On Funding, ATC, Ground Services

DALLAS — The National Air Transportation Association meets in March for its annual meeting, which has been restructured to reflect changes in membership over the past decade. Besides key business management issues on the agenda, a host of industry issues will be discussed. At the top of the issues agenda, says NATA president James Coyne, are how the aviation system will be funded after FY07; the future of the air traffic control system; changes in FAR Part 135 regulations (see page 30); and, the ongoing debate of who provides services at airports — private companies or airports themselves.

During the association's recent committee meetings held in Dallas in February, Coyne in an interview related that the dramatic increase in charter and consolidation among the fixed based operator segment of NATA's membership have caused the group to rethink its annual convention. As a result, the annual meeting in March has been repackaged into the FBO Leadership Conference, with a pre-conference FBO/Airport Symposium, co-sponsored by the American Association of Airport Executives.

The leadership conference will focus more on business management issues for airport-based businesses. Part 135 air taxi firms will now have a new air charter summit of their own, scheduled for later this spring. At the same time, NATA is pushing for more membership among airports, particularly general aviation facilities, and plans to name an airport manager to its Board of Directors for the first time ever.

Explains Coyne,"We want to try and give our members a more customized annual meeting experience. There's been a fair amount of specialization over the past 20 years. There are probably only about 50 of our members who have both an FBO and a charter certificate.

"We want to reach out to the airport operators and to build an airport-centric convention around the FBOs. The Air Charter Summit will focus on the Part 135 operators; the charter issues are really big issues this year, especially with the operational control issue."

Consolidation in the FBO sector has also been a primary driver."There are now close to 25 chains," says Coyne,"and even some of the chains have been consolidated. In the 13 years since I've been [president of NATA], there are probably a hundred privately held FBOs that are now parts of chains. That's a significant consolidation.

"We want to try and get the FBO managers focusing on the FBO leadership; general managers are a target too, especially with the chains. We want to bring in that degree of professional management assistance."

The User Fee Debate
In early February, the Bush Administration released its preliminary FY2008 budget, which goes into effect October 1st of this year. In that budget was an Administration proposal to restructure how the aviation trust fund is funded. While at press time the DOT and FAA had not clearly delineated exact details of the proposal, it's expected to reflect much of what the airlines and the Air Transport Association have been proposing — primarily, new user fees for business aviation.

Central to the debate is FAA's assertion that the current funding mechanisms are inadequate for meeting the needs of the system long term. However, former DOT Inspector General Ken Mead, who earned a reputation for candor in his studies of DOT/FAA activities, also came out with a report in which he maintains the current system is adequate. Comments Coyne,"I don't think there's any doubt about it."

Coyne says that FAA is under pressure from the Administration to get a handle on operational costs. One obstacle here, he says, is air traffic controller salaries."I can see the White House's argument that the operation budget at FAA is out of control," he says."FAA is trying to deal with it but they're not dealing with it head on. They're coming at it obliquely, because they know that if they confront the controllers head on with these issues of productivity and salaries, especially after the brutal renegotiation of last year and now with the Democrats in control of both the House and the Senate, they can't win the argument."

ATC - A Multi-Tier Approach?
A goal of all the interested parties remains modernization of the U.S. air traffic control system, and Coyne relates that the Administration is seeking to get the ‘next generation' ATC system out of the FAA bureaucracy."Congress doesn't have much confidence that they know what they're doing in terms of spending money on these big projects. The White House doesn't have much confidence, either."

Coyne suggests that the industry needs to take an entirely new approach, one that is multi-tiered and open to private sector competition."I don't think we should have a monopoly provider for air traffic control," he says."The government ought to be able to provide different contractor segments for different classes of users. Maybe the government should provide a way for the airlines to contract with FAA or ARINC or somebody else. Business users might have a different contractor," as would piston aircraft users.

Airports and Ground Services
Also on NATA's agenda is to heighten the discussion of airports getting into the ground services business as a way to help reduce costs to airlines, as they try to attract air service. It has become a growing issue, and Coyne thinks education of airports is a first step after attending AAAE's January issues conference.

"It was clear that some of the airports out there did not understand the specialization that's occurring in our industry around airline service companies," says Coyne."Rather than trying to figure out how to do this by themselves from scratch, why not hire someone who is experienced at it."

Coyne says that if the FBOs at an airport aren't interested in providing airline services, there are other options."There are airline service companies nationally that would be willing to come in and support the airline needs of that airport as a contractor," he explains. At the same time, he points out that airports then will avoid the increased liability exposure and hiring/firing of employees that go with airline services.

 

Loading