Airports, FBOs and Users Role in Fostering Airport Health

March 29, 2018

Airports and their tenants provide essential services to keep general aviation healthy, sustainable and successful, as well as support the economic viability of local communities. In a recent Airport Business/AviationPros.com article, NATA Board Member Curt Castagna discussed pathways to maintain the sustainability of airports and to encourage stakeholders, including users, to collaborate on achieving a robust airport that supports both economic development and public access to aviation.

Is Your Airport Healthy?

BY CURT CASTAGNA, President and CEO of Aeroplex/Aerolease Group
Originally posted by Airport Business/AviationPros.com ON DEC 26, 2017

For managers of general aviation airports across the nation, the definition of sustainability is as diverse as the stakeholders whom they serve. However, most contend that maintaining both economic viability and social responsibility are vital to maintaining a healthy airport.

The Airport Cooperative Research Program (ACRP), which is funded by the Federal Aviation Administration (FAA) and undertakes research in a variety of aviation subject areas, defines airport sustainability as practices that ensure:

  • Protection of the environment, including conservation of natural resources
  • Social progress that recognizes the needs of all stakeholders
  • Maintenance of high and stable levels of economic growth and employment

There is no simple formula for achieving airport sustainability, as each facility has a unique operating environment, business structure, governance and market. In addition, airport management face diverse challenges in relation to meeting user needs in the areas of maintenance, modernization, budgeting, security, grant assurances, and local political and community initiatives.

This discussion is designed to encourage visionary thinking from airport, business and community leaders, as well as airport users, on how to collaboratively achieve a robust airport that supports both economic development and public access to aviation.

Navigating the Path to Self-Sufficiency

When it comes to maintaining the economic health of an airport, it is crucial to understand its unique operating environment. In broad terms, general aviation airports must comply with a host of federal regulations and requirements, while navigating local market forces and economic and environmental pressures.

General aviation airports traditionally generate revenue from lease rates, fees and charges collected from tenants and users who provide a broad range of aeronautical services to the aviation community including: aircraft sales and acquisitions, fuel, aircraft ground support, passenger and crew services, aircraft parking and storage, on-demand air charter, aircraft rental, flight training, aircraft maintenance and overhaul facilities, parts sales, and business aircraft and fractional ownership fleet management.

Development at general aviation airports often takes the shape of public-private partnerships, modeling the discussions currently underway at the nation’s commercial service airports. For example, an airport sponsor enters into a type of public-private partnership with a fixed based operator (FBO) that provides airport users with a wide range of aeronautical services. In return, the airport sponsor receives a fee for the land and the community receives the economic benefit, with minimal risk for the business enterprise that is created. An increased number of airports are also entering into agreements with private companies that provide renewable energy sources, such as solar panel installations, that can diversify revenue streams, significantly reduce energy costs and benefit the environment.

A third revenue stream at airports comes from specialty companies that serve aviation-related segments of the economy. Corporate and general aviation services are augmented by a diverse array of mixed-use facilities, including business parks and industrial centers, which make airports a powerful economic engine.

Finally, public-use airports benefit from grants provided by the FAA for vital infrastructure projects. Eligibility for these Airport Improvement (AIP) funds is specifically based on the airport’s ability to maintain a level and competitive playing field for leaseholders engaged in aeronautical activities. To maintain its grant assurances, airport sponsors are responsible for ensuring that its tenants provide services at prices that are fair, reasonable and non-discriminatory.

Competition, Not Regulation, Creates Healthy Airports

At some general aviation airports, as well as commercial airports with general aviation facilities, corporate aviation accounts for a disproportionate share of revenue generated compared to smaller general aviation aircraft. How then, do airports achieve economic sustainability while maintaining a healthy mix of jet, propeller and helicopter operations?

A proper mix of operations and aircraft cannot be achieved through increased federal regulation or market manipulation. Rather, airports must aggressively work to implement policies that maintain balance among the needs of diverse airport users, while extending the benefits of aviation to the local community.

This includes using a competitive selection process to attract tenants that make significant capital investment and offer quality services at reasonable prices. Airport sponsors must also establish fair and equitable lease rates and charges appropriate to the local market, as well as address mixed land use in their long-term master and business plans. When airport operators view their tenants as true business partners, they achieve mutual success and advance the airport’s mission to achieve both economic and social sustainability.

