Survey of Minimum Standards: Commercial Aeronautical Activities at Airports (2011)

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3 SURVEY OF MINIMUM STANDARDS: COMMERCIAL AERONAUTICAL ACTIVITIES AT AIRPORTS By Daniel S. Reimer, Esq., and Paul A. Meyers Kaplan, Kirsch, Rockwell LLP, Aviation Management Consulting Group I. INTRODUCTION Numerous commercial aeronautical activities occur at airports. Examples of these activities include aircraft fueling, aircraft line (ground handling) services, aircraft maintenance and repair, aircraft storage, aircraft rental and flight training/instruction, aircraft sales, and air- craft charter and management. Airport owners and operators commonly impose re- quirements that must be met by the businesses that perform these commercial aeronautical activities. These requirements are known as “Minimum Standards.” Airport Minimum Standards vary from airport to airport, based on factors such as the nature of aeronau- tical activities, the type and level of aircraft operations, the type and number of based aircraft, the types of commercial aeronautical services provided, and avail- able land and improvements. The Federal Aviation Administration (FAA) recommends against “fill in the blank” Minimum Standards.1 The Problem Statement for this project noted that there is not a comprehensive source of information on airport Minimum Standards available to airport law- yers. Section II of this digest provides an introduction to and overview of airport Minimum Standards. Section III summarizes the legal standards for developing and implementing airport Minimum Standards, with refer- ence to FAA guidance, and more than 30 reported cases involving airport Minimum Standards. Section IV pre- sents the results of research on the subject of airport Minimum Standards, including a literature review, survey, and interviews. Section V identifies the com- mercial aeronautical activities that customarily occur at airports and summarizes the contents of airport Mini- mum Standards. It is important to note that the sum- mary of airport Minimum Standards contents is not intended to serve as a recommendation, as content will vary from airport to airport. What may be considered relevant, reasonable, and appropriate at one airport may not be at another. Section VI summarizes common 1 FAA Order 5190.6B, Airport Compliance Manual § 10.5(a) (2009), available at http://www.faa.gov/airports/resources/ publications/orders/compliance_5190_6/ (“The FAA will not endorse ‘fill-in-the-blank’ minimum standards because of the high probability that many airport sponsors would adopt the document without modifying it to the needs of their particular airports. This could result in the imposition of irrelevant and unreasonable standards.”). industry practices used in developing and updating air- port Minimum Standards. The appendices to this digest contain further infor- mation on the subject of airport Minimum Standards. Appendix A is an index of relevant case law. Appendix B contains the survey conducted for this project and a summary of the survey results. Appendix C contains the interview questions and responses. Appendix D con- tains a compendium of comparative Minimum Stan- dards for commercial aeronautical activities customar- ily conducted at airports. Again, the compendium is not intended to serve as a recommendation. Appendix E contains a list of abbreviations used herein and defini- tions of key terms. Appendix F contains illustrative examples of airport Minimum Standards reflecting the diversity of requirements and approaches from airport to airport. This information, taken together, should assist air- port lawyers and others to critically evaluate airport Minimum Standards and to counsel airports on devel- oping, implementing, and enforcing airport Minimum Standards. II. INTRODUCTION TO MINIMUM STANDARDS As commonly understood within the aviation indus- try and the airport community, Minimum Standards are the minimum requirements that must be met for an entity to conduct aeronautical activities on an airport.2 2 See id. at App. Z (“Minimum Standards” defined to mean “[t]he qualifications or criteria that may be established by an airport owner as the minimum requirements that must be met by businesses engaged in on-airport aeronautical activities for the right to conduct those activities.”); National Air Transpor- tation Association, Airport Sponsors Guide to Preparing Mini- mum Standards and Airport Rules and Regulations, at 5 (2009), http://www.nata.aero/data/files/GIA/airport_misc/ minstdsguidefinal.pdf. (“Airport minimum standards set forth the minimum requirements an individual or entity wishing to provide aeronautical services to the public on a public-use air- port must meet in order to provide those services, such as minimum leasehold size, required equipment, hours of opera- tion, and fees.”); Aircraft Owners and Pilots Association, Minimum Standards for Commercial Aeronautical Activities, at 10 (1998), http://www.aopa.org/asn/minimum_standards. pdf (defining “minimum standards” to mean “[t]he criteria established by an airport owner as the minimum requirements that must be met by businesses in order to engage in providing on-airport aeronautical activities or services.”).

