Can a Tennessee municipal airport authority ban a tenant from selling fuel to other aircraft on its airport?

Plain-English summary

Public airports in Tennessee, like most public airports across the country, often accept federal grants under the FAA's Airport Improvement Program. Those grants come with conditions ("grant assurances") that bind the airport sponsor for years. One of the most important assurances, codified at 49 U.S.C. § 47107, prohibits granting an "exclusive right" to use the airport for any aeronautical activity. That assurance has been read by the FAA to allow reasonable, non-discriminatory "Minimum Standards" governing who may provide aeronautical services on the airport, but to prohibit standards that effectively lock out competition.

The AG was asked whether a Tennessee municipal airport authority could enact Minimum Standards barring an airport tenant from selling fuel on the airport to aircraft the tenant does not own. The answer was a qualified yes. The Tennessee Airport Authorities Act (§§ 42-3-101 to -205) gives airport authorities "all the powers necessary or convenient" (except taxation) to operate, regulate, and develop the airport. Adopting Minimum Standards is well within that authority. The federal layer is what creates the case-by-case caveat: a Minimum Standard that prohibits tenant fuel sales must be reasonable, must be applied evenhandedly, and must not produce a de facto exclusive right.

In practice, this often means the airport authority can require any commercial fueling provider to meet specified standards (insurance, training, equipment, hours, fuel storage compliance, etc.) and may legitimately decline to allow a small-tenant fueling operation that cannot meet those standards. But an outright ban applied selectively, or a ban with no substantive justification, exposes the airport to FAA Part 16 complaints and possible loss of grant eligibility.

What this means for you

If you sit on a municipal airport authority board

You have authority to adopt Minimum Standards. Build a record. Document the safety, operational, and financial reasons for the standards you adopt; tie them to FAA Advisory Circulars (AC 150/5190-7 in particular) where available. Apply the standards across all similarly situated tenants. If your airport is federally obligated and you adopt a standard that limits fuel sales, expect that decision to draw scrutiny if a tenant complains to the FAA.

If you are an airport tenant or fixed base operator

Read your lease and the airport's Minimum Standards carefully. If you want to sell fuel to other aircraft on the airport, you generally need to qualify as a fixed base operator (FBO) under the airport's standards. If those standards are tailored to exclude you while accommodating an incumbent FBO, the federal "no exclusive rights" assurance is your remedy. You can file a Part 16 complaint with the FAA after exhausting local processes.

If you are a flight school, charter operator, or self-fueling owner

The FAA grant assurances generally protect a tenant's right to "self-fuel" their own aircraft, even when the airport restricts third-party fuel sales. But self-fueling can also be reasonably regulated for safety and equipment standards. Know the difference between a ban on selling fuel to others (which is generally permissible if reasonable) and a ban on self-fueling your own aircraft (which is usually not permissible).

Common questions

Q: What is a "federally obligated" airport?
A: An airport that has accepted federal grants under the FAA's Airport Improvement Program (AIP). Acceptance binds the sponsor to grant assurances for the useful life of the funded property, often 20 years or more, and triggers FAA oversight of airport practices.

Q: What are "Minimum Standards"?
A: A set of operational, safety, and economic requirements the airport sponsor adopts to govern who can perform aeronautical activities on the airport. They typically cover hours of operation, insurance, equipment, leased space, and personnel qualifications. The FAA encourages reasonable Minimum Standards as a way to manage airport activities consistent with the no-exclusive-rights assurance.

Q: Can the airport authority operate the only fuel concession itself?
A: Yes, in many cases. The "proprietary exclusive right" doctrine permits an airport sponsor to be the sole provider of an aeronautical service when it itself runs the operation. That is one of the recognized exceptions to the no-exclusive-rights rule, but it has its own limits, the airport must actually run the operation rather than contract it out exclusively to a single private FBO.

Q: What happens if a tenant violates the Minimum Standards?
A: Lease enforcement is the airport's primary tool. The Minimum Standards are typically incorporated into lease terms, and violations can lead to lease termination. Whether the underlying ban itself is enforceable is a separate question that an aggrieved tenant can raise through state-court or FAA channels.

