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Airport Operator Options for Delivery of FBO Services AIRPORT COOPERATIVE RESEARCH PROGRAMACRP SYNTHESIS 86 A Synthesis of Airport Practice Sponsored by the Federal Aviation Administration

ACRP OVERSIGHT COMMITTEE* CHAIR Kitty Freidheim Freidheim Consulting VICE CHAIR Kelly Johnson Northwest Arkansas Regional Airport Authority MEMBERS Gloria G. Bender TransSolutions Rochelle Cameron City of Philadelphia-Division of Aviation, Philadelphia International Airport Deborah Flint Los Angeles World Airports Rhonda Hamm-Niebruegge Lambert-St. Louis International Airport Winsome A. Lenfert Federal Aviation Administration Margaret McKeough Metropolitan Washington Airports Authority Scott McMahon Morristown Municipal Airport Frank Miller Hollywood Burbank Airport Bob Montgomery Southwest Airlines Eric Potts Freese and Nichols, Inc. Megan S. Ryerson University of Pennsylvania EX OFFICIO MEMBERS Sabrina Johnson U.S. Environmental Protection Agency Mark Kimberling National Association of State Aviation Officials Laura McKee Airlines for America Christopher Oswald Airports Council International—North America Neil J. Pedersen Transportation Research Board Melissa Sabatine American Association of Airport Executives T.J. Schulz Airport Consultants Council SECRETARY Christopher J. Hedges Transportation Research Board TRANSPORTATION RESEARCH BOARD 2017 EXECUTIVE COMMITTEE* OFFICERS CHAIR: Malcolm Dougherty, Director, California Department of Transportation, Sacramento VICE CHAIR: Katherine F. Turnbull, Executive Associate Director and Research Scientist, Texas A&M Transportation Institute, College Station EXECUTIVE DIRECTOR: Neil J. Pedersen, Transportation Research Board MEMBERS Victoria A. Arroyo, Executive Director, Georgetown Climate Center; Assistant Dean, Centers and Institutes; and Professor and Director, Environmental Law Program, Georgetown University Law Center, Washington, DC Scott E. Bennett, Director, Arkansas State Highway and Transportation Department, Little Rock Jennifer Cohan, Secretary, Delaware DOT, Dover James M. Crites, Executive Vice President of Operations (retired), Dallas–Fort Worth International Airport, TX Nathaniel P. Ford, Sr., Executive Director–CEO, Jacksonville Transportation Authority, Jacksonville, FL A. Stewart Fotheringham, Professor, School of Geographical Sciences and Urban Planning, Arizona State University, Tempe John S. Halikowski, Director, Arizona DOT, Phoenix Susan Hanson, Distinguished University Professor Emerita, Graduate School of Geography, Clark University, Worcester, MA Steve Heminger, Executive Director, Metropolitan Transportation Commission, Oakland, CA Chris T. Hendrickson, Hamerschlag Professor of Engineering, Carnegie Mellon University, Pittsburgh, PA Jeffrey D. Holt, Managing Director, Power, Energy, and Infrastructure Group, BMO Capital Markets Corporation, New York S. Jack Hu, Vice President for Research and J. Reid and Polly Anderson Professor of Manufacturing, University of Michigan, Ann Arbor Roger B. Huff, President, HGLC, LLC, Farmington Hills, MI Geraldine Knatz, Professor, Sol Price School of Public Policy, Viterbi School of Engineering, University of Southern California, Los Angeles Melinda