# o

• ' ^ Offic e o f Airport Complianc e an d Fiel d Operation s 80 0 Independenc e Ave. , S.W

. o f Transportatio n Washington , D.C

. 2059 1 Federa l Aviatio n Administratio n AU G 1 9 200 8 Complainants , Respondent s andCounse l o n Attache dServic e Lis t

Re : FAA Docke t

No
. 16-07-0 4

Dea r Parties :

Enclose di s acop y o f

th e Director' s Determinatio n in accordanc e with 1 4 CF R§16.3 1 with respec t t o th e abov e reference dDocket
. Base do n th e recor di n thi s proceedin g regardin g th e Indianapoli s Airport Authority' s allege dviolation s o f

economi c discrimination , exclusiv e rights , fe e an drenta l structure , an d airport revenues , th e Federa l Aviatio n Administratio n finds tha t th e Indianapoli s Airport Authorit y i s no t

i n violatio n o f

Federal obligation s with regar dt o gran t assurance s 22 , 23 , 2 4 an d2 5 o r Federa l law
. Accordingly , th e Complain t i s dismissed
. Th e reason s ar e se t fort h i n th e enclose dDirector' s Determination
. Sincerely ,

Randal l S
. Fiert z Director , Airport

Complianc e an d Fiel dOperation s Enclosur eUNITE D STATE S DEPARTMEN T O FTRANSPORTATIO N FEDERA LAVIATIO N ADMINISTRATIO N

WASHINGTON , D C

Northwes t

Airlines , Inc. , Delt aAirlines , Inc
. AirTra n Airway s Inc. , Continenta l Airlines , Inc. , Southwes t

Airlines , Inc
. Complainant s

V
. Indianapoli s Airport

Authority , Indianapoli s Internationa l Airport , BAA-Indianapoli s Respondents
. FAA Docke t 16-07-0 4

DIRECTOR' S DETERMINATIO N I
. INTRODUCTIO N Thi s matte r

i s before th e Federa l Aviatio n Administratio n (FAA ) basedo n th e Complain t filedunde r

1 4 Cod e o f

Federa l Regulation s (1 4 CFR ) Part 16 , b y Northwes t

Airlines , Inc. , Delt aAi r

Lines , Inc. , AirTra n Airway s Inc. , Continenta l Airlines , Inc. , an d Southwes t

Airlines , Inc
. (Airlines/Complainants)
. Th e Complain t wa s filedagains t

th e followin g Respondents , Indianapoli s Airpor t Authority , Indianapoli s Internationa l Airport , BAA-Indianapoli s (Authority)
. I n thi s Part

16 , Complainant s alleg e tha t th e Authorit y i s violatin g 4 9 U.S.C
. § 4710 1 e t seq. , an dGran t

Assurance s 22 , 23 , 24 , an d2 5 a s wel l a s th e FAA' s Polic y Regardin g Airpor t Rate s an dCharge s an dth e FAA' s Polic y an dProcedure s o n th e Us e o f Airpor t Revenue
. Complainant s argu e tha t th e violation s ste mfi-oma n alread y execute d amendmen t

t o a n agreemen t

betwee n th e Authorit y an dFedera l Expres s Corporatio n ("FedEx") , involvin g th e developmen t an dfinancing o f

ane w aircraf

t parkin g apro n a t Indianapoli s Internationa l Airport (IND ) for

FedEx' s exclusiv e use . Th e amendmen t i n questio n i s know n di

s Amendmen t

No
. 3 t o th e Airport-FedE x Lan dLeas e Agreemen t (Amendmen t

No
. 3) , date dApri l 14 , 2006
. A s part o f thi s Complaint , Complainant s reques t tha t th e FA A (i ) findAmendmen t No
. 3 t o b e unlawfu l in s o fa

r a s i t afford s FedE x Landin g Fe e Ren t Credit s tha t

resul t i n a fiinding shortfal l compare dt o th e tota l cos t o f th e FedE x Carg o Apron , (ii ) prohibi t th e Authority fro

maddin g an y fundin g shortfal l relate dt o th e FedE x Carg o Apro n t o th e airfiel dcos t

cente r o r otherwis e includ e th e cos t o f th e FedE x Carg o Apro n i n th e computatio n o f

landin g fee s at

th e Airport , an d(iii ) awar dsuc h furthe r relie f an dtak esuc hfiirther actio n a s th e FAA deem s necessar y o r appropriate , including , but no t limite d to , seekin g civi l penalties. ' Th e Authorit y denie s al l allegation s tha t i t violate dit s Federal obligation s an dask s th e FA A t o dismis s th e Complaint. ^ Specifically , an da s affirmativ e defenses , th e Authorit y answer s that

(1 ) "a s aresul t

o f th e settlemen t

offe r mad e b y th e Authority , th e Complainin g Airline s ar e no t directl y an dsubstantiall y affecte da s a resul t o f Amendmen t

No
. 3 " (2 ) "th e Authorit y di dno t unjustl y discriminat e agains t th e Complainin g Airlines, " (3 ) "th e Authorit y di dnot gran t a n exclusiv e righ t

t o FedEx, " (4 ) th e "th e Authority di dno t violat e th e Rate s an dCharge s Policy, " (5 ) "th e Authorit y di dnot

violat e th e Revenu e Us e Policy, " an d(6 ) "th e Authority di d not violat e it s self-sustainability obligations." ^ Th e FAA' s decisio n in thi s matte r i s basedo n th e applicabl e Federa l law an dFA A policy , an drevie w o f

th e pleading s an dsupportin g documentatio n submitte db y al l th e parties , whic h compris e th e administrativ e recor dreflecte din th e attache dFA A Exhibi t 1
. II
. TH E COMPLAINANT S Th e Complainants , Northwes t Airlines , Inc. , Delt aAi r

Lines , Inc. , AirTra n Airway s Inc. , Continenta l Airlines , Inc. , an dSouthwes t Airlines , Inc. , i n thi s cas e ar e referre dt o a s "Airlines " o r

"Complainants. " Northwes t i s aU.S
. certificate dai r

carrie r providin g schedule dpassenge r

ai r servic e t o airport s throughou t th e Unite dStates , includin g IND , an dth e world
. AirTran i s aU.S
. certificate dai r carrie r providin g schedule dpassenge r ai r servic e t o airport s throughou t th e Unite dStates , includin g IND , an dth e Bahamas
. Delt a i s aU.S
. certificate dai r

carrie r providin g schedule dpassenge r ai r servic e t o airport s throughou t

th e Unite dStates , includin g IND , an dth e world
. Continenta l i s aU S certificate dai r

carrie r providin g schedule dpassenge r ai r servic e t o airport s throughou t th e Unite dStates , includin g IND , an dth e world. " Southwes t i s aU S certificate dai r carrie r providin g schedule dpassenge r ai r servic e t o airport s throughou t th e Unite dStates , includin g IND. ' Eac ho f th e Complainin g Airline s i s asignator y t o th e Agreemen t an dLeas e o f

Premise s a t Indianapoli s Internationa l Airpor t (Leas e Agreement) , whic h set s landin g fe e rate s at th e Airport

o n aresidua l basi s unti l th e Leas e Agreemen t expire s b y it s ow n term s at th e en do f Decembe r

2010. *

' FAA Exhibi t

1 , Item1 , Pag e 2 ^ FA A Exhibi t

1 , Item10 , Pag e 4 8
' Se e FA A Exhibi t

1 , Ite m10 , Pag e 1 2
" FA A Exhibi t

1 , Item2 , Pag e 2
' FAA Exhibi t

1 , Item6 , Pag e 2 * FAA Exhibi t

1 , Item10 , Pag e 2 Th e Airport admit s tha t

eac ho f th e Complainin g Airline s i s asignatory t o th e Airport

Leas e Agreement ; see FA A Exhibi t 1 , Ite m10 , pag e 9III
. TH E AIRPOR T AN D IT S FEDERA LOBLIGATION S

Th e Indianapoli s Airport

Authority (Authority ) own s an doperate s th e Indianapoli s Internationa l Airport

(IND ) in Indianapolis , Indiana. ^ FN D i s acommercia l servic e airport that hold s a1 4 CFRPart

13 9 Operatin g Certificate
. Th e Airport occupie s approximatel y 7,70 0 acres , abou t 1 2 squar e mile s o f

lan di n Wayn e an dDecatu r Township s o f

Mario n County , al l withi n th e city o f Indianapolis , Indiana. ' IN D i s th e bas e for mor e than 7 4 base daircraf t an dserve s awid e spectru mo f aeronautica l activitie s totalin g ove r

213,00 0 annua l operations , ove r 96,00 0 o f

whic h ar e ai r

carrie r operations. ' Th e airport

i s th e larges t

i n Indian aan damajo r

hu b for FedEx
. Th e 1. 9 millio n squar e foot FedE x hu b a

t IN D i s FedEx' s secon dlarges t facility.' " FedE x i s als o asignatory t o th e Leas e Agreement. " Th e Airport i s completel y manage db y aprivat e firmthroug h a managemen t

contrac t with th e airport

operator . Responden t

BAA.' ^ FA A record s indicat e tha t th e plannin g an ddevelopmen t o f IN D ha s bee n financed, in part , with fund s provide db y th e FA A unde r th e Airport

Improvemen t

Progra m(AIP ) and , betwee n 198 2 an d2007 , th e Airport receive dmor e tha n $35 5 millio n i n federal airport developmen t

assistanc e i n AI P grants.' ^ In addition , par t o f IN D wa s conveye db y th e Wa r Asset s Administratio n (WAA ) t o th e City o f Indianapoli s a s surplu s property . A s aresult , th e Airport

incurre dobligation s i n th e for mo f restrictiv e dee dcovenant s arisin g fromconveyance s o f

lan dunde r

th e power s an dauthority containe di n th e provision s o f th e Surplu s Propert y Ac t

(SPA ) o f 1944 a s amended , 4 9 U.S.C
. § 47151-153.' " IV
. ISSUE S UNDE RINVESTIGATIO N Th e issue s unde r

investigatio n befor e th e FA A ar e whethe r th e Amendmen t

No
. 3 t o th e lAA-FedEx Lan dLeas e Agreemen t (Amendmen

t No
. 3) , date dApri l 14 , 2006' ^ i s consisten t wit h

• Gran t Assuranc e 2 2 Economi c Nondiscrimination , 4 9 U.S.C
. § 4710 7 (a)(1 ) throug h (6) , whic h require s th e airport sponso r t o mak e th e Airpor t

availabl e t o al l types , kinds , an dclasse s o f

aeronautica l activit y on reasonabl e terms , an dwithou t unjus t discrimination
.

^ Th e Directo r

note s that

th e airport

sponso r i n thi s cas e i s th e Airpor t Authority
. I t

i s tha t entity tha t

i s responsibl e fo

r complianc e with th e applicabl e Federa l obligations
. However , th e ter mAirport i s als o use d t o describ e th e Respondent s an dtherefore , i n thes e proceeding s Authorit y an dAirpor t refer t o th e airport sponsor . Se e FAA Exhibi t 1 , Ite m10 , Page s 12-1 3 * http://www.indyindiana.com/indianapolis_airport.ht m 'FA A Exhibi t

1 , Ite m1 6 "'http://imaps.indygov.org/edj3ortal/template.asp?page=trans_ai r " FA A Exhibi t

1 , Ite m10 , Pag e 2
' ^ http://www.indyindiana.com/indianapolis_airport.ht m ' ^ FAA Exhibi t

1 , Ite m1 8
' " FAA Exhibi t

1 , Ite m1 6
' ' FAA Exhibi t

1 , Ite m1 , Page s 1 - 2• Gran t Assuranc e 2 3 Exclusiv e Rights , 4 9 U.S.C
. § 47107(a ) (4) , whic h prohibit s th e grantin g o f

a n exclusiv e righ t

fo r th e us e o f

th e airport
. Gran t Assuranc e 24 , Fe e an dRenta l Structure , 4 9 U.S.C
. § 47107(a)(13 ) whic h requires , i n pertinen t

part , that th e owne r

o r sponso r t o maintai n afee an drenta l structur e for

th e facilitie s an dservice s bein g provide dt o airport users whic h wil l mak e th e airport

a s self-sustainin g a s possibl e unde r th e circumstance s existin g a t th e airport.' *

• Gran t Assuranc e 2 5 Airpor t

Revenues , 4 9 U.S.C
. § § 47107(b ) an d47133 , whic h require s th e airport

sponso r t o ensur e tha t

al l revenue s generate db y th e airport wil l b e expende db y it

for th e capital o r

operatin g cost s o f

th e airport ; th e local airport system ; o r

other local facilitie s whic h ar e owne do r operate db y th e owne r

o r operato r o f th e airport

an ddirectl y an dsubstantiall y relate dt o th e actual ai r transportatio n o f passenger s o r

property ; o r

for nois e mitigatio n purpose s o n o r of f th e airport.' ^ 

### V . BACKGROUN D Sinc e 1993 , FedE x an dth e Authority hav e ha da n operatin g leas e agreement . Th e 199 3 Amende dan dRestate dLan dLeas e Agreemen t i s on e o f tw o lease s currentl y i n effec t betwee n FedE x an dth e Authority an dha s bee n amende dthre e times
. I t was first amende d a s Amendmen t

No. l i n Octobe r

21 , 1994 , asecon dtim e a s Amendmen t No
. 2 o n Jun e 16 , 2000 , an dfinally, b y Amendmen t No
. 3 o n Apri l 14 , 2006
. Amendmen t No
. 3 i s at

issu e here.' * In th e sprin g 2006 , th e Authority informe dth e designate dcarrier-representativ e for th e Signatory Airline s (Northwes t Airlines) " tha t

th e Authorit y ha dbee n discussin g with FedE x th e expansio n o f

it s domesti c carg o facilitie s an doperation s at th e Airport.^ " O n Apri l 5 , 2006 , th e Authorit y provide dNorthwes t Airline s asummar y o f

th e term s o f

a n agreement , an dprovide dth e othe r airline s with writte n informatio n abou t th e FedE x agreement . Th e Authorit y indicate dtha t Amendmen t

No
. 3 woul db e signe db y FedE x withi n tw o weeks , o n Apri l 14 , 2006
. A s planned , o n Apri l 14 , 2006 , th e Authorit y an d FedE x execute dAmendmen t No
. 3 for th e financing an ddevelopmen t o f ne w carg o facilitie s an da

n adjacen t

apro n a t IN D for FedEx' s exclusiv e use .

' * Include s claim s relate dt o th e Polic y Regardin g Airpor t Rate s an dCharges , 6 1 Fed
. Reg
. 3194 4 (Jun e 21 , 1996 )
" Include s claim s relate dt o th e Polic y an dProcedure s Concernin g th e Us e o f Airpor t Revenue , 6 4 Fed
. Reg
. 769 6 (February 16 , 1999 )
' * FAA Exhibi t

1 , Ite m10 , Pag e 2
" A n airlin e that

enter s int o an agreemen t tha t i s substantiall y similar

t o th e Airpor t

Us e Agreemen t

i s considere dt o b e a"Signatory Airline. " Se e FA A Exhibi t 1 , Ite m10 , Pag e 2 ^' ' However , it

i s note dthat

th e Authority denie s tha t representative s o f

th e Signator y Airline s wer e no t informe dunti l th e Sprin g o f 200 6 that

ther e wer e ongoin g discussion s with FedE x regardin g th e expansio n o f th e carg o facilitie s an dtha t th e Authorit y introduce dth e carg o expansio n projec t t o th e Signatory Airline s a s earl y a s th e Summe r o f 200 5 durin g th e Airport' s capita l budge t revie w process . Se e FAA Exhibi t 1 , Item10 , p . 11
. Th e Directo r note s that

th e Authorit y faile dt o includ e i n th e recor dth e referenc e t o validat e thi s clai mdespit e anot e i n it s Answer , bu t whethe r th e Complainant s wer e notifie din th e Sprin g o f 200 6 or afew month s earlie r

i n th e Summe r

200 5 i s no t

critical , th e issu e i s lef

t a s represente dhere
.Specifically , Amendmen t No
. 3 facilitate s amajo r

expansio n o f

FedEx' s operation s a

t th e Airport , includin g th e financing an dconstructio n o f a400,00 0 squar e foo t

expansio n o f

it s existin g sort

building , ane w 175,00 0 square foo t secondary sort

building , a40,00 0 squar e foot aircraf t maintenanc e building , an da n 8,00 0 square foot

facilit y fo r groun dsupport equipment , al l o f

whic h wil l belon g t o th e Authority upo n completio n o f construcfion
. Th e Authority expect s FedE x t o inves t approximatel y $16 2 millio n i n expandin g thos e facilities.^ ' Th e Complainant s alleg e that unde r Amendmen t

No
. 3 , th e Authority wil l buil dth e FedE x Carg o Apro n at acos t t o th e Authority o f

approximatel y $4 9 million.^^ O n May 3 , 2006 , th e Authority sen t a n emai l t o th e member s o f th e TN D Airline

Authority Affair s Committe e Member s (Airlines/Complainants ) announcin g tha t th e negotiation s for

th e FedE x expansio n a

t IN D ha dbee n successfially completed
. Th e Authority notifie dth e Airline s tha t th e agreemen t

woul db e presente dt o th e Airport' s Boar dfo r approva l o n May 5 , 2006
. O n Ma y 5 , th e Airline s sen t th e Authorit y alette r objectin g t o th e Special Facilit y Ren t Credit , als o calle dth e Landin g Fe e Credi t o r th e Ren t Credi t ("Credit " o r

"Ren t Credit") , whic h i s part

o f Amendmen t

No
. 3
. That

sam e day , th e Airpor t

Boar dapprove dAmendmen t No
. 3.^ ^ Throughou t

200 6 an d2007 , Complainant s an dth e Authorit y attempte dunsuccessfull y t o resolv e th e dispute an di n Februar y 2007 , th e Authorit y provide dComplainant s with a n actual cop y o f

