Becoming Bakersfield Jet Center - NATA

OFFICIAL PUBLICATION OF THE NATIONAL AIR TRANSPORTATION ASSOCIATION1 st Quarter 2011BecomingBakersfieldJet Center∑page 32Photo courtesy Bakersield MagazineAlso Inside:• Cowboy Charter Operations• FAA Legal Interpretations• A Closer Look at RTTFAgreements

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AviationBusinessJournalOfficial Publication of theNational Air Transportation AssociationChairpersonJames MillerFlight OptionsCleveland, OHVice ChairpersonTodd DuncanDuncan Aviation - LincolnLincoln, NEImmediate Past ChairKurt F. SuttererColumbia, ILBoard of DirectorsCharles CoxNorthern Air, Inc.Grand Rapids, MIRobert “Buddy”StallingsEastern Aviation Fuels, Inc.New Bern, NCBob MarinaceKey AirOxford, CTJames P. SweeneyFargo Jet CenterFargo, NDPublisherJames K. CoyneEditorShannon ChambersEditorial DirectorEric R. ByerPresidentJames K. CoyneNATAAlexandria, VATreasurerBruce Van AllenBBA Aviation FlightSupportOrlando, FloridaAlfred G. PetersonNantucket MemorialAirportNantucket, MAMark WilleyBridgeford Flying ServiceNapa, CAAnn PollardShoreline Aviation, Inc.Marshfield, MAContributing EditorsMaryanne Arthurwww.justwritesolutions.comAmy HornadayLinda PylantArt Direction/DesignLaurel Prucha MoranBlue Room Designwww.blueroomstudio.comAdvertising SalesMarshall BoomerThe YGS GroupAdvertisingFor advertising information, call 800.501.9571 x123 oremail marshall.boomer@theYGSgroup.com4226KingStreet•Alexandria,VA22302800/808-6282•Fax703/845-8176www.nata.aeroSteven Loyd (President),Bakersfi eld Jet Center1 st Quarter 2011Issue 1 | Volume 9Photos courtesy Fahey Photography, Bakersield, CABirds of a Feather 11By Colin BaneNearly 20 of the most successful general aviation companiesin North America now belong to the Pinnacle Air Network,first founded in 1993; and that number is steadily increasing.Find out more about their goal to help negotiate new dealson behalf of their growing membership to bring some of thecosts down so that they can put those savings to better useand better serve their customersCowboy Charter Operations 17By Lindsey C. McFarrenThe legitimate on-demand charter community – those with avalid Part 135 air carrier certificate – refer to those operatorsconducting illegal charter activity as “Part 134 ½ operators.”Our industry has been tarnished enough by the improper actionsof Part 134 ½ operators. It’s time to tame the cowboys.Becoming Bakersfield Jet Center 32By Paul Seidenman & David J. SpanovichWhen Loyd’s Aviation, Inc. opened its sleek, new BakersfieldJet Center at Meadows Field (BFL) in March 2009, the countrywas in the grip of a severe recession and general aviation activityhad all but stalled. But, as company President Steve Loydexplained, Bakersfield Jet Center was a bet on the future.President’s Message By James K. Coyne 7Inside Washington By Eric R. Byer 9FAA Legal Interpretations By Jacqueline E. Rosser 22How will NATA’s Policy Agenda Aid its Members in 2011?By Kristen Moore 27Advertiser Index 31A Closer Look at RTTF Agreements By Michael France 38NATA’s 2010 Aviation Business Roundtable Recap 40DISCLAIMERThe information in this publication is general in nature, is prepared strictly for informational purposes, and is notintended to serve as legal, accounting, financial, insurance, investment advisory, aviation operation or safety, or otherprofessional advice as to any reader’s particular situation. Readers are encouraged to consult with competent legal,financial, insurance, investment advisory, aviation, and/or other professional advisors concerning specific mattersbefore making any decisions. Statements of fact and opinion are the responsibility of the authors alone and do not implyany opinion on the part of the officers, employees, and/or members of NATA. Publication of any advertisement in thismagazine is not an endorsement of the vendors or advertisers nor of the products advertised.COPYRIGHT & TRADEMARK NOTICE© 2011. National Air Transportation Association, Inc. All rights reserved. All articles, stories, and other content (includingbut not limited to text, graphics, layout, and design) (the “Content”) of this magazine are the intellectual property ofNATA and/or of its licensors and are protected by United States copyright, trademark, and other intellectual propertylaws. No Content may be copied, modified, published, broadcast or otherwise distributed without the prior writtenpermission of NATA or the licensor of such Content.“NATA” and “NATIONAL AIR TRANSPORTATION ASSOCIATION” are registered trademarks of NATA.“AVIATION BUSINESS JOURNAL” are trademarks of NATA.

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President’s MessagePrivate Sector InitiativeWhat It Means at Your AirportBy James K. CoyneThe mid-term electionswere about many things:taxes, jobs, the deicit,the size of government,Obama, congressionalleadership, and local issues too; fewthings got voters more upset in theweeks before the election than reportsof corrupt, bloated, and wasteful localgovernment. New Jersey GovernorelectChristie’s vivid confrontationwith public employee unions wentviral on the Internet, and exit pollsshowed that most Americans are worriedthat state and local governmentbudget, payroll, pension, and beneitlevels are unsustainable. It didn’t helpthat there were widespread reports ofgraft and corruption from Californiato Illinois to Maryland. Government,at all levels, was told by voters to goon a diet!Many people are fundamentallysuspicious that government bureaucratsare more interested in self-preservationand empire-building thandelivering local services eficiently.Government programs seem to lastforever. Even when they underperformor fail, politicians are tempted tothrow more money at them. But now,the tide has turned. Austerity is “in”and everyone is looking for ways tocut out the fat and lighten the load onlocal taxpayers.Your airport, of course, is not immunefrom this iscal contagion, especiallyif it depends on the local communityfor inancial support. Airportcommissions face public scrutiny oftheir budgets, and if, for one reasonor another, revenue is down, they facethe same dificult choice that everylocal government entity has to make:Should we increase fees or must wecut back on expenses somewhere?Hundreds of airports are strugglingwith this question right now, as manyof them face the reality of less lightactivity with fewer commercial andgeneral aviation operations over thepast few years. But, this is just partof a much greater struggle across thecountry, as local and federal policymakersgrapple with fundamentalpolitical questions: Government orthe private sector? Who should weturn to for economic growth? Who canmanage with limited resources mosteficiently and fairly? Who can get thejob done? On whom should we rely?When I worked for PresidentReagan years ago, this debate was afamiliar one, but Mr. Reagan admittedhis bias toward the privatesector. He knew that government wasimportant and necessary, but it alwaysseemed to him that bureaucratshad very different incentives thanbusinesspeople had. Private sectorinitiative, he said, gets things done.Public sector initiative might be anoxymoron.Airport managers and commissionersface this issue every day, and manyof them know that their airport succeedslargely because of the initiativeof the businesses based at that airportand the off-airport businesses thatthey serve. More importantly, federalguidance to airports is very clear: theairport doesn’t exist to make a proit,but rather to support the local community,foster economic growth, andprovide other non-economic beneitslike emergency services and supportfor healthcare providers.With all the budgetary problemsfacing some airports, however, airportcommissioners face hard decisionsand sometimes “simple” answers aretempting, even when wrong. Mosttempting, it seems, is the strategyof forcing a private FBO to leave,usually at the end of its lease, andhaving the airport offer FBO servicesdirectly. There’s a pot of gold hiddenContinued on page 8Aviation Business Journal | 1 st Quarter 2011 7

President’s MessageContinued from page 7somewhere in that FBO, they must think. How wrong theyusually are!Airport-run FBOs exist, and in some locations makesense. In most cases, however, the lack of private sectorinitiative is economically fatal. The airport is constrained bypublic sector employment rules that reduce its workforcelexibility and add extra costs. Also, few public sponsors areprepared for the liability issues that come with direct operationalresponsibility. But most of all, they misunderstand theservice demands of a time-sensitive aircraft user communityand rarely manage costs as consistently and effectively asprivate sector owners.Private sector FBOs, by contrast, have used their initiativein recent years to invest millions of dollars in new passengerfacilities, on-line ramp safety training, new technology thatgives pilots, passengers, and aircraft dispatchers real-timeaviation-related information, modern fuel safety and storageprograms, and new state-of-the-art hangars—not to mentiona wide variety of marketing investments to bring more basedand transient aircraft to their facility. In fact, advertising expendituresby airport-owned or managed FBOs is less than1% of all FBO advertising. Governments must just expect thepublic to come when they feel like it. Private businesses, onthe other hand, are eager to offer incentives, and these extraefforts can make the difference between proit and loss atmany small airports across the country.Also, I’ve seen no evidence that airport-run FBOs savetheir customers any money. Government price increases inother areas, from highway and bridge tolls to postage rates,convince me that government entities are quick to raiseprices whenever they face a budget shortfall. Private sectoroperators usually pay much closer attention to the need tomaintain competitive prices that will preserve or increasemarket share.Americans understand that there are jobs that only thepublic sector can do, but I don’t think that pumping fuel isvery high on that list. Do we expect to ind government-rungas stations when we need gas for the family sedan? Thoseairport commissioners or managers who, out of desperation,think they can balance their budget by pumping fuelshould, at a minimum, give it a second thought. Their bestinancial strategy is to operate the airport as eficiently aspossible—and let private sector initiative meet the needs ofthe marketplace.Raise Your Voice,Get InvolvedAs the Voice of Aviation Business,NATA’s focus is to protect theinterests of aviation businessesthrough aggressive and professionalrepresentation. To get involved, call(800) 808-6282 or visit www.nata.aero.8 Aviation Business Journal | 1 st Quarter 2011

Inside WashingtonIf You Haven’t Yet DoneSo, It’s Time to EducateYour Local Airport BoardBy Eric R. ByerIn his opinion editorial, JimCoyne addresses the virtuesof private sector versus publicsector initiative in coping withthe severe iscal crisis many ofAmerica’s airports face as a result of thecurrent economic recession. Jim does agreat job of laying out the beneits accruedfrom private sector businesseson airports getting things done.Our RoleOne of the most important thingsthat NATA members in the privatesector can do, whether they are anFBO, Part 135 on-demand air charteroperator, Part 145 repair station, lighttraining facility, aircraft managementcompany or any other type of aviationbusiness, is educate local airportboards or commissions on their businesses’importance to airports andcommunities. Former Speaker of theU.S. House of Representatives TipO’Neill coined the phrase, “All politicsis local.” This statement is especiallytrue when considering the politicsinvolving a local airport board. In alllikelihood, airport board members areappointed by a local political leaderas a “thank-you” for the airport boardmembers’ support in an electionor previous dealings. And, for ourmembers, all too often an uneducatedairport board makes critical inancialand regulatory decisions affectingaviation businesses.Now, I am not saying that everyairport board is not educated onthe importance of the businessesat their airport; there are certainlyairport board members who arepilots, aviation business owners oremployees, or aircraft owners whoalready understand general aviation’scritical role. Also, NATA does havesome incredibly proactive memberswho have spent a great deal of timeeducating airport board members onthe virtues of the service they provideto the airport and its surroundingcommunity. But over the last fewyears, I have noticed a growing trendof general aviation airport boardsmaking decisions that simply do notrecognize the immense value of thebusinesses that serve on that ield.Whether it be ive bored local citizenswho are tired of watching C-Span andwant to complain about aircraft noise(even though the airport was probablythere long before they were born) orare concerned with jet fuel purportedlybeing sprayed on their roofs,the not-in-my-back-yard crowd hasdone an impressive job of convincinglocal airport board members how theairport user and business communityat the ield are the devil incarnate.The bottom line is that we needour members to become increasinglyproactive in this education process.It is amazing how the tune changeswhen an airport board member iseducated on the beneicial economicimpact, including jobs, philanthropicendeavors, and key civic and businessleaders’ use of the airport, that theairport businesses have on the localcommunity.If you need help, give NATA a call.Jim Coyne does a fantastic job ofeducating local airport boards and, iftime permits, he would welcome theopportunity to visit your local airport.NATA staff is always available toprovide the background informationand guidance you might need for thisendeavor.Consider becoming more active ingetting the message out to your localairport board. Remember, all politicsis local!Aviation Business Journal | 1 st Quarter 2011 9

