NATA Convention puts hot issues on the table

 - January 30, 2007, 9:57 AM

Security concerns; new flight, duty and rest time recommendations; and growing attention from the private-equity financial camp topped the items of interest at
this year’s NATA Convention. Held in conjunction with Aviation Industry Week, NATA’s annual meeting also addressed the changing role of aircraft charter brokers, airport authorities assuming FBO roles and NATA’s own Safety First Management System program.

Breakout seminars and educational programs stretched the convention beyond its three-day format, which officially spanned March 8 to 10. All in all, this year’s Las Vegas meeting was punctuated by some candid, thought-provoking views from a variety of perspectives.

The Aviation Industry Week (AIW) format is still a little confusing, despite the fact that this year’s running at the Sands Convention Center is the third go-around for the event in its current form. It breaks down this way: AIW incorporates the annual conventions of three aviation services trade groups into a single common trade show with close to 500 exhibitors.

Three years ago, Cygnus Business Media acquired the rights to two trade shows, the ground-support industry’s GSExpo International and Aviation Services and Suppliers Supershow (AS3). The latter had been controlled by the National Air Transportation Association (NATA), which originally held a smaller trade show in conjunction with its annual convention.

Several years ago, NATA convinced the Professional Aviation Maintenance Association (PAMA) to join the party, resulting in AS3. (See accompanying story on PAMA on facing page.) Part of the idea was that a number of vendor exhibitors had interest in both organizations, and AS3 allowed them to economize by reaching both constituencies with a single three-day booth rental.

Now that both GSE Expo and AS3 are under the management of Cygnus, the trade- show portion has blossomed still further. GSE vendors and their AS3 counterparts are segregated on the show floor–differentiated by the color of the carpet covering the aisles (red for AS3, blue for GSE). Even so, there are products that cross over to both sides of the aisle, ranging from aircraft tugs to the latest marshaling wands and illuminated vests for ramp workers.

Member Sessions
For all the glitter and bustle of the trade show floor, there was great interest among NATA members in the forums, seminars and general sessions. This year’s featured speakers included former American Airlines CEO Robert Crandall, now president of Pogo, the start-up air limo operator. Also on the docket was Admiral David Stone, assistant secretary of homeland security, Transportation Security Administration (TSA).

Panelists included long-time NATA stalwarts from within the FBO industry as well as senior FAA officials such as Kathy Perfetti, national resource specialist for Part 135 operators; David Bennett, director of safety and standards in the office of airports; and Dave Cann, manager of the aircraft maintenance division, AFS-300, flight standards.

Crandall kicked off the proceedings during the opening session. Beginning with provocatively anti-government sentiments regarding the current airline crisis, he suggested that airline excise taxes are unfair and that the airline infrastructure currently supported by the ticket tax should be supported from the general fund.
Supporting his assertion, Crandall said the U.S. should strive to retain leadership in key areas such as education, telecommunications, information technology and transportation, all supported by government. He said, “Jobs don’t flow to where wages are lowest. They flow to where the cost to produce, distribute and deliver product is lowest.”

Though he maintained he opposes user fees for general aviation (as he said he is against excise taxes for airlines), Crandall is quoted in the February issue of Air Line Pilot, the Air Line Pilots Association magazine, saying, “The United States is the only country in the world that finances aviation with excise taxes; it is time to move to user fees.”

Regarding Pogo, Crandall reasserted his plans for point-to-point service using very light jets. He said he believes the cost to operate these jets will be low enough to
enable realistic fares for flights to and from some 3,600 suitable airports in the U.S. The service would be regional, concentrating on flights of fewer than 500 miles.
He sees Pogo’s planned full ownership (or leasing) of the fleet to be an advantage over current charter, which, he pointed out, relies almost exclusively on third-party-owned aircraft whose availability could be compromised. Pogo aircraft would be kept in company-owned hangars and maintained by company-trained mechanics. Pilots would also be trained in-house.

