NATA Hosts FBOs, Charter Firms

CHANTILLY, VA — In June the National Air Transportation Association hosted a reformulated version of its annual meeting, combining its Air Charter Summit with its FBO Leadership Conference. Several hundred operators and government officials met near Dulles International Airport, with a primary topic of discussion the image problem that general aviation has today following the industry bashing that has occurred in Washington during the past year. NATA president James Coyne terms it “a war on wealth.” The economy was also a central part of presentations here, along with updates from the Federal Aviation Administration on Part 135 regulations and the proposed regulation on safety management system (SMS) implementation, still under development at the agency.

Peter Bunce, president and CEO of the General Aviation Manufacturers Association, says that the rhetoric in Washington against business aviation has taken a toll both on new aircraft orders as well as resulting layoffs.

To combat the image issue, Bunce says that he and representatives from the manufacturers have held some 64 meetings with representatives on Capitol Hill as well as with a senior White House advisor. Comments Joe Lombardo, president of Gulfstream Aerospace, “I think we got our message heard, especially when the topic of jobs was discussed.”

The reps also took their campaign to Cahokia, IL to relate to local officials the impact that one company, Midcoast Aviation at St. Louis Downtown Airport, can have on the local economy. One point made was that companies that did business with Midcoast accounted for some 7,500 hotel rooms annually. “That message hit a nerve,” says Lombardo.

NATA’s Coyne says he is proposing that the industry hold up President Obama as the “poster child for private aviation.” As President he has logged more hours in Air Force One than any of his predecessors, says Coyne, who points out that various operators in attendance flew the new President during his campaign run.

Finding new opportunities
Despite the image issue, Gulfstream’s Lombardo says it is the economic downturn that has had the greatest impact on his company, which recently announced an additional 2,000 furloughs of employees.

Comments industry veteran Richard Van Gemert, vice president with Jet Aviation, “We’re a very capital-intensive industry, and there’s no capital in the system.” [Van Gemert was awarded NATA’s William A. ‘Bill’ Ong Memorial Award during the meeting, citing extraordinary achievement.]

“We’ve got a tremendous excess of supply versus demand,” says Van Gemert, who doesn’t see that situation changing significantly until 2013.

James C. Christiansen, president of fractional provider NetJets, says that the “demonization” of business aviation has the potential to be turned into a positive for his company and charter providers. Charter, he says, can put general aviation “at arm’s length” for business executives who seek to “legitimize their business aviation interests.

“This is the time to keep your message out in front of prospective clients,” he says.

Bill Haberstock, president and CEO of Million Air Salt Lake City, reports that his company’s charter division is refining its product for the new marketplace. “We’re also refining our marketing for our new product,” he says. What are the new needs of the customer? he asks.

Haberstock says that a component of a new marketing approach needs to include a differentiation of the product, with the target being “marginal” operators who may be “upside down” with aircraft or who may have Part 135 compliance issues. “We have not been doing that in our industry,” he says, adding that “we have to ensure that cheap” is not acceptable as an industry.

Update on sms, Part 135
Don Arendt, manager of FAA’s Flight Standards SMS office, addressed the topic of safety management systems. Under international agreement, FAA is required to issue guidelines to industry on an SMS program that meets ICAO Annex 6 standards, as of January 1, 2009. He says FAA has “filed a difference” with the International Civil Aviation Organization to recognize that FAA and the U.S. system is currently not in compliance.

Arendt says that SMS “is not a substitute for compliance. Oversight will continue. It’s more an effective interface — not a replacement for system safety.

“It’s a set of decisionmaking practices. It’s all about decisionmaking.” Arendt adds that operators can expect that implementation will bring associated costs.

There are four pillars to SMS, says Arendt: policy; safety risk management; safety assurance; and, safety promotion. The focus needs to be on providing confidence that quality requirements are being met.

He also sees SMS as an opportunity for FAA and industry to work more closely on ensuring safety, reflecting a need for the two to have more interaction on the safety management front. That despite recent charges on Capitol Hill that the agency is “too cozy” with industry in its regulatory role. Asks Arendt, “Is anything ever enhanced by having a distant, adversarial relationship?”

An advance notice of proposed rulemaking is in the works at FAA and Arendt expects issuance later this year.

On the subject of Part 135 regulation, Dennis Pratte, manager at FAA’s Part 135 Air Carrier Operations Branch, reports that an aviation rulemaking committee (ARC) studying the regulations has made some 167 recommendations to the agency. “We’ve got some IOUs” regarding follow-through, he says.

Pratte says that there are currently some 2,223 Part 135 air carriers in the U.S. and points out that nearly 50 percent of air carrier operations are actually carried out by Part 135s. He calls the Part 135 accident rate “troubling” when compared to Part 121, but says there has been a downward trend. “It’s getting there,” he says.

