The National Air Transportation Association (NATA) is rejecting assertions by the Aircraft Owners and Pilots Association (AOPA) that FBOs are unfairly profiting from excessive ramp fees and fuel pricing. In the article, “AOPA Battling Excessive FBO Fees,” the organization faulted FBOs at publicly funded airports for not providing “unfettered ramp access” to general aviation users.
In rebuttal, NATA insists that the basis for AOPA’s complaints is invalid. “The AOPA effort is particularly disappointing as it continues a pattern of contradictory assertions designed to alleviate industry concerns while it pursues an economic regulatory agenda,” stated NATA president Martin Hiller. “While AOPA claims to support FBOs and the free market, there is no recognition of the fact that some locations require different pricing models.”
The AOPA article is based on a closed-door presentation the organization made to the FAA, requesting agency oversight of the industry. The FAA then offered the presentation to NATA for comment. “Incredibly, AOPA chose to attack the FAA for asking stakeholders to comment on its call for economic regulation of FBOs and even criticized NATA for bringing its covert eleven-month campaign to others' attention,” Hiller added.
The National Air Transportation Association (NATA) has rejected assertions by the Aircraft Owners and Pilots Association (AOPA) that the FBO industry is unfairly profiting from excessive ramp fees and should be subject to FAA oversight.
In a rebuttal to an article in the May issue of AOPA Pilot magazine, “AOPA Battling Excessive FBO Fees,” NATA insists that the basis for AOPA’s complaints is invalid. “The AOPA effort is particularly disappointing as it continues a pattern of contradictory assertions designed to alleviate industry concerns while it pursues an economic regulatory agenda,” stated NATA president Martin Hiller. “While AOPA claims to support FBOs and the free market, there is no recognition that some locations require different pricing models.”
The recent AOPA article was prompted by the results of a campaign the organization has run over the last year, requesting that its members submit what they deem egregious examples of FBO pricing they had encountered, whether it be ramp fees or fuel pricing. According to the organization, 67 percent of the complaints involved FBOs that are the sole providers at their airports, while 59 percent referenced Signature Flight Support, which became the world’s largest FBO operator last year when it acquired Landmark Aviation.
AOPA compiled those submissions into a closed-door presentation the organization made to the FAA in December. One of the key tenets in AOPA’s proposal is that the FAA should mandate that GA pilots have “unfettered access between the ramp and the parking lot,” without having to use an FBO and pay ramp fees. While it acknowledged that some pilots can choose to use other airports where fees may be lower, the organization decried the loss of convenience they face in those circumstances. AOPA also argued that the practice of waiving ramp fees with large fuel purchases forces some pilots into taking on fuel at places and at prices they otherwise would not. “If pilots are given unfettered ramp access they can then choose to tanker fuel into airports where FBOs charge prices outside normal market prices,” AOPA president and CEO Mark Baker was quoted in the article. “But now pilots have no choice except to purchase overly expensive fuel or pay the fees, or in some cases both.”
Call for 'Unfettered Access'
He reiterated those sentiments in an interview with AIN: “I call it a hostage situation when you wind up on a ramp and you have to pay an excessive ramp fee or excessive fuel pricing to satisfy that FBO,” said Baker. “We’re talking about either to create, or in some cases describe where and outline where the public parking spaces already exist on an airport, so that we can then as aviators buy our fuel somewhere else and create a free marketplace for ourselves in choosing where to stop for fuel without paying a ramp fee.”
“If ramp space was built with Airport Improvement Program [AIP] funding, a case may be made for free space, but that is not how the real world works,” said Robert Olislager, executive director at Denver Centennial Airport, one of the nation’s busiest business aviation hubs, and home to five FBOs. “At Centennial Airport and many airports around the country, FBO ramps are constructed at the FBO's expense. FBOs are responsible for operations and maintenance costs and property or possessory interest taxes.”
“Even if the ramp has been leased from the airport, its upkeep is invariably the FBO’s responsibility,” added Hiller. “As a result, AOPA’s proposal to require FBOs to provide 'unfettered access' to ramps is really the economic regulation of private investment.”
Even the discounts that some service providers give to large fleet operators could be called into question as discriminatory against smaller GA pilots and owners who pay “list price” for fuel, according to AOPA. “We’re looking at the FAA as a responsible party to make sure that the fairness and non-discriminatory practice is enforced,” Baker told AIN. “If some of these larger operators are getting much better prices than the general public, we want to examine if that is fair or not.”
Baker insists that his organization’s activism is not a call for FAA oversight of the FBO industry. “Just to be clear, we have no issues with 95 percent of the places,” he noted, “but at some of the larger regional airports with more than 30,000 or 40,000 operations and just one player, the airport didn’t change any fees in that period of time, and the prices have gone through the roof.”
Following AOPA’s presentation, the FAA offered the report to NATA for comment. “Incredibly, AOPA chose to attack the FAA for asking stakeholders to comment on its call for economic regulation of FBOs and even criticized NATA for bringing their covert eleven-month campaign to others' attention,” Hiller added.
NATA submitted its own report to the FAA, showing that of the top 100 general aviation airports in the country, more than a quarter support only one FBO. Of the top 200 airports, nearly 80 have lone providers. The report also stated that local governments have come to view FBOs as encouraging economic development in their communities, and as leases come up for renewal, more and more airports are expecting or even requiring FBOs to invest in high-end facilities. The report also examined several recent trends and their effects on the industry as a whole.
“When you liken FBOs to public utilities, it becomes a matter of concern to all of us in the general aviation business community,” said Maria Sastre, president and COO of Signature, one of two FBO chains mentioned in the AOPA article. “As NATA’s report to the FAA clearly demonstrates, contemporary FBO commercial strategies are the result of changes in the macro-economic conditions in the general aviation community, including fewer pilots, declining sales of 100LL, changing aircraft performance and the increased capital investment needs for airport infrastructure.”
She added that the current fees and pricing are simply signs of the evolution of the aviation industry. “To suggest regulatory intervention in pricing, as AOPA does, will not bring back the conditions of a previous era and instead potentially accelerate the decline of general aviation in America,” said Sastre.