Module 1 Flashcards
Airport Sponsor
the entity legally responsible for the operation of the airport (city, county, Airport Authority, State or Port authority)
Federal Regulations
Mandates from the FAA
Advisory Circulars
General guidelines from the FAA about the requirements for airports/airlines/etc.
General and used to provide additional information about complex regulations
Local Govt Rules
Zoning
Airports operate under what guidelines?
Federal regulations, Advisory Circulars, Local government rules
How is an airport a public service?
Water, trash, etc
How is an airport a business?
FAA mandates that all airports must be self sufficient (grant assurances) - ie. profit center
How does an airport generate economic development?
Creates jobs at the airport and in the region
How is an airport a transportation center?
Provides airline/GA service to the local community
What are the joint use functions that take place at the airport?
Cargo, passengers, GA, military, evacuation
A marriage is a dichotomy (marriage) between a ____ and _____.
public entity; business
How are capital improvements at an airport paid for?
through the Aviation Trust Fund (not local money)
Where can money made at an airport be spent?
All money made at the airport must remain at the airport - requirement of the FAA
What “hats” must an airport executive wear to effectively do their job?
Regulatory (FAA, TSA, EPA); Tenant relations (air carriers, ground services, concessions); City/County/Business-2-Business); Politics; Promote the benefits of aviation to their community and beyond
Federal Airport Act of 1946
transferred ownership of surplus military airports to local municipalities with contracts
AP-4 Agreements
promises made by municipalities that the airport would continue to be operated and maintained
What percentage of U.S. airports are operated by a municipality?
33%
What percentage of U.S. airports are operated by a county?
15%
What percentage of U.S. airports are operated by a state?
7%
What percentage of U.S. airports are operated by a Port Authority?
9%
What percentage of U.S. airports are operated by an Airport Authority?
30%
What percentage of U.S. airports are operated through other agreements such as inter-city contracts (Dallas/Ft. Worth) or by special tax districts?
6%
What is an Airport Authority?
An independent, public agencies created by state legislation that add another layer of government - 30% of all U.S. airports
What are some advantages of Airport Authorities?
Airports outgrow political boundaries; allows for more specialization; smaller, more experienced staff for better coordination; on-scene decision making; airport is sole focus of the organization; insulated from political impact; more efficient operations
What is a Port Authority?
Special type of legally chartered institution that generally has the same status as a public corporation but operates other facilities along with the airport such as harbors, toll roads, railways, or other public transportation systems (ie. Port Authority of New York and New Jersey (PANYNJ))
What is a commission?
Same responsibilities and statures as airport authorities; generally established to allow for focused attention and expertise to be applied in operation the airport by appointing individuals to represent the city or county (ie. Los Angeles World Airports Authority (LAWA))
What is a disadvantage of a municipally owned airport?
In time of financial constraints, airports are often viewed as a liability and suffers corresponding budget reductions or personell restrictions, and; the airport must compete between other departments for the attention of local leadership
What is a disadvantage of an airport or port authority?
Resources (HR functions, health care and benefits, etc) and funding may not be readily available as the authority operates in isolation from the county - usually more of a problem for smaller authorities
Privatization (Definition)
Shifting government functions to private enterprise
Grant Assurances (Definition)
Specify the use of airport revenue; set fair and reasonable fees for airport users, and; disposition of airport property
What are the primary areas of airport management that report to the airport executive?
Finance and administration; Planning and engineering; Operations and maintenance, and; Marketing, public relations (PR), and air service development (ASD)
List some of the functions of Operations & Maintenance
Comply with Part 139; airfield and inspections; maintain airport elements; wildlife management; ARFF, security
List some of the functions of Finance & Adminsition
Accounting; manage the budget; HR, business planning; revenue management; customer service
List some of the functions of Planning & Engeineering
Capital improvement plans; airport master plans, compliance with environmental laws; administrative space planning; noise abatement planning; works with FAA’s Airports District Office
List some of the functions of Marking, PR, and ASD
Publicity and response to issues; marketing to new airlines to provide services to the airport; marketing for airport services and properties
What are the primary functional areas that report to the airport sponsor?
