There are approximately 2,800 federally obligated airports in the United States. The Federal Aviation Administration (FAA) is responsible for administering grants to federally obligated airports and for monitoring the airports’ compliance with those federal grant obligations. If you haven’t already, I encourage you to read my August 2021 article “What Are Federal Grant Assurances and How Do They Impact Our Nation’s Airports” for more on what it means to be a federally obligated airport. The FAA’S Airport Compliance Program is responsible for making sure Airport Sponsor’s comply with their federal grant obligations. It also serves to protect the public interest in airports and maintain compliance with applicable laws, regulations, and policies. The FAA’s Airport Compliance Manual (FAA Order 5190.6B, Change 1) provides guidance to FAA employees regarding the implementation of the Airport Compliance Program. The Airport Compliance Manual also serves as a valuable resource for those wanting to understand the scope of the obligations pursuant to the Federal Grant Assurances including airport tenants and users who may question an airport’s compliance with the federal grant obligations. On November 21, 2022, the FAA issued revisions to five (5) chapters of the Airport Compliance Manual. The revised chapters are Chapter 1, Scope and Authority; Chapter 9, Unjust Discrimination Between Aeronautical Users; Chapter 10, Reasonable Commercial Minimum Standards; Chapter 11, Self-Service; and Chapter 23, Reversions of Airport Property. These updates are the first updates in more than a decade. In this article, I provide a summary of the changes. It is important for airport tenants in particular to be familiar with these updates because there are provisions that may be beneficial in preparing for their next lease negotiation or to make sure they are prepared in the event that the airport suddenly requests modification to a long-term lease.
Chapter 1, Scope and Authority
This chapter was updated to reflect the inclusion of recent federal programs that could be a source of an airport’s federal grant obligations including the following: American Recovery and Reinvestment Act of 2009 (ARRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES). The chapter has also been updated to reflect an expanded discussion of the National Plan of Integrated Airport Systems (NPIAS) and a chart breaking down the 3,310 existing and proposed airports into categories including Primary and Nonprimary and subcategories of Large, Medium, Small and Nonhub. Lastly, it was updated to reflect that the FAA’s authority was limited by the FAA Reauthorization Act of 2018. While the update is silent on the nature of the limitations, the FAA Reauthorization Act of 2018 imposed limitations on the FAA’s authority to regulate an airport’s acquisition, use, lease encumbrance, transfer or disposal of land and facilities (See FAA Reauthorization Act of 2018, Pub. L. 115-254).
Chapter 9, Unjust Discrimination Between Aeronautical Users
Chapter 9 is an often-cited chapter because it addresses Grant Assurance 22, Economic Nondiscrimination. Grant Assurance 22 precludes Airport Sponsors from unjustly discriminating among users and requires (1) that airports and their facilities are available for public use, and (2) the terms imposed on users of airports, including rates and charges, are fair and reasonable.
The most significant change to Chapter 9 is the expansion of the portions that provide guidance on leasing of general aviation aprons constructed with federal assistance. This includes a discussion of management agreements whereby an Airport Sponsor contracts with an FBO to manage the apron area. It also includes an expanded discussion relating to lease agreements. It specifically provides that an airport may lease apron areas provided that it complies with the Federal Grant Assurances. It does, however, require the Airport to seek FAA approval when the apron area was constructed using Airport Improvement Program (AIP) funding. (See FAA Order 5190.6B, Change 1, Sec. 9.7(d)(2)). It also specifically provides that the “lease of any apron area to an FBO should not result in activity or use contrary to the approved Airport Layout Plan (ALP) and or the intended use of the AIP funded infrastructure.” (FAA Order 5190.6B, Change 1, Sec. 9.7(d)(2)).
In addition, Chapter 9 has been updated in the following ways:
· It specifically provides that Air Carrier Incentive Programs designed to attract new air service and competition are permissible provided that the program is implemented in a nondiscriminatory manner (FAA Order 5190.6B, Change 1 at Sec. 9.2); and
· The discussion of minimum standards has been expanded to provide that the standards must not unreasonably deny access, and uses insurance requirements as an example (FAA Order 5190.6B, Change 1 at Sec. 9.6(d)).
Chapter 10, Reasonable Commercial Minimum Standards
Chapter 10 addresses commercial minimum standards and “describes the sponsor’s discretion to establish minimum standards for commercial service providers and airport regulations for all other airport activities.” (FAA Order 5190.6B, Change 1 at Sec. 10.1)).
