FAA Docket No. 16-06-04 - Airports Council International

U.S. Department
of Transportation
Office of Airport Safety and
Standards
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Federal Aviation
Administration
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800 IndependenceAve., S.W.
Washington, D.C.20591
&E %Lii~ae?~7Schul
te
127 East Third Street
Covington, KY 4101 1
Mr. Stephen Fagel
Assistant City Solicitor
801 Plum Street, Room 214
Cincinnati, OH 45202
Dear Messieurs Schulte and Fagel:
FAA Docket No. 16-06-04
Enclosed is a copy of the Director’s Determination in the above-captioned formal complaint
under 14 CFR Part 16.
Upon consideration of the evidence and arguments presented by the parties in the record, the
Director concludes that the actions by the City concerning Complainant’s request to operate
scheduled 14 CFR Part 121 commuter service with aircraft seating less than 30 passengers
are consistent with the City’s Federal obligations, namely Grant Assurance 22,49 USC
47107(a), which requires the City to make the Airport available to all types, kinds, and
classes of aeronautical activity on reasonable terms, and without unjust discrimination.
Accordingly, the above-referenced matter is dismissed, all motions and requests not
expressly granted are denied.
Sincerely,
David L. Bennett
Director, Office of Airport Safety
and Standards
Enclosure
FAA Docket 16-06-04
FlaminEo Exmess, Inc. v. Citv of Cincinnati
UNITED STATES DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
WASHINGTON, DC
Flamingo Express, Inc
Complainant,
V.
City of Cincinnati, Ohio
Respondent.
DIRECTOR’S DETERMINATION
I.
INTRODUCTION
This matter is before the Federal Aviation Administration (FAA) based on the Complaint filed under
14 Code of Federal Regulations (14 CFR) Part 16, by Flamingo Express, Inc. (Flamingo/Complainant).The
Complaint was filed against the City of Cincinnati, Ohio (City/Airport Sponsor), which owns and operates the
Cincinnati Municipal Airport-Lunken Field (LunkedLUWAirport) in Cincinnati, Ohio.’
In this Part 16, Complainant argues that the City did not approve Complainant’s request to operate scheduled 14
CFR Part 121 commuter air service with aircraft seating less than 30 passengers, by limiting scheduled
commuter air service to aircraft with not more than 9 seats, by requiring aircraft liability insurance in the amount
of $20 million per occurrence, and by imposing a monthly $200 operating fee.2 As a result, Complainant alleges
the City is in violation of 49 USC 47107(a). 49 USC 47107(a) requires the City to make the Airport available to
all types, kinds, and classes of aeronautical activity on reasonable terms, and without unjust discrimination
(Grant Assurance 22).3 The City denies all allegations that it violated its Federal obligations4and requests the
dismissal of the Complaint.’
Under the particular circumstances existing at the Airport and the evidence of record, as discussed below, the
Director concludes that:
o The actions by the City concerning Complainant’s request to operate scheduled 14 CFR Part 121
commuter service with aircraft seating less than 30 passengers are consistent with Grant Assurance 22, and
49 USC 47107(a), which requires the City to make the Airport availabIe to all types, kinds, and classes of
aeronautical activity on reasonable terms, and without unjust discrimination.
The FAA’s decision in this matter is based on the applicable Federal law and FAA policy, and review of the
pleadings and supporting documentation submitted by all the parties, which comprise the administrative record
reflected in the attached FAA Exhibit 1.
See FAA Exhibit 1, Item 3. p. (pages) 1-2.
* See FAA Exhibit 1, Item 3, p. 2-5. and Exhibit D, Item 6, letter from Mr. Michael J. Schulte to Mr. Mr. Stephen J. Fagel, Dated
February 1 1,2005.
See FAA Exhibit 1. Item 3, p. 2,4. Complainant argues that the City’s failure to accommodate its proposed activity “wrongfully
discriminates against Flamingo’s ability to conduct economic activity at Lunken and is in clear violation of its contractual and statutory
obligations.” FAA Exhibit 1, Item 6, p. 7-8.
See FAA Exhlbit 1, Item 5, p. 5 . The City denies the allegations that its actions denied Complainant an opportunity to engage in
reasonable economic activity at the Airport.
See FAA Exhibit 1, Item 5, p. 11 and FAA Exhibit I , Item 7, p. 5.
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FAA Docket 16-06-04
11.
Flamingo
- Express, Inc. v. Citv of Cincinnati
THE COMPLAINANT
The Complainant in this proceeding is Flamingo Express, Inc., located at the Lunken Airport, Cincinnati!
Although Flamingo Express, Inc. does not currently operate at Lunken as an independent company: it is owned
by the same principals (Ms. Sharon McGee and Mr. David MacDonald)’ who own and operate a related entity
named Flamingo Air, Inc., located at the Airport. Flamingo Air, Inc., which could be referred to as an affiliate
of Complainant Flamingo Express, was incorporated in 1994,9and currently conducts chartered and
unscheduled air services under a 14 CFR Part 135 certificate using a single-engine Piper Cherokee Six (PA-32300) aircraft registered as N6868D.l’ The current Part 135 certification information on file with the FAA’’
provides the following information for Flamingo Air, Inc.:
Airline internet site
i
ON-DEMAND AIRPLANE (PassengerslCargo)
Flamingo Air, Inc. also possesses permits to operate at Lunken providing flight instruction and airplane rides.13
Since Flamingo Air, Inc. and Hamingo Express, Inc. are two related companies, based on the pleadings and the
information in the record, Flamingo Express, Inc. is considered to be the proposed Part 121 element of Flamingo
Air. Therefore, for the purposes of this Complaint, both are referred to conjointly as Flamingo or C~mplainant.’~
111. THE AIRPORT AND ITS FEDERAL OBLIGATIONS
The City of Cincinnati is the owner and operator of the Lunken Airport.” The Airport occupies 1,025 acres of
land, and is included in the National Plan of Integrated Airports Systems (NPIAS). It is a reliever airport and
6FAA Exhibit 1, Item 3, p.1.
The City reports that Complainant Flamingo Express does not currently operate at Lunken Airport, though Flamingo Air, Inc. is a
month-to-month tenant based at Lunken Airport occupying the same address listed by Complainant. Additionally, since approximately
1994 Flamingo Air has possessed Permits to Operate at Lunken Airport and currently holds one for Charter Service, Flight instruction
and Airplane Rides. FAA Exhibit I, Item 5, p.1.
FAA Exhibit 1, Item 5, p. 2.
FAA Exhibit 1, Item 3, Exhibit B.
l o Data from Cincinnati FSDO, Mr. Mark Holtgrave, FAA, telephone conversation, Sept 11,2006. See
http://registry.faa.gov/airci-aftinquiry/nnumsql.asp’?NNumbertxt=6868D
for aircraft registry data and http://www.flamingoair.neV for
additional information on Complainant’s operations. Also see Advisory Circular AC-135-13P FAA Certificated Air Carrier Directory,
8/22/2006, p. 62 for additional information on Flamingo.
I ’ http://av-info.faa.gov/detail.~p?DSGN~CODE=F2MA&OPER~FAR=l35&OPER~NAME=FLAMINGO+AlR+INC
Federal Aviation Administration, Flight Standards District Offce, 4020 Airport Road, (Lnwd.) Cincinnati, Ohio 45226, Telephone:
(513) 977-6400.
l 3 FAA Exhibit 1, Item 5, p. 1, 3.
l4 To illustrate this, the Director points to the fact that correspondence between the City and Complainant shows that in several instances,
“Flamingo Express” letters to the City were issued under the letterhead of “Flamingo Air.” See FAA Exhibit 1, Item 3, Exhibit D, letter
dated June 2 1, October 7 and October 18,2004
l5 FAA Exhibit I , Item 5, p. 1.
*
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Flaminpo Express, Inc. v. Citv of Cincinnati
FAA Docket 16-06-04
serves the aviation needs in the tri-state area by providing needed runway capacity and landside support
facilities relief to the CincinnatilNorthern Kentucky International Airport (CVG). The Airport is the base for
more than 270 aircraft and serves a wide spectrum of aeronautical activities totaling 130,000 annual operations.
LUK’s airfield infrastructure is composed of three runways, the longest of which is 6,101 feet in length.16 The
Airport is equipped with a Category I Instrument Landing System (CAT I ILS) and also has a fulltime Air
Traffic Control Tower (ATCT).
Prior to June 2004, the Airport was classified as a Limited 14 CFR Part 139 category airport. This level of
certification allowed it to serve charter or unscheduled operations and scheduled operations of 30 seats or less.”
Since December 2,2005, the Airport has held a Class IV 14 CFR Part 139 certificate.18
FAA records indicate that the planning and development of LUK has been financed, in part, with funds provided
by the FAA under the Airport Improvement Program (AIP) and, between 1983 and 2005, the Airport received
more than $9.53 million in federal airport development assistance in AIP grants.”
IV.
ISSUES UNDER INVESTIGATION
The issue under investigation before the FAA in this complaint is:
Whether the actions by the City concerning Complainant’s request to operate scheduled 14 CFR Part 121
commuter service with aircraft seating less than 30 passengers are consistent with Grant Assurance 22, and
49 USC 47107(a), which requires the City to make the Airport available to all types, kinds, and classes of
aeronautical activity on reasonable terms, and without unjust discrimination.
V.
BACKGROUND
On April 21,2004, Complainant submitted a permit application to operate scheduled 14 CFR Part 121
commuter air service, with aircraft seating less than 30 passengers. The City recorded the submittal and the
associated $100.00 permit fee. The Airport manager approved Complainant’s permit application on April 2 1,
2004, while the City’s Risk Manager did so on May 19,2004. On August 10,2004, Complainant submitted a
preliminary proposal in the form of an operating agreement.20A public hearing on Complainant’s permit
application was held on August 24,2004:’
In October 2004, Complainant voiced concerns regarding the City’s failure to move forward with its permit
application and proposed operating agreement.22On January 11,2005, Complainant wrote to the City
complaining about the City’s inaction23and on January 19,2005, the City provided Complainant with a
proposed “Air Route Operating Agreement” (Operating Agreement) in conjunction with Complainant’s Permit
application. The Operating Agreement proposed by the City permitted, among others, commuter operations of
nine seats or less, required a $200 per month fee for up to 40 flights per month along with a $5 surcharge for
each flight thereafter, and required liability coverage in the minimum amount of $20 million per ~ c c u r r e n c e . ~ ~
l 6 Airport Master Plan Update (DRAFT), Cincinnati Municipal Airport- tiinken Field, November 24,2004, 1-7. This document is
located at the FAA’s Detroit Airports District Office (ADO), in Romulus, Michigan.
17
FAA Exhibit 1, Item 3, p. 2; FAA Exhibit 1, hem 5, p. 1,3.
l8 http://www.faa.gov/aimorts airtraffic/airports/airportsafetvlpart139 cert/media/partl39 cert status table.xls and FAA Exhibit 1,
Item 5, p. 1 Although the City states in its Answer that “it is awaiting certification as a Class 1V Airport under the 2004 revision of Part
139,” current FAA records indicate that the Airport holds that classification today. See FAA Exhibit I , Item 15.
l9 FAA Exhibit 1, Item 9.
*‘FAA Exhibit 1, Item 3, Exhibit D. letter from Ms. Sharon McGee to Mayor Charlie Luken, dated October 18,2004, and see FAA
Exhibit 1, Item 3, Exhibit E for a copy of the proposed operating agreement.
FAA Exhibit I, Item 3, p. 2-3 and FAA Exhibit 1, Item 5, p. 4.
22 FAA Exhibit I. Item 3, Exhibit D, letter from Mr. David MacDonald to Councilman James Tarbell, dated October 7,2004 and FAA
Exhibit 1, Item 3, Exhibit D, letter from Ms. Sharon McGee to Mayor Charlie Luken, dated October 18, 2004.
23 FAA Exhibit 1, Item 3, Exhibit D, letter from Mr. Michael J. Schulte to Ms. Eileen Enabnit, dated January 11, 2005.
24 FAA Exhibit 1, Item 3, Exhibit D, letter from Mr. Stephen J. Fagel to Mr. David MacDonald, dated January 19,2005. This exhibit
includes the proposed Operating Agreement as Exhibit F.
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Flaminpo Express, Inc. v. Citv of Cincinnati
FAA Docket 16-06-04
On February 11,2005, Complainant replied and noted that City’s proposal was unreasonable in part because it
did not allow Complainant to conduct scheduled service with aircraft of greater than 9 but less than 30 seats, and
required a high $20 million in liability insurance. Complainant also opposed the $200 monthly fee and asked
for the Operating Agreement to be revised.25 On February 18,2005, the City stated that it did not use the
Operating Agreement to delay consideration and argued that the $20 million liability requirement as well as the
$200 per month fee were justified. Moreover, the City stated that the agreement it had under consideration was
for the use of aircraft with nine seats or less and not with larger aircraft up to less than 30 seats.26The City’s
response included justifications of the City’s position and a request for Complainant to submit additional
information justifying its stance.”
On March 10,2005, Complainant reiterated its request for air carrier service with less than 30 seats and argued
that it couldn’t attain the City’s insurance requirement of $20 million. Complainant argued that its current
insurance coverage of $1 million is consistent with industry standards and continued to oppose the $200
monthly fee.28 On March 24,2005, the City reiterated its position and noted that the insurance requirements and
$200 monthly fee were reasonable and that Complainant’s application was for 9 seats, not more, because
Complainant only had a 9-seat aircraft at the time. Finally, the City added that “sadly, it doesn’t appear we are
making any progress as these are the exact same 3 issues you raised in your previous correspondence” and if
Complainant is “not willing to move on these issues” it should “consider withdrawing their application.’”’
On July 11,2005, Complainant stated that the City had taken no serious action regarding Cornplainant’s
application and reiterated its position that the City’s insurance requirement cannot be written for the type of
operation Complainant was proposing. Once again, Complainant argued that the request for air carrier service
was to permit flights of up to less than 30 seats3’ On July 24, 2005, the City responded that Complainant had
not responded to the City’s March 24,2005, letter and advised Complainant to withdraw its application if the
matters in that letter were not addre~sed.~’
On March 10,2006, the FAA received Complainant’s formal Complaint.32On March 24,2006, the FAA
dismissed the Complaint without prejudice as incomplete under 14 CFR Part 16.27.33On May 31,2006,
Complainant re-filed the Complaint34and on June 14,2006, the FAA issued a Notice docketing it as FAA
Docket No. 16-06-04.35 In its Complaint, Complainant contends that since the City has failed to approve
Complainant’s April 2004 application for a permit to operate scheduled 14 CFR Part 121 commuter service with
aircraft seating less than 30 passengers, the City was violating its Federal obligation^.^^
On July 3,2006, the City filed its Answer to the Complaint denying Complainant’s allegations and requesting
that the FAA dismiss Flamingo’s Part 16 Complaint.37On July 15,2006 Complainant filed its Reply to the
City’s Answer while on July 24,2006, the City filed its Reb~ttal.~’
On December 28,2006, the FAA issued a
Notice of Extension of Time.39
FAA Exhibit I , Item 3, Exhibit D, Item 6, letter from Mr. Michael I. Schulte to Mr. Stephen 1. Fagel, dated February 11,2005.