Birds of a FeatherThe Pinnacle Air Network Proves There’sStrength in Flocking TogetherBy Colin BaneNearly 20 of the most successful general aviationcompanies in North America now belongto the Pinnacle Air Network, irst founded in1993; and that number is steadily increasing.At least four new members have come aboardsince the NBAA 2010 meeting in October, where PinnaclePresident Jim Taylor’s Peak Power presentation was a hit.Taylor says he’s in the midst of an aggressive campaign toadd at least another ive companies to the network in 2011.Volume is the name of the game, said Taylor:“We started a campaign this year at NBAA and ran an adin Pro Pilot because we’re looking to add more members andmore vendors. It’s all about volume: The more members youhave the more volume and the more you get the attentionof the supplier-vendors out there that we buy from. That’s alarge part of what we are: A buying co-op. Back in 1993 wesaw an opportunity to get together and do some co-op buying,and there was a group of us that had the foresight to seethe value in going into those negotiations collectively ratherthan individually.”The Pinnacle Air Network is a limited liability corporationcollectively owned by its members, a roster that nowincludes new members: Aerolíneas Ejecutivas in Toluca,Mexico; Muncie Aviation in Muncie, Indiana; Kansas CityAviation Center in Olathe, Kansas; and Midwest Air Centerin Chesterield, Missouri, in addition to longer-standingmembers like Cutter Aviation (Will Cutter is chairman ofPinnacle Air Network) and Elliott Aviation (Wynn Elliott isvice chairman). Other Pinnacle members include SkytechInc., Aerodynamics Inc. (ADI), Epps Aviation, Flightcraft,Flightline Group, Executive Beechcraft Inc., Central FlyingService, Stevens Aviation, Landmark Aviation, TulsairBeechcraft, Woodland Aviation, Eagle Aviation, PiedmontAircraft Company, and Million Air.“The roster alone was a big selling point for me,” explainedAngelo Fiataruolo, general manager at Kansas CityAviation Center and one of the newest members of the network.“That list is a who’s who of companies in this industrythat I respect and am proud to be associated with. Obviouslywe did our due diligence to make sure our membership inthe network would have substantial and tangible inancialbeneits, too; but irst and foremost I just thought it wouldbe great to be a part of that group.”Fiataruolo says he’s also honored to be bringing someof his company’s own resources—and signiicant addedvolume—to the table, and Taylor says that’s what Pinnacle isall about.“Obviously the membership is made up of some tremendouscompanies—these are companies that have greathistory and heritage,” Taylor said. “We really want to bringin folks who have a high degree of integrity in this business.If you look at our list of members, you will see that we havedone just that very thing. These people bring a lot of valueto the table because of their years and years and years ofexperience, and then we also have some younger people andsome younger companies now, and they bring some greatnew ideas to the table, too.”The Pinnacle Air Network currently has volume discountand VIP programs with ifteen different supplier-vendors,including biggies like Dallas Airmotive, Aviall and UPS, withnew vendors coming on board all the time to offer specialpricing to the network. Will Cutter of Cutter Aviation ischairman of the Pinnacle Air Network (“Evidently I left theroom when the nomination came up,” he jokes) and saysthat new members see those beneits immediately.“There’s a one-time $10,000 initiation fee, and that givesyou a percentage of ownership in Pinnacle Air Network,LLC,” Cutter explained. “Just on ownership stake alone thatinvestment nearly doubles in value on Day One. The otherside of it is that the very irst engine you send to DallasAirmotive, you’ll more than make that initial investmentback over what you would have paid as a standalone FBO,because we’ve got a better program with Dallas Airmotivethan anybody else in the world. If you’re going to do an enginea year, or two engines, or you’re going to buy parts fromContinued on page 13Aviation Business Journal | 1 st Quarter 2011 11

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Birds of a FeatherContinued from page 11Aviall, then you’re going to make that investment back inthe irst year if not in the irst three to six months. The shortterm beneit of joining Pinnacle is that you’re going to savesome money right away, and the long term beneit is you’regoing to save a lot of money over time and you’re also goingto get access to the wealth of knowledge and experience thatthis network represents.”Pinnacle bills itself as “a family of proudly independentbusiness men and women whose names and faces are knownto their customers – and whose reputations and integritystand behind every product and service they sell.” Taylor’sall for independent spirit and small business entrepreneurship,but says he realized early on that general aviationcompanies would need to stand together in order to upholdthose values in the face of increasing competition, particularlyduring an economic downturn.“We don’t have a big agenda,” Taylor said. “It’s all aboutcreating additional value and getting better bottom-lineproit for our members by allowing them to buy with bettermargins than the competition. A network like Pinnaclebecomes even more valuable in a tough economic time likewe’ve been going through, because every little bit helps.We’re in an environment where you have to look after yourpennies.”Why would a group of competitors within the generalaviation industry join forces in a network like Pinnacle? It’ssimple math and a matter of strength in numbers, accordingto Taylor:“Are some of our members competitors with each other?Oh, yeah! There’s deinitely some overlap, but there’s alsoan acknowledgment among the members that none of themcan afford to be a loner in this economy, especially when itcomes to purchasing. I’m talking about fuel, maintenance,airplanes, the whole program: When we can approach asupplier-vendor and drop some big numbers on them, thenwe can get right down to business to make better marginsfor all of our members, help put more people in airplanes,and divert some of those crucial resources to other areas toimprove the customer experience. It’s good for the vendors,too, because it means they’re moving more product and nothaving to spend all their time dealing with each individualcompany. Any time you can consolidate and buy a lot moreproduct, you’re going to get a better price break for it.”Indeed, more and more suppliers are lining up to offerpricing programs to the network, and Taylor’s 2011 goals areaggressive on this front, too: He’s aiming to add at least adozen new relationships with vendors to offer better programsfor his members and increase the overall value of thenetwork.“At irst it was a hard sell, trying to convince some ofthese vendors to come down on their prices to work with usas a larger network,” Taylor admitted. “They’d say to me,Continued on page 15Pinnacle Air NetworkAerodynamics, Inc.Cutter Aviation, Inc.Eagle AviationElliott Aviation, Inc.Epps Aviation, Inc.Executive Beechcraft, Inc.Flightcraft Aviation, Inc.Flightline Group, Inc.Landmark AviationPiedmont AircraftTulsair Beechcraft, Inc.Woodland Aviation, Inc.Central Flying Service (CFS)Stevens Aviation, Inc.Skytech IncAs listed on www.pinnacleairnetwork.com as of 1/21/2011.Aviation Business Journal | 1 st Quarter 2011 13

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Birds of a FeatherContinued from page 13‘Well, we have a large part of your business already, so whydo we need to do this?’ And I’d say, ‘You might have it now,but if we can’t work together on a better program for morevolume then you may not have our business in the future.’Now I think the vendors see the value in it, and more ofthem are trying to get in on it. As an example, we have agreat, long relationship with Dallas Airmotive. Other companieshave tried very hard to get their foot in that door andwe open it back up to bids every two years; but so far theyhaven’t prevailed. And, as a result, we have the best pricingprogram we can possibly get with that company. Let’s sayyou’re a new member just coming on with Pinnacle and youneed to send a turbine engine to Dallas Airmotive for overhaul:You’re going to see a tremendous discount over whatyou might have been quoted without that relationship andthe volume of the entire network behind you. The beneits ofmembership in our network are immediate.”Taylor says the collective strength of the Pinnacle AirNetwork has had other less tangible but equally importantbeneits, and that the shared wisdom and experience of thenetwork is helping to show the path out of the recession andinto a prosperous future for everybody involved.“This is a critical time for any business,” Taylor said. “It’sa time to watch your spending and take a look at every singleline item to see where you can improve the margins. It’s alsoa crucial time for marketing, and you’ve got to shout longand hard about how important the customer is, then makegood and sure that you’re taking the very best possible careof those customers. And, like I’ve said before, it’s a timeto start looking at what new kinds of partnerships you canforge. We meet twice a year at our different members’ facilitiesto share our different perspectives and we always comeaway wondering, ‘How did we ever do this without eachother?’”So, what does a man with intimate knowledge and insiderperspective on many of the most successful companies in theindustry see on the horizon for his members?“I think there’s going to be a good future for generalaviation and I think our members are well positioned forit,” Taylor said. “I don’t know that we’ll ever see the kindof rapid growth we once saw, but that might actually befor the best. I think what we’ll see now is a long period ofslow growth. I can tell you irsthand that we have a lot ofentrepreneurial spirit in this industry. The people I workwith, these are people who will tighten their belts and they’llput their thinking caps on and weather the storm, knowingthat we’ll all be stronger when it’s over. We’ve already beenseeing some positive trends coming into the New Year. I, forone, am optimistic about what’s ahead. It’s not going to berobust, necessarily, but I think we’re all headed in the rightdirection now. My goal to help us all get where we’re going isto help negotiate new deals on behalf of our growing membershipto bring some of the costs down so that they can putthose savings to better use and better serve their customers.I look at the people we have in this network and the strengthof these companies and I feel really good about where we’reheaded.”For more information about Pinnacle Air Network, visitwww.pinnacleairnetwork.com.AVIATION & AIRPORT LAW PRACTICEOur multi-state law offices represent FBOs, Ground Handlers,of aviation matters, including acquisitions, day to day legal matters,contracts and leases, Part 13 and 16 complaints, insurance defenseand enforcement matters, as well as, commercial litigation.OUR TEAM OF SEASONED ATTORNEYS HAS THEEXPERTISE YOU NEED.Call today to arrange a consultation with theAVIATION AND AIRPORT LAW PRACTICE GROUP:w.mklawnyc.comAviation Business Journal | 1 st Quarter 2011 15

Cowboy Charterowbo OperatorsPutting a Stop toPart 134 1 /2Charter ActivityBy Lindsey C. McFarrenThe legitimate on-demand charter community—thosewith a valid Part 135 air carrier certiicate—refer tothose operators conducting illegal charter activityas “Part 134 ½ operators” or perhaps more commonly:“Those scoundrels who offer transportationat cut-throat prices, steal my clients, and have no regard forregulatory requirements.” One region of the country is evenreferred to as “The Wild West” of charter operations becauseof the allegedly rampant 134 ½ activity.Illegal charter operations came to the public eye in 2005with the Challenger crash at Teterboro, when Platinum JetManagement and Darby Aviation became the Department ofTransportation (DOT) and Federal Aviation Administration’s(FAA) “Most Wanted” aviation bad guys. The enforcementproceedings against these two companies—and their ownersand employees—have been closely watched by the aviationindustry. The illegal activities of Platinum Jet and Darby haveresulted in DOT penalties; FAA revocation of certiicates; andinally, federal fraud indictments, guilty verdicts and jail timefor some Platinum Jet and Darby executives and employees.These enforcement proceedings have certainly been twoof the most drawn out and dramatic cases in our industry’shistory; but those two companies are not the only ones toconduct illegal charter activity and become the focus ofenforcement activity.Typically, when an aircraft operator crosses the line intoillegal air charter activity, it’s because the operator has runafoul of Part 119, Part 135 or both.Part 119 outlines the requirements for air carriers andcommercial operators. It deines direct air carrier as a personwho provides, or offers to provide, air transportation andwho has control over the operational functions performed inproviding that transportation. It also deines a wet lease asany leasing arrangement whereby a person agrees to providean entire aircraft and at least one crewmember.There are a few circumstances in which a wet leasemay be legally conducted under Part 91 (see Part 91.501).However, any time lights are conducted under a wet leaseand for compensation or hire, the individual or company arrangingthe light and holding operational control must havea Part 135 on-demand air carrier certiicate.Part 135 outlines the requirements for commuter and ondemandoperations. Speciically, it is applicable to the commuteror on-demand operations of each person who holds, oris required to hold, an air carrier certiicate under Part 119.Below are summaries of other, lesser-known enforcementcases resulting from illegal charter activities. Two of thesecases demonstrate how Part 135 certiicate holders can stepoutside the authorizations of their certiicate and becomeillegal charter operators themselves.Nix Flying ServiceThe scenario presented in Administrator v. Nix in thelate 1990’s is a pretty standard example of the Part 134 ½concept. Tommy Hue Nix, the owner of Nix Flying Service inBelmont, Mississippi, received a 120-day suspension of hiscommercial pilot certiicate due to conduct of illegal activities.Over the course of several years, Nix provided both theaircraft and pilot to Belmont Homes, Inc. for compensationthrough a somewhat familiar scheme. The aircraft wasowned by Nix’s wife’s company Aircraft Leasing. The pilotswere employed by Nix Flying Service. Neither company helda Part 135 air carrier certiicate. Although the lease agreementand pilot services agreement were separate contracts,during the course of the FAA’s investigation, it became clearthat Aircraft Leasing had virtually no involvement in theactual lights. Belmont Homes’ employees called Nix to arrangelights. Nix was found to have held operational controlof the lights, choosing pilots, handling light planning andContinued on page 19Aviation Business Journal | 1 st Quarter 2011 17

