FAA’s Southern Region DENIES AOPA’s complaint against the GRAA- teachable moment?

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FAA Rejects

AOPA’s Pricing Complaint at Asheville Airport

The agency says claims of excessive airport and FBO fees aren’t supported by the facts

FAA finds AOPA provided inadequate proof

Economics and Accounting NOT FAA strengths

LESSON: more proactive action

Late last summer, AOPA’s General Counsel, Ken Mead, filed an FAA Part 13 Complaint against Signature Flight Support alleging that the company’s FBOs and the sponsors from which they were authorized to operate the airports

Failed to “guard against potential monopolistic behavior at airports and prohibit, through grant assurances, the unreasonable and discriminatory pricing for aeronautical facilities and services.” Actually, the target is Signature Aviation, which coincidentally owns the sole FBO at each of the airfields at issue and which AOPA avers that the company “controls all the ramp space available for transient operators to park, is the only fuel provider, and thus possesses a monopoly position and significant power over access to a public AIRPORT.”

 

 

 

 

 

 

 

 

The Frederick, MD general aviation advocate withdrew one of its pleading against Waukegan National Airport in Illinois after that facility opened a free transient tiedown area and worked with the FBO to reduce the price of self-service avgas.

What should have not been a surprise to Counsel Mead, who was the Inspector General at the DOT and in that position reviewed the FAA, the FAA’s Southern Region Airport Compliance Specialist, Ms. Heather A. Haney, turned down AOPA’s complaint as it applies to the Greater Asheville Regional Airport Authority (GRAA).

[front and back page of the letter]

The first thing that AOPA did not take into account is that the agency’s primary mission is SAFETY. Pose a complex engineering question, the FAA will do well. But economics and accounting are not the critical skills for its work. The quant jocks over at OMB, in particular, have been known to reject the calculations offered by the FAA’s number people. The OIG, too, has differed with the analysis of various mathematically-based determinations.

The lesson from that agency trait? If one is arguing that a service is priced over real costs, it is inadequate to make the allegation without an impressive set of the FBOs’ expenses. The Southern Region pointed out that the burden of proof was on AOPA and in the absence of a bunch of audits or forensic estimations of how “egregious” Signature’s prices were, it was easy to dismiss the complaint.

Anyone, who has followed the FAA’s track record in airport economics, would predict that in the absence of incredibly compelling evidence, the regulator tends to defer to the regulated business practices. Why? Because a determination of an unduly discriminatory or unreasonable rates would necessitate that the inhouse staff would have to set what the discriminatory or unreasonable number was. Rate-regulating has been a lost aviation governmental talent since 1978.

 

 

 

Unless AOPA is going to appeal the opinion of a first level airport specialist (there are at least 3 more tiers of review available, each with higher levels of experience and judgment), the lesson of Ashville is that in the future one should participate in the drafting of the Airport Authority’s RFP or better yet when it established its Minimum Standards. Those documents set potential barriers to entry—large Taj Mahal terminals, hangars for big enough for a B-747, required repair capabilities (MRI machine for used parts), more tie-downs than needed for the next 50 years, etc. The defense of the Ashville FBO was able to cite these expenses because they were buried in documents set by the airport authority.

AOPA has an unequalled airport network and its representatives should appear at their airport authorities to assures that the terms and criteria embedded in the Minimum Conditions and RFPs are relevant to the association’s needs. That is a far more proactive and positive tactic than filing Part 13 complaints.



 

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