Airport-Funded FBO Debate Draws Government Interest

Aviation International News » October 2012
October 5, 2012, 12:15 AM

Dialog over the propriety of competition from airport-sponsored FBOs ratcheted up when several members of Congress submitted a letter to acting FAA Administrator Michael Huerta expressing their concern about the use of federal funding provided by the agency for airport development.

The FAA has a grant assurance in its funding programs that demands that services provided by an airport-sponsored business operate under the same conditions as a commercial service provider. “We believe it is necessary to further define this assurance so that airport sponsors fully understand the rules they must follow if they are to engage in competition with privately owned FBOs,” stated the letter signed by Texas representative Pete Sessions and 10 fellow House members.

The letter cites the situation at Chattanooga Metropolitan Airport, where the airport-owned and -subsidized FBO has seen greater-than-anticipated losses, which are essentially passed along to taxpayers. The airport authority has stated that it built the new FBO to spur competition that would result in better services and lower fuel prices for its customers. In reply to the Congressional letter, Gregory Principato, president of Airports Council International-North America, sent a rebuttal to Huerta that asserted, “This inquiry is a misguided attempt initiated by a few privately operated fixed-base operators to eliminate competition to their monopolies.”

The ACI-NA letter defends the airports stating, “Airports have a customer service mandate to [ensure]…that the aeronautical needs of both passengers and airport operators are adequately met,” and declared ACI-NA’s opposition to the FAA’s imposition of any uniform conditions on airports offering FBO services.

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David Edwards
on October 5, 2012 - 10:44am

If an airport does not want a single FBO operating on the field ("monopoly"), then why not just issue an RFP for another operator to come in?

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Rod Beck
on January 20, 2013 - 11:41pm

Many GA airports around the nation have multiple FBO's. In most cases, to much supply, insufficent demand. However, seems very little attention is paid BEFORE charging unto an airport; an in depth market demand study simply asking the question; "is there enough milk for 2-4 kitty's?" The problem is inept or big ego management with a "we'll just out price them (competition) by offering fresh baked cookies, cold bottle water and Jet-A .02 cents over wholesale". The FAA and government operated airports are not concerned. If a fool hardy FBO can meet or exceed the "Minimum Standards" criteria, (it's THEIR money at risk) - not ours! Moral of the story: The BIGGER tomcat gets the milk and scares off the other malnourished kittens"!

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