Airport executive; legal council; engineering consultant; auditor
Surplus Property Act of 1944
has deed restrictions including the requirement to keep the airports open
Government Immunity
Concept that government cannot commit a legal wrong; provides protection for employees acting within the scope of their job
Federal Tort Claims Act
waives immunity if a government employee causes damages
Tucker Act
waives immunity over claims arising out of contracts with the federal governemnt
Notice of Proposal Rulemaking (NPRM)
Commonly issued when independent agencies desire regulation changes, additions, or removal
Federal Register
The place where proposed regulations are published in their final, edited version after the public comment period closes becoming enforecable
Sponsor Assurances (Grant Assurances)
Agreements or obligations, typically lasting up to 20 years, to be fulfilled upon accepting FAA funds (ie. AIP funds)
Grant Assurance #5: Preserving Rights and Powers
Restricts sponsors from taking any action that would take away ability to properly manage the airport; sponsors cannot sell airport property acquired with federal funds without the permission of the FAA
Through-the-Fence (TTF) Agreements
Airports are expected to negotiate and require access fees to balance difference from lease fees; allows airports to make money on other businesses that use the airport to further their business (if a business makes money at the airport - the airport should make money)
Grant Assurance #19: Operations and Maintenance
Set minimum standards for safe and serviceable condition; establishment of rules and regulations at each airport
Grant Assurance #20: Hazard Removal and Mitigation
Airport is required to take action to protect airspace including approach paths
Grant Assurance #21: Compatible Land Use
Airport needs to attempt to restrict use of land adjacent or within vicinity
Grant Assurance #22: Economic Nondiscrimintation
Airport must be available for public use on reasonable terms without unjust discrimination to all types, kinds, and classes of aeronautical activities, including commercial aeronautical activities offering services at the airport
Unjust Discrimination
Parameter the airport can use to prohibit or limit any given type, kind, or class of aeronautical use of the airport if such action is necessary for the safe operations of the airport
Grant Assurance #23: Exclusive Rights
Airport operator cannot grant exclusive rights to a tentant
Grant Assurance #24: Fee and Rental Structure
Requires set fees and lease rates directed at being as self-sustaining as possible; must impose fair market value charges for noncommercial uses of property
Grant Assurance #24: Airport Revenue
Revenue earned on airport property stays with the airport or authority
Revenue Diversion
Use of airport revenue for: general economic development; marketing and promotional activities unrelated to the airport or airport system; payment in lieu of taxes or other assessments that exceed the value of service; payments to compensate sponsoring governmental bodies for lost tax revenues exceeding state tax rates, and; direction or indirect payments of airport revenue beyond what is required to pay for services and facilities provided to the airport
Grant Assurance #24: Disposal of Land
Requires the airport to dispose of land no longer needed at FMV
Grant Assurance #24: Competitive Advangage
Addresses medium or large hub airport operators who cannot accommodate access or additional gate request by an air carrier to allow or expand service at the airport; requires airport operator to report to the Secretary of Transportation why requests cannot be accommodated
FAA Orders (FOs)
Directives on specific subjects and programs issued by the FAA and remain in effect until rescinded by the FAA (Guidance/instruction to FAA personnel on compliance, airport safety, operations, and other related issues)
Joint Use Airports
Owned by the DoD with leases or contracts between the military and civil entities
Commercial Service Airports
2,500 annual passenger emplanements
Primary Commercial Service Airports
10,000+ annual emplanements
Nonprimary Commercial Service Airprots
2,500-10,000 annual emplanements
Large Hub Primary Commercial Service Airports
1% or greater of annual national enplanements
Medium Hub Primary Commercial Service Airports
At least .25% but less than 1% annual national enplanements
Small Hub Primary Commercial Service Airports
At least .05% but less than .25% of national annual enplanements
Non-hub Primary Commercial Service Airports
More than 10,000 but less than .05% of national annual enplanements
National GA Airports
Located in metropolitan areas, multiple sophisticated jet aicraft
Regional GA Airports
Support interstate and intrastate flying, usually support jet and charter aircraft
Local GA AIrports
Majority piston aircraft traffic; activities are primarily flight training, emergency services, and personal flying
Basic GA Airports
Single runway; aircraft are self piloted for personal or business reasons; no jet aircraft
TSA
Office under the Department of Homeland Security; responsible for “all” modes of transportation; approximatly 700 security checkpoints
NTSB
Independent agency; accident investigation; perform ‘Court of Appeals’ funcitons for airman who have certificate actions taken against them
ICAO
UN agency that promotes civil aviation worldwide and sets best practices for civil aviation
DHS Department of Homeland Security
US agency; anti-terrorism intelligence
Under what laws can the FAA take enforcement actions against airports?