If You’re an Aviation Business, We’re in Business for You.That general aviation aircraft getoff the ground at all is due in largemeasure to the aviation servicebusinesses that support them.It is, after all, the FBOs, flightschools, maintenance and repairorganizations and GA airports thatemploy the good folks on theground who make it possible toget off the ground.Aircraft operating companies andaviation service businesses makegeneral aviation work.Founded in 1940, the National AirTransportation Associationaggressively promotes safety andthe success of aviation businessesthrough its advocacy effortsbefore government, the mediaand the public.If you work in an aviation business,NATA is your association.Get involved. Get assistance.Benefit from valuable programsand forums designed just for you.Give us a call at 800-808-NATA or visit us at www.nata.aero anytime.

Cowboy Charter OperatorsContinued from page 17other arrangements, and securing the aircraft from AircraftLeasing. Because Nix performed these tasks for compensationor hire, the lights could not be operated legally under Part 91.Nix was found to have violated FAR 119.49(g) whichprohibits any person from operating as a direct air carrieror as a commercial operator without, or in violation of, anappropriate certiicate and appropriate operations speciications.Nix also conducted these faux commercial operationswithout proper pilot training, violating Parts 135.293(a) and(b) and 135.299(a).Don Bessette Aviation, Inc.Administrator v. Bessette illustrates illegal activities conductedby an operator with a valid Part 135 air carrier certiicate.Trinity Hospital secured transportation for compensationfrom Don Bessette Aviation, Inc. Though the aircraftand pilot services were contracted separately, the speciicterms of the aircraft lease essentially forced certain pilotsto be used on the lights. Bessette Aviation supplied the aircraft,while a separate company, Aviation Services, providedthe pilots. Aviation Services, previously been owned by DonBessette’s holding company, was sold to two pilot-employeesin May 2003. The two entities were co-located and undoubtedlyrelated. As the Administrative Law Judge stated, “As apractical matter, aircraft and pilot were leased as a team.”However, Part 119 also requires compliance with issuedOperations Speciication. In 2004 when Bessette Aviationconducted the illegal lights, its Ops Specs limited the companyto single-pilot on-demand activity in only one speciicaircraft with only one named pilot. The irony of this caseis that Bessette Aviation held the appropriate certiicate toprovide an aircraft and pilots for compensation, but the aircraftand pilot used for some of the lights were not listed onBessette Aviation’s Ops Specs. Further, the pilot used was nottrained in the aircraft used, according to Part 135 regulations.Bessette Aviation was found to have operated lights onApril 14 and 22, 2004, under Part 135 in violation of FAR119.49(c)(5), 119.49(c)(6), 135.293(a)(1), 135.293(b), and135.299(a). Bessette Aviation faced a civil penalty of $3,000for these violations. FAR 119.49 refers to Ops Specs requirements,while 135.293 and 135.299 address pilot training forPart 135 operations.Interstate HelicopterOn March 4, 2008, a Cessna Citation I operated byInterstate Helicopters, encountered American WhitePelicans on departure from Wiley Post Airport in OklahomaCity. Tragically, the encounter resulted in ive fatalities,including both pilots and three passengers. InterstateHelicopters was a certiicated Part 135 air carrier. However,it was only authorized to ly helicopters, not the aircraft thatcrashed in 2008. The light had been chartered by UnitedEngines. The Citation I was owned by an orthopedic clinic.The pilots were not employed by Interstate Helicopters.Interstate Helicopters reportedly “leased” the airplaneto United Engines on a number of occasions, sometimesinvoicing the airplane as a “sales demo”. (The president andCEO of United Engines testiied neither he nor the companyhad any intention of buying an aircraft and he had toldInterstate Helicopters that repeatedly.) The NTSB claimedInterstate Helicopter’s arrangements “circumvented”proper certiication and authorization. The FAA revokedInterstate Helicopter’s Part 135 certiicate in September2008. (Interstate Helicopter was issued a new certiicate inJanuary 2009.) It’s not just the operator who faced enforcementaction – another pilot involved with InterstateHelicopters received a 30-day suspension of his airlinetransport pilot certiicate for failing to meet Part 135 trainingrequirements on one of these so-called “demo lights.”Combating Illegal CharterAlthough we might not always agree with the FAA’s regulationsor enforcement of those regulations, the air carrierqualiications and requirements exist for a reason. Asidefrom the obvious concern of losing business to the Part 134½ operators, legitimate air charter operators are subject toFAA oversight. Training requirements are more stringent forpilots lying Part 135 operations than for Part 91 operations;maintenance standards are also stricter. Part 135 pilots andmaintenance personnel are subject to drug and alcohol testing.Finally, the DOT requires a minimum level of insurancecoverage be obtained by the individual or company prior tothe FAA issuing a Part 135 certiicate. In short, Part 119 and135 requirements provide an additional level of operationalsafety over Part 91 regulations and ensure the operator isable to appropriately handle losses if that level of safety fails.NATA/FAA HotlineNATA and the FAA launched the Illegal Charter Hotlinealmost two years ago in a step to combat illegal charter activity.The hotline, which is staffed by an independent thirdContinued on page 21Aviation Business Journal | 1 st Quarter 2011 19

ISON, TX • ADS • ASHEVILLE, NC • AVL • BLOCK ISLAND,D • CALGARY, AB • YYCFixed• CEDARBaseRAPIDS,OperationsIA • CID • CHARTESVILLE, VA • CHO • CLEVELAND, OH • BKL • DALLAS,DAL • FAYETTEVILLE, NC • FAY • FREDERICK, MD • FDK •EENSBORO, NC • GSO • HOUSTON, TX • IAH • LAUGHLINLHEAD CITY, AZ • IFP • LAWRENCEVILLE, GA • LZU • LEEG, VA • JYO • LINCOLN, RI • SFZ • LOS ANGELES, CA • LADDLETOWN, RI • UUU • NICE, FR • LFMN • NORFOLK, VAF • NORTH KINGSTOWN,Maintenance,RI • OQU • OCALA,RepairFL •&OCF • PEE, FL • PHK • PALM BEACH, FL • F45 • PARIS, FR • LFPBEIGH, NC • RDU • ROANOKE, Overhaul VA • ROA • SAN ANTONIO,• SAN DIEGO, CA • SAN • SCOTTSDALE, AZ • SDL • SIOULLS, SD • FSD • SPRINGFIELD, IL • SPI • SYRACUSE, NY• TORONTO, ON • YYZ • VANCOUVER, BC • WASHINGTOLLES, VA IAD • WAUKEGAN, IL • UGN • WESTERLY, RIT • WHITE PLAINS, NY • HPN • WICHITA FALLS, TX • SPSCharter & ManagementSTON-SALEM, NC • INT • ADDISON, TX • ADS • ASHEVILLC • AVL • BLOCK ISLAND, RI • BID • CALGARY, AB • YYC •EDAR RAPIDS, IA • CID • CHARLOTTESVILLE, VA • CHO •VELAND, OH • BKL • DALLAS, TX • DAL • FAYETTEVILLE,AY • FREDERICK, MD • FDK • GREENSBORO, NC • GSOUSTON, TX • IAH • LAUGHLIN/BULLHEAD CITY, AZ • IFPRENCEVILLE, GA • LZU • LEESBURG, VA • JYO • LINCOL1500 CityWest Blvd., Suite 600 • Houston, TX 77042SFZ • LOS ANGELES, CA888.362.6738• LAX • MIDDLETOWN, RI • UUUE, FR • LFMN • NORFOLK, www.landmarkaviation.com VA • ORF • NORTH KINGSTOWI • OQU • OCALA, FL • OCF • PAHOKEE, FL • PHK • PALM

Cowboy Charter OperatorsContinued from page 19party, receives dozens of calls each year. The original intentof the hotline was to allow any employee or agent of a Part135 on-demand certiicate holder to call a special toll-freehotline, 888-SKY-FLT1 (or 888-759-3581), to report a suspectedillegal commercial light in which an aircraft operatorwithout an FAA Part 135 certiicate is accepting compensationfor transportation in violation of both FAA and DOTregulations. However, the hotline also receives reports ofother types of suspicious activity. Most of the calls are placedby reporters who choose to remain anonymous. Every call isassigned a case code so reporters can call back with additionalinformation or to receive updates.What type of activity should be reported?Many different types of suspicious activity can be reportedthrough the illegal charter hotline. Below are somehypothetical examples:■■■■■■■■■■A pilot could call to report a request from a non-certiicated entity to ly a commercial light—or a“demo light” that seems sneaky!A charter operator or astute client could report decep-tive marketing practices, such as misleading websitesor magazine ads, of certiicated charter operators, noncertiicatedaircraft operators acting as legal charteroperators, or brokers.An FBO employee could call with details on asuspicious-looking operation.A charter operator could report a broker who may becrossing the lines of legality.A charter operator could report an aircraft owner whohas been using the aircraft in ways that indicate theowner is receiving compensation for the lights.Hotline Report GuidelinesCall during ofice hours. Call the hotline during normalofice hours, Monday through Friday from 9 AM to 5 PMEST. If you receive the voicemail, leave a message withcontact information so an agent can return your call. Thehotline is not afiliated with the FAA or NATA, and agentsalways asks callers if they prefer contact information be keptconidential.Provide details. The more details you can provide inthe report, the more likely the FAA will be able to successfullyinvestigate the situation. Provide the tail number ofthe aircraft in question; information about the operator orpilots; speciic lights you think were or will be operatedillegally; and the reason you believe lights are being operatedillegally. For example, some callers suggest anotheroperator—without proper certiication—has provided quotesfor transportation to the legal operator’s clients. Typicallythe “suspicious” operator’s fees are much lower than theoperator who is playing by the rules and the honest operatorloses a client to the lower price. If you ind yourself in thissituation, be prepared to share the details of the lights youlost to the other operator. Who was the client? What werethe dates and destinations of the lights? Is there proof theother operator took those lights (for example, is light planinformation available or did the client show you an itineraryor invoice)? It might sound far-fetched for a client to givea legal operator the itinerary or invoice of an illegal charterlight but some clients will submit information once theylearn they’ve been duped by a shady operator. Of course,others will just be happy to have found a cheap alternative tolegal aircraft charter.Consumer EducationNATA has created two free consumer publications,“Chartering and Aircraft, A Consumer Guide” and “Risksof Illegal Charter,” to aid consumers in both choosing alegitimate on-demand air charter operator and avoidingillegal operators. Both publications are suitable for printingand are available for download at the online store on NATA’swebsite (www.nata.aero). Legitimate air charter operatorsshould provide these publications to their prospective andcurrent clients, especially if a client is receiving solicitationsor quotes from questionable aircraft operators.ConclusionLegitimate air carriers that spend valuable resources tomaintain legal operations need to report aircraft owners andoperators who seem less concerned with complying withregulatory requirements. Use the hotline to report suspiciousactivity. Provide as many details about the situation aspossible and leave your contact information, knowing it willbe kept conidential. And educate your clients! Our industryhas been tarnished enough by the improper actions of Part134 ½ operators. It’s time to tame the cowboys.Lindsey C. McFarren is the president of McFarren AviationConsulting, a safety, security and regulatory consulting firmfocusing on general aviation issues.Aviation Business Journal | 1 st Quarter 2011 21

