The Leading Voice of Aviation Business

Since taking the helm at NATA, I have come to recognize that our members join the association for a variety of reasons. Some take advantage of the products and services we provide to help their business run safely and successfully. Others find participation in our policy committees or two annual industry conferences an important part of their interaction with, and opportunity to give back to, the industry. Advocacy does not always rise to a first-order consideration. It’s difficult to quantify, though many members recognize the behind-thescenes advocacy work of an association often prevents bad ideas from taking root, still other members see it as a type of insurance—there when you need it. Right now, advocacy is more important than ever, as NATA members confront proposals that threaten our industry from both within the general aviation community and as well as from without.

Bill Deere’s column this quarter discusses how the nation’s airlines proffer various myths as facts in their quest to create an air traffic control corporation. Tim Obitts looks at a legal aspect to NATA advocacy, our recent Supreme Court filing in support of a member company caught up in the IRS interpretation of the applicability of Federal Excise Taxes to aircraft management services. Unfortunately, I need to discuss a threat to our industry from within, specifically the Aircraft Owners and Pilots Association’s (AOPA) assertions that FBOs and airports are maximizing their respective revenue streams in a manner that is unfair to pilots. Despite the best efforts of NATA, its member companies and others in the general aviation community, AOPA is requesting the FAA require either FBOs to provide no-cost access to ramps and facilities or airports to provide pilots with free public ramp space.

For those of you unfamiliar with the situation, in late November of last year, the FAA met with Bill and his regulatory team, and informed them that AOPA planned to meet with the agency in December to discuss FBO pricing. That meeting occurred in late December, and shortly after the holidays, NATA was contacted by the FAA requesting we provide our perspective. AOPA’s documents (which we have posted online at http://www.nata.aero) revealed an eleven-month campaign and included a cursory review of leases at a select few public-use airports, as well as pricing information derived from AirNav data, concluding:

  • Widespread FBO industry consolidation is harming the general aviation user
  • A compelling need exists to oversee the business relationship between airports and FBOs
  • Analogized FBOs to utilities—wants FAA to explore oversight mechanisms for prices.

In response to AOPA’s concerns, NATA presented an overview, “The State of the FBO Industry,” (also available on the frontpage of our website) to the FAA. The summary, developed with the assistance of our FBO and air charter members, discusses the costs of operating airport businesses and the many variables that go into determining pricing structure, including capital invested, lease duration, fuel volume, personnel expenses, hours of operation, and traffic types. The FAA is in the process of reviewing our comments as well as those from other stakeholders. I was proud of the NATA staff and members who helped develop our response. This is NATA and its members working in the best tradition of trade associations—meeting rhetoric with fact.

The May edition of AOPA’s Pilot magazine highlighted their FBO initiative and chose to attack the FAA for asking stakeholders to comment on its call for economic regulation of FBOs. The association even criticized NATA for bringing its eleven-month campaign to your attention.

As your president, I take seriously my responsibility to present the facts in a straightforward manner. NATA is not going to be the association that cries, “Wolf!” Despite claims to the contrary, AOPA’s documents speak for themselves. Its presentation compares 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. While it claims to support FBOs and the free market, there is no recognition of the fact that some locations require different pricing models. Among other things, the AOPA proposal requires FBOs to assume the security and safety liabilities associated with utilizing your business–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.

Importantly, 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.” Neither NATA nor its members support those violating that important assurance, which would also represent a breach of faith with their customers.

Many of you rightly ask whether I have met with Mark Baker, the President of AOPA. I have; and, while I do not believe it is appropriate to share confidential conversations or comments of others publicly, let’s simply say that, on this issue, we have significantly different positions. However, I can also attest that, on other important issues, the two associations continue their tradition of joint work toward the benefit of all general aviation.

Let me close by saying, “thank you.” I have been heartened by your ongoing support and am gratified by your continuing offers of assistance. Be assured NATA will continue to meet rhetoric with facts in support of free enterprise.

NATA is–and will remain–the leading voice of aviation business.

Republished from the 2017 Q2 Aviation Business Journal.

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