14 CFR Part 13 - Individuals, businesses, and private and public organizations can be fined, sanctioned, forced to close, and even jailed for violating federal regulations
Under what laws can the FAA investigate airports?
14 CFR Part 16 - contains the rules for filing complaints and adjudicating compliance matters involving federally-assigned airports
Airport Expenses include…
Provision of facilities and services, runway/taxiway system, and airfield safety and security
What are the three types of airport revenue?
Aeronautical, non-aeronautical, and non-operating
Define Aeronautical Activity
Any activity that involves, makes possible, or is required for the operation of airport or that contributes to or is required for safety of such operations (Pilot training, general and corporate aviation, air taxi and charter operations, aircraft sales and services, aircraft storage, etc)
What are some sources of aeronautical revenues?
Landing fees, land leases, terminal and hangar rent, and fuel flowage fees
Non-aeronautical revenue (ancillary fees)
Includes land rent received from an off-industrial park that is owned by the airport, reservation centers, catering facilities, rental car operations, parking, and concession sales (airports collect fees from tenants or a percentage of revenue) - Can exceed 50% of gross annual revenues
Non-operating revenue
Passenger facility charges (PFCs), customer facility charges (landside access fees), interest income, and grants
Why is it difficult to establish fees at airports?
The airports is the mix between a government entity and a private enterprise - both with different roles and goals
Is a state or airport authroity more flexible in setting fees?
Airport Authorities
What is the purpose of Aeronautical Use (Lease) AGreements
AN airports attempt to guarantee reliable revenue streams from airline, not necessarily service (gates, baggage claim areas, etc.)
Signatory air carrier agreement
Fill IN. Have significant control over an airports capital
Non-signatory agreement
Fill in. Pays landing fees bc….
Residual Rates
Residual, financial risk is transferred to the airlines in return for a negotiate limit on profits; airlines cover the revenue gap for airport, resulting in a break even
Compensatory Rates
Airport proprietor assumes all liability for costs and retains all revenue for airport usage
Straight Lease
Lease remains constant throughout term
Graduate Lease
Lease provides for changes in rents and fees at previously arranged intervals
Revaluation Lease
Leases provides for periodic valuations of the property and rent adjustments to current values (which can sometimes go down)
Percentage Lease
Lease calls for rents equivalent to a percentages of business sales
Sections of a Lease: Recitals
Includes a detailed statement that reflects the facts, events, and description of the general terms and conditions of the lease. The recitals contain information on the lessor and lessee, as well as statements that reflect the therms that have been agreed upon
Sections of a Lease: Grant of Lease
Includes the official legal terminology that grants the lease to the lessee
Sections of a Lease: Lease Term
Includes the date of commencement and duration of the lease; extensions may also be included in this section
Sections of a Lease: Rates, Fees, Charges
Includes how much the lessee will pay, along with rate adjustments, usually tied to a pre-determined rate, such as the CPI, or some other pre-arranged determiner
Sections of a Lease: Taxes
If taxes are paid, they are addressed in this section
Sections of a Lease: Security Deposit
Deposits on the property
Sections of a Lease: Improvements
Any construction or improvements by the lessee that are to be performed are in this section; improvements are often tied to lease extenstions
Sections of a Lease: Obligations for Repair, Maintenance, and Upkeep
Outlines the lessee and lessors responsibilities (ie,. snow removal and general maintenance performed by the airport
Sections of a Lease: Covenants by Tenant/Lessee
Licenses, permits, and the right of the lessor to inspect the facilities and approve alterations
Sections of a Lease: Indemnity
Lessees promise to hold harmless and indemnify the lessor from injury, claims, etc - unless caused by negligence, omissions, or willful acts on behalf of the lessor
Sections of a Lease: Insurance
Required isnurance minimums
Sections of a Lease: Signage and Use of Property by Lessee
Describes the approved uses of the property, along with commercial sign standards
Sections of a Lease: Subletting
Describes the process and procedures for subletting facilities
Sections of a Lease: Damage to Premises
Allows the lessor to make rent adjustment or go after restitution and repairs for damage caused by lessee
Sections of a Lease: Condemnation, Default, or Expiration of the Lease/Agreement
Outlines the process for termination of the lease prior to the expiration of the term, and can also describe the process for turning over the property and any improvements back to the lessor at the end of the lease - In some cases, the airport operator requires the property to be restored to its original state
Sections of a Lease: Title
Proves good title to the lessee of leased premises; provides for the right of the lessor in the event of foreclosure or other action taken by a lender to the lessee who constructs improvements; allows for Quiet Enjoyment
Sections of a Lease: Signature Blocks
Can only be signed by those with the authority to commit the lessor and lessee to contracts and agreements
How are concessions leased at large airports?