4 This understanding of Minimum Standards has been in place for decades.3 Minimum Standards are adopted, implemented, and enforced by the airport sponsor.4 Minimum Standards typically include procedural requirements for obtaining approval from the airport sponsor to engage in aeronau- tical activities and substantive standards related to such activities. While Minimum Standards typically concern com- mercial aeronautical activities (i.e., the sale of aeronau- tical products and services to the public), they also may contain standards applicable to noncommercial aero- nautical activities (e.g., private aircraft storage, flying clubs). The FAA recommends against regulating certain noncommercial activities, particularly self-service, through Minimum Standards.5 As a practical matter, airport sponsors typically include requirements for self- service, including self-fueling, in Minimum Standards, Rules and Regulations, or in both documents. Minimum Standards typically do not address nonaeronautical activities.6 No federal law or regulation requires an airport sponsor to establish and implement Minimum Stan- 3 See, e.g., FAA Advisory Circular 150/5190-1A, Minimum Standards for Commercial Aeronautical Activities on Public Airports § 5(a) (1985), http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgAdvisor yCircular.nsf/8e17c23e2f26e8018625726d006ce776/135131b2 ba5d424786256da9005a84e3/$FILE/150-5190-1a.pdf. (“Mini- mum Standards” are defined as “[t]he qualifications which may be established by an airport owner as the minimum require- ments to be met as a condition for the right to conduct an aero- nautical activity on the airport.”) (This Advisory Circular has been cancelled and superseded.) 4 As used herein, “airport sponsor” is intended to refer to the public or private entity with primary responsibility for operat- ing an airport and for carrying out the obligations attendant to the receipt of federal airport grant funding. The terms “airport proprietor” and “airport operator” commonly are used to refer to this same entity. 5 FAA Advisory Circular 150/5190-7, Minimum Standards for Commercial Aeronautical Activities § 1.3(c) (2006), http://www.faa.gov/documentLibrary/media/advisory_circular/1 50-5190-7/150_5190_7.pdf, (Since self-service operations performed by the owner or op- erator of the aircraft using his or her own employees and equip- ment are not commercial activities, the FAA recommends that airport sponsor requirements concerning those non-commercial activities be separate from the document designed to address commercial activities. Airport rules and regulations or specific language in leases can better address requirements concerning self-service operations and other airport activities.). 6 See FAA Order 5190.6B § 10.2 (2009), available at http://www.faa.gov/airports/resources/publications/orders/comp liance_5190_6/ (“There is no requirement to include nonaero- nautical activities (such as restaurants or car rental) in mini- mum standards since those activities are not covered under the grant assurances.”); FAA Advisory Circular 150/5190-7 § 1.2(d) (same), available at http://www.faa.gov/document Library/media/advisory_circular/150-5190-7/150_5190_7.pdf. dards.7 Airport sponsors receiving federal financial as- sistance through the Airport Improvement Program (AIP) are prohibited from granting an exclusive right to conduct aeronautical activities8 and further are re- quired to ensure that “the airport will be available for public use on reasonable conditions and without unjust discrimination.”9 Minimum Standards are one way for an airport sponsor to condition use of the airport.10 Minimum Standards also may serve and promote an airport sponsor’s obligation to ensure the safe and effi- cient use of the airport.11 Minimum Standards serve broad purposes, beyond compliance with the airport sponsor’s obligations to the FAA (known as Sponsor Assurances or Grant Assur- ances). For example, Minimum Standards typically ad- dress the range, level, and quality of products and ser- vices offered to the public as a means of protecting the public and ensuring that the customers of commercial aeronautical service providers can obtain the products and services required in the manner desired. 7 Director’s Determination, The Aviation Ctr., Inc. v. City of Ann Arbor, FAA Docket No. 16-05-01, at 23 (Dec. 16, 2005), http://part16.airports.faa.gov/pdf/16-05-01b.pdf (“neither Fed- eral Law nor policy requires the development of minimum standards.”); Director’s Determination, Pacific Coast Flyers, Inc. v. County of San Diego, FAA Docket No. 16-04-08, at 28– 29 (July 25, 2005), http://part16.airports.faa.gov/pdf/16-04- 08b.pdf, (While recommending the use of minimum standards to avoid violations of Federal law and to ensure adequate public service, the FAA cannot mandate minimum standards at airports. In this particular case, the Complainants’ argument that the County has not imposed minimum standards on PAC/Burrows, does not, per se, mean that the County is in noncompliance with its Federal obligations or has otherwise violated a particular grant assurance, such as Grant Assurance 23.). 8 49 U.S.C. § 40103(e) (2010), available at http://www.law.cornell.edu/uscode/49/usc_sec_49_00040103---- 000-.html (“A person does not have an exclusive right to use an air navigation facility on which Government money has been expended.”); 49 U.S.C. § 47107(a)(4), available at http://www.law.cornell.edu/uscode/49/usc_sec_49_00047107---- 000-.html (“a person providing, or intending to provide, aero- nautical services to the public will not be given an exclusive right to use the airport…”). 9 49 U.S.C. § 47107(a)(1) (2010) available at http://www.law.cornell.edu/uscode/html/uscode49/usc_sec_49_0 0047107----000-.html . 10 See Grant Assurance 22(h), http://www.faa.gov/airports/aip/grant_assurances/media/airpor t_sponsor_assurances.pdf (“The sponsor may establish such reasonable, and not unjustly discriminatory, conditions to be met by all users of the airport as may be necessary for the safe and efficient operation of the airport.”). 11 See Grant Assurance 19, http://www.faa.gov/airports/aip/grant_assurances/media/airpor t_sponsor_assurances.pdf. (“The airport and all facilities which are necessary to serve the aeronautical users of the air- port…shall be operated at all times in a safe and serviceable condition and in accordance with the minimum standards as may be required or prescribed by applicable Federal, state and local agencies for maintenance and operation.”).