FAA Exhibit 1, Item 3, Exhibit D, Item 7, letter from Mr. Stephen J. Fagel to Mr. Michael 1. Schulte to. dated February 18,2005.
FAA Exhibit 1, ltem 5, p. 9.
28 FAA Exhibit 1, Item 5, Exhibit 1.
29 FAA Exhibit I , Item 5. Exhibit J .
FAA Exhibit 1, Item 5, Exhibit K. The City states that “after transmitting the proposed operating agreement to Complainant on January
19,2005, Complainant‘sattorney responded with a letter dated February 11,2005 accusing City of unreasonably denying Complainant’s
rmit and stating its objections to certain provisions in the operating agreement.”FAA Exhibit 1 , Item 5, p. 9.
‘FAA Exhibit 1, Item 5, Exhibit L.
j2 FAA Exhibit 1, Item 1 .
33 FAA Exhibit I, Item 2.
34 FAA Exhibit 1, Item 3.
35 FAA Exhibit 1, Item 4.
)‘See FAA Exhibit 1 , Item 3, p. 2.
37
See FAA Exhibit 1, Item 5 , p. 5, 1 1 .
38 FAA Exhibit 1, Item 6 and 7.
39 FAA Exhibit 1. ltem 14.
26
27
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FAA Docket 16-06-04
VI.
A.
Flaminpo Express, Inc. v. Citv of Cincinnati
APPLICABLE LAW AND POLICY
The Airport Improvement Program and the Airport Sponsor Assurances
Title 49 USC 9 47101, et seq., provides for Federal airport financial assistance for the development of publicuse airports under the Airport Improvement Program (AIP) established by the Airport and Airway Improvement
Act ( M I A ) , as amended. Section 47107, et seq., sets forth assurances to which an airport sponsor agrees as a
condition of receiving Federal financial assistance. Upon acceptance of an AIP grant, the assurances become a
binding obligation between the airport sponsor and the Federal government. The FAA has a statutory mandate
to ensure that airport owners comply with these sponsor assurances.m FAA Order 5190.6A, Airport Compliance
Requirements, issued on October 1, 1989, provides the policies and procedures to be followed by the FAA in
carrying out its legislatively-mandated functions related to federally-obligated airport owners’ compliance with
their sponsor assurances.
B.
Public Use of the Airport - Grant Assurance 22
The owner of any airport developed with Federal grant assistance is required to operate the airport for the use
and benefit of the public and to make it available to all types, kinds, and classes of aeronautical activity on
reasonable terms, and without unjust discrimination. Grant Assurance 22, Economic Nondiscrimination, of the
prescribed sponsor assurances implements the provisions of 49 USC 8 47107(a)( 1) through (6),and requires, in
pertinent part, that the sponsor of a federally-obligated airport
...will make its airport available as an airport for public use on reasonable terms, and without unjust
discrimination, to all types, kinds, and classes of aeronautical activities, including commercial
aeronautical activities offering services to the public at the airport. [Assurance 22(a)]
... may establish such reasonable, and not unjustly discriminatory, conditions to be met by all users of
the airport as may be necessary for the safe and efficient operation of the airport. [Assurance 22(h)]
FAA Order 5 190.6A describes in detail the responsibilities assumed by the owners of public-use airports
developed with Federal as~istance.~’
C.
Federal Preemption of Authority Over Air Carrier Service
49 USC 5 41713 prohibits a state or local government from regulating the rates, routes or services of an air
carrier authorized to provide air transportation. 49 USC 5 41713(b)(l) provides, in relevant part, that “a State,
political subdivision of a State, or political authority of at least 2 States may not enact or enforce a law,
regulation, or other provision having the force and effect of law related to a price, route, or service of an air
carrier that may provide air transportation under this subpart.’442
However, 49 USC 417 13(b)(3) establishes an exception to this general prohibition by providing, in pertinent
part, that “this subsection does not limit a State, political subdivision of a State, or political authority of at least 2
States that owns or operates an airport served by an air carrier holding a certificate issued by the Secretary of
Transportation from carrying out its proprietary powers and rights.” This provision preserves the proprietor’s
rights to conduct the business of an airport, but it does not create any new powers for the proprietors. The
proprietary rights are still subject, in the case of a grant-funded airport, to section 308 of the Federal Aviation
Act of 1958,49 USC 40103, and the grant assurances. The FAA has found that a ban on scheduled service can
See, e.g.. 49 USC 0 40101,40103(e), 401 13,40114,46101.46104,46105,46106,46110,47104,47105(d), 47106(d), 47106(e).
47107,47108,47111(d),47122.
“ See Order, Sec. 4-13(a).
See Director’s Determination, FAA Docket 16-98-05, Centennial Express Airlines, Golden Eagle Charters d/b/a Centennial Express
Airlines v. Arapahoe County Public A i m r t Authority, p. 9. , affirmed AraDahoe County Public A i m r t Authority v. FAA, 242 F. 3d
1213 (10th Cir, 2001).
‘*
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Flaminpo Express. Inc. v. Citv of Cincinnati
be tantamount to the regulation of rates, routes, and service within the meaning of 49 USC 0 41713, and that the
airport sponsor’s actions to restrict that service may fall outside the scope of the proprietor’s exemption.43
D.
Background on 14 CFR Part 139 and Related Policies
Under Title 49, USC 8 44706, the FAA has the statutory authority to issue Airport Operating Certificates (AOC)
to airports serving passengercarrying operations of certain air carriers and establish minimum safety standards
for the operation of those airports. The FAA uses this authority to issue requirements for the certification and
operation of certain land airports through 14 CFR Part 139 (Part 139). Part 139 requires the FAA to issue AOCs
to airports that (1) serve scheduled and unscheduled air carrier aircraft with more than 30 seats; (2) serve
scheduled air carrier operations in aircraft with more than 9 seats but less than 3 1 seats; and (3) those the FAA
Administrator requires to have an AOC. To obtain an AOC, the airport operator must agree to certain
operational and safety standards and provide for such things as firefighting and rescue equipment. These
requirements vary depending on the size of the airport and the type of flights available.
In 2004, FAA issued a final rule that revised Part 139 and established certification requirements for airports
serving scheduled air carrier operations in aircraft designed for more than nine passenger seats but less than 31
passenger seats. This final rule went into effect on June 9, 2004.44The last major revision to Part 139 had taken
place in 1988 and provided for two categories of AOC: Unlimited and Limited.45The revised Part 139 changed
the airport certification process to incorporate all airports covered by the statute, including those serving
scheduled operations of smaller air carrier aircraft and those airports that serve a mixture of air carrier
operations. Under this changed certification process, airports are reclassified into four new classes, based on the
type of air carrier operations served. The following table indicates the types of air carrier operations that each
Part 139 airport class can serve:
Under the new rules, airports that held a Limited AOC could become either Class II or Class IV airports. Class
IV airports are those airports that serve only unscheduled operations of large air carrier aircraft. Although at
Class IV airports air carrier operations are infrequent, and in the past the FAA only required them to comply
with some Part 139 requirements, today new operational requirements have been added along with
modifications to the airport certification process and other administrative changes.
As part of the implementation of the new rules, in June 2004 the FAA issued program policy and guidance
(Policy 75) entitled Designation of Class of Cert9cate under the Revised 14 CFR Part 139.46 This policy
provided general guidance to address several of the issues that resulted from changes in Part 139. In its policy,
the FAA noted that the operator of a certificated airport that has received Federal assistance (AIP grants or
property conveyances) also has the independent obligation to provide reasonable, not unjustly discriminatory
access to the airport. This is because the class of AOC held by an airport can affect an operator’s access to an
See Director’s Determination, FAA Docket 16-98-05, Centennial Exmess Airlines. Golden Eagle Charters d/b/a centennial Express
Airlines v. Arapahoe County Public Airport Authority, p.28, affirmed Arapahoe County Public A i m r t Authority v. FAA, 242 F. 3d 1213
(10th Cir, 2001).
44
See 69 F. R. 6424 (February 10,2004) or 24069 (May 3,2004).
45 The 1988 rule provided for two categories of airport operating certificate (AOC): unlimited and limited. The new regulation has four
classes of AOC. The purpose of providing four separate classes of A X , as with the two types of AOC under the prior rule, is to apply
the right level of safety regulation for the kind of aircraft operations at each airport and avoid imposing more stringent requirements than
are actually required.
46 FAA Exhibit 1, Item 16.
43
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FAA Docket 16-06-04
airport, in that commercial aircraft operators can operate only at airports with a certain level of AOC. In other
words, the FAA would generally expect an airport operator to meet the requirements of the AOC that
corresponds to the kinds of commercial operations at the airport at the time it applies for the new certificate, in
order to meet the obligation for reasonable, not unjustly discriminatory access.
There are limitations to an airport’s ability to downgrade its AOC classification without affecting its obligation
to provide reasonable access. An airport that had a Limited AOC, and air carrier service, could surrender its
AOC at any time under 14 CFR 5 139.109. However, if that airport has accepted Federal assistance,
surrendering the AOC could conflict with the Federal requirements for reasonable access if current or planned
air carrier operations must be cancelled as a result. If an airport had a Limited AOC under the previous Part 139
requirements and had scheduled service with 10-30 seat aircraft, a Class I1 AOC would be required after the new
rules came into effect in order to permit current operations to continue. In such a case, the airport operator
cannot elect to be a Class IV Airport under the new Part 139, because that would effectively require the
commuter service to cease.47
The FAA generally treats planned service the same as existing service, where the planned service is reasonably
expected to operate. If there was no scheduled service at a Limited-AOC airport, but an air carrier has notified
the airport that it intends to begin scheduled service, the airport cannot elect not to meet the requirements for the
needed AOC class in order to prevent the air carrier from beginning scheduled service. The FAA would consider
an operator that was prevented from starting service to be “directly and substantially affected” by the airport’s
actions not to seek the AOC classification applicable to the existing or planned service. In this case, FAA would
view the selection of a Class IV certificate as a potential violation of the airport’s Federal obligations.48
E.
The FAA Airport Compliance Program
The FAA ensures that airport owners comply with their Federal grant obligations through the FAA’s Airport
Compliance Program. The program is based on the obligations that an airport owner accepts when receiving
federal grant funds or the transfer of Federal property for airport purposes. These obligations are incorporated in
grant agreements and instruments of conveyance in order to protect the public’s interest in civil aviation and to
ensure compliance with federal laws.
The FAA Airport Compliance Program is designed to ensure the availability of a national system of safe and
properly maintained public-use airports operated in a manner consistent with the airport owners’ federal
obligations and the public’s investment in civil aviation. The Airport Compliance Program does not control or
direct the operation of airports; it monitors the administration of the vaIuable rights pledged by airport sponsors
to the United States in exchange for monetary grants and donations of federal property to ensure that the public
interest is being served. In addressing allegations of noncompliance, the FAA will make a determination as to
whether an airport sponsor is currently in compliance with the applicable federal obligations. FAA will make a
judgment of whether the airport sponsor is reasonably meeting the federal obligations. FAA may also take into
consideration any action or program the sponsor has taken or implemented, or proposed action or program the
sponsor intends to take, which in FAA’s judgment is adequate to reasonably carry out the obligations under the
grant assurance^.^^
VII.
ANALYSIS AND DISCUSSION
Before addressing in detail whether the actions by the City concerning Complainant’s request to operate
scheduled 14 CFR Part 121 commuter service with aircraft seating less than 30 passengers are consistent with
Note that 49 USC 9 44706(f) does not apply to changes in class of AOC by a certificated airport. Since the airport already had an
AOC (even if Limited), i t would be required to continue to meet appropriate certification requirements for the kinds of operations at the
airport and convert its AOC lo one of the new Part 139 classes.
4s See Part 139 Certification FAQ http://www.faa.gov/airports_aIrtraffic/airports/airport_safety/part139_cert/‘?pl =faq#q I
49 See FAA Order 5190.6A, Sec. 5-6. Thus, the FAA can take into consideration reasonable corrective actions by the airport sponsor as
measures to resolve alleged or potential violations of applicable federal obligations, and as measures that could prevent recurrence of
noncompliance and ensure compliance in the future.
47
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Flamingo Express. Inc. v. Citv of Cincinnati
the City’s Federal obligations, the Director discusses four preliminary issues. These preliminary issues are (A)
whether Complainant showed a violation of 49 USC 947107, (B) whether informal resolution took place, (C)
whether there was a claim for which relief can be granted, and (D) allegations of violation of local rules and
regulations.
A. Violation of 49 USC $47107
The City argues that Complainant has not met its obligation under 14 CFR §16.23(b) and because Complaint
does not allege or show a violation of 49 USC §47107(a)(l), dismissal is warranted by both 16 CFR §$16.25(b)
and 16.27. The City asserts that contrary to 14 CFR §16.23(b), requiring a Complainant to state the specific
provisions of the statutes, regulations, and agreements that were violated by the City, “Complainant makes
perfunctory reference to violations of various statutes” but “nowhere” does it state which specific provision was
violated?’ The City further argues that “while Complainant has alleged City has not been reasonable in its
dealings on this matter, nowhere does Complainant allege much less offer evidence that such actions constitute
unjust discrimination” and that “Complainant cites no City dealings with other commercial operators showing
different treatment or alleges or submits evidence of patterns of discrimination at Lunken Airport.” The City
argues that its actions are “perfectly reasonable, it is not in and of itself unjust discrimination, a necessary
element for finding a violation of 49 USC §47107(a)(I) and relevant portions of 14 CFR Part 139.”5’
In addition, although the City admits that it must make Lunken Airport available “for public use, including
commercial activities, on reasonable grounds and without unjust discrimination pursuant to federal codes and
regulations” as alleged by Complainant, the City argues that “Complainant did not supply a copy of said
contract.” 52 The City argues that although Complainant cites the “July 2001 Contract,” “Complainant did not
attach a copy of said contract” and “did not cite the specific language of said section and did not state how it
believes the City violated such section.” Finally, the City takes the position that “Complainant cannot even state
whether such contract was in effect during the time of the alleged ~ i o l a t i o n . ” ~ ~
Complainant responds that the City’s “arguments that Flamingo has failed to show any contractual or statutory
violations.. .” are “without merit.”54The Director agrees. With regards to $ 16.23(b) Complaints, Answers,
Replies, Rebuttals, and Other Documents,” the record shows that Complainant did state the name and address of
each person who is the subject of the Complaint and the specific provisions of each Act that Complainant
believes were violated [ 16.23 (b) ( l)].56Complainant specifically cited 49 USC $47107, the Federal statute
governing the issues at hand, and argues that the City’s action “violates the Federal Aviation Act including the
Airport Development Act, the current contract between the City and FAA for the City’s operation of
Lunken...”57 Complainant also served the Complaint in accordance with $ 16.15, along with all documents then
FAA Exhibit 1, Item 5, p. 7-8.