Case Study – The Airport Sponsor/Tenant Relationship

Currently, the Aircraft Owners and Pilots Association is calling for the FAA to regulate the price of aeronautical services provided by FBOs, such as fuel and ramp fees, to achieve unfettered airport access. While this suggests that private pilots would receive the lowest costs available, it actually constrains the airport’s ability to serve the aviation community and achieve its goals.

The investments made by aviation and FBO facilities not only serve local pilots, but are gateways to economic investment in the community. As leases come up for renewal, an increased number of airports are requiring FBOs to make significant capital investments which revert back to the sponsor at the end of the ground lease. Each airport and each market is different. Thus, based on local and regional knowledge, FBOs construct pricing that enables them to provide quality service at a reasonable rate of return.

The economics of airport business place great importance on master lease terms and available revenue streams to create viable airports. While FBOs frequently comply with guaranteed service levels and facilities dictated by airport minimum standards, their business model does not guarantee income. Sparing airports the risks of an open and volatile market, they provide a steady revenue stream in the form of rent. Ultimately, the rates and charges collected by the airport sponsor are reinvested to help create a healthier airport.

In circumstances where pilots feel they do not have access to the best prices for fuel and other FBO services, the situation is best mitigated locally through the airport sponsor, which is obligated by federal law to ensure access on fair and reasonable terms. This does not equate to the lowest prices, but does require FBOs to offer equal rates to similarly-situated pilots. If the situation is not resolved, a last resort is the formal FAA Part 13 or 16 complaint process.

Clearly, this does not remove responsibility for the fair and equal treatment of pilots and other airport users from the realm of the airport sponsor. Rather, airports are held accountable for supporting policies and programs that best serve the diverse needs of the entire aviation community.

At Van Nuys Airport, for instance, progress on a 30-acre development project dedicated to propeller aircraft is climbing full speed ahead. This site, still under construction, provides hangars, tie-downs and office facilities for up to 270 propeller aircraft and related businesses. It also features a self-serve fueling station for private pilots. By relocating approximately 85 portable hangars from other leaseholds, this facility enabled other development projects to move forward and generate substantial economic impact.

Practices to Achieve Economic Sustainability

Creating an environment where airport businesses can thrive provides benefits to airport sponsors, users and operators, while creating high-skilled, high-paying jobs in the community. A business-friendly environment also attracts public-private partnerships to the airport, including those that advance green technology and neighborhood compatibility.

The following are a few practices that can help propel an airport toward economic health and, in so doing, promote policies that are both responsive to business and responsible to the community:

  • Develop and enforce airport minimum standards that promote the highest levels of safety, security and service for all airport users.
  • Ensure the airport has a current business/redevelopment plan and schedule of rates and charges that reflect its overall vision and mission.
  • Consider a transparent RFP process to solicit business proposals for real estate that is designated for both aeronautical and FAA approved non-aeronautical uses.
  • Review and maintain compliance with all airport grant assurances and regulatory measures established by federal, state and local government agencies with jurisdiction over the airport and its users.
  • Think globally, but work locally with airport users and operators, public officials and prominent business, civic and community organizations to form an airport business support team.

Finally, aviation industry leaders and policymakers should take advantage of organizations throughout the world, such as ACRP, that contribute guidance and research on subjects of importance to airports. Many of their findings derive from the day-to-day challenges faced by airport managers and can lead to innovative solutions.

Curt Castagna, president and CEO of Aeroplex/Aerolease Group, is a member of the Los Angeles County Airport Commission, president of the Van Nuys and Long Beach Airport Associations, and a board member of the National Air Transportation Association. A certified private and instrument-rated pilot, he has instructed courses in aviation administration at Cal State Los Angeles for over two decades.


Trump Administration Sends Infrastructure and FY2019 Budget Proposals to Congress – What’s In It for Aviation?