The vertical integration stops there, however, as Crandall said he has no plans to get into the fueling business, expecting to negotiate fuel deals with existing FBOs. He also said he has no current plans to audit destination airports as part of his program. Finally, Crandall made the point that there is a growing segment of wealthy Americans–those who buy $75,000 automobiles, for example. Coupled with the increasing demands on passengers’ time and dignity in the airline sector, Crandall sees Pogo as the right idea at the right time.

Asked by AIN if the delay in certification of the Adam A500 piston twin could affect Pogo’s order for 75 Adam A700 jets (an airplane derived from the A500), Crandall said he is “not committed” to Adam, and has been talking with Eclipse and Cessna about their respective Eclipse 500 and Citation Mustang, both now under development. Crandall’s surprise reply raises questions about the terms of the original Adam order, announced in May last year.

Safety First Management System
NATA director of safety management Amy Koranda presented a discussion of the association’s Safety First Management System. She was joined by Lou Sorrentino, v-p of SH&E, the firm NATA contracted to administer the program.

The purpose of the management system, an adjunct to NATA’s Safety First FBO employee training and evaluation program, is to provide a clearinghouse for data on all ramp accidents and incidents. Information on these mishaps, including near misses, is to be sanitized to protect the reporting firm and disseminated to all participants. The object is for all to learn from the mistakes of the few.

According to NATA, there are few FAA regulations regarding ground handling, but there are best practices that should be presented and shared among its members. One attendee asked if there was any chance of offering immunity for such reports–
similar to that enjoyed by pilots who submit an ASRS form to NASA after a blunder. Another suggested taking the reporting system beyond NATA membership, and to include data on equipment failures as well as human error.

NATA expects to release one of its Safety First Management Systems e-tool kits for Part 135 charter operators to complement the kit intended for FBOs. As for response from the insurance industry, the panelists said that participation in the system would demonstrate a commitment to safety to which the insurance underwriters would respond, eventually. But simply signing onto the system would not involve any discount on insurance premiums.

Security Briefing
David Stone, assistant secretary of homeland security for the TSA, delivered a prepared address to NATA membership that consisted, primarily, of outlining the TSA’s efforts at airline handling. He cited the Department of Homeland Security’s $5.3 billion budget and its 180,000 employees, 54,000 of whom work for the TSA. Of those, 48,000 are airport screeners charged with screening two million passengers daily.

He outlined some of the TSA’s current programs, including developing metrics to measure its own performance and technology to better detect thin-sheet explosives while reducing incidents of torso pat-downs.

Stone said the TSA is pro-access and strives to preserve individual freedoms, while emphasizing security based on accurate risk assessment. He cited programs, again involving airlines only, such as Registered Traveler and Secure Flight, the latter designed to identify known passengers who have proved themselves to be no threat; the former to return the “no-fly” list to government control and adjudication.
Specifically addressing general aviation interests, Stone said he would be meeting with the Secret Service and other agencies concerning access to Ronald Reagan Washington National Airport. He also ad- dressed the alien flight training restrictions that allegedly have been harmful to U.S. training specialists such as FlightSafety International and SimuFlite.

Much of the rest of Stone’s speech involved such axioms as “The three ships: leadership, partnership and friendship,” and “The best homeland security is hometown security.” Though he did not mention the AOPA Airport Watch program by name, he made reference to “the general aviation hotline,” comparing it to the over-the-road truckers’ security information hotline. He closed by saying that the TSA would be rolling out a “vulnerability assessment tool” late this summer, “as a template for self-assessment of risk.”

Should Airports Serve as FBOs?
Panelist Doug McNeeley, manager of general aviation airports for Clark County, Nev., addressed NATA members’ concerns over relationships between airport authorities and FBOs. He said, “There are 5,300 public-use airports in the U.S. Each is different. There are no cookie-cutter solutions and the best systems evolve over time.”
The session was designed to address changes in the ways some authorities are viewing the fiscal approach to general aviation under their control. Some have suggested that declining revenues from cash-strapped airlines have caused airport authorities to look elsewhere for their sustenance. Fears of increased fuel flowage fees, higher rents and other increased overhead have some FBOs looking over their shoulders.