Exhibit 1, Item 5, p. 8. The City adds that “Complainant itself currently possesses 2 separate City licenses for 5 different
activities, the most recent of which was issued by the City in November 2005” and that “in almost every instance the City has gone out of
its way to accommodate Complainant.”
52 FAA Exhibit 1, ltem 5, p. 3.
53 FAA Exhibit I, Item 5, p. 7. The City argues that assuming “that the Complainant’s citation of ”Section 3(C)(22)(a), July 2001
Contract” is in fact the Grant Assurance mandated by 49 USC 547107(a)f1), Complainant still has not met its obligation under 14 CFR
5 16.23(b).”
54 FAA Exhibit 1, Item 6, p. 2.
55 $16.23 (b) states that Complaints filed under this part shall50
51 FAA
( 1 ) State the name and address of each person who is the subject of the complaint and, with respect to each person. the specific
provisions of each Act that the complainant believes were violated;
(2) Be served, in accordance with 516.15, along with all documents then available in the exercise of reasonable diligence, offered in
support of the complaint, upon all persons named in the complaint as persons responsible for the alleged action(s) or omission(s)
upon which the complaint is based;
(3) Provide a concise but complete statement of the facts relied upon to substantiate each allegation; and
(4) Describe how the complainant was directly and substantially affected by the things done or omitted to be done by the
respondents.
56
See FAA Exhibit I , ltem 3, p. I-2,4.
’’FAA Exhibit 1, ltem 3, p. 2-4.
Page 8 of 31
FAA Docket 16-06-04
FlaminPo Express, Inc. v. Citv of Cincinnati
available in the exercise of reasonable diligence, offered in support of the Complaint [ 16.23 (b) (2)]?8
Complainant provided a concise and complete statement of the facts relied upon to substantiate each allegation
[ 16.23 (b) (3)] and described how it was directly and substantially affected by the things done or omitted to be
done by the City [16.23 (b) (4)].
The City’s arguments that Complainant has not properly alleged unjust discrimination or that its actions are
“perfectly reasonable” and not in violation of 49 USC $47107 are also rejected.59 Complainant has reasonably
alleged that the City has violated 49 USC $47107 and has done so in a manner consistent with 14 CFR Part 16.
Finally, the City’s argument that Complainant referred to the applicabIe Federal obligations as “contract” or
failed to provide a copy of said document is is not a basis for complaint dismissal. Complaint clearly identifies
LUK as an obligated airport.60
B. Informal Resolution
The City argues that “Complainant neither initiated nor engaged in any efforts, good faith or otherwise to
resolve this di~pute”~’
and that Complainant “has not complied with 14 C.F.R $16.21.742The City asserts that
“Complainant has made no efforts, much less reasonable good faith efforts, to resolve this issue” and that “while
Paragraph 16 of the Complaint contains a certification [of informal resolution] there is not even the barest
mention of its efforts to obtain informal resolution” and that “all the Complainant ever did was make threats and
demands. Making threats and demands is not akin to dispute re~olution.”~~
The City also denies that there is no
prospect of timely resolution because Complainant has utterly failed to make any reasonable efforts to resolve
this issue. Finally, the City argues that because of this, “dismissal is warranted by 16 CFR $0 16.25(b) and
16.27.”65
Complainant disagrees with the City’s arguments that Complainant “failed to engage in a good-faith attempt to
resolve this matter prior to filing this action.. - ”and asserts that it “ignores the facts of this case as documented
in correspondence.. .”% The Director agrees with Complainant. First, in its Complaint, Complainant certifies
“that substantial and reasonable good faith efforts to resolve the issue have been made and that there is no
reasonable prospect for a timely re~olution.”~~
This certification is consistent with the informal resolution
requirements under 14 CFR Part 16.21, Pre-Complaint Resolution. There is no information in the record to
indicate that certification mentioned above is invalid.
Second, the record shows that there were extensive communications between Complainant and the City and a
record of these communications is attached to both the Complaint and the City’s Answer. These
communications include several meetings, letters, and exchanges over many months from June 2004 through
July 2005,69and includes draft documents of proposed operations, agreements, and permits. In addition, both
sides made arguments and counter-arguments discussing many of the issues under contention here.70
See FAA Exhibit 1, Item 3, p. 5 and Exhibits A-H.
FAA Exhibit 1, Item 5, p. 8
6o FAA Exhibit 1, Item 3, p. 2. Moreover, the City has a copy of its Federal obligations attached to each FAA grant it has received and
the FAA specifically confirms in Section I11 of this decision that the airport is federally obligated.
“ FAA Exhibit 1, Item 5, p. 10-11.
FAA Exhibit 1, Item 5, p. 6, 11. The City adds that Complainant’s certification “is not even the barest mention of its efforts to obtain
informal resolution” and that “all the Complainant ever did was make threats and demands.”
63 FAA Exhibit I , Item 5, p. 10-11.
a FAA Exhibit 1, Item 5, p. 6.9. Moreover, the City contends that “neither Complainant nor Complainant’s attorney responded to City’s
request, submitted any additional information, proposed negotiating sessions, alternative dispute resolution or even responded at all to the
City’s last two letters” and that “in fact Complainant has not communicated with City since July 11,2005.”
65 FAA Exhibit 1, Item 5, p. 10-11. The City states “that such a statement is not sufficient, especially when the evidence so strongly
shows Complainant made no such efforts to engage in any type of process.”FAA Exhibit I , Item 7, p. 4.
66 FAA Exhibit 1, Item 6, p. 2. 6.
67 FAA Exhibit 1, ltem 3, p. 4-5.
See FAA Exhibit 1. Item 5, p. 9-10.
69 FAA Exhibit I, ltem 3, Exhibit D.
’O See correspondence contained in FAA Exhibit 1 , Item 3, Exhibit D and City’s statements in FAA Exhibit I , ltem 5, p. 9. The record
contains significant information indicating that over several months, both parties attempted to negotiate an operating agreement
unsuccessfully.
59
‘’
Page 9 of 31
FAA Docket 16-06-04
Flamingo Express. Inc. v. City of Cincinnati
Moreover, all of these communications predate the Complaint. Although the City argues that during these
communications Complainant’s posture was based on “threats and demands” and that this is not “akin to dispute
re~olution,”~~
the fact remains that these documents and exchanges indicate that the parties had many contacts
centering on their respective positions and this constitutes reasonable attempts by both sides to informally
resolve their differences.
In any event, the record shows that the City admits some informal resolution when it states that it “made more of
an effort to resolve this than Complainant did,” implying some level of informal resolution efforts by
C ~ m p l a i n a n tMoreover,
.~~
as the record indicates, the City stated on March 24,2005, and after several months
of correspondence between Complainant and the City that “sadly, it doesn’t appear we are making any progress
as these are the exact same 3 issues you raised in your previous correspondence” and if Complainant is “not
willing to move on these issues” it should “consider withdrawing their ap~lication.”~~
These statements by the
City indicate that the City thought that continuing discussions with Complainant would not bring results.74
Finally, if FAA had doubts regarding compliance with 14 CFR 0 16.21(b), it would not have docketed this
Complaint.
Based on the above, the Director finds that Complainant made substantial efforts at informal resolution, that the
Complaint was not premature, and that overall the Complaint, as filed and docketed, met the informal resolution
requirements under 14 CFR Part 16.21 Pre-Complaint Resolution.
C. Claim for Which Relief Can Be Granted
As part of its arguments, the City claims that “Complainant fails to state a claim upon which relief can be
granted.” 75 The Director disagrees. Complainant’s allegations that the City failed to approve Complainant’s
application for a permit to operate scheduled 14 CFR Part 121 commuter service with aircraft seating less than
30 passengers, in violation of 49 USC 47107(a), states a valid claim under Part 16. This claim is related to the
City’s Federal obligations to make the Airport available on reasonable terms and without unjust discrimination
(Grant Assurance 22) as Complainant specifically argues that “the City must make the airport available for
public use on reasonable terms and without unjust discrimination to all types and classes of aeronautic activities,
including commercial aeronautic activities.”
Complainant specifically argues that “it is the application” to operate scheduled 14 CFR Part 121 commuter
service with aircraft seating less than 30 passengers which forms the basis for the argument that Complainant
“has been wrongfully denied by Cincinnati because the City seeks to limit allowing any aeronautic commercial
activity.. ..,776
D. Violation of Local Rules and Regulations
As part of its Complaint, Complainant maintains that the City’s refusal to process and approve the permit filed
by Flamingo Express “violates,” among others, “the City of Cincinnati Municipal Code, and the Cincinnati
Municipal Lunken Airport Rules and regulation^."^^ As discussed above, Complainant’s argument concerning a
violation of 49 USC 47107(a) states a valid claim, under Part 16, however, arguments alleging violations of the
Exhibit 1, Item 5, p. 11.
FAA Exhibit I , Item 5, p. 10.
73 FAA Exhibit 1. Item 5, Exhibit J. On July 24,2005. the City again stated that because Complainant had not responded to the City’s
March 24, 2005 letter, it advised Complainant to withdraw its application if the matters in that letter were not addressed. FAA Exhibit 1,
Item 5, Exhibit L.
Complainant states that “Cincinnati’s only response to Flamingo’s objections to its proposed operating agreement is for Flamingo to
withdraw its application if it does not want to limit its service to nine seats and obtained $20 million in insurance coverage” and that the
City “refusal to even consider the type of service sought by the Application and its “take it or leave it” response to Flamingo’s objections
makes any further attempt at informally resolving this matter fruitless.”FAA Exhibit 1, ltem 6,p. 6-7.
FAA Exhibit I , Item 5, p. 6.
76 FAA Exhlbit I , Item 6, p. 2, 7.
77 FAA Exhibit 1 . Item 3, p. 4.
71 FAA
72
’‘
’’
Page 10 of 31
FAA Docket 16-06-04
Flaminpo Express,
Inc. v. City of Cincinnati
“the City of Cincinnati Municipal Code, and the Cincinnati Municipal Lunken Airport Rules and Regulations”
are not valid claims under Part 16. The FAA does not adjudicate or enforce rules and regulation adopted by
local jurisdiction^.^^
Therefore, the Director will not decide arguments on whether local rules and regulations were followed or not,
including allegations pertaining to Cincinnati Municipal Code Section 402-22 and allegations concerning
articles of the Lunken Airport Rules and Regulations. 79
E. Whether the actions by the City concerning Complainant’s request to operate scheduled 14 CFR Part
121 commuter service with aircraft seating less than 30 passengers are consistent with Grant Assurance
22,49 USC 47107(a), which requires the County to make the Airport available to all types, kinds, and
classes of aeronautical activity on reasonable terms, and without unjust discrimination.
In its Complaint, Complainant argues that the City denied Complainant’s request to operate scheduled 14 CFR
Part 121 commuter air service with aircraft seating less than 30 passengers, by not permitting operation of
aircraft with more than 9 seats, by requiring aircraft liability insurance in the amount of $20 million per
occurrence, and by imposing a monthly $200 operating fee, and as a result, the City is in violation of 49 USC
47107(a). Complainant argues that the City imposed unreasonable demands as outlined in its proposed
Operating Agreement” and that City’s actions also unjustly discriminate.8’
Upon consideration of all of arguments made by the parties, and since the main issue here is whether the City’s
actions are consistent with the City’s obligation to provide reasonable access, the Director organized the
arguments as (1) the alleged delay by the City in considering Complainant’s permit and operating agreement, (2)
the City not permitting operations by aircraft with more than nine seats, (3) the City’s $20 million requirement
in liability protection, (4) the City’s requirement for a $200 monthly operating fee, and (5) unjust discrimination.
1. Alleged Delay by the City in Considering Complainant Permit and Operating Agreement
As discussed above, on April 21,2004, Flamingo submitted a permit application to operate scheduled 14 CFR
Part 121 commuter service with aircraft seating less than 30 passengers at Lunken. That same day, the City
recorded the submittal and the Airport manager approved Complainant’s permit. On May 19,2004, the City’s
risk manager approved the permit application.82The City admits this.83Complainant argues that from that point
on, the City delayed Complainant’s application and has refused “to process and approve the Permit filed by
Flamingo.’’ Complainant refers to this as a “substantial delay’784
that first lasted for four months until the public
hearing in August 2004” and later that the City “refused to take any action” for another five months until
January 19,2005 when the City “forwarded a proposed Operating agreement to Flamingo.”85 Complainant
Both sides use local rules and regulation in their arguments. Complainant argues that although the City’s own rules and regulations,
Section 402-78 Cincinnati Municipal Code, stipulate that (1) upon consideration of an application and evidence produced at a public
hearing, the Airport manager “shall submit a report to the City Manager as to whether or not the applicant complies with the rules and
regulations and applicable Iaw and whether or not such application should be granted,” (2) that the City Manager, after a review of the
appIication and the report of the Airport manager, must approve the application unless denial is appropriate based upon the appIication
and the report of the Airport manager and (3) that once the application is approved, the approval shall be conditioned upon a contract
being entered into between the City and the applicant, the City, “despite repeated requests,” has “failed to approve the application despite
approval by the Airport Manager” and despite no opposition at the public hearing. Complainant adds that the City did not respond to the
proposed “Operating Agreement” (See FAA Exhibit I, Item 3, p. 3.) that was submitted on August 10, 2004. FAA Exhibit 1, Item 3,
Exhibit D, tetter from Ms. Sharon McGee to Mayor Charlie Luken, dated October 18,2004. The City argues that “Complainant’s
requested operation was governed by Cincinnati Municipal Code Section 402-22. “the permit could not be issued until it entered into a
contract [Operating Agreement) with the City for use of the Airport.” FAA Exhibit 1, Item 5. p. 2. The City states that the permit could
still be approved but issuance withheld until a contract (operating agreement) was entered into, FAA Exhibit 1, Item 5, p. 4. As explained
above, these local Law matters are outside Part 16jurisdiction and will not be further addressed.
