Deadline? What deadline? And what’s ADS-B?

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In May 2010 the FAA issued a mandate which if you own or operate turbine business aircraft, or operate general aviation single-engine piston aircraft in most airspaces, your aircraft will be required to be equipped with Automatic Dependent Surveillance- Broadcast (ADS-B) by no later than January 1, 2020.

ADS-B Out capability will be required to transmit aircraft identification and GPS-derived position information to air traffic control.

But why ADS-B? And what specifically is it? A search of the subject on the FAA’s website brings a wealth of information! The following FAQ from the FAA website will bring you “current” on this important pending requirement:

Why is the FAA transitioning away from radar and towards ADS-B technology?

ADS-B is an environmentally friendly technology that enhances safety and efficiency, and directly benefits pilots, controllers, airports, airlines, and the public. It forms the foundation for NextGen by moving from ground radar and navigational aids to precise tracking using satellite signals.

With ADS-B, pilots for the first time see what controllers see: displays showing other aircraft in the sky. Cockpit displays also pinpoint hazardous weather and terrain, and give pilots important flight information, such as temporary flight restrictions.

ADS-B reduces the risk of runway incursions with cockpit and controller displays that show the location of aircraft and equipped ground vehicles on airport surfaces – even at night or during heavy rainfall. ADS-B applications being developed now will give pilots indications or alerts of potential collisions.

ADS-B also provides greater coverage since ground stations are so much easier to place than radar. Remote areas without radar coverage, like the Gulf of Mexico and parts of Alaska, now have surveillance with ADS-B.

Relying on satellites instead of ground navigational aids also means aircraft will be able to fly more directly from Point A to B, saving time and money, and reducing fuel burn and emissions.

The improved accuracy, integrity and reliability of satellite signals over radar means controllers eventually will be able to safely reduce the minimum separation distance between aircraft and increase capacity in the nation’s skies.

The mandate covers the vast majority of turbine business aircraft as well as single- engine piston aircraft. In most cases we are told by avionics professionals an upgrade or replacement of existing transponders will be needed to bring aircraft into ADS-B compliance.

Currently, the ADS-B mandate is only for transmitting out. However, it may be useful for some operators to consider installing ADS-B In as well. The “In” capability would bring traffic and other information to the pilots, greatly enhancing situational awareness as just mentioned.

So if you’re thinking there’s plenty of time to get the ADS-B equipment installed, you may be in for a surprise. Three years ago the General Aviation Manufacturers Association estimated that only about 9,100 aircraft, mostly GA, had become compliant. A recent NBAA Advisory noted there are about 950 avionics repair stations in the US, of which 750 are installation shops. With the total number of general aviation fixed-wing aircraft registered in the US, approximately 170,000, it is not hard to imagine that as the deadline gets nearer, those shops will be booked further and further out.

No one will be exempt from the equipment requirement. It’s possible some operational aspects won’t be ready by 2020 however, but that will not give you a pass.

The impact of the rule means aircraft owners and operators will need to determine what ADS-B solutions are available for their aircraft, and to plan accordingly while also considering other upgrade options.

Preliminary data from a recent study carried out by NBAA indicated that about 92% of all aircraft in the business aviation fleet have identified an ADS-B solution.

The last step in validating your installation is to request a Public ADS-B Performance Report (PAPR) from the FAA. It is a free report and there are no penalties or violations if any concerns are identified. “The future health of your ADS-B system will be judged by what (data) the FAA is receiving. That’s it. There’s no required maintenance check or continuing airworthiness process,” said Mr. Peri. However, he does recommend adding ADS-B system checks to your maintenance program and conducting them concurrent with transponder checks.

The recommendation is more than clear! Now is not the time to procrastinate! Determine a solution and schedule the installation as soon as practicable. If you wait too long you may not be able to get scheduled installation before the deadline. And the result will be – you’ll be grounded until your aircraft is compliant!

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

Helpful Links – https://www.faa.gov

The Latest From Our President And Does It Have Any Consequences For General Aviation?