Amendmen t

No
. 3.^ " O n Apri l 13 , 2007 , Complainant s filed a1 4 CF RPart 1 6 Complain t

with th e FAA
. I t

was dockete da s FA A Docke t No
. 16-07-04
. ^ ' O n Apri l 20 , 2007 , Continenta l Airlines , Inc
. submitte damotio n t o joi n th e Complain t a s aJoin t Complainant.^ * A n Answe r t o thi s motio n wa s filedo n Ma y 1 , 2007. " O n Ma y 1 , 2007 , th e Authority submitte daMotion Requestin g Extensio n o f Time.^ ' A n Answe r

b y Complainant s t o thi s mofio n wa s filedo n Ma y 2 , 2007.^ ' O n May 4 , 2007 , FA A issue da n Orde r extendin g th e du e dat e for th e Answe r

unti l Jun e 4 , 2007.^ ° Als o o n that day
. Southwes t

Airline s Co. , filed amofio n t o joi n th e Complain t

a s aJoin t

Complainant^ ' t o whic h o n Ma y 9 , 2007 , th e Authorit y fileda n Answer
. ^ ^ O n Jun e 4 , 2007 , an Answe r an dMotio n t o Dismis s wa s filedb y th e Authority. " Thi s wa s followe do n Jun e 8 , 2007 , b y a n Unoppose dMotio n for Extensio n o f Time.^ " O n Jun e 22 , 2007 , Complainant s filed aRepl y an dAnswe r t o th e Authority' s

^ ' FAA Exhibi t

1 , Ite m10 , Page s 2- 3 ^ ^ FAA Exhibi t

1 , Ite m1 , Pag e 2 ^ ' FAA Exhibi t

1 , Ite m1 , Page s 18-1 9 ^ * FAA Exhibi t

1 , Ite m1 , Pag e 1 9 ^ ^ FAA Exhibi t

1 , Ite m1 ^ * FAA Exhibi t

1 , Ite m2
" FAA Exhibi t

1 , Ite m3 ^ * FAA Exhibi t

1 , Ite m4 "FA A Exhibi t

1 , Ite m5 ^ ^ FAA Exhibi t

1 , Ite m7 ^'FA A Exhibi t

1 , Ite m6 ^ ^ FA A Exhibi t 1 , Ite m8 "FA A Exhibi t

l,Ite m1 0 ^ ^ FAA Exhibi t

1 , Ite m1 1Motio n t o Dismiss. " Thi s wa s followe db y th e Authority' s Rebutta l on Jul y 16 , 2007.^ *

On Jul y 30 , 2007 , Complainant s filed aMofio n fo r Leav e t o Fil e an dResponse " whic h was followe do n Augus t

9 , 200 7 b y th e Respondent' s Answe r t o Complainin g Airlines ' Mofio n for

Leav e t o Fil e an dResponse.^ * O n Decembe r 5 , 2007 , th e FAA issue daNofic e o f Extensio n o f

Time.^ ' O n Marc h 28 , 2008 , th e FA A issue dareques t for addifional informafio n wit h si x (6 ) question s fro mth e Responden t (FAA Questions)
. Th e FA A requeste dth e followin g information : (1 ) Provid e alayou t

o f th e FedE x facilitie s locate do n th e Airport ; (2 ) I s th e FedE x Apro n subjec t t o th e Credi t

locate dwithi n th e Airport Cos t Cente r know n a s th e "Airfiel dArea " unde r th e Agreemen t

an dPremise s Lease ; (3 ) Wer e th e provision s o f secfion s 8.0 1 an d 8.0 3 applie dt o th e FedE x Apro n subjec t t o th e Credit ; (4 ) Ho w ar e th e fund s representin g th e Credi t applie dt o th e Special Facilitie s Deb t o f th e FedE x Apron ; (5 ) Doe s th e Agreemen t

an dLeas e o f

Premise s explicitl y provid e for increasin g th e Airfiel dAre a requiremen t

t o accoun t

for th e Credi t

unde r th e FedE x Amendmen t

N o 3 ; (6 ) What

othe r type s o f credit s hav e bee n claime db y Signatory Airline s unde r th e provision s o f

th e Agreemen t

an dPremise s Lease." " O n May 12 , 2008 , th e FA A receive dth e respons e t o th e FA A Question s fi-omth e Authority." ' O n Jun e 11'*" , 2008 , th e FA A receive dth e respons e t o th e Authority' s respons e t o th e FA A Question s fromth e Complainants." ^ VI
. APPLICABL E LA WAN D POLIC Y Th e federal rol e in civi l aviafio n ha s bee n augmente db y variou s legislativ e acfion s that authoriz e program s for

providin g federal fund s an dothe r assistanc e t o local communitie s fo r th e developmen t

o f Airport facilifies
. In eac h suc h program , th e Airport sponso r assume s certai n obligations , eithe r b y contrac t

o r b y restrictiv e covenant s in property deed s an dconveyanc e instruments , t o maintai n an doperat e it s Airpor t facilitie s safel y andefficientl y an di n accordanc e with specifie dconditions
. Commitment s assume db y Airport sponsor s i n propert y conveyanc e o r gran t agreement s ar e importan t factor s i n maintainin g ahig h degre e o f safet y an defficienc y i n airpor t design , construcfion , operatio n an dmaintenance , a s wel l a s ensurin g th e publi c fair an dreasonabl e acces s t o th e Airport
.
"FA A Exhibi t

I , Ite m1 2 ^ * FAA Exhibi t

1 , Ite m1 3
" FAA Exhibi t

1 , Ite m1 4
" FA A Exhibi t

1 , Ite m1 5 ''FA A Exhibi t

1 , Ite m1 7 ""FA A Exhibi t

1,Ite m2 2 "'FA A Exhibi t

1 , Ite m2 0
" ^ FAA Exhibi t

1 , Ite m2 1Titl e 4 9 U.S.C
. § 47101 , e / seq. , provide s fo

r federal airport

financial assistanc e fo

r th e developmen t

o f public-us e airport s unde r th e Airport

Improvemen t

Program(AIP ) establishe db y th e Airport andAirway Improvemen t Ac t o f 1982 , a s amended
. Titl e 4 9 U.S.C
. § 47107 , e t

seq. , set s fort

h assurance s t o whic h a

n airport sponso r agree s a s a conditio n o f

receivin g federal financial assistance
. Upo n acceptanc e o f a n AI P grant , th e assurance s becom e abindin g contractua l obligatio n betwee n th e airport sponso r an dth e federal government . Th e assurance s mad e b y airport sponsor s in AI P gran t

agreement s ar e importan t

factor s i n maintainin g aviabl e nationa l airport system . Airpor t Sponso r Assurance s A s aconditio n preceden t t o providin g airport

developmen t

assistanc e unde r

th e Airport Improvemen t

Program , 4 9 U.S.C
. § 47107 , e t seq. , th e Secretary o f

Transportatio n and , b y extension , th e FA A mus t receiv e certai n assurance s fromth e airport sponsor . Titl e 4 9 U.S.C
. § 47107(a ) set s fort h th e statutory sponsorshi p requirement s t o whic h a n airport sponso r receivin g federal financial assistanc e mus t agree . Th e FA A ha s astatutory mandat e t o ensur e tha t airport owner s compl y with thes e sponso r assurances." ^ FAA Orde r 5190.6A , Airpor t

Complianc e Requirements (FA A Orde r 5190.6A) , issue do n Octobe r 2 , 1989 , provide s th e policie s an dprocedure s t o b e followe db y th e FA A i n carryin g ou t it s legislativel y mandate dfunction s relate dt o federall y obligate dairport owners ' complianc e wit h thei r sponso r assurances . Th e FA A consider s it

inappropriat e t o provid e federal assistanc e for improvement s t o airport s wher e th e benefit s o f

suc h improvement s wil l no t b e fully realize ddu e t o inheren t restriction s o n aeronautica l activities
. Th e gran t assurance s relevan t

t o th e issue s raise d i n th e Complain t

ar e th e following :
Gran t Assuranc e 22 , Economi c Nondiscriminatio n Th e owne r

o f an y airport

develope dwith federal gran t assistanc e i s require dt o operat e th e airport

for th e us e an dbenefi t

o f th e public
. Federa l gran t assuranc e 22 , Economi c Nondiscrimination , (Assuranc e 22 ) deals with both th e reasonablenes s o f airport acces s an dth e prohibition o f

adoptin g unjustl y discriminator y condition s a s apotential fo r limitin g access . Assuranc e 2 2 o f th e prescribe dsponso r

assurance s implement s th e provision s o f

4 9 U.S.C
. § 47107(a)(1 ) throug h (6) , an drequires , i n pertinen t part : [Th e airport

owne r o r sponsor ] wil l mak e th e airpor t availabl e a s a

n airport for publi c us e o n reasonabl e term s an dwithou t unjus t discriminatio n t o al l types , kind s an dclasse s o f

aeronaufical activities , includin g commercia l aeronautica l activifie s offerin g service s t o th e publi c at th e airport
. [Assuranc e 22(a). ]

" ^ See , e.g. , th e Federal Aviatio n Ac t o f 1958 , a s amende dan drecodified , Titl e 4 9 U.S.C
. § § 40101 , 40113 , 40114,46101 , 46104 , 46105 , 46106 , 46110 ; an dth e Airpor t an dAirwa y Improvemen t Ac t o f 1982 , a s amende dan drecodified , Titl e 4 9 U.S.C
. § § 47105(d) , 47106(d) , 47107(k) , 47107(1) , 47111(d) , 4712 2Eac h fixed-base operato r a t th e airport

shal l b e subjec t

t o th e sam e rates , fees , rentals , an dothe r

charge s a s ar e uniforml y applicabl e t o al l othe r fixed-base operator s makin g th e sam e o r similar use s o f suc h airpor

t an dutilizin g th e sam e o r simila r facilities
. [Assuranc e 22(c). ] [Th e airport

owne r o r sponsor ] wil l no t

exercis e o r

gran t an y righ t o r privileg e whic h operate s t o preven t any person , firm, o r

corporatio n operatin g aircraf t o n th e airpor t

fromperformin g any service s on it s ow n aircraf t with it s ow n employee s (includin g bu t no t limite dt o maintenance , repair , an dfueling ) that i t ma y choos e t o perform
. [Assuranc e 22(f). ] Th e sponso r

ma y establis h suc h reasonable , an dno t unjustl y discriminatory , condition s t o b e me t

b y al l user s o f

th e airport

a s may b e necessary for

th e saf e an defficien t

operafio n o f

th e airport
. [Assuranc e 2 2 (h). ] Th e sponso r

may prohibi t

o r limi t an y give n type , kin do r

clas s o f aeronautica l us e o f th e airport

i f suc h actio n i s necessar y for th e saf e operatio n o f

th e airport

o r necessar y t o serv e th e civi l aviafio n need s o f th e public
. [Assuranc e 22(i). ] Subsectio n (h ) qualifie s subsectio n (a) , an dsubsectio n (i ) represent s a n exceptio n t o subsectio n (a ) t o permi t

th e sponso r

t o exercis e contro l o f

th e airport

sufficient t o preclud e unsaf

e an dinefficient

condifion s tha t

woul db e detrimenta l t o th e civi l aviatio n need s o f th e public
. In al l case s involvin g restriction s o n airport us e impose db y airport

owner s for

safet y an d efficienc y reasons , th e FAA wil l mak e th e final determinafio n o n th e reasonablenes s o f suc hrestriction s whe n thos e restricfion s den y o r limi t acces s to , o r

us e of , th e airport
. [FAA Orde r

5190.6A , Secfio n 4-8. ]

Assuranc e 23 , Exclusiv e Rieht s Federa l gran t

assuranc e 23 , Exclusiv e Rights , (Assuranc e 23 ) implement s th e provision s o f 4 9 U.S.C
. § § 40103(e ) an d47107(a)(4) , an drequires , i n pertinen t part , tha t th e owne r o r sponso r o f afederall y obligate dairport : "...wil l permi t

n o exclusiv e right

for th e us e o f

th e airport

b y an y person s providing , o r

intendin g t o provide , aeronautica l service s t o th e public. " "...wil l not , eithe r

directl y o r

indirectly , gran t

o r permi t an y person , firm, o r corporation , th e exclusiv e righ t at th e airpor t

t o conduc t

an y aeronaufical activities... " "...wil l terminat e an y exclusiv e righ t t o conduc t

a n aeronautica l activity no w existin g a

t suc h a n airport befor e th e gran t

o f an y assistanc e unde r Titl e 4 9 Unite dState s Code. "In FA A Orde r 5190.6A , th e FA A discusse s it s exclusiv e right s polic y an dbroadl y identifie s aeronautica l activifie s a s subjec t t o th e statutory prohibitio n agains t exclusiv e rights
. Whil e public-us e airport s may impos e qualification s an dminimu mstandard s upo n thos e wh o engag e in aeronautica l activities , FA A ha s take n th e positio n tha t th e applicatio n o f

an y unreasonabl e requiremen t o r any standar dtha t

i s applie di n a

n unjustl y discriminator y manne r

may consfitute th e constructiv e gran t o f a n exclusiv e right
. Court s hav e foun dth e gran t

o f a n exclusiv e righ t

wher e asignifican t

burde n ha s bee n place do n on e competito r

that i s no t place do n another
. [Se e e.g . Pompan o Beac h v FAA
. 77 4 F2 d 152 9 (11" ^ Cir , 1985). ] A n owne r o r sponso r i s unde r n o obligafion , however , t o permi t aircraf t owner s t o introduc e ont o th e airport equipment , personnel , o r practice s whic h woul db e unsafe , unsighfiy , detrimenta l t o th e publi c welfare , o r whic h woul daffec t

th e efficient us e o f airport facilities
. [Se e FA A Orde r 5190.6A , Sectio n 3- 9 (e). ] Leasin g al l availabl e airport lan dan dimprovement s planne dfor aeronautica l activitie s t o on e enterpris e wil l b e construe da s evidenc e o f inten t t o exclud e other s unles s i t can b e demonstrate dtha t

th e entir e lease dare ai s presentl y require dan dwil l b e immediatel y use dt o conduc t

th e activitie s contemplate db y th e lease
. [Se e FA A Orde r 5190.6A , Secfio n 3-9(c). ] FA A Orde r

5190.6 A provide s additiona l guidanc e o n th e applicatio n o f th e statutory prohibition agains t

exclusiv e right s an dFA A polic y regardin g exclusiv e right s a t public

us e airports
. [Se e FA A Orde r 5190.6A , Chapte r

3. ] Assuranc e 24
. Fe e an dRenta l Structur e Gran t Assuranc e 24 , "Fe e an dRenta l Structure, " o f th e prescribe dsponso r

assurance s safisfie s th e requirement s o f 4 9 U.S.C
. § 47107(a)(13)
. I t provides , i n pertinen t

part , tha t th e airport

sponsor : "wil l maintai n afee an drenta l structur e for th e facilitie s an dservice s at th e airport

whic h wil l mak e th e airport a s self-sustainin g a s possibl e unde r th e circumstance s existin g a t th e particula r

airport , takin g int o accoun t suc h factor s a s th e volum e o f traffi c an deconom y o f

collection
. N o part o f th e Federal shar e o f

a n airport development , airpor t

plannin g o r

nois e compatibility projec t

for whic h agran t

i s mad e unde r

Titl e 49 , Unite d Stat e Code , th e Airport

an dAirwa y Improvemen t Ac t o f 1982 , th e Federa l Airport Ac t o r th e Airport

an dAirwa y Developmen t Ac t o f 197 0 shal l b e include din th e rat e basi s in establishin g fees , rates , an dcharge s for user s o f that airport. " FAA' s Polic y an dProcedure s Concernin g th e Us e o f Airpor t Revenue s (Revenu e Us e Policy)" " provides , amon g othe r things , th e FAA' s polic y o n th e maintenanc e o f aself

sustainin g rat e structur e b y federally-assiste dairports
. I t provides , in relevan t

part , that :

4 4 Se e 6 4 F

R7696 , February 16 , 1999
."Airpor t proprietor s mus t

maintai n afe e an drental structur e that in th e circumstance s o f

th e airport

makes th e airpor

t a s financially self

sustainin g a s possible
. [Secfio n VII(B)(1) ] I f marke t condition s o r

deman dfor

ai r servic e doe s no t

permi t th e airport t o b e financially self-sustaining , th e airport proprieto r

shoul destablis h lon g ter mgoal s an dtarget s t o mak e th e airport a s financially self

sustainin g a s possible
. [Secfio n VII(B)(2) ]

. . .th e FA A doe s no t

conside r th e self-sustainin g requiremen t t o requir e airport sponsor s t o charg e fair

marke t rate s t o aeronautica l users . Rather , fo r charge s t o aeronautica l users , th e FA A consider s th e self-sustainin g assuranc e t o b e satisfie db y airport charge s that

reflec t th e cos t t o sponsor s o f providin g aeronautica l service s an dfacilitie s t o users . [Sectio n VII(B)(5). ]