19
FAA Exhibit I , Item 5, p. 3-4.
FAA Exhibit 1 , Item 3, p. 4.
FAA Exhibit 1, Item 6, p. 7-8.
FAA Exhibit 1, Item 3, p. 2 and FAA Exhibit 1, Item 3, Exhibit B.
83 FAA Exhibit 1, Item 5. p. 3.
84 FAA Exhibit I , Item 3, p. 3-4.
85 FAA Exhibit 1 . Item 6, p. 4-5.
Page 11 of 31
FAA Docket 16-06-04
Flaminpo Express. Inc. v. City of Cincinnati
concludes the argument by stating that “it has now been over two years since Flamingo filed its application .
seeking permission to operate scheduled service up to 30 seats.. .86
The City disagrees that it caused “substantial delay,” denies that there was a substantial delay in scheduling the
August 2004 hearing regarding Complainant’s appli~ation,’~
and argues that it did not use the Operating
Agreement to delay or deny Flamingo Express a permit.” The City states that because it had not contracted for
scheduled air service since 1989, preparation of an operating agreement “required lengthy consultation with
various City departments” but that it “was finally transmitted to Complainant on January 19, 2005.89 The City
argues that because Complainant’s proposal was the “first Air Route License requested in 15 years,” the City
needs to identify all items that needed to be included, make critical decisions about insurance, fees, and use of
facilities, and then create the agreement” and that it “wanted to make sure that everything necessary was
included in the agreement and carefully considered by both the Department of Transportation and Engineering
and the Law Department as this will be the template for any future agreements of this type.”g0
The City rejected the Complainant’sobjections to the City’s contract provisions, including the required
insurance, restrictions on the size of the plane and the monthly fee in the first few months of 2005 (February
through July) and adds that Complainant kept restating the same position “without submitting any additional
information” as the City requested and that by July 26,2005, “nothing further was heard or received from
Complainant or Complainant’s attorney until legal proceedings were initiated in February 2006.”9’
The record contains no information indicating that the City deliberately delayed Complainant’s application for
air camer service. Without discussing the specifics of some of the City’s requirements (these are discussed
below), the Director finds and the record supports that over several months, both parties attempted,
unsuccessfully, to negotiate an operating agreement. The time sequence associated with the issue is not
unreasonable. Complainant filed a permit application in April 2004, which was approved shortly thereafter by
the City and was followed by a public hearing in August 2004. Submissions of draft operating agreements - one
by Complainant in August 2004 and one by the City in January 2005 - followed this.
This in turn led to extensive correspondence concerning certain terms and conditions in the operating
agreements, and this deliberative process is indicative of argument, not delay, and it lasted a few months until
late July 2005. Nothing in this process is inherently unusual or indicative of deliberate delay other than
indicating that the parties had disagreements on many areas and were not able to resolve their differences in a
timely manner. Taking several months to consider a proposal for commercial air service is not inherently
Exhibit 1, Item 6, p. 7.
FAA Exhibit 1, Item 5, p. 4.
88 FAA Exhibit 1, Item 5. Exhibit H.
89 FAA Exhibit 1, Item 5, p. 2. The City argues that “while the application has been pending for two years,” Complainant “misstates the
timeline” and that it “forwarded the mandatory operating agreement in January 2005” and that “it is Complainant who has failed to take
any action since then by refusing to negotiate or submit requested information supporting its positions.” The City adds that “Complainant
has refused repeated requests from City to submit information to the contrary.” Finally, the City takes the position that “Complainant also
refused to submit information to the City on this aspect and City suspects that Complainant’s budget and finances are more directly
related to their alleged problem in obtaining the required insurance than practicality.” FAA Exhibit 1, Item 5, p. 5.
FAA Exhibit I, Item 3, Exhibit D, letter from Mr. Mr. Stephen J. Fagel to Mr. Michael J. Schulte, dated February 18, 2005.
Complainant states that “the City’s excuse. outlined in correspondence dated February 18.2005, attached as exhibit H to the City’s
Answer and Motion, that the five-month delay in responding to Flamingo’s proposed operating agreement was due to Cincinnati not
having prepared this type of contract for the past several years is simply not credible. “ FAA Exhibit 1, Item 6, p. 5.
91
FAA Exhibit 1, Item 5, p. 2-3. The City argues that Complainant did not submit any additional information but had its attorney send
another letter dated March 10,2005, which did not address any of the issues advanced by the City and merely reiterated the points raised
in the February 18, 2005 letter and that it “nevertheless again conferred with its Risk Manager on the insurance issue and responded by
letter to Complainant’s attorney on March 24,2005 further addressing Complainant’s issues and again requesting the submission of
additional information to consider whether to accept their point.” The City states that “no further response or communication was
received until a letter dated July 11. 2005, from Complainant’s attorney inquiring as to why he had not heard from City” and that ”the
City responded on July 26, 2005 pointing out that it was incumbent upon Complainant to respond to the City” but that “no further
information was heard or received from Complainant or Complainant’s attorney until legal proceedings were initiated by it in February
2006.” FAA Exhibit 1 . Item 5 , p. 9-10. The City also states “Complainant made no attempt to negotiate but just continually restated its
position while the City continually asked for additional information to consider modifying its own position. In the Response,
Complainant continues its obdurate position.”FAA Exhibit 1 , Item 7, p. 4.
86 FAA
Page 12 of 31
FAA Docket 16-06-04
Flaminpo Express, Inc. v. Citv of Cincinnati
unreasonable due to the complexity and the number of issues involved. The issue here is new scheduled air
service with all the preparations and requirements on the part of the airport sponsor that such an endeavor
entails.
Based on the above, the Director finds that the City did not unreasonably delay Complainant’s submissions.
2. The City’s Not Permitting Operations by Aircraft With More than 9 Seats
On January 19,2005,the City provided Complainant with a proposed “Air Route Operating Agreement”
(Operating Agreement) in conjunction with Complainant’s Permit application of April 21,2004. Complainant
argues that through this proposed Operating Agreement, the City is limiting the service requested to nine seats
contrary to Complainant’s permit application, which seeks scheduled service up to 30 seats.= Complainant adds
that its application “requesting a permit for scheduled service up to less than 30 seats was submitted prior to
Cincinnati seeking recertification as a Class IV Certified Airport” and that “in light of its current certification [as
a Limited Part 139 Airport, Lunken is certified to provide scheduled operations of 30 seats or less]y3 according
to Complainant, Cincinnati cannot choose to refuse to allow scheduled service up to 30 seats simply because it
no longer wishes to recognize its contractual and statutory obligations to make Lunken available for any
commercial aeronautic activity within the operating parameters of a Limited Part 139 Airport.”94Complainant
contends that the City’s refusal “to permit operation of aircraft of more than nine seats contrary to the Permit
and Lunken’s Limited Part 139 ~ertification”’~
is unreasonable.%
Moreover, Complainant argues that the City “has refused to allow, or even consider, Flamingo’s request to
operate scheduled service up to 30 seats.. . presumably for political reasons, Cincinnati seeks to limit
commercial aeronautical activity at Lunken.” Complainant argues that the City wants a Class IV Certification to
“preclude the start up of future operations of scheduled service up to 30 seats” and97that the City seeks to put a
moratorium on granting a permit for scheduled service with less than 30 seats but that the City “has an
obligation pursuant to its contract with the FAA and pursuant to its statutory obligations in operating Lunken
Airport to make the airport available for any aeronautic commercial activity within the parameters of a Limited
part 139
The City denies Complainant’s allegations and takes the position that it had “not received any indication” from
Complainant that it intends to use aircraft larger than 9 seats and that because of this, the City “developed the
ageement based on their proposal and our mutual concurrence on this issue.”w The City denies the
Exhibit 1. Item 6, p. 6.
FAA Exhibit 1. Item 6, p. 1.
94 FAA Exhibit 1, Item 6, p. 2-3.
95 FAA Exhibit 1, Item 3, p. 3-4.
96 FAA Exhibit I. Item 3, Exhibit D, letter from Mr. Michael J. Schulte to Mr. Stephen J. Fagel, dated February 11,2005.
”FAA Exhibit I. Item 6, p. 2.
98 FAA Exhibit 1, Item 6,p. 7. complainant states that the City’s “intent to refuse to consider Flamingo’s application for scheduled
service up to 30 seats is clearly demonstrated by the reaction of Cincinnati’s City Council upon learning of the filing of Flamingo’s
application” and that “nine days after Flamingo filed the application in question, members of Cincinnati’s City Council were concerned
that the permit would allow scheduled service up to thirty (30) seats prior to Cincinnati seeking recertification of the Lunken’s
classification.” Finally, Complainant argues that the City council did in fact take action to “ban the service” and that “in light of this
document and the comments made by Cincinnati City Council following the Application filed by Flamingo, it is clear that Cincinnati has
elected to attempt to ignore and delay any consideration of the application until forced to do otherwise.”9s FAA Exhibit 1, Item 6, p. 3.
The Complainant argues in detail that the City’s “concern to seek ways to limit commercial aeronautical activity at Lunken is also
apparent in a memorandum prepared by the city solicitor in response to a request by JetLink Express Inc. for canier operations at Lunken
Airport in June, 2003 and that as at the time, the City “was already concerned with the possibility of an application being filed seeking
scheduled air service up 30 seats or less prior to the recertification of Lunken Airport.” Complainant also contends that the City
“considered imposing a moratorium on scheduled air service pending recertification but determined that such action would not be
permitted by the FAA: and that “in the case at hand, Cincinnati seeks to accomplish a de facto moratorium on consideration of scheduled
air service by refusing to properly consider Flamingo’s application which is now been pending for over two years.” In summary.
Complainant states that the City “chose to ignore the request for service up to 30 seats and has refused to consider anything other than
service of up to only nine seats, the same limitation which would be consistent with the Class IV Certification sought by Cincinnati.”See
FAA Exhibit 1, Item 6. p. 3-5.
FAA Exhibit I . Item 3, Exhibit D, Item 7, letter from Mr. Mr. Stephen J. Fagel to Mr. Michael J. Schulte, dated February 18,2005.
92 FAA
93
Page 13 of 31
FAA Docket 16-06-04
Flamingo Express, Inc. v. Citv of Cincinnati
Complainant’s allegation that its “submission was a permit for service up to thirty seats as the permit contained
no such de~ignation.”’~
The City refers to the April 21,2004 permit application as “a permit to operate a
Scheduled Air Route from Complainant” and states that Complainant met with the City Airport officials “to
discuss their application, proposed operation and the contents of a operating agreement” and that Complainant
“agreed to limit the application and operation to a 9-seat aircraft, which would be memorialized in the
c~ntract.’”~~
The City adds that “not only did Complainant agree to the 9-seat [Piper PA-31-350 Chieftain, see
Exhibit 2, Figure 13 service, it was Complainant who proposed the 9-seat servi~e.”’’~
With respect to Part 139 certification, the City takes the position that Complainant’s argument is “inaccurate and
irrelevant as well as unresponsive” and that the FAA “is well aware that Airport Classes are assigned” “based
upon the type of services provided at that airport at the time of submission of the ACM [Airport Certification
M a n ~ a l ] ”and
~ not ’sought’ by an airport” and that “Lunken’s certification under Part 139 is a matter between
the City and the FAA and is not subject to Complainant’sallegations.” The City argues that “the City’s current
safety certification of Lunken Airport” does not fulfill a requirement contrary to the City’s obligations.Iw
The record shows that the January 2005 Operating Agreement proposed by the City specifically restricted
operations to commuter operations of nine seats, and although it would permit Complainant to conduct
scheduled air service, it limited that operation to nine seats.lo5 Although Complainant did contemplate acquiring
and initially using a 9-seat Piper PA-31-350 Chieftain aircraft,Io6and although the City can argue that this was
what the City wanted, it does not change the fact that Complainant’s request was for scheduled Part 121
operations with a larger aircraft. The record shows that the actual permit application made by Complainant
specifically mentioned “Part 21 Scheduled Commuter < 30
even though the City takes the position that
that application was “for a 9-seat airplane.”108.Moreover, as established in the record, Complainant’s arguments
against the City’s show that Complainant had always intended to use a larger aircraft than a Piper PA-31-350
Chieftahlog
Other information in the record indicates that Complainant’s proposal was for scheduled Part 121 air carrier
operations with aircraft less than 30 seats. For example, in September 2003, a news report points to
Complainant’s business plan envisaging using two 19-seat turboprop aircraft.”’ The record also indicates that at
the time it submitted its Permit application to the City in April 2004, Complainant planned “to partner with a full
Part 121 Flag operator” in order to “provide daily service to Chicago and other destinations using aircraft of 30
FAA Exhibit 1, Item 5, p. 3.
FAA Exhibit 1, Item 5, p. 2. The City also states that it met with Complainant’s principals initially on July 7,2004 to discuss their
application, their proposed operation and the permit approval and issuing process. The meeting ended with all parties in agreement as the
course to take to issue the permit and have this commercial activity begin at Lunken Airport. FAA Exhibit 1, Item 5, p. 9.
IO2 FAA Exhibit 1, Item 7, p. 3. In addition, the City provides an affidavit stating that the airplane associated with its discussions with
Complainant from May 2004 onward was a 9-seat Piper PA-31-350 Chieftain [FAA Exhibit 1. Item 7, Exhibit A] and that the proposals
it received were for 9-seat operations. FAA Exhibit 1, Item 5, Exhibit 0.
IO3 The ACM is a written document that details how the airport operator will comply with the requirements of Part 139,
http://www.faa.govlairports_airtr~ficlairports~airport_safety/part139-cert/?pl
=process.
IO4 FAA Exhibit I, Item 7, p. 1-2.
lo5 FAA Exhibit 1, Item 5, Exhibit F and FAA Exhibit 1, Item 3, Exhibit D, letter from Mr. Stephen 1. Fagel to Mr. David MacDonald.
dated January 19,2005. This exhibit includes the proposed Operating Agreement.