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This is Mother’s Day weekend 2017, and we’ve just come through a tumultuous few days where President Trump has fired Attorney General James Comey. Oh, and also a return to tweeting about Rosie O’Donnell! (I never thought I would be saying that in one sentence following another . . .)

So what does all this have anything to do with general aviation?

I’m not sure but it gives me more than enough “provocation” to rant about what’s going on in this country today.

This is not meant to be political. I know that sounds strange but I really don’t mean it to be so. I’m just pointing out that our President seems to be acting with haste, without much forethought, and with an incredible inability to rely on those that he has nominated or appointed to be in his inner circle. And that’s not even mentioning that most of those he’s surrounded himself with don’t seem to be very well qualified or reasonably gifted in the brains department.

So that makes me worried about our country in general, and since we work in General Aviation, should we be concerned about irrational changes being applied to our industry? For instance the commercial airlines want general aviation to pay much higher fees to use the air traffic control system. We don’t think that’s fair or necessary. Our level of use of the system is small compared to Commercial Aviation.

And this has nothing to do with whether the president is Republican or Democrat.I could care less. What I do care about is when the President of the most powerful country in the world chooses to blog about how much he hates Rosie O’Donnell again and calls her names during periods of crisis, think North Korea for example. Now truthfully, I don’t care for Rosie O’Donnell at all. I don’t think she has any talent,

and for the rest, I’ll just leave it at that. But for the life of me I can’t understand why President Trump continues to spend valuable time, WASTING his time by tweeting about someone, in this case Rosie O’Donnell, who is about the least important person that he should be concerned with at this moment, this week, this year, and how about all the rest of the time he is in office! Why does he pick such a worthless “fight”, one in which there will be no winner and one in which there really is no issue to argue about. She doesn’t like him, he hates her, and neither of them are ever going to change. The President doesn’t need her and she sure as heck doesn’t need the President for anything other than to be the President!

So I’m starting to question, and at times worry, about the decision process our President uses, if any, to make major decisions. He doesn’t seem to have any processes from what I can tell, he just shoots from the hip and asks questions later, if att all.

In General Aviation we have several pivotal important issues facing us such as, attempts to privatize the Air Traffic Control System, continued funding of the FAA, and recently the 180° about-face by the FAA who recently granted permission to the Santa Monica Airport to shorten its runway by almost half effectively making the airport unusable by some 70% of the General Aviation jet aircraft that uses the airport. That’s an historic about face for the FAA . . . and none of us ever thought that ever had a chance!

I always think that logic will prevail, that eventually “they”, whoever “they” are will do the right thing. For the first time in my life, and I’ve been around for quite a while, I no longer have that slightly comforting feeling that senses will prevail, “they” will do the right thing, and things will then be all right.

It wasn’t that long ago when I would comment that, “No, they (in aviation) won’t do that because that doesn’t make any sense”. Today, and as a result of this past week with the fiasco of firing the FBI Director, whether or not you think he should have been fired, and the

Rosie O’Donnell nasty tweet exchange started by the President again as just two examples, I now no longer have any clue what’s going to happen in General Aviation. I don’t know what’s going to happen to oil prices, not that I ever really did, but now I really don’t think there’s any kind of plan or course that we are following and if there is, I bet our President would not hesitate to do a 180° turn, and then vector 90° after that, then vector back to the original heading all within a couple of days, and by the way without consulting air traffic control all the while Tweeting again about how $#&*! Rosie O’Donal is . . .

“Please fasten your seatbelts”, the Captain anticipates more “turbulence” ahead!

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

 

Preliminary Application To Privatize St. Louis Airport Approved!

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We must confess, we have not reviewed the financial documents and application to the Department of Transportation (DOT) that was submitted by the airport to justify the concept of privatization of the airport. So our comments and opinions which follow are our personal and anecdotal at best but perhaps there might be kernels of “wisdom” to be considered.