FAA Legal InterpretationsDeiningPilot Restand MuchMoreBy Jacqueline E. RosserAir carriers, and everypilot who works for one,are very familiar withthe regulations providingfor pilot rest periods.But what exactly is “rest” whenit comes to regulatory compliance?The ine folks at Merriam-Webstersay rest is, among other things,“sleep or a freedom from work orlabor”. That’s actually not too farfrom how the Federal AviationAdministration (FAA) deines rest,but they include a few more conditionsthat either clarify or confusethe situation, depending on yourperspective and whether or not youhave a law degree.According to about 5,000 legalinterpretations (okay, that may be aslight exaggeration), the FAA has saidthat for a “rest period” to be legal itmust be: 1) continuous, 2) determinedprospectively (i.e. known in advance)and 3) free from all restraint from thecertiicate holder, including freedomfrom work or freedom from the22 Aviation Business Journal | 1 st Quarter 2011

present responsibility for work shouldthe occasion arise.Requiring a pilot to answer cellphone calls? No problem. But don’teven think about calling that timepart of a rest period. You failed tomeet part three of the deinition. Calla pilot during his or her rest periodto ask a question about that updatedW-2 he or she iled? Okay. But, if youcall him or her again, you just bustedthat rest period and can’t count anyof it toward meeting your regulatoryrequirement. Why? The rest wasn’tcontinuous.In simple terms, anytime yourequire a pilot to do something, likeanswer a call from you and/or reportfor duty once that call is answered,that time is simply not rest. At leastnot according to the FAA. And, well,when it comes to regulatory compliance(and enforcement!) theiropinion is really the one that mattersmost.If you’ve never heard of thatdeinition of rest before, don’t feeltoo badly. I speak with operatorsevery year who have never heard thathighly detailed deinition of rest, norseen its many interpretations. Don’tbother looking in the FARs for thatdeinition; you won’t ind it there. I’venever found it in the FAA’s inspectorguidance or any Advisory Circulareither.Although you might not realize it,the FAA’s deinition of rest has actuallybeen around for a few decades.Unfortunately, it largely exists onlyin legal interpretations issued by theFAA Ofice of the Chief Counsel.At a recent webinar presented byNATA, we delved into the subject ofwhat makes a legal rest period andhow the FAA’s deinition can make itvery dificult for Part 135 operatorsto comply, particularly those whosebusiness relies mainly on pop-upcharters that have less than ten hoursof notice. If you are a Part 135 operatorand missed it, you can review thewebinar recording by visiting www.nata.aero/webinars.During that session, several operatorswere concerned that, not onlydidn’t they know about the multitudeof interpretations related to restperiods, but also they were unawarethat legal interpretations can and doapply to almost all regulated entities,not just the person who requested theinterpretation.The saying “knowledge is power”comes to mind. Knowing how theFAA will determine whether the restperiods you provide are compliantrequires you to know and understandthese legal interpretations. How canyou do that?To start with, become familiar withthe FAA’s online searchable databaseof legal interpretations (see sidebarto locate that database). Spend anafternoon searching on key phrasesand reading the interpretations. Forexample, a simple search for “restperiod” yields 96 different interpretations.Check back periodically tosee what new interpretations mayhave surfaced. Then take what you’velearned and do your best to make sureyour system for assigning rest periodsactually comports to the FAA’srequirements.Ultimately, the purpose of the restperiod lines up precisely with thedictionary deinition; giving a pilotthe chance to sleep, not work. Butthe FAA determines whether or notyou’ve done that by relying upon theirinterpretations.Finding InterpretationsThe FAA has issued thousands of legal interpretations over the years related to anynumber of speciic regulatory requirements. Any one of them could be insightful to aircarriers, repair stations, light schools, training centers or anyone required to complywith FAA regulations. The agency has begun posting legal interpretations dating backto 1990. All are searchable, but may not be currently available. Navigate to the Oficeof the Chief Counsel’s Regulation Division’s search tool at http://www.faa.gov/about/ofice_org/headquarters_ofices/agc/pol_adjudication/agc200/Interpretations/ to get there.Aviation Business Journal | 1 st Quarter 2011 23

2011 Air Charter SafeMarch 15–16, 2011YouThe Air Charter SafetySymposium is the premierevent focusing on safetyin the on-demand aircharter and shared aircraftownership industry. Thesymposium is a mustattendevent to learn thelatest developments andpractical techniques forimplementation of safetyprograms.9:00 a.m. – 10:00 a.m. 10:00 a.m. – 10:30 a.m. James Christiansen, Chairman,Air Charter Safety Foundation10:30 a.m. – 11:00 a.m. John M. Allen, Director of FlightStandards Service, FAA11:00 a.m. – 12:00 noon Dr. Don Arendt, SMS Program Manager,FAA12:00 noon – 1:00 p.m. 1:15 p.m. – 2:30 p.m. Sponsored by:Shawn Pruchnicki, Lecturer,Department of Aviation,The Ohio State University2:30 p.m. – 2:45 p.m. 2:45 p.m. – 3:45 p.m. Don Rickerhauser, Manager,Safety & Security, Bombardier FlexJet3:45 p.m. – 4:00 p.m. 4:00 p.m. – 5:00 p.m. Bob Schmidt, Director of Operations,Million Air-Dallas5:00 p.m. – 8:00 p.m. Sponsored by:

ty Symposiumr business plan for safety.www.acsf.aero/symposium7:30 a.m. – 8:00 a.m. 8:00 a.m. – 8:45 a.m. Sponsored by:The Honorable Earl Weener,Board Member, NTSB8:45 a.m. – 9:00 a.m. 9:00 a.m. – 10:00 a.m. Bob Schmidt, Director of Operations,Million Air-DallasDon Rickerhauser, Manager – Safety &Security, Bombardier FlexJetPaul S. Sledzik, Director, TransportationDisaster Assistance, Office ofCommunications, NTSB10:00 a.m. – 10:15 a.m. 10:15 a.m. – 11:15 a.m. Tony Fazio, Director, Office of AccidentInvestigation and Prevention, FAAAll events are at the NTSB Training Center in Ashburn, VATote bags11:15 a.m. – 12:00 noon The Honorable Deborah A.P. Hersman,Chairman, NTSB12:00 noon 12:15 p.m. – 4:00 p.m. For more information and to register go to www.acsf.aero/symposium

How will NATA’s Policy Agenda Aidits Members in 2011?By Kristen MooreOn January 5, 2011, the 112th session ofthe United States Congress will convene.New leadership in the U. S. House ofRepresentatives brings new committeechairmen important to general aviationsuch as John Mica (R-FL) the Chairman of the HouseTransportation and Infrastructure Committee, who takesthe gavel from the 36-year veteran of the chamber who wasdefeated in the mid-term elections James Oberstar (D-MN).Thomas Petri (R-MN) will resume his chairmanship of theSubcommittee on Aviation. The new leadership will seek i-nal passage of legislation to reauthorize the Federal AviationAdministration (FAA) as their top priority. However, overthe past three years, legislation to reauthorize the FAA hasnot been stalled in the U.S. House of Representatives butrather in the U.S. Senate. Once again, it appears that swiftpassage of a bill will likely take place by spring 2011 andMembers of Congress remain optimistic on getting supportand inal passage in the senate chamber. Passage of FAAreauthorization is just one of many policy priorities NATAwill be working on this year. While a few ongoing prioritieshave remained on the agenda for a few years, some are newsuch as legislation to override the FAA regarding ResidentialThrough-the-Fence (RTTF) agreements. Each policy priorityhas been outlined below:FAA Reauthorization LegislationPassage of a long-term bill to reauthorize the FAA is a toppriority for NATA. Since September 2007, the United StatesCongress has passed seventeen short-term extensions to ensurethat FAA policies and programs could continue withoutlacking funds. Over the past two years, the U.S. House ofRepresentatives has passed two bills out of its chamber toreauthorize the FAA, while the U.S. Senate completed onebill last year. Conference negotiations were not inalized toallow a bill to be approved and passed by both chambersbefore the end of the 111th Congress last year. NATA’s goalis to ensure that the newly introduced bill this year containsprovisions important to the association and its members.The provisions and their importance are as follows:Foreign Repair Station Language. NATA is concernedwith the requirement to increase inspections on foreignrepair stations. The potential job loss to U.S. repair stationsis high if the European Union retaliates against the tradeagreement with the U.S.No User Fees. Commercial airline travel is the reasonwhy the cost of air trafic control services continues toincrease. General and business aviation are incremental usersof the national airspace system. Increasing the costs fornon-scheduled operators will result in operators lying lessfrequently. NATA supports a reasonable increase in the fueltax to help alleviate the burden on the Airport and AirwaysTrust Fund and is opposed to any new funding proposals forgeneral aviation.Repeal of the Fuel Fraud Provision. The 2005 HighwayBill contained a provision altering the collection method offuel taxes for business and general aviation fuel providers,which has had a signiicant inancial impact on the aviationindustry and constitutes a de facto tax increase. While thetax on aviation jet fuel remained at 21.9 cents per gallon(CPG), the Highway Bill mandated that all taxes on aviationjet fuel be collected at the same tax rate as that for highwaydiesel fuel, 24.4 CPG. When aviation fuel is purchased, the24.4 CPG tax is deposited into the Highway Trust Fund.Only when a fuel provider applies to the IRS for the 2.5CPG refund does the remaining 21.9 CGP transfer fromthe Highway Trust Fund into the Airport and Airway TrustFund. In many cases, operators or fuel providers do not applyfor a refund; therefore, the Aviation Trust Fund receivesno revenue from the sale of the aviation jet fuel. This policyhas increased Highway Trust Fund revenues by hundreds ofmillions of dollars at the expense of the Airport and AirwayTrust Fund. NATA supports measures by the U.S. SenateCommittee on Finance to repeal this onerous provision.Termination of Exemption for Small Aircraft on NonestablishedLines. Last year’s Senate bill contained a provision(Section 806) that would place a signiicant inancialburden on small businesses providing aircraft charterservices. Currently, commercial air carrier operations inContinued on page 28Aviation Business Journal | 1 st Quarter 2011 27