’06 FAA Exhibit 1. Item 5, Exhibit D and FAA Exhibit I, Item 8, Exhibit B
lo’ FAA Exhibit 1, Item 3, Exhibit B.
loa FAA Exhibit 1, Item 5, Exhibit J. letter from Mr. Stephen Fagel to Mr. Michael J. Shulte. dated March 24, 2005. The City provides a
copy of the same permit with the text “Scheduled Air Route” instead of “Part 21 Scheduled Commuter < 30 seats.” FAA Exhibit 1. Item
5, Exhibit C. In summary, upon examination, the Director finds that the document submitted by Complainant on April 21,2004 is an
application for scheduled Part 121 air carrier operations with aircraft less than 30 seats. The examination and comparison of the two
versions of the copies of the application permit shows that the document submitted by the City was modified and initialed. The copy
provided by the City indicates that Complainant’s “Part 21 Scheduled Commuter < 30 seats” entry was changed to “Scheduled Air
Route.”
IO9 See Section V Background describing Complainant’s requests to the City to operate aircraft with a seating capacity greater than 9 but
less than 30 seats. In any case, it is not uncommon for air carriers to upgrade service with larger aircraft as permitted by an airport’s Part
139 certification since changing market conditions may evolve, such as seasonal variations in traffic or increasing demand for a particular
route, or an airline may opt to upgrade its fleet (new aircraft).
‘ l o FAA Exhibit 1, Item 8, Exhibit B.
IW
lo’
Page 14 of 31
FAA Docket 16-06-04
Flaminpo Express, Inc. v. City of Cincinnati
An April 30,2004, news piece states that Complainant “wants to offer scheduled commuter
seats or
service for 10 to 30 passengers” and the airport manager stated that “the City should go after Class I1
certification,” which would permit small commercial scheduled passenger service with aircraft seating less than
30 seats.’12In addition, on May 20,2004, local media mentioned scheduled air service at the Airport when it
reported that “in recent months, two companies, JetLink Express Inc. of Denver and Flamingo Express Inc. at
Lunken, applied to the city to begin scheduled service on planes of 30 seats or less to Chicago,” and that
although “JetLink recently withdrew its request, Flamingo’s president, Sharon McGee, said Wednesday that the
company won’t give up despite council’s unanimous vote” denying scheduled air ~ervice.”~
The record also
shows that JetLink’s proposal was initially to use 19-seat FairchiId Metro I11 turboprop air~raft.”~
Based on the above, the Director finds that although Complainant envisaged some level of operations using a 9seat aircraft, it also submitted an application for the use of aircraft with seating capacity of less than 30 ~ e a t s . ” ~
Moreover, the Director finds that Complainant did not agree to limit its operations to only nine seats or less and
that the limitation to service of nine seats or less has always been at the insistence of the City and was not agreed
to by Complainant.Il6 Certainly, if Complainant had not made an application for 30 seats but rather for 9 seats,
the record would have shown little, if any, conflict on the matter. The record would not have shown any interest
by complainant in operations using aircraft seating less than 30 seats in the months preceding and immediately
following Complainant’s permit application, nor would it have likely shown media and airport officials’ interest
in operations by aircraft with up to less than 30 seats.
The next step is to consider the Airport’s Part 139 certificate or Airport Operating Certificates (AOC).
Contrary to the City’s claims, “the current and pending certification status of Lunken Airport under 14 CFR Part
139” is very relevant to this case, and that although the Airport’s “certification under Part 139 is a matter
between the City and the FAA,” it is central to this case. This is because the City’s actions with regard to its
Part 139 certification are directly related to granting Complainant’s request to operate scheduled 14 CFR Part
121 commuter service with aircraft seating less than 30 passengers in a manner consistent with Grant Assurance
22, and 49 USC 8 47107(a).
As mentioned in Section VI, Applicable Law and Policy,airports that held a Limited AOC could become either
Class 11or Class IV airports but the operator of a federally-obligated airport has the independent obligation to
provide reasonable, not unjustly discriminatory access to the airport since the class of AOC held by an airport
can affect an operator’s access to an airport, in that commercial aircraft operators can operate only at airports
with a certain level of AOC. If an airport had a Limited AOC, that airport cannot elect, after the new Part 139
requirements came into effect in June 2004, to downgrade to a Class IV AOC, and require the existing service to
cease. It would have to meet appropriate certification requirements for the kinds of operations at the airport and
convert its AOC to the appropriate new Part 139 class.”’ Since the FAA treats planned service the same as
existing service,”’ the same applies in cases where there was no existing service, but there had been a plan to
provide that service in the form of Complainant’s April 21,2004 permit to operate scheduled 14 CFR Part 121
commuter air service, with aircraft seating less than 30 passengers.
The record shows that although there was no scheduled service at Lunken as a Limited-AOC airport,
Complainant, as a prospective air carrier, not only notified the airport that it intended to begin scheduled service
with aircraft less than 30 seats, but the City accepted a permit application to do so. Complainant did this before
[emphasis added] the new Part 139 requirements came into effect in June 2004. The record also shows that after
Complainant’s submittal for a permit application and while attempting to negotiate an operating agreement, the
FAA Exhibit 1, ltem 3, Exhibit D, letter from Mr. David MacDonald to Councilman James Tarbell, dated October 7,2004.
FAA Exhibit I , Item 6, Exhibit A.
FAA Exhibit 1, Item 8. Exhibit C.
‘I4 FAA Exhibit 1 , Item 12.
I IS
This includes the proposed Terminal Use and OperafingAgreemenf proposed by Complainant on August 10,2004, FAA Exhibit I ,
ltem 3, Exhibit E.
‘I6 FAA Exhibit I , ltem 6, p. 5.
‘I7 See Part 139 Certification FAQ http://www.faa.gov/aiirports_airtraffic/ai~o~s/~~o~-safety/p~139-cert/?pl=faq#q
I
‘I8 FAA Exhibit 1 , ltem 16 and Section VI (A) of this decisions, entitled Backgruirnd on 14 CFR Part 139 arid Related Policies.
‘’I
’I2
Page 15 of 31
FAA Docket 16-06-04
Flaminpo Express. Inc. v. Citv of Cincinnati
City submitted an application to the FAA “under the new regulations that, when a p p r ~ v e d , ”will
~ no longer
accommodate 30-seat flights from Lunken.””’ The City admits this “downgrading” its Part 139 certificate as it
states “that the City’s current airport certification allowing 30-seat flights is temporary” and since “the FAA
recently changed the certification criteria,” the City has submitted an application to the FAA “under the new
regulations that, when approved, will no longer accommodate 30-seat flights from Lunken.””’ The City Council
voted to accept a Class IV certificate and as a result, today, Lunken has a Class IV AOC.’22
Additional information in the record supports the conclusion that the City intended to limit the air carrier service
sought by Complainant, in part by pursuing a Class IV AOC. In response to statements by Complainant that it
intended to seek service with aircraft up to 30 seats, a City Councilman stated that “he is concerned that the
permit, filed last week, may be granted and grandfathered in before the airport’s FAA certification changes June
9 [2004]” and “when it changes, Lunken’s certification no longer will permit scheduled passenger commercial
service at 30 seats and less.” The City Councilman called for the rest of the City Council to vote to accept the
new Class IV certification and ban the service.. .”Iz3 Local media reported on May 20,2004, that the City
Council “unanimously agreed that it does not want scheduled commercial passenger service at Lunken Airport,
ending an intense debate over the future of the city-owned airfield” and that “this shuts the door on scheduled
commercial service unless some future council decides to reverse our policy, which I hope never happens.” The
article reports counciI’s vice chairman as stating that the decision “speaks volumes that council unanimously
voted on this issue and saw the importance, immediacy and urgency of banning scheduled commercial service at
Lunken.. .” and that “it has been a long process to get to this point,” that “we have been working diligently the
past four or five years to provide the neighborhoods with what they need and deserve, which is what this
ordinance does.”’24
The City took the actions it took despite the fact that the record shows the City knew of its Federal obligations
and its relationship to Part 139 certification. In March 2003, the City had a request for scheduled service and
noted that it could accommodate that type of service from a Part 139 perspective and that it had to do so from a
Federal obligations standpoint. On March 5,2003, in discussing JetLink Express’ proposed 19-seat Fairchild
Metro I11 turboprop service, the City stated that “JetLink’s initial service is permitted under the current
standards and permitted at Lunken Airport and due to grant assurances to the FAA, we are required to permit
this activity.” The City also noted that the Limited Part 139 certificate would allow JetLink’s operations to
conduct “scheduled service using 30 seat aircraft or less.. .,9125 Finally, the City had also considered the upgrade
in certificate since the record shows that as early as April 2004, the airport manager recommended that the City
seek a Class 11certificate to “permit small commercial scheduled passenger service.”
Although the City’s Limited AOC would have allowed Lunken to serve scheduled operations of 30 seats or less
at the time,’” the new Class IV AOC does not. Therefore, the Director could perhaps find that the City has
effectively banned scheduled air service and consequently, that without more, the City’s actions could be a
violation of the City’s Federal obligations, in that the City is not providing reasonable and not unjustly
discriminatory access to the Airport.”* The City cannot choose a particular AOC class in order to prevent
Complainant from beginning scheduled service at LUK. The FAA expects that the operator of a Limited-AOC
airport, such as Lunken, to meet the requirements of a Class I1 AOC for existing or planned service in order to
remain in compliance with its grant assurance of reasonable, not unjustly discriminatory access.129The City’s
As discussed earlier, although the City states that “it is awaiting certification as a Class 1V Airport under the 2004 revision of Part
139,” current FAA records indicate that the Airport holds that classification today. See FAA Exhibit I , Item 15.
FAA Exhibit 1, Item 3, Exhibit D, Item 7, letter from Mr. Mr. Stephen 1. Fagel to Mr. Michael J. Schulte, dated February 18.2005.
FAA Exhibit 1, Item 3, Exhibit D, Item 7, letter from Mr. Mr. Stephen J. Fagel to Mr. Michael J. Schulte, dated February 18,2005 and
FAA Exhibit 1 , Item, 5, Exhibit J.
http://www.faa..gov/airports airtraffic/aimortdai~rt safety/uart139 cert/media/partl39 cert status table.xls and FAA Exhibit 1,
Item 15.
FAA Exhibit 1, Item 6. Exhibit A.
FAA Exhibit I , Item 8, Exhibit C.
FAA Exhibit 1. Item 12.
FAA Exhibit 1, Item 6, Exhibit A.
127
FAA Exhibit 1, Item 3, p. 2.
See Part 139 CertifKation FAQ httu://www.faa.eov/airuorts airtrafficlairuortslaimrt safety/part139 cert/?ul=fau#ul.
See Part I39 Certification FAQ http://www.faa.gov/airports-airtr~~c/airports/ai~ort-safetylpart
1 39_cert/?pI=faq#q 1
‘I9
~~
Page 16 of 31
FAA Docket 16-06-04
Flaminpo Exmess, Inc. v. Citv of Cincinnati
actions could also be inconsistent with the Federal statute that preempts state and local regulation of air carrier
prices, routes, and service. This is because 49 USC 0 41713(b)(1) provides, in relevant part, that “a State [or]
political subdivision of a State ... may not enact or enforce a law, regulation, or other provision having the force
and effect of law related to a price, route, or service of an air carrier that may provide air carrier
transportation. 30
’
Our analysis cannot end there, however, there is still a need to ascertain whether Complainant’s proposed Part
121 operations are sufficiently realistic to be considered “planned,” for the purpose of determining reasonable
access. This is important because the FAA would not expect the City to meet the Class I1 requirements on an
unsubstantiated or unrealistic proposal by an air carrier proponent. In other words, it is necessary to determine
the feasibility of the planned Part 121 service before the City’s action could be treated as a violation of the
City’s Federal obligations.
The record shows that although Complainant conducts Part 135 operations, Complainant does not hold a 14
CFR Part 121 ~ertificate.’~’
The FAA has no record of Flamingo Express, Inc. attempting to seek the required
. certification to engage in Part 121 operations. The record contains no information indicating that Complainant
has engaged the FAA for its Part 121 certification process, such as a Pre-Application Statement of Intent (PASI)
and Schedule of Events (SOE) submitted to the Cincinnati FAA Flight Standards District Office (FSDO), then
(in 2004) or that Complainant has initiated the process by filing its Formal Application or seeking the needed
OST economic authority. For an applicant to be considered a realistic prospective operator necessitating action
from an airport sponsor in terms of changing an existing Part 139 Airport Operating Certificate (AOC), the
prospective Part 121 operator should, at a minimum, have filed its PASI and SOE with the local FAA FSD0.’32
’’)
See Final Agency Decision, FAA Docket 16-98-05, Centennial Express Airlines, Golden Eagle Charters d/b/a centennial Express
Airlines v. Arapahoe County Public Airport Authority, p, 29. Also, in Director’s Determination, FAA Docket 16-98-05, Centennial
Express Airlines, Golden Eagle Charters d/b/a centennial Express Airlines v. Araoahoe County Public A i m r t Authority, p. 25, the FAA
found that “by banning scheduled air camer service on or about September 8, 1994, [the airport sponsor] violated its Federal obligations
regarding Economic Nondiscrimination, as set forth in 49 USC 9 47107(a)(l) and standard AIP grant assurance No. 22.” In the Final
Agency Decision, the FAA found that an airport sponsor cannot ban scheduled air service under the premise that doing otherwise would
conflict with a designation as a general aviation or reliever airport. Such a ban would be both unnecessary and unlawful. Banning
scheduled air service is not something the FAA would defer to regional and local planning, but rather an issue covered under Grant
Assurance 22. that is, reasonable and non-unjustly discriminatory access. Although Lunken’s primary function may be to serve general
aviation, it does not logically follow that any level of scheduled air service is inconsistent with that primary function. The initiation of
scheduled passenger service at Lunken is unlikely to change the predominately general aviation role of the airport. As such, any
argument claiming that both scheduled and unscheduled passenger operations would alter the character of the airport would be
speculative and hence rejected. See Final Agency Decision, FAA Docket 16-98-05, Centennial Express Airlines, Golden Eagle Charters
d/b/a centennial ExDress Airlines v. Arapahoe County Public A i m r t Authority, p. 24-25. Affirmed Arapahoe County Public Aimort
Authoritv v. FAA, 242 F. 3d 1213 (10th Cir, 2001).Also in FAA Docket 16-98-05, the FAA found that “the FAA has determined that the
airport sponsor did not justify an access restriction based on safety, congestion or environmental grounds and that “moreover, a ban on
scheduled operations would not be a reasonable and nondiscriminatory response even if some restrictions were justified. The FAA
recognizes the sponsors’ obligation to protect against adverse effects on airport operations such as undue ramp congestion on the ground
or lack of adequate ground-side facilities. However, in accordance with the grant obligations, these concerns can and should be addressed
in the first instance through adoption of appropriate minimum standards for scheduled commuter facilities and operations. Lack of a
public passenger terminal with baggage handling facilities does not justify a commuter service ban at this airport, since on-demand air
taxi operations have been providing passenger services without these facilities. The FAA has determined that a camer may not be denied
access to an airport solely based on the non-availability of currently existing facilities and that some arrangements for accommodation
must be made if reasonably possible. See FAA Order 5190.6A9 4-15(d), p. 23. This guidance is especially applicable in this case, where
CEA had obtained access to facilities through a sub-lease. Where a sponsor has defended a challenged restriction on safety grounds, the
FAA will make the final determination of the reasonableness of the airport owner’s restrictions, which deny or restrict use of an airport.”