. . .th e FA A interpret s th e self-sustainin g assuranc e t o requir e that th e airport receiv e fair

marke t valu e for th e provisio n o f

nonaeronautica l facilitie s an dservices , t o th e exten t practicabl e considerin g th e circumstance s a

t th e airport
. [Sectio n VII(C).] " Mos t o f th e principle s o f

th e FAA' s Polic y Regardin g Airpor t Rate s an dCharge s (Rate s an dCharge s Policy)" ^ includin g th e prohibitio n o n unjus t economi c discriminatio n an d th e requiremen t

t o b e financially self-sustaining , ar e base do n th e statutory gran t assurance s foun da

t 4 9 U.S.C
. § 47107 , e t

seq. , i n existenc e sinc e befor e 1982
. I n additio n t o th e unjus t

discriminatio n prohibition" * an dth e self-sustainability requirement," ^ rates , fees , rentals , landin g fees , an dothe r servic e charge s impose do n aeronautica l user s for

aeronautica l us e o f

airpor t facilitie s mus t

b e reasonable." ' In accordanc e with relevan t

Federa l statutor y provision s governin g th e us e o f airport revenue , airpor

t proprietor s may expen drevenu e generate db y th e airport onl y for statutoril y allowabl e purposes." ' Unde r th e term s o f

gran t agreement s administere db y th e FAA , al l aeronautica l user s ar e entitle dt o airpor

t acces s o n fair

an dreasonabl e term s withou t unjus t discrimination
. Therefore , th e FA A consider s that th e principle s an dguidanc e se t fort h i n th e Rate s an d Charge s Polic y appl y t o al l aeronautica l use s o f th e airport
. Th e FA A recognizes , however , that

airport proprietor s ma y us e differen t mechanism s an dmethodologie s t o establis h fee s for

differen t facilities , e.g. , th e airfield
. Th e FA A take s thes e difference s int o accoun t

whe n calle dupo n t o resolv e adisput e ove r aeronautica l fee s o r

otherwis e

" ^ Se e 6 1 F

R31994 , Section s o f

th e policy , no t

applie dherein , wer e vacate di n Ai r Transpor t

Associatio n v DOT
. 11 9 F3d
. 3 8 (D C Cir
. 1997) , amende d12 9 F.3 d625
. " * Se e Paragrap h 3 o f

th e Rate s an dCharge s Policy , Pag e 32021 ; se e als o 4 9 U.S.C
. § 47107(a)(1 )
" ' Se e Paragrap h4 o f

th e Rate s an dCharge s Policy , Pag e 32021 ; see als o 4 9 U.S.C
. § 47107(a)(13)(A )
" * Se e Paragrap h 2 o f

th e Rate s an dCharge s Policy , Pag e 32019 ; se e als o 4 9 U.S.C
. § 47107(a)(1 ) "'Se e 4 9 U.S.C
. §47107(b )
1 0conside r whethe r a n airport sponso r i s in complianc e with it s obligatio n t o provid e acces s o n reasonabl e term s withou t unjus t discriminafion.' " A Federall y obligate dairport owner' s obligatio n t o mak e th e airport availabl e for

publi c us e doe s no t

preclud e th e owne r

fromrecoverin g th e cos t o f providin g facilitie s an d service s a t th e airport

throug h th e impositio n o f reasonabl e fees , rents , an dothe r use r charge s designe dt o mak e th e airport a s self-sustainin g a s possibl e unde r th e airport

specifi c circumstances. " Neithe r Federa l law no r

FA A polic y require s asingl e approac h t o airpor t rate-setting
. Airport

fees , rents , an dothe r

charge s may b e se t

accordin g t o a methodology , e.g. , residua l o r compensatory , o r

acombinatio n thereof

, a t th e discretio n o f th e airport

sponsor , a s lon g a s th e methodolog y an dcost-allocafio n formul aselecte di s transparent , reasonable , an dnot unjustl y discriminatory. " Airport proprietor s mus t

emplo y areasonable , consistent , an dtransparen t (i.e. , clear

an d fully justified ) metho do f establishing th e airport

fee s an dadjustin g th e fee s o n atimel y an dpredictabl e schedule
. Airport proprietor s ar e advise dt o establis h fee s with du e regar dfor economy an defficiency. " Th e airport proprieto r

mus t appl y aconsisten t methodolog y in establishing fee s for comparabl e aeronautica l user s o f th e airport (similarl y situated)
. Th e prohibitio n o n unjus t discriminatio n doe s not

preven t a n airport proprieto r frommakin g reasonabl e distinction s amon g aeronautica l user s (e.g. , signatory an dnon-signatory carriers , tenant s an dnon-tenants , commercia l an dnon-commercia l users ) an dassessin g highe r fee s on certai n categorie s o f aeronautica l user s basedo n thos e disfinction s (e.g. , highe r

fee s for non-signator y carriers , a s compare dt o signatory carriers).' "
Assuranc e 25 , Airpor t Revenue s Gran t Assuranc e 25 , "Airpor t

Revenues, " o f

th e prescribe dsponso r

assurance s implement s provision s o f 4 9 U.S.C
. § 47107(b) , e t seq. , an drequires , i n pertinen t part , that : "a
. Al l revenue s generate db y th e airport an dan y loca l taxe s o n aviatio n fue l establishe dafter

Decembe r

20 , 1987 , wil l b e expende db y i t for th e capita ] o r operatin g cost s o f

th e airport ; th e local airport system ; o r

othe r local facilitie s whic h ar e owne do r operate db y th e owne r

o r operato r o f th e airport

an dwhic h ar e directl y an dsubstantiall y relate dt o th e actua l ai r transportatio n o f

passenger s o r

property ; o r

for nois e mitigatio n purpose s on o r of f th e airport
. Provided , however , tha t i f covenant s o r

assurance s i n deb t obligation s issue dbefor e Septembe r 3 , 1982 , b y th e owne r

o r operato r o f th e airport , o r

provision s enacte dbefor e Septembe r 3 , 1982 , i n

^ ^ Se e Sectio n A o f

th e Rate s an dCharge s Policy , Pag e 3201 7 "5e e Order , Sec
. 4-14(a )
" Se e 4 9 U.S.C
. § 47129(a)(2 ) an dparagrap h2 o f th e Rate s an dCharge s Policy , Pag e 3201 9
" Se e Paragrap h 2.4. 3 o f th e Rate s an dCharge s Policy , Pag e 3202 0
' " Se e Paragrap h3. 1 o f

th e Rate s an dCharge s Policy , Pag e 3202 1
1 1governin g statute s controllin g th e owne r or operator' s financing, provid e for th e us e o f

th e revenue s fromany o f th e airport

owne r o r operator' s facilities , includin g th e airport , t o support no t onl y th e airport

owne r o r operator' s general deb t

obligation s o r

othe r facilities , the n thi s limitafio n on th e us e o f

al l revenue s generate db y th e airport (and , i n th e cas e o f

a publi c airport , local taxes o n aviatio n fuel ) shal l not apply
. b
. A s par t

o f th e annual audi t

require dunde r

th e Singl e Audi t

Ac t o f 1984 , th e sponso r

wil l direc t

tha t th e audi t wil l review , an dth e resulfin g audi t repor t wil l provid e a

n opinio n concerning , th e us e o f airport revenu e an dtaxe s i n paragrap h (a) , an dindicatin g whethe r fund s pai do r transferre dt o th e owne r

o r operato r are pai do r

transferre di n amanne r consisten t with Tifi e 49 , Unite dState s Cod e an dan y othe r applicabl e provisio n o f

law includin g an y regulatio n promulgate db y th e Secretary o r Administrator
. c . An y civi l penalties o r

othe r sanction s wil l b e impose dfor violatio n o f thi s assuranc e in accordanc e with th e provision s o f Sectio n 4710 7 o f

Titl e 49 , Unite dState s Code
. Th e Revenu e Us e Polic y provides , amon g othe r things , th e FAA' s polic y o n th e us e o f airport revenue . I t

provides , i n relevan t

part , that : "Unlawfu l revenu e diversio n i s th e us e o f airport revenu e for

purpose s othe r tha n th e capital an doperatin g cost s o f th e airport , th e local airport system , o r

othe r local facilitie s owne dan doperate db y th e airport owne r o r operato r an ddirectl y an dsubstantiall y relate dt o th e ai r transportatio n o f passenger s o r

property . [Sectio n 11(C). ] Prohibite duse s o f

airport revenu e includ e but

ar e no t limite dto : (1 ) Direc t o r indirec t payment s tha t

excee dth e fair

an dreasonabl e valu e o f service s provide dt o th e airport
. Th e FA A generall y consider s th e cos t o f providin g th e service s o r

facilitie s t o th e airport

a s areliabl e indicato r

o f value
. (12 ) Direc t

subsid y o f

ai r carrie r operations
. Direc t

subsidie s are considere dt o b e payment s o f airport fund s t o carrier s for

ai r service
. Prohibite ddirec t

subsidie s d o not

includ e waiver s o f

fee s o r discounte d landin g o r

othe r fee s durin g apromotiona l period
. [Sectio n VI(B)(1 ) an d (12).] " Th e FAA Airpor t Complianc e Prosra m Th e FA A discharge s it s responsibilifie s for ensurin g airpor t

ovraers ' complianc e wit h thei r federal obligation s throug h it s Airport Complianc e Program
. Th e FAA' s airpor t complianc e effort s ar e base do n th e contractua l obligation s an airpor t owne r accept s when receivin g federal gran t fund s o r th e transfe r

o f federa l propert y for

airport purposes . Thes e obligation s ar e incorporate di n gran t agreement s an dinstrument s o f conveyanc e in

1 2orde r

t o protec t

th e public' s interes t

i n civi l aviatio n an dt o ensur e complianc e with federal laws
. Th e FA A Airpor t

Complianc e Programi s designe dt o ensur e th e availability o f anationa l syste mo f saf e an dproperl y maintaine dpublic-us e airport s operate din amanne r consisten t wit h th e airport

owners ' federa

l obligation s an dth e public' s investmen t i n civi l aviafion
. Th e Airport

Complianc e Programdoe s no t contro l o r

direc t th e operatio n o f

airports
. Rather , it monitor s th e administratio n o f th e valuable right s pledge db y airpor t sponsor s t o th e peopl e o f

th e Unite dState s in exchang e for monetary grant s an ddonation s o f federal propert y t o ensur e tha t th e publi c interes t

i s bein g served
. FA A Orde r 5190.6 A set s fort h policie s an dprocedure s fo r th e FA A Airport

Complianc e Program
. Th e Orde r i s not regulator y an di s no t

controllin g wit

h regar dt o airport

sponso r conduct
. Rather , i t establishe s th e policie s an dprocedure s t o b e followe db y FA A personne l in carryin g ou t th e FAA' s responsibilitie s fo r ensurin g airport

compliance
. I t

provide s basi c guidanc e for FA A personne l in interpretin g an dadministerin g th e variou s continuin g commitment s mad e t o th e Unite dState s b y airport owner s a s acondifio n o f receivin g agran t

o f federal fiands o r th e conveyanc e o f

federal property for

airport purposes . Th e Orde r

analyze s th e variou s obligation s se t

fort h in th e standar dairport

sponso r assurances , addresse s th e natur e o f thos e assurances , addresse s th e applicatio n o f thos e assurance s in th e operatio n o f public-us e airports , an dfacilitate s interpretatio n o f th e assurance s b y FA A personnel
. Th e FA A Complianc e Programi s designe dt o achiev e voluntar y complianc e with federal obligation s accepte db y owner s and/o r operator s o f

public-us e airport s develope dwith FAA-administere dassistance
. Therefore , i n addressin g allegation s o f noncompliance , th e FA A wil l mak e adeterminatio n a s t o whethe r a n airport sponso r i s currentl y i n complianc e with th e applicabl e federal obligations
. Consequently , th e FA A wil l conside r th e successfu l actio n b y th e airport t o cur e an y allege do r

potentia l pas t

violafio n o f applicabl e federal obligatio n t o b e ground s for dismissa l o f

suc h allegations
. [Se e e.g . Wilso n Ai r

Cente r v . Memphi s an dShelb y Count y Airpor t Authority
. FA A Docke t

No
. 16-99-10 , (Augus t

30 , 2001 ) (Final Decisio n an dOrder) ] Enforcemen t

o f Airpor t Sponso r Assurance s FA A Orde r

5190.6A , Airpor t

Complianc e Requirements , date dOctobe r 2 , 1989 , cover s al l aspect s o f

th e airport

complianc e progra mexcep t enforcemen t

procedures
. Enforcemen t

procedure s regardin g airport complianc e matter s ma y b e foun dat FA A Rule s o f Practic e fo r

Federall y Assiste dAirpor t Enforcemen t

Proceeding s (1 4 CF RPart 16)
. Thes e enforcemen t

procedure s wer e publishe di n th e Federa l Registe r (6 1 FR 53998 , Octobe r

16 , 1996 ) an dbecam e effectiv e o n Decembe r 16 , 1996
. Th e Complain t

an dAppea l Proces s Pursuan t t o 1 4 CFR , Part

16 , § 16.23 , aperso n directl y an dsubstantiall y affecte db y an y allege dnoncomplianc e may file acomplain t with th e FAA
. Th e Complainan t shal l

1 3provid e aconcis e bu t complet e statemen t

o f th e fact s relie dupo n t o substanfiate eac h allegation
. Th e complain t shal l als o describ e ho w th e Complainan t was directl y an d substantiall y affecte db y th e thing s don e o r omitte db y th e Respondents
. [1 4 CFR , Part 16,§16.23(b)(3,4). ] If , basedo n th e pleadings , ther e appear s t o b e areasonabl e basi s for fiirther investigation , th e FA A wil l investigat e th e subjec t matte r o f th e complaint
. In renderin g it s initial determination , th e FA A ma y rel y entirel y o n th e complain t an dth e responsiv e pleading s provided
. Eac h party shal l file document s tha t it consider s sufficient

t o presen t

al l relevan t fact s an dargument s necessary for th e FA A t o determin e whethe r th e sponso r

i s i n compliance
. [1 4 CFR , Part 16 , § 16.29. ] Th e proponen t

o f amotion , request , o r

orde r ha s th e burde n o f

proo f A party wh o ha s asserte da n affirmativ e defens e ha s th e burde n o f provin g th e affirmativ e defense
. Thi s standar dburde n o f

proo f i s consisten t

with th e Administrativ e Procedur e Ac t (APA ) an d federal cas e law
. Th e AP A provisio n states , "[ejxcep t a s otherwis e provide db y statute , th e proponen t

o f arul e o r orde r ha s th e burde n o f

proof. " 5 U.S.C
. § 556(d)
. [Se e also , Director
. Offic e o f

Worker' s Compensatio n Programs
. Departmen t o f Labo r v . Greenwic h Collieries
. 51 2 U S 267 , 27 2 (1994) ; Ai r Canad ae t

al
. v . Departmen t

o f Transportation , 14 8 F3 d1142 , 115 5 (D C Cir , 1998). ] Tifi e 1 4 CF R§ 16.229(b ) i s consisten t wit h 1 4 CF R§16.23 , whic h require s th e complainan t t o submi t

al l document s the n availabl e t o support

hi s o r he r complaint
. Similarly , 1 4 CF R§ 16.2 9 state s that "[e]ac hpart y shal l file document s that it consider s sufficien t

t o presen t

al l relevan t

fact s an dargumen t

necessar y for

th e FA A t o determin e whethe r th e sponso r

i s i n compliance. " VII
. ANALYSI S AN D DISCUSSIO N Th e Complainant s filedthi s Par t 1 6 Complain t

t o argu e agains t

aSpecia l Facility Rental Credi t (Credit ) t o FedE x o n it s apro n rent. " Th e Complainant s askedth e FA A t o ensur e th e airline s wil l no t

bear th e cos t o f th e Authority' s $4 9 millio n expenditure' * t o expan d th e FedE x cargo-apron. " Th e Complainant s see k relie f t o (i ) th e exten t

th e Credi t

cause s fundin g shortfall s compare dt o th e tota l cos t o f th e FedE x Carg o Apron , (ii ) kee p an y fiinding shortfall s ou t

o f th e airfiel dcos t

center , an d(iii ) awar dfurther relief , includin g civi l penalties.' *

" FA A Exhibi t

1 , Ite m1 , Exhibi t

1 , Pag e 1 8
' * FA A Exhibi t

1 , state s th e expansio n wil l cos t $4 9 million , whil e th e Answe r state s th e expansio n wil l occu r i n 3 phase s an dcos t

$46. 5 millio n ($14.4+$20.5+$12.0 ) suc h adifferenc e ha s n o impac t o n th e analysi s o r

th e FA A Determinatio n " FAA Exhibi t

1 , Ite m10 , Exhibi t

L , Pag e 1 "FA A Exhibi t

l,Ite mI

1 4I n thei r Answe r an dMotio n t o Dismiss,^ ^ th e Authority argue s that "Th e Complainin g Airline s objec t

t o th e landin g fee rat e effect s o f on e aspec t

o f amajo r groun dleas e amendmen t

entere dint o b y th e Authority an d[FedEx]
. However , th e Complainin g Airline s nonetheles s seek t o retai n al l o f

th e benefit s resultin g fro

mthat amendment
. B y seekin g t o hav e thei r

landin g fee rate s base dupo n th e additiona l renta l revenu e an d addifional lande dweight s resultin g fromFedEx' s expansion , bu t no t upo n th e ren t

credi t tha t wa s necessar y t o obtai n them , th e Complainin g Airline s wrongl y clai ma n entitlemen t

t o th e benefit s o f

a n agreemen t

mor e advantageou s than th e on e that th e Authority actuall y was abl e t o negotiat e with FedEx."^ " In thei r Repl y t o th e Answer , th e Complainant s further reques t th e FA A to : (i ) den y th e Respondents ' Mofio n t o Dismiss , (ii ) findth e Credit s o f th e Amendmen t

No
. 3 t o b e unlawfu l becaus e the y wil l burde n othe r airline s wit h th e cost s o f FedEx' s exclusiv e Carg o Apron , (iii ) prohibi t th e Respondent s fro maddin g an y fundin g shortfal l relate dt o th e FedE x Carg o Apro n t o th e airfiel dcos t cente r o r otherwis e includin g th e cos t o f th e FedE x Carg o Apro n in th e computatio n o f landin g fee s at

IN D throughou t

th e duratio n o f Amendmen t

No
. 3 , an d(iii ) awardsuc h further relie f an dtak e suc h further

actio n a s th e FA A deems necessar y o r appropriate , including , but not limite dto , imposin g civi l penaltie s upo n th e Respondents.* ' Specifically , th e Complainant s stres s tha t "I f th e Landin g Fe e Ren t

Credit s wor

k th e way FedE x an dth e Respondent s inten dfor the mt o work , th e Join t

Complainant s wil l pa y highe r landin g fee s tha n the y woul dpa y absen t th e Landin g Fe e Ren t

Credits
. Burdenin g th e othe r carrier s at

IN D with ten s o f

million s o f dollar s i n cost s for

a n exclusiv e facility t o b e buil t b y th e Airport

for th e exclusiv e us e b y anothe r carrie r i s unreasonable , unjustl y discriminatory , an dunlawfu l for th e reason s se t fort hi n th e Join t

Complaint."* ^ Th e Authority assert s that , "...th e ren t credi t arrangement s an dlanding-fe e rat e calculation s hav e bee n implemente di n suc h away tha t th e shiftin g o f

responsibilit y for cos t recovery t o FedE x occu r earlier i n tim e tha n an y increas e i n th e Airport Syste m requiremen t

resultin g fromth e credit
. Thus , th e othe r Signatory Airline s obtai n atime

valu e benefi t

fromth e reduce dlanding-fe e rate s befor e an y offsettin g increas e in th e Airport Syste mrequiremen t

woul doccur . Also , becaus e o f a n impendin g switc h t o fixed landing-fe e rate s for

th e balanc e o f

th e termo f

th e curren t

Signator y Agreemen t

(whic h expire s Decembe r

31 , 2010) , th e credit-relate dincreas e i n th e Airpor t Syste m requiremen t

may neve r

occur."* ^

' ' Th e Authority requeste dth e FAA dismis s th e complain t becaus e th e Join t

Complainant s misname dth e responsibl e party . FA A Exhibi t 1 , Ite m10 , page s 12-13
. Th e Complainant s liste dth e Authority , th e Airport an dBAA-Indianapolis , th e airport operato r a s partie s t o th e complaint
. Th e FA A agree s it s enforcemen t

authoritie s unde r

Par t 16. 1 ar e generall y limite dt o action s take n b y th e sponsor , especiall y withregar dt o th e Gran t

assurances , bu t

th e FA A wil l no t

dismis s th e Complain t

base do n thi s assertio n b y th e Authority
. Unde r

Part 16 , th e Authority i s generall y responsibl e fo r th e action s take n b y th e Airpor t an dBAA-Indianapolis , an dFAA wil l hol dth e Authorit y responsibl e for action s take n b y th e Airport and/o r BAA-Indianapoli s * " FAA Exhibi t