McGrath, Executive Director, Mississippi DOT, Jackson Patrick K. McKenna, Director, Missouri DOT, Jefferson City James P. Redeker, Commissioner, Connecticut DOT, Newington Mark L. Rosenberg, Executive Director, The Task Force for Global Health, Inc., Decatur, GA Daniel Sperling, Professor of Civil Engineering and Environmental Science and Policy; Director, Institute of Transportation Studies, University of California, Davis Gary C. Thomas, President and Executive Director, Dallas Area Rapid Transit, Dallas, TX Pat Thomas, Senior Vice President of State Government Affairs, United Parcel Service, Washington, DC James M. Tien, Distinguished Professor and Dean Emeritus, College of Engineering, University of Miami, Coral Gables, FL Dean H. Wise, Vice President of Network Strategy, Burlington Northern Santa Fe Railway, Fort Worth, TX Charles A. Zelle, Commissioner, Minnesota DOT, Saint Paul EX OFFICIO MEMBERS Michael Berube, Deputy Assistant Secretary for Transportation, U.S. Department of Energy Mary R. Brooks, Professor Emerita, Dalhousie University, Halifax, Nova Scotia, Canada, and Chair, TRB Marine Board Mark H. Buzby (Rear Admiral, U.S. Navy), Executive Director, Maritime Administration, U.S. DOT Steven Cliff, Deputy Executive Officer, California Air Resources Board, Sacramento Howard R. Elliott, Administrator, Pipeline and Hazardous Materials Safety Administration, U.S. DOT Audrey Farley, Executive Director, Office of the Assistant Secretary for Research and Technology, U.S. DOT LeRoy Gishi, Chief, Division of Transportation, Bureau of Indian Affairs, U.S. Department of the Interior, Washington, DC John T. Gray II, Senior Vice President, Policy and Economics, Association of American Railroads, Washington, DC Heath Hall, Deputy Administrator, Federal Railroad Administration, U.S. DOT Brandye Hendrickson, Deputy Administrator, Federal Highway Administration, U.S. DOT Michael P. Huerta, Administrator, Federal Aviation Administration, U.S. DOT Daphne Y. Jefferson, Deputy Administrator, Federal Motor Carrier Safety Administration, U.S. DOT Heidi King, Acting Administrator, National Highway Traffic Safety Administration, U.S. DOT Bevan B. Kirley, Research Associate, University of North Carolina Highway Safety Research Center, Chapel Hill, and Chair, TRB Young Members Council Wayne Nastri, Acting Executive Officer, South Coast Air Quality Management District, Diamond Bar, CA Craig A. Rutland, U.S. Air Force Pavement Engineer, U.S. Air Force Civil Engineer Center, Tyndall Air Force Base, FL Todd T. Semonite (Lieutenant General, U.S. Army), Chief of Engineers and Commanding General, U.S. Army Corps of Engineers, Washington, DC Karl Simon, Director, Transportation and Climate Division, U.S. Environmental Protection Agency Richard A. White, Acting President and CEO, American Public Transportation Association, Washington, DC K. Jane Williams, Executive Director, Federal Transit Administration, U.S. DOT Frederick G. (Bud) Wright, Executive Director, American Association of State Highway and Transportation Officials, Washington, DC Paul F. Zukunft (Admiral, U.S. Coast Guard), Commandant, U.S. Coast Guard, U.S. Department of Homeland Security * Membership as of October 2017.* Membership as of November 2017.