See Director’s Determination, FAA Docket 16-98-05, Centennial Express Airlines, Golden Eagle Charters d/b/a centennial Express
Airlines v. Arauahoe County Public Airport Authority, p. 22. Moreover, “potential economic harm to another airport would never justify
an access restriction under the grant assurance that requires Centennial Airport to be accessible to all categories of aeronautical users on
reasonable terms. ..See Director’s Determination, FAA Docket 16-98-05, Centennial Exuress Airlines. Golden Eagle Charters d/b/a
centennial Exuress Airlines v. Arapahoe County Public Airuort Authority, p. 25.
See FAA Exhibit I , Item 17.
13* See 14CFR PART 121 AIR CARRIER CERTIFICATION WEB SITE at
http://www.faa.gov/safety/programs_initiatives/oversight/atos/air~c~er/data~collection/medi~applican
t.pdf
Page 17 of 31
Flaminpo
- Express, Inc. v. City of Cincinnati
FAA Docket 16-06-04
However, in this case, the Cincinnati FSDO has not received any such information for Part 121 operations by
omp plain ant.'^^
The airport sponsor would have had to accommodate planned scheduled air carrier operations by Complainant
with aircraft seating less than 30 passengers, because such operations were permitted under the prior AOC and
were requested before the new AOC was approved. However, the FAA has no record that Complainant has
taken steps to initiate the air carrier service discussed throughout this decision nor taken concrete steps towards
Part 121 certification. Therefore, the City’s actions in this case cannot be said to have prevented access by
planned operators. As a result, the City is not currently in violation of its obligation to provide reasonable access
under Grant Assurance 22, Economic Nondiscrimination, 49 USC 0 47107(a).
3. The City’s $20 million in Liability Requirements
The issue discussed in this section is whether the City’s requirement of $20 million in liability insurance is
reasonable and consistent with its Federal obligations as applicable to scheduled Part 121 operations with
aircraft less than 30 seats, e.g., a twinengine turbo-prop aircraft seating approximately 20 passengers, which is
essentially the aircraft Complainant would be using for Part 121 scheduled service.
The January 2005 Operating Agreement included a requirement for aircraft liability in the minimum amount of
$20 million per ~ c c u r r e n c e . ’Complainant
~~
objected to this and argued that $20 million in liability coverage is
unreasonable, and “contrary to industry standards as well as the City’s own Airport Minimum Liability
Insurance requirements.” Complainant adds that the insurance amount is “unc~nscionable”~~~
and that the
insurance coverage of $20 million is “~nobtainable.”’~~
Complainant states that the City’s insurance
requirement “cannot be written for the type of operation Complainant was proposing’7137
and “simply not
a ~ a i l a b l e . ” ’Complainant
~~
also argues that “it would be impossible to obtain the level of coverage” required by
the City ($20 million), and that “Flamingo’s current coverage, which is consistent with industry practice, is
$100,000.00 bodily injury limit per seat per incident and $1 million of coverage per incident for property
damage” would suffice. Complainant contends that the “original permit application has been signed off with
153
See FAA Exhibit 1, ltem 17. Part 121, Operating Requirements: Domestic, Flag, and Supplemental Operations, prescribes among
others, the rules governing domestic operations of entities that hold or are required to hold an Air Carrier Certificate or Operating
Certificate under Part 1 19. See 14 CFR Part 121.1, 14 CFR PART 12 1 AIR CARRIER CERTIRCATION WEB SITE at
httu://www.faa.gov/safetv/uromams
initiatives/oversighVatodair carrierldata collectionlmedia/auulicant.udf. The FAA’s process for
certification and oversight of air carriers is designed to ensure that prospective certificate holderdair carrier operators are capable of
operating to the highest level of safety as required by 49 USC Section 44702. When satisfactorily completed. the certification process
ensures that the applicant is able to comply with the applicable FAA regulations. The actual certification process has four distinct phases:
(1) Formal Application, (2) Design Assessment, (3) Performance Assessment, and (4) Administrative Functions. See I4CFR PART 121
AIR CARRIER CERTIFICATION WEB SITE. An air carrier applicant is also required to provide FAA a copy of the OST (Office of the
Secretary of Transportation)economic authority, generally in the form of a certificate. Under Title 49 of the United States Code, anyone
who wants to provide air transportation service as a U.S. air carrier or foreign air carrier must first obtain two separate authorizations
from the Department of Transportation: “safety”authority from the Federal Aviation Administration and “economic”authority from the
Office of the Secretary of Transportation. Economic authority for U.S. carriers may be in the form of either a certificate for interstate or
foreign passengers and/or cargo and mail authority, an all-cargo air transportation certificate, or authorization as a commuter air carrier.
http://ostpxweb.dot.gov/aviation/X-5O%2ORo~e~file~aircarriereconauth.htm.
After receiving the OST economic authority. the FAA will
issue the appropriate certificate and operations specificationsto the applicant, who is thereafter referred to as the certificate holder. The
Air Carrier or Operating Certificate, the operations specifications, and the OST economic authority enable the certificate holder to begin
revenue operations. Since this certification process is complex and demanding, in order to allow FAA adequate time to review, the PreApplication Statement of intent (PASI) and Schedule of Events (SOE) should be submitted to the local FAA Flight Standards District
Office (FSDO) as soon as the applicant begins preparing for the FonnaE Application stage. See I4CFR PART 121 AIR CARRIER
CERTIFlCATlON WEB SITE
134 FAA Exhibit 1 , Item 3, Exhibit D, letter from Mr. Stephen J. Fagel to Mr. David MacDonald, dated January 19,2005. This exhibit
includes the proposed Operating Agreement.
135
FAA Exhibit 1, ltem 3, p. 4, and See FAA Exhibit 1 . Item 3, p. 4, and Exhibit D, Item 6, letter from Mr. Michael J. Schulte to Mr. Mr.
Stephen 1. Fagel, Dated February 1 1,2005. Complainant argues that “Cincinnati was informed that their proposed operating agreement
was unacceptable since it only permitted scheduled air service of up to nine seats contrary to the Application filed by Flamingo. and the
requirement of $20 million in insurance coverage was unobtainable.”FAA Exhibit 1, ltem 6, p. 5.
136 FAA Exhibit 1, Item 6, p. 6.
137FAA Exhibit 1, ltem 5, Exhibit K.
13’ FAA Exhibit 1, ltem 6, Exhibit C.
Page 18 of 31
FAA Docket 16-06-04
Flaminpo Express. Inc. v. Citv of Cincinnati
approval by the City Risk Manager and that the current insurance policy with coverage above was submitted
along with the original application” and that ‘‘this has already been approved by the City Risk Manager.”’39
The City responds that its insurance requirements “are reasonable and can be obtained,”’@that the ‘‘$20,000,000
Aircraft Liability Insurance limit was determined after research of the industry standards,” and denies
“knowledge that the insurance amount is practically unobtainable by C~mplainant.”’~’
The City also states that
“the $20 million insurance limit” is based on research done “regarding requirements at other airports.”142The
City recognizes that “no other Lunken operator is required to carry such insurance” but states that it is because
Complainant is “proposing the operation of an airline, the only one located at Lunken Airport” and
“consequently, comparisons to other Lunken operators are not relevant on this issue.” 143 Finally, the City takes
the position that it offered Complainant an opportunity to provide insurance information when it states that if
Complainant has “information or evidence that would justify a reduction in the insurance limits, please submit it
to me and I will share it with Risk Management for their consideration.”Iu
It is not uncommon for an airport sponsor to require aviation liability insurance from those providing
aeronautical services to the public. This includes air carriers. Generally, this type of insurance coverage would
cover bodily injury or property damage arising out of the ownership, maintenance, use, service, or repair of an
aircraft. In this respect, the Director concurs with the City that it is its responsibility as the airport sponsor “to
ensure that there is adequate insurance to protect the airport and to handle possible claims.”’45However, as the
FAA has determined, although it is reasonable for an airport sponsor to require an insurance level that would be
sufficient to cover a particular type of activity, it must be commensurate to the activity at hand and also
0btainab1e.I~~
In addressing Complainant’s argument that “Flamingo’s current coverage, which is consistent with industry
practice, is $100,000.00 bodily injury limit per seat per incident and $1 million of coverage per incident for
property damage” would suffice, the Director finds that Complainant’s existing operations under Part 135 with a
small singleengine Piper PA-32-300 aircraft seating six passengers, depending on configuration, cannot be
compared with a much larger scheduled air carrier Part 121 operation of a Beech 1900 or Metroliner I11 type
aircraft (see Exhibit 2, Figure 2 and 3 for size comparison) with a full load of 20 or so passengers. The liability
exposure between the two types of operations are very different for both the operator and the Airport alike. The
$1 million coverage, in the form of airport liability and aircraft liability, as provided in the Airport’s Minimum
Liability Insurance Requirements doc~ment,’~’
is typical of that associated with many general aviation activities,
such as Fl30,self-fueling, flights school operations, and even certain types of Part 135 operations such as
Complainant’s current singleengine operations. However, it is neither typical nor common for scheduled Part
121 air carrier operations with aircraft seating less than 30 seats.
It is not uncommon for airport sponsor to require aircraft liability insurance coverage in an amount of not less
than $1 million occurrence for pistonengine aircraft and not less than $10 million per Occurrence for turbineengine aircraft.Ia The type of aircraft Complainant may eventually use, less than 30 seats, but more than 9 seats,
may be a turboprop aircraft seating 20 passengers according to the information in the record.’49Complainant’s
~~
~~
~~
~
139 FAA
Exhibit I , Item 5, Exhibit 1.
FAA Exhibit I. Item 5, Exhibit J.
I4l FAA Exhibit 1, Item 5 , p. 5.
142 FAA Exhibit I , Item 3. Exhibit D, Item 7 , letter from Mr. Mr. Stephen J. Fagel to Mr. Michael J. Schulte, dated February 18,2005.
143 FAA Exhibit 1, Item 3, Exhibit D. Item 7 , letter from Mr. Mr. Stephen J. Fagel to Mr. Michael J. Schulte, dated February 18,2005.
FAA Exhibit I , Item 3, Exhibit D, Item 7, letter from Mr. Mr. Stephen J. Fagel to Mr. Michael J. Schulte, dated February 18, 2005.
On t h s issue, Complainant adds that this insurance “information was provided previously in correspondence dated March 3,2005, from
the undersigned to Cincinnati’s legal council, Stephen Fagel” and that “Cincinnati’sclaim that it was never provided information
concerning the unavailability of this type of coverage is false.” FAA Exhibit 1. Item 6, p. 6.
14’ FAA Exhibit I , Item 5, Exhibit J.
See FAA Docket No. 16-05-09,Brown Transport Co. v. City of Holland, p. 14.
147 FAA Exhibit 1, Item 3, Exhibit H.
14’ As an example, see the insurance requirements for OSU Airport in Ohio, See FAA Exhibit 1, Item 20.
FAA Exhibit I , ltem 8, Exhibit B, FAA Exhibit 1 , Item 3, Exhibit D, letter from Mr. David MacDonald to Councilman James Tarbell,
dated October 7,2004.
‘40
Page 19 of 31
FAA Docket 16-06-04
Flaminpo Express. Inc. v. Citv of Cincinnati
argument that “a limit of $20 million is simply not available for a piston engine charter o p e r a t i ~ n , ”is
’ ~rejected.
~
This is because not being able to secure $20 million insurance level, as Complainant contends, refers to a piston
aircraft in charter operation such as the Piper PA-3 1-350 Chieftain, not operations by the typical turboprop type
aircraft engaged in Part 121 scheduled air service, as Complainant intends to 0~erate.I~’
Reference to pistonengine aircraft is either referring to Flamingo’s existing single-engine piston PA-32-300 aircraft or a twinengine piston aircraft like the Piper PA-31-350 Chieftain seating nine passenger^,'^^ but in any event, it does not
refer to a typical turboprop aircraft that would be engaged in scheduled Part 121 operations with an aircraft
seating 20 passengers, which is at issue here.
A typical turboprop aircraft engaged in Part 121 scheduled air service with less than 30 seats, such as a Beech
1900 or a Fairchild Metroliner 111 seating 20 passengers, would likely carry a limit of $20 million, or about $1
million per passenger, and this is considered an obtainable insurance level for such operation^.'^^ In any event,
Complainant provides no information showing that a $20 million in liability coverage for scheduled operation
using a turboprop aircraft seating 20 is not attainable or otherwise available.
Although $1 million general liability protection as a minimum for air carrier operations with less than 30 seats is
sometimes found, airports may rely on or consider an air carrier’s actual coverage in entering into an operating
agreement or add to that basic req~irement.’~~
It is not unreasonable for an airport to have a minimum
requirement of $1 million for most aeronautical activities but also require a higher amount depending upon the
actual coverage the air carrier may have in its insurance certificate. Airports may also choose to require a
different minimum requirement right up front. For example, a $10 million liability insurance requirement for a
Beech 1900D scheduled air carrier operation with 20 seats is not unusual’55and in some cases, airports have
asked for aircraft damage coverage of $50 million per Occurrence and $25 million in personallbodily and
property damage coverage’56while others may ask for $50 million per Occurrence for 60 seats and below and
$100 million for more than 60 seats.’”
There are Federal requirements that govern the minimum insurance requirements for air carrier operations.
Depending on the type of operation @e., commuter air carriers and air taxi operatodon demand) and aircraft
type (i.e., aircraft with less than 60 seats and/or less than 18,000pounds payload capacity), the minimum
insurance requirements can range per involved aircraft for each occurrence from $75,000 times 75 percent of the
number of passenger seats installed in the aircraft to $300,000 times 75 percent of the number of passenger seats
installed in the aircraft. When applied to a Beech 1900 aircraft with 20 passengers, these requirements would be
FAA Exhibit 1, Item 6, Exhibit C.
