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.


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