FAA issues guidance on FBO pricing
Clarifies airport sponsor responsibilities and what communities can do
Following AOPA’s initiative to ensure reasonable fixed-base operator pricing and transparency, the FAA issued guidance Dec. 7 for pilots, FBOs, and airport sponsors. "Q&As—FBO Industry Consolidation and Pricing Practices” 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.
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.
“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,” Baker continued.
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, composed 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.
Mead pointed out the guidance refers to reasonable fees and pricing practices at least 20 times and said, “The affordability of flying and airport access are cornerstones of AOPA’s core missions, and while most FBO’s are doing a great job, a handful appear to be imposing unreasonable fees and pricing practices on pilots.”
Over the past year, AOPA has received reports from pilots across the country about their experiences at airport FBOs. Many pilots have reported pricing practices at certain FBOs that restrict access to the airport, including unreasonable and often unknown fees for services that were neither requested nor needed.
On Aug. 28, AOPA, along with seven affected pilots, filed three FAA Part 13 complaints over egregious FBO pricing practices at Illinois's Waukegan National Airport, North Carolina's Asheville Regional Airport, and Florida's Key West International Airport, on behalf of its membership. At each of these airports, a single FBO controls all transient ramp space and fuel services, giving the FBO significant power over access to a public airport. AOPA believes each of the FBOs has used its monopoly position to engage in egregious pricing practices that have prevented reasonable access to public ramp space.
Pilots have already reported improvements at Waukegan and Asheville following AOPA’s complaints. Troy Kinsey, a Florida pilot and journalist, wrote in a post on Instagram, “Thanks to @flywithaopa's anti-price gouging efforts, we paid a reasonable $29 for two nights of parking” at Asheville.
Waukegan has taken a major step in offering transient pilots and aircraft owners “free overnight parking, tie-downs, and landside access,” according to the website. The airport posted a map clearly indicating the free transient parking area as well as the locations of self-service avgas and a pedestrian ramp entrance.
AOPA also has worked directly with several airports to develop policies and practices that will reduce the burden of unreasonable prices and fees on local and transient pilots, and is already seeing improved access and transparency at some of those locations.
With the help of AOPA, Utah's Heber City facilitated competition by revising its minimum standards to allow a self-fueling option. AOPA also sent California's Santa Barbara Municipal Airport recommendations for its request for proposal (RFP) for two FBO leases, suggesting how the airport could facilitate more transparency, competition, and oversight.
Other airports have taken steps on their own to protect pilots and access. Following complaints about high prices, the Orange County Board of Supervisors voted in January to replace Signature Flight Support with ACI Jet at California's John Wayne Airport. New York's Syracuse Hancock International Airport is in the process of adding a second FBO. Signature Flight Support is the sole FBO at the airport, but that is set to change in early 2018 when a second facility operated by Million Air is scheduled to open.
Syracuse Regional Airport Authority Executive Director Christina Callahan told AOPA, “When I first started here back in 1997, this airport had two what I would call homegrown FBOs, both started by local folks who saw a need to provide FBO services at the airport, and over a period of time one was acquired by another and then the single FBO was acquired by a national FBO and that was kind of the status-quo for the next 10 to 12 years.
“As an airport we recognize the need for competition at all levels. When you introduce a competitor to the market, it’s going to have an impact on the services and the cost of those services.”
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 that 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.