February 16, 2018

By Rebecca Mulholland, Director, Legislative Affairs

This week was a busy one for Washington – President Donald Trump released his long-awaited $1.5 trillion infrastructure proposal and his fiscal year 2019 budget request on Monday, February 12th. Here is a look into each proposal, and what they mean for aviation:

Infrastructure Proposal:

President Trump’s infrastructure plan aims to invest $1.5 trillion into our nation’s infrastructure, including $200 billion in investment from the federal government and the remaining funds from states and the private sector. The proposal has been met with skepticism in Congress, with Republican frustrations on the $1.5 trillion price tag and Democratic concerns about the disproportionate federal government share. The proposal seeks to change existing infrastructure programs and creates pilot programs to incentivize, transform and finance state and local governments to make their own investments, allocating $50 billion of investment in rural America to states to prioritize their needs.

For aviation, the proposal:

  • Seeks to provide government agencies the ability to sell off federal assets, including airports, if it can be demonstrated that “an increase in value from the sale would optimize the taxpayer value for federal assets” (p. 19). This would include the potential sale of Reagan National Airport (DCA) and Dulles International Airport (IAD).
  • Aims to expand the streamlined passenger facility charge (PFC) application process, currently at non-hub airports, to small hub airports.
  • Calls for Congress to limit the FAA’s authority to manage and approve airport projects that are not related to “critical airfield infrastructure.” The proposal names hangars and terminals as examples of projects that the Administration says are not “critical airfield infrastructure projects.”
  • Encourages airports to offer incentive payments for Airport Improvement Program (AIP) projects and limits FAA oversight of AIP funds.

However, questions remain. For example, how much of the $1.5 trillion will go to each mode of transportation (given that some grant programs may be utilized for non-transportation fields, like broadband) or what the revised PFC process means for charter operators (will making the process easier for small airports increase the likelihood that PFCs will impact air charter operators more than they currently do?).  It is also unclear how interested Congress is in taking up this transformative proposal given the recent passage into law of a two-year fiscal 2018 budget bill.

Budget Proposal:

While Congress celebrates the passage of the Fiscal Year 2018 Budget, the Trump Administration has shifted gears to the next fiscal year, releasing its $4.4 trillion federal budget blueprint for Fiscal Year 2019. This budget blueprint aims to provide more details of how the proposed $200 billion from the infrastructure proposal discussed above will be divided up, department by department.

The budget request does not bode well for transportation, slashing the Department of Transportation’s (DOT) discretionary funding by 19 percent, to $15.6 billion, compared with what was enacted for Fiscal Year 2018. Here is a brief breakdown of how aviation is impacted by the budget request:

  • $16.1 billion allocated to FAA. This is down from the $16.3 billion that was enacted this year;
  • $3.35 billion allocated to AIP. That number is the level at which AIP has been flat-lined since fiscal year 2014; and,
  • $93 million for the Essential Air Service (EAS) program, down 38 percent from the $149 million provided in fiscal year 2018. The proposal also calls for reforms to who is eligible for the EAS program.

Also, it is important to note that, like last year, the budget proposal calls for privatizing our nation’s air traffic control system, beginning in 2022. NATA released a press statement in strong opposition to this addition, noting that privatization has continuously “been met with the collective resistance of NATA and hundreds of other leading general aviation organizations.” Also, a strong bipartisan and bicameral coalition in the House of Representatives and the Senate are not supportive.

Now that Washington has had time to absorb what is in the budget proposal, the legislative process begins. The House and Senate Budget Committees will review the numbers and supply budget resolutions to the House and Senate Appropriations Committees. The Appropriations Committees will markup the bills, send to the House and Senate chambers for approval and the President will sign each appropriation (or one omnibus) bill into law.

Note that the budget proposal is just that, a proposal, and Congress can accept or reject any cuts suggested. There is still a long way to go to a final deal, and a lot can happen, so follow NATA as the legislative process continues.


NATA Members Help Shape Debates in 2017, Build Strong Foundation for 2018

January 4, 2018

By Bill Deere, Executive Vice President of Government and External Affairs

This time last year, I warned that 2017 could be a wild one for the aviation business community. That turned out be a vast understatement. From proposals to corporatize air traffic control to price regulation of FBOs, this past year has been a constant challenge to the association and its members. As we head into the new year, challenges will remain but we are also hopeful that the work begun this year may result in significant progress in 2018.