Q: Why did the AG decline to give a yes-or-no answer?
A: Because the validity of any particular Minimum Standard turns on facts: the size and operational profile of the airport, the existence and capacity of incumbent FBOs, the burden the standard imposes on different tenants, whether the standard reflects safety or financial concerns, and whether the airport has applied the standard evenhandedly. The AG can describe the legal framework but cannot adjudicate a specific dispute.

Background and statutory framework

Tennessee municipalities can run their own airports under the Municipal Airport Act (§§ 42-5-101 to -205) or create separate municipal or regional airport authorities under the Airport Authorities Act (§§ 42-3-101 to -205). Authorities have broad statutory powers under § 42-3-108(a) to plan, develop, operate, regulate, equip, and maintain airports. They cannot levy taxes or special assessments, but they can adopt rules and Minimum Standards to manage tenant operations.

Federal law layers on top. 49 U.S.C. § 47107 conditions FAA airport grants on the sponsor's commitment to several assurances. The "no exclusive rights" assurance forbids granting any one provider monopoly status over an aeronautical activity. The "reasonable, non-discriminatory access" assurance requires the sponsor to make the airport reasonably available to qualified users. The FAA enforces these through Part 16 complaint procedures and through grant-eligibility consequences.

Minimum Standards are the airport sponsor's mechanism for satisfying both the "rule of reason" embedded in federal law and the practical needs of running a complex public facility. The FAA has published guidance (AC 150/5190-6 and -7) on how to draft Minimum Standards that survive federal review. The AG opinion, while not specifically discussing those Advisory Circulars, signals that an airport authority should approach Minimum Standards with the federal framework in mind.

Citations

• Tenn. Code Ann. §§ 42-3-101 to -205 (Airport Authorities Act)
• Tenn. Code Ann. § 42-3-108(a) (broad authority powers)
• Tenn. Code Ann. §§ 42-5-101 to -205 (Municipal Airport Act)
• 49 U.S.C. § 47107 (FAA grant assurances; no exclusive rights)
• Tenn. Att'y Gen. Op. 16-14 (Apr. 5, 2016) (background on airport authorities)

Subject

Validity of Minimum Standards that Prohibit the Sale of Fuel by Tenants at Federally Obligated Airports

