Clarifies Airport Sponsor Responsibilities And What Communities Can Do

The FAA has issued guidance for pilots, FBOs, and airport sponsors in an online document titled “Q&As – FBO Industry Consolidation and Pricing Practices”. The document lays out a series of questions and answers addressing how federally funded airports should facilitate competition and transparency, as well as promote reasonable access and pricing. As a condition of receiving federal funding for development projects, airports must agree to protect public access to the airport by ensuring each FBO’s prices and fees are reasonable and not unjustly discriminatory.

According to the document, Over the past several months, the FAA has received a number of complaints about fixed base operator (FBO) services at Federally obligated airports. Some users have voiced concerns over the rising costs of FBO services, including fueling costs, ramp fees, parking fees, and handling fees. Concerns have also been raised over significant, if not exclusive, FBO control over airport ramp parking and associated fees. Pricing practices could, in some cases, preclude reasonable access to public-use airports. Changes in the FBO industry in recent years have presented challenges for airport sponsors, FBOs, and their customers. The continuing consolidation of the FBO industry, the post-9/11 security demands placed on the airport and FBO, the lack of traffic volume to support FBOs, and airport sponsors’ need to operate self-sustaining enterprises along with other variables have been factors that have put the FBO business under stress. Airport sponsors have no control over industry consolidation or local market forces, and the Federal government does not regulate the pricing of FBOs.

The publication follows an industry initiative led by AOPA to ensure reasonable FBO pricing and transparency. AOPA president and CEO Mark Baker said the FAA’s initiative in publishing this document is an important and welcome first step in highlighting these issues and assisting communities and airports in developing policies that will ensure fair and transparent pricing and reasonable airport access. “We appreciate the FAA making an effort to clarify the responsibilities and available options in preserving airport access, improving fee transparency, and ensuring public-use airports comply with grant obligations,” said Baker. “This isn’t about any new regulations or price controls, and we look forward to furthering our work with the industry to ensure that FBOs are profitable and airport sponsors are able to meet their grant obligations.”

AOPA General Counsel Ken Mead expects the guidance will better inform airport sponsors of the tools available to them as they exercise the necessary oversight critical to fulfilling their grant obligations. AOPA is working to bridge the gap between airports and FBOs through the Airport Access Advisory Panel, comprised of leaders from all aspects of the aviation industry, to provide an informed perspective on FBO pricing and fees. Mead said AOPA will continue and expand its work bringing together the FBO industry, airport sponsors, and pilots on best practices to meet federal grant obligations as well as encourage competition and transparency.

The newly released FAA guidance directly addresses mergers and industry consolidation. AOPA has found that many of the most complained about FBOs are part of relatively recent industry consolidations. The FAA notes that “FBO acquisitions or mergers may trigger anti-competitive concerns.” The FAA also outlined a series of actions airport sponsors can take to address high pricing which may result from consolidation.

The guidance also articulates existing policy and expectations for airports in fulfilling their grant obligations. In particular, the FAA reiterated that airport sponsors are ultimately responsible for ensuring the reasonableness of FBO prices and services, and recommends sponsors engage in a more transparent process when developing fees and prices imposed on airport users.

According to the guidance, “In order to confirm whether airport fees are reasonable and not unjust discriminatory, the fees, rates, and charges should be disclosed and made publicly available.”

The FAA further noted that sponsors can impose lease terms on FBOs to ensure their compliance with certain service levels and pricing policies.

(Source: AOPA news release. Images from file)

FMI: FAA document, www.aopa.org