Roundtable Airs FBO-Airports Issues

ACI-NA recently participated in a roundtable hosted by House Aviation Subcommittee Chairman Tom Petri (R-WI) regarding several issues fixed based operators have with airports.  The roundtable was held at the request of Congressman John Duncan (R-TN) who said that he wanted to host a forum where FBOs and airports could work out their differences on several issues including competition and leases.  There were six other members of Congress in attendance: Congressman Mike Capuano (D-MA), Congressman Leonard Boswell (D-IA), Congresswoman Eddie Bernice Johnson (D-TX), Congressman Sam Graves (R-MO), Congressman James Lankford (R-OK), and Congresswoman Jean Schmidt (R-OH).

Participants:

ACI-NA

-          Michael J. Landguth, President &CEO, Chattanooga Metropolitan Airport Authority

-          Jane Q. Calderwood, VP Government and Political Affairs

AAAE

-          Brad Van Dam, Vice President

-          Bruce Carter, Director of Aviation, Quad City International Airport

National Air Transportation Association (NATA)

-          Michael Scheeringa, President, Signature Flight support

-          Greg Arnold, President &CEO, Truman Arnold Companies

-          Eric Byer, VP Government and Industry Affairs

Discussion:

Bruce Carter discussed the FBO services that his airport offers after trying to get their FBO to get into the commercial fueling business several years ago.  After the FBO said that they could not do it, the airport filled the gap and now operates both fueling and ground handling services.

ACI-NA’s Jane Calderwood explained airports’ opposition to Congressman Duncan’s legislation, H.R. 1474 (The Freedom from Government Competition Act), that would require airports to contract out FBO services.  Ms. Calderwood explained that a recent survey done by ACI-NA showed that there was not a trend to back up the claims made by NATA that airports are getting more and more into the FBO business.  She also explained to Congressman Duncan the exact language in his bill that is of the greatest concern to airports as it would give the Office of Management and Budget the ability to craft regulations regarding the contracting out of activities for which states, cities and counties receive federal funding.

Mr. Landguth told the Committee that airports are responsible to their customers, and therefore customer service was a priority.  He explained that the local community and airport customers expect the airport to be their advocate whether it is to offer lower fares through increased competition or to ensure that fees are low.

The representatives from the FBO’s focused their attention not on H.R. 1474 but on the need for Congress to regulate airport-FBO leases.  The only substantive mention of H.R. 1474 was made by Mr. Arnold who told the Members that when airports fail as FBOs it’s ultimately the tenants who are stuck picking up the cost.

With regard to the leasing issue, Mr. Byer said that not having long term leases was impacting the FBO’s ability to recapture FBO investments.  Mr. Arnold said that there currently are no incentives for FBOs to invest in airports without a long term lease.  He said that FBO’s need enough time to amortize their investments.

Mr. Scheeringa explained that Signature along with several other FBOs and NATA had formed a coalition called the General Aviation Infrastructure Investment Coalition.  He added further that it is the mission of his group to ensure that private companies who make investments at airports gain fair lease agreements and is asking Congress to guarantee a buyout clause in all leases made between airports and private FBOs.  He said that the group wants Congress to ensure that airport leases are in line with IRS regulations for 39 year terms.

During the discussion period, Mr. Scheeringa singled out ACI-NA saying that the organization was not interested in discussing the group’s proposal.  Ms. Calderwood explained that ACI-NA had, in fact, met with representatives of the group to discuss the issue.  Given that ACI-NA opposes any and all efforts that would allow the federal government to strip airports of their proprietary rights, Calderwood told the committee that ACI-NA did not see a point in entering into further discussions as that is exactly what the leasing proposal put forth by this new coalition would do.

Congressman Duncan reiterated that it was his hope that ACI-NA would come to the table to discuss the issue.  Mr. Landguth told the Congressman and the Subcommittee Chairman that he would work to begin dialogue between FBOs and airport directors about leasing issues.  It’s important to note that legislation regarding the regulation of airport-FBO lease agreements has not been introduced in either the House or Senate.