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2021/op21-11.pdf

Original opinion text

July 1, 2021
Opinion No. 21-11
Validity of Minimum Standards that Prohibit the Sale of Fuel by Tenants at Federally
Does a municipal airport authority operating a federally obligated airport have the authority
to enact "Minimum Standards" that prohibit an airport tenant from engaging in fuel sales on airport
A municipal airport authority operating a federally obligated airport has the authority to
enact reasonable "Minimum Standards," including standards that may prohibit an airport tenant
from engaging in fuel sales on airport premises to aircraft that are not owned by the airport tenant,
but the validity of such a standard in any given case would depend on the reasonableness of, and
the justification for, the prohibition evaluated in light of the specific facts and circumstances at the
particular airport.
Municipalities may establish, operate, regulate, and maintain airports. See 1957 Tenn. Pub.
Acts, chs. 375, 376. Municipalities may perform these functions themselves (Municipal Airport
Act, Tenn. Code Ann. §§ 42-5-101 to -205) or they may establish municipal or regional airport
authorities to perform these functions (Airport Authorities Act, Tenn. Code Ann. §§ 42-3-101 to -
205). See Tenn. Att'y Gen. Op. 16-14 (Apr. 5, 2016).
A municipal airport authority established under the Airport Authorities Act has "all the
powers necessary or convenient" to operate airport facilities except the power to levy and collect
taxes or special assessments. Tenn. Code Ann. § 42-3-108(a). Such airport authorities have the
[p]lan, establish, develop, construct, enlarge, improve, maintain, equip, operate,
regulate, and protect airports and air navigation facilities, within this state and
within any adjoining state, including the acquisition, construction, installation,
equipment, maintenance, and operation of such airports or buildings and other
facilities for the servicing of aircraft or for the comfort and accommodation of air
STATE OF TENNESSEE
OFFICE OF THE ATTORNEY GENERAL
July 1, 2021
Opinion No. 21-11
Validity of Minimum Standards that Prohibit the Sale of Fuel by Tenants at Federally
Obligated Airports
Question
Does a municipal airport authority operating a federally obligated airport have the authority
to enact “Minimum Standards” that prohibit an airport tenant from engaging in fuel sales on airport
premises to aircraft that are not owned by the airport tenant?
Opinion
A municipal airport authority operating a federally obligated airport has the authority to
enact reasonable “Minimum Standards,” including standards that may prohibit an airport tenant
from engaging in fuel sales on airport premises to aircraft that are not owned by the airport tenant,
but the validity of such a standard in any given case would depend on the reasonableness of, and
the justification for, the prohibition evaluated in light of the specific facts and circumstances at the
particular airport.
ANALYSIS
Municipal Airport Authorities
Municipalities may establish, operate, regulate, and maintain airports. See 1957 Tenn. Pub.
Acts, chs. 375, 376. Municipalities may perform these functions themselves (Municipal Airport
Act, Tenn. Code Ann. §§ 42-5-101 to -205) or they may establish municipal or regional airport
authorities to perform these functions (Airport Authorities Act, Tenn. Code Ann. §§ 42-3-101 to -
205). See Tenn. Att’y Gen. Op. 16-14 (Apr. 5, 2016).
A municipal airport authority established under the Airport Authorities Act has “all the
powers necessary or convenient” to operate airport facilities except the power to levy and collect
taxes or special assessments. Tenn. Code Ann. § 42-3-108(a). Such airport authorities have the
broad power to
[p]lan, establish, develop, construct, enlarge, improve, maintain, equip, operate,
regulate, and protect airports and air navigation facilities, within this state and
within any adjoining state, including the acquisition, construction, installation,
equipment, maintenance, and operation of such airports or buildings and other
facilities for the servicing of aircraft or for the comfort and accommodation of air
travelers, and the purchase and sale of supplies, goods, and commodities as are
incident to the operation of its airport properties
Id. § 42-3-108(a)(3).
A municipal airport authority generally also has the power to enter into agreements that
grant others the privilege of using the airport, as well as agreements that confer the privilege of
"supplying goods, commodities, things, services or facilities" at the airport. Id. § 42-3-112(a)(1).
A municipal airport authority's grant of such privileges, though, must accord with the terms and
conditions of any government grant, loan, or agreement that the airport authority has accepted. Id.
When a municipal airport authority accepts federal funds to develop or improve its airport,