Lessee is often one development company that manages all concessions at the given airport/terminal?
What are bookkeeping activities?
Double-entry accounting to account for all financial transactions
What are financial accounting activities and their purpose?
Using accounting data to calculate and report cash flows, profit, and loss of financial entity - makes accounting information easier for managers and other non-accountant personnel to understand the financial performance of the airport
What are auditing activities?
The process of checking the financial records to ensure their accuracy and integrity
What is the purpose of accounting activities?
Presenting detailed information about individual products, services, or managers that is used to make decisions about costs, pricing, and who to promote
Procurement Laws
Regulations for conducting purchase of goods and services and awarding contracts - typically involving some form of competitive selection
What is required of the airport through federal regulations for construction projects over $100,00?
Airport is required to obtain a bid guarantee equal to 5% of bid price, and bond equaling 100% of bid price
What is required of the airport through federal regulations for construction project over $2,000
Provide weekly reporting of wages
Definition of Value Engineering
Substituting materials and methods for less expensive alternatives that don’t compromise functionality
Federally grant funded projects exceeding $100,00 must be:
Publicly advertised with information on how to bid for the work; when bids are due; and date, time, and place of the bid opening
Sealed Bid Method
Contracts for construction and equipment must go to the lowest RESPONSIVE and RESPONSIBLE bidder
Competitive Proposals
Provided state and local laws allow the process, an RFP can be used - selection is not limited to the lowest price but may include other factors such as project approach, experience of proposer, personnel, etc.
Design-Build
One entity works under a single contract with owner to provide design and construciton services
Task-Order
Permit government stocks of specific items to be maintain at minimum levels and allow direct shipments to user
CMAR
Fill In
Single-source
Fill In
Disadvantaged Business Enterprise
Small businesses that have socially and economically disadvantaged individuals owning at least 51% interest in business; personal net worth cap for eligibility is $1.32 million
What are the Disadvantaged Business Enterprise laws regulation under?
Title 49 CFR Part 26 - Requires a DBE program if they anticipate awarding more that $250,000 in prime contracts using federal funds
Define Airport Concession DBE
Creates competition for concession opportunities - required for primary airports that accept Federal funds
What should an Airport Executive consider when developing airport property?
Physical constraints; zoning regulations; political factors; conveyance (or use) and restrictions, and; legal consel
General Obligation (G.O.) Bonds
Issued only by states, municipalities, and other authorized, general-purpose governments - usually require voter approval, pledge the full faith and credit of the bond issuer as security to the investor
How does the government pay off General Obligation (G.O.) Bonds?
Levying property, sales, or income taxes
Revenue Bonds
“Facilities should be paid for by those who use them” - used to finance a wide variety of airport projects - often 25-30 year terms which result in lower monthly debt payments
Special Facility Bonds
Issued by the airport sponsor in order to obtain tax-exempt status - bonds are secured by the revenue from the indebted facility (hangar, terminal, mx facility, etc) rather then the airports general revenue fund
Hybrid Source Bonds
Airport revenue bonds are combined with PFCs, CFCs, general obligation bonds, or some other pledge to fund a project
Industrial Development Bonds
Special types of revenue bonds suited to small airports - typically issued by a municipality or governmental unity to finance facilities that are then leased to the private entity user at a rental rate equal to the debt service and for a term equal to the maturity of the securities
Airport Improvement Program
Grants are issued to public-use airports that are included in the National Plan of Integrated Airports System (NPIAS) for airport planning, airport development, noise compatibility projects, etc.