No doubt the biggest debate in aviation in 2017 was the airline industry proposal to privatize the nation’s air traffic control system, an idea that was embraced by both the Trump Administration and the Chairman of the House Transportation Committee, Representative Bill Shuster (R-PA). Ultimately, the proposal was incorporated into the House version of the FAA reauthorization, H.R. 2997, the 21st Century AIRR Act. Following committee approval, it looked like the legislation was headed to the floor of the House of Representatives for a vote.

That is where the proposal met with the collective resistance of NATA and the rest of the general aviation community. NATA’s hundreds of Hill meetings, combined with the grassroots support of our members and countless others, were enough to introduce uncertainty in the House Republican leadership as to whether the corporatization proposal would survive a House floor vote. For that reason, the current FAA authorization was extended until March 30, 2018.

Significantly, the Senate FAA legislation contains no corporatization proposal. NATA members who participated in our annual Congressional Fly-In were the last general aviation group to visit the Senate before the bill was drafted and your direct advocacy efforts in opposition to corporatization benefited the entire general aviation community.

For 2018, you can expect the ATC corporatization battle to be fought one more time. At this writing, Congress is focused elsewhere, tax legislation, year-end spending bills, and immigration to name just a few issues. But as the calendar turns, and the next FAA authorization deadline approaches, you can expect our deep-pocketed opponents to make one more attempt to wrest control of the air traffic control system and turn it over to the airlines. We ask you to stand ready and be prepared to weigh in with your elected representatives. You are the aviation business community’s best voice.

While we expected the ATC corporatization battle, in 2017 we unexpectedly found ourselves in a debate with a national pilot organization that suggested to the FAA that FBOs are akin to public utilities and should be regulated along similar lines. This was a moment where our members were critical to our efforts to shape the debate. Thanks to the help of member companies, FBOs and Part 135 companies alike, we developed a report on the state of the FBO industry. The report, which is available on the front page of our website, is a comprehensive look at the industry and the many factors that impact the pricing of FBO services.

I am pleased that as 2017 progressed, more and more industry leaders turned to our report as the foundation for debate. It has also been gratifying to see the thoughtful approaches that have been taken to the issue by other groups, including the Experimental Aircraft Association, which featured an excellent article on the subject in its May edition of Sport Aviation.

So where do we go from here? As you will see in the article on our annual leadership conference (page 51), your association met the issue head-on with a panel that included pilots, FBOs, airports and fuelers. A dialogue started there that I hope will continue into 2018.

Finally, I don’t want to leave you with the idea that all we do at NATA is try and beat back bad ideas. We take seriously our responsibility to advance a positive, member-driven industry agenda. There are proposals in Congress and before the agencies across a range of issues, including taxes, addressing illegal charter, air carrier training and others that we hope to see implemented in 2018.

As we reflect on 2017 and look ahead to 2018, one thing is clearer than ever. We are in it together. To advance big ideas or defeat major threats, is a job that requires all of us to be engaged.

Republished from the 2017 Q4 Aviation Business Journal.


More Fixing of Things That Aren’t Broken

October 3, 2017

By Bill Deere, Executive Vice President of Government and External Affairs

The campaign to economically regulate FBO pricing took its latest step recently, when a national pilot organization filed informal complaints against aviation businesses at three airports. It is certainly reasonable for an association that represents pilots to act as a consumer ombudsman, just as NATA does on behalf of aviation businesses.

However, I very much agree with NATA’s President Marty Hiller who, pointing to the big picture noted, “This action is disappointing, coming at a time when the general aviation community is confronting a serious effort to privatize our nation’s air traffic control system. General aviation (GA) as we know it in this nation is under a real threat. We need to stand united right now and not be concerned with distractions like this.” Think Marty is exaggerating? I was on a recent call where the same national pilot organization was telling pilot groups from around the country the debate on ATC privatization has reached a point where the next seven days are critical to the future of GA in this nation.

To be clear, neither NATA nor its membership is afraid of a debate on FBO pricing. In fact, I am proud that NATA insists that viewpoints on controversial issues be aired directly with our members. On November 8th, NATA members will hear directly from AOPA General Counsel Ken Mead, who has agreed to join us at the 2017 Aviation Business Roundtable, to discuss pricing on a panel that will also include FBOs, airports and fuelers. I have assured Ken that no flak jacket is required.