As reported in The Hill.com on April 25, 2017, “The Department of Transportation (DOT) has accepted St. Louis’s preliminary application to privatize its airport operations, the agency announced Monday.

St. Louis said in its application that airport privatization would help boost Lambert International Airport, which is a medium hub airport, as well as the region. The city hopes to maximize additional parking revenue and increase cargo revenue by using additional land assets.

The Federal Aviation Administration’s (FAA) airport privatization program enables airports to use private capital for infrastructure improvements by selecting a private operator, negotiating an agreement and submitting a final application to the FAA for approval.“Today’s announcement to accept the St. Louis Lambert International Airport’s preliminary application to participate in FAA’s Airport Privatization Pilot Program demonstrates the administration’s commitment to leveraging innovative financing strategies to revitalize our nation’s aviation infrastructure,” said Transportation Secretary Elaine Chao.

“As we’ve already seen in San Juan, this approach to airport management increases productivity, revenue and operating efficiency for airports, creating greater access to capital for infrastructure needs.”

For the most part if you will study the aftereffects of privatization of essential government services or facilities (which include toll roads, power plants, and now airports) you will note in nearly every instance of privatization that fees and charges have increased, and some increases have been dramatic. There are those that argue this is exactly what has occurred for the Chicago Toll Roads.

Perhaps the San Juan Airport privatization is an excellent model to study the effectiveness of such a change. Again, we’ve not reviewed enough data about the San Juan Airport privatization form an opinion as to whether it’s claimed privatization success is truly a “success” in most aspects. So many questions need to be asked and researched: 1) What was the “condition” of the airport, its infrastructure, its facilities, at

the time of privatization? 2) What were the financial alternatives to funding the necessary needed improvements both current and ongoing? (Of course it’s widely known that the Puerto Rican Territory is for all practical purposes bankrupt so government funding by the territory was certainly not an option. And because of this perhaps Privatization was the only option available?)

The argument FOR privatization is mainly that the infrastructure being purchased by the private sector will continue to be maintained and improved at lower or no cost to the taxpayer (if government owned).

One can only wonder if this privatization effort which is being pushed by the private sector and cash strapped government really is for the best, the best for the users, the best for those that foot the bill – the taxpayers, the best for service and facilities.

There are those that argue that he central government services such as rubbish removal, electrical utilities, waste water and sewer utilities, etc. should be left to the government or quasi-government sector, or at the very least a “monopoly” operator to assure the balance of providing the necessary services at a cost structure to the user which results, those who believe in this, in a moderated charge to the end-user, the public, you and me.

The announcement comes as the Trump administration seeks to leverage more money from the private sector to help upgrade U.S. roads, bridges and airports. President Trump’s proposed $1 trillion infrastructure package is expected to focus heavily on public-private partnerships.

And Trump has also called for separating air traffic control from the federal government and handing it over to a nonprofit or nongovernmental agency. There surely is no shortage of arguments on both sides of this question! If air traffic control was privatized would it have been modernized more quickly, resulting in a large increase in air traffic efficiency, resulting in more cost savings, but certainly someone has to pay for those improvements and if it’s not the taxpayer, then it’s the private sector in the private sector operates on a profit model as it should. So please “stand by and hold” for newly proposed user fees or taxes or some other collection model . . .

There is no easy answer.

 

 

Helpful Links – http://thehill.com/policy/transportation

Congressman asks FAA, Why Did You Issue That Ruling to Allow the Closing of the Santa Monica Airport . . . ?

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US Representative Ralph Abraham is asking the U.S. Department of Transportation to explain why the FAA entered into a settlement agreement with the city of Santa Monica, allowing the city to close the airport in 2028 and shorten the runway in the meantime.

The settlement agreement with the city of Santa Monica by the FAA allows the city to close the iconic airport in 2028 AND shorten the runway in the meantime.The runway shortening to 3,500 feet from the existing 4,973 feet, is estimated to effectively eliminate about 47 percent of jet traffic that currently flies into Santa Monica Airport (SMO). (We predict that that estimated 47% reduction in jet traffic would actually be greater in the interim period and that the city will succeed in an even greater reduction in jet traffic.)