Set-Aside FUnds
Portions of AIP funds designed to achieve specified funding - Noise Abatement Programs (35%), Military Airport Program, GA reliever airports
Discretionary Funds
Capacity/safety/security noise - remaining 25% known as Pure Discretionary funds can be used for any eligible project at an airport
Who distributes dictionary monies?
Office of Management and Budget - allow FAA to obligate Congressional apportionments
Where is project eligibility found?
AIP Handbook (in general - large capital projects are eligible but day-to-day costs are required to be paid by the airport)
Lists some eligible improvement for AIP funds:
Site preparation, runway construction/repairs; ground access roads; safety equipment required for certification of an airport facility; land acquisition; etc.
List some ineligible improvement for AIP funds:
landscaping, artwork, parking facilities, airport operational costs, exclusive use ares (FBO ramps), etc.
OMD Circular A-87, Cost Principles for Local Governments
Describes requirements on allowable project costs - governed by the Single Audit Act of 1984
Under OMD Circular A-87: Indirect costs include
Those incurred for a common or joint purpose benefiting more than one cost objective; not readily assignable to the cost objectives specifically benefited, without effort disproportinoate to the restls achieved
FAA Order 5100.39A - Priority System
Describes the priority system for discretionary funds that is used to determine which projects will receive funding - Runway -> Taxiway -> Apron -> etc.
State Block-Grants
the State assumes responsibility for administering AIP grants
Under what legislation are PFCs allowable?
Aviation Noise and Capacity Act of 1990
What airports are allowed to levy PFCs
Commerical service airports enplaning more than 2,500 pax annually
Large and medium-hub airports that collect PFCs must return ___% of their AIP apportioning if the collect $___ in PFCs
50%; $3 OR 75%, $4.50
If an airport violates the Aviation Noise and Capacity Act, what can the FAA do?
Reduce a sponsors ability to collect PFCs to a level necessary to pay off issued bonds
What areas do airports typically cover with insurance?
Property damage, bodily injury, death, and riders
Hanger Keepers Liability covers:
Damage caused to aircraft
Premises Liability covers:
Injury to persons or property
Product Liability covers:
Products, such as fuel and oil, that tenants may sell
Does FAA Part 139 provide any coverage/insurance for airports?
No - passing a safety inspection does not provide coverage for airports in the court of law against lawsuits by tennants
Are airports liable for actions taken by tenants?
Airports can be held accountable for services and products sold by tenants but both the airport and tenants should have their own insurance
What can airports do to mitigate risk? (specific tasks)
Compliance with FAA Part 139; regular training with FAA and TSA; daily inspections; performing risk analysis
EAS was established under what legislation?
1958 Federal Aviation Act
What is the purpose of EAS?
Ensures air service to small communities
What is required by Basic EAS?
Scheduled air service of persons to a medium or large hub (small or non-hub in Alaska at least 400 miles away) with: no more than one intermediate stop; minimum 15 seat aircraft, average of 11+ passengers/day
What are the eligibility requirements for Enhanced EAS?
Airport received service prior to Oct. 23, 1978; more than 50 miles from nearest small-hub; more than 150 miles from hub; the state and local government is willing to contribute 25% of the cost of the air service
What are some of the responsibilities of the airport executive?
Airport operations; grant writing; snow removal; utilities - historically retiring pilots but now full-time professional exectuives
What is required to become an Accredited Airport Executive?
Pass the CM exam; writing requirement; interview with at least 3 A.A.E. members
How do you receive your Certified Member (C.M.) designation from AAAE?
Pass a 180 question multiple choice examination from the Body of Knowledge modules and have received a bachelor’s degree
Airport Legislative Alliance
Represents the U.S. airport system to various political bodies across the nation; doubled the size of AIP; increased PFC cap by 50%
Transportation Security Policy
Represents airport to federal governments in regards to aviation security policy
Regulatory Affairs
Represents airports to EPA, FAA, and DoT
Transportation Security Clearinghouse (TSC)
A nonprofit arm of the AAAE that operations in partnership with the TSA to ensure Security Threat Assessments (STA) and Criminal History Record Checks (CHRC) are accomplished for aviation workers who require access to the secure area of airports
