October 25, 2020
58 Alpine Avenue
Los Gatos, CA 95030
Mr. Bryant Francis C.M.
Director of Aviation
Port of Oakland
530 Water Street
Jack London Square
P.O. Box 2064 Oakland, CA 94604-2064
Dear Mr. Francis,
At the request of several of our members, I am writing you regarding Port Ordinance 4430. We are concerned about not only about the failure of the Port to recognize who the non- commercial small General Aviation users are and why they transit Oakland Airport but also the excessive and unreasonable minimum landing fee charged to those operators whose smaller aircraft weigh under 12,500 pounds. The minimum fee provision imposes a significant penalty on smaller aircraft as they are charged rates that are 20 percent higher than commercial operator rates and are eﬀectively charged four to five times that of larger aircraft since the minimum fee structure is based on larger aircraft’s landing weights.
In previous communications, airport staﬀ made a number of statements that are dubious at best:
- Staﬀ contends that GA landing fees are levied to ensure that “one type of airport user is not subsidizing another type of user”. Air carriers, both signatory and non-signatory, pay landing fees based on aircraft landing weights and those fees are adjusted annually (or more often in unusual circumstances) to balance the airport budget. In the case of Oakland, the GA landing fees, North Field tenant fees and rents, and other GA fees (ie. Fuel Flowage Fees) are being used to help maintain the CPE (Cost per Passenger Emplaned) as a stated goal for the benefit of the signatory air carriers. That is the definition of “subsidizing another type of user”. Further, the airport conveniently fails to recognize the other fees that the GA users pay – Overnight fees (which the port has waived for the year for signatory air carriers), Ramp or Handling fees, Infrastructure fees, nor does it recognize Sales Tax or State or Federal Gas Taxes on purchases made at the airport (and which the air carriers are exempt from). In sum, they have omitted some of the revenue stream to fit staﬀ’s narrative.
To truly put this into perspective, to land a small single engine aircraft at Oakland Airport and park overnight costs approximately $123. Is it any wonder that traﬃc numbers at Oakland are down almost 40 percent. Imagine what the airport parking lots would look like if vehicles were charged over $100 per night for airport parking or how Uber revenue would decrease if the drop oﬀ fee were to be $64 per trip.
2. Is it staﬀ’s contention that Oakland’s fee (and cost) structure is somehow comparable to San Francisco International. From an operational and passenger standpoint those numbers are far apart. Let’s look at actual numbers that contradict staﬀ’s position:
|Airport||2019 Total Operations- National Rank||2020 Total Operations- National Rank||2020 Passengers- National Rank|
Does staﬀ contend that Oakland Airport should be “competitive” with San Francisco International where fees are considered? Rather than focusing on the SFO fee structure as they have told the users they are, they should look at the other airports around the Bay Area that have comparable (or greater) General Aviation operations and consider how the
$63.93 minimum landing fee and $.21 per gallon Fuel Flowage Fee compare.
For Oakland, the operations number indicates that there are approximately 110 itinerant operations per day. As you will see below, these numbers are far below the numbers of other local and national airports.
It is clear that Oakland’s landing fees have significantly reduced General Aviation operations at the airport. Here are some other airports in California who rank higher in operations and do not charge small non-commercial General Aviation operations a landing fee.
|Airport||2020 Operations Rank||Daily Itinerant GA Operations|
|Santa Ana||2020 Operations Rank – 21||Daily Itinerant Operations – 230|
|Long Beach||2020 Operations Rank – 17||Daily Itinerant Operations – 275|
In addition, the contention that it is “normal” for air carrier airports to charge smaller GA aircraft landing fees is erroneous. Here are some other large airports that do not charge landing fees to non-commercial small General Aviation aircraft:
- Charlotte Douglas International- Ranked 6 in operations and 11 in passengers
- Phoenix Sky Harbor – Ranked 13 in passengers
- Portland International – Ranked 43 in operations
- San Antonio International- Ranked 44 in passengers
- Nashville International – Ranked 44 in operations
In written communications, staﬀ provided in both table and chart form numbers for itinerant GA operations at the airport. Those numbers deviate excessively from the numbers provided by the FAA regarding itinerant operations. Staﬀ stated that operations were: CY 2017 – 79,947, CY 2018 – 80,527, and CY 2019 – 77,437. The FAA numbers (including itinerant air taxi operations) were CY 2017 – 65,930, CY 2018 – 66,807, and CY 2019 – 72,061. It should be noted that air taxi operations at Oakland from 2015 to 2019 increased from 21,800 operations annually to 33,300 operations annually.
Now let’s look at how airports around the state are doing year over year for itinerant GA operations.
|Airport||2018 Itinerant GA Operations||2019 Itinerant GA Operations||2020 Itinerant GA Operations (January through August)|
|Oakland (2015 42,100)||39,700||38,700||16,400|
(The numbers listed are very diﬀerent from those the airport has provided in their responses and are taken directly from the FAA ATADS database on the FAA website.)
