Santa Barbara Municipal Airport could lose $17 million in Federal Aviation Administration grants over the next five years if an allegation of unfair competition is not addressed quickly.
The funds are typically used for the maintenance and improvement of the airport through projects — such as runway resurfacing — which have helped fuel the almost 40 percent passenger growth at the airport this past year.
The funds could be withheld, however, over an economic discrimination verbal complaint filed with the FAA filed by flight school Above All Aviation, an airport tenant.
The complaint alleges unfair competition by independent flight instructors who are not airport tenants. While brick-and-mortar flight schools pay rent and associated fees with owning planes, independent flight instructors do not bear those costs by working without an office at the airport and teaching clients who own their own planes.
To address the issue, the airport administration today will make recommendations to the airport commission — the seven-member committee that advises the City Council — that include requiring independent instructors to operate out of a brick-and-mortar office, and requiring them to work for a flight school or set up their own.
Airport Director Henry Thompson, however, said the recommendations will be forwarded to the City Council, regardless of how airport commision members vote.
“The rules are going to have to be modified regardless,” Mr. Thompson told the News-Press. “It’s a compliance issue with the FAA that we’re working on addressing.”
According to independent contractor Michael Fountaine, there are advantages and disadvantages to both business models.
Independent contractors tend to lose clientele who do not own planes, he said.
When faced with a potential client who does not own a plane, he has to say “ ‘When you’ve bought an airplane, give me a call.’ I lose tons of business because of that,” Mr. Fountaine said.
He added that federal funding and scholarships do not apply to independent contractors who are not certified under federal regulations.
All instructors, independent or not, must pay $200 per year per pilot for a Santa Barbara airport permit. Not everybody, however, is paying the fee to obtain a permit, according to the airport administration.
It is a “small group who comply with the existing rules,” said Mr. Thompson. “People are operating too loosely out there. …The FAA understands that we’ve been working on it.”
The need for speed stems from the fact that SBA could lose $17 million in grants over the next half a decade if the FAA launches an investigation. Whether or not the FAA takes a closer look depends on the nature of the complaint.
“Should the complainant submit a written complaint … the FAA would initiate an investigation,” read a letter penned a year ago by FAA Airports Compliance Program Manager George E. Aiken. “We strongly suggest that the airport sponsor review and revise rules and standards to establish and maintain an equitable competitive environment in which tenant and non-tenant entities can do business without unfair advantage or unintended disadvantage.”
Above All Aviation President and CEO Shawn Sullivan declined to speak in detail of the matter. “I’d like the airport to handle this,” Ms. Sullivan told the News-Press. “FAA and them have an idea of what’s fair.”
What is fair and unfair seems to differ from party to party. Mr. Fountaine said requiring independent instructors to operate out of a brick-and-mortar office appears unnecessary.
“We teach in an airplane,” said Mr. Fountaine.
“Obviously the airport director is in a very difficult position,” he added. “He’s in a position where he’ll have to solve this, and he’ll have to solve it quickly. What they’re worried about is that this person’s going to pull the plug on the formal complaint.”
After analyzing the costs and benefits of each business model — between being a tenant or non-tenant operator — a decision must be made, according to Mr. Fountaine.
“If the brick-and-mortar operators are arguing that it is such an advantage to be a freelance operator … there’s nothing stopping them from conducting as a freelance operator,” said Mr. Fountaine.
Eventually, the City Council will be involved in addressing the complaint.
“City Council comes in once we get into the details of changing the minimum standards, rules and regulations,” said Mr. Thompson. “City Council has to ultimately approve.”
Mr. Thomspon said he and his team plan on presenting recommendations to the City Council in either January or February.
“There’s a lot of work to be done,” he said.
The Airport Commission meeting takes place at 6 p.m. today at the Airport Administrative building, 601 Firestone Road, Santa Barbara.