1 , Ite m10 , Pag e 2
'' ' FAA Exhibi t

1 , Ite m12 , Page s 5 - 6
. " FAA Exhibi t

1 , Ite m12 , pag e 3
" FAA Exhibi t

1 , Ite m20 , Pag e 7- 8
1 5Th e docke t reflect s that

th e Authority an dFedE x entere dint o Amendmen t No
. 3 unde r whic hFedE x woul dspen d$16 2 millio n t o expan dit s sor t an dmaintenanc e facilities.*' * Th e partie s disput e whethe r th e apro n i s Special Purpos e Facility.* ^ Th e Authorit y argue s in thei r answe r tha t th e Complainant s hav e no t me t th e burde n o f proo f standar drequire di n aPar t 1 6 proceeding
. Th e Authority claim s th e economi c discriminatio n standar di s "persuasiv e evidenc e tha t asimilarl y situate duse r

.. . receive d preferentia l treatmen t

vis-a-vi s th e Complainant. " The y continue , i t i s "incumben t

upo n th e Complainan t

t o prov e it s allegation s o f unjus t discriminatio n b y providin g evidenc e tha t similar term s andcondition s wer e requeste dan dwer e subsequentl y denied , withou t adequat e justificafion.* * In thei r Reply , th e Complainant s argu e that , "Althoug h Respondent s hav e take n great pain s t o poin t

ou t th e burde n o f

proo f o n th e Join t

Complainant s (whic h ha s bee n ftilly met)
. Respondent s hav e faile dt o acknowledge , muc h les s satisfy , thei r ow n burden
. It

i s wel l establishe dtha t

th e 'proponen t

o f amotion.
. .ha s th e burde n o f proof
. A party wh o ha s asserte da

n affirmativ e defens e ha s th e burde n o f provin g th e affirmativ e defense. " [Martyn , FA A Docke t

16-02-03 , D D a

t 44]
. * ' A s state di n th e Applicabl e Law an dPolic y Section , th e proponen t o f amotion , request , o r orde r ha s th e burde n o f

proo f A part y wh o ha s asserte da n affirmativ e defens e ha s th e burde n o f provin g th e affirmativ e defense
. Thi s standar dburde n o f proo f i s consisten t withth e Administrativ e Procedur e Ac t (APA ) an dFedera l cas e law
. Th e AP A provisio n states , "[ejxcep t

a s otherwis e provide db y statute , th e proponen t o f arul e o r orde r ha s th e burde n o f proof. " 5 U.S.C
. §556(d)
. Se e also
. Director , Offic e o f Worker' s Compensatio n Programs , Departmen t

o f Labo r v . Greenwic h Collieries , 51 2 U S 267 , 27 2 (1994) ; Ai r Canad ae t

al
. v . Departmen t

o f Transportation , 14 8 F3 d1142 , 115 5 (D C Cir , 1998)
. Tifi e 1 4 CF R§ 16.229(b ) i s consisten t with 1 4 CF R§16.23 , whic h require s tha t th e complainan t

mus t submi t al l document s the n availabl e t o support hi s o r he r complaint
. Similarly , 1 4 CF R§16.2 9 state s that "[e]ac h part y shal l file document s tha t it consider s sufficient t o presen t

al l relevan t

fact s an dargumen t

necessar y for

th e FA A t o determin e whethe r th e sponso r

i s i n compliance. " Th e FA A doe s no t

concu r with th e Authorit y tha t

th e Complainant s hav e faile dt o mee t th e burde n o f

proo f standard
. Th e FA A note s th e Complainant s bas e thei r argument s o n know n fact s containe din Amendmen t No
. 3 an dth e Leas e Agreement ; thes e ar e

* " FAA Exhibi t

1 , Ite m10 , Exhibi t

L , Pag e 1 * ' FAA Exhibi t

1 , Ite m10 , Leas e Agreement , pag e 11
. Th e Leas e Agreemen t define s aSpecial Purpos e Facility a s "an y specifi c improvemen t undertake n b y AUTHORIT Y for th e benefi t

o f on e o r mor e airline s o r any othe r Airport Syste mtenan t

pursuan t t o th e term s o f

aseparat e agreemen t

tha t provide s for , amon g othe r things , (1 ) th e paymen t

o f rental s or

fee s fo r th e us e o r

occupanc y thereo f

i n sufficien t

amount s t o permi t th e financing o f

suc himprovemen t

an dpaymen t

o f al l cost s thereo f

solel y fromsuc h rental s o r fees , an d(2 ) th e paymen t

o f th e maintenanc e an doperatin g cos t o f suc h improvemen t

b y th e tenan t

o r tenant s thereof " * * FAA Exhibi t

1 , Ite m10 , pag e 1 6 " FAA Exhibi t

1 , Ite m12 , Pag e 1 4
1 6document s tha t wil l determin e i f

th e Authority violate dit s gran t assurances . Ther e i s a sufficient recor dt o procee dwit

h th e Part 1 6 proceeding
. Therefore , th e analysi s anddiscussio n belo w i s se t u p t o addres s allegation s b y th e Complainant s that

th e Respondent s violate dGran t Assuranc e Nos
. 22 , Economi c Nondiscrimination , 23 , Exclusiv e Rights , 24 , Fe e an dRental Structur e an d25 , Revenu e Use
. 1
. Whethe r

th e Amendmen t

No
. 3 t o th e lAA-FedE x Lan dLeas e Agreemen t (Amendmen t

No
. 3) , date dApri l 14 , 200 6 i s consisten t wit h Gran t

Assuranc e 2 2 Economi c Nondiscrimination , 4 9 U.S.C
. § 4710 7 (a)(1 ) throug h (6) , whic h require s th e airpor t

sponso r t o mak e th e Airpor t

availabl e t o all types , kinds , an dclasse s o f aeronautica l activit y o n reasonabl e terms , an dwithou t unjus t discrimination
. Th e Complainant s presen t severa l allegation s o f

unjus t economi c discriminatio n b y th e Respondents
. Thes e allegation s ar e addresse di n th e followin g subtopics : Amendmen t No
. 3 , th e Agreemen t

an dLeas e o f

Premises , Ren t

Credit , Advers e Impac t

an dSimilarl y Situated
. Amendmen t

No
. 3 Th e Complainant s assert

"Amendmen t

No
. 3 begin s b y appearin g t o requir e FedE x t o pay arental , calle dth e Additiona l Specia l Facilifie s Rent , calculate dt o reimburs e for 100 % o f th e projec t

cos t ove r twenty year s (includin g financing cost s an dcapitalize d interest)."^ ^ Th e Complainant s stat e th e Special Facilifie s Credi t caus e othe r

airline s t o bear avery substantia l part

o f th e FedE x Carg o Apron.^ ^ "Bu t FedE x wil l no t

actuall y pa y that ful l amoun t i n rent . In fact , FedE x may not pa y anythin g for

th e apro n project
. Thi s i s becaus e fo

r th e nex t 2 0 year s o r

so , throug h 2028 , Amendmen t No
. 3 give s FedE x credits , essentiall y ren t

reductions , o f

u p t o 100 % o f

th e Additiona l Specia l Facilitie s Rent."' ° Accordin g t o th e Complainants , th e Authorit y i s attemptin g throug h Amendmen t No
. 3 t o d o indirectl y what

i t canno t d o directly , stating , "Obviously , th e lA A i s fre e t o buil da facility fo r FedEx' s exclusiv e us e a s lon g a s i t o r FedE x pay s th e cos t

an dn o portio n o f th e cost s are born e b y othe r airlines".' ' In it s Answer , th e Authorit y state s tha t Amendmen t

No
. 3 allow s FedE x t o expan dit s sort an dmaintenanc e facilitie s a t it s ow n cost , an dth e Authorit y agree s t o finance expansio n o f th e FedE x apro n a s aSpecial Purpos e Facility
. FedE x wil l the n ren t th e expande d apro n fro mth e Authorit y an dwil l pa y th e Authorit y ren t (Additiona l Specia l Facilitie s

* * FA A Exhibi t

1 , Item1 , Pag e 8 * ' FAA Exhibi t

1 , Ite m1 , Pag e 8 TM FA A Exhibi t

1 , Ite m1 , Page s 8- 9 ^ ' FA A Exhibi t

1 , Ite m1 , Pag e 9
1 7Rental)
. I f FedE x achieve s certai n lande dweigh t incentives , th e Authority wil l gran t i t a Credi t on aportio n o f

th e Additiona l Special Facilitie s Renta l fo r th e expande dapron.' ^ Th e Authorit y note s that

th e Credi t

shal l b e equal t o amaximu m75 % o f th e incrementa l landin g fee revenu e o f

FedE x (abov e a5 billio n poun dannual base , increase db y 3 % annuall y beginnin g in 2011) , an dth e annua l Credi t wil l remai n a

t 75 % a s lon g a s al l thre e phase s o f th e apro n expansio n are complete dwithi n th e five year expansio n term provide db y Amendmen t

3
. Otherwise, th e Credi t shal l b e 70 % i f

Phase s 1 an d2 are complete do r

65 % i f onl y Phas e 1 i s completed.' ^ Th e Authority wil l calculat e th e incrementa l addifional lande dweigh t a s follows :

• Creat e a

n (annual ) adjuste dbas e ( 5 billio n pounds ) an dincreas e i t 3 percen t annuall y beginnin g i n 2011
.

• Comput e th e incremental lande dweigh t b y deductin g th e actua l lande dweigh t fromth e adjuste dbase
.

• Comput e th e incremental landin g revenu e b y multiplyin g th e incrementa l lande dweigh t

b y th e landin g fe e (no t

t o fall belo w $1.6 2 pe r

1,000 pound s o f lande dweigh t

for Credi t calculatio n purposes)
.

• Divid e th e incrementa l landin g fe e revenu e betwee n th e airport syste man dth e Credi t amount , with 2 5 percen t t o th e Airport

Syste man d7 5 percen t

t o th e Credit , bu t

limitin g th e Credi t

t o 7 5 percen t

o f th e Addifional Special Facilitie s Rental.'' * Th e Complainant s clai mtha t "[a]nnual fundin g deficiencie s for th e constructio n o f FedEx' s Carg o Apro n ar e forecas t t o rang e from$1,387,00 0 pe r year t o $2,688,00 0 pe r

year , startin g i n 2010
. Th e projecte dfundin g deficienc y du e t o th e Landin g Fe e Ren t

Credit s total s ove r

$37,000,00 0 for

th e year s betwee n 200 8 an d 2026 , al l o f

whic h woul db e born e a s additiona l cos t b y th e airline s doin g busines s a

t TN D in th e for

mo f increase dlandin g fees."' ^ Th e Complainant s maintai n tha t "unde r Articl e V.B(2 ) o f

Amendmen t

No
. 3 , FedEx' s Additiona l Special Facilitie s Renta l wil l b e reduce db y th e amoun t o f a n Additiona l Special Facilitie s Renta l Credit
. That sectio n provide s that : "Beginnin g January 1 , 2007 , th e Lesse e shal l ear n aCredi t agains t th e Additiona l Specia l Facilitie s Rental s otherwis e

' ^ FAA Exhibi t

1 , Ite m1 0
' ^ FAA Exhibi t

1 , Ite m1 , Pag e 9
' " FAA Exhibi t

1 , Ite m10 , pag e 2 3 - (referenc e t o footnot e 3 5 - whic h refer s t o Articl e I I or Amendmen t No
. 3 ) [FA

A Exhibi t 1 , Ite m1 , Exhibi t

1 ]
" " FAA Exhibi t

1 , Ite mI , Pag e 9du e pursuan t t o Subsectio n (1 ) above , calculate din th e manne r describe di n thi s paragrap h (2)
. Th e Additiona l Special Facilitie s Rental Credi t shal l equal th e differenc e i n Actua l Revenue s an dBas e Revenues , multiplie db y th e applicabl e Percentag e Credit ; provide dhowever , i f Actual Revenue s ar e les s than Bas e Revenues , n o Credi t shal l apply. " ' ^ Th e Authorit y state s that , "Th e Complainin g Airline s objec t t o th e ren t

credi t notwithstandin g that

Amendmen t

No
. 3 , take n a s awhole , wil l benefi t the mfinancially b y lowerin g thei r

landin g fees
. Amendmen t No
. 3' s beneficia l impac t exist s b y design , a s th e magnitud e o f

th e ren t credi t give n t o FedE x wil l alway s b e smaller , b y definition , than th e additional landin g fee s t o b e pai db y FedE x above th e negotiate dthreshol d amounts . I n addition , s o lon g a s th e Airport' s landin g fee s are se t o n aresidua l basis , th e Complainin g Airline s fiirther benefi t fromth e additiona l renta l revenue s produce db y Amendmen t

No
. 3
. Amendmen t

No
. 3' s ne t

benefit s presumabl y explai n wh y th e Complainin g Airline s ar e a t suc h pain s t o stres s tha t

the y ar e not

seekin g t o "unwind " th e FedE x transaction."' ' Th e Complainant s an dth e Authorit y us e different duration s t o represen t

th e impact s o f Amendmen t

No
. 3
. Th e Authorit y stop s it s analysi s at 2028 , whe n Amendmen t No
. 3 ends , whil e th e Complainant s us e 2036 , th e year th e financing o f

th e apro n i s complete
. Th e Complainant s stat e th e differenc e i s significan t becaus e th e Authorit y doe s not conside r th e f\il l impac t o f th e financin g costs . I t

stop s it s calculation s a

t 2028 , whil e th e actual financing cost s continu e throug h 2036
. ' ^ On Marc h28 , 2008 , th e Directo r issue dth e FA A Question s t o assis t i n clarifyin g some detail s an dallegation s raise di n th e pleadings
. Th e Complainant s i n thei r respons e t o th e FAA Question s responde dthat th e "Ren t

Credi t increase s th e Airpor t

Syste m Requiremen t

pai dfor b y th e Complainant s an dothe r airline s at

IN D i n th e for

mo f increase dlandin g fees
. Thi s i s precisel y wha t th e Join t Complain t

i s about..
. "' ^ Th e Complainant s insist , "(i ) An y carrie r growin g at

th e Airpor t

ha s t o pa y th e landin g fee s o n al l o f it s incrementa l lande dweigh t an d(ii ) th e carriers ' landin g fee s woul db e lowe r i f ther e wer e n o FedE x Landin g Fe e Ren t Credi t factore dint o th e Airpor t Syste m Requirement
. Consequently , a s lA A concedes , th e amoun t o f Airpor t Syste mOperatin g Revenu e wil l b e les s o n adollar-for-dollar basis , an dtherefor e th e Airpor t Syste m Requiremen t

o n whic h th e airline' s landin g fee s ar e base dwil l b e highe r o n adollar-for

dolla r basi s than wha t

thos e fee s woul db e i n th e absenc e o f th e Ren t Credit
. Simpl y put , th e incremental landin g fee s pai db y FedE x canno t validat e a

n arrangemen t

tha t burden s othe r airline s for

man y year s wit

h th e substantial cos t

o f aRen t Credi t grante dt o on e carrie r o n it s exclusiv e facility."^* '

' * FAA Exhibi t

1 , Ite m10 , Pag e 21-2 2
" FAA Exhibi t

1 , Ite m10 , pag e 4 ^ * FAA Exhibi t

1 , Ite m12 , Pag e 24
" FAA Exhibi t

1 , Ite m21 , Pag e 6 *" FAA Exhibi t

1 , Ite m21 , Page s 7- 8
1 9While , th e Authorit y present s acontrary vie w in thei r respons e t o th e FA A Questions , "t o th e exten t tha t FedE x land s sufficient

weigh t t o generat e incrementa l landin g fee revenu e an dt o produc e aren t

credit , ther e are tw o offsettin g rat e effects
. On e i s that th e Airport Syste mrequiremen t

wil l b e increased
. Th e othe r i s tha t FedE x wil l pa y agreate r percentag e o f

tha t Airport Syste mrequirement
. Th e ren t credi t i s designe di n suc h away tha t th e secon deffec t

wil l outweig h th e first, thu s holdin g othe r Signatory Airline s harmless agains t

an y rat e impact s o f

FedE x ren t

credi t and , in fact , reducin g th e other Signatory Airlines ' landin g fees"
. Th e Authority goe s o n t o argu e that , "Th e botto mlin e i s that...an y increas e o f

th e Airport

Syste mrequiremen t

cause db y th e ren t

credi t i s mor e tha n offset

b y a n increas e in FedEx' s landin g fees
. Ultimately , onc e th e Additiona l Specia l Facilitie s Rental Credi t i s applied , th e deb t

associate dwith th e carg o apro n expansio n i s service db y acombinatio n o f Additiona l Special Facilitie s Ren t an dFedEx' s incrementa l landin g fees , an dnot , a s th e Complainin g Airline s claim , fromth e landin g fee s pai db y them
. Amendmen t No
. 3 ha s n o negativ e financial impac t o n th e other Signatory Airlines."^ ' Th e Directo r

develope dTabl e 1 belo w t o not e b y way o f illustration , th e Credi t

fo r 201 2 woul db e take n i n 201 3 b y creditin g th e $1,416,24 7 agains t th e Additiona l Special Facilitie s Rental
. Thi s i n turn lower s Airport Syste mOperatin g Revenu e unde r th e separat e Leas e Agreement , resultin g in ahighe r Airport Syste mRequiremen t

o f $1,416,24 7 an dahighe r

landin g fee
. Tabl e 1

Calculatio n o f

Ren t Credi t Fo r 201 2 Actua l Lande dWeight

6,182,79 3 Year Rat e Adjustmen t

Adjuste dBas e 201 0 5,000,00 0 201 1 3 5,150,00 0 201 2 3 5,304,50 0 Les s Adjuste dLande dWeight Bas e 5,304,50 0 Equal : Additiona l Lande dWeigh t Attributabl e t o Expansio n 878,29 3 Landin g Fe e Rat e $ 2.1 5 Incrementa l Landin g Fe e Revenu e $1,888,33 0 Les s 25 % Retaine dfo

r Airport Syste m$ 472,08 2 Equal s 75 % o f

Incrementa l Landin g Fe e Availabl e fo r Credi t $1,416,24 7
Th e Directo r

in th e FA A Question s specificall y aske dth e partie s t o "describ e th e flow o f fund s fromth e Airfiel dAre aCos t Cente r onc e th e Credi t

i s claime db y FedEx."* ^ Th e Authority advise dtha t

i t "ha s offere dan dth e Signator y Airline s hav e indicate d unanimousl y that

the y wis h t o accept , anegotiate dfixedlandin g fe e rat e for th e balanc e o f th e termo f

th e Signatory Agreemen t base do n 200 8 levels. " ^ Th e gravaman o f th e

* ' FA A Exhibi t

1 , Ite m20 , pag e 7- 8 * ^ FA A Exhibi t

1 , Ite m2 2 8 3 FA A Exhibi t

1 , Ite m2 0
2 0Complain t i s tha t th e Complainant s alleg e that th e ren t Credi t t o FedE x wil l resul t

i n increase dlandin g fee s i n th e ftiture, after th e en do f

th e curren t

contract , whil e th e Authority argue s tha t

ther e i s n o negativ e impac t t o th e Complainant s unde r thei r curren t contract . Th e Authorit y stres s tha t th e airline s wil l hav e thei r landing-fe e rate s froze n a t th e 200 8 level s throug h Decembe r 31 , 2010
. Whil e th e Complainant s counte r that the y hav e no t

signe dany agreemen t

t o reflec t thi s proposal , th e Respondent s represen t tha t th e Airline s wil l hav e thei r landing-fe e rate s frozen a t th e 200 8 level s throug h Decembe r 31 , 2010.^" * Th e Leas e Agreemen t

i s aseparat e stand

- alon e agreemen t betwee n th e Authority an dth e Signatory Airlines , includin g th e Complainant s an dFedEx , an dtha t Amendmen t

