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.


International, Innovation and Investment in NATA

June 20, 2016

Greetings from Washington! With Congress still looking for a path forward on a long-term FAA reauthorization and the ongoing controversy surrounding the House Transportation Committee proposal to split the FAA into public and private organizations, it is as important as ever to remain engaged, informed and active in helping your NATA staff communicate directly and effectively with your nation’s lawmakers. Bill Deere provides the latest information as we go to press in his column. Please help us ensure our voice remains strong and consistent. NATA continues to make progress on several other fronts. Here are a few highlights.

NATA’s international presence continues to grow rapidly and Safety 1st products are leading the way. Tim Obitts, our Senior Vice President of Membership and Business Development and Mike France, NATA’s Managing Director of Safety and Training just recently returned from attending EBACE in Geneva, Switzerland. NATA’s presence and the buzz around our industry-leading Safety 1st training programs are driving greatly increased international interest and adoption. By working with the International Business Aviation Council to roll out the International Standard for Business Aircraft Handling (IS-BAH), NATA’s footprint is now rapidly growing abroad. To help showcase this continued growth, the NATA staff recently created an interactive electronic world map on NATA’s website for members to see where Safety 1st and NATA are expanding (www.fbostatus.com or www.groundhandlerstatus.com). Please take a look and see which of your competitors is taking advantage of this world class training. In addition, we can use member assistance in reaching out to those in the industry that are advertising NATA membership and Safety 1st Training, yet are not currently participating as either NATA members or Safety 1st graduates. This creates a potential competitive disadvantage for those continuing to support the expansion and continued improvement of this clearly top shelf training. Please let us know if you are aware of anyone mistakenly advertising their participation so we can follow up with some outreach to clear up any misunderstandings.

This quarter’s Aviation Business Journal features a very interesting article on JetSuite’s foray into scheduled Part 135 operations in the Western U.S. As the major airlines continue to reduce service to smaller markets and regional airlines struggle to fill cockpit seats, this is creating vacuums and for some, opportunities. NATA members are all very entrepreneurial and agile. This is clearly evident by those that successfully navigated the post financial crisis downturn. Member companies like JetSuite continue to look for opportunities to create their own niche and hopefully, success, in the marketplace. Many industry veterans might view these innovative efforts with some degree of skepticism, but let’s face it, the economy, consumers and the competitive landscape are all evolving and NATA’s members are always looking for new paths to ensure success.

Over these last few years, NATA’s voice in Washington has grown stronger; however, the need to ensure general aviation businesses continue as a stronger voice in Washington is greater than ever. As I often like to say, for some, a strong trade association is like insurance—you only need it when you need it. Fortunately for all of us, leaders from around the world recognize that by unifying business leaders around a common purpose, the industry’s destiny is much more controllable as long as the foundation is built upon an active and engaged membership.

As NATA kicks off the second annual Aviation Business Conference in Washington, please recommit to attending and supporting the unique opportunity this member-driven conference presents. The ability to speak directly with the TSA Administrator or the FAA’s top regulator or key Congressmen and Senators or to network with colleagues to generate new business opportunities are great reasons to attend this event. Take advantage of the convenience meetings such as this provide to foster multiple parts of your businesses’ growth strategy. The Aviation Business Conference is sure to provide many opportunities and attending helps support NATA’s efforts in Washington.

Please lend your support and plan to spend some time with NATA’s staff while attending any of our events. They all do a great job of helping tell the story of aviation businesses growing, innovating and investing in the economy, both here and around the world.

Republished from Q2 2016 Aviation Business Journal


Greetings from Washington!

April 22, 2016

As we go to press with this ABJ issue, NATA is in the midst of an intense lobbying campaign to help shape the House version of the FAA Reauthorization Bill titled, “The Aviation Innovation, Reform, and Reauthorization (AIRR) Act. Our Senior Vice President for Government and External Affairs, Bill Deere, will provide a fuller “from the trenches” view of our team’s lobbying efforts; but, before that, let’s cover a few points on NATA’s multi-year strategy that is now bearing fruit as we ensure that the Voice of Aviation Business is heard loudly and clearly by legislators and other policy makers. NATA began laying the groundwork for this ongoing effort almost four years ago. By quietly and respectfully building key relationships, NATA’s reputation, relevance and view as an “honest broker” in Washington is yielding needed access, at this critical time, that is vital to ensuring your voice is heard. Throughout this period, NATA’s team sought solutions and focused on listening to both our members and policy makers.

At the same time, through multiple meetings with lawmakers and administration officials, our staff worked diligently to educate the Hill and federal agencies on NATA’s unique and critical membership and how seemingly well-intended policy prescriptions can have a detrimental impact on small businesses.