The panel discussed a recent bill that would enforce a 75-year minimum lease for FBOs with their respective airports. Even NATA president Jim Coyne conceded this was likely to serve as the equivalent of an “initial offer” in a real estate deal and that the final legislation would dictate terms closer to 20 or 30 years.

Robert Olislagers, executive director of Denver Centennial Airport, respectfully (and politely) told Coyne, who supports the proposed legislation, “Don’t tell me how to lease property, and I won’t tell you how to pump fuel.” He later added, “Airports provide safety. FBOs provide service.” Olislagers backed up his philosophy by pointing out that the three FBOs at Centennial Airport, Denver Jet Center, TAC Air and Signature, all ranked in the top 25 of last year’s AIN 2004 FBO Survey. (For this year’s survey results see page 20.)

McNeeley cited a very different scenario at North Las Vegas Airport. He said Clark County is in the fuel business, thanks to a “nightmare contract” with a former FBO service provider with whom the county signed an ill-advised lease. He said, “The owner preferred to wear torn jeans and T shirts to work. Pretty soon, guess how the line staff were dressing. Then he started allowing his employees to bring their dogs into work.” The capper was when the FBO operator hosted a beer party for his employees behind one of the hangars and they lit a bonfire.

McNeeley cited the example as a means of illustrating how important it is for both airport authorities and FBOs to have comprehensive lease agreements and clearly defined minimum standards. John Enticknap, president of Mercury Air Centers, related his company’s experience in Nashville, where he bought into an existing lease. After some tornado damage, Mercury invested the funds necessary to bring some 30-year-old hangars up to code and asked for a lease extension in return for the investment.

With a new airport authority director coming in, airline revenues down and some high-profile corporations offering to move to the city if they were allowed corporate hangars with fuel farms, Mercury found itself looking at a shrinking leasehold (to make way for new corporate hangars and fuel tanks) and requests to upgrade the facility without a lease extension. “There were clauses in the existing lease that allowed the authority to take back the property,” said Enticknap.

Olislagers said he is assailed regularly with pressure to introduce corporate fuel farms on Centennial. He steadfastly refuses, citing the need to support the field’s FBOs and encourage high levels of service. Sometimes, he said, the pressure comes from the highest political levels. Larry Ulrich, senior v-p at Denver Jet Center, later told AIN that Olislagers’ efforts are one of the primary reasons for his operation’s long-term success and profitability.

Panel moderator Bobbi Thompson said she has been on both sides of the argument in her career. Now executive v-p of consulting firm Airport Business Solutions, Thompson has been owner and president of an FBO chain, an airport manager and project manager for a series of FAA programs related to airports. She advised those on both sides of the airport authority/FBO fence to remain in constant communication. She said, “Don’t talk just when someone wants to put in a fuel farm, a new FBO wants to come in on the other side of the field or some other issue crops up. By then, it’s probably too late.”

David Bennett, FAA director of airport safety and standards, explained the “proprietary exclusive” mandate set forth in the early 1960s. He said an airport authority cannot promise an FBO exclusivity on the field as a contractual stipulation but the airport itself can operate a fuel concession as the sole provider. Stipulations include the requirement to use its own employees (not by outsourced contract). Then the municipality is exempt from antitrust laws.

Bennett cited one case in which an FBO filed a Part 16 complaint with the FAA against its airport authority, maintaining that the authority had allowed the FBO to pump fuel, then rescinded the right by means of a change in rules. Bennett said that, although the FBO might have a case in civil court based on contract terms, the authority was not outside its rights to invoke “proprietary exclusive” at any time.

It’s Back to Glitter Gulch Next Year
The 2006 edition of Aviation Industry Week will reconvene in Las Vegas next March 28 to 30. For its next running AIW moves from the Sands back to the Las Vegas Convention Center. With the issues facing FBOs, charter operators, maintenance personnel and ground-support providers over the next 12 months, the meeting will likely feature a packed agenda.