The Leading Voice of Aviation Business

June 23, 2017

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.


Not The Answer for Air Traffic Control

March 21, 2016

The following is the full-length response opinion piece by Tom Hendricks’ excerpted by the Denver Post.

The Denver Post’s March 12th editorial, “The remedy for aviation delays,” endorsing a congressional proposal to create a federally chartered air traffic control corporation, is rooted in a number of factual errors that call into question the basis for the Post’s support. In fact, the creation of a federally chartered, not-for-profit air traffic control corporation will erode aviation system safety, stifle the deployment of new technologies and saddle the traveling public with ever increasing travel costs.

The Post’s first factual misstatement centers on the corporation’s governance. Federally chartering an air traffic control corporation, the Post implies, means the U.S. government somehow supervises it. While such corporations are required to provide annual independent audits and reports to Congress, controversies surrounding such corporations often come down to issues of managerial accountability and fiduciary responsibility. The Post itself noted the record of another such corporation, the Post Office. But other examples include Fannie Mae, Freddie Mac, the Red Cross and the Smithsonian. It is notable that each of these federally chartered institutions have required in their history some form of government intervention.

Next, the Post implies the corporation would be overseen by the government. Wrong. The corporation would be controlled by a 13-member board of aviation insiders. In fact, one indisputable fact at the legislative hearing on the proposal – the nation’s airlines would have effective control of the board.

The Post also buys into an argument put forward by many of the principal supporters of this proposal, largely academics and economists, about the level of modernization of the air traffic control system. These experts sorely lack the necessary operational experience and expertise required to develop a fully integrated perspective of the “puts and takes” critical to ensuring a balanced approach to safeguarding the unprecedented level of safety performance that is the hallmark of the U.S. air traffic control system.

Among other things, this lack of real world depth of experience blithely leads to simplistic pronouncements such as “a blip is just a blip” when referring to aircraft displayed on air traffic control systems and similarly, that the U.S. is “using World War II technology” as the foundation for our air traffic control system. These views are simplistic, uninformed and clearly point to an academic, not operational view of reality.

The incredibly robust U.S. air traffic control system is modern, highly-integrated and provides for an extremely high level of continuity in the face of disruptive meteorological and technological challenges. This system was designed with the predominant users of the system in mind – major airlines. One must only visit state-of-the-art FAA facilities like the Atlanta Terminal Radar Approach Control Facility, the FAA Command Center in Warrenton, Virginia, the FAA William J. Hughes Technical Center in New Jersey and others to realize that these extremely robust and modern facilities leave “World War II” technology in the dust. These facilities, along with the Enroute Automation Modernization-equipped high altitude enroute air traffic control centers, are already fusing multiple sensor sources, including radar, Global Positioning System inputs and other sources into these highly-integrated systems.

We understand the idea of creating an air traffic control corporation is appealing to many, including the Post, as a way to address budgetary stability at the FAA. But doesn’t the Department of Defense deserve a little budgetary stability? What about federal law enforcement or programs to assist the poor with their heating bills, could they use a little budget stability? The FAA isn’t the only part of the federal budget that needs relief from political in-fighting over the budget.

Air traffic control is a monopoly and the governance of this proposed corporation is already precooked in the proposal endorsed by the Post to pick its winners and losers, leaving the consumer and general aviation largely on the outside looking in.