To quote directly from Representative Ralph Abraham’s (R-Louisiana) letter to U.S. Department of Transportation (DOT) Secretary Elaine Chao and FAA Administrator Michael Huerta, “This agreement departs from the long-standing principle that the federal government will preserve airport infrastructure and hold airport sponsors accountable, especially when they have accepted federal money and committed to deed-based obligations to operate an airport in perpetuity.” The city had signed a transfer agreement after World War II in which it agreed to continue operating the airport in perpetuity.

“The agency’s congressionally authorized mission includes ensuring that airports remain safe and efficient while also protecting our entire aviation system,” Abraham wrote. “This agreement not only appears to take the opposite approach, but [also] to be inconsistent with agency and congressional requirements that changes to airport obligations be fully publicized and documented. I would appreciate a thorough explanation of the FAA’s apparent departure from this mission.”

SMO is a vital asset as a reliever for Los Angeles International Airport (LAX) and a critical part of local and state emergency plans said Representative Abraham. “Further, this deal comes at a time when the president has made clear that the renewal of and investment in infrastructure is a top priority for the administration. Could you provide any analysis that the FAA has utilized or prepared regarding the consequences of its actions, such as negative impact on other airports, area residents, businesses, general aviation, the flying public, and the national aviation system?”

Congressman asks FAA to explain itself over its SMO ruling allowing the city of Santa Monica to eventually close the airport!

As we reported last week in our commentary, “Colossal Consequences to FAA’s SHOCKING Santa Monica Ruling . . . In a stunning reversal the Federal Aviation Administration recently did a 180° reversal of its position to enforce the FAA’s Grant Assurances requiring the Santa Monica Airport (SMO) to remain open for some additional 11 years.”

The National Business Aviation Association (NBAA) and five other aviation interests have petitioned the U.S. appeals court to review the legality of the SMO-FAA agreement. In their petition they also requested a stay against the FAA and an injunction against the city to halt the city’s efforts to shorten the runway, until the appeals court can conduct its review, according to the NBAA.

As we all know it’s impossible to predict the possible success of the industry group petition. The US appeals court can issue the requested injunction to stop the city from shortening the runway OR it can let the city proceed with its aggressive (as approved by the FAA) plan by simply denying the requested injunction and hearing the merits of the petition at an unknown future court date, which by the way can be potentially after the city has proceeded and possibly completed its aggressive runway shortening plan.

The city of Santa Monica can “place its bets” and “roll the dice” and take aggressive action during this time while our general aviation industry and FBO’s hold their breath for a positive ruling. Without the temporary injunction, the city of Santa Monica politically strongly positions itself if it takes quick aggressive action and then as is often said, pleads for forgiveness. We can assume that if the city does take aggressive action prior to a US appeals court hearing it will have determined that its chances of the FAA ruling in its favor being overturned are slim.

And let’s of course remember the most important part, the US appeals court can simply decline to hear the case. At that point those knowledgeable in legal circles have said the industry and the Santa Monica Airport FBO tenants can hope for their day in Federal District Court. As we all know, our court system moves slowly and a speedy trial or hearing at the appeals court level will neither be quick or timely enough for general aviation and the FBO community both in Santa Monica and throughout our country.

As we said in our earlier commentary, the Federal Aviation Administration ruling to effectively allow the city to close down the airport despite the Grant Assurances in place could have devastating and repetitive future impact on the financial health and viability of the FBO industry and general aviation in general.

No one saw this coming.

Stay tuned, the next chapter in this nightmare for the FBO and general aviation industry hasn’t been written yet. We will keep you posted.

March 16, 2017

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

Helpful Links – https://www.FAA.gov

Signature Flight Support “OUT” at John Wayne Orange County Airport (SNA)

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What some have described as a “soap opera” unfolding, the Orange County Commissioners have voted to award the RFP for FBO services to ACI Jet Center, a California-based FBO operator instead of the incumbent Signature Flight Support. (The other John Wayne Orange County Airport incumbent FBO, Atlantic Aviation, was awarded a renewal of its concession in the RFP process.)

