Fuel & FBO Fees are Nemeses to AOPA & aviation in general

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FBO Fees

Maybe A4A & AOPA Can Work Together To Find A Solution

AOPA says [this texted has been excerpted; it is still long, but the information is important]:

aopa fbo feesDon Mayer, AOPA director of research and analysis, has compiled the results. Scores of them fall into a category he calls “exceptionally egregious,” the arbitrary cutoff being fuel that is more than $6 a gallon or fees for minimal or no services topping $100. “We still need pilots to share additional detailed comments, including locations and prices paid,” Mayer said. Members can post comments at www.aopa.org/FBOfees.

Reports to AOPA of high fees at a relatively small number of airports are not new, but the number of reports and cost of the reported fees has spiked significantly over the past year. Some 40 percent of the most egregious fees have come from locations where Signature Flight Support is the only FBO on the field.

airport fbo fees

“It’s all about access to public places,” said AOPA President and CEO Mark Baker. “Pilots who don’t want or need services should not be held prisoner on a public ramp. At many of these locations, there is no way to pass through a gate without going through an FBO lobby. We’re asking the FAA to look at giving GA pilots unfettered access between the ramp and the parking lot.”

Baker, and many of the commenters responding to AOPA’s request for more information, point out that most of the ramps in debate were built with federal tax dollars and then leased by an airport owner to the FBO. “Essentially the FBOs are a concessionaire. The problem is pilots don’t have a choice of purchasing services or not. They are charged just for showing up—held hostage, if you will,” said Baker.

A Piper single-engine pilot writing to AOPA agrees. “What I would like to see is for every airport that receives FAA (our) dollars to be required to provide transient parking at a very reasonable cost. If you want full service and warm cookies, go to the FBO. If you don’t then there should be an alternative.”

Pilots can choose to go to other airports where fees may be lower, but those airports may not be as convenient to the desired destination. Airport owners should understand that flights may simply bypass their locations because of the high fees, resulting in less traffic at the airport, which can have its own ripple effect regarding access to FAA funding. Some FBOs may offer to waive fees with a fuel purchase. However, FBOs at most of the noted airports charge fuel prices that are $2 to $3 more a gallon—or more—than other airports in the region. Choosing to make an interim stop nearby for cheaper fuel adds an additional engine cycle and more flight time, each of which has its own cost.

fbo fees

Look, I like a nice place as much as the next guy, but most of the time when I’m flying, I just want a way to the parking lot,” Baker said recently, a theme repeated frequently by those sending comments to AOPA.

I believe for a publicly funded airport, there should be a public parking area without fee, or minimal fee assuming no FBO services were used,” wrote a Pilatus PC-12 pilot after being charged $230 for dropping off a passenger at Signature’s Midland, Texas, location.

We understand the economics of airport and FBO operations,” Baker said, noting that numerous AOPA employees have managed FBOs and airports. “We strongly support FBOs. We need a healthy FBO infrastructure. The lion’s share do a great job at fair and reasonable prices, but this is simply not the case at some locations. We continue to be concerned about the consolidation in the FBO business, particularly among the chains, at a few locations, probably less than 200 of the nation’s 5,200 airports. Those are important locations to pilots. Those paying their own way and on a budget, shouldn’t be forced to go somewhere else nor should they be forced to pay for services they don’t want or, worse yet, simply charged for showing up. Pilots are not looking for a free ride. We’re willing to pay our own way, but any fees need to be reasonable and in sync with the service delivered.”

[ full text and interview here]

NATA reply [complete text]:

nata fbo feesEarlier this year, NATA became aware of AOPA’s eleven-month campaign to regulate airports and on-field businesses, obtained the relevant documentation from the FAA and shared it with other impacted parties in the general aviation community. Recently, AOPA announced it is requesting either the FAA require FBOs to provide unfettered access to ramps and facilities or airports to provide pilots with free public ramp space.

“The AOPA effort is particularly disappointing as it continues a pattern of contradictory assertions designed to alleviate industry concerns while it pursues an economic regulatory agenda,” stated NATA President Martin Hiller. “While AOPA claims to support FBOs and the free market, there is no recognition of the fact that some locations require different pricing models. Incredibly, AOPA chose to attack the FAA for asking stakeholders to comment on its call for economic regulation of FBOs and even criticized NATA for bringing their covert, eleven-month campaign to others attention,” Hiller continued.