2018 A IRPORT COOPERAT IVE RESEARCH PROGRAM ACRP SYNTHESIS 86 SubScriber category Aviation Airport Operator Options for Delivery of FBO Services A Synthesis of Airport Practice conSultantS Lois S. Kramer KRAMER aerotek inc. Boulder, CO John P. Daniel BEGGS & LANE Pensacola, FL Mike Moore KRAMER aerotek inc. Boulder, CO Michael Moroney Michael G. Moroney & Associates Danville, CA Gary Shafer Southern Illinois Airport Carbondale, IL

AIRPORT COOPERATIVE RESEARCH PROGRAM Airports are vital national resources. They serve a key role in trans- portation of people and goods and in regional, national, and interna- tional commerce. They are where the nation’s aviation system connects with other modes of transportation and where federal responsibility for managing and regulating air traffic operations intersects with the role of state and local governments that own and operate most air- ports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Coopera- tive Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near-term solutions to meet demands placed on it. The need for ACRP was identified in TRB Special Report 272: Air- port Research Needs: Cooperative Solutions in 2003, based on a study sponsored by the Federal Aviation Administration (FAA). ACRP carries out applied research on problems that are shared by airport operating agencies and not being adequately addressed by existing federal research programs. ACRP is modeled after the suc- cessful National Cooperative Highway Research Program (NCHRP) and Transit Cooperative Research Program (TCRP). ACRP undertakes research and other technical activities in various airport subject areas, including design, construction, legal, maintenance, operations, safety, policy, planning, human resources, and administration. ACRP provides a forum where airport operators can cooperatively address common operational problems. ACRP was authorized in December 2003 as part of the Vision 100—Century of Aviation Reauthorization Act. The primary partici- pants in the ACRP are (1) an independent governing board, the ACRP Oversight Committee (AOC), appointed by the Secretary of the U.S. Department of Transportation with representation from airport operat- ing agencies, other stakeholders, and relevant industry organizations such as the Airports Council International-North America (ACI-NA), the American Association of Airport Executives (AAAE), the National Association of State Aviation Officials (NASAO), Airlines for America (A4A), and the Airport Consultants Council (ACC) as vital links to the airport community; (2) TRB as program manager and secretariat for the governing board; and (3) the FAA as program sponsor. In October 2005, the FAA executed a contract with the National Academy of Sci- ences formally initiating the program. ACRP benefits from the cooperation and participation of air- port professionals, air carriers, shippers, state and local government officials, equipment and service suppliers, other airport users, and research organizations. Each of these participants has different inter- ests and responsibilities, and each is an integral part of this cooperative research effort. Research problem statements for ACRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the respon- sibility of the AOC to formulate the research program by identi- fying the highest priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel appointed by TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport professionals, the intended users of the research products. The panels prepare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing cooper- ative research programs since 1962. As in other TRB activities, ACRP project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the intended users of the research: airport operating agencies, service pro- viders, and academic institutions. ACRP produces a series of research reports for use by airport operators, local agencies, the FAA, and other interested parties; industry associations may arrange for workshops, training aids, field visits, webinars, and other activities to ensure that results are implemented by airport industry practitioners. ACRP SYNTHESIS 86 Project A11-03, Topic S01-15 ISSN 1935-9187 ISBN 978-0-309-39015-6 Library of Congress Control Number 2018930306 © 2018 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materi- als and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to repro- duce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FRA, FTA, Office of the Assistant Secretary for Research and Technology, PHMSA, or TDC endorsement of a particular prod- uct, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permis- sion from CRP. NOTICE The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Acad- emies of Sciences, Engineering, and Medicine. The opinions and con- clusions expressed or implied in this report are those of the research- ers who performed the research and are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the Airport Cooperative Research Program do not endorse products or manufac- turers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report. Published reports of the AIRPORT COOPERATIVE RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to http://www.national-academies.org and then searching for TRB Printed in the United States of America

The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. C. D. Mote, Jr., is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to increase the benefits that transportation contributes to society by providing leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Board’s varied committees, task forces, and panels annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.

TOPIC PANEL S01-15 CURT G. CASTAGNA, Aeroplex/Aerolease Group, Long Beach, CA BRETT FAY, Hillsborough County Aviation Authority, Tampa, FL VIVEK KHANNA, KSA Engineers, Inc., McKinney, TX RICHARD LANMAN, Auburn–Lewiston Airport, Auburn, ME MARY MILLER, Signature Flight Support, Washington, D.C. GARY E. SCHMIDT, Minneapolis–St. Paul Metropolitan Airports Commission, Minneapolis, MN BILL DEERE, National Air Transportation Association, Washington, D.C. PAUL J. EUBANKS, Airports Council International–North America, Washington, D.C. ALEX GERTSEN, National Business Aviation Association, Washington, D.C. THOMAS VICK, FAA Liaison CHRISTINE GERENCHER, TRB Liaison COOPERATIVE RESEARCH PROGRAMS STAFF CHRISTOPHER J. HEDGES, Director, Cooperative Research Programs LORI L. SUNDSTROM, Deputy Director, Cooperative Research Programs MICHAEL R. SALAMONE, Manager, Airport Cooperative Research Program GAIL R. STABA, Senior Program Officer BRITTANY SUMMERLIN-AZEEZ, Program Associate DEMISHA WILLIAMS, Senior Program Assistant EILEEN P. DELANEY, Director of Publications ACRP COMMITTEE FOR PROJECT 11-03 CHAIR JOSHUA D. ABRAMSON, Easterwood Airport, College Station, TX MEMBERS DEBBIE K. ALKE, Montana Department of Transportation, Helena, MT GLORIA G. BENDER, TransSolutions, Fort Worth, TX DAVID A. BYERS, Quadrex Aviation, LLC, Melbourne, FL DAVID N. EDWARDS, Jr., Greenville–Spartanburg Airport District, Greer, SC BRENDA L. ENOS, Massachusetts Port Authority, East Boston, MA LINDA HOWARD, Independent Aviation Consultant, Bastrop, TX PATRICK W. MAGNOTTA, FAA Liaison ADAM WILLIAMS, Aircraft Owners and Pilots Association MATTHEW J. GRIFFIN, Airports Consultants Council LIYING GU, Airports Council International–North America Cover figure: Global Express approaching Boeing Field/King County International Airport. Photograph, taken and provided by Timothy Burke, copyright 2017.