NATA’s Policy AgendaContinued from page 27aircraft weighing fewer than 6,000 pounds, and that are notoperated on an established line, are exempt from the commercialFederal Excise Tax (FET). Instead, these operatorspay the noncommercial aviation fuel tax. Section 806 wouldeliminate that exemption and replace it with a far narrowerexemption solely for those conducting sightseeing lights insmall aircraft.Airports Providing Aviation Services. NATA recommendsthat the Congress closely monitor government-runentities that attempt to compete with private industry at ournation’s airports. Aviation businesses, such as ixed baseoperators, are better equipped to provide aviation services atan airport, and the government must recognize that airportmanagement should focus on fostering a competitive environmentthat will beneit air travel passengers.Accelerating Implementation of Next Generation AirTransportation System (NextGen). Funding provided forNextGen in the FAA reauthorization bill will help ensure thatcritical upgrades are made to existing facilities and equipment,and enable implementation of new technologies thatwill better deine routes within the national airspace system,allowing more aircraft to travel within the airspace. Thistechnology will minimize the impact on the environmentdue to aircraft lying more direct routes, improving fuel eficiencyand reducing carbon dioxide emissions.NextGen Equipment Incentives. As Congress works to deviseincentives for equipping aircraft with NextGen technology,NATA will work to ensure that general aviation aircraftare included.The strength of our national airspace system and its abilityto meet future demands is dependent upon the federalgovernment’s success in meeting its obligations in providingadequate infrastructure. Passage of a comprehensive, longtermreauthorization bill will enable our country to meet thecurrent and growing demands being placed on the aviationsystem.Large Aircraft Security ProgramSince October 2008, the general aviation industry hasbeen in a state of uncertainty on what the TransportationSecurity Administration’s (TSA) proposed Large AircraftSecurity Program (LASP) would entail. The LASP proposalintends to govern operations for all aircraft weighing morethan 12,500 pounds and requires operators of those aircraftto implement an approved security program. In addition, theLASP would, for the irst time ever, require security programsfor thousands of privately operated general aviationaircraft and, ultimately, seek to combine a number of securityprograms currently in place for general aviation, includingthe Twelve-Five Standard Security Program (TFSSP),into a single, uniform program. When the notice of proposedrulemaking (NPRM) was issued, NATA, along with the restof the general aviation industry, were angered with the lackof knowledge and understanding of the general aviationcommunity by the TSA. The proposed rule came after yearsof working diligently with the agency and offered assistanceto provide an effective, feasible means to address the TSA’sconcerns. Over the past 18 months, NATA has been workingwith the TSA to arrive at a compromise on the LASP programand to develop more appropriate methods to increasethe already outstanding security record of general aviation.A revised LASP proposal is expected sometime this year.Standardization of Regulatory Interpretations atFAALast year, U.S. Representatives John Mica (R-FL) andPete Sessions (R-TX) requested that the GovernmentAccountability Ofice (GAO) review inconsistent regulatoryinterpretations at the FAA. The reason for the request wasbecause the general aviation industry is continually confrontedwith varying interpretation of FAA regulations by theagency’s Regional Aircraft Certiication (ACOs) and FlightStandards District Ofices (FSDOs). The 9 FAA regions, 10ACOs and more than 80 FSDOs each issue approvals on awide range of maintenance and operational requests madeby regulated entities. These regulated entities include Part135 on-demand charter operators, Part 145 repair stations,and Part 141 and 61 light training facilities. However, inOctober 2010, the GAO released a report titled “Certiicationand Approval Processes are Generally Viewed as WorkingWell, but Better Evaluative Information Needed to ImproveEficiency.” The report was in response to NATA’s requestfor a review of the lack of standardization of regulatoryinterpretations at the regional and local levels. The reportunfortunately missed the mark by failing to provide meaningfulinformation on the root cause and scope of the FAAregulatory interpretation inconsistencies, and lacks aninsightful analysis on how aviation businesses are impacted.NATA has since requested that the U.S. Congress push theContinued on page 3028 Aviation Business Journal | 1 st Quarter 2011

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NATA’s Policy AgendaContinued from page 28GAO to review, once again, the ongoing concern over lackof standardization of regulatory interpretations at the FAA.NATA is hopeful that an additional assessment will reveal aresult targeted to this speciic burden to its operators.State Income Tax Threatens Interstate CommerceAn increasing number of states have begun to pursue taxrevenue from Part 135 air charter operators and Part 91Kfractional jet operators. These state taxes have been in theform of corporate/business tax ilings, but there are othertax statutes applicable to charter and fractional operatorsthat may designate them as a public utility and/or subjectthem to property tax assessments. The diverse nature ofstate tax laws makes it dificult for operators to identify andunderstand their potential for liability when operating tostates other than their home base. The primary concern withstates levying such taxes is the enormous administrativeburden placed on companies. It is unreasonable for a smallbusiness to have to ile income tax reports in ifty differentstates, especially when some of those states were only visitedonce or twice in a given year. Such tax burdens do not posea problem to large commercial airlines, as most airlinesalready do signiicant business in a state, with multipleemployees working within that state. Charter operators andfractional ownership companies, however, do not have suchan established presence, and may only use the airport to pickup or drop off customers. NATA will work to make Congressaware of this anomaly in state taxes and implement a legislativechange that allows on-demand air charter and fractionaljet operators to avoid the requirement to ile in all states. Inlieu of registering with each state revenue department, charteroperators would prefer to pay a lat fee for doing businessin a particular state. NATA will be requesting that Congressamend federal law to clarify a state’s right to levy an incometax on an aviation business.Part 135 Flight, Duty and Rest RegulationsThe FAA issued a NPRM in October 2010 amendingPart 121 light, duty and rest hours for pilots. It is of greatconcern to the Part 135 industry because the FAA states inthe proposal that it sees Part 135 as “substantially similar”to Part 121 and that a similar, if not identical, rule is likelyto be published impacting Part 135. NATA was extremelydisappointed by this given the fact that the Part 135 industryinvested substantial effort to create a comprehensiverulemaking addressing this subject in 2005. The Part 135Flight, Duty and Rest (FDR) Subgroup was a part of theFAA Part 125/135 Aviation Rulemaking Committee (ARC).The FDR subgroup developed a comprehensive proposal toaddress unscheduled/on-demand operations under 14 CFRPart 135. The recommendations would dramatically improveupon current regulations while still permitting the operationallexibility inherent to the continued ability to conducton-demand operations. NATA will continue to urge the FAAto move forward with new regulations for Part 135 basedupon the Part 125/135 ARC rather than attempt to implementone-size-its-all rules.Termination of Exemption for Small Aircraft onNon-established LinesLast year, the U.S. Senate’s FAA Reauthorization bill containeda provision (Section 806) that will place a signiicantinancial burden on small businesses providing aircraft charterservices. Currently, commercial air operations in aircraftweighing fewer than 6,000 pounds and that are not operatedon an established line are exempt from the commercial FET.Instead, these operators pay the noncommercial aviationfuel taxes. The provision in the Senate bill attempted toeliminate the exemption and replace it with a far narrowerexemption solely for those conducting sightseeing lightsin small aircraft. A very small sector of the general aviationindustry would be subject to signiicant inancial, administrativeand paperwork burdens as a result of this provision.Most of these small air charter operations have only one ortwo aircraft, typically single-engine, piston-powered airplanesand helicopters. They may conduct aerial surveying,photography, mail delivery, passenger transportation forpersonal or business reasons, and numerous other tasks towhich small aircraft are perfectly suited. In addition, lightsin aircraft weighing fewer than 6,000 pounds that qualifyfor the small aircraft exemption are not exempt from payingtaxes under the current law, they pay taxes under a simplerprocess – the noncommercial aviation fuel tax. Compliancewould involve completion and submission of quarterly taxilings, semi-monthly payments of the taxes collected, andthe establishment of a system to evaluate on a light-by-lightbasis whether certain components of the FET apply. Further,these operators will still pay the per-gallon noncommercialtax every time they buy fuel and will have to wait untilthey ile their taxes to claim a refund of that tax. The states30 Aviation Business Journal | 1 st Quarter 2011

most affected by this provision are Alaska, Arizona, Nevada,Hawaii and Louisiana. NATA will continue to convince theSenate Finance committee on why this provision should beexcluded from the FAA reauthorization bill.Residential Through-the-Fence AgreementsIn late 2009, the FAA released a draft guidance letter regardingRTTF operations at public-use airports. And late lastyear, a proposed policy on RTTF agreements was publishedin the Federal Register prohibiting any new RTTF agreementswhile allowing existing RTTF agreements to continueunder tighter federal oversight. An RTTF agreement is alegal document between a residential property owner and anairport owner that allows the property owner to access theairield directly from the residential property by aircraft. TheFAA’s draft guidance letter stated that there “are no formsof acceptable” RTTF agreements and determined that RTTFagreements were unacceptable because the signing of theseagreements violated the federal grant assurances signed bythe airport sponsor (owner) in return for federal funds beingexpended for development at the airport. While RTTF agreementsmay provide a short-term beneit to airports throughadditional revenue and community goodwill, NATA believesthose beneits are far outweighed by the risk posed to thelong-term usability of airports. Legislation was introducedlast year to override FAA policy by statute H.R. 4815. NATAbelieves this legislation could result in unintended consequencesthat damage the future utility of public-use airportsand could call into question the future of all grant assurancesand the FAA’s ability to ensure that those obligations arefollowed by all airports receiving federal funding. NATA supportsthe FAA’s proposed policy on RTTF agreements andbelieves that it provides a solution that protects the value ofthe taxpayer investment in airport development while allowingexisting RTTF agreements to continue.Congressional General Aviation CaucusAn important group was established on Capitol Hill in2009 to support the general aviation industry. The U.S.House of Representatives and the U.S. Senate establishedGeneral Aviation caucuses in their respective chambers tohelp educate Members of Congress and their staff about thevital role of general aviation. The primary goal of the Houseand Senate caucuses is to work with pilots, aircraft owners,the general aviation community and relevant governmentagencies to ensure a safe and vibrant environment exists forgeneral aviation in our country. Each caucus holds regularbrieings for Members of Congress and their staff on speciicissues affecting the industry. Both the House and Senatecaucuses are open to all Members of the House and Senatedespite party afiliation and committee assignments.Currently, there are more than 85 members of the U.S.House of Representatives who have joined the HouseGeneral Aviation Caucus. There are 28 members of theSenate General Aviation Caucus. NATA will seek the supportof new members of congress by requesting they join the GAcaucus.ConclusionThe outlined policy agenda for 2011 is just the beginning.A number of other policy issues are brought to our attentionthroughout the year. If an issue arises that you feel should bebrought to the attention of NATA’s Legislative Staff, pleasecontact Kristen Moore at kmoore@nata.aero or 703-845-9000. A detailed view of each policy priority can also befound on the government affairs page at www.nata.aero, orto learn more about NATA’s political contributions, pleasevisit www.nata.aero/natapac.Advertiser IndexAir BP Aviation Services Back coverACSF Audit 36ACSF Symposium 24Avfuel Corporation Inside front coverCorporate Angel Network, Inc. 14FltPlan.com 6Jet Aviation 12KaiserAir 39Landmark Aviation 20McBreen & Kopko 15NATA Membership 18NetJets 3Phillips 66 Aviation 10Shell/Eastern Aviation Fuels, Inc. 26Signature Flight Support 4Sustaining Members 44totalFBO 8USAIG 16UVair 29Velcon Filters 39Aviation Business Journal | 1 st Quarter 2011 31

Photo courtesy Bakersield MagazineOwner’s Steven(President) andPatricia Loyd (HumanResource Manager)When Loyd’s Aviation, Inc. opened itssleek, new Bakersield Jet Centerat Meadows Field (BFL) in March2009, the country was in the grip ofa severe recession and general aviationactivity had all but stalled. But, as company PresidentSteve Loyd explained, Bakersield Jet Center was a bet onthe future.“It was our belief that as the economy improved, businesslying would recover irst,” he said. “By offering a front-lineoperation, with superior, full service and amenities, ourcorporate aviation customers would continue to select usas their preferred FBO at Meadows Field.”“My daughter, a third generation family member to playa role in the history of the company, Kelly Loyd Pieczonka,took two years out of her career as a retail merchandiserto help the company become more eficient and poised forgrowth than it had been. With a BA from the University ofCalifornia at Berkeley and ten years experience in business,she reorganized the operation and managed every aspect ofthe remodel of the front line,” said Loyd.The 5,000 square foot terminal, which offers 3.5 acres oframp space, sits beside BFL’s main taxiway. It replaced theoriginal Loyd’s Aviation FBO, a 1,500 square foot facilitylocated at a more obscure location on the airport’s northeastcorner with limited aircraft parking. “If we had a jet and acouple of piston aircraft on our ramp at the same time, wewere maxed out, and there was simply no room to grow,” hesaid. “At the new FBO, we have increased our ramp spaceby ive to six times, giving us the capability to handle 10-15airplanes at a time. In fact, we can now handle an aircraftthe size of an MD 80 or a 737.”Planning for the Bakersield Jet Center began in pre-recession2004, when a building with an FBO tenant suddenlycame on the market. Loyd explained, “The owners wanted tosell, and we saw an opportunity to buy it, although we didn’tbegin the renovation until March 2008. That was when itsformer occupant, Mercury Air Center, let its lease run out.”32 Aviation Business Journal | 1 st Quarter 2011