it must comply with certain federally mandated obligations, some of which relate to tenants and
businesses operating at the airport. The primary source of these obligations is the grant agreement
that contains the continuing commitments the airport authority must make to the United States as
The most recent airport development grant program is the Airport Improvement Program
(AIP), which is authorized by 49 U.S.C. §§ 47101 to -47144. Any municipal airport authority that
applies for an AIP grant must give "assurances" that then become binding obligations on the
parties when they enter into the AIP grant agreement.² Rick Aviation, Inc. v. Peninsula Airport
Comm'n, FAA Docket No. 16-05-18, 2007 WL 4109715, at 4, Final Decision and Order (Nov.
6, 2007); Roberts v. Daviess Cnty, Ind. Bd. of Aviation Comm'rs, FFA Docket No. 16-00-06, 2001
WL 1683273, at 5, Final Decision and Order (Dec. 13, 2001); see Flamingo Express, Inc. v.
Federal Aviation Admin., 536 F.3d 561, 563 (6th Cir. 2008).
Two of those required assurances are pertinent here: (1) An airport authority must make
its airport "available for public use on reasonable conditions and without unjust discrimination,"
and (2) it must not grant any person providing aeronautical services to the public "an exclusive
right to use the airport." 49 U.S.C. § 47107(a).
2 The "assurance"
requirement is imposed on every "airport sponsor," which means any public agency or private
owner that submits an application for financial assistance for a public-use airport. 49 U.S.C. § 47102(26). A municipal
airport authority that submits an application comes within that definition.
3 There is also a required grant assurance that a municipal airport authority will not prevent any person from self-
fueling or self-servicing his or her own aircraft with his or her own employees. See 49 U.S.C. §47107(a)(6); 14 C.F.R.,
pt. 152, app. D at §A(20)(c). But that assurance is not at issue here since the question presented to this Office concerns
the authority of a municipal airport authority to prohibit an airport tenant from engaging in fuel sales to "other aircraft,"
i.e., aircraft not owned by the airport tenant.
2
travelers, and the purchase and sale of supplies, goods, and commodities as are
incident to the operation of its airport properties. . . .
Id. § 42-3-108(a)(3).
A municipal airport authority generally also has the power to enter into agreements that
grant others the privilege of using the airport, as well as agreements that confer the privilege of
“supplying goods, commodities, things, services or facilities” at the airport. Id. § 42-3-112(a)(1).
A municipal airport authority’s grant of such privileges, though, must accord with the terms and
conditions of any government grant, loan, or agreement that the airport authority has accepted. Id.
Federally Obligated Municipal Airport Authorities
When a municipal airport authority accepts federal funds to develop or improve its airport,
it must comply with certain federally mandated obligations, some of which relate to tenants and
businesses operating at the airport. The primary source of these obligations is the grant agreement
that contains the continuing commitments the airport authority must make to the United States as
a condition for the grant of federal funds.
The most recent airport development grant program is the Airport Improvement Program
(AIP), which is authorized by 49 U.S.C. §§ 47101 to -47144. Any municipal airport authority that
applies for an AIP grant must give “assurances”1
that then become binding obligations on the
parties when they enter into the AIP grant agreement.2
Rick Aviation, Inc. v. Peninsula Airport
Comm’n, FAA Docket No. 16-05-18, 2007 WL 4109715, at 4, Final Decision and Order (Nov.
6, 2007); Roberts v. Daviess Cnty, Ind. Bd. of Aviation Comm’rs, FFA Docket No. 16-00-06, 2001
WL 1683273, at 5, Final Decision and Order (Dec. 13, 2001); see Flamingo Express, Inc. v.
Federal Aviation Admin., 536 F.3d 561, 563 (6th Cir. 2008).
Two of those required assurances are pertinent here: (1) An airport authority must make
its airport “available for public use on reasonable conditions and without unjust discrimination,”
and (2) it must not grant any person providing aeronautical services to the public “an exclusive
right to use the airport.”3
49 U.S.C. § 47107(a).
1
Available at https://www.faa.gov/airports/aip/grant_assurances/media/airport-sponsor-assurances-aip-2020.pdf.
2
The “assurance” requirement is imposed on every “airport sponsor,” which means any public agency or private
owner that submits an application for financial assistance for a public-use airport. 49 U.S.C. § 47102(26). A municipal
airport authority that submits an application comes within that definition.
3
There is also a required grant assurance that a municipal airport authority will not prevent any person from self-
fueling or self-servicing his or her own aircraft with his or her own employees. See 49 U.S.C. §47107(a)(6); 14 C.F.R.,
