Author:
Bennett, David L., Director
Complainant(s):
Langa Air, Inc.
Respondent(s):
Saint Louis (Mo.) Regional Airport Authority
Airport(s):
Saint Louis Regional Airport (ALN)
History:
Affirmed by Final Decision and Order of Dec. 13, 2001. See Determination No. 94.
Holding:
Finding violation.
Abstract:
Complainant, Langa Air, Inc., filed a complaint against Respondent, the St. Louis Regional Airport Authority, operator of St. Louis Regional Airport, alleging that Respondent violated Grant Assurance 22(a) and (c) by discriminating against Complainant in its rent, fuel flowage fee and other lease terms. The Director found Respondent in violation.|Economic Nondiscrimination (Grant Assurance 22):|"FAA permits different rental and fee structures in a number of circumstances, i.e., tenant leasing facilities as opposed to a tenant constructing facilities at its own expense, or rental differentials recognizing one FBO's prime location on the airport compared to another FBO's less advantageous location and leases separated by time, even though a sponsor has an obligation to facilitate parity of rates and charges between new FBO services coming on the airport and long standing operators." (p. 18) (citing FAA Order 5190.6A, para. 4-14(d)(2)).|Respondent unjustly discriminated against Complainant in violation of Grant Assurance 22 when it refused to grant Complainant similar lease terms to its competitor where both Complainant's and competitor's leases were simultaneously under negotiations for renewal of similar FBO facilities by the same airport boards and manager. Although Respondent may have had reason to charge dissimilar lease payments in the original leases which were negotiated at different times and by different management, Respondent was obligated to work to achieve parity in the leases when they were both being renegotiated at the same time. (pp. 18-19).|Respondent's fee structure that derived its rental rates from the debt service incurred to construct facilities was unjustly discriminatory, because the methodology used the cost of debt service for establishing buildings constructed more than 30 years ago to determine fees for leases that are projected 45 years into the future and was therefore "neither transparent nor reasonable in a ratemaking system that seeks to recover costs," and contrary to FAA's Final Policy Regarding Airport Rates and Charges, 61 Fed. Reg. 31,994, 32,021 (June 21, 1996). (p. 19).|Respondent was in violation of Grant Assurance 22 for granting Complainant's competitor a lease renewal in which Respondent was responsible for the maintenance and repair of heating, air conditioning, electricity and plumbing costs over $300 but not granting Complainant a similar benefit in its lease renewal. (p. 21).|Respondent was in violation of Grant Assurance 22 for requiring Complainant to pay for all fuel purchased while requiring its competitor only to pay for fuel sold. This gave Complainant's competitor an advantage and unfairly reallocated the "common costs" of the Airport among airport users and user groups. (pp. 21-22).|Exclusive Rights (Grant Assurance 23):|The differences in lease terms, conditions and rates between those agreed to by the Complainant and its competitor, which provided Complainant's competitor with several advantages over Complainant, granted a constructive exclusive right in violation of Grant Assurance 23. (p. 23).
Index Terms:
Unjust economic discrimination|Economic Nondiscrimination (Grant Assurance 22)|Similarly situated|Exclusive Rights (Grant Assurance 23)|Fee and Rental Structure (Grant Assurance 24)|Self-sustainability|Cost-based methodology|Debt service|Fixed-base operator (FBO) agreement