CASE STUDY ACKNOWLEDGMENTS Appleton International Airport, Abe Weber, Airport Manager Avflight Corporation, Carl Muhs, CEO Boeing Field/King County International Airport, Randall Berg, A.A.E., Airport Director and Mark Witsoe, A.A.E., Marketing and Business Manager Capital Region International Airport, Jonathon Vrabel, Senior V.P. and COO, and Carl Muhs, Avflight CEO Coleman A. Young Airport, Jason Watt, Airport Manager, and Carl Muhs, Avflight, CEO D.C. Metro Aviation Services, Sandy Poe, Owner and General Manager, and Keith Miller, Airport Manager, Montgomery County Revenue Authority Fort Wayne International Airport, Scott Hinderman, Executive Director of Airports MBS International Airport, Jeff Nagel, Airport Manager, and Carl Muhs, Avflight CEO Signature Flight Support, Mary Miller, V.P., Industry and Government Affairs Southern Illinois Airport, Gary Shafer, Airport Manager Tampa International Airport, Randy Forister, Commercial Real Estate Director, and Brett Fay, Senior Manager of General Aviation Van Nuys Airport, Jess Romo, Director, Long Beach Airport Washington Dulles International Airport, Christopher U. Browne, A.A.E., Airport Manager

Airport administrators, engineers, and researchers often face problems for which infor- mation already exists, either in documented form or as undocumented experience and prac- tice. This information may be fragmented, scattered, and unevaluated. As a consequence, full knowledge of what has been learned about a problem may not be brought to bear on its solution. Costly research findings may go unused, valuable experience may be overlooked, and due consideration may not be given to recommended practices for solving or alleviating the problem. There is information on nearly every subject of concern to the airport industry. Much of it derives from research or from the work of practitioners faced with problems in their day-to- day work. To provide a systematic means for assembling and evaluating such useful infor- mation and to make it available to the entire airport community, the Airport Cooperative Research Program authorized the Transportation Research Board to undertake a continuing project. This project, ACRP Project 11-03, “Synthesis of Information Related to Airport Practices,” searches out and synthesizes useful knowledge from all available sources and prepares concise, documented reports on specific topics. Reports from this endeavor consti- tute an ACRP report series, Synthesis of Airport Practice. This synthesis series reports on current knowledge and practice, in a compact format, without the detailed directions usually found in handbooks or design manuals. Each report in the series provides a compendium of the best knowledge available on those measures found to be the most successful in resolving specific problems. In the 1980s, an estimated 10,000 fixed base operator (FBO) locations served general aviation aircraft across the country. In 2016, the number of FBOs operating in the United States was approximately 3,500; 47% of these locations were owned and operated by airport sponsors. These changes, while dramatic, reflect a nimble and solution-driven industry. An airport sponsor can deliver FBO services with traditional third-party leases or the engage- ment of a contract manager, or the airport can self-operate the FBO. Decisions about which model is appropriate are based on an evaluation of an airport’s unique local economic con- ditions, the particulars of the general aviation market in the area, and the level of interest expressed by private FBOs to operate at a particular airport. This synthesis presents a discussion of the local considerations that go into deciding how airport operators provide fueling, flight continuation services, maintenance, and concierge services and, if a traditional lease approach is selected, how to proceed with procurement pro- cesses that include key real estate leasing and development provisions in lease agreements. Information used in this synthesis was acquired through a review of the literature and from case studies of 10 airports that have recently changed FBO providers. Principal Investigator Lois S. Kramer, KRAMER aerotek inc., Boulder, Colorado, with the assistance of John P. Daniel, Mike Moore, Michael Moroney, and Gary Shafer, collected and synthesized the information and wrote the report. The members of the topic panel are acknowledged on page iv. This synthesis is an immediately useful document that records the practices that were acceptable within the limitations of the knowledge available at the time of its preparation. As progress in research and practice continues, new knowledge will be added to that now at hand. FOREWORD PREFACE By Gail R. Staba, Senior Program Officer, Transportation Research Board