On a 4-1 board vote, ACI Jet — which originally was awarded the contract in January before the vote was contested and then rescinded — won it anew to replace incumbent Signature Flight Support, the world’s largest fixed- base operator. ACI Jet’s interim lease, good for about two years, is effective once the operator provides the required insurance and security deposit. (ACI Jet is a smaller, San Luis Obispo-based FBO operator.)

Reviewing reports of the hearings and process by the Orange County Commissioners in industry publications and the local Orange County Register has made for an entertaining insight (as long as you’re not Signature Flight Support) into the politics of airport RFPs for FBO’s.

The brief history in case you lack that background is the Orange County Commissioners decided to entertain an RFP process to qualify either the renewal of the two FBO incumbents, Signature Flight Support and Atlantic Aviation, or possibly award one or both of the two FBO concessions to new operators. It was reported that the County Commissioners had received complaints over possible “price gouging” by these two FBO chain operators, and in particular a complaint by a long term flight school tenant at the airport.

Not surprisingly, what followed was a two-year “exercise” by the Airport Administration Staff in researching, writing, and issuing finally the RFP submittal.

Let the “games begin” or so they say, and with that Signature Flight Support, Atlantic Aviation, Ross Aviation, and a host of others both local and national entered the foray. Four entrants made it to the final round and

were scored by the Airport Administration Staff who made their recommendation for Signature Flight Support and Atlantic Aviation to be (renewed), awarded the two FBO concessions at the airport.

But not so fast. The recommendations to the County Commissioners by the Airport Staff were just that, recommendations subject to consideration by the County Commissioners of Orange County. And apparently the Commissioners were ready for battle.

Several public hearings ensued and some who attended report that for Signature Flight Support it wasn’t “pretty”. The incumbents were accused of highly inflated retail fuel pricing and that pricing by them was not competitive compared to other nearby airports, by approximately a dollar higher per gallon the reports suggested. Signature Flight Support countered by saying that very little fuel they actually dispensed at the airport was sold at the posted rate, (what some refer to as the “rack” or posted retail price). It was also reported that during this process Atlantic Aviation made a significant reduction in their posted fuel price. The “Orange County Register” reported, “When supervisors in July announced their intent to search for alternate contractors, Atlantic rapidly dropped its fuel price by 31 percent, according to Flightaware.com, which tracks airport information. After waiting at least three months, Signature lowered its fuel price by 16 percent around the deadline for contract applications.”

The County Commissioners on February 28, 2017 also re-awarded Atlantic’s fixed-base operator contract. Both roughly two-year interim leases for Atlantic Aviation and ACI Jet will allow for services to be provided while the airport conducts a study for future development of its general aviation facilities, according to county documents.

Signature Flight Support’s response, according to published reports in the Orange County Register was, “Signature, which realized in January it could lose the contract, previously alleged the county had violated federal and local procurement laws and sent complaints to the Federal Aviation Administration and the Department of Transportation”. As quoted in the “Orange County Register” on February 28, 2017, Geoff Heck, Signature’s senior vice president of sales and marketing, said, “The board’s decision, Tuesday, to substitute “an under-qualified bidder” for Signature is in

violation of the county’s agreements with Federal Aviation Administration rules on safety and efficient operations at the airport. Today’s action was not transparent, fair, or objective, and will cause unnecessary disruption at the airport,” Heck added, “Additionally, the disparaging, unfounded and meritless allegations that have been made against Signature to justify this decision are patently false.” Heck said Signature “will vigorously pursue all avenues of redress.”

So what’s next?

ACI Jet is busily preparing to take over for Signature Flight Support at SNA. Atlantic Aviation is continuing their existing operation though probably a little more “price-sensitive”. And Signature Flight Support, well they’ve turned it over to their attorneys and the filing of a complaint with the FAA.

