AOPA & Affected Pilots File Three Official Complaints Over FBO Pricing

By October 18, 2017Uncategorized

The Aircraft Owners and Pilots Association (AOPA), along with seven
affected pilots, filed FAA Part 13 complaints over egregious FBO pricing
practices at Illinois Waukegan National Airport (UGN), North Carolina
Asheville Regional Airport (AVL), and Florida Key West International Airport
(EYW), on behalf of its membership. At each of these airports, a single
FBO controls all transient ramp space and fuel services, which means each
FBO possesses a monopoly position and significant power over access to
a public airport. AOPA contends each FBO has failed to fulfill its
responsibility to protect the airport for public use through reasonable and
fair pricing. The FBOs have instead engaged in egregious pricing practices
under minimal oversight and in violation of standards designed to protect
reasonable access to public ramp space.

The FAA Part 13 complaint process is a means for AOPA and impacted
pilots, who also signed the complaints, to ask the FAA to investigate these
practices and take any necessary action to ensure compliance with the
airport’s grant assurances.

The FAA has the responsibility and authority to ensure that airports are
complying with grant obligations the airports agreed to when they accepted
federal funding through the Airport Improvement Program (AIP).
Obligations include requiring their FBOs charge reasonable and
nondiscriminatory pricing for each aeronautical service rendered. This
requirement is necessary to protect the airport for public use. Otherwise,
permitting exorbitant FBO prices would restrict or deter access, and disrupt
the entire national system of publicly funded airports the FAA oversees and
has sought to create.

According to the a AOPA, of the many complaints it has received over
egregious FBO pricing, Waukegan, Asheville, and Key West are three of
the top five most complained about airports.The other two airports rounding
out the top five are Heber City, Utah (36U), and Rochester, Minnesota
(RST).

AOPA General Counsel Ken Mead commented, “The FAA really hasn’t
exercised proper oversight in this area for a very long time. These kinds of
pricing practices have put airports in violation of grant assurances and at
risk of losing federal funding. It’s the responsibility of the FAA and airport
sponsors to ensure the terms incorporated in each lease are upheld,
especially when they are accepting federal grants.”
The Part 13 complaints point out the importance of the airport sponsor’s
responsibility to “protect general aviation’s ability to access local
communities and, conversely, local access to the national transportation
system,” and how vital oversight is necessary to protect against
unreasonable and discriminatory pricing.

AOPA has requested the FAA “exercise its investigative oversight authority
and take appropriate action to ensure pricing complies with” each
governing body’s grant assurances. AOPA believes the FAA needs to help
airports use their authority to curtail egregious pricing practices.
“Our members have spoken and they’re tired of being forced to pay for
services they don’t want, ask for, or need,” said AOPA President and CEO
Mark Baker. “It’s all about price transparency and reasonable access to
places that are supposed to be public. We also believe that promoting more
competition will help relieve some of the ongoing problems our members
continually face at these locations.” Further, egregious pricing practices
deter and restrict airport access and severely affect all aspects of general
aviation from flight training to recreation. Unreasonable pricing practices
can also have grave effects on surrounding communities. By pricing out
certain GA traffic, FBOs are harming local economies. Pilots and travelers
who usually access these communities are scared away by the FBO’s skyhigh
prices. The money those travelers would normally spend never
reaches cities and towns across America.

The likely response from the FBO operators themselves will be pointing out
the cost of acquiring, creating, and operating mostly 24/7 facilities is quite
significant and must be done with a reasonable profit. That statement can’t
be challenged. In the observation of this blog, it needs to be pointed out
that the significant capital investment required for FBO facilities must be
recaptured, including an acceptable market rate of investment return over
the period of the concession granted by the airport, (i.e. the ground lease
which is typically 30 years or less). This puts significant “pressure” on the
owners and operators of FBO’s to recover their investment and make a
profit over a strictly defined (and ultimately expiring) lease term.
This “story” and complaint is far from over. It will be interesting to see how
the FAA responds and what the actual outcome of fuel pricing, specifically
at these 5 airports becomes. Stay tuned!

FBO Advisors, LLC
Serving the FBO industry for more than 40 years

 

 

About Us

Since 1975 we have successfully served the best interests of our clients by focusing on their specific FBO needs. By having a diverse staff, combined with being exposed to a wide variety of FBOs and aviation businesses with unique situations, we’ve cultivated a focused and high level of FBO expertise and resources.

We are specialists, not generalists, and we take pride in offering the best solutions and providing the highest level FBO services to our clients. We serve FBOs, aviation businesses, and airports:

 

  • Fixed base operators – small, large, single location or independently owned.
  • Specialized aviation businesses – Maintenance, SASO, and Charter Companies
  • Airports – small non-hub general aviation airports to medium hub airports
  • Professional organizations – financial institutions, law firms, stockholders
  • .

More About Us

Call Us: 480.614.1000

How Can We Help You?

FBO Advisors © 2018

Contact

Call: +1 (480) 614.1000

C o n t a c t