The issue of FBO pricing is not new, and the pressure aviation businesses often face for more improvements and additional private investment can ignore the reality that these costs are ultimately paid for by the users. However, what is new, is the increasing lack of collaboration to address these issues. Historically, industry groups work in partnership on issues on behalf of their memberships, and in this case aircraft owners, aviation businesses and airports should be sitting down to address concerns and develop solutions, not looking for government regulation. This campaign to economically regulate FBOs began in secrecy, and ignores the fact the Department of Justice reviews FBO consolidations and requires adjustments if necessary to assure adequate competition continues. It seems reasonable that if a pilot organization felt its members were threatened at these locations, that their historic mission would have brought aircraft owners, aviation businesses and airports together, not pitted them against each other.

The commitment of the industry to work together on an unleaded avgas replacement exemplifies the potential of collaborative relationships. This effort provides users, businesses and airports opportunities to review incentives for alternative fuels as they hopefully become more readily available in the next several years.

While NATA does not take a position on pricing at individual FBOs, the association is providing important industry perspective, supplying both the FAA and local decisionmakers context as to the factors that go into FBO pricing. As you may recall, earlier this year NATA presented a state of the aviation business sector overview to the FAA. The overview, developed with the assistance of FBO and air charter members, discusses the costs of operating airport businesses and the many variables
that go into determining its pricing structure—including capital invested, lease duration, fuel volume, personnel expenses, hours of operation, and traffic types.

Press coverage of the informal complaints has been balanced and, most important, not accepting as axiomatic the assertion that FBO pricing is “egregious.” Especially gratifying to NATA are the comments that follow the related news stories. This would be a natural place for pilots to “pile on.” And while some do, there are also thoughtful comments from
writers who understand that FBO pricing is more complex than its glib portrayal in what is essentially an association’s membership renewal campaign. Some of the best discussion centers around the role of airports and the impact on FBO economics of a local airport or community’s desire for highend facilities, ways to most easily address security concerns or their own investment challenges. Federal requirements and local conditions can be managed together, and the industry has traditionally united to seek the necessary balance.

The FBO services market is and remains a very competitive industry. As the filings demonstrate, pilots, flight departments, charter companies, and fractional operators make a choice every day of what airports to fly into and which provider meets their requirements. Pilots have more technology than ever to create options to assist them in deciding where to land, purchase fuel, and remain overnight based on cost, convenience, reputation and services a fixed base operation provides. Currently, in the case of Jet A fuel there are no less than 26 providers of contract fuel (a method of payment offered by fuel suppliers and other transaction entities), most if not all posting weekly prices at most FBOs across the country. There are numerous websites that offer the piston and turbine pilots prices, with flight planning and other services, including FltPlan.com, AirNav, and RocketRoute.

Those within the aviation industry fully understand that FBOs compete vigorously with each other on price, service, and quality of facilities. Often, an FBO’s primary competitor is not a competing operation on the same airport but rather another airport in close proximity, or the airport where the plane came from or its final destination.

Pilots, take some of the self-congratulatory back patting of organizations with a grain of salt. The reporting has a tendency to peter out when the news turns inconvenient. For example, taking credit for a second FBO at Jackson Hole has stopped. Why? Because the airport authority may buy out the existing operation in favor of a city-run FBO. How about prices at John Wayne Airport now that an incumbent FBO was turned out? Looks like the total user price for fuel, handling fees and rents are still about the same. Economic regulation of FBOs is no different than trying to privatize air traffic control, another example of trying to fix something that isn’t broken. (Visit www.nata.aero to read NATA’s state of the aviation business sector overview.)

Republished from the 2017 Q3 Aviation Business Journal.