BecomingBakersfieldJet Center∑ DavidAn OldCompanyRe-BrandsBut ContinuesA Top-LineServiceTraditionBy Paul Seidenman &David J. SpanovichBy then, of course, the economy was tanking, but Loyddecided to go ahead with the project. “I had a few sleeplessnights, but it appears to be paying off,” he said.The company invested more than $500,000 and spentnearly a year to refurbish the building, which was originallyconstructed in the 1970s. “The building was run down whenwe got it, and the blacktop was completely shot. But, it hadgreat potential,” said Loyd.Bakersield Jet Center will be the new public face andname of the company established at BFL in 1958 as Loyd’sFlying Service by Steve’s father, Byron Loyd, along withhis wife Eleanor. Initially, the founders set up the businessas a parts dealership, focusing on single and twin-pistonaircraft.Byron, a World War II Navy veteran who learned to ly onthe GI Bill, also lew charter trips in his single-engine, PiperModel 250 Comanche, along with contract lying for localcorporate aircraft owners out of the city which sits at theContinued on page 34Aircraft Fuel Technicians Jason Skiby, Robert Fox (Line Service Manager),Julio Penaloza and Bryant Valdez, and President Steve LoydThis and all subsequent photos courtesy Fahey Photography, Bakersield, CAAviation Business Journal | 1 st Quarter 2011 33

BakersfieldContinued from page 33south end of California’s Central Valley, and is a major oildrilling center. Steve, who joined the company after graduatingfrom California Polytechnic State University (Cal Poly)in 1973, noted that his father was active in the company untilhis death at age 79 in November 2005.By 1970, the business had expanded to include hangars.Loyd explained, “My father was the irst entrepreneur tobuild hangars for general aviation aircraft at BFL, startingwith 20 T-hangars on the northeast corner of the airport.”Today, the Bakersield Jet Center complex providesover 130,000 square feet of covered storage. This includesa 30,000 square foot shade port, built at the company’sformer location, and designed to shield up to 25 transiting,piston, turboprop or light jet aircraft from the hot sun ofa Central Valley summer. The remaining 100,000 squarefeet is a combination of individual and community (multitenant)hangars. The largest, at over 15,000 square feet,can accommodate eight to nine piston aircraft, or ive to sixmedium cabin jets—or up to two large cabin jets, the size of aFalcon 900 or Gulfstream IV.Currently, Bakersield Jet Center has 50 tenant aircraft,mostly single and twin pistons, along with two turboprops—a Beechcraft King Air 200 and a King Air 350. “The two KingAirs are our largest based aircraft,” said Loyd. “But it’s notunusual for jet operators to ly in here and request hangarstorage for one to three nights.”“We’re in a transitional period now with regard to ouridentity at BFL,” he noted. “The Loyd’s Aviation name iswell known locally, but at the same time, we believed thatthe new name would give us greater visibility nationally.This is why the name on the building will say ‘Bakersield JetCenter—By Loyd’s Aviation.’ “Customer ServiceRepresentatives Nancy Lajas,Denise Shaar (CSR Manager),and Taarna LongAs with the FBO project, the company’s maintenance operation,which does business as Loyd’s Aircraft Maintenance,Inc., seized an opportunity when another business on theairport—Beechcraft West—closed in 1986. A major incentivebehind this deal was Loyd’s Aviation’s aircraft managementbusiness.“Because of quality control considerations, we wanted todo most of the maintenance in-house on aircraft we operatedunder management contracts, as well as for outside customers,”Loyd pointed out. “So, when Beechcraft West closed,my father saw an opportunity to pick up a ready made staffof mechanics.”Loyd’s Aircraft Maintenance, Inc. is structured as a separatecorporate entity, in which Steve Loyd holds a 67 percentinterest. Most of the remaining equity is held by MarkJensen, who serves as director of maintenance. Mark Wiebe,a long-time mechanic, and Bill Long, the company’s partsmanager, also hold small percentages.In addition to Jensen and Wiebe, the operation employsfour A&P licensed mechanics, including three who hold FAAinspection authorization. The mechanics average over 25years of experience, and all repair work is carried out undereach mechanic’s A&P ticket.Starting with a mostly piston aircraft customer base, thecompany, which is a Cessna Single Engine Certiied ServiceCenter, has expanded to turboprops and jets.“In turboprops, we have become a King Air specialist forall airframe service, and powerplant work, up through hotsections on the (Pratt & Whitney-Canada) engines,” Loyd explained.“Of course, we still do all maintenance on single andtwin pistons, and most Continental and Lycoming engineservice. However, all reciprocating and turbine engine overhaulsare contracted out.” Also totally out-sourced are avionicssales and service, mostly to BFL neighbor MegaHertzAvionics, Inc.Most of the jet maintenance the company performs islimited to line level work, such as tire change-outs andbrake repairs. Said Loyd, “At one point, we were servicinga Sabreliner 65, a Cessna Citation II and a CJ2 CitationJetwhich were based elsewhere on the ield. The Sabreliner hassince been sold, but we’re still servicing the two Cessna jets.”Loyd also stressed that the mechanics have the capabilityto repair most piston models and turboprops. “We haveworked on Turbo Commanders and Cessna Conquests, butbasically, our guys can work on anything. If we were to gointo a management contract on an aircraft type we had nevermaintained, we would send our mechanics to school fortraining so we could service it in-house,” he said.34 Aviation Business Journal | 1 st Quarter 2011

With a current total workforce of 20, Bakersield JetCenter, according to Loyd, is the largest of the three FBOsat BFL (Atlantic Aviation and Epic Jet Center are the othertwo), and the only one that offers an extensive major maintenanceand repair service, along with fuel, hangar spaceand aircraft management. Because of the maintenancecompany’s reputation for high quality work, Loyd reportedthat about 50 percent of its business comes from owners ofaircraft based at airports other than BFL, but mostly withinCalifornia.Bakersield Jet Center also provides line maintenancefor the two regional airlines serving BFL—SkyWest (UnitedExpress) and Mesa Airlines (US Airways Express). Both operateBombardier CRJ regional jets. SkyWest, in addition toits CRJs, still schedules some Embraer EMB 120 turbopropsat BFL.“The air carrier line maintenance includes system checksand tire changes, but we’ve even assisted their mechanicswith engine changes,” Loyd explained.At this time, the company does no into-plane fueling orground handling. In fact, Loyd said that he considered, butultimately decided against, ground handling.“We looked at it in the past, but we saw it as a lowmarginbusiness because the airlines are only interestedin getting that service at the cheapest price,” he explained.“When we combined that with the fact that it’s not our coreexpertise, we concluded that it’s better to leave that businessto the airline ground handling specialists. We’ll staywith what we know.”Bakersield Jet Center has long been an Avfuel brandedFBO, and Loyd refers to the distributor as “a great partner.”He said, “They do an excellent job of marketing and promotingtheir FBO dealers, along with the fact that they are verycustomer focused and have an excellent reward program.I’m a big Avfuel fan!”Currently, fuel sales are about equal to maintenance—each accounting for 40 percent of the company’s totalrevenues—with the remaining 20 percent divided amonghangar rentals, charter and aircraft management. Loyd saidthat for 2010, fuel sales were on track to perform better thanmaintenance, thanks in no small part to a military fuelingcontract he secured.Also helping is a contract with BFL-based InternationalFlight Training Academy, the All Nippon Airways-owned abinitio pilot training provider. The contract, which was signedin October 2010, is accounting for 30,000 gallons of avgasper month to power the academy’s leet of Beechcraft A36Bonanzas and Baron 58s.“We are estimating sales of about one million gallons offuel for all of 2010, which is nearly double our 2009 total of561,000 gallons,” said Loyd. “Generally, Jet A accounts forabout 60 percent of fuel sales.”If the estimated sales of one million gallons for 2010 bearout, it will bring Bakersield Jet Center back up to its prerecession2007 sales of about the same amount. That year,Loyd reported, the company took in some $6 million—doublethe $3 million of total revenue for a recession-wracked 2009.The company operates its own fuel farm on-site, whichis comprised of three above ground tanks—two 10,000 gallontanks for Jet A, and one 12,000 gallon tank for 100 LLavgas. The fuel is dispensed directly into the aircraft fromtanker trucks, of which the FBO has ive: Three trucks—twoof which can accommodate 3,000 gallons each, and one witha 2,000 gallon capacity are used for jet fuel; and two othertrucks for avgas—of 1,500 and 750 gallon capacity, respectively.All ive line staff persons have been certiied underNATA’s Professional Line Service Training (PLST) program;and, as Loyd noted, Loyd’s Aviation was one of the irstFBOs to have PLST certiied fuelers.Ryan Crowl (Vice President,Loyd’s Aviation Operations,Flight, Line and RentalService) and President SteveLoydIn addition to fuel sales and maintenance, BakersieldJet Center is poised to increase its aircraft management andcharter business with a recovering economy. At this time,the company is managing three of its based aircraft—theKing Air 200 and 350, as well as a twin piston BeechcraftBaron 58P. Although customized management contracts areavailable, the King Airs are being operated under a full, turnkeyplan, which includes pilots as well as maintenance.“The management focus is primarily concentrated onturboprops, speciically King Airs,” said Loyd, who has overContinued on page 37Aviation Business Journal | 1 st Quarter 2011 35

Everyone has a standard.Some are higher.The Air Charter Safety Foundation (ACSF) is a nonprofit entity that was established byaviation industry leaders to promote safety among charter operators and fractionalmanagers. Additionally, ACSF has set the most robust audit standard for 135 operators and91K managers. The ACSF Industry Audit Standard is the only audit standard designedto specifically evaluate both compliance with FAA regulations and its establishment ofa proactive Safety Management System. Leading independent audit companies employthe standard during their audit process and ACSF, as the entity that sets the standard,reviews and verifies the results of each independent audit. Those aircraft providers passingthe audit are then listed on ACSF’s central registry. Look for the ACSF registered sealanytime you plan to use a charter operator or fractionally owned aircraft.These companies have met the standard. Has yours?JET SOL UTIO N SJET SOL UTIO Find out more about us and our members at www.acsf.aero or 1-888-723-3135.The ACSF audit standard is administered by leading independent audit providers that are trained and accredited by ACSF. ACSF reviews and verifies the results of the audit and subsequently places charter providers who successfully pass the audit on the ACSF Register.The ACSF audit standard is administered by leading independent audit providers that are trained and accredited by ACSF. ACSF reviews and verifies the results of the audit and subsequently places charter providers who successfully pass the audit on the ACSF Register.