FAA also expects to launch in mid-July a new WebOps site for Part 135 compliance via the Internet. The agency is currently in the process of educating its Flight Standards District Offices nationwide on an implementation of the program.

TSA: A Secure Chain of Custody

During this year’s Air Charter Summit, Transportation Security Administration assistant administrator John P. Sammon updated attendees on the proposed Large Aircraft Security Program (LASP), which was met with an outpouring of objections by industry this spring.

Since that time, TSA has held two meetings with industry to explore options for securing general aviation aircraft, and was expected to host another in late June with reps from FlightSafety, Chambers of Commerce, and the Secret Service, according to Sammon.

The need, he says, is to maintain “a secure chain of custody” for an aircraft when it arrives at an airport. Just as TSA doesn’t want guns being brought onto an airfield through the fence or gates, it wants to ensure they don’t arrive by aircraft, either.

As a result of the industry reaction to the LASP proposal and with subsequent industry input, TSA continues to explore its options on what a future notice of proposed rulemaking would look like, explains Sammon.

Subsequent to this meeting, the Inspector General of the Department of Homeland Security issued a report questioning the need for heightened security regulations on general aviation aircraft.

MAC’s Schmidt Named 2009 Winner, NATA Airport Executive Partnership Award

Since 1995, the National Air Transportation Association has been recognizing airport executives who foster positive working relationships with their tenants. The award, which is sponsored by AIRPORT BUSINESS magazine, was given to Gary Schmidt, A.A.E., director of the reliever airport system for the Metropolitan Airports Commission of Minneapolis-St. Paul, during this year’s NATA annual meeting held outside Washington, D.C. in June.

Schmidt, 59, oversees six reliever airports which encircle the Twin Cities, part of a system operated by MAC. He has 35 years in the aviation sector; prior to entering airport management, he was one of the controllers later dismissed by President Reagan. Following reception of the award, Schmidt sat for an interview. Here are edited excerpts ...

On the idea of receiving a ‘partnership’ award …

“I’m really happy to get the award. Some people might disagree, but we’ve really worked hard to try to form some partnerships in the past few years. I was serious this morning when I said, you start out as an enforcer because they give you a set of rules and everybody’s got to tow the line. And when you make the rules and have to see whether they work or not, you suddenly realize there’s another part to this too.

“The direction our commission has given us is to operate more like a business. In order for these airports to be successful, it really is the commercial operators that make it or break it for us. It’s the FBOs, the charter operators, the maintenance; we’ve tried to create a better climate for them.”

On his current initiative to review rates and charges, in light of the economic environment ...

“We had a pow wow with about six or seven of our operators and had a several hour discussion about the state of the industry and where people were and whether they could survive in this economy.

“You know, we’re not a big part of their overall expenses. We look at their total revenues and what our charges are to them, and it’s a very small percentage.

“But, having said that, we understand that there are some small margins that they’re working with; and in these times when they’re fighting for survival, anything we thought we could do to help would be a good thing.

So, we’re looking at a formula to reduce their rates for the next year at least. What we were thinking is doing a percentage rent for the first four months, then reducing it slightly for the next four months, and then reducing it again for the final four months. Then we’ll make a determination whether we want to continue with that or go back to the old rates.

On breaking ground on a runway extension to 5,000 feet at Flying Cloud Airport ...

We thought there was a demonstrated need based on some of the deadheading that was going on out of Flying Cloud to pick up passengers at Minneapolis, because of the short runway. There was a lot of concern by a core group of people around the airport.

We also did some negotiating with the city trying to make it a win/win for everybody. They (Eden Prairie) agreed not to sue us or not oppose the runway extension. In return, we are leasing them some property for a park for athletic fields. We removed a major stumbling block by negotiating with the city.

On a recent spate of runway incursions at Flying Cloud ...

There were some tower issues; they’ve had their problems. I say that having been a controller. How can you let a Citation taxi a half mile to the end of a runway and never look up and see it?

How does that happen?

In my day, those guys would have been taken off ‘the boards’ and sent to remedial training. If they didn’t pass the remedial training they were done. Today they wrote up the pilot.

On the high number of refueling companies at Flying Cloud ...

We have six fuelers. That is not a good thing. It’s one of those circumstances where Flying Cloud was in its heyday in the late ’60s. It was one of the busier airports in the country at the time. The commercial operators couldn’t keep up with all the business. And nobody looked ahead 20 years to see what was going to happen; there was no zoning; no long-range plan.

We’re having to deal with some of the residual effects of some of those decisions.

On the future of general aviation ...

I don’t think recreational flying is ever going to rebound. I think it will stay to a small degree; there’s not the passion for flying. People are just more engaged in different types of activities.
Business aviation is where we’re going to see the growth; it’s what we need to develop and plan for. As the airport people, we need to provide the facilities that allows them to utilize their airplanes and to grow their businesses. That’s what I think our role and responsibility will be.