pt. 152, app. D at §A(20)(c). But that assurance is not at issue here since the question presented to this Office concerns
the authority of a municipal airport authority to prohibit an airport tenant from engaging in fuel sales to “other aircraft,”
i.e., aircraft not owned by the airport tenant.
1. Assurance That Airport Will Be Made Available for Public Use without Unjust
A municipal airport authority must assure that its airport will be made available for the use
and benefit of the public and that it will be open to all types, kinds, and classes of aeronautical use
on fair and reasonable terms without unjust discrimination. See id.; 14 C.F.R., pt. 152, app. D at
§§A(18), (20). 4 In sum and substance, these provisions prohibit the airport authority from adopting
unjust discriminatory conditions that would limit reasonable airport access while still permitting
the airport authority to exercise control necessary to preclude unsafe and inefficient conditions—
conditions that would be detrimental to the civil aviation needs of the public. See Rick Aviation,
Inc., 2007 WL 4109715, at 5; Roberts, 2001 WL 1683273, at 5.
2. Assurance That No "Exclusive Right" Will Be Granted
The municipal airport authority must also assure, subject to the limited exceptions
discussed below, that it will not permit any "exclusive right" for the use of the airport by any
person that provides or intends to provide aeronautical services to the public. See 49 U.S.C.
§47107(a)(4); 14 C.F.R., pt. 152, app. D at §A(19); Federal Grant Assurance 23, Exclusive Rights;⁵
see also 49 U.S.C. §§ 47103(e) (providing independently of the grant assurance requirement in
§47107(a)(4) that "[a] person does not have an exclusive right to use an air navigation facility on
which Government money has been expended").
"Exclusive right" describes "a power, privilege, or other right excluding or debarring
another or others from enjoying or exercising a like power, privilege, or right." City of Pompano
Beach v. Federal Aviation Admin., 774 F.2d 1529, 1541 (11th Cir. 1985) (citing 40 Op. U.S. Att'y
Gen. 71, 72 (1941)). An exclusive right may be conferred by express agreement, by imposition of
Conferring a particular right on one or more aeronautical service providers while excluding
others from having a similar right could be a violation of the exclusive-rights assurance. FAA
Advisory Circular 150/5190-6, app. at §1.1(f). For example, an exclusive-rights violation occurs
4 Federal Grant Assurance 22, Economic Nondiscrimination, which implements this requirement, provides in pertinent
part that:
[The airport sponsor] will make the airport available as an airport for public use on reasonable terms
and without unjust discrimination to all types, kinds and classes of aeronautical activities,⁴ including
commercial aeronautical activities offering services to the public at the airport. [Assurance 22(a)]
The sponsor 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)]
The sponsor may prohibit or limit any given type, kind or class of aeronautical use of the airport if
such action is necessary for the safe operation of the airport or necessary to serve the civil aviation
needs of the public. [Assurance 22(i)].
5 See note 1, supra.
3
1. Assurance That Airport Will Be Made Available for Public Use without Unjust
Discrimination
A municipal airport authority must assure that its airport will be made available for the use
and benefit of the public and that it will be open to all types, kinds, and classes of aeronautical use
on fair and reasonable terms without unjust discrimination. See id.; 14 C.F.R., pt. 152, app. D at
§§A(18), (20).4
In sum and substance, these provisions prohibit the airport authority from adopting
unjust discriminatory conditions that would limit reasonable airport access while still permitting
the airport authority to exercise control necessary to preclude unsafe and inefficient conditions—
conditions that would be detrimental to the civil aviation needs of the public. See Rick Aviation,
Inc., 2007 WL 4109715, at 5; Roberts, 2001 WL 1683273, at 5.
2. Assurance That No “Exclusive Right” Will Be Granted
The municipal airport authority must also assure, subject to the limited exceptions
discussed below, that it will not permit any “exclusive right” for the use of the airport by any
person that provides or intends to provide aeronautical services to the public. See 49 U.S.C.
§47107(a)(4); 14 C.F.R., pt. 152, app. D at §A(19); Federal Grant Assurance 23, Exclusive Rights;5
see also 49 U.S.C. §§ 47103(e) (providing independently of the grant assurance requirement in
§47107(a)(4) that “[a] person does not have an exclusive right to use an air navigation facility on
which Government money has been expended”).
“Exclusive right” describes “a power, privilege, or other right excluding or debarring
another or others from enjoying or exercising a like power, privilege, or right.” City of Pompano
Beach v. Federal Aviation Admin., 774 F.2d 1529, 1541 (11th Cir. 1985) (citing 40 Op. U.S. Att’y