No
. 3 i s astand

- alon e agreemen t betwee n th e Authorit y an dFedEx
. Th e Directo r note s tha t

th e Leas e Agreement , coul dnot an ddi dno t

specificall y referenc e Amendmen t No
. 3 , h e nonetheles s recognize dthat th e term s o f

Amendmen t

No
. 3 can influenc e th e landin g fee calculatio n o f

th e Leas e Agreement
. I f FedE x claim s th e Credi t agains t it s Additiona l Specia l Facilitie s Rental an dth e Airport Syste mOperatin g Revenu e unde r th e Leas e Agreemen t

decrease s b y th e amoun t o f th e Credit , it coul dcaus e th e Airport

Syste mRequiremen t

t o rise , resultin g in ahighe r landin g fee tha n woul dotherwis e b e th e cas e withou t th e Credit
. Unde r

th e existin g Leas e Agreement , th e FedE x Credi t canno t b e impose dunilaterall y o n th e Complainants
. Thi s i s tru e eve n i f

th e Airline s benefi t

fromadditiona l FedE x operation s becaus e airfiel d cost s are sprea dove r

mor e operation s an dth e Complainant s actuall y pa y les s a s aresult
. Agreemen t

an dLeas e o f

Premises
. Th e Complainant s state dtha t th e Authorit y di dnot

obtai n Majority-In-Interes t (Mil ) approva l for

th e apro n expansion , a s th e Agreemen t an dLeas e o f

Premise s (Leas e Agreement ) requires
. I n accordanc e with th e Leas e Agreement , th e Authority mus t consul t withth e Signatory Airline s an dreceiv e two-third s approva l prio r t o committin g t o certai n capita l improvements
. Thi s requiremen t i s in Articl e 8 , Capita l Improvements :

• Sectio n 8.01 , Capita l Improvements , A
. "[0] n o r

befor e Augus t

1s t eac h year , AUTHORIT Y shal l notif y Signatory Airline s o f

th e purchas e price/constructio n cos t o f Capita l Improvement s an dth e amortizatio n schedul e t o b e adde dt o th e rat e base , pursuan t t o Articl e 6 , for

Capita l Improvement s for

whic h amortizatio n i s t o b e include di n th e nex t appropriat e renta l period..
. B
. Withi n areasonabl e time , bu t n o soone r

tha n 3 0 day s after distributio n o f

th e report , AUTHORIT Y shal l conven e a meetin g o f

th e Signatory Airline s t o discus s an dobtai n FAA Exhibi t

1 , Ite m2 1
2 1concurrenc e o f th e Signatory Airline s t o an y propose dCapital Improvemen t

requirin g suc h concurrence.. . [emphasi s added ] C
. I f concurrenc e on aCapital Improvemen t i s specificall y withhel dfollowin g th e first meeting , AUTHORIT Y shal l hav e th e opfio n t o conven e asecon dmeetin g o f th e Signatory Airlines
. Th e secon dmeetin g shal l b e hel dwithi n 3 0 day s afte r th e receip t

o f notic e o f nonconcurrenc e fromth e Signatory Airlines , upo n nofic e b y AUTHORITY
. At th e secon dmeefin g AUTHORIT Y shal l respon dt o question s raise ddurin g th e first meetin g an dshal l as k

for reconsideratio n o f

th e Capita l Improvemen t

o r consideratio n o f

th e amende dCapita l Improvement
. Upo n reconsideration , o f th e Origina l Capita l Improvemen t

o r consideratio n t o th e amende dCapita l Improvement , th e propose dCapita l Improvemen t shal l b e deeme dconcurre din unless , withi n 3 0 day s after suc h secon d meeting , concurrenc e i s specificall y withhel di n writing , b y tw o third s (2/3 ) o f

th e Signatory Airlines
. I f concurrenc e i s withheld , th e Capital Improvemen t wil l b e deferre dunti l th e nex t Fisca l Year..
. D
. After providin g notic e t o th e Signator y Airlines , AUTHORIT Y may , withou t complyin g with th e provision s o f subsectio n (B ) hereof

, procee dwith an y o f

th e followin g Capita l Improvement s [emphasi s added ] an dinclud e th e cos t o f suc hCapita l Improvemen t in tha t Fisca l Year' s calculatio n for th e Landin g Fe e an drental s o f th e Signator y Airlines , i f suc h Capita l Improvemen t

i s necessar y o r

pruden t to : (1 ) Assur e o r facilitat e complianc e with arule , regulation , o r orde r o f an y federal
. State , o r

othe r governmenta l agenc y (excludin g AUTHORITY ) that

ha s jurisdicfio n ove r

th e operatio n o f

th e Airport
. (2 ) Maintain , operate , o r creat e Airpor t

Syste m functional capability an dcapacit y at aleve l tha t

i s require d(a ) b y publi c health , safety , access , securit y o r welfar e o r

(b ) b y th e truste e for

th e security o f

th e Bonds
. (3 ) Satisf

y judgment s o r fines agains t

AUTHORIT Y impose db y an agenc y o f federal o r stat e governmen t

rendere db y acour t

o f competen t

jurisdiction
. (4 ) Repai r casualty damag e ne t

o f insuranc e proceed s t o Airport Syste mproperty . (5 ) Develo p aSpecia l Purpos e Facility
. [emphasi s added \(6 ) Acquir e lan dt o preserve , protect , o r enhanc e th e Airport

system . (7 ) Expenditure s for architectural , engineering , o r

economi c studie s o r

othe r professiona l service s o f planne dAirport

Syste mfacilities
. "^

^

8 5 FAA Exhibi t

I , Ite m10 , Exhibi t

B , Page s 50-5 3

2 2Th e Complainant s argue dth e expansio n o f th e apro n i s no t

aSpecial Purpos e Facility becaus e othe r

airline s wil l pay it s financin g costs . Th e Complainant s charg e "[T]h e execufio n o f

th e Leas e Agreemen t

(i.e
. Amendmen t

No
. 3 ) withou t

approva l violate s th e Mi l provision s o f

eac h o f th e carrier' s respectiv e leases
. Th e Respondent s incorrectl y clai mtha t th e contemplate dexpansio n o f FedEx' s Carg o Apro n a

t IN D wa s aSpecial Purpos e Facilit y Transactio n no t requirin g Mi l approva l fi-omth e Signatory Carriers
. lA A i s wrong . A Special Purpos e Facility i s on e whic h provide s for 'th e paymen t

o f rental s o r fee s fo r th e us e o r

occupanc y thereo f

in sufficient

amount s t o permi t

th e financin g o f

suc h improvemen t

an dpaymen t

o f al l cost s thereo f

solel y fromsuc h rental s o r fees... ' A s explaine dabove
. Amendmen t No
. 3—wit

h it s Landin g Fe e Ren t

Credit s t o FedEx—shift s million s o f dollar s o f

cost s t o othe r

carrier s a t IND , s o thi s capital projec t canno t possibl y mee t

th e definitio n o f

aSpecia l Purpos e Facility."^ ^ Th e Complainant s confir

mthei r positio n i n thei r

respons e t o th e FA A Question s tha t th e carg o apro n projec t

require dMi l approva l becaus e it wa s not aSpecial Purpos e Facility
. "[T]h e FedE x Carg o Apro n i s exclusivel y for FedEx' s use , bu t

a s aresul t

o f th e Ren t Credit , it s constructio n an dmaintenanc e ar e not pai dfor 'solel y from[FedEx ] rentals ' a s require db y th e Airlin e Lease
. B y virtu e o f th e Ren t Credit , asubstantia l portio n o f th e cos t burde n i s t o b e impose do n othe r carrier s throug hhighe r

landin g fees
. Thus , th e o n FedE x Carg o Apro n i s no t aSpecial Purpos e Facility. " Th e Authorit y disagree s an dstate s i n it s respons e t o th e FA A Questions : Th e Authority complie dwith th e provision s o f Sectio n 8.0 1 an d8.0 3 with regar dt o th e FedE x apro n subjec t t o th e Credit
. Specifically , o n Jun e 30 , 2005 , b y lette r

fromlAA' s Marsh aStone , Financ e Director , t o th e Airlin e Technica l Committee , Airlin e Propertie s Representatives , an dAirlin e Statio n Managers , th e Authorit y transmitte dasummar y o f th e 200 6 Capita l Improvemen t

Program , i n whic h th e carg o apro n expansio n wa s expressl y note da s bein g exemp t fromMi l approval
. Se e Respons e Exhibi t C ; se e als o Respons e Exhibi t D (individua l response s fromSignator y Airlines)
. Thereafter , o n Ma y 3 , 2006 , Patric k Dooley , th e Airpor t Director , sen t

alette r t o Eri n Heitkamp , th e designate drepresentativ e for th e Signatory Airlines , in whic h h e describe dth e scop e o f th e propose d project , includin g source s o f fiinds , an dinclude daren t credit
. Answe r Exhibi t L
. In tha t letter , Patric k

Doole y reiterate dtha t

th e "Federa l Express ' expansio n i s aSpecial Purpos e Facilit y a s define di n the..
. Signatory Agreemen t

an di s therefor e no t

subjec t t o aMajority I n Interes t vot e o f th e Signatory Airlines
. ^ ^ Th e carg o apro n expansio n i s aSpecia l Purpos e Facilit y becaus e it wa s 'undertake n b y th e Authorit y for th e benefi t

o f on e o r mor e

* ^ FAA Exhibi t

1 , Ite m1 , Page s 17-1 8 '• ' FA A Exhibi t

1 , Ite m21 , Pag e 1 1 8 8 FAA Exhibi t

1 , Ite m20 , Pag e 3- 4
2 3airlines.
. .pursuan t t o th e term s o f

aseparat e agreement, " Amendmen t No
. 3 , 'tha t provide s for , amon g othe r thing s (1 ) th e paymen t

o f rental s o r fee s fo r th e us e o r

occupanc y thereo f

in sufficient

amount s t o permi t

th e financing o f

suc h improvemen t

an dpaymen t

o f al l cost s thereo f

solel y fromsuc h rental s o r

fees , an d(2 ) th e paymen t o f th e maintenanc e an d operatin g cos t

o f suc h improvemen t

b y th e tenan t

o r tenant s thereof. ' Amendmen t

No
. 3 ensure s tha t

FedE x wil l pay th e ful

l deb t servic e associate dwit

h th e carg o apro n expansio n throug h th e rent s an dfee s i t pay s t o th e lAA
. Moreover , pursuan t t o th e term s o f

Amendmen t

No
. 3 , FedE x i s responsibl e fo

r maintenanc e an doperatio n o f th e enfir e carg o I I 8 9 apron . "Th e Authorit y provide dnofic e t o th e Signatory Airline s regardin g (a ) th e anticipate dcost s o f

th e FedE x apro n expansio n an d(b ) th e Authority' s determinatio n that

th e apro n expansio n wa s aSpecial Purpos e Facility no t requirin g a

n Mi l vote . Respons e Exhibi t C , Answe r

Exhibi t L , an dth e Signatory Airline s raise dn o objection s t o that determination
. Response , Exhibi t D
. In othe r

cases , whe n th e Signatory Airline s hav e disagree d with th e Authority' s determinatio n tha t aprojec t shoul db e treate da s Specia l Purpos e Facility , the y hav e expressl y objecte dt o tha t determinatio n in writing
. See , e.g. , Respons e Exhibi t E (200 3 letter s transmittin g Mi l ballot s fromNorthwest , Delta , Continental , Southwest , an dothe r Signatory Airlines)."^ ° Th e Complainant s stat e "lAA' s Respons e contain s letter s fromcertai n carrier s t o support th e ertoneou s clai mtha t

th e Complainant s ha dagree dtha t th e FedE x Carg o Apro n projec t was aSpecial Purpos e Facility not requirin g Mi l approval...however , thos e letter s provid e n o suc h evidence."^ ' "First , non e o f

th e letter s expressl y concede s tha t th e FedE x Carg o Apro n wa s a Special Purpos e Facilit y outsid e th e Mi l approva l requirement. " ^ "Second , a

t th e tim e thos e airlin e letter s wer e writte n i n mid-2005
. Responden t lA A ha dmerel y informe dth e airline s a t IN D abou t

th e genera l outline s o f

apotentia l projec t t o expan dth e FedE x Carg o Apro n facility , no t th e illega l pla n t o pa y for th e projec t o n th e back s o f

othe r carrier s a

t IND
. .. . Thus , t o th e exten t on e stretche s t o rea dthos e letter s a s someho w indicatin g som e for mo f acquiescenc e with respec t t o a FedE x Carg o Apro n project , i t wa s - at mos t - with respec t

t o th e genera l concep t

o f th e project , not

ho w th e projec t

wa s goin g t o b e funde da s provide dfor in Leas e Amendmen t

No
. 3
. Indeed , it

wa s not unti l th e followin g yea r

(Sprin g 2006 ) tha t

th e Join t Complainant s wer e fo

r th e first tim e presente dwit h th e fundin g detail s o f

* ' FAA Exhibi t

1 , Ite m20 , Pag e 4- 5
' " FA A Exhibi t

1 , Ite m20 , Page s 5
" FAA Exhibi t

1 , Ite m21 , Pag e 1 1
' ^ FAA Exhibi t

1 , Ite m21 , Pag e 1 2
2 4Amendmen t No
. 3 , includin g th e Ren t Credit , an dthe n onl y at

th e las t momen t a s a fait accompli."^ ^ "Third , eve n bac k

in 2005 , Northwes t

Airline s clearl y indicate dit s positio n tha t th e propose dFedE x Carg o Apro n mus t b e subjec t

t o acos t recovery agreemen t

with FedEx
. Northwest' s commen t stated : "Projec t

#3 6 Carg o Apro n Constructio n - Contingen t

Approval Subjec t

t o cos t recovery agreemen t

with FedEx. ' Northwest' s positio n wa s clear
. Th e Carg o Apro n projec t coul db e aSpecial Purpos e Facilit y onl y i f al l o f it s cost s wer e recovere db y FedEx
. Sinc e FedE x doe s no t fiilly pay for

th e Apro n project , it

i s no t aSpecial Purpos e Facility an dMi l approva l wa s required."^' * "Fourth , upo n learnin g i n mid-200 6 o f th e detail s for

th e fundin g o f

th e Carg o Apro n withaFedE x Landin g Fe e Ren t Credit , th e Join t

Complainant s fiirther

mad e clear

- immediatel y an din writin g - tha t th e Projec t

wa s not aSpecial Purpos e Facilit y exemp t fromMi l approval."^ ^ Th e Complainant s summarize dthat , "Amendmen t No
. 3 - with it s Landin g Fe e Ren t Credi t fo r FedE x - shift s ten s o f

million s o f

dollar s o f

cost s ont o othe r

carrier s at

IND , s o thi s capital projec t

canno t possibl y mee t

th e definitio n o f

aSpecia l Purpos e Facility."^ ^ Th e Complainant s assert

tha t th e Leas e Agreemen t

doe s not explicitl y provid e for

th e Ren t Credi t becaus e th e Leas e Agreemen t predate db y man y year s FedE x Amendmen t No
. 3
. Therefore , i t

coul dnot hav e "explicitly " referre dt o th e FedE x Landin g Fe e Ren t Credit.^ ' Th e Complainant s state , "[Tjher e i s n o disput e that th e Airpor t

Syste mExpens e include s th e FedE x Carg o Apro n projec t an dit s correspondin g deb t service
. A s lAA' s Respons e states , th e FedE x Carg o Apro n projec t ha s 'bee n financed, thu s far , fromth e proceed s o f Serie s 200 6 [General Airport Revenu e Bonds ] GARBs, ' an dth e 'deb t servic e for

thos e GARB s i s include da s a

n Airport Syste mExpens e fo

r purpose s o f

calculatin g th e Airport Syste mRequirement.'..
. Ther e i s als o n o disput e tha t th e Airpor t

Syste mOperatin g Revenu e include s al l o f

th e renta l fee s pai db y FedE x (reduce db y th e Landin g Fe e Ren t Credit)...
. "^

^ Consequently , accordin g t o th e Complainants , "th e FedE x Carg o Apro n projec t increase s th e Airport

Syste mRequiremen t

an dth e resultin g cos t

burde n o f

landin g fee s for

othe r carrier s a t IN D on both th e expens e an drevenu e sid e o f th e equation-b y increasin g th e Airport SystemExpens e t o accoun t for apro n cost s an ddeb t

servic e an db y reducin g th e Airport SystemOperatin g Revenu e a s aresul t o f th e Ren t Credit
. Thi s arrangemen t -

