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FAA questions exclusive L.A. County fuel sales A letter by 50 pilots questioning the exclusive right to sell fuel at five airports managed by American Airports Corp.

FAA questions exclusive L.A. County fuel sales

A letter by 50 pilots questioning the exclusive right to sell fuel at five airports managed by American Airports Corp. (AAC) under a Los Angeles County contract has brought an inquiry from the FAA Western Pacific Region Airports Division in Los Angeles. The pilots, in a letter prepared by Arcadia attorney and pilot Tulane Peterson, said it was illegal for the county to delegate to AAC the county's exclusive right to sell fuel. The airports managed by AAC are Brackett Field, Whiteman, El Monte, Gen. William J. Fox Airfield, and Compton/Woodley.

As this article was written, Los Angeles County Aviation Division Chief Ted A. Gustin was preparing a response to meet the FAA's April 28 deadline for answers. He said the county has always known it could not prevent fuel competition and has never tried to do so, and will "take it seriously and put in writing our unwritten policy." Competitors that wanted to sell fuel have contacted the county over the years, including in 1991 when the county first awarded a contract to AAC's predecessor to manage the five airports, but none proceeded with its plans. That may be because of L.A. County's 30-cent flowage fee (35 cents on jet fuel), which Gustin said is probably the highest in the nation.

Peterson, asked whether he felt the exclusive fuel sales policy was actually enforced, said that the county has always required anyone wanting to sell fuel to first buy it (at near retail) from the exclusive airport manager. "That written requirement appears explicitly in FBO leases," he said. "The absolute absence of competition for the past 15 years is proof positive that county practices have always been an effective and illegal deterrent to competition."

L.A. County gets $2.8 million a year from the contract to pay Aviation Division salaries, provide matching grants to local airports, and fund projects that are not eligible for grants, Gustin said.

The FAA had few concerns about the contract until Peterson's letter arrived, FAA Airports Compliance Specialist Tony Garcia wrote in a letter to Gustin. "Although the county granted an exclusive right, the Federal Aviation Administration did not initially view it as an illegal exclusive right," Garcia wrote. "In view of the complaint, however, we wish to advise the county that its agreement with AAC may very well be an illegal exclusive right because the county, by its agreement with AAC, may be excluding other qualified airport users from participating in aeronautical activity."

The language granting exclusive fuel sales rights is still contained in old leases and contracts, but now there will be a "blanket elimination of this claim," Gustin said.

Those who signed Peterson's letter were concerned that the contract gave American Airports an incentive to keep profits as high as possible, once the county's $2.8 million per year has been paid, and ignore the needs of the airports. They suggested that this may constitute illegal revenue diversion. The FAA's Garcia also addressed that issue, noting that Peterson's letter alleged that there is no accountability for the revenues generated or the expenses incurred.

Garcia wrote: "Title 49 United States Code 47133 places statutory limitations on the uses of airport revenue and stipulates that airport revenue may only be expended on the capital and operating costs of the County airport system. Any use of airport revenue that is not authorized by the Policy and Procedures Concerning the Use of Airport Revenue (64FR7696, February 16, 1999) would represent revenue diversion. It is being alleged that the public is not informed and, therefore, does not know whether or not airport revenue is being managed in accordance with the law and the assurances."

American Airports worked with the county to come up with an action plan that has now been released to the L.A. County Board of Supervisors under an L.A. County Department of Public Works letterhead on March 8. Although it puts the emphasis on Brackett Field, where tenants have left in recent years, the plan states that it also applies to the other four airports. It calls for quarterly meetings with stakeholders such as airport businesses and pilot groups, a marketing and advertising plan to be completed in June to attract flight schools and businesses, quarterly occupancy reports, a tighter policy on interim nonaviation uses of hangars (to be written by July), appraisal of hangar rates, advance information to the county on potential leases before negotiations begin, and an address database on airport users for informational and customer survey purposes.