Gen. 71, 72 (1941)). An exclusive right may be conferred by express agreement, by imposition of
unreasonable standards, or other means.
Conferring a particular right on one or more aeronautical service providers while excluding
others from having a similar right could be a violation of the exclusive-rights assurance. FAA
Advisory Circular 150/5190-6, app. at §1.1(f). For example, an exclusive-rights violation occurs
4
Federal Grant Assurance 22, Economic Nondiscrimination, which implements this requirement, provides in pertinent
part that:
[The airport sponsor] will make the airport available as an airport for public use on reasonable terms
and without unjust discrimination to all types, kinds and classes of aeronautical activities,4
including
commercial aeronautical activities offering services to the public at the airport. [Assurance 22(a)]
The sponsor 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)]
The sponsor may prohibit or limit any given type, kind or class of aeronautical use of the airport if
such action is necessary for the safe operation of the airport or necessary to serve the civil aviation
needs of the public. [Assurance 22(i)].
5
See note 1, supra.
when the airport sponsor fails to afford other qualified parties the opportunity to be an aeronautical
service provider. Id.
At the same time, the rendering of most-or even all-aeronautical services by a single
provider is not, in and of itself, evidence of an exclusive-rights violation. FAA Advisory Circular
150/5190-6, 1.3(b)(2). For example, an airport authority may issue a competitive offering for all
qualified parties to compete for the right to be an aeronautical service provider, and, if it does so,
it "is not required to accept all qualified service providers without limitation." FAA Advisory
Circular 150/5190-6, 1.3(b)(2). And "[t]he fact that only one qualified party pursued an
opportunity in a comprehensive offering would not subject the airport to an exclusive-rights
violation." Id. However, the airport authority may not, "as a matter of convenience, choose to
have only one [aeronautical service provider] provide services at the airport regardless of the
circumstances at the airport." Id.
An airport authority does not impermissibly grant an exclusive right to a single provider
of aeronautical services at its airport when both of the following conditions exist: (1) It would be
unreasonably costly, burdensome, or impractical for more than one entity to provide the service,
and (2) the airport authority would have to reduce the space leased under an existing agreement
with the entity providing the aeronautical services in order to accommodate a second provider.
See 49 U.S.C. §47107(a)(4); Federal Grant Assurance 23.
Finally, there is no exclusive-right violation when the airport authority invokes its own
proprietary exclusive right to provide any or all of the aeronautical services needed by the public
at the airport. FAA Advisory Circular 150/5190-6, §1.3(b)(1). But if the airport authority opts to
itself provide an aeronautical service exclusively it may not exercise that proprietary right through
a management contract but must use its own employees and resources. Id.
the FAA "highly recommends" that they adopt "reasonable minimum standards that are relevant
to the proposed aeronautical activity with the goal of protecting the level and quality of services
offered to the public." FAA Advisory Circular 150/5190-7, §§1, -1.1. The minimum standards are
intended to establish the 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.
Tennessee municipal airport authorities have the power to adopt such minimum standards because
they are authorized by statute to adopt rules and regulations they deem necessary for the
management, government, and use of airports under their control. Tenn. Code Ann. § 42-3-113.
4
when the airport sponsor fails to afford other qualified parties the opportunity to be an aeronautical
service provider. Id.
At the same time, the rendering of most—or even all—aeronautical services by a single
provider is not, in and of itself, evidence of an exclusive-rights violation. FAA Advisory Circular
150/5190-6, §1.3(b)(2). For example, an airport authority may issue a competitive offering for all
qualified parties to compete for the right to be an aeronautical service provider, and, if it does so,
it “is not required to accept all qualified service providers without limitation.” FAA Advisory
Circular 150/5190-6, §1.3(b)(2). And “[t]he fact that only one qualified party pursued an
opportunity in a comprehensive offering would not subject the airport to an exclusive-rights
violation.” Id. However, the airport authority may not, “as a matter of convenience, choose to
have only one [aeronautical service provider] provide services at the airport regardless of the
circumstances at the airport.” Id.
An airport authority does not impermissibly grant an exclusive right to a single provider