Myths and Facts Surrounding Air Traffic Control Corporatization

August 3, 2017

By Bill Deere, Executive Vice President of Government and External Affairs

As the debate heats up over whether or not to corporatize our nation’s air traffic control system, one of the biggest challenges facing general aviation is overcoming proponents’ various assertions that I categorize as “myths,” that through deliberate, endless repetition, can become “facts” to policymakers. It’s an impressive laundry list of dubious assertions and, if left unchallenged, will create a groundswell of support for a user fee-funded air traffic control system. As NATA members prepare to come to Washington, D.C. for our annual Aviation Business Conference, they will have the opportunity to meet with Capitol Hill offices. It’s important that Members of Congress and their staffs understand many of the arguments offered by ATC corporatization supporters cannot stand the sunlight of fact. Let’s look at a few of the most popular ATC corporatization myths.

First is the notion the United States is actually behind the rest of the world because we have not yet corporatized. Proponents of corporatizing air traffic control often hold up the number of privatized air traffic control systems around the world as “proof.” However, a close look reveals the size of these systems and the level of investment are significantly smaller than in the U.S. system, in some places allowing for the creation of minimal levels of surveillance where none had previously existed. My colleague Rebecca Mulholland attended a recent Hill briefing hosted by ATC proponents, where this myth was exposed by the Democratic professional staff of the House Transportation Committee. In fact, proponents were forced to admit, the only countries that really matter in this regard are Canada and those in Western Europe. A 2015 U.S. Department of Transportation Inspector General (IG) report clearly demonstrates these international air traffic control systems are much smaller and less complex than our own. More devastating, the IG (who, believe me, is no fan of the FAA) also reported these air traffic control providers, unlike the FAA, “do not embark on large, comprehensive modernization efforts such as NextGen transformational programs or conduct extensive aviation research and development.” Instead, as the report notes, these air traffic providers, including NavCanada, “modernize” by relying on small, incremental changes using off-the-shelf technology.

Another sound bite, tossed around Washington that has taken on a life of its own, refers to our air traffic control system as based on “WW2 technology.” We recommend proponents of corporatizing ATC 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. Sure, radar is certainly one of the technologies used to provide surveillance of aircraft, but other surveillance technologies, including GPS-based ADS-B, and multi-lateration, are also 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.

By far the most annoying myth of the corporatizers is that FAA’s current modernization program, NextGen, is a failure. Really? A recent FAA report to the Senate Commerce Committee notes the turning point in the NextGen program came in 2010 with the establishment of the NextGen Advisory Committee (NAC). This is the industry-wide, aviation stakeholder group that, for the last seven years, has been driving where and when the NextGen technologies are deployed. By utilization of the NAC, through 2016, the FAA and industry have a combined 96.2 percent (102 of 106) success rate on meeting and delivering expected outcomes for each commitment. On top of that, 60 of the commitments were completed ahead of time. Through 2016, the entire system enjoyed $2.72 billion in savings in passenger time and occupant safety, as well as reduced fuel and aircraft operating costs. By 2030, total NextGen benefits are expected to be $160.6 billion, based on an investment cost of $35.8 billion by the FAA and the aviation industry. If only the rest of the government could “fail” like this. In other words, ATC corporatization proponents are using old facts to justify their radical agenda.

Let me close with the myth that I believe poses the greatest risk to general aviation. The notion that an ATC corporation with a diverse board of directors, representing all aviation stakeholders, guarantees its fairness. Air traffic control is not a competitive business but rather a monopoly. How exactly is it fair to the traveling public to turn the public airspace over to a group of special interests? More importantly, follow the money. While such a board may include a diverse group of aviation stakeholders, 90% of the corporation’s revenues will be derived from a very small number of those stakeholders— commercial and cargo airlines. Is it reasonable or realistic to expect the CEO of an ATC corporation to ignore or dismiss the views of this small group that represents such an outsized portion of the corporation’s revenues? The decisions that will undermine general aviation will not come in high-stakes board meeting confrontations but, incrementally, every day, through calls to the CEO from these big money interests.

If you have read this far, I ask you to go a little further on behalf of aviation businesses. NATA has recently made changes to its website, making it incredibly easy for you to share your concerns over proposals to corporatize air traffic control with your elected officials. So go to www.nata.aero/actioncenter, it’s fast, it’s painless and it will be a tremendous help in protecting general aviation in America!

Republished from the 2017 Q2 Aviation Business Journal.


Does the President’s Support for ATC Privatization “Trump” the Political Dynamic?