BakersfieldContinued from page 357,000 hours in the King Air series. “We are very comfortablewith our niche as a King Air specialist.”While optimistic, Loyd also conceded that the economyhas impacted his aircraft management business. “It’s somethingthat grows and shrinks with business conditions,” hesaid. “For instance, between 2005 and 2008, we managedsix aircraft. As the economy picks up, we expect that ourmanaged leet will grow.”Loyd, who is one of four pilots on the company payroll,holds an ATP certiicate, has over 16,000 light hours, andlies the King Airs, under FAR Part 91. (The King Air 200 isalso operated under the company’s Part 135 charter certiicate.)He reported that in a typical month, he’ll ly approximately4-5 trips, for about 15-20 hours. The other threepilots also hold the ATP rating, and each has about 5,000-6,000 light hours.“Although charter accounts for a small portion of therevenue, we went ahead and met the requirements for theARG/US Gold level rating for charter operations,” Loyd said.“Charter largely went away in 2009, due to the economy, butas the economy recovers, corporate and on demand charterwill have increasing light hours. In fact, we are already seeingsigns of that.”An upturn in the economy may also prompt the companyto look again at light instructing, which it provided beforethe current downturn.But Bakersield Jet Center has continued to offer anaircraft brokerage service, even though the outlook for thatbusiness remains challenging. Its area of focus is piston andturboprop aircraft. “With aircraft values having droppedby 20 to 50 percent in some cases, this is deinitely a greattime to buy an aircraft,” said Loyd. “But, people are stillbeing very conservative, and I don’t expect to see any greatimprovements in the pre-owned aircraft market for now.”Despite challenging times, Loyd remains conident thatrunning a successful FBO still comes down to maintaininga reputation for good service. “Good service starts withyour management team. Ryan Crowl our Chief pilot andoperations manager leads a superb staff of young talent. Weare totally focused on providing superior customer service,whether our customer comes in on a Cessna 172 or aGulfstream IV. I personally introduce myself to every one ofour customers and thank them for their business. I realizethat might be considered old fashioned, but it has paid off.”Along that line, he added that any increase in fuel saleswill be driven more by service than by price. To cite anexample, Loyd reported that, while Bakersield Jet Centerdoes not have fueling contracts with any of the fractionalownership plans, it has been drawing an increasing amountof business from Flight Options participants. “They know us,and when they come to Bakersield, they tell their pilots touse us to purchase fuel and catering,” he said.At the same time, the company has gotten a numberof customers who formerly used his competitors. “Theydecided to give us a try, and have remained with us, eventhough we are not the cheapest fuel supplier on the ield—although we are very competitive,” said Loyd. “You haveto give everybody the right kind of service, but at the sametime, keep your costs under control.”As for his own view of the big picture for FBOs, Loydminces no words. “The customer base for the piston marketis shrinking, and the future will be moving more in thedirection of corporate operated turbine powered aircraft,” heexplained. “Yes, we have to take care of everyone, but corporateaviation is where the higher proit margins are. This iswhy we moved our FBO from a back corner of the airport tothe front lines. In doing this, we are giving everyone, includingthe corporate operator, better service—but it helps us todevelop our corporate market that much more.”A 20-year NATA member, Loyd currently chairs theassociation’s Business Management Committee, and citesthe advantages of NATA membership. “It truly representspeople in the FBO industry, and helps us to run our businesses,”he said. “An example of that is the Professional LineService Training Program, which is second to none. I alwaysrecommend NATA membership to any FBO.”Loyd’s Aviation Offi cersChris Clements (AccountingManager), Steve Loyd(President), Bill Long (VicePresident of Sales, Aircraftand Parts, & IT), Mark Jensen(Senior Vice President Loyd’sAircraft Maintenance).Aviation Business Journal | 1 st Quarter 2011 37

A Closer Look At RTTF AgreementsBy Michael FranceAviation never presents a shortage of controversialissues. Between FAA Reauthorization,general aviation security and the impacts oftemporary light restrictions, it is easy for otherimportant issues to fade into the background.One of the issues of 2010 that didn’t receive a bright nationalspotlight, at least in terms of press coverage, is ResidentialThrough-the-Fence (RTTF) agreements at federally obligatedairports. NATA has been working on this issue for thepast year due to its possible impact on public-use airportsand the businesses that make them work.In its most simple terms, an RTTF agreement is a contractbetween the owner of residential property adjacent to apublic-use airport and the airport’s operator or sponsor thatprovides the property owner the right to access the airport,by aircraft, directly from their property. At irst glance, theidea of RTTF agreements at public use airports may seeminconsequential, but they are far from it. In fact, RTTFagreements, when utilized at public use airports, can pose athreat to the future utility of the airport.The irst step in realizing the impact of RTTF agreementsis understanding that an individual airport must be viewedas part of the larger system of public-use airports acrossthe country. For an airport to be eligible to receive fundingfrom the federal government for development projects,that airport must be part of the National Plan of IntegratedAirports System (NPIAS). NPIAS “identiies [the] existingand proposed airports that are signiicant to national airtransportation and [also]… estimates of the amount of AIPmoney needed to fund infrastructure development projects”at those airports. NPIAS is built upon the idea that individualairports serve a national purpose as a transportation infrastructureand therefore federal funds should be expendedin the development and maintenance of those airports.Along with those federal funds come restrictions in how theairport can be operated. Those restrictions, known as grantassurances, work to assure that the airport is operated in amanner that serves the needs of the public and protects thefederal investment in the future of the airport.Through-the-fence agreements, in general, and RTTFagreements, speciically, create threats to the future usabilityof public use airports and therefore have become areas ofconcern for the FAA. In late 2009, the FAA released a draftguidance document that attempted to clarify the agency’sposition on RTTF agreements. The draft guidance speciicallystated that there are “no acceptable forms of RTTFagreements”. This clariication actually worked to confusethe issue due to the fact that the FAA at the local and regionallevel had approved RTTF agreements at some publicuse airports in the past. At the urging of the industry theFAA reevaluated its position and ultimately released a draftpolicy on RTTF agreements in mid-2010. This draft policyallowed existing RTTF agreements to remain in place undercloser control of the airport and the FAA, while also prohibitingany future RTTF agreements.In addition to attention from the FAA, RTTF agreementswere the subject of proposed legislation. Some in the industryobjected to the idea of a national policy that speciically prohibitedRTTF agreements and felt that the issue of whether toallow an agreement should be a local decision. The proposedlegislation offered to prevent the FAA from being able to stopairports from signing RTTF agreements by exempting thoseagreements from grant assurance compliance.The aviation industry and federal government have longrealized that residential encroachment into the areas surroundingan airport poses a direct threat to the future ofthat airport. The political power and legal rights of homeownersresiding near an airport are frequently brought tobear against projects that would expand the utility of theairport. Any national policy or legislation that permits newRTTF agreements would, by its very nature, work to increasethe amount of residential development around airports.Supporters of RTTF note that the residents of homes withRTTF access would most likely be aviation enthusiasts andsupporters of the airport and, therefore, far less likely to objectto airport noise and other airport operations. While thismay be true at the moment these residents purchase theirproperties, even aviation enthusiasts would be likely to ightchanges to the airport that would detract from their qualityof life or property value. If an airport expansion became necessaryto meet the demand present at the airport, it is highlyunlikely that these residents would gladly surrender theirhomes for the beneit of the airport. The reality is that, asthe operations, trafic type and volume at the airport change,38 Aviation Business Journal | 1 st Quarter 2011

homeowners with RTTF access would likely become as resistantto change as any other homeowner looking to protecttheir family home and investment in their residence.NATA believes that the FAA has struck a careful balancewith its proposed policy on RTTF agreements by allowingexisting agreements to continue but preventing any newagreements from being signed. NATA is concerned thatlegislative efforts to allow new RTTF agreements to continuecould be extremely harmful. Suggested legislative remediesinclude preventing the FAA, by statute, from enforcingthe grant assurances in regards to RTTF agreements. Thiscourse of action represents an extreme threat to our systemof federal investment in airport development as well as theprivate investment of aviation business in building generalaviation infrastructure. The long case history regardingthe federal grant assurances establishes a well understoodfoundation of how public use airports must be operated. Anystatute exempting RTTF agreements from that framework,regardless of how well written, substitutes a new standard inplace of the assurances. This new standard will be subject tocountless interpretations by the FAA and the judiciary andwill introduce a level of uncertainty in airport operationsand utility that is unacceptable. The long term dangers, toboth public and private investments in airports, threaten thefuture of the public airport system.Currently nothing in FAA policy or federal law preventsan individual who desires to live in a residence with directaccess to an airield from doing so at any of the thousandsof private airports across the country. The question involvedin the RTTF debate is should this type of residential developmentbe encouraged surrounding our nations public useairports. In 2011 this issue is likely to receive renewed attentionas the FAA presumably releases a inal policy on theseagreements. NATA will continue to support the FAA’s positionthat new RTTF agreements at federally funded airportsis not in the best long term interest of our industry.CLEAN FUELAny Time. Any Place.Velcon is a trusted namein the commercial andmilitary aviation industry.NEW VELCON POSTERSPlease send an email request tovfsales@velcon.comInclude your name, address, and your choiceof the Apache, F-35, or both posters.Velcon Filters, LLCColorado Springs, COUSAwww.velcon.com1.800.250.1985719.531.5855Fax 719.531.5690vfsales@velcon.comFuel Filtration and SeparationSpecialists for over 50 yearsAviation Business Journal | 1 st Quarter 2011 39

NATA’s 2010 Aviation Business RoundtableThe 2010 NATA Aviation Business Roundtable took place November 8-9 at The Ritz-Carlton Hotel in Arlington,Virginia. More than 70 aviation business leaders met with key political, policy and inancial experts to discuss anumber of critical issues affecting the aviation community, including the results of the 2010 mid-term elections, theeconomy, jobs, taxes, safety and security. The two-day meeting concluded after an exclusive tour of the 89th AirliftWing at Andrews Air Force Base.“It is clear from this year’s rise in attendance that the NATAAviation Business Roundtable continues to provide real valueto our participants,” stated NATA President James K. Coyne.“From leaders on Capitol Hill and at the TransportationSecurity Administration to those within our own industry, thisyear’s Roundtable provided a robust platform for our attendeesto learn the latest economic, security and legislative issues thatwill affect their businesses in 2011 and beyond.”40 Aviation Business Journal | 1 st Quarter 2011

Highlights from the 2010 Aviation BusinessRoundtable included:• An industry overview from NetJetsChairman and CEO David L. Sokol includinghis thoughts on NetJets recent purchaseof Marquis Jet and of 125 EmbraerPhenom 300s.• Post-2010 mid-term election analysisby acclaimed political analystStuart Rothenberg. During this review,Rothenberg highlighted that Republicanswon 36 of the 48 seats in the U.S. Houseof Representatives held by Democrats thatwere carried by Senator John McCain (R-AZ) during the 2008 presidential election.• TSA Administrator John Pistole’s overviewof the latest security developments affectingthe general aviation community.• Hawker Beechcraft Chairman & CEO BillBoisture’s review of the challenging economicand political climate that the generalaviation manufacturing industry hasfaced over the last three years as well asthis community’s outlook for the future.• Congressman Sam Graves’ (R-MO)outlook as to what legislative issuesRepublicans will undertake once they takeover the majority in the U.S. House ofRepresentatives in 2011. It is anticipatedthat Graves, as the lead Republican onthe House Committee on Small Business,will become chairman in 2011.• U.S. Senate Subcommittee on AviationOperations, Safety and Security ChairmanByron Dorgan’s (D-ND) review of the challengesin passing a long-term FederalAviation Administration reauthorization bill.• Pharmaceutical Research & Manufacturersof America (PhRMA) President JohnCastellani’s analysis of the challengesAmerica’s businesses have seen since theeconomic recession.Aviation Business Journal | 1 st Quarter 2011 41

Safety 1 st NewsNATA Safety 1 stNEW Online ModuleDe/Anti-icingWinter weather training programs like NATA’s Safety 1st De/Anti-Icing module are designed to familiarize yourline service specialists with the responsibilities of their job and give an overview of the skills necessary forsafe aircraft departures.What’s covered in the online training?The Deicing /Anti-IcingIntroductiondiscussesthe impact ofsnow and iceon aircraft aswell as crucialreasons fordeicing.Deicing &Anti-IcingFluids coversthe differenttypes of luids,their characteristicsandtheir primaryusage.Deicing andAnti-icing Safetydiscussesprocedures forthe safe operationof deicingequipment andpersonal protectiveequipmentrequirementsfor the safetyof line servicespecialists.DeicingProcedures coverstechniquesto effectivelydeice aircraftand best practicesto ensuresafe deicing ongeneral aviationaircraft.42 Aviation Business Journal | 1 st Quarter 2011

