Lexis Cite:
2003 FAA LEXIS 92
Westlaw Cite:
2003 WL 1524500
Author:
Bennett, David L., Director
Complainant(s):
Skydance Helicopters, Inc.|Skydance Operations, Inc.
Respondent(s):
Sedona Oak-Creek Airport Authority (Ariz.)|Yavapai County (Ariz.)
Airport(s):
Sedona Oak-Creek Airport (SEZ)
Holding:
Finding violation.
Abstract:
Complainant Skydance Helicopters, Inc. d/b/a Skydance Operations, Inc., a provider of helicopter sightseeing tours, filed a complaint against Respondents Sedona Oak-Creek Airport Authority, operator of Sedona Oak-Creek Airport, and Yavapai County, Arizona, sponsor of the Airport, alleging that Respondents violated Grant Assurance 22 by limiting Complainant’s license to a two-year term with restrictive constraints and denying Complainant reasonable use and access to the Airport for the purpose of leasing space for construction of a hangar and office under a long-term lease with reasonable terms and conditions. The FAA construed the Complaint to further allege that Respondents had constructively granted an exclusive right to commercial operators already on the Airport in violation of 49 U.S.C. § 40103(e) and Grant Assurance 23. The Director found Respondents in violation.|Economic Nondiscrimination (Grant Assurance 22):|Although the requirement that sightseeing tours obtain a license to operate at the Airport is not, in itself, a violation of federal grant assurances, the license provisions required by Respondents formed an unreasonable requirement for access to the Airport in violation of Grant Assurance 22 where the license was terminable at the will of the Authority, could be revoked without cause by the Authority, provided seven days to quit the premises upon breach of the agreement, and required Complainant to forfeit appeal rights. (pp. 26-27).|Because the circumstances of Complainant’s proposed 30-year lease term differed from the circumstances of other scenic tour operators, Respondents were required by Grant Assurance 22 to treat Complainant differently from other scenic tour operators to ensure that it had access to the airport on fair and reasonable terms. (p. 28).|The two-year renewable feature of the license, as applied to Complainant, was unreasonable, because (1) the termination, revocation, breach of agreement, and appeal right limitations exacerbated the short period of the business license in comparison to the long term lease; (2) the limitation of a two-year lease term could have improperly burdened Complainant’s attempt to obtain substantial capital investments; and (3) the two-year license requirement unjustly discriminated against aeronautical operators unwilling to leave control and risk in the hands of Respondents. (pp. 29-30).|Respondents unjustly discriminated against Complainant by providing other aeronautical operators with the same length/concurrent rental and license agreements while requiring Complainant to couple its long-term lease with a short-term license agreement. (p. 30).|Respondents’ offer to Complainant of a 10-year lease term with a five-year renewal option was unjustly discriminatory where Respondents had given other commercial operators 30-year leases. (p. 31). Respondent Airport Authority’s argument that it could not provide Complainant a 30-year lease term because its own lease with the County would expire in 29 years and five months did not justify the lease terms offered (first a two-year lease term, then a ten-year lease term). (p. 31).|Exclusive Rights (Grant Assurance 23):|Respondent constructively granted an exclusive right in violation of Grant Assurance 23 by providing long-term lease opportunities for one set of commercial operators constructing hangars while denying the same to Complainant, another commercial operator desiring to invest in hangar construction. (p. 33).|Standing:|Complainant had standing to file a Part 16 complaint, because Complainant was “directly and substantially affected” by the alleged denial of reasonable access to a public-use airport for conducting aeronautical activities in service to the public. (p. 34).|Airport Revenues (Grant Assurance 25):|If a net surplus revenue was generated from the Authority’s lease with the County that was not used for airport purposes, Respondents may have violated the FAA’s Policy and Procedures Concerning the Use of Airport Revenue and Grant Assurance 25. (p. 37).|Airport Layout Plan (Grant Assurance 29):|If the Airport were to pursue a leasing policy that encouraged non-aeronautical users to use the Airport to reduce the amount of Airport property available to aeronautical users, Respondents would possibly be in violation of Grant Assurance 29. (pp. 37-38).
Index Terms:
Economic Nondiscrimination (Grant Assurance 22)|Exclusive Rights (Grant Assurance 23)|Unjust economic discrimination|Licenses/Permits|Standing|Airport Revenues (Grant Assurance 25)|Airport Layout Plan (Grant Assurance 29)|Non-aeronautical use|Revenue diversion|Sightseeing tours|Land lease|Airport purposes