Short-Term Lease, Long-Term Investment

FBOs Struggle for Sound Lease Agreements

Some airport managers thought the GAIIC was trying to mandate contract lease terms between airports and FBOs. Quite to the contrary, the GAIIC thinks these best practices provide benefits for both airport sponsors and FBOs, such as the creation of jobs; the ability for FBOs to re-invest in facilities and provide higher levels of customer service; and flexibility to determine the length of FBO leases based on local conditions and needs.

Byer is also familiar with the misconceptions of some airport sponsors. “Many airports understand that encouraging private sector investments in facilities, such as general aviation hangars, means offering terms that best enable FBOs to utilize tax advantages that benefit off-airport commercial investors.

“However, a few airports do not sufficiently recognize the need to encourage investment in facilities and only offer short-term opportunities that constrict investment and a job-creation environment,” Byer explains.

Communication Is Key

Both Byer and Whitehorn know the key to the success of these guidelines is communication.

Says Byer, “NATA believes these best practices prove the value of open communication and establish guidelines for airport sponsors and service providers to continue a process that incentivizes investment and could promote economic growth.”

Anecdotally, one industry expert believes recent requests for proposals (RFPs) from airport sponsors seem to reflect these best practices. The true test of whether the industry accepts the GAIIC guidelines will be to evaluate RFPs over the next few years to determine if the concepts of the best practices are reflected in the RFPs.

Whitehorn knows educating airport sponsors and ASPs on leasing conditions that are mutually beneficial will take time. “Change is hard,” he relates. “We know full acceptance of these practices won’t happen overnight.”

ACI-NA, NATA, and other general aviation trade associations are working to get the word out to their membership through newsletters and conferences.

But Byer, Whitehorn, and others in the industry know the concepts in the best practices guidelines have the potential to overhaul the entire airport/FBO relationship, especially with support from Congress.

The GAIIC has made progress in its efforts to bring visibility to the issue on Capitol Hill. In fact, U.S. Representative Tom Petri (R-WI), Chairman of the Committee on Transportation and Infrastructure, Subcommittee on Aviation, and Representative John Duncan (R-TN) hosted representatives of the GAIIC and airport sponsors in a roundtable discussion in June of last year.

The GAIIC hopes to continue gaining support from the Hill while working towards general acceptance in the aviation industry.

about the author

Lindsey McFarren is an industry-recognized expert in GA regulations, safety, and security. She founded McFarren Aviation Consulting (MAC) in 2009. She has a Masters of Aeronautical Science degree from Embry-Riddle Aeronautical University (ERAU) and was the manager of regulatory affairs at the National Air Transportation Association (NATA), where she focused heavily on Part 135 issues.

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