This provided the framework to develop thoughtful and member-driven policy positions for this key legislation. Further, to be most effective, these are relationships that must endure over time. It is folly to view policy debates as zero-sum game transactions. While we sometimes disagree with key policy makers, we continue to be respectful and solution oriented. Why is this so critical? The politics of Washington will grind on long after the fate of one piece of legislation is decided. Maintaining long-term, respectful relationships is the most effective way to guarantee the enduring effectiveness of NATA long into the future.

House Transportation Committee Chairman Shuster released the specific language of the AIRR Act on February 3, 2016, then very quickly followed with a hearing six days later, and a full committee vote the following day. Although Chairman Shuster revealed some broad details over the last year, NATA did not have access to the bill’s language prior to its release. Going back to our point on enduring relationships, we made the decision to “keep our powder dry” and focus on the specifics of the bill prior to launching our advocacy campaign. We did this to ensure we maximized the efforts of NATA’s members at the most appropriate time so our message to lawmakers was not diluted by the passage of time or lack of volume. This strategy is paying off as we speak, but there is still a lot of fighting left to do to ensure aviation businesses remain a key part of this discussion.

With this as a backdrop, here are some key NATA observations on House Transportation Committee Chairman Congressman Bill Shuster’s AIRR Act:

  • On balance, the bill that passed the House Transportation and Infrastructure Committee will, in the long term, hurt general aviation businesses. In the U.S., we enjoy the safest, most complex, most diverse system in the world with unparalleled access for general aviation. Contrary to views often driven by academics and economists, from an operator perspective, the air traffic control (ATC) system works very well.
  • A sound bite often tossed around Washington refers to our ATC system as based on “WWII technology.” I invite any proponents of corporatizing ATC to spend some time in any enroute center in the country, the FAA Command Center in Warrenton, VA, the William J. Hughes Technical Center in Atlantic City, NJ, or any of a host of truly high-technology Terminal Radar Approach Control facilities around the nation. Yes, we do use radar as one of the technologies to provide surveillance of aircraft. Other surveillance technologies, including GPS and multi-lateration, are also currently being “fused” with radar data at these high tech facilities. For a point of reference, we also continue to use electricity, first introduced into our homes in the late 19th century. So, just because a particular technology endures, does not necessarily minimize its relevance. ATC is difficult to discuss in sound bites or elevator pitches. It requires a deep operational perspective to truly understand the impacts of massive change to such a highly developed, safe and stable system.
  • We are in no way apologists for the FAA’s struggles in rolling out large modernization programs. The FAA is making progress, albeit slower than anticipated. This is frustrating. However, it is important to understand and reset expectations about the degree of change that is possible and appropriate. Over a decade ago, policy makers in Washington introduced the Next Generation Air Traffic Control System – NextGen. Looking back now, the expectations about the ability to modernize the air traffic control system were unrealistic; and corporatizing the current system will do nothing to ease the challenges ahead. In the meantime, and rarely acknowledged, the FAA successfully built and is integrating three foundational technologies that are providing the framework for future success. Enroute Automation Modernization (ERAM) is now operational at all of the nation’s high altitude enroute centers. The ADS-B ground network is in place and provides surveillance and vital safety information today. And finally, Digital Data Communications (DATACOMM) is rapidly growing at key airports, including Teterboro.
  • Somewhat surprising for a transportation issue, the debate has become infused with ideology, “government—bad, private enterprise—always good.” While we do agree that more private-sector practices would greatly benefit the FAA, we are also urging caution based on the history of other similar efforts. It’s clear that creating government-backed enterprises is no panacea. Organizations similar to the proposed ATC corporation include Sallie Mae, Freddie Mac, the Red Cross, and the Smithsonian and have met with very mixed results.
  • The proposed corporation will, over time, be dominated by the commercial airlines. The long-term impact of this is likely reduced service to small and rural communities with a further reduction of investment in safety-enhancing high technologies in those locations. Why would an airline-dominated board want to invest in areas of the country that they currently don’t, and likely never will, serve?
  • Absent the move to corporatize air traffic control in the U.S., many of the remaining provisions of the Shuster legislation are helpful and will improve the current system. This is a direct result of NATA’s approach to educating our nation’s policy makers on the vital role that general aviation businesses play in the nation’s economy.

Finally, please stay informed with all the tools provided by NATA. Visit http://www.nata.aero/nocorporation to contact your elected representatives and explain that the AIRR Act is bad for small businesses and general aviation. Actions like these are very effective and make a difference. Legislators listen to voters and job creators. Invite your Congressmen and Senators out to your business to show them how important the jobs you provide are to the local community. The time for engagement is upon us. Please stay in touch and let us know how we can help.

Republished from Q1 2016 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.