Changes to Chapter 10 include:
· A reference that it would be unreasonable to establish a minimum standard that precluded a Fixed Based Operator (FBO) from selling ethanol-free premium unleaded automotive fuel at an airport where users routinely operator aircraft that use automotive fuel (FAA Order 5190.6B, Change 1 at Sec. 10.5(a));
· A discussion about the application of minimum standards to Specialized Aviation Service Operations (SASOs) wherein the FAA advised that airports should not require SASOs to meet all minimum standards required of FBOs. The FAA further clarifies that “Airport sponsors are not required to permit a SASO for fuel sales alone. The right to sell fuel is generally bundled with other required services.” (FAA Order 5190.6B, Change 1 at Sec. 10.5(f));
· Detailed discussion of flying clubs based on the FAA’s Policy Interpretation regarding the operation of flying clubs at federally-obligated airports (81 FR 13719; March 15, 2016) which requires the following: (1) flying clubs cannot hold themselves out as FBOs, flight schools or businesses offering services to the general public, (2) certified flight instructors and mechanics should be permitted to receive either monetary compensation or discounted/waived membership fees but not both; and (3) flying clubs must not indicate, in any form of marketing and/or communications that they are a business where people can learn to fly; and
· A detailed discussion of illegal charter. Specifically, it acknowledges that illegal charters, sometimes referred to as illegal Part 135 charters, operate without meeting the safety requirements of certificated air carriers. The guidance offers that illegal charter can sometimes present as flight instruction or aircraft demonstration flights. It further encourages Airport Sponsors to (1) report suspected illegal charter to the FAA for investigation, (2) include terms in leases requiring compliance with Federal Aviation Regulations and require tenants to provide a listing of aircraft used for commercial activities and their owners; and (3) require copies of FAA issued Air Operating Certificates. ((FAA Order 5190.6B, Change 1 at Sec. 10.7).
Chapter 11, Self-Service
Chapter 11 of the Airport Compliance Manual addresses “Self-Service.” “The FAA considers the right to self-service as prohibiting the establishment of any unreasonable restriction on the owners or operators of aircraft regarding the servicing of their own aircraft and equipment.” (FAA Order 5190.6B, Change 1 at Sect. 11.2). This chapter has been updated to identify the following activities that are included within the right to self-service: the right to “tie down, adjust, refuel, clean, perform self-service repair and preventative maintenance, and otherwise take care of their own aircraft provided their employees perform these tasks.” (FAA Order 5190.6B, Change 1 at Sec. 11.2). The FAA further clarifies that the “establishment of reasonable rules, applied in a not unjustly discriminatory manner, that restrict the introduction of equipment, personnel, or practices that would be unsafe, detrimental to the public welfare, or that would affect the efficient use of airport facilities by others, will not be considered a violation of Grant Assurance 22(f), Economic Nondiscrimination.” (FAA Order 5190.6B, Change 1 at Sec. 11.2).
Chapter 11 has also been updated to specify that the following preventative maintenance activities must be permitted:
· A general aviation aircraft owner or operator may perform preventative maintenance in accordance with 14 CFR Part 43, and aircraft restoration, major repairs and alterations if the owner holds the appropriate certificate to perform same (FAA Order 5190.6B, Change 1, Sec. 11.3(d)(1));
· Part 121 and Part 135 operators may perform maintenance, preventative maintenance, and alterations as provided for in 14 CFR Parts 121 and 135 (FAA Order 5190.6B, Change 1, Sec. 11.3(d)(2));
· “The holder of a sport pilot certificate who owns or operates a light sport category aircraft may perform preventive maintenance on that light sport category aircraft.” (FAA Order 5190.6B, Change 1, Sec. 11.3(d)(3)); and
· Owners and operators of aircraft with an experimental certificate can perform maintenance, repairs, and alterations of the aircraft if the owner or operator holds an appropriate repairmen certificate (FAA Order 5190.6B, Change 1, Sec. 11.3(d)(4)).
Lastly, the FAA clarifies that third-party may perform “self-service activities” where the aircraft owner retains sufficient control over the third-party contracted employees. The FAA specifically states: “Airport sponsors may not allow third-party contracting of self-service activities where the owner/operator of the aircraft does not retain ultimate control over contracted personnel, including interviewing, hiring, assigning duties, and termination of the employee assigned to the aircraft” and further encourages Airport Sponsors to seek assistance from the FAA in evaluating whether sufficient control is retained. (FAA Order 5190.6B, Change 1, Sec. 11.3(d)(4)).
Chapter 23, Reversions of Airport Property
Chapter 23 of the Airport Compliance Manual “provides guidance on the revision of real property originally conveyed by the United States to an airport sponsor or other entity.” (FAA Order 5190.6B, Change 1, Sec. 23.1). This chapter has been updated to (1) include examples of when property reverts; and (2) requires that environmental due diligence be performed before title reverts to the United States Government. The chapter defines environmental due diligence as “the process of identifying, evaluating, and documenting the environmental conditions of real property to inform decision-making and minimize potential environmental liabilities associated with real property transactions.” (FAA Order 5190.6B, Change 1, Sec. 23.9).
CONCLUSION
The FAA’s revisions to Chapters 9-11 are likely the most impactful for airport users and tenants. Accordingly, I strongly recommend that airport tenants and users review the updates to those chapters. Most importantly, airport tenants who are nearing the end of their terms or who are negotiating lease extensions should familiarize themselves because they may be able to use these updated provisions to their advantage during their next negotiation or at least be prepared for the fact that their landlord may be seeking to update terms per this guidance in their next negotiation.