1 SUMMARY 5 CHAPTER ONE INTRODUCTION FBO Demographics, 5 FBO Transition Points, 7 Research Approach and Report Organization, 8 Other Transportation Research Board Resources, 8 10 CHAPTER TWO LOCAL CONSIDERATIONS FOR FBO MODEL SELECTION Choices for Delivery of FBO Services, 10 Evaluating FBO Options, 12 Selection of the FBO Business Model, 18 Conclusions, 21 22 CHAPTER THREE FBO OR CONTRACT MANAGER PROCUREMENT PROCESS Checklist for FBO or Contract Manager Selection, 22 Planning for the RFI, RFP, and Solicitation, 23 Requests for Information (RFIs), 26 Procurement Preparations, 27 Solicitation, Selection, and Approval, 30 Wrap-Up, 32 33 CHAPTER FOUR THE FIXED BASE OPERATOR LEASE FBO Leased Premises, 33 FBO Lease Term, 34 Use of Leased Premises, 34 Competitive Fuel Pricing Standard, 35 Removal of Disabled Aircraft, 35 Nonexclusive Rights and Privileges, 35 FBO Maintenance and Cost Responsibilities, 35 Facilities Refreshment, 36 Ground Rent, 36 Building Rents, 37 Fees, 37 Liquidated Damages for Delinquent Payment, 38 Performance Guarantee, 38 Minimum Operating Standards, 39 Airport Development Rights; Substitution of Leased Premises; Buyout of Improvements, 39 Audit, 39 Security Requirements, 39 Taxes and Assessments, 40 Indemnification, 40 Insurance, 40 Environmental Compliance, 41 Safety Standards, 41 Laws, Rules, and Regulations, 41 Leasehold Improvements and Alterations, 42

Default and Remedies, 42 Assignment and Subleasing, 43 44 CHAPTER FIVE AIRPORT EXPERIENCES WITH DIFFERENT FBO MODELS Introduction to the Case Studies, 44 Interview Questions, 45 Appleton International Airport, Appleton, Wisconsin, 46 Fort Wayne International Airport, Fort Wayne, Indiana, 49 Southern Illinois Airport, Carbondale, Illinois, 51 Capital Region International Airport, Lansing, Michigan, 54 Coleman A. Young Airport, Detroit, Michigan, 56 MBS International Airport, Freeland, Michigan, 58 Boeing Field/King County International Airport, Seattle, Washington, 59 Tampa International Airport, Tampa, Florida, 61 Van Nuys Airport, Los Angeles, California, 64 Washington Dulles International Airport, Dulles, Virginia, 66 FBO Case Studies, 69 78 CHAPTER SIX CONCLUSIONS Concluding Thoughts and Considerations, 78 80 ABBREVIATIONS AND ACRONYMS 81 BIBLIOGRAPHY AND REFERENCES 84 APPENDIX A FEDERAL AND AIRPORT REGULATORY RESPONSIBILITIES FOR FBOS 88 APPENDIX B PART 13 AND 16 ACTIONS 90 APPENDIX C GLOSSARY

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TRB's Airport Cooperative Research Program (ACRP) Synthesis 86: Airport Operator Options for Delivery of FBO Services explores the local considerations that go into deciding how fixed base operator (FBO) airports provide fueling, flight continuation services, maintenance, and concierge services. This synthesis also explores the tools that airports use to evaluate which options work best for airports. Broadly speaking, an airport sponsor can deliver FBO services with traditional third-party leases or by engaging a contract manager, or the airport can self-operate the FBO. Decisions about which model is appropriate hinge on an evaluation of an airport’s unique local economic conditions, the details about the area’s general aviation market, and the level of interest private FBOs express about operating at a particular airport.

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