General Aviation

AOPA & Affected Pilots File Three Official Complaints Over FBO Pricing

By October 18, 2017September 15th, 2020No Comments

The Aircraft Owners and Pilots Association (AOPA), along with seven affected pilots, filed FAA Part 13 complaints over egregious FBO pricing
practices at Illinois Waukegan National Airport (UGN), North Carolina Asheville Regional Airport (AVL), and Florida Key West International Airport(EYW), on behalf of its membership.

At each of these airports, a single FBO controls all transient ramp space and fuel services, which means each FBO possesses a monopoly position and significant power over access to a public airport. AOPA contends each FBO has failed to fulfill its responsibility to protect the airport for public use through reasonable and fair pricing. The FBOs have instead engaged in egregious pricing practices under minimal oversight and in violation of standards designed to protect reasonable access to public ramp space.

The FAA Part 13 complaint process is a means for AOPA and impacted pilots, who also signed the complaints, to ask the FAA to investigate these practices and take any necessary action to ensure compliance with the airport’s grant assurances.

The FAA has the responsibility and authority to ensure that airports are complying with grant obligations the airports agreed to when they accepted federal funding through the Airport Improvement Program (AIP). Obligations include requiring their FBOs charge reasonable and nondiscriminatory pricing for each aeronautical service rendered. This requirement is necessary to protect the airport for public use. Otherwise, permitting exorbitant FBO prices would restrict or deter access, and disrupt the entire national system of publicly funded airports the FAA oversees and has sought to create.

According to the a AOPA, of the many complaints it has received over egregious FBO pricing, Waukegan, Asheville, and Key West are three of the top five most complained about airports.The other two airports rounding out the top five are Heber City, Utah (36U), and Rochester, Minnesota (RST).

AOPA General Counsel Ken Mead commented, “The FAA really hasn’t exercised proper oversight in this area for a very long time. These kinds of pricing practices have put airports in violation of grant assurances and at risk of losing federal funding. It’s the responsibility of the FAA and airport sponsors to ensure the terms incorporated in each lease are upheld, especially when they are accepting federal grants.”

The Part 13 complaints point out the importance of the airport sponsor’s responsibility to “protect general aviation’s ability to access local communities and, conversely, local access to the national transportation system,” and how vital oversight is necessary to protect against unreasonable and discriminatory pricing.

AOPA has requested the FAA “exercise its investigative oversight authority and take appropriate action to ensure pricing complies with” each governing body’s grant assurances. AOPA believes the FAA needs to help airports use their authority to curtail egregious pricing practices. “Our members have spoken and they’re tired of being forced to pay for services they don’t want, ask for, or need,” said AOPA President and CEO Mark Baker. “It’s all about price transparency and reasonable access to places that are supposed to be public.

We also believe that promoting more competition will help relieve some of the ongoing problems our members continually face at these locations.” Further, egregious pricing practices deter and restrict airport access and severely affect all aspects of general aviation from flight training to recreation.

Unreasonable pricing practices can also have grave effects on surrounding communities. By pricing out certain GA traffic, FBOs are harming local economies. Pilots and travelers who usually access these communities are scared away by the FBO’s sky high prices. The money those travelers would normally spend never reaches cities and towns across America.

The likely response from the FBO operators themselves will be pointing out the cost of acquiring, creating, and operating mostly 24/7 facilities is quite significant and must be done with a reasonable profit. That statement can’t be challenged. In the observation of this blog, it needs to be pointed out that the significant capital investment required for FBO facilities must be recaptured, including an acceptable market rate of investment return over the period of the concession granted by the airport, (i.e. the ground lease which is typically 30 years or less). This puts significant “pressure” on the owners and operators of FBO’s to recover their investment and make a profit over a strictly defined (and ultimately expiring) lease term.

This “story” and complaint is far from over. It will be interesting to see how the FAA responds and what the actual outcome of fuel pricing, specifically at these 5 airports becomes. Stay tuned!

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Serving the FBO industry for more than 40 years