos Aviation in 1994, Dale Sause has leased building space at the North Bend airport to provide those services. At first, the company was one of two franchise holders, but the other company, Pegasus, closed its North Bend operations five years later and left Sause without competition for runway services - until last June.

That month, Ocean Air Aviation, a Florence-based corporation that earlier began offering charter flights and the Emergency Airlift air-ambulance service from North Bend, applied to the Airport District for the right to offer fixed-base operations. But where the newcomer saw opportunity, Sause saw the return of hard times for his franchise.

"We lost money all the years when there were two FBOs at the airport," he said later Thursday. "There wasn't enough business for two and it was a constant struggle."

In a series of Airport District meetings beginning in September, Sause and his Coos Bay lawyer, Roger Gould, protested Ocean Air's arrival in North Bend. On Thursday, Sause painted the dispute as a safety issue, saying the airfield is too constricted to safely accommodate two groups of planes.

"We have limited space on the ramp and the area the planes arrive on," he said, pointing to proximity of Coos Aviation's and Ocean Air's buildings, about 200 feet. "You can't safely commingle two operations. The issue is making sure the safety of the aircraft and the passengers is secured. Putting two FBOs side by side is going to compromise that."

At the meeting Thursday, the conflict flared when Vice Chairwoman Sue Richardson and board members Helen Brunell Mineau and Judy Weeks halved the minimum area needed for leased airport sites from two acres to one, a move apparently meant to ease the expansion of Ocean Air's operations. Board members authorized smaller hangars, 12,000 square feet instead of 30,000.

Gould immediately challenged the airport board's rule changes, saying they would unfairly rig the rules in favor of Ocean Air and insisting his client was protesting "not because Coos Aviation is concerned about competition (but) that we're concerned that the rules are applied evenhandedly."

"We believe these rules are being proposed for one reason only - to facilitate the existence of a second FBO," he continued. "... These standards are set for a reason and there is no justification for reducing them at this time."

Later, Sause declared Federal Aviation Administration rules allow the district to keep out other providers if that provides the most safety and efficiency - an assertion district officials rejected.

"The standards were written to ensure one healthy, prosperous FBO at the airport, not two locked in battle with each other," he told the board.

"You can decide to have just one FBO and if you set standards that only one can meet, that's your right," Gould concurred.

The district's executive director Gary LeTellier and legal counsel Jerry O. Lesan responded that federal airport laws actually encourage, even demand, competition among service providers.

"As for competition, yes, I am supporting competition," LeTellier told Gould. "Federal law allows for that, encourages that."

"We have to make every effort to allow competition," said Lesan, who pointedly continued: "I was taken aback by Dale's statement that standards are made to make competition difficult. That's precisely what we cannot do and why the minimum standards have to be amended."

An FAA letter dated Jan. 17 indicates the Airport District can use only space considerations, not economic ones, in deciding whether to accept a second service contractor in North Bend.

Bill Watson, a supervisor at the federal agency's regional office in Renton, Wash., wrote that the FAA's airport regulations are "quite specific in requirements for a single activity not to be considered an 'exclusive right.' This determination is largely based upon the availability of space on the airport to support multiple operators. Whether or not the market can support two full-service FBOs is not an issue.

"... The (regional office's) opinion is that there is space on North Bend Municipal Airport for two full-service FBOs to operate," Watson continued. "The presence of a second party with a business plan and the capability to operate an FBO is adequate demonstration of the market for a second operator."

Even if the Airport District wanted to grant Coos Aviation an exclusive franchise, LeTellier said doing so would invite severe punishment from the FAA, especially the loss of funding and the right to host commercial flights.

"The federal law is very clear: You cannot restrict competition," the airport director said Friday. "If you do and if you're found guilty of that, then you can be held in noncompliance of your (operating) certificate. They (also) will most likely freeze all grants; you won't collect another dime."

After the meeting, Denise Alexander, Ocean Air's marketing director, argued the rising number of airport landings - and visiting pilots - justifies allowing two service providers in North Bend. In any case, she said, a small market is no reason to keep out any company.

"We've done our research; there's plenty of business for two FBOs to exist," Alexander said on Thursday afternoon. "We plan to focus on bringing new business to that airport; we already have. I work on bringing in new business full time.

"... Even if there's not enough business for two, that's my right," she continued with undisguised frustration. "And if I go under, then that's my right, too. We're hoping that after this whole thing subsides, (Sause) will get used to us."

Edward Langerveld, Ocean Air's chief pilot and director of operations, was only a spectator during the debate, but later he praised the Airport District for defending his right to operate in North Bend. Shortly before the meeting adjourned, he described the air services he had developed in his five years living on the South Coast, then called on the district to keep pushing to open the pilot service market.

"The reason I came here is because it's changed and it's going to change - and it needs to change," Langerveld told the district staff members. "Keep up the good work. It's tough to be in your position sometimes."