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One of our local airfields is a small D class, towered during the day, probably kept running at this status mostly because of historical/charity reasons. It gets 2 or 3 commercial flights a day and a moderate amount of General Aviation local traffic.

We have just one Fixed Base Operator (FBO) there.

My instrument instructor recently had a payment misunderstanding with the FBO over some hangar time. He paid what they asked, but wasn’t happy about it. Because his displeasure was expressed (and probably because of some past disagreements as well) the FBO's owner informed the instructor that he wasn’t welcome there anymore and neither were any of his students.

There’s always two sides to every story and this doesn’t inconvenience me right now, so I’m not looking for any advice on the actual situation itself.

What this situation made me curious about though, is what rules (if any) govern FBOs? Are they just “normal” businesses? They have an interesting relationship where they have a quasi granted monopoly to serve the public. I assume that if I tried to open an FBO, that I would be influenced, at least partially, by both FAA and the local port authority.

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    $\begingroup$ I think this would be better on Law.SE. Really it boils down to the FBO being a business like any other, and having the right to refuse service (at least refuse based on non-protected statuses unlike race). $\endgroup$
    – Ron Beyer
    Jan 14 at 3:26
  • $\begingroup$ So are you basically saying they’re just normal businesses and governed the same way any other service business, like say an auto mechanic are? $\endgroup$ Jan 14 at 3:44
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    $\begingroup$ Yes, they really don't even have a "monopoly", there are quite a few airports that have multiple FBO's on the same field. $\endgroup$
    – Ron Beyer
    Jan 14 at 4:31
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    $\begingroup$ Does being asked to leave the FBO equate to being asked to not use the airport at all? There are literally thousands of airports (in the US). The instructor could be home based elsewhere, perhaps a few miles distant, and still use the airport, yes? $\endgroup$
    – CGCampbell
    Jan 14 at 12:53

2 Answers 2

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You can read an FAA Q&A from 2017 that gives some information about how FBOs are regulated at airports that receive Federal money. The key point seems to be that the "airport sponsor" set conditions for FBOs and other businesses at the airport, and the FAA is mostly concerned with making sure that the sponsor meets their Federal obligations.

This may be the most direct answer to your question:

The FAA does not directly regulate the FBO industry at Federally obligated airports, except for some limited aspects of these operations that are subject to FAA safety regulations. Nor does the FAA approve airport leases with FBOs or regulate FBO market entry or exit conditions, investment or business models, cost-based rates, net operating revenues, adequate rates of return, mergers, and rates and charges schedules. However, if requested or if part of a complaint or compliance review, the FAA may review FBO leases or agreements to determine if they are consistent with the airport sponsor’s Federal obligations.

And this, on your comment about monopolies:

An airport sponsor is prohibited from granting an exclusive right for the use of the airport. Nor may an airport sponsor grant a special privilege to anyone providing aeronautical services on the airport or engaging in an aeronautical use. The intent of these restrictions is to promote aeronautical activity and protect fair competition at Federally obligated airports.

The existence of a single FBO at an airport does not necessarily mean the airport sponsor has granted an exclusive right or that an illegal monopoly exists. The FAA recognizes there are many reasons why there might only be a single FBO at an airport, including space limitations and the realities of market demand. Additionally, the airport sponsor has the right to establish itself as the sole FBO provider (Proprietary Exclusive Right) using its own employees.

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(Re FBOs):

They have an interesting relationship where they have a quasi granted monopoly to serve the public. I assume that if I tried to open an FBO, that I would be influenced—at least partially—by both FAA and the local port authority.

This is true in some cases, at least in regards to local municipal or state authority. Local authorities often develop a "master plan" for an airport, which may grant some form of preference or exclusivity to a particular FBO, at least by virtue of the fact that there simply may not be room for multiple FBOs in the space allotted for such operations in the master plan. Google for example "Jabara airport FBO dispute" --you'll find some content of interest, such as this article.

As to one of your other questions--

Does the FAA regulate FBOs?

Certainly there are FAA regulations pertaining to businesses offering flight instruction, maintenance services, etc. None of these FAA regulations would specifically restrict the number of business which may offer such services at any given airport, nor do any of these FAA regulations force an FBO to offer services to any given customer.

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  • $\begingroup$ Re the first link, it appears that the issue is not that one FBO had an exclusive agreement per se, but rather that they felt a potential second FBO was being allowed to circumvent the usual channels in their planned move/expansion -- it's complicated; the basic point is that you can't just roll up to an airport and stake out some vacant land and start building your FBO, so in practice there may be essentially a monopoly, even if not explicitly recognized as such -- $\endgroup$ Jan 14 at 12:10

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