With that said, the Director disagrees with the City that the October 17,2005 letter from the insurance company “rather than
buttressing” Complainant’s position, this ‘‘correspondence validates the City’s denial.” It does not because as discussed by the Director, it
is related to operations of a piston twin-engine aircraft in charter service and not, as discussed here, to the use of a turbo-prop seating less
than 30 passengers in Part 121 scheduled air service. FAA Exhibit 1, Item 7, p. 3.
152 For information refemng to a Piper PA-31-350 Chieftain aircraft, see FAA Exhibit I, Item 5, Exhibit D and FAA Exhibit 1, Item 7.
See FAA Exhibit 1, Item 13. The FAA contacted an insurance company that was able to provide information to this effect. Aircraft
providing scheduled Part 121 service using a Beech 1900 aircraft (20 seats) would not be operating with only $1 million coverage and
that such a low insurance coverage would be unrealistic and not acceptable. A scheduled Part 121 operation using a Beech 1900 would
most likely and realistically have $10 to $20 million in coverage, with a $1 million per seat not being unreasonable. See FAA Exhibit 1,
Item 13. The record shows that the City gave Complainant the opportunity to substantiate their argument that $20 million in coverage is
too much. As discussed above, the City did ask Complainant to submit information or evidence that would justify a reduction in the
insurance limits. However, although Complainant submitted some information from its insurance provider, Complainant did not submit
information demonstrating that the City’s $20 million insurance requirements were inappropriate or without justification for the type of
operation Complainant intends to conduct, that is, operations with aircraft seating more than 9 but less than 30 seats.
See FAA Exhibit 1, Item 18. The Hagerstown Regional Airport in Maryland for example, has a minimum liability requirement of $1
million for many of its aeronautical activities. including air carrier, but relies on the air carrier’s much larger coverage in its insurance
certificate. Some air carriers may carry $750 million in comprehensive air carrier liability. Conversation with Mr. Rakowski, Operations
Manager. November 6,2006.
See FAA Exhibit 1, Item 19. The Lancaster Airport Authority, in Pennsylvania has a basic insurance requirement of $1 million for
most of the aeronautical activities at the airport (FBO, flight school, hangar) but requires a minimum of $10 million in liability coverage
for Part 121 scheduled operations with a Beech 1900 aircraft. Conversation with Mr. Dave Eberly, Airport Manager, November 6,2006.
FAA Exhibit I , Item 21. Information from the Hamsburg International Airport, Pennsylvania, via the FAA Hamsburg Airport District
Office (ADO), November 6,2006. These are the insurance requirements asked of air carrier using Beech 1900 aircraft.
’57 FAA Exhibit I , Item 21. Information from the Lehigh Valley International Airport, Pennsylvania, via the FAA Harrisburg Airport
District Office (ADO), November 7,2006.
‘’I
Page 20 of 31
Flaminpo Express, Inc. v. Citv of Cincinnati
FAA Docket 16-06-04
$1.125 million and $4.5 million, respectively. The fact that the City requires a higher insurance coverage
amount than the minimum Federal requirements does not mean that the City’s requirement is unreasonable.
Nevertheless, the basic required Federal requirements for minimum insurance coverage alone, either for air taxi
or those requiring a DOT certificate, exceeds Complainant’s proposed $1 million coverage.’58
The Director also considered past air carrier service at L ~ n k e n . ’The
~ ~City has no obligation today to simply
accept the terms and conditions an air carrier proposes simply because some of those terms and conditions or
similar ones were part of an operating agreement the City used years earlier. Previous operating agreements the
City may have had in 1989-1990 with other airlines, such as Central States Airlines, including the insurance
requirement for $1 million in liability coverage, are of little relevance in this case insofar as guidance for
establishing the requirement the City may consider necessary in dealing with Complainant’s 2004 request.lW
The circumstances existing at the Airport in 1989-1990 are not adequately reflected in the record, and although
Central States Airlines used BAe Jetstream turboprop aircraft in its routes to and from Lunken,I6*the actual
operations an airline conducted are also not documented in the record. In any case, even if they were, it does not
override reasonable considerations the City may have today when considering a request for new scheduled Part
121 air carrier service. Moreover, two operators, Central States Airlines in 1989-1990 and Complainant (2004to date) are not likely to be similarly situated users for a comparison to be relevant.I6*
Finally, Complainant argues that the original permit application was signed off by the City Risk Manager and
that it incorporated Complainant’s current insurance policy in that “the Application as approved by the Airport
Manager on April 21,2004, and approved by the Airport Risk Manager on May 19,2004” is “particularly
noteworthy since the Risk Manager’s approval means that insurance requirements had been reviewed and
As part of the certification of an air carrier. certain Federal requirements govern the minimum insurance requirements for air carrier
operations. 49 USC Section 41738 and 14 CFR Part 298,Exemptions For Air Taxi & Commuter Air Carrier Operations, require that any
entity operating or proposing to operate scheduled passenger service as a commuter air carrier must first be found “fit, willing, and able”
to provide such service. New commuter air carriers may not hold out or conduct scheduled passenger service unless and until they have
been found fit by the Department. Prior to conducting any operations, a commuter air carrier must, among others, meet the specific
insurance requirements set forth in 14 CFR Part 205,Aircraft Accidenr Liability Insurance (How to Become a Commuter Air Carrier, p.
25,htt~://ost~xweb.dot.~ov/aviation/certific/Commuter%20~acket2.~f.
See 14 CFR Part 205.3Basic Requirements) which contains
detailed rules for aircraft accident liability insurance coverage (in the form of a certificate of insurance, OST Form 6410 - US.Air
Carriers Cert@cate of Insurance) (See 14 CFR Part 205.4Filing of Evidence of Insurance) and is needed by U S . air carriers including
commuter air carriers and air taxi operators. Commuter air carrier means an air carrier holding or seeking authority under part 298 of this
Chapter that canies passengers on at least five round trips per week on at least one route between two or more points according to its
published flight schedules that specify the times, days of the week, and places between which those flights are performed. 14 CFR Part
204.2(d). In cases involving air carriers operating aircraft with less than 60 seats and/or less than 18,OOO pounds payload capacity in ondemand passenger service or scheduled passenger service of less than five round trips a week in a single market (air taxi operations), the
minimum insurance requirements would be aircraft accident liability coverage for bodiIy injury to or death of persons, other than
passengers, with minimum limits of $75,000for any one person in any one occurrence, and a total of $300,000per involved aircraft for
each occurrence, and a limit of a least $100,000for each occurrence for loss of or damage to property. In cases dealing with air taxi
operators (whether or not commuter air carrier operations are involved), an air camer must submit basic information about the company,
including name, address, telephone and fax numbers, types of operations being performed, FAA office overseeing the carrier’s
operations. list of aircraft being used in the operation, and whether the company is a US. citizen. Evidence of current insurance coverage
that meets the requirements of Part 205 of the Department’s regulations must accompany the registration These air taxi operators must, in
addition, maintain aircraft accident liability insurance coverage for bodily injury to or death of aircraft passengers, with minimum limits
of $75,000for any one passenger, and a total per involved aircraft for each occurrence of $75,000times 75 percent of the number of
passenger seats installed in the aircraft. See 14 CFR Part 205.5(c). Cases involving more than five round trips a week in a single market
with aircraft of not more than 60 seats or 18,000pounds maximum payload capacity require aircraft accident liability coverage for bodily
injury to or death of persons. other than passengers, and for damage to property, with minimum limits of $300,000for any one person in
any one occurrence, and a total of $2,000,000per involved aircraft for each occurrence. In addition, for passengers, an air carrier
operator must maintain aircraft accident liability insurance coverage for bodily injury to or death of aircraft passengers, with minimum
limits of $300,000for any one passenger, and a total per involved aircraft for each occurrence of $300,000times 75 percent of the
number of passenger seats installed in the aircraft. See 14 CFR Part 205.5 (b).
159
FAA Exhibit 1, Item 5.p. 4-5,and FAA Exhibit 1, Item 5, Exhibit N.
‘60 The same argument would apply when discussing other terms and conditions, such as the $200 monthly fee discussed below.
16’ Davies, R.E.G. and Quastler, I. E.. Commuter Airlines ofthe United States, Smithsonian Institution Press, Washington, DC,1995,p.
401.
The City states that it examined that agreement for use as a model and found it to be outdated and impracticable for the proposed
Complainant operation because among other things, many of its provisions dealt with the rental of terminal space and Flamingo was
already a Terminal tenant, FAA Exhibit 1 Item 5,p. 5.
~
Page 21 of 31
FAA Docket 16-06-04
Flaminpo Express, Inc. v. City of Cincinnati
approved.” The Director disagrees. The City’s internal approval does not preclude the City from addressing
more specific insurance coverage as part of an operating agreement with a proposed operator. It is not
uncommon practice in the industry to have overlapping insurance coverage, including a minimum coverage in
one document and additional requirements in others. Many airports require a minimum insurance coverage on
one hand but also rely on an air carrier’s certificate of insurance.Ia In any event, the Director does not find it
unreasonable for an airport sponsor to update its insurance requirements as part of the process leading to
acceptance of Part 121 air carrier service using aircraft seating less than 30.
The Director finds that there is no evidence to suggest that this type of insurance coverage, in this amount ($20
million), is not obtainable or is so high that it is cost prohibitive for the type of operation Complainant intends to
conduct, that is, Part 121 scheduled air service with less than 30 seats using a typical twin-engine turboprop
seating 20 passenged” involving possible aircraft such as the Beech 1900, the BAe Jetstream 31, or the
Fairchild Metroliner IILIM These aircraft types are commonly used in Part 121 operations with less than 30 seats
and insurance coverage from $10 to $20 million is rather common and attainable in the industry for those types
of operations and that it would be unusual for those operations to rely on only $1 million in ~ 0 v e r a g e . I ~ ~
The Director finds that the City’s $20 million coverage is not unreasonable or inconsistent with the City’s
Federal obligations, provided it is applied to a twin-engine turboprop seating 20 or so passengers engaged in
Part 121 scheduled air service operations, as Complainant seeks and which is the basis for this Complaint.
However, a requirement for $20 million in liability coverage applied to operations using a 9-sed Piper PA-3 1350 Chieftain piston twinengine aircraft may not be attainable, and hence would be unreasonable and
inconsistent with Grant Assurance 22,49 USC 47107(a), which requires the County to make the Airport
available to all types, kinds, and classes of aeronautical activity on reasonable terms That level of insurance
requirement would not be obtainable since the operator of a Piper PA-31-350 Chieftain piston twin-engine
aircraft (seating 8-9 passengers) would not be able to obtain $20 million in coverage.’68
4. The City’s $200 Monthly Operating Fee
On January 19,2005, the City provided Complainant with a proposed “Air Route Operating Agreement”
(Operating Agreement) in conjunction with Complainant’s Permit application. The proposed Operating
Agreement by the City required, among others, a $200 per month fee for up to 40 flights per month and a $5
surcharge for each flight thereafter.’69
Complainant contends that the City’s imposition of a monthly $200 operating fee as part of its proposed
Operating Agreement is ~nreasonable’~’
and “inconsistent with the City’s agreement with any scheduled
operator in the past and the current operators on the field.”171The City disagrees and adds that the $200 per
month fee was “based in part on our research on other airport fee structures,” that the fee “is the fair and proper
amount” and that “since the only previous agreement with a scheduled operator was in 1989, reliance on that for
fee comparison would be inappropriate.” The City also argues that “operation of an airline from Lunken will
certainly increase the costs of operating the Airport and the City is obligated to collect sufficient revenues to pay
Exhibit 1, Item 6, p. 4.
FAA Exhibit 1, Item 18.
See FAA Docket No. 16-05-09, Brown Transport Co. v. Citv of Holland, p. 14.
See Beech 1900 Type Certificate Data Sheets at httr>://www.airweb.faa.gov/Remlaton/
and Guidance library/. Other aircraft in this
category include the Fairchild Metroliner. Note: To use as example a BAe Jetstream aircraft for this type of service is reasonable since in
1989-1990, Central States Airlines used such an aircraft in its routes between Lunken, Cleveland. and Detroit. Davies, R.E.G. and
Quastler, I. E., Commuter Airlines ofthe United Stares, Smithsonian Institution Press, Washington. DC, 1995. p. 401.
167 FAA Exhibit 1, Item 13.
See FAA Exhibit I, Item 13. Also, see FAA Docket 16-05-09, Brown Transport Co. v. City of Holland, Michigan, p. 15.
‘69 FAA Exhibit 1, Item 3, Exhibit D, letter from Mr. Stephen J. Fagel to Mr. David MacDonald, dated January 19,2005. This exhibit
includes the proposed Operating Agreement.
I7O See FAA Exhibit I , Item 3, p. 4, and Exhibit D, Item 6. letter from Mr. Michael J. Schulte to Mr. Mr. Stephen J. Fagel, Dated
February 1 1,2005.
FAA Exhibit 1, Item 3, Exhibit D, Item 6, letter from Mr. Michael 1. Schulte to Mr. Stephen 3. Fagel, dated February 11, 2005.
163 FAA
Page 22 of 31
FAA Docket 16-06-04
Flamingo Express, Inc. v. Citv of Cincinnati
for its operation and maintenance.” Finally, the City notes that it told Complainant that if Complainant had
“some information to justify an alternate fee structure” that the City would consider it.’72
The argument that the $200 monthly fee imposed by the City to Complainant for scheduled air carrier operations
is unreasonable because it is inconsistent with the City’s agreements “with any scheduled operator in the past
and the current operators on the field”173is rejected. First, the proposed scheduled air carrier activity and other
aeronautical activities existing at the Airport are not comparable. Second, previous operating agreements the
City may have had in 1989-1990 with other airlines, such as Central States Airlines, including a monthly fee of
$250, are also of little relevance here 174 since Complainant today and Central States Airlines in 1989-1990 may
not be similarly situated users and the record lacks evidence on this point. Sixteen years separate the two and in
any event, it would not be unreasonable for the Airport to adjust its practices, including fees, in the intervening
years.
In addition, there is no evidence that it is unreasonable for the Airport to charge $200 per month for up to 40
flights or $5 per flight to a scheduled air carrier using 20-seat turboprop aircraft for the privilege of using its
ramp areas as well as other public areas in the terminal building associated with passenger, aircraft servicing
equipment, luggage handling and security. In any event, in its correspondence with the City arguing against
the $200 monthly fee, Complainant proposed “a per flight fee of $5.00 per flight.”’75
Based on this, the Director rejects Complainant’s argument that the $200 monthly fee in unreasonable.