of aeronautical services at its airport when both of the following conditions exist: (1) It would be
unreasonably costly, burdensome, or impractical for more than one entity to provide the service,
and (2) the airport authority would have to reduce the space leased under an existing agreement
with the entity providing the aeronautical services in order to accommodate a second provider.
See 49 U.S.C. §47107(a)(4); Federal Grant Assurance 23.
Finally, there is no exclusive-right violation when the airport authority invokes its own
proprietary exclusive right to provide any or all of the aeronautical services needed by the public
at the airport. FAA Advisory Circular 150/5190-6, §1.3(b)(1). But if the airport authority opts to
itself provide an aeronautical service exclusively it may not exercise that proprietary right through
a management contract but must use its own employees and resources. Id.
Minimum Standards for Federally Obligated Airport Authorities
To help federally obligated airport authorities avoid violations of their grant assurances,
the FAA “highly recommends” that they adopt “reasonable minimum standards that are relevant
to the proposed aeronautical activity with the goal of protecting the level and quality of services
offered to the public.” FAA Advisory Circular 150/5190-7, §§1, -1.1. The minimum standards are
intended to establish the 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.
Tennessee municipal airport authorities have the power to adopt such minimum standards because
they are authorized by statute to adopt rules and regulations they deem necessary for the
management, government, and use of airports under their control. Tenn. Code Ann. § 42-3-113.
When an airport authority adopts such minimum standards, the FAA generally will not find
the airport sponsor in violation of its contractual "assurance" obligations if-among other
considerations-those particular minimum standards:
FAA Advisory Circular 150/5190-7, § 1.2(d). In short, although an airport authority's complete
denial of an aeronautical activity at a federally obligated airport is inherently antithetical to the
purpose of minimum standards, an airport authority is permitted "to restrict the commercial use of
the Airport based on nondiscriminatory standards and may insist that the person, firm or
corporation using the Airport meet certain standards regarding the quality and level of services
offered to the public so long as those standards are reasonable, relevant to the proposed activity,
and applied objectively and uniformly." International Flight Ctr. V. City of Murfreesboro, 45
S.W.3d 565, 571 n. 7 (Tenn. Ct. App. 2000).
Thus, there are some circumstances in which an airport authority may prohibit certain
aeronautical activities at its airport. For instance, it may prohibit airport users from conducting
certain aeronautical activities for reasons of safety or efficiency. 7 See Federal Grant Assurance
22; FAA Advisory Circular 150/5190-7, 1.2(b). To deny an aeronautical activity on these
grounds, the airport authority must provide evidence that safety will be compromised if the
applicant is allowed to engage in the proposed aeronautical activity.⁸ FAA Advisory Circular
150/5190-7, 1.2(b). As discussed earlier, an airport sponsor may also preclude airport users from
6 A fixed-base operator (FBO) is "[a] commercial business granted the right by the airport sponsor to operate on an
airport and provide aeronautical services such as fueling, hangaring, tie-down and parking, aircraft rental, aircraft
maintenance, flight instruction, etc." FAA Advisory Circular 150/5190-7, app. at §1.1(i). Single-service providers
differ from full-service FBOs in that they typically offer "only a specialized aeronautical service such as aircraft sales,
flight training, aircraft maintenance, or avionics service for example." See id. at §1.1(n).
7 "Efficiency" in this context refers to "the efficient use of navigable airspace," and "FAA Air Traffic (AT) is to be
consulted in such cases." FAA Advisory Circular 150/5190-7, 1.2(b) n. 2. "Efficiency" in this context should not
"be construed as protecting the 'efficient' operation of an existing aeronautical service provider for example." Id.
8 The FAA encourages an airport authority contemplating the denial of an aeronautical activity to contact the local
airports district office or the regional airports division for a reasonableness assessment. Id. at 1.2(b).
5
When an airport authority adopts such minimum standards, the FAA generally will not find
the airport sponsor in violation of its contractual “assurance” obligations if—among other
considerations—those particular minimum standards:
(1) apply to all providers of aeronautical services, from full service FBOs to single
service providers;6
(2) impose conditions that ensure safe and efficient operation of the airport in
accordance with FAA rules, regulations and guidance;
