FAA Publishes Guidance for Airport Sponsors on Pricing and Services

There’s nothing guaranteed to make steam pour from the ears of a GA pilot quite like a discussion about the price of fuel and services at some airports. But that’s just what the AOPA did earlier this year. They began asking questions about pricing and airport access and conferenced in the FAA. The result was this week’s publication of the agency’s, “Q&As – FBO Industry Consolidation and Pricing Practices," a practical guide for airport sponsors.

AOPA’s General Counsel Ken Mead said, “In late 2015 we started getting complaints from members and non-members about pricing practices at certain airports around the U.S., mostly those with a single FBO. The complaint meter got loud enough that we started to take a deep dive into the issue late in 2016 and early 2017.” Mead said the complaints began to increase following the last round of FBO consolidations that ended with Signature Flight Support acquiring Landmark Aviation. He was quick to point out that Signature was not the only company about which members complained.

The complaints focused around high fuel and airport service prices, as well as airport access. In some cases, pilots couldn’t easily determine the prices at some airports, while in others, they said prices changed between the time they called an FBO and when they arrived. Mead said the association saw a pattern where only a single FBO ran everything and set rules that included the need to purchase high-priced fuel or pay a ramp fee after landing. He said some airports even told tenants they’d need to buy fuel from the single airport FBO or face eviction. Mead said AOPA began talking to FAA in early 2017 because these airports accepted AIP money. The grant assurances that came with the money demanded fair pricing policies, if the airport sponsor was correctly handling its due diligence responsibilities of course.

The FAA’s Q&A was the result of many months of discussions. While it offers airport sponsors details on what they can and cannot do in relation to prices and access, the inside message is that airport sponsors have not been paying close enough attention to operations on their airports, perhaps due to fear of overstepping their authority. This new FAA document holds the airport sponsors as accountable while also putting FBOs on notice about the un-crossable lines of authority.

Question 6 in the FAA document offers 11 steps any airport sponsor can consider when trying to resolve pricing or access, or simply while conducting their local due diligence. Items like publicly disclosing rates and charges for airport access and services, retaining exclusive control over ramp areas and perhaps establishing different categories of FBOs on the same airport that provide different levels of service.

Justin Barkowski, another AOPA attorney told the story of Heber City airport (HCR) southeast of Salt Lake City, the facility that received more complaints than any other airport. In an attempt to quash user complaints over high prices, airport management initiated steps to install a self-serve fuel system, although that move would have violated the airport’s minimum standards already in place. The airport worked with local city governance and amended the minimum standards to allow self-serve fueling. In response, Barkowski said the current FBO sued the airport to halt the self-serve installation.

While not all problems on any airport can be easily solved with the publication of the FAA’s document, Mead said, “I think the FAA has taken a very important first step and it was welcome and very much needed. I think AOPA has awakened FAA to this problem and they needed to be awakened. Airports should be about transparency [of operations] and getting [sponsors] smart about what tools are in their toolbox to promote competition and exercise their own due diligence and oversite. I hope this document will do that.”

“AOPA plans to push very hard on alternative airport access because that represents a lot of economic power,” he continued. He also mentioned speaking on access and pricing at a recent NATA conference. “I think they listened and we had a good healthy dialogue. We’ll be in conversations with NATA over the coming months. We’re all in this boat together.”

(Evangle Luo of TTFLY shared with you)