SBA Joins AOPA In Opposing Rule Proposal
The Small Business Administration's
Office of Advocacy says the FAA's charity/sightseeing notice of
proposed rulemaking (NPRM) is filled with incomplete or
questionable data and needs to be withdrawn. In formal comments
submitted to FAA Administrator Marion Blakey, the Office of
Advocacy says the agency failed to accurately account for the
economic impact of the proposed rule, formally known as the
National Air Tours Standards, or how many small businesses it would
force to close.
Early in its investigation, the Office of Advocacy turned to the
Aircraft Owners and Pilots Association for solid information about
general aviation and a more accurate picture of who operates small
sightseeing businesses and how they would be affected.
"AOPA has opposed this proposed rule from the day it was first
released and began collecting information to disprove the FAA's
basic assertions almost immediately," said AOPA President Phil
Boyer. "So when the SBA's Office of Advocacy turned to us for help,
we were more than happy to share what we'd discovered."
The Office of Advocacy's strong
comments and call for withdrawal are a significant victory for
sightseeing operators. The Office of Advocacy operates under the
umbrella of, but independently from, the Small Business
Administration. Under an executive order signed by President George
W. Bush, federal agencies are required to give every appropriate
consideration to any comments provided by the office. The agency
must also include a response to the comments in any explanation or
discussion accompanying the final rule or certify that doing so
would not be in the public interest.
The FAA says the proposed charity/sightseeing rule is intended
to address alleged safety deficiencies in the air tour industry.
AOPA believes even the allegation is suspect, because it is based
on an amalgamation of small and large air tour operators flying
both fixed-wing aircraft and helicopters.
Currently air tour operators must meet standards set in Federal
Aviation Regulations (FAR) Part 135. However, there is an exemption
for pilots operating under FAR Part 91 (general operating and
flight rules) who offer sightseeing flights that take off from and
land at the same airport and stay within 25 statute miles of that
The proposed rule would remove the exemption and require all
sightseeing operators to comply with the more stringent and more
costly Part 135 regulations. By the FAA's own estimation in the
proposal, nearly 700 Part 91 sightseeing operators would be driven
out of the business. It would also deplete the number of pilots who
can use their skills to aid charities by offering sightseeing
flights as fund-raisers because it more than doubles the minimum
number of flight hours a pilot must have to make such flights from
200 to 500 hours.
The SBA Office of Advocacy says both the FAA's estimate of how
many Part 91 sightseeing operators there are and the number who
would "choose to exit" the business if the new rule were adopted
There is currently no requirement that Part 91 operators report
their sightseeing business to the FAA, which based its estimate on
a number of assumptions about data gathered from a number of
sources. In its comments, the Office of Advocacy says it "believes
the numerous assumptions in the FAA's economic analysis undermine
the quality of the data."
The Office of Advocacy also says the FAA did not accurately
calculate the economic impact of the proposed rule on small
businesses. It says it's concerned because the FAA "recognizes that
the rule could cause hundreds of entities to leave the air tour
business, yet the agency seems to have taken no steps to mitigate
"The sightseeing and air tour
industries contend that requiring a Part 119 certificate would
cause thousands, not hundreds of small operators to go out of
business. Because the FAA likely underestimated the number of small
Part 91 operators and failed to provide accurate data on Part 91
operations, revenues and costs, Advocacy believes the industry's
estimate may be sound. Consequently, the actual incidence of
business closure is likely to be significantly higher than
estimated" by the FAA.
The Office of Advocacy's comments go on to say, "The agency
states that '89 percent of the Part 91 sightseeing aircraft are
estimated to log fewer than 50 sightseeing hours per year.' The FAA
calculated the revenues for all [original emphasis] operators based
on this 50 flight hour figure. The FAA provides little data to
explain the 50 flight hour average estimate for Part 91
"[The Office of] Advocacy's discussions with the sightseeing
industry suggest that many operators, perhaps even a majority,
conduct in excess of 50 flight hours each year. Further, the AOPA
surveyed ... members providing Part 91 flights to ascertain
characteristics of their business operations, with 63% responding
that they conducted more than 50 hours of Part 91 flights
The Office of Advocacy also says the FAA failed to consider the
availability and cost of insurance for those Part 91 businesses
that might choose to convert to Part 135 operations, or the loss of
revenue during a certification process that the agency admits would
likely take longer than the proposed sunset clause. The comments
also indicate that the FAA significantly underestimated the costs
of additional safety requirements in the proposed rule on existing
and converting Part 135 operators.
The Office of Advocacy concludes by saying, "Advocacy encourages
the FAA to review the comments provided and withdraw the rule to
conduct further outreach with interested parties."
"AOPA has said from the very beginning that this rule is
unnecessarily costly and damaging to the industry and that the FAA
should talk directly to the pilots involved to better understand
the issue," said AOPA's Boyer. "We hope the FAA will take the SBA's
comments to heart and pull this proposed rule."