AOPA is solidly in the center of the fray, working with both sides. At the request of American Airports board chairman David Price, AOPA Vice President of Airports Bill Dunn met with the company in Los Angeles to discuss developments. American Airports has a 20-year contract that expires in 2011, with two five-year options. Gustin said the contract is not in danger of being cancelled.

State keeps pressure on Oceanside

Although night operations resumed earlier this year at Oceanside Municipal Airport thanks to the removal of trees, the airport remains under state pressure to remove additional obstacles and correct deficiencies that the city says will cost $350,000. The City Council has no plans to seek federal or state money to remove the obstacles that include a chain-link fence, a concrete retaining wall, and a driveway to the Deutsch manufacturing plant that encroaches on the airport. Other actions, including the removal of an unapproved helipad and the elimination of 88 tiedowns to allow for moving the taxiway, have been completed.

The San Diego Union-Tribune reported incorrectly that the airport did not have to remove the additional obstacles, and that report was picked up in the February AOPA Pilot. That brought this response from California Office of Airports Chief Gary Cathey:

"Night use was suspended at Oceanside Municipal Airport for repeated failure to remove numerous obstructions to the FAR Part 77 7:1 transitional surface north of the runway. We agreed to remove the suspension to night use once the trees were cut, but at no time did we inform the airport manager or the newspaper reporter that the remaining items did not have to be taken care of in a timely manner. We don't identify discrepancies, only to say later on that they don't need to be taken care of. This would be inconsistent and contrary to the content of our inspection letter."

The city, prior to the resumption of night operations, had informed the state that although it is in the airport's master plan to make the $350,000 in improvements, there are no current plans to do so in the absence of funding.

Benton Airpark opposition countered

Benton Airpark Manager Rod Dinger is, at this writing, expecting to answer questions for the Redding City Council at its May meeting about the future of Benton Airpark. The questions include considering the impact of moving a portion or all operations at the airport, with its 2,420-foot runway, to Redding Municipal Airport.

"I do not see anything changing," said Dinger, who added that the most recent FAA grant for the airport was accepted August 24, 2005. The grant carries with it the stipulation that the airport continue to be operated as such for 20 years. Dinger had appeared in January before the council to present the routine master plan, but was asked to address at a future meeting issues raised by airport opponents about safety, financial issues, noise, and flight patterns. That has delayed approval of the master plan. The council has been supportive of the airport in the past, but AOPA is taking no chances. Airport Support Network volunteer Ginne Mistal set up meetings with City Council members and local airport supporters, including California Regional Representative John Pfeifer, a Redding resident, to discuss the importance of the airport to the community.

Upcoming aviation events in California


5-7 — Groveland. First Annual Central Sierra Helicopter Meet. Call Nancy Miller, 707/833-5905.

6 — San Jose. Reid-Hillview Airport (RHV). Flying Companion Seminar. Call 510/673-4505.

11-14 — Sequoia National Park. Flying Physicians Western Spring Meeting. E-mail Ronald Slaughter.

13 — Modesto. Modesto City/County Airport (MOD). Airshow/Airport Appreciation Day. Call Jerry Waymire, 209/529-8254.

18-20 — Hayward. Hayward Airport (HWD). Hayward Proficiency Air Race. Call Tony Flusche, 510/247-3225.

23 — San Diego. San Diego Marriott La Jolla. AOPA Pilot Town Meeting. Visit the Web site.

24 — Newport Beach/Irvine. Marriott Irvine at John Wayne Airport. AOPA Pilot Town Meeting. Visit the Web site.

25 — Concord. Crown Plaza Concord. AOPA Pilot Town Meeting. Visit the Web site.

27-28 — Llano. Brian Ranch Airport. "World's Smallest Air Show." Call Felice Apodaca, 661/261-3216.

"Calendar" is updated weekly on the Web. Weekend flying destinations are posted each Friday in AOPA ePilot.

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