" FAA Exhibi t

1 , Ite m21 , Pag e 1 2
' " FAA Exhibi t

1 , Ite m21 , Pag e 1 3
' ^ FAA Exhibi t

1 , Ite m21 , Pag e 1 2
' * FAA Exhibi t

1 , Ite m21 , Pag e 1 3
' ^ FAA Exhibi t

1 , Ite m21 , Pag e 2
' * FAA Exhibi t

I , Ite m21 , Pag e 3

2 5whereb y th e burde n o f th e Ren t Credi t fo r FedEx' s exclusiv e Carg o Apro n wil l b e born e b y th e othe r

airline s a t IN D over

man y year s - i s unlawfial...."^ ^ Th e Authorit y hold s that

th e FedE x apro n expansio n doe s no t requir e Mi l approva l under th e term s o f

th e Leas e Agreemen t

becaus e it

i s aSpecial Purpos e Facility
. Articl e 8 o f th e Leas e Agreemen t

provide s fo

r th e developmen t

o f aSpecial Purpos e Facility'^ " withou t Mi l approval
. Th e Complainant s disagree
. The y stat e th e Authority ha s no t followe dth e term s o f

th e Leas e Agreemen t

becaus e th e FedE x apro n projec t i s no t a Special Purpos e Facility , a s define db y Articl e 8 o f th e Leas e Agreement
. Th e Complainant s hol dthat

th e definitio n in th e Leas e Agreemen t o f aSpecial Purpos e Facility require s th e tenant , a s i n thi s cas e FedEx , t o pa y for al l o f th e financin g an dcost s o f th e Special Purpos e Facility
. In th e Complainant s view , th e us e o f th e Credi t

transfer s some o f thes e cost s (an dpossibl y al l th e costs ) t o th e Complainant s i n thei r landin g fee
. Therefore , th e Complainan t assert s tha t

th e FedE x projec t

canno t b e considere daSpecial Purpos e Facilit y an dMi l approval i s require dbefore th e FedE x projec t coul db e developed
. Th e Authority on th e othe r han dstate s i t

di dnotif y th e Complainant s throug h letter s t o th e Airlin e Technica l Committee , Airlin e Propertie s Representatives , an dAirlin e Statio n Manager s o f

th e apro n expansio n project , an dit state dth e letter s explaine dth e projecte d rent s an dth e us e o f

th e Credit
. Th e Complainant s stat e the y wer e not awar e o f th e us e o f th e Credi t unti l jus t befor e approva l o f

th e FedE x projec t

b y th e Authority
. Onc e the y learne do f th e inten t

t o us e th e Credit , the y hav e proteste dth e projec t sinc e tha t

time
. Th e Directo r

note s tha t

th e Leas e Agreemen t

provide s th e processe s th e Authorit y an d th e Signatory Airline s hav e agree dt o for th e developmen t

o f capita l improvement s on FND
. Th e Directo r

agree s that

i f th e apro n i s aSpecia l Purpos e Facilit y a s define di n th e Leas e Agreement , th e paymen t for it s us e o r occupancy , maintenanc e an doperatin g cost s woul db e solel y frompayment s b y FedEx
. Accordingly , unde r th e existin g agreemen t whic hi s se t

t o expir e o n Decembe r

30 , 2010 , n o fe e resultin g fromth e constructio n o f th e Special Purpos e Facilit y woul db e abl e t o b e impose do n th e Complainants , eve n i f th e othe r carrier s benefi t

fromFedE x additional operation s becaus e airfiel dcost s ar e sprea d ove r mor e operation s an dth e Complainant s actuall y pa y les s a s aresult
. Ther e i s presentl y n o complianc e proble mher e sinc e th e Respondent s hav e committe dt o freeze th e Complainants ' landing-fe e rate s a t th e 200 8 level s throug h th e 201 0 expiratio n date
. Advers e Impac t Th e Authority argue s th e Complainant s wil l no t b e adversel y affecte dat al l b y th e FedE x apro n expansio n durin g th e termo f thei r existin g leases , "lA A mad e a n offer t o remov e fromth e rate s an dcharge s calculation , th e principa l an dinteres t payment s o n th e airport s capital investmen t

i n th e apro n expansio n an dth e leas e payment s for tha t facility throug h

9 9 FAA Exhibi t

1 , Ite m21 , Pag e 3- 4
"" ^ FAA Exhibi t

1 , Ite m10 , Exhibi t

B , Pag e 5 3
2 6Decembe r 31 , 2010."'° ' Th e Authority goe s o n t o state that , "lA A ha s offere dt o exclud e fromth e Complainin g Airlines ' landin g fee rate s bot h th e cos t an dfacilit

y rent s associate dwit h th e carg o apro n expansio n (whil e continuin g t o giv e the mth e benefi t o f FedEx' s incrementa l lande dweight) , an dbecaus e ther e i s n o demonstrate dbasi s fo r assumin g tha t

ther e wil l b e an y rat e impac t a t al l afte r th e curren t

Airport Us e Agreemen t expire s in 2010 , th e Complain t shoul db e dismisse dfo

r failure t o satisf

y th e requirement s ofl4C.F.R
. § 16.23(a)."'° ^ I n thei r Reply , th e Complainant s state dth e offe r t o hol dharmles s "protect s th e Join t Complainant s fromnothing , becaus e i t end s before th e cos t

impact s ar e expecte dt o begin...lAA' s 'offer ' t o hol dth e Carrier' s harmless fromth e effect s o f th e Landin g Fe e Ren t Credi t wa s a"cynica l an dillusory gestur e becaus e i t wa s limite dt o aperio dbefore th e advers e impact s o f

th e Landin g Fe e Ren t

Credit s wil l b e incurred. " Therefore , th e Complainant s stat e th e FA A shoul drejec t th e "Respondents ' absur dcontentio n that th e Complainant s hav e n o "standing "
.. . unde r Part 16.1."'° ^ Th e Complainant s state dtha t "insofa r a s the y us e th e runways/taxiway s a t IN D an dpa y landin g fees , th e Landin g Fe e Ren t Credit s for

FedE x an dth e increase dFedE x operation s a t IN D envisione db y Leas e Amendmen t No
. 3 wil l directl y an dsubstanfiall y affec t eac h o f them,"'"' * whic h establishe s thei r standin g t o pursu e th e Complaint
. Th e Complaint s cite dBombardie r

Aerospac e Com , v . City o f Sant aMonica
. FA A 16-03-11 , D D (Jan
. 3 , 2005) , wher e tw o larg e aircraf t operator s ha dstandin g t o contes t landin g fee s wher e both "hav e operate dan dcontinu e t o operat e at SM O in additio n t o havin g pai dlandin g fee s o n several occasions. " ^ Th e Complainant s als o clai mstandin g "i n ligh t o f thei r well-substantiate dclai mo f revenu e diversion
. Fo r

suc h claim s ther e i s apresumptio n o f standing..
. regardles s o f whethe r ther e i s asubstantiv e showin g o f detrimenta l effect
. Ji mMarty n v . Port o f Anacortes
. FA A Docke t

16-02-03 , D D (Apri l 14 , 2003 ) (" acomplainan t presenfi y engage din abusines s arrangement with th e airport

in questio n woul db e assume dt o

" " FAA Exhibi t

1 , Ite m10 , Ite m1 , Page s 13 , 1 9 an d20
. Th e ftill tex t o f paragrap h 4 4 is , "[T]h e lA A an d BAA-IN D hav e refuse dt o remedy , i n an y substantiv e manner , th e concern s outline db y th e Join t Complainants , and , a

t thi s point , ther e i s n o reasonabl e prospec t for timel y resolutio n o f

th e dispute
. Althoug hlA A mad e an offe r t o remov e fromth e rate s an dcharge s calculatio n th e principa l an dinteres t payment s o n th e airport' s capita l investmen t i n th e apro n expansio n an dth e leas e payment s fo r that facilit y throug hDecembe r

31 , 2010 , that

offe r utterl y fail s t o resolv e thi s disput e becaus e i t ignore s th e burde n o n th e othe r airline s o f

th e Landin g Fe e Ren t

Credit s whic h exten dwel l beyon d201 0 an dwhic h tota l ten s o f million s o f

dollars. "
'" ^ FAA Exhibi t

1 , Ite m10 , Pag e 1 4
'" ^ FAA Exhibi t

1 , Ite m12 , Pag e 6 '" " FA A Exhibi t

1 , Ite m12 , Pag e 7
'" ^ FA A Exhibi t 1 , Ite m12 , Pag e 7
. I n th e Respons e o f th e lA A t o FAA' s Reques t for Additiona l Information , i

t states , "However , th e Authorit y ha s offered , an dth e Signator y Airline s hav e indicate d unanimousl y tha

t the y wis h t o accept , anegotiate dfixedlandin g fe e rat e fo r th e balanc e o f

th e termo f

th e Signatory Agreemen t

basedo n 200 8 levels
. [Se e Respons e Exhibi t 1 , an dRespons e Exhibi t J ] A s aresult, th e Signatory Airline s wil l hav e 'frozen ' in plac e th e advantage s stemmin g fromth e timin g o f th e landin g fee calculation s fo

r 2008. " FA A Exhibi t

1 , Ite m20 , pag e 9
27suffe

r from adirec t

an dsubstantial effect

whe n revenu e diversio n i s allege dwithou t havin g t o demonstrat e that effect
. ..tha t

presumptio n fiall

y applie s here.")"'" ^ Th e Complainant s als o argu e th e Authority' s argumen t mus t b e rejecte dbecaus e "...i t woul dseverel y undermin e th e Par t 1 6 process . Allowin g aresponden t t o defea t a complainant' s standin g unde r Par t 1 6 merel y b y profferin g ameaningles s settlemen t offer. " Th e Complainant s cited , Miami Internationa l Airport Rate s Proceeding
. DO T Orde r 97-3-26 , tha t

"reject[e dthe ] airport' s relianc e o n a n 'impracticable ' settlemen t offe r woul dcreat e agian t

loophol e andallo w respondent s t o becom e th e 'gatekeepers ; o f Part 1 6 claims.
. .Suc h aresul t

woul db e contrary t o th e publi c interes t becaus e it

woul dreduc e th e ability o f

complainant s t o pursu e relie f an dth e FAA' s ability t o remed y noncompliance. " Th e Complainant s additionall y hol dthat th e FedE x apro n expansio n i s no t aSpecial Purpos e Facilit y a s define db y th e Leas e Agreemen t becaus e i t

i s no t solel y pai dfo

r b y FedE x bu t

it s cos t i s share db y th e Complainant s becaus e o f th e applicatio n o f

th e Credi t an dth e impac t

o n th e landin g fee
. Th e Complainant s believ e th e FedE x apro n expansio n require s Mi l approva l unde r Articl e 8 o f

th e Leas e Agreement
. Th e Authority hold s that th e FedE x apro n expansio n i s aSpecial Purpos e Facilit y an dtherefor e doe s not requir e Mi l approva l o f

th e Signatory Airline s unde r th e Leas e Agreement
. A s discusse dearlier , th e interactio n o f

tw o separat e agreements , th e Leas e Agreemen t an dAmendmen t

No
. 3 , ha s ye t t o adversel y affec t

th e Complainant s an di s therefor e aconfrac t disput e an dwil l no t b e adjudicate dunde r

Part 16
. Th e Authorit y fiirther

states , "FA A shoul dno t

allo w th e Complainin g Airline s opportunisticall y t o reap th e incrementa l ren t an dlandin g fee benefit s o f FedEx' s expansio n withou t

acceptin g th e limite dren t credi t tha t wa s necessar y t o facilitat e th e expansion.""^ ^ Th e pertinen t issu e her e i s i f

th e Authority' s premis e tha t i t i s contractuall y abl e t o appl y th e Credi t t o th e calculation s o f

th e landin g fee s i n th e Leas e Agreemen t

i s not sustained , the n it

i s lef t with attempt s t o unilaterall y impose , throug h th e Credi t mechanism , ahighe r

landin g fe e o n th e Complainant s tha t woul dotherwis e b e th e cas e withou t

thei r expres s approval
. Th e FA A note s that

Marty n an dth e Complainan t significanfi y differ
. In Martyn , th e complainan t

wa s in fac t

bein g denie dacces s t o th e airport
. I n thi s Complaint , th e Complainant s are o n th e airport bu t arguin g agains t

apotentia l future event , whic h i s uncertai n considerin g th e differin g analyse s submitte db y th e Complainant s an dth e Authority
. Th e Directo r

agree s with th e Authority tha t Amendmen t

No
. 3 ha s ye t

t o adversel y affec t th e Complainants, however , th e Directo r disagree s tha t

th e Complainant s d o no t hav e standin g unde r

Part 16.23(a)
. Th e Complainant s d o hav e standin g unde r Part 16 , bu t th e issu e i s no t

ye t rip e for revie w sinc e th e ren t

Credi t ha s no t bee n applie dan dth e

'" * FAA Exhibi t

1 , Ite m12 , Pag e 9
'" ^ FAA Exhibi t

1 , Ite m12 , Page s 9-1 0 10 8 FAA Exhibi t

1 , Ite m10 , Pag e 3 3
2 8Complainant s hav e no t bee n harmed
. Th e Authority ha s agree dno t t o appl y th e Credi t durin g th e ter mo f

th e Leas e Agreemen t

whic h expire s on Decembe r 31 , 2010
. Th e Directo r wil l no t speculat e regardin g th e futur e rat e makin g methodolog y tha t th e Complainant s an dth e Authority ma y negotiat e for

th e replacemen t

o f th e Leas e Agreement
. Moreover , th e Directo r

conclude s that

th e clai mregardin g advers e impac t involve s a contrac t disput e betwee n th e Authority an dth e Complainant s an dtha t Part 1 6 i s not th e prope r venu e t o adjudicat e contrac t dispute s whe n n o actio n ha s ye t t o b e take n t o implemen t

th e contrac t

term s that

are i n amanne r

contrary t o th e gran t

assurances . I t i s paramoun t

tha t th e Complainant s an dth e Respondent s understan dthat th e FA A doe s no t arbitrat e o r

mediat e negotiation s throug h aformal Part 1 6 complain t

process . No r doe s th e FA A enforc e leas e term s betwee n partie s t o a n agreement . Rather , th e FA A enforce s contract s betwee n a n airport sponso r an dth e federal government . [Se e AmA v V
. Marylan dAviatio n Administrafion
. FA A Docke t No
. 16-05-12
. (Marc h 20 , 2006 ) (Director' s Determination). ] Whethe r o r not a n airport tenan t ha s breache dth e term s o f it s leas e agreemen t

with th e airport

sponso r i s amatte r

t o b e resolve di n stat e court . Th e FAA i s not

apart y t o litigatio n proceeding s betwee n complainant s an drespondent s involvin g contrac t

disputes ; no r

doe s th e FA A hav e jurisdictio n ove r matter s o f

confrac t la w betwee n airport

tenant s an dsponsors . [Se e Ric k Aviation , Inc. , v . Peninsul aAirport Commission , FA A Docke t No
. 16-05-18 , (Novembe r 6 , 2007 ) (Final Decisio n an d Order.) ] Ther e i s presentl y n o gran t assuranc e violatio n sinc e ther e i s n o advers e impac t t o th e Airline s withou t

th e FedE x Credit
. Ren t Credi t Th e Complainant s argu e tha t th e Ren t Credi t provisions , i f

applied , woul db e unreasonabl e an dconstitut e unjus t economi c discriminatio n agains t th e carriers
. '° ^ Accordin g t o th e Complainants , "[T]h e critica l poin t a t th e hear t o f th e Join t Complain t

i s simple : that

th e Landin g Fe e Ren t

Credi t provide dt o FedE x for

it s exclusiv e facility wil l requir e th e Join t

Complainant s an dothe r

airline s at

IN D t o pa y highe r

landin g fee s ove r man y year s the n the y otherwis e woul dpa y i n th e absenc e o f th e Ren t Credit. " '' ° Th e Complainant s argu e tha t th e Authorit y i s shiftin g FedE x cost s t o th e Complainants , whic hi s unjus t

economi c discrimination
. The y state , "[ajssumin g .. . that FedE x exceed s th e baselin e level s an denjoy s th e benefi t o f th e Landin g Fe e Ren t

Credit , FedEx' s renta l payment s wil l no t

fiilly cove r

th e cos t o f th e Apro n facility , an dthos e cost s no t covere d b y ren t wil l b e born e b y othe r

airline s o n adollar-for-dolla r basi s i n highe r

landin g fee s than the y woul dotherwis e pay...."' "

" " FAA Exhibi t

1 , Ite m12 , Pag e 1 6
'' " FAA Exhibi t

1 , Ite m21 , Pag e 4
' " FA A Exhibi t 1 , Ite m12 , Pag e 1 6
2 9T o fiirther thei r argument , th e Complainant s cite dsevera l case s the y believ e support thei r allegafio n o f

unjus t economi c discriminatio n including :

• Miam i Internationa l Airport Rate s Proceeding
. DO T Orde r 97-3-2 6
• LAWA-2007
. DO T Orde r 2007-6- 8
• Bombardie r

Aerospace , FAA Docke t 16-03-1 1
• Wilso n Ai r

Ctr.
. LL C v . FAA
. 37 2 F.3 d80 7 (6t h Cir
. 2004 )
• Penobsco t

Ai r Services
. Ltd
. v . FAA
. 164 F.3 d71 3 (1s t Cir
. 1999 )
• Ric k Aviatio n Inc
. v . Peninsul aAirport Commissioners
. FA A Docke t 16-05-1 8 Fro mth e Miam i Internationa l Airport Rate s Proceeding , DO T Orde r 97-3-26 , th e Complainan t

cite s th e following , "Th e Departmen t als o raise dwarnin g flags abou t arrangement s similar

t o thi s on e i

n th e Miam i Intemafiona l Airport s Rate s Proceeding
. In tha t proceeding , th e Departmen t emphasize dtha t

i t woul db e concerned , however , i f a n airport buil t facilitie s demande dan duse db y ahu b airlin e an dcharge dmuc h o f thei r cos t t o othe r airline s i n circumstance s wher e th e latte r airline s woul dno t

hav e comparabl e facilitie s neede dt o replac e outmode dfacilities...Tha t concern i s front

an dcente r here."" ^ I n thei r Answer , th e Authority state dth e Ren t Credi t doe s not harmth e Complainant s an d argue dthe y di dno t

freat FedE x mor e advantageousl y tha n i t freatedth e Complainants , s o ther e i s n o unjus t

discrimination
. Additionally , th e Authorit y states , "Althoug h th e Complainin g Airline s styl e thei r Complain t

a s on e allegin g unjus t

discrimination...th e relie f the y see k

i s no t typical o f

suc h claims..
. instea dthe y as k for rat e relief

, bu t th e rat e adjustmen t

the y see k

goe s beyon daskin g t o b e hel d"harmless " fromth e FedE x transaction."' ' Th e Authorit y dispute dth e conclusion s reache db y th e Complainant s i n th e above cite d cases . Specifically , th e Authority cite dth e Miam i Internationa l Airpor t Rate s Proceeding , i n support

o f thei r position ; stating , "Bot h DO T an dth e D.C
. Circui t rejecte d exactl y th e pe r

s e rul e advocate db y th e Complainin g Airline s here : tha t 'fee s canno t

b e reasonabl e whe n on e airlin e subsidize s renovation s t o benefi t another'...The y rejecte d th e clai meve n thoug h th e amount s at issu e i n Miam i wer e fa

r greate r tha n th e amoun t

o f FedEx ' s Ren t

Credi t a t IN D an deve n though , unlik e here , th e MI A complainant s wer e in direc t competitio n with th e beneficiary o f th e allege ddiscrimination
. Becaus e th e Authority' s action s her e are squarel y withi n th e circumstance s unde r whic h i t i s permissibl e t o charg e airline s th e sam e fee s (b e the y non-discriminator y landin g fees , a s a t IND , o r equalize drent s a s at