5. Unjust Discrimination
Complainant argues that the City had unjustly discriminated against it.’76The City denies this and responds that
complainant “failed to state how Complainant was unjustly discriminated against.”’77
The City must apply a consistent methodology in imposing terms and conditions for similarly situated
aeronautical users of the Airport. The prohibition on unjust discrimination does not prevent an airport proprietor
from making reasonable distinctions among aeronautical users,178e.g., signatory and non-signatory carriers,
tenants and non-tenants, commercial and noncommercial users, or in this case, users that are engaged in
scheduled Part 121 air service with aircraft seating less than 30 passengers and those engaged in other types of
operations such as Part 135 operations with aircraft seating less than nine passengers, flights training or FBO
services.
The Director agrees with Complainant that the City’s “argument that it has not discriminated against Flamingo
because it has granted Flamingo other types of operating permits is irrele~ant.”’~~
Permitting Complainant to
give flight instruction, conduct plane rides or offer Part 135 charter operations does not absolve the City from
responding to a request to permit scheduled air carrier service at the Lunken. However, in order to make a
finding of unjust discrimination, Complainant would have had to provide persuasive evidence that a similarly
situated user based at the Airport or one wanting to provide the same service Complainant is proposing received
preferential treatment vis-&vis the Complainant.I8’ The record contains no evidence that other users similarly
situated to the Complainant and based at the Airport or wanting to serve Lunken are not being imposed the same
terms and conditions the City imposed on Complainant.
Therefore, the Director rejects Complainant’s assertions that the City has unjustly discriminated.
FAA Exhibit 1, Item 3, Exhibit D, Item 7, letter from Mr. Mr. Stephen J. Fagel to Mr. Michael J. Schulte, dated February IS, 2005.
FAA Exhibit 1, Item 5 , Exhibit G .
174 FAA Exhibit I , Item 5, Exhibit N.
17’ FAA Exhibit 1, Item 5, Exhibit 1.
176 FAA Exhibit 1, Item 3, p. 2-4.
177
FAA Exhibit 1, Item 7, p. 5.
178 See FAA Docket No. 16-05-14,
WT-182.LLC v. Portage County Regional Airport Authority, November 1,2006,p. 12.
FAA Exhibit I , Item 6,p. 7.
I8O FAA Docket No. 16-99-09,
January 28,2000,p. 31. and FAA Docket No. 16-05-14,R/T-182,LLC v. Portage Countv Regional
Aimrt Authority, November I , 2006,p. 14.
17’
173
Page 23 of 31
FAA Docket 16-06-04
VIII.
Flaminpo Express. Inc. v. Citv of Cincinnati
FINDINGS AND CONCLUSIONS
Upon consideration of the evidence and arguments presented by the parties in the record, the Director concludes
that the actions by the City concerning Complainant’s request to operate scheduled 14 CFR Part 121 commuter
service with aircraft seating less than 30 passengers are consistent with the City’s Federal obligations, namely
Grant Assurance 22,49 USC 47107(a), which requires the City to make the Airport available to all types, kinds,
and classes of aeronautical activity on reasonable terms, and without unjust discrimination. This finding is
based on the following findings and conclusions:
(1) Complainant’s case is based on asking the City to allow Complainant to conduct scheduled Part 121 air
carrier service with a turboprop type aircraft capable of seating up to 29 seats (less than 30 seats), such as by a
20-seat twinengine turboprop,
(2) Complainant is not in a position at this time to conduct such scheduled Part 121 air carrier because
Complainant has not taken the adequate steps for a formal application for Part 121 service with the FAA nor has
it obtained the required economic authority from the Office of the Secretary of Transportation (OST), and
(3) The City cannot impose a $20 million in liability coverage requirement for operation of a 9-seat Piper PA31-350 Chieftain piston twinengine aircraft, but it may impose such a requirement for 20-seat twin-engine
turboprop
Page 24 of 31
FAA Docket 16-06-04
Flaminpo Express. Inc. v. Citv of Cincinnati
ORDER
ACCORDINGLY, it is ordered that:
1.The Complaint is dismissed.
2.AIl motions not specifically granted herein are denied.
FUGHT TO APPEAL
This Director's Determination is an initial agency determination and does not constitute final agency action
subject to judicial review under 49 USC 0 461
A party to this proceeding adversely affected by the
Director's Determination may appeal this initial determination to the FAA Associate Administrator for Airports
pursuant to 14 CFR 8 16.33(b) within thirty (30) days after service of the Director's Determination.
Date:
David L. Bennett, Director
Office of Airport Safety and Standards
'*I
See also 14 C.F.R. 5 16.247.
Page 25 of 31
FAA Docket 16-06-04
Flaminpo Exmess, Inc. v. Citv of Cincinnati
INDEX OF THE ADMINISTRATIVE RECORD
The following items constitute the administrative record in this proceeding:
FAA Exhibit 1
Item 1
Original Complaint No. 16-06-04 dated March 9,2006. This Complaint was dismissed by the FAA
Item 2
FAA Notice dismissing the Complaint, March 24,2006.
Item 3
Re-filed Complaint No. 16-06-04 dated May 31,2006 including appendices containing the following
documents:
Q
Exhibit A
0 Exhibit B
o Exhibit C
Q Exhibit D
Memorandum from J. Rita McNeil, City Solicitor to Valerie A. Lemmie, City Manager,
April 30,2003.
Flamingo Express application for a Permit to Operate Part 121 scheduled commuter
<30 seats, April 21,2004.
Lunken Airport, Rules and Regulations, October 1975.
Correspondence between Flamingo and the City of Cincinnati including the following
items:
1. Letter from Sharon McGee, President, Flamingo Express Mr. Charlie Luken,
Mayor, City of Cincinnati, June 2 1,2004.
2. Letter from David MacDonald, President, Flamingo Express to Mr. James
Tarbell, Councilman, City of Cincinnati, October 7,2004.
3. Letter from Sharon McGee, President, Flamingo Expres's Mr. Charlie Luken,
Mayor, City of Cincinnati, October 18,2004.
4. Letter from Mr. Michael J. Schulte to Eileen Enabnit, Director, Transportation
and Engineering, City of Cincinnati, January 11,2005.
5. Letter from Mr. Stephen J. Fagel, Assistant City Solicitor to David
MacDonald, President, Flamingo Express, January 19,2005 (includes
unsigned copy of Scheduled Air Route Operating Agreement Between
Flamingo Express and the City of Cincinnati).
6. Letter from Mr. Michael J. Schulte to Stephen J. Fagel, Assistant City
Solicitor, February 11,2005.
7. Letter from Mr. Stephen J. Fagel, Assistant City Solicitor to Mr. Michael J.
Schulte, February 18,2005.
8. Letter from Mr. Michael J. Schulte to Stephen J. Fagel, Assistant City
Solicitor, March 3, 2005. (This letter is similar to the March 10, 2005 below
and in FAA Exhibit 1, Item 5, Exhibit I).
9. Letter from Mr. Michael J. Schulte to Stephen J. Fagel, Assistant City
Soiicitor, March 10, 2005. (This letter is similar to the March 10,2005 below
and in FAA Exhibit 1, ltem 5, Exhibit I).
10. Letter from Mr. Stephen J. Fagel, Assistant City Solicitor to Mr. Michael J.
Schulte, March 24,2005. (Same as below)
11. Letter from Mr. Stephen J. Fagel, Assistant City Solicitor to Mr. Michael J.
Schulte, March 24,2005. (Same as above)
12. Letter from Mr. Michael J. Schulte to Stephen J. Fagel, Assistant City
Solicitor, July 11, 2005.
Page 26 of 31
FAA Docket 16-06-04
a Exhibit E
0
Exhibit F
Exhibit G
o Exhibit H
Flaminpo Exoress, Inc. v. Citv of Cincinnati
Fax from Mr. David MacDonald (Flamimgo) to Mr. Steve Fagel (City of Cincinnati)
containing proposed terminal Use and Operating Agreement, dated 8-10-04.
(Proposed) Scheduled Air Route Operating Agreement Between Flamingo Express and
the City of Cincinnati. The document is not signed or dated.
Section 402-22 Permit Fees.
Airport Minimum Liability Insurance Requirements.
Item 4
FAA Notice docketing the Complaint as Docket No. 16-06-04, June 14,2006..
Item 5
Answer and Motion to Dismiss, July 3,2006 including appendices containing the following documents:
0
Exhibit A
0
0
Exhibit B
Exhibit C
0
Exhibit D
0
0
0
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
Exhibit M
0
Exhibit N
0
0
Exhibit 0
Exhibit P
0
Exhibit Q
0
0
0
0
0
0
Lease between City of Cincinnati and Flamingo Air, Inc. dated September 25,
2003.
Flamingo Air 2006 Permit for operations at Lunken Airport.
Flamingo Express 2004 Permit Application for Scheduled Air Service. (Copy
appears to have been altered)
Notes from Meeting on July 7,2004 with Flamingo and City Airport
Officia1s.
Cincinnati Municipal Code Section 402-22.
Letter and draft Operating Agreement from City to Flamingo, January 19,2005.
Letter from Michael Schulte to Stephen Fagel, February 11,2005.
Letter from Stephen Fagel to Michael Schulte, February 18,2005.
Letter from Michael Schulte to Stephen Fagel, March 10,2005.
Letter from Stephen Fagel to Michael Schulte, March 24,2005.
Letter from Michael Schulte to Stephen Fagel, July 11,2005.
Letter from Stephen Fagel to Michael Schulte, July 26,2005.
Article II, Section 2, Rules and Regulations, Lunken Airport, October 1975,
(undated and untitled copy of).
Lease and Permit between City of Cincinnati and Central States Airlines,
November 13, 1989.
Partial Transcript of Proceedings, Flamingo Public Hearing, August 24,2004.
Flamingo Air Academy 2005 Permit and Memo & 2006 Permit to operate at
Lunken.
Letter from Michael Schulte to Eileen Enabnit, January 11,2005.
Item 6
Reply - Flamingo Express, Inc.’s Response to the City of Cincinnati’s Answer and Motion to Dismiss, July 15,
2006 including appendices containing the following documents:
0
0
0
0
0
Affidavit of David MacDonald, July 13, 2006.
Affidavit of Sharon McGee, July 13,2006.
Exhibit A
News Article: Lunken Passenger Service Sought, Flamingo Air Seeks Airport
Permit, Cincinnati Enquirer, April 30, 2004.
Memo from Valerie A. Lemmie, City Manager to Mayor and members of
Exhibit B
Council, City of Cincinnati, June 23,2003 and Memo from J. Rita McNeil, City
Solicitor to Valerie A. Lemmie, City Manager, June 23, 2003.
Letter from Lee A. McKinley, Aviation Insurance Resources, to David
Exhibit C
Page 27 of 31
Flaminpo Express. Inc. v. Citv of Cincinnati
FAA Docket 16-06-04
MacDonald, October 17, 2005. This document is entitled Supplement to
Flamingo Express, Inc.’s response to the City of Cincinnati’s Answer and
Motion to Dismiss, July 18,2006.
Item 7
Rebuttal by the City of Cincinnati, dated July 24,2006 including appendices containing the following
documents:
0
Exhibit A
Affidavit of Michael Brenner, July 24,2006.
Item 8
Exhibit A
News Article: Residents Near Lunken Fear Expansion Of Air Service, WCPO.com, May 1,2003.
http://www.wcpo.com/news/2003/local/O5/01/lunken.html
Exhibit B
News Article: Flamingo Flies on a Leap of Faith, the Cincinnati Enquirer, September 14,2003.
http://www .enquirer.~om/editions/2003/09/
14/biz flamingo14.html
Exhibit C
News Article: Lunken to get longer runway,but council says ’No’to passenger service, May 20,2004.
http://www.en~uirer.com/editions/2004/05/20/10~
lunken20.html
Item 9
Grant history for Lunken Airport.
Item 10
Information on Flamingo, http://www.flamingoair.net/
Item 11
Central States Airlines, Timetable, 1989.http://www.timetableimages.com/ttimages/ps8909a.htm
Item 12
FOR YOUR INFORMATION MEMO, to the Mayor and Members of Council from Valerie A. Lemrnie, City
Manager, Date: March 5,2003. Subject: JetLink Express.
http://64.233.161.104/search?q=cache:0wex6ZHNU:joinlnc.or~pdfs/JetLink3-503.pdf+%22JetLink+Express%22&hl=en&gl=us&ct=c~nk&cd=
11
Item 13
Memo to File, FAA Docket No. 16-06-04, November 16,2006.
Item 14
Notice of Extension of Time, December 28,2006.
Item 15
Lunken’s Part 139 Class IV certification Documents.
Page 28 of 31
FAA Docket 16-06-04
Flaminpo Exmess, Inc. v. Citv of Cincinnati
Item 16
Airport Certification Program - 14 CFR Part 139 Program Policy and Guidance, Policy 75, Airport
Classification, 6/10/2004, Subject: Designation of Class of Certificate under the Revised 14 CFR Part
139.
Item 17
Memo to File, FAA Docket No. 16-06-04, September 11,2006.
Item 18
Memo to File, FAA Docket No. 16-06-04, November 6,2006.
Item 19
Memo to File, FAA Docket No. 16-06-04, November 6,2006.
Item 20
The Ohio State University Airport, Rules and regulations, Revised February 2002, p 1, 8.
Item 21
Memo to File, FAA Docket No. 16-06-04, November 6-7,2006.
Page 29 of 31
Flarninpo Express, Inc. v. City of Cincinnati
FAA Docket 16-06-04
INDEX OF THE ADMINIS‘I’KATIVE RECOKI)
The following items constitute the administrative record in this proceeding:
FAA Exhibit 2
I
-
Figure 1 Piper PA-31-350. Source: (FAA)
Figure 2 - Flamingo’s Piper PA-32-300 aircraft, N6868D, seating
approximately 6 passengers (Source: httpJ/www.flamingoair.neV)
Figure 3 - Above, a Beech 1900D aircraft seating
approximately 20 passengers and used extensively in
commuter air service. (Source: US Army)
Page 30 of 31
FAA Docket 16-06-04
Flaminpo Express, Inc. v. Citv of Cincinnati
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on
class mail, postage paid) a true copy
,I caused to be placed in the United States mail (first
addressed to:
Mr. Michael J. Schulte
127 East Third Street
Covington, KY 4101 1
Fax: (859) 49 1-0033
Mr. Stephen Fagel
Assistant City Solicitor
801 Plum Street, Room 214
Cincinnati, OH 45202
Fax: (513) 352-1515
Celeste Colbert-King
Office of Airport Safety and Standards
Page 31 of 31