“AOPA’s documents speak for themselves,” said Hiller. “Their presentation to the FAA likens FBOs to public utilities and requests the agency examine oversight mechanisms in other industries as possible models. That is a pure and straightforward move toward economic regulation, borne out by last week’s announcement.”

In response to AOPA’s initial allegations, NATA presented report on the state of the aviation business sector to Winsome Lenfert, FAA’s Deputy Associate Administrator for Airports. The summary, developed with the assistance of FBO and air charter members, discusses the costs of operating airport businesses and the many variables that go into determining its pricing structure, including capital invested, lease duration, fuel volume, personnel expenses, hours of operation, and traffic types.

fbo fees gas

“NATA was gratified by the FAA’s outreach to us and their response to our report,” stated Hiller. “In addition, I also met with Mark Baker, the President of AOPA. While I do not believe it is appropriate to share confidential conversations or comments of others publicly, I will say that we have significantly different positions. Among other things, the AOPA proposal requires FBOs to assume the security and safety liabilities associated with their presence – without compensation. The decision to assess a facility charge, particularly when there are no purchases of fuel or services, should be yours and not imposed by law or regulation.”

There are existing FAA mechanisms to address situations where an FBO or airport is violating grant assurance requirements to furnish services on a ‘reasonable, and not unjustly discriminatory, basis to all users thereof,’” Hiller continued. “Neither NATA nor its members support those violating that important assurance, which would also represent a breach of faith with their customers.”

“NATA looks forward to our continuing work with the FAA and other aviation stakeholders on this important issue and will continue to meet rhetoric with facts in support of free enterprise,” Hiller concluded.

#       #       #

Two aviation association heavy weights have engaged in a serious debate about FBOs and fuel prices.

The Act, 49 U.S. Code § 47107(a)(4)(5), is an unusual Congressional delegation of economic/competitive powers to the FAA:

(4) a person providing, or intending to provide, aeronautical services to the public will not be given an exclusive right to use the airport, with a right given to only one fixed-base operator to provide services at an airport deemed not to be an exclusive right if—

(A) the right would be unreasonably costly, burdensome, or impractical for more than one fixed-base operator to provide the services; and

(B) allowing more than one fixed-base operator to provide the services would require reducing the space leased under an existing agreement between the one fixed-base operator and the airport owner or operator;

(5) fixed-base operators similarly using the airport will be subject to the same charges;

The agency’s primary mission is safety and in the ordinary exercise of its statutory powers, it rarely is called upon to make these determinations (another example of this exceptional power is the review of airports’ “rates and charges”).

The terms of the Act are micro in scope and the AOPA request for solution would require national determinations. The staff assets needed to review pricing on an airport-by-airport case would be insufficient in number and may not have the right competences (accounting, financial, economics and specific understanding of fuel pricing).

Another difficult aspect of the AOPA complaint is that the current FBO market status was reviewed (02/03/2016) by the US Department of Justice in its assessment of the proposed acquisition of Landmark Aviation, a competing FBO by Signature Flight Support. The Antitrust Division’s settlement was conditioned on the divestiture of 6 of the FBOs purchased. “The merger would have subjected general aviation customers at six airports to a monopoly or duopoly for critical fueling and support services,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “Higher prices and lower quality services were the likely result. Today’s proposed settlement will ensure that customers at these airports will continue to receive the benefits of vigorous competition.

With such an expert opinion on the record, it would be highly unlikely for the FAA to reexamine the AOPA pricing allegations and even more improbable for the safety organization to reverse the judgment of a preeminent competition authority.

a4a FBO Fees

Oddly enough, AOPA might actually agree with A4A on the subject of fuel pricing. The Association of major airlines has had this issue as a major priority for a number of years. Its advocacy has led to a couple of hearings, but no statutory changes. Its outreach efforts have included a briefing to the airports. A4A even created a members-only portal to attack the high prices with information (IATA has a comparable information resource).

The FAA is unlikely to examine charges set by FBOs as requested by AOPA. Fuel and associated fees have posed challenges to many industries. Even the big airlines have failed to get energy-related prices under control.

Perhaps A4A and AOPA can work together to find a solution.


NATA, AOPA Spar Over FBO Fees
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