We’ll just have to see where that goes. Our prediction is the FAA will let the local decision stand and not overrule the County Commissioners, and Signature reduces its location count by 1 . . .

 

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

Helpful Links –

http://www.acijet.com https://www.atlanticaviation.com http://www.ocregister.com https://www.signatureflight.com

Colossal Consequences to FAA’s SHOCKING Santa Monica Ruling . . .

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In a stunning reversal the Federal Aviation Administration recently did a 180° reversal of its position to enforce the FAA’s Grant Assurances requiring the Santa Monica Airport (SMO) to remain open for some additional 11 years.

As reported in the AOPA newsletter of February 2, 2017, “A deal between the FAA and the city of Santa Monica, California, became official Feb. 1 when the Honorable John F. Walter of the U.S. District Court for the Central District of California signed a detailed stipulation and order/consent decree that requires the city to keep Santa Monica Municipal Airport open and operating with reasonable services until Dec. 31, 2028, upon which time it has the option to close the facility.”

To say that the industry was shocked would be an understatement. As far as we can determine this has either never occurred before, or if a similar FAA ruling was issued long ago no one can recall such a ruling truly against the FBO industry.

So what can likely be the effect of this shocking reversal and ruling by the FAA? Well, if you’re an FBO owner or FBO chain like Signature Flight Support, Atlantic Aviation, Sheltair, and the others you might now wonder if your lease term with the airport, say 20, 30, or 40 years or more could be trumped by the airport deciding to bend to the occasional vocal minority of its constituents complaining about airport noise, congestion, or danger from airport accidents and move ahead with closing the airport much as the city of Santa Monica done.

Don’t think this is a far-fetched possibility. FBO Advisors LLC was involved in a similar situation approximately 15 years ago in Stuart Florida where the newly elected county commissioners made good on their campaign promises to vocal constituents to close the “noisy” Stewart Florida airport. FBO Advisors was retained to assist the

airports FBO operators in making their case to the county commissioners against closure. The process was long, expensive, and rife with politics as you can imagine. No matter that the Stuart Florida airport contributed to the economic base of this somewhat sleepy County, the newly elected county commissioners, one in particular who rode to office on the campaign promise to close the airport, were unsympathetic to put it gently to the benefits that an airport and FBO’s serve to the local community.

Back to the potential impact on existing FBO owners such as Signature Flight Support, Atlanta Aviation, etc. Whereas all of them made their decision to purchase a particular FBO at a particular airport based upon the business the FBO (via the airport) generated and the length of the concession granted in terms of lease term, say 30 years or 40 years, these FBO owners conducted extensive pro forma’s and amortization calculations to justify their initial investment.

So it’s not difficult to understand the potential devastating effect this shocking FAA ruling can have on the investment made by these FBO owners and FBO chains. If your pro forma was based upon a 30 year or 40 year amortization schedule and analysis and now you’re faced with a situation like in Santa Monica that Atlantic Aviation is facing, your recapture of your investment originally based upon say 30 years for example has now been shortened by 50% to only 15 years instead of the original 30 years you modeled. The word shocking is appropriate.

Do the FBO’s and FBO chains that might face a surprise accelerated shutdown of the airport or early termination of their lease have any options or redress? That’s yet to be determined and certainly the attorneys on both sides of the issue are going to have a field day, and an expensive one at that.

While we confess not to be attorneys, it strikes FBO Advisors that the early termination of a lease due to the city or county’s desire to close an airport is effectively a “condemnation taking” by the government

and if our conclusion is correct at the very least the FBO’s affected (Atlantic Aviation in Santa Monica for example) perhaps have a condemnation claim, a government “taking” as is described in some leases, and hopefully they can receive significant monetary damages from a court ruling in their favor.

At least that’s better than nothing.

Because of this shocking FAA ruling, fasten your seatbelts if you’re an FBO owner because you now have something new to worry about!

Helpful Links – https://www.atlanticaviation.com

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:

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