June 15, 2017

By Bill Deere, Executive Vice President of Government and External Affairs

A White House event can be one of the greatest home field advantages in the political world, jump starting initiatives and changing the dynamics of policy debates in Washington.  That was no doubt the intent last week when the White House unveiled infrastructure week, a series of speeches kicked off with an East Room event where President Trump announced to a room full of airline CEOs and reporters his support for the airline plan to corporatize the nation’s air traffic control system.  Did the event change the political dynamics?  Early returns indicate it did not.

The event was preceded by the obligatory conference call of Administration officials and reporters.  The call continues the tendency of supporters of ATC corporatization to assert as “fact” things that are at best opinions and at worst misleading or wrong.  For example, in the related Washington Post article the weekend before the White House event, the Chairman of the National Economic Council, Gary Cohn, asserts that “GPS will help pilots fly more direct routes, cutting down both flight times and fuel usage.”  The reality is that capably equipped aircraft have been given direct routing for over 15 years.  In fact, U.S. carriers have lagged behind much of the world in investing in new, better equipped aircraft.  ADS-B has been fully operational for several years, yet the airlines are waiting until the last minute of the 2020 deadline to equip.  Who is really the laggard, the FAA or the airlines?

WHEvent

That tendency to exaggerate continued at the White House event.  Flanked by current and former Secretaries of Transportation (one of whom is a well-compensated airline lobbyist), the President continued the series of airline assertions that NATA rebutted in its paper, “Myths and Facts Surrounding Air Traffic Control Corporatization.” Stating the proposal will “get you where you need to go more quickly, more reliably, more affordably and, yes – for the first time in a long time – on time,” the format precluded questions, including asking about the fact the number one cause of delays is neither the FAA nor weather, but rather the airlines themselves.  The President also referenced a broad group of supporters including controllers. Really? NATCA President Paul Rinaldi said in a statement, “We look forward to reviewing the specifics of the air traffic control reform legislation so we can evaluate whether it satisfies our Union’s principles, including protecting the rights and benefits of the ATC workforce.” Hardly a ringing endorsement.

Did it change the political dynamic?  From the general aviation perspective, NATA President Marty Hiller reacted swiftly, “The Trump proposal introduces significant uncertainty to the world’s largest, most complex and safest air traffic control system, offering a radical solution to issues easily addressed within the FAA’s current framework. Surprisingly, the proposal also makes little business sense, it does nothing to address the need for additional airport infrastructure investment but adds significantly to annual budget deficits and increases the costs to be borne by the non-flying public.”

On the political front reaction was equally fast.  Senate Minority Leader Chuck Schumer (D-NY) panned the proposal noting, “Creating a private not-for-profit for the airlines to control could be like putting the fox in charge of the henhouse.”  The Chairman of the powerful Senate Finance Committee, Orrin Hatch (R-UT) stated, “I’m worried about it. There are all kinds of small airports all over the country that I’m not sure the private sector can handle.”  Senator John Thune (R-SD), Chairman of the Senate Commerce Committee (the one that will actually write the Senate version of the FAA bill) stated, “Getting a bill to President Trump’s desk will require bipartisan support as well as a consensus among the aviation community on a way forward.” His opposite number, Ranking Member Bill Nelson (D-FL) was even more definitive, “The safety of the flying public should not be for sale. Handing air traffic control over to a private entity partly governed by the airlines is both a risk and liability we can’t afford to take.”

Where was aviation business that day?  Information about the event came to general aviation second-hand.  Our inquiries about the event were met with silence.  So instead of using the grandeur of a presidential event to help persuade, general aviation was shown its place in Administration thinking – nowhere.

Act Now to Prevent the Privatization of the Air Traffic Control System, Visit NATA’s Action Center.


If It’s On the Internet It Must Be Safe

April 24, 2017

By Rebecca Mulholland, Director, Legislative Affairs and Chief of Staff

As NATA prepares for Congress to release its FAA reauthorization legislation, we meet with Members of Congress and their staffs on potential issues (see our Major Policy Issues for the 115th Congress), a big part of that is protecting against provisions that undermine safety and/or are harmful to our members. One such provision would create “flying Uber” websites (examples include Flytenow, AirPooler, and others) that deliberately bypass the FAA’s safety net of required pilot training and aircraft maintenance for commercial flights.