MIA) , FA A shoul ddismis s th e complaint. " "' *

" ^ FA A Exhibi t

1 , Ite m12 , Pag e 1 7
" ^ FA A Exhibi t

1 , Ite m10 , Page s 4- 5 11 4 FAA Exhibi t

1 , Ite m13 , Page s 28-2 9
3 0I n addition , th e Authority state s th e Complainant s shoul dno t hav e ignore dgroun dren t whe n computin g potential advers e impacts." ^ Th e Complainant s stat e tha t every airlin e pay s groun dren t

andal l mus t

pay th e fixedrate , therefor e the y properl y exclude dgroun d ren t whe n computin g th e advers e impac t o f th e Credit
. " ^ Th e Authorit y state s th e Complainant s use doutdate dlande dweights , whic h dramaticall y increase dth e amoun t o f th e Credit
. Th e Complainant s disagree dwith th e ne w dat astatin g tha t i t wa s for onl y a4

- mont h period , howeve r

usin g th e Authority' s projection s th e lande dweight s woul d continu e t o suppor t

thei r calculatio n o f

thei r revise dadvers e impact
. " ^ Th e Authorit y charge s that "th e Complainin g Airlines ' premis e i s fals e becaus e FedEx' s additiona l ren t

an dlandin g fee s excee dth e amoun t o f any ren t forgon e becaus e o f

th e credit , an dbecaus e th e Complainin g Airline s ar e benefited , no t harmed , b y Amendmen t No
. 3 a s awhole."" ^ Th e Authorit y assert s that , "Becaus e FedE x an dth e Complainin g Airline s pa y th e sam e landin g fee rate , th e Complainin g Airline s ar e force dt o clai mtha t i t i s unjustl y discriminatory t o charg e th e sam e landin g fee rat e whe n tha t rat e include s th e cost s o f

facilifie s that

onl y FedE x uses . However , tha t clai mha s neithe r

factual no r legal support . First , th e Complainin g Airline s ar e mistake n whe n the y argu e tha t th e combinatio n o f

th e FedE x ren t

credi t an dth e residua l landin g fe e rat e methodolog y means tha t

they , rathe r

than FedEx , wil l b e payin g th e cos t o f FedEx' s apron...th e credi t was designe dfromth e outse t t o ensur e tha t

FedE x wil l pa y th e fiill cos t o f th e facilities
. Second , eve n i f

ther e wer e ane t

cos t include din th e landin g fee calculation , tha t woul d not b e unjustl y discriminatory.
. .there i s n o pe r s e rul e prohibitin g residua l landin g fe e rate s that includ e th e cos t

o f facilitie s tha t

benefi t som e airport

user s an dno t

others. " '^ ° Th e Authority fiirther

assert s that , "Th e Complainin g Airline s d o not challeng e th e Authority' s residua l rat e methodology
. O n th e contrary , the y indicat e tha t "an y suc h chang e [fromth e residual method ] t o acompensator y methodolog y woul dlikel y b e strongl y resiste db y th e Carriers. " Bu t residually-calculate drate s almos t alway s includ e som e cost s for

facilitie s that

ar e no t use db y al l o f

th e airport

user s payin g th e residua l rates . That

i s tru e regardles s o f

whethe r th e formul ai s acost-cente r residual , a

n airport residual , o r

a n airport-syste mresidual
. I n acost-cente r residual , landin g fe e rate s for th e airfiel dcos t

cente r may wel l includ e ne t

cost s o f genera l aviatio n facilitie s tha t passenge r airline s d o no t

use . .. . Thes e arrangement s ar e reasonabl e becaus e an y on e airport user' s chance s of'subsidizing ' th e cos t o f anothe r user' s facilitie s i s balance db y it s chance s o f bein g subsidize db y othe r users ' revenues. " I n summary , th e Authority state s tha t i t carefull y negotiate dAmendmen t No
. 3 s o tha t

th e FedE x Ren t

Credi t woul dnot

negativel y impac t

othe r Airlines
. Th e Authorit y note s that , "B y insistin g that

th e maximu mamoun t

o f Additiona l Specia l Facilit y Renta l Credi t

" ' FAA Exhibi t

1 , Ite m10 , Pag e 2 7
" * FAA Exhibi t

1 , Ite m12 , Pag e 19-2 0
" ^ FAA Exhibi t

1 , Ite m10 , Pag e 27-2 8
" " FAA Exhibi t

1 , Ite m12 , Pag e 2 1
' " FA A Exhibi t 1 , Ite m10 , Pag e 3 3 '^ " FAA Exhibi t

1 , Ite m13 , Pag e 1 5 '^ ' FA A Exhibi t 1 , Ite m13 , Pag e 2 2
3 1eamabl e i n an y on e year b e limite dt o n o mor e than 75 % o f th e incrementa l landin g fee s pai db y FedE x tha t

year (u p t o th e leve l o f

Additiona l Special Facilitie s Ren t that year) , th e Authority ensure dthat : (1 ) FedE x wil l onl y qualif y fo r aren t credi t i n thos e year s in whic hi t generate s sufficient

incrementa l landin g fee revenue s t o cove r th e credit , (2 ) th e Complainin g Airline s wil l alway s shar e in th e benefit s resultin g fromFedEx ' s incrementa l lande dweigh t andlandin g fees , an d(3 ) th e Complainin g Airlines ' benefit s wil l continu e t o increas e i n eac h o f th e out-year s after

th e Additiona l Specia l Facility Renta l Credi t

reache s it s negotiate dcap . In othe r words , b y it s ow n terms . Amendmen t No
. 3 wil l protec t

th e Complainin g Airline s i f FedE x fail s t o generat e additiona l landin g fee revenue s for

th e Authority , an dwil l benefi t th e Complainin g Airline s onc e th e threshol di s surpassed."'^ ^ Th e Complainant s an dth e Authority argu e ove r th e impac t

o f th e Credi t

o n th e airline s doin g busines s a

t IND
. Th e Complainant s first claime dth e carrier s woul dpay approximatel y $3 7 millio n throug h increase dlandin g fees
. ' ^ Th e Authorit y argue s th e Credi t woul dno t

adversel y impac t

th e carriers , i n fact , th e Authority state s th e Credi t wil l hav e ane t

benefi t o f $1 0 millio n fromincrease drevenue s tha t FedE x wil l generat e for th e airport

fromit s increase dnumbe r o f landing s an dadditiona l facilitie s rental.'^' * Afte r considerin g ne w informatio n fromth e Authority , th e Complainant s late r reduce dth e cumulativ e negativ e impac t on th e ai r

carrier s t o $2 3 millio n throug h 2028. ' ^ Th e Directo r

finds that

i n thi s case , i t

i s clear tha t unde r th e term s o f

Amendmen t

No
. 3 , FedE x wil l not

b e solel y responsibl e for "th e paymen t

o f th e rental s o r

fee s fo r th e us e o r occupanc y thereo f

in sufficient

amount s t o permi t

th e financing o f

suc h improvemen t

an d paymen t o f al l cost s thereo f

solel y fro msuc h rental s o r fees
. " Credit s give n bac k t o FedE x i n return fo

r lande dweigh t

wil l serv e t o dilut e th e cost s o f th e improvement s t o FedE x an dwil l sprea dthe mout , throug h th e residua l agreement , t o al l Signatory Airline s a t th e Airport
. I t

i s no t reasonabl e t o impose on e carrier' s specia l facility cost s o n othe r carrier s wher e ther e wil l no t b e areciproca l benefit , a s i n th e blende drate s i n th e Miami terminal , wher e al l th e carrier s woul deventuall y hav e thei r facilitie s upgraded
. Furthermore , it

i s contrary t o th e expres s term s o f th e Leas e Agreement
. Th e FA A finds th e Complainants ' argumen t tha t the y wil l incu r

additiona l cost s a s a resul t o f Amendmen t

No
. 3 coul db e vali di f

th e Authorit y impose s thi s arrangemen t o n th e Airline s withou t

thei r concurrence . Fo r

th e present , a s noted , th e FA A view s th e Credi t arrangemen t

a s acontrac t

disput e fo r

whic h Par t

1 6 i s no t th e prope r

venu e t o resolve
. I f

th e Airline s an dth e Authorit y d o no t com e t o term s i n asubsequen t agreement , an dth e Authorit y unilaterall y impose s th e Credit , th e matte r ma y the n b e appropriat e fo

r FA A review
. Absen t

awritte n agreement , th e takin g o f "commo n use "

'^ ^ FA A Exhibi t

1 , Ite m13 , Pag e 1 9 '^ ^ FA A Exhibi t

1 , Ite m1 , Pag e 9 '^ " FA A Exhibi t

1 , Ite m10 , Pag e 3 2 '- ' FA A Exhibi t

1 , Ite m12 , Pag e 1 8 126 FAA Exhibi t

1 , Ite m10 , Exhibi t

C , definition s
3 2revenu e an dusin g it fo r a n "exclusiv e use " FedE x apro n coul damoun t t o aviolatio n o f Gran t Assuranc e #22
. Th e responsibilit y for

resolvin g th e disput e ove r aCredi t that ha s ye t t o b e applie drest s first wit hth e Authorit y an dth e Complainants , no t th e FAA
.

• I f th e Complainant s agre e t o includ e th e Credi t i n afutur e methodology , i t

woul d no t violat e th e FA A gran t

assurance s o r

th e Rate s an dCharge s Policy
.

• I f th e Authorit y impose s landin g fee s on th e carriers , thos e fee s wil l b e subjec t t o th e reasonablenes s principl e o f th e Rate s an dCharge s Policy
.

• I f th e Complainant s agre e t o exten dth e Leas e Agreemen t an dno t amen di t t o recogniz e th e Credit , Thi s matte r woul dcontinu e t o b e acontrac t dispute an dPart 1 6 woul dnot

b e th e appropriat e venue . Th e Directo r

agree s ther e i s significan t variatio n an duncertaint y wit h th e projection s presente db y bot

h partie s in thei r

pleading s a s wel l a s i n thei r respectiv e response s t o th e FA A Questions
. However , th e issu e tha t i s th e basi s o f

thi s complain t

i s no t th e presenc e o f asurplu s o r

shortfal l resultin g fromth e Credit , o r wha t component s o f

th e rent s shoul d b e o r no t b e considered
. Th e principa l issu e i n thi s complain t i s whethe r

th e applicatio n o f th e Credi t

result s i n th e unilatera l impositio n o f extr acost s adde dt o th e Airport Syste mRequiremen t

requirin g ahighe r

landin g fee tha n woul dotherwis e b e th e cas e i n orde r t o compensat e for

th e Credit
. Sinc e th e FA A doe s no t

kno w th e for

mo f th e future agreement , o r

whethe r ther e wil l eve n b e a n agreement , i t

i s no t appropriat e a

t thi s tim e t o rul e o n th e Authority' s possibl e futur e applicatio n o f

th e Credi t

for th e FedE x apron . Th e Directo r finds that

i f th e Complainant s an dth e Authority d o not com e t o term s i n areplacemen t agreemen t

an dth e Authority unilaterall y impose s th e Credi t o n th e Complainant s (an dal l airlines ) suc h a n actio n woul db e subjec t

t o th e Rate s an dCharge s Policy
. Th e Polic y woul dnot permi t th e Authority t o unilaterall y impos e th e cost s o f on e carrie r

o n al l othe r

carrier s b y addin g suc hcost s t o it s commo n rat e bas e unles s approve db y thos e carriers.'^ ^ Similarl y Situate d Th e partie s t o thi s instan t complain t

disagre e o n whethe r

th e passenge r

carrier s an dth e carg o carrier , FedEx , ar e similarl y situate dalthoug h th e Complainant s di dnot rais e thi s issu e i n thei r Complaint
. Th e Authorit y argue s tha t th e Complainant s ar e not similarl y situate dwit

h FedEx , s o ther e coul db e n o unjus t discrimination
. Th e Authorit y note d several point s o f

differenc e tha t

mak e FedE x an dth e othe r airline s dissimilar :

• "FedEx , unlik e th e passenge r carriers , ha s investe dhundred s o f million s o f

dollar s i n tenant-finance dimprovement s at IN D tha t belon g t o lA A o r

wil l rever t

t o lA A

' Polic y Regardin g Airport Rate s an dCharges , F.R
. Vol
. 61 , No
. 121 , Sectio n C
. 3 3ownership
. Thes e investment s includ e ...FedEx' s curren t $16 2 millio n expansio n o f it s sortin g facilitie s a

t IND."'^ *

• "FedE x i s th e onl y airport tenan t i n positio n t o leas e an dus e tha t muc h spac e i n that location
. Accordingly , leasin g that lan dt o FedE x benefit s th e Authority an d th e Signatory Airlines..
. withou t substantia l opportunity cos t t o th e Airport

o r othe r Airport users. " '^ ^

• "[T ] h e onl y similarit y betwee n FedE x an dth e complainant s i s that the y are al l airline s doin g busines s a

t IND
. Virtuall y everythin g els e i s different
. FedE x an d th e Complainin g Airline s provid e different service s usin g different

busines s models , different

facilitie s (th e FedEx-built sortin g facility versus th e Airport

constructe dTerminal ) an dlease dpremise s (e.g. , groun dan dapron ) locate di n substantiall y differen t

part s o f th e Airport. " ' ^ Th e Complainant' s argu e that , "Respondent s see k t o avoi dth e prohibition s o n unjus t discrimination...b y arguin g tha t FedE x an dth e Join t

Complainant s are no t

similarl y situated
. Accordin g t o Respondents , thes e difference s includ e th e tim e an d circumstance s whe n th e lease s wer e negotiated , th e leas e durations , th e amoun t o f tenan t investmen t

at issue , th e size/locatio n o f th e relevan t

facilities....Thi s argumen t i s withou t merit. " Th e Complainant' s stat e that the y recogniz e tha t

th e prohibitio n o n unjus t discriminatio n doe s no t

preven t a n airport proprieto r

from"makin g reasonabl e distinction s amon g aeronautica l users.... " However , the y not e that , "tha t prohibitio n bar s airport proprietor s fromcharging ai r carrier s makin g similar

us e o f th e airport' s facilitie s fee s whic har e no t

substantiall y comparable...a s Respondent s see k t o do. " '^ ' Th e Complainan t

als o argu e that , "Th e Join t Complainant s an dFedE x ar e al l larg e airline s providin g ai r

transportatio n service s with larg e aircraf t at IN D an dmakin g comparabl e us e o f

th e runways , taxiways , an dth e othe r airsid e facilitie s tha t

are essential component s o f

th e airfiel dcos t

center . Accordingly , th e Join t Complainant s ar e similarl y situate dt o FedE x regardin g landin g fee s an dleases."'^ ^ FA A polic y provide s tha t

i f a n airport sponso r can justif y tha t differen t rate s are nondiscriminatory an di f

th e rate s ar e substantiall y comparable , i t ma y charg e airpor

t tenant s different

rate s for similar airport users . Fo r

example , th e renta l rate s fo r similar tenant s may vary becaus e o f difference s in deb t

an dphysica l layou t

o f renta l an dpubli c space.'^ ^ In thi s case , th e FA A finds tha t FedE x an dal l o f

th e Signator y Airline s ar e similarl y situate dunde r

th e term s o f

th e Leas e Agreement , whic h the y al l signed
. I t i s th e

'^ ' FAA Exhibi t

1 , Ite m10 , Pag e 3 7 TM FAA Exhibi t

1 , Ite m10 , Pag e 3 7 '^ " FAA Exhibi t

1 , Ite m10 , Pag e 3 8 '^ ' FAA Exhibi t

1 , Ite m12 , Page s 24-2 5 '^ ^ FAA Exhibi t

1 , Ite m12 , Pag e 2 5
' " FA A Orde r 5190.6A , Sectio n 4 , 4-1 4 (c ) an d(d )
3 4interpretatio n o f th e term s o f

th e Leas e Agreemen t

tha t i s th e basi s for

th e Complain t

a t issue
. Whil e th e different Signatory Airline s ma

y occup y different

lease dpremise s unde r differen t agreement s wit

h th e Authority , may serv e different type s o f markets , o r

may mak e differen t

investment s o n th e Airport , the y are al l tie dtogethe r unde r thi s Complain t b y th e term s o f

th e Leas e Agreemen t

herei n an dthu s similarl y situate dfor purpose s o f reviewin g gran t

compliance
. Accordingly , sinc e th e Complainant s an dFedE x ar e similarl y situated , i f

th e Authority wer e t o implemen t Amendmen t

No
. 3 at thi s time contrary t o th e term s o f

th e Leas e Agreement , it

coul damoun t

t o aviolatio n o f

Gran t Assuranc e 22 , Economi c Nondiscrimination
. However , a s state dth e Responden t ha s frozen th e Complainants ' landing-fe e rate s a t th e 200 8 level s throug h Decembe r 31 , 2010 , an dther e i s n o curren t noncompliance
. I n closing , th e Directo r

emphasize s tha t

th e FAA' s rol e i n aPar t

1 6 Complain t

i s t o determin e whethe r

th e Responden t

i s in curren t

complianc e with it s federal obligations
. [Se e Sectio n VI , "Applicabl e La w an dPolicy, " FA A Airpor t Complianc e Program. ] Th e FA A Airport

