What’s at Issue



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NATA COMMENTS TO FAA ON AIP GRANT ASSURANCES
September 28, 2004

What’s at Issue


On August 24, 2004, the Federal Aviation Administration (FAA) published Airport Improvement Program Grant Assurances; Proposed Modifications and Opportunity to Comment in the Federal Register. The Federal Register Notice proposes the FAA plan to modify the standard grant assurances required of a sponsor before receiving a grant under the Airport Improvement Program (AIP). NATA submitted comments to the FAA on Thursday, September 23, 2004.


Why It’s Important


The Secretary of the Department of Transportation must receive certain assurances from a sponsor (applicant) seeking financial assistance for airport planning, airport development, and noise compatibility planning or noise mitigation under Title 49, U.S.C., as amended. These assurances are submitted as part of a sponsor’s application for federal assistance and are incorporated into all grant agreements.

Background

In the past, the FAA used four separate sets of standard assurances: Airport Sponsors (owners/operators), Planning Agency Sponsors, Non-airport Sponsors Undertaking Noise Compatibility Program Projects (otherwise known as Non-Airport Sponsor Assurances), and State Assurances (for the Block Grant Program). The FAA also included requirements for carrying out AIP-funded projects as general grant assurances. This approach has led to confusion over the application of these requirements to projects completed without AIP support.


A comparison of the modifications with the existing assurances can be found on the FAA Website at http://www.faa.gov/arp/pdf/assrnap.pdf .
For the most part, assurances that are proposed for retention are incorporated without change; however, there are some instances of wording modifications for clarity that were proposed. As a result of proposed changes, the assurances for Planning Agency Sponsors and those for Non-Airport Undertaking Noise Compatibility Program Projects will be eliminated and incorporated either as grant application certifications or grant conditions since all of the assurances are effective only for the duration of the project. In addition, two new assurances are added at the end as a result of AIR-21 dealing with hangar construction and competitive access.
In summary, of the 39 provisions of the existing airport sponsor assurances, the FAA is proposing that 19 be retained as assurances, 12 be converted into grant conditions, and 8 be converted into application certifications.


Major Provisions


Provisions of the most interest to NATA members include assurances Economic Non-Discrimination (C. 6.), Exclusive Rights (C.7.), and Hangar Construction (C. 17).

OVER…


(Major Provisions Continued)
While NATA supported provisions within Assurance C. 6. such as “Each fixed base operator at the airport shall be subject to the same rates, fees, rentals, and other charges as are uniformly applicable to all other fixed-base operators making the same or similar uses of such airport and using the same or similar facilities,” (C.6.c) or “Each air carrier using such airport shall have the right to service its own aircraft or to use any commercial aeronautical service provider authorized or permitted by the airport sponsor to provide aeronautical services,” (C.6.d), the association took exception to the suggestion given to airport sponsors in section C.6.g. The section on which the association commented read as follows:
“If the airport sponsor elects to provide aeronautical services to the public, it shall do so only on the same terms as are uniformly applicable to other commercial service providers authorized by the airport sponsor to provide such services at the airport. This assurance is not intended to prevent the airport sponsor from invoking its propriety exclusive right to be the sole provider of a given aeronautical service.”
NATA expressed concern to the FAA over the phrasing of this assurance, urging them to not use wording that encourages the airport sponsor to evoke that propriety exclusive right. NATA told the FAA that entering into the aeronautical business side of operations would distract an airport manager from his or her duties, as well as call into question some anti-trust laws, should the airport be government-run.
Section C. 7 on Exclusive Rights stated:
It will permit no exclusive right for the use of the airport by any person providing, or intending to provide, aeronautical services to the public. For purposes of this paragraph, providing services at an airport by a single fixed-base operator shall not be construed as an exclusive right if both of the following apply:

  1. It would be unreasonably costly, burdensome, or impractical for more than one fixed-base operator to provide such service(s), and

  2. Allowing more than one fixed-base operator to provide such service(s) would require the reduction of space currently leased pursuant to an existing agreement between such single fixed-base operator and such airport.”

NATA believes that there are many issues to examine when an airport considers adding additional FBOs to their airport and while two are addressed in the above assurance, the FAA should remove the requirement for both the above conditions and, rather, encourage airport sponsors to make a responsible decision on the matter on a case-by-case basis. NATA believes that airport sponsors have a fiduciary responsibility to study situational economics before approving or denying a new FBO petition rather than just approving it out of fear of violating their grant assurances.


Lastly, new section C.17 addressing Hangar Construction at the airport states:
If the airport owner or operator and a person who owns an aircraft agree that hangar is to be constructed at the airport for the aircraft at the aircraft owner’s expense, the airport owner or operator will grant to the aircraft owner a long-terms lease for the hangar…”
While NATA is encouraged to see the FAA promoting the idea of a long-term lease, the assurance as written fails to define exactly what constitutes a long-term lease. The current phrasing of this assurance leaves the length of a “long-term lease” up to the subjective nature of whoever is writing the lease document at a particular airport.


NATA Position


NATA is supportive of the FAA efforts to simplify the AIP and grant assurances for the aviation community.
MORE…

(NATA Position Continued)


However, some current phrasing of the assurances is troublesome to the aeronautical business community, and NATA hopes that the FAA will give consideration to the submitted comments.


Status


The FAA is currently reviewing comments and will respond to them accordingly in a future Federal Register publication.
Staff Contact: Beth Van Emburgh

Manager, Government & Industry Affairs



bvanemburgh@nata-online.org


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