(3) . . . are reasonable, not unjustly discriminatory, attainable, uniformly applied
and reasonably protect the investment by providers of aeronautical services to
meet minimum standards from competition not making a similar investment;
(4) . . . are relevant to the activity to which they apply; and
(5) . . . provide the opportunity for newcomers who meet the minimum standards
to offer their aeronautical services within the market demand for such services.
FAA Advisory Circular 150/5190-7, § 1.2(d). In short, although an airport authority’s complete
denial of an aeronautical activity at a federally obligated airport is inherently antithetical to the
purpose of minimum standards, an airport authority is permitted “to restrict the commercial use of
the Airport based on nondiscriminatory standards and may insist that the person, firm or
corporation using the Airport meet certain standards regarding the quality and level of services
offered to the public so long as those standards are reasonable, relevant to the proposed activity,
and applied objectively and uniformly.” International Flight Ctr. v. City of Murfreesboro, 45
S.W.3d 565, 571 n. 7 (Tenn. Ct. App. 2000).
Thus, there are some circumstances in which an airport authority may prohibit certain
aeronautical activities at its airport. For instance, it may prohibit airport users from conducting
certain aeronautical activities for reasons of safety or efficiency.7
See Federal Grant Assurance
22; FAA Advisory Circular 150/5190-7, §1.2(b). To deny an aeronautical activity on these
grounds, the airport authority must provide evidence that safety will be compromised if the
applicant is allowed to engage in the proposed aeronautical activity.8
FAA Advisory Circular
150/5190-7, §1.2(b). As discussed earlier, an airport sponsor may also preclude airport users from
6
A fixed-base operator (FBO) is “[a] commercial business granted the right by the airport sponsor to operate on an
airport and provide aeronautical services such as fueling, hangaring, tie-down and parking, aircraft rental, aircraft
maintenance, flight instruction, etc.” FAA Advisory Circular 150/5190-7, app. at §1.1(i). Single-service providers
differ from full-service FBOs in that they typically offer “only a specialized aeronautical service such as aircraft sales,
flight training, aircraft maintenance, or avionics service for example.” See id. at §1.1(n).
7
“Efficiency” in this context refers to “the efficient use of navigable airspace,” and “FAA Air Traffic (AT) is to be
consulted in such cases.” FAA Advisory Circular 150/5190-7, §1.2(b) n. 2. “Efficiency” in this context should not
“be construed as protecting the ‘efficient’ operation of an existing aeronautical service provider for example.” Id.
8
The FAA encourages an airport authority contemplating the denial of an aeronautical activity to contact the local
airports district office or the regional airports division for a reasonableness assessment. Id. at §1.2(b).
engaging in certain aeronautical activities when the statutory exclusive-right exception relating to
single aeronautical service providers exists, see 49 U.S.C. §47107(a)(4), Federal Grant Assurance
23, or when the sponsor elects to exercise its proprietary exclusive right to provide an aeronautical
service with its own employees and resources, see FAA Advisory Circular 150/5190-6, §1.3(b)(1).
Accordingly, a municipal airport authority operating a federally obligated airport has the
authority to enact reasonable "Minimum Standards," including standards that may prohibit an
airport tenant. The validity of such a standard in any given case would depend on the
reasonableness of and the justification for the prohibition evaluated in light of the specific facts
and circumstances at the particular airport.
6
engaging in certain aeronautical activities when the statutory exclusive-right exception relating to
single aeronautical service providers exists, see 49 U.S.C. §47107(a)(4), Federal Grant Assurance
23, or when the sponsor elects to exercise its proprietary exclusive right to provide an aeronautical
service with its own employees and resources, see FAA Advisory Circular 150/5190-6, §1.3(b)(1).
Accordingly, a municipal airport authority operating a federally obligated airport has the
authority to enact reasonable “Minimum Standards,” including standards that may prohibit an
airport tenant from engaging in fuel sales on airport premises to aircraft that are not owned by the
airport tenant. The validity of such a standard in any given case would depend on the
reasonableness of and the justification for the prohibition evaluated in light of the specific facts
and circumstances at the particular airport.
HERBERT H. SLATERY III
Attorney General and Reporter
ANDRÉE SOPHIA BLUMSTEIN
Solicitor General
LAURA T. KIDWELL
Assistant Solicitor General
Requested by:
The Honorable Todd Gardenhire
State Senator
425 Rep. John Lewis Way N.
Suite 732 Cordell Hull Bldg.
Nashville, TN 37243