In relative terms, Oakland’s operations are down 37%, Santa Ana’s are down 11%, and Long Beach’s are down 7%. In summary, the pandemic has had a significant impact on some airports and far less on others. The question remains – Why has Oakland been so adversely aﬀected? Could it be that excessive landing fees have had a greater negative impact on operations than the pandemic?
Given the totality of the operational numbers, it would appear that that is the case at Oakland, and staﬀ’s response of raising fees instead of lowering them is only increasing the damage to the bottom line. At many airports, that impact might be management’s goal to reduce the volume of GA operations in order to minimize the impact on air carrier operations. Oakland, however, is a unique case due to the North Field being almost exclusively General Aviation operations and not having an eﬀect on air carrier utilized pavement or airspace.
3. Staﬀ made several statements regarding budgetary matters where General Aviation is concerned:
- They contend that the airport operates on a single budget and does not fully break out the South and North Field revenues and lists North Field capital expenditures at full cost rather than actual airport cost after Federal AIP grant funds are received.
- Staﬀ’s letters reiterate the stated goal of the Port Authority Board to control the CPE
- They quote specific landing fee revenue numbers indicating that GA landing fees make up approximately 1.5 percent of the total airport budget, but they do not breakdown the figures for small General Aviation landing fees, which again skews the numbers to fit their narrative.
- Staﬀ fails to indicate what other revenue the airport receives from General Aviation and the North Field, thus preventing users from determining if the fees charged are reasonable, fair or accurate.
In fact, staﬀ’s letters state the airports methodology is to recover costs from all users equitably but the letters lack the necessary figures to determine whether such costs truly are fair. Clearly, the airport achieves a significant revenue stream from the North Field and those revenues, when accounted for in a single budget, are being utilized for the sole (and stated) purpose of supporting the air carriers costs (CPE). That is the standard operating practice found at most
Air Carrier airports where General Aviation revenue is used to oﬀset either a lack of revenue, excessive debt burden, or poor cost management practices.
In reviewing the CAFR (Comprehensive Annual Financial Report) and Port Resolution 4483, several conclusions are apparent: 1) General Aviation is being charged based on landing fees that are 20% higher that the signatory air carriers or other based operators who are flying for hire, 2) General Aviation as a whole is paying greater than 10% of the total airport budget, and
3) General Aviation as a whole is not credited for the other revenue it provides both on budget and oﬀ budget to the community.
Of greater concern, it would appear that there is either an error in the reporting in the CAFR or staﬀ has failed to properly collect (and/or report) landing fee revenues. In communications to the public, staﬀ has stated that GA landing fee revenues were:
This fails to correlate with the FAA number of reported itinerant air taxi operations of 33,322 operations for CY 2019 which would generate over $1,630,000 alone. Adding based air taxi/ charter operations as designated in Rates and Charges Exhibit A and GA landing fees would indicate a severe under-reporting of landing fee revenue. If staﬀ contends that their number of 77,000 operations is accurate and each operation paid only the minimum landing fee, that revenue figure should be over $3,700,000 for GA landing fees alone.
In closing, I am attaching a page with a number of questions that should add transparency to this issue and move the port to a fairer and more equitable system of cost recovery as well as benefit both the aviation and local communities by reducing General Aviation operating costs and returning traﬃc to the airport that supports businesses both on and oﬀ the airport.
Based on the evidence above, we request that Oakland Airport rescind the landing fees being charged to small non-commercial general aviation users. CalPilots believes that the minimum landing fees charged to these operators are excessive and discriminatory.
Regional Vice President – CalPilots
CC: Port of Oakland Commission
Signature Flight Support
Oakland City Council
Oakland Chamber of Commerce
Are Touch and Go aircraft assessed a landing fee?
Are aircraft that conduct instrument approaches and/or aircraft that taxi back for takeoﬀ without leaving the AOA assessed a landing fee?
Please provide the methodology for calculating the small GA landing fee and explain the rationale for penalizing the GA community under 12,500 pounds with the minimum landing fee?
Provide the monthly fuel flowage volume for the past 12 months broken down by month
Provide the landing fee revenue for small GA (under 12,500 pounds) for the past 24 months broken down by month.
Provide an estimate of the lost landing fees, fuel flowage fees, sales tax and road tax revenue associated with the decrease in traﬃc due to the increase in landing fees for the past 12 months
How many Port FTE employees are allocated to the North Field? Provide the cost allocation for Fire and Police for the North Field
Provide the current Land Lease/Lease Revenue for the North Field tenants on an annual basis Current percentage of airport expenses allocated to the North Field
Total North Field Revenue Current (October 1, 2020) CPE
Current Signatory and Non-Signatory Landing Fee for Air Carriers (in dollars per 1000 lbs.) as of October 1, 2020