Earlier this month, I attended a listening session on Capitol Hill that focused on aviation innovation. A Flytenow representative gave Hill staff and other attendees an overview of the company’s structure and attempted to defend the company’s business model.  Following the overview, the audience had the opportunity to ask questions. Flytenow’s answers were instructive of how internet innovators often miss the point of various FAA safety regulations.

How many hours of flight time are required, under the company’s model, before a Flytenow pilot can fly passengers?

  • Flytenow Answer: The private pilot can fly, and share the cost of the flight, with passengers with as little as 40 hours of flight time.
  • Fact: Would you put your family into an aircraft with someone you don’t know who has 40 hours of flight time? The general public is not trained to judge what constitutes enough flight hours or what levels of certification are needed to ensure a safe flight. The consumer doesn’t know how to evaluate what they are getting. On an Uber ride, I know enough about driving to know if the driver is acting dangerously or breaking the law. But how am I to know if aircraft safety checks were performed, or if a storm is coming that the pilot should not be flying in? Placing the burden of rating the safety ability of a pilot on the consumer is inappropriate.

How informed do passengers need to be?  Do the methods of communication matter?

  • Flytenow answer: We are slowly moving away from the days of posting a flight on a bulletin board at the airport, and extending the practice to the internet seems like a logical progression. As stated during the listening session, “You shouldn’t have to put your flight on a bulletin board, you should communicate with the latest and greatest technology.” A March 16th Wall Street Journal article, authored by Mercatus Center fellows, noted that using the internet will allow private pilots to find more passengers, save on fuel costs, fly more routes, and gain proficiency.
  • Fact: NATA President Marty Hiller responded in the Wall Street Journal shortly after the article appeared that “Supporters of this proposal continue to try and distract readers by focusing on the technology used to communicate, despite clear direction from the FAA and courts that it isn’t the method but rather the intent and outcome of the communication that matters.” Pilots can communicate via telegram, phone call, email, text or snapchat to make arrangements for legitimate, permissible expense sharing flights. Already, there are other startup software apps that have legally entered the field, including FlyOtto and Linear Air, who are eager to support methods to bring more air taxi capacity online. These companies are successfully working with smaller operators to offer affordable single-engine piston charter (typical of that envisioned by Flytenow).

What about the issue of compensation?

  • Flytenow answer: The Flytenow model does not benefit the pilot – it is simply a service whereby private pilots and the general public can share the cost of a flight and fly to a destination. The intention is to make flying more accessible, fun and enjoyable.
  • Fact: Those who offer the public transportation by air and receive compensation for it (not just money, but through the accumulation of flight hours and gaining proficiency as well as savings on fuel costs – mentioned above) are common carriers. They must be a commercial pilot and often must have an air carrier certification. The FAA has always said that the money received from sharing expenses is compensation. But when a pilot is sharing expenses with passengers with whom he/she shares a common purpose, the FAA created an exception to the otherwise well-established need for a commercial pilot/air carrier certification (FAR 61.113). Also, FAA Legal Interpretation 1985-24 states, “…any payment for a flight, even partial payment, means that a flight is for compensation or hire. This is true even if payment is made under the expense sharing provisions…” During the listening session, it was admitted that flight-sharing “helps me to fly more so I can be a more current and safer pilot.” That’s true, and it’s important to build hours and gain experience, but not at the expense of the safety of the traveling public. Compensation does not mean strictly monetary compensation, so holding out for a flight so you can fly more means you’re building flight hours, which constitutes compensation and requires more stringent certification standards and aircraft maintenance.

As I go from Hill office to Hill office, I have been gratified by the response we are receiving to the real facts. Once they understand that if you want to fly people for compensation or hire, you need higher levels of certification and aircraft maintenance, staffers get it. More than just opposing a dangerous idea, we also suggest policymakers consider additional steps to streamline the process to grow the pool of pilots that could provide safe single-engine piston charter. Such a proposal will help young professionals build time to meet the 1500-hour Airline Transport Pilot certificate requirement and reduce the growing problem of illegal charter. This would increase the number of people already available to offer that service legally and safely, regardless of the means of communication – it helps everyone.