Safety 1 st NewsAnti-icing FluidApplicationstresses whatto do andwhat NOTto do whenapplying antiicingluids.FinalPreparationsFor Departurediscusses yourresponsibilitiesand lightcrew expectationsafter de/anti-icing andprior to aircraftdeparture.What are the beneits of de/anti-icing onlinetraining?■■ Vivid videos and photos tell the story■■■■■■■■■■■■Quizzes throughout reinforce major conceptsFinal exam ensures comprehensionMost up-to-date de/anti-icing best practices andproceduresCurrent FAA holdover tablesConsistent training for all deicing crewsSpeciically designed for general aviationAdditional information and a recorded webinar maybe found on NATA’s Safety 1st De/Anti-Icing module atwww.nata.aero/onlinetraining.NATA’s Safety 1 st Offers Customer Service, Safety &Security Online Training For Airport, Charter Operations& FBO EmployeesNATA’s Safety 1st Professional Line Service Training(PLST) Online is the standard training program of choice foraviation entities that sell fuel. The question we often receiveis: “Have you ever thought about offering other onlinetraining that would beneit other employees at an airport,charter operation or FBO?” The answer is ‘Yes!’ and this isthe irst of more online training that will beneit ALL of youremployees.NATA’s Safety 1st Customer Service, Safety & Securitytraining is made up of four modules taken from PLSTOnline, packaged in one convenient training module foreveryone at your facility. The irst module covers thegeneral aviation industry, explaining the vast number ofaircraft it encompasses as well as particulars concerning theservicing aspects of ground procedures of the line specialist.Educating others at your operation will give them abetter perspective of the line specialist’s duties and a betterunderstanding the next time s/he doesn’t answer the radioimmediately because s/he is towing, marshaling, refueling,assisting crew/passengers or any other demands of the job.The second module includes all aspects of ramp safety, suchas personal protective equipment, aircraft care and servicingdangers, standard marshaling procedures for aircraftand helicopters, refueling and best practices, mobile refueleroperations, emergency procedures and best practices,ground service equipment movements/procedures as wellas seasonal operations and best practices. The third moduleincludes customer service speciics that anyone at an airport,charter operation or FBO may experience with the manycustomers who visit your operation. And inally, module fourcovers general aviation security on the ramp, in the hangar,the facility and more.Safety may typically start with your line service specialists,but it does not end with them. To ensure that your FBO,airport or charter operation is performing at the highest service,safety and security standards, all employees must havea stake. The customer service, safety and security trainingmodule opens up an opportunity to train your entire staff.NATA’s Safety 1st Customer Service, Safety & Securitymodule is comprehensive – everything needed to train, testand track trainees in one convenient online module. Learnmore by visiting www.nata.aero/onlinetraining.Aviation Business Journal | 1 st Quarter 2011 43

NATA SUSTAINING MEMBERSThese special members have made a commitment to help develop programs andinitiatives throughout the year. This membership class includes participation,sponsorship, and recognition in all major NATA events and publications.Air BP Aviation ServicesAvfuel CorporationEastern Aviation Fuels, Inc.Flight Options LLC/Nextant AerospaceFltPlan.comJet AviationLandmark AviationNetJetsPhillips 66 AviationSignature Flight SupportUniversal Weather and Aviation, Inc.USAIGFounded in 1940, the National Air Transportation Association proactively promotes aviation safetyand the success of aviation service businesses through its advocacy efforts before government, the mediaand the public, and by providing valuable programs and forums to further its members’ prosperity.National Air Transportation Association4226 King Street Alexandria, VA 22302(800) 808-NATA www.nata.aero

NATA 2011 Events ScheduleFebruary-8 FBO Leadership Conference, Savannah, GA21-2 NATA’s Spring Training Week at the CygnusAviation Expo, Las Vegas, NVSpring Training Week, Las Vegas, NV21-22 Line Service Supervisor Training Seminar22NATA Safety 1st Trainer SeminarEnvironmental Compliance Seminareld in conunction ith the Cygnus Aviation EpoMarch2-2MayLine Service Supervisor Training Seminar,Windsor Locks, CT26-2 OSHA 10-Hour Seminar, Windsor Locks, CTJune6-8 Air Charter Summit, Dulles, VATBAAugustCommercial Operators Tax SeminarOctober1-16 Air Charter Safety Foundation Symposium,Dulles, VAwww.acsf.aero/symposiumTBAFall Committee Meetings, Las Vegas, NVNovemberAviation Business Roundtable,Pentagon City, VAwww.nata.aero

Safety NATA Member 1 st WatchNewsIs Membership in NATA Worththe Price of Admission?By: Jack Evans, CEO, Total Airport Services, Inc.Let’s face it, times are tough and every expense hasto be weighed against its impact on your bottomline. I recently spoke to one company CEO whohas been in the business a long time. When Iasked him why his company wasn’t representedin NATA, his response was a little surprising. He said, “Idon’t have time for all those conferences and sitting aroundtalking.” I believe NATA membership is more than that andI can give you two speciic examples of where it’s helped ourcompany.The irst is NATA Workers’ Compensation insurance. TheNATA Worker’s Compensation insurance program was createdin 1975 with three speciic goals in mind:■■■■■■Provide NATA members with a dependable long-termmarket for workers’ compensation insurance;Structure the plan in such a way that, if the overall lossexperience of the participating members is favorable,participants would share in the return of a portionof the premium at the end of the policy year (GoodExperience Return); andMake joining the program as easy as possible.Since its inception, the plan has annually distributed aGood Experience Return to participating members. Through2009, plan participants have received over $71 million inGood Experience Returns. The number of participants hascontinued to grow – from 76 original members in 1975 tomore than 800 in 2010. Also, USAIG – America’s irst namein aviation insurance – managed by USAU (a division ofBerkshire Hathaway), has provided the coverage since theplan’s inception.Once again this year, we have done a cost comparisonto try to reduce costs. NATA has partnered with USAIGto provide some very good rates to members. Our savingsfrom the difference in rates is more than the cost of NATAmembership. If your insurance broker isn’t touting yourNATA membership in their rate quotes, you might thinkabout talking to another broker.The second is NATA’s ability to represent the industry inaviation-related matters. One of the most recent instancesto come to mind for us is in cargo security. NATA workedvery closely with the TSA to guide and inluence the way weimplemented the congressionally mandated rules on cargosecurity. Without industry representation, this wouldn’thave had a chance of being implemented in a way that wasgood for passengers without being burdensome for airlinesand their service companies. Having worked inside the beltwayof Washington D.C. for eight years, to me, this was themodel of government/industry cooperation and success.NATA is best known for its advocacy role in Washington,D.C., and throughout the nation. NATA ights hard to ensurethat aviation businesses receive equitable treatment in boththe legislative and regulatory arena. NATA’s Governmentand Industry Affairs Department represents the interests ofaviation businesses before Congress and the FAA, as well asother state and federal agencies. Locally, NATA actively supportsa growing airport network so aviation businesses cancontinue to prosper.For 70 years, NATA has focused on representing theinterests of aviation businesses. Our dedication will continuewith the support of our members and staff, and lead to thefurther growth and prosperity of air transportation.There are many other examples that I could point to, butthese have been signiicant for us. So when you’re looking atcutting costs to try to stay competitive, don’t sell your NATAmembership short. It really can produce immediate savingsin things like the insurance and in the long-run throughinluencing government programs.46 Aviation Business Journal | 1 st Quarter 2011

New Safety NATA Members 1 st Watch• Aspen AvionicsTherese Volkmer5001 Indian School Rd NEAlbuquerque, NM 87110-3947(505) 856-5034• Bloomington NormalAirport AuthorityLynnette Hindman3201 CIRA Dr., Suite 200Bloomington, IL 61704(555) 663-7384fax: (555) 663-2430www.cira.com• Chris Aircraft IncChris Drago211 Access RoadMiddletown, RI 02842(401) 846-4550fax: (401) 846-4334• Coordinates Operations,LLCJustin Serbent130 Hanscom Dr Bldg 11Bedford, MA 01730-2630(339) 368-1799fax: (781) 861-0499• Estrella Air Inc.Roberto Cejas7121 NW 44 LaneCoconut Creek, FL 33073(561) 596-9544fax: (954) 416-6548estrellaaircraftmaintenance.com• Gale Associates, Inc.Brian Smith15 Constitution DriveBedford, NH 03110(603) 471-1887fax: (603) 471-1809gainc.com• General Dynamics Corp.Keith Anderson44830 Cockpit CtDulles, VA 20166-7711(703) 876-3762fax: (703) 876-3460www.gendyn.com• Inflight Medical ServicesRandall Latona9 Bartlet StreetAndover, MA 01810(800) 432-4177fax: (800) 828-3515www.inflightmed.com• Landry’s Restaurants Inc.David Di Napoli8501 Telephone Rd.Houston, TX 77061(713) 645-9191www.landrysrestaurants.com• LifeMed AlaskaLee McCammon6320 South Airpark PlaceAnchorage, AK 99502(907) 563-6633fax: (907) 563-6636www.lifemedalaska.com• McCormick Air CenterTheresa Hart3210 W Washington AveYakima, WA 98903(509) 248-1680fax: (509) 248-6161www.mccormickaircenter.com• MRK AviationGeorge Fuge44050 Russia Rd.Elyria, OH 44035(440) 323-7000fax: (440) 323-5721mrkaviation.com• North American Jet CharterGroup, LLCCaitlin Green125 Fairchild St, Suite 100Daniel Island, SC 29492(843) 284-1118www.najet.net• Northrop GrummanCorporationHenry Roediger8710 Freeport Parkway, Suite 180Irving, TX 93550(661) 272-8788fax: (661) 272-8788• ProEnergy ContractingServices, LLCMatthew Mogel2001 ProEnergy BlvdSedalia, MO 65301(660) 829-5100fax: (660) 829-1160www.proenergyservices.com• R & B Aircraft LLCGregory Hoefer3600 NE Sardou Ave Ste 10Billard AirportTopeka, KS 66616-1678(785) 357-7751fax: (785) 357-7752• Steecon IncLinda Steel5362 Industrial DrHuntington Beach, CA 92649(714) 895-5313fax: (714) 895-3535www.steecon.com• Vultures Row Aviation, LLCCarol Wahl3045 Boeing RoadCameron Park, CA 95682(530) 677-2828vulturesrowaviation.com• Watts-Woodland Airport,Inc.Milton Watts17992 County Road 94BWoodland, CA 95695(866) 951-7352fax: (866) 951-7352www.watts-woodlandairport.comAnnouncing….New NATA Member DiscountNATA Compliance Services now offers a 10% discountoff our already competitive rates to NATA memberson background check services. As a subsidiary ofthe National Air Transportation Association (regarded as the“Voice of Aviation Business”), NATA Compliance Services(NATA-CS) is better suited to ill the role of “Watchdog ofTransportation” than any other team in the business.NATA-CS is the only one-stop-source in delivering regulatorycompliance services ranging from the TransportationSecurity Administration’s security requirements, to theDepartment of Transportation’s substance abuse preventionrequirements, to the Federal Aviation Administration’s safetyrequirements.For background checks, badging, training, ingerprinting,record-keeping and substance abuse prevention programmanagement, you have a one-stop-source to manage yourcompliance solutions. Each compliance service agent has oversix years’ experience in the regulatory compliance arena withmanagement personnel having greater than ifty years’ collectiveexperience in aviation.Aviation Business Journal | 1 st Quarter 2011 47

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