Complianc e Progra mi s designe dt o achiev e voluntar y complianc e with federal obligation s accepte db y owner s and/o r operator s o f

public-us e airport s develope d withfederal financial assistance
. Therefore , i n addressin g allegation s o f noncompliance , th e FA A wil l mak e adeterminatio n a s t o whethe r a n airport sponso r i s currentl y i n complianc e with th e applicabl e federal obligations
. A s state dabove , ther e i s n o curren t noncompliance
. 2
. Whethe r

th e Amendmen t

No
. 3 t o th e lAA-FedE x Lan dLeas e Agreemen t (Amendmen t

No
. 3) , date dApri l 14 , 200 6 i s consisten t wit h Gran t

Assuranc e 2 3 Exclusiv e Rights , 4 9 U.S.C
. § 47107(a ) (4) , whic h prohibit s th e grantin g o f a n exclusiv e righ t

fo r th e us e o f

th e airport
. Th e Complainant s alleg e th e Ren t Credi t i s aviolatio n o f

Gran t Assuranc e 23 , Exclusiv e Rights.' ^ Th e Complainant s alleg e tha t th e Authority , "b y grantin g FedE x a n exclusiv e right..
. i s discriminatin g agains t th e othe r carrier s b y providin g mor e favorabl e term s an d condition s t o FedE x an db y shiftin g th e cos t o f th e exclusiv e facility t o othe r airlines
. Th e Complainant s als o argu e tha t th e gran t assurance s prohibi t

airport s fromgrantin g exclusiv e right s and , "FA A ha s mad e clear tha t th e applicatio n o f

an y unreasonabl e requiremen t

o r standar dtha t

i s applie di n a

n unjustl y discriminator y manne r woul d constitut e aconstructiv e gran t o f aprohibite dexclusiv e right."'^ ^ In thei r Reply , th e Authorit y disagree s with th e Complainants ' positio n an dstate s that , "Th e constructiv e exclusiv e righ t clai mi s merel y aderivativ e o f thei r economi c discriminatio n clai man dfail s for th e sam e reasons . I t

als o fail s for

th e obviou s reaso n that non e o f th e Complainin g Airline s ha s bee n exclude dfromth e Airport
. Eac h i s 13 5

'^ " FAA Exhibi t

1 , Ite m1 , Pag e 1 2 '^ ^ FAA Exhibi t

1 , Ite m1 , Pag e 1 3 '^ * Th e FA A ha s sinc e recognize dthat providin g dua l analysi s o f unjus t economi c discriminatio n an da constructiv e grantin g o f

a n exclusiv e righ t

i s redundant
. [Se e Skydiv e Pari s v . Henr y County , TN , FAA Docke t No
. 16-05-06 , Director' s Determination , p . 19. ]
3 5providin g schedule dpassenge r transportatio n servic e t o END , an dnon e ha s identifie dan y servic e it ha s bee n prevente dfromproviding."'^ ' Th e Complainant s conten t that , "...Leas e Amendmen t No
. 3..
. grant s a

n actual exclusiv e righ t becaus e th e Carg o Apro n expansio n i s bein g undertake n for FedEx' s sol e us e a s part o f th e expansio n o f

it s IN D hub
. Respondent s protes t tha t thi s doe s no t

constitut e a

n exclusiv e right

becaus e th e Carrier s hav e no t "bee n delaye dfromgainin g acces s t o th e Airport , o r

prevente dfromoperatin g a t th e Airport

or...i n actual competitio n with FedEx
. However , Respondent' s crimpe dvie w o f a n exclusiv e right

i s misplaced. " '^ * I n it s Rebuttal , th e Authority state s ther e was n o conferrin g o f a n exclusiv e righ t

because , "...constructiv e an dactual exclusiv e right s both requir e tha t ther e b e som e degre e o f exclusio n - som e showin g o f a n aeronautica l activit y tha t th e complainan t

was constructivel y o r

actuall y prevente dfromproviding. " ' Rather , th e Authority state s that,"Th e Complainin g Airlines , however , poin t t o n o provisio n o f

Amendmen t

No
. 3 , o r th e underlyin g 199 3 Amende dan dRestate dLan dLeas e Agreement , tha t grant s FedE x exclusiv e us e o f

th e carg o apron.. . A s apractica l matter , th e Complainin g Airline s an d othe r passenge r

airline s are unlikel y t o us e th e FedE x carg o apron , but that i s no t th e resul t o f FedEx' s righ t

t o exclud e others
. Rather , i t i s afunctio n o f

th e airport

layout , th e locatio n o f

th e respectiv e facilities , an dth e ampl e availabilit y o f apro n spac e adjacen t

t o th e passenge r

termina l buildin g an delsewher e a t th e Airport.
. .i n year s past , th e existin g carg o apro n ha s bee n use db y othe r aeronautica l user s t o par k aircraf t a t n o charg e t o thos e aeronautica l users.... " '' ° Additionally , th e Authorit y argue s that , "i t i s wel l establishe dtha t

in orde r t o sho w th e constructiv e gran t

o f a n exclusiv e right, aclaiman t mus t sho w tha t

i t actuall y ha s bee n barre dfromconductin g a'particular aeronautica l activity ' at

th e airport
. Cit

y o f Pompan o V
. FAA , 11 A F.2 d1529 , 154 1 (11t hCir
. 1985) , throug h th e impositio n o f unreasonabl e standards
. Here , th e Complainin g Airline s d o no t clai mtha t

the y hav e bee n denie dth e righ t t o self-servic e aircraf

t o r any othe r opportunitie s t o provid e aeronautica l service s a t th e Airport."" " Th e Directo r

remind s th e partie s that

FA A consider s i t

inappropriat e t o provid e federal fund s for improvement s t o airport s wher e th e benefit s o f suc h improvement s wil l no t b e fiilly realize ddu e t o th e inheren t restriction s o f

a n exclusiv e monopol y o n aeronautica l activities
. Unde r

FA A Orde r

5190.6A , th e existenc e o f a n exclusiv e righ t

t o conduc t

an y aeronautica l activit y at

a n airport limit s th e usefulnes s o f

th e airport

an ddeprive s th e publi c o f th e benefit s o f

competitiv e enterprise
. However , thi s i s no t

th e cas e here
. Eve n i f

Amendmen t

No
. 3 grant s FedE x th e exclusiv e us e o f th e Apron , th e Directo r

finds th e Authorit y i s withi n it s right s t o mak e suc h a

' " FAA Exhibi t

1 , Ite m10 , Pag e 6 '^ * FA A Exhibi t

1 , Ite m12 , Pag e 2 9 '^ ' FA A Exhibi t

1 , Ite m13 , Pag e 2 9
'" " FA A Exhibi t 1 , Ite m13 , Page s 30-3 1 14 1 FA A Exhibi t

1 , Ite m13 , Pag e 2 9
3 6grant , provide dit doe s no t den y othe r

airline s th e opportunity fo r simila r treatmen t

unde r asimilar situation.''* ^ I t

i s in denyin g other s asimila r righ t that create s aviolatio n o f Gran t Assuranc e 23 ; her e th e Complainant s hav e no t show n th e Authority ha s denie d the masimilar

righ t in usin g th e Airport
. A s note dabove
. Amendmen t No
. 3 ha s ye t

t o b e implemente do r

adversel y affec t

th e Complainant s an di s no t

rip e fo r revie w unde r

Part 16
. I f th e partie s hav e adisput e regardin g thei r

Leas e Agreement , Part

1 6 i s not th e prope r

venu e fo r resolvin g apur e contrac t dispute
. 3
. Whethe r

th e Amendmen t

No
. 3 t o th e lAA-FedE x Lan dLeas e Agreemen t (Amendmen t

No
. 3) , date dApri l 14 , 200 6 i s consisten t wit h Gran t

Assuranc e 24 , Fe e an dRenta l Structure , 4 9 U.S.C
. § 47107(a)(13 ) o f 4 9 U.S.C
. whic h requires , i n pertinen t part , tha t

th e owne r

o r sponso r t o maintai n afee an drenta l structur e fo r th e facilitie s an dservice s bein g provide dt o airpor t user s whic h wil l mak e th e airpor t a s self-sustainin g a s possibl e unde r th e circumstance s existin g a t th e airport
. Th e Complainant s referenc e th e "self-sustaining " requiremen t ''*•' an dstate , "th e lon g duratio n o f

th e Landin g Fe e Ren t

Credi t als o violate s Assuranc e 2 4 requirin g th e Airport t o b e a s self-sustainin g a s possible."''*' ' Th e Authorit y rebut s thi s in it s respons e statin g th e Complainants' , "introduce[d ] n o evidenc e t o sho w that

th e Airport

wil l not b e a s self-sustainin g a s possibl e a s aresul t o f enterin g int o Amendmen t No
. 3."'"* ^ Th e Authorit y wen t o n t o state , "th e Additiona l Special Facilitie s Renta l Credi t doe s no t violat e th e Airport' s self-sustainability obligations
. First , th e ren t credit s wer e negotiate da t arm s length with FedEx , an dreflec t th e stat e o f

marke t condition s a

t th e time
. Second , althoug h a n importan t

part o f th e fee structur e negotiate dwit

h FedEx , th e ren t

credit s ar e part

o f th e broade r

contractua l commitment s mad e b y FedEx
. In fact
. Amendmen t No
. 3 wa s carefull y structure ds o tha t th e ren t credit s woul daccru e onl y unde r circumstance s specificall y designe dt o preven t revenu e shortfal l t o th e Airport.""* ^ It appear s that

th e Authority negotiate da n agreemen t

with FedE x that

contribute s t o it s ability t o b e self-sustaining
. Th e Directo r acknowledge s tha t

th e Complainant s d o not wis ht o 'unwind ' th e agreemen t wit h FedEx , bu t

wan t assurance s that

th e Complainant s base dat IN D wil l not

directl y o r

indirectl y bea r

th e cos t o f th e improvement s t o FedEx' s

'" ^ I n Ji mMartv n v . Port

o f Anacortes
. FA A Docke t

No
. 16-02-03 , (Apri l 14 , 2003 ) (Director' s Determination) , th e FA A foun dth e Complainan t ha drequeste dt o leas e spac e fo r th e sam e purpos e an d unde r similar condition s a s anothe r

similarl y situate daeronautica l tenant , bu t wa s denied
. Th e Directo r foun dth e airpor

t sponso r in noncompliance
. I n th e curren t case . Complainant s hav e no t demonstrate d the y requeste dt o leas e spac e fo r th e sam e purpos e an dunde r simila r condition s a s anothe r

similarl y situate daeronautical tenant .

'" ' FA A Exhibi t

1 , Ite m1 , Pag e 1 3
'" " FAA Exhibi t

1 , Ite m1 , Pag e 1 6 Footnot e 1 1
'" ^ FA A Exhibi t

1 , Ite m10 , Pag e 4 6
'" * FA A Exhibi t

1 , Ite m10 , Pag e 4 7
37leasehold.''* ' Th e Directo r agree s that

it i s no t necessary t o und o th e agreemen t especiall y i n ligh t

o f th e fac t that th e Credi t

doe s no t violat e th e requiremen t

t o b e self

sustaining
. Th e recor dsupport s th e Respondent' s assertio n tha t th e Credi t

wa s integral t o th e FedE x expansio n o f

upward s o f

$42 0 millio n in leasehol dimprovements , al l o f whic h wil l rever t

t o Authority ownership.''* ^ Gran t Assuranc e 2 4 require s th e airport sponso r t o establis h afee an drenta l structur e that wil l mak e th e airport

a s self-sustainin g a s possibl e unde r th e circumstance s existin g a t th e particular airport
. Th e inten t

o f th e assuranc e i s for

th e airport

operato r t o charg e fee s that ar e sufficien t

t o cove r a s muc h o f

th e airport' s cost s a s i s feasible
. Ther e ha s bee n n o showin g tha t

th e Responden t

i s no t meetin g thi s Gran t

Assuranc e requirement
. 4
. Whethe r

th e Amendmen t

No
. 3 t o th e lAA-FedE x Lan dLeas e Agreemen t (Amendmen t

No
. 3) , date dApri l 14 , 200 6 i s consisten t wit h Gran t

Assuranc e 2 5 Airpor t Revenues , 4 9 U.S.C
. § § 47107(b ) an d47133 , whic h require s th e airpor t sponso r t o ensur e tha t

al l revenue s generate db y th e airpor t wil l b e expende db y i t fo r th e capita l o r

operatin g cost s o f

th e airport ; th e loca l airpor t system ; o r

othe r loca l facilitie s whic h ar e owne do r operate db y th e owne r

o r operato r o f th e airpor t an ddirectl y an dsubstantiall y relate dt o th e actua l ai r transportatio n o f

passenger s o r property ; o r

fo r nois e mitigatio n purpose s o n o r of f th e airport
. Th e Complainant s allege dviolation s o f Gran t Assuranc e No
. 2 5 an dth e Revenu e Us e Polic y b y th e Respondents
. Thes e allegation s ar e addresse di n th e followin g subtopics : Subsidy an dLandin g Fees
. Subsid y Th e Complainant s alleg e tha t th e Credi t

violate s th e Revenu e Us e Polic y becaus e th e Credi t i n effec t subsidize s FedEx , whic h th e Revenu e Us e Polic y prohibits
. Th e Complainant s recogniz e tha t a n exceptio n i n th e Revenu e Us e Polic y doe s permi t th e us e o f airport revenu e for

short promotiona l periods , sometime s for u p t o 2 years , bu t

th e Authority allow s th e Credi t fo r 2 0 years , whic h accordin g t o th e Complainant s i s reall y a subsid y for

FedEx
. ''* ^ Th e Complainant s stat e th e Credi t i s asubsid y becaus e th e apro n wil l b e for

th e exclusiv e us e o f

FedE x an dFedE x wil l pa y for onl y aportio n (i f

any ) o f th e cos t o f constructin g th e Apron.'^ ° Th e Authority aver s th e Credi t i s no t aprohibite dsubsidy , but rathe r i s acarefull y constructe dbusines s transactio n tiedt o FedEx' s $42 0 millio n in leasehol dimprovements , whic hwil l eventuall y revert t o th e Airport.'^ ' I

n addition , th e Authorit y assert s i t ha s give n incentive s t o othe r

carriers , s o th e Credi t

offere dt o FedE x i s no t

unique.'^ ^ Th e

'"• ' FAA Exhibi t

1 , Ite m1 , Pag e 2 0
'" * FAA Exhibi t

1 , Ite m10 , Pag e 4 6
'" ' FAA Exhibi t

1 , Ite m1 , Pag e 1 6
'' " FAA Exhibi t

1 , Ite m1 , Pag e 1 7
' " FA A Exhibi t 1 , Ite m10 , Pag e 4 6
' " FAA Exhibi t

1 , Ite m10 , Pag e 4 6Authorit y state s that Chautauqu aAirline s an dNorthwes t Airline s hav e als o receive d Credits
. Northwes t

ha s receive dtw o Credit s fo r $226,11 4 an d$133,285 ; Responden t di d not provid e th e amoun t

o f Credi t for Chautauqu aAirlines.'^ ^ Th e Complainant s stat e th e Credit s offere dt o Northwes t Airline s are readil y distinguishabl e fromCredit s offere dt o FedE x becaus e the y ar e smalle r amount s an dwer e for duration s o f

jus t on e year.'^' * Th e Complainant s claim , "Respondent s conten dthat th e ren t Credit s in Leas e Amendmen t

No
. 3 d o no t

contraven e th e FAA' s Airport Revenu e Diversio n Polic y for thre e reasons : th e ren t

credit s ar e no t

direc t subsidie s an dtherefor e th e Revenu e Diversio n Polic y doe s no t apply ; the y are not

part o f apromotiona l "incentive " bu t rathe r ar e a n economi c "concession; " an dth e Airport ha s give n ren t

credit s t o othe r

airline s for tenan t improvements
. Non e o f thes e contention s withstand s scrutiny."'^ ^ Th e Complainant s alleg e "th e ren t credit s are clearl y offset s t o th e cost s o f FedEx' s Carg o Apro n expansion , regardles s o f whethe r th e subsid y i s 'direct ' o r not... " th e ren t credit s are par t

o f abroadincentiv e progra mt o induc e FedE x t o expan dit s hu b an d increas e it s flight

operation s a

t IND, " an d"Th e lAA' s incentiv e schem e fail s th e FAA' s Revenu e Diversio n requiremen t for promotiona l incentiv e programs."'^ ^ Th e Respondent s maintai n i n thei r Rebutta l that , "Th e Complainin g Airline s misunderstan dFedera l law an dFA A polic y i n thi s area , an dmischaracteriz e th e Respondent' s arguments . Respondent s di dnot assert tha t th e Revenu e Us e Polic y 'doe s not apply ' but

rather , tha t

sinc e n o airport

fund s wil l b e transferre dt o FedEx , 'th e revenu e us e section s o f

th e Revenu e Division Polic y are no t implicated. " Th e Respondent s additionall y argue dthat , "...becaus e ther e i s n o evidenc e t o establis h tha t a s aresul t o f th e Additiona l Special facilitie s [sic ] Renta l Credi t th e Airpor t

woul dno t

b e a s self-sustainin g a s possibl e unde r th e circumstances , th e Revenu e Diversio n Polic y wa s no t violated. " Respondent s conten d"tha t th e Additiona l Specia l Facilitie s Renta l Credi t i s not adirec t subsid y t o FedEx , an dthu s th e revenu e us e section s o f th e Revenu e Diversio n Polic y ar e no t implicated....Th e ren t

credit s i n thi s cas e ar e no t subsidies ; the y ar e credit s that , i f an d whe n the y are earned , woul dhav e th e effec t o f reducin g on e o f

th e component s o f

th e ren t that FedE x i s require dt o pay...."'^ ^ Th e Directo r

note s tha t

th e Revenu e Us e Polic y doe s prohibi t direc t subsid y o f

ai r carrie r operations , a s state din th e Applicabl e La w an dPolic y Section
. Direc t subsidie s ar e considere dt o b e payment s o f airport fund s t o carrier s fo

r ai r service
. Prohibite ddirec t

' " FAA Exhibi t

1 , Ite m20 , Pag e 1 1
'' " FA A Exhibi t

1 , Ite m21 , Page s 14-1 5
' " FAA Exhibi t

1 , Ite m12 , Pag e 3 0
' " FAA Exhibi t

1 , Ite m12 , Pag e 3 2
' " FAA Exhibi t

1 , Ite m13 , Pag e 3 1
" ' FA A Exhibi t 1 , Item10 , Pag e 4 3
3 9subsidie s d o no t includ e waiver s o f

fee s o r discounte dlandin g o r

othe r fee s durin g a promotiona l period
. Th e Directo r

agree s wit

h th e Authority tha t

technicall y th e Credi t

i s no t asubsid y withi n th e meanin g o f

th e Revenu e Us e Polic y becaus e th e Authority i s no t directi y payin g airport fiind s t o FedE x t o operate . Nonetheless , th e Authority canno t impos e th e cos t

o f FedEx' s ren t

Credi t o n othe r carrier s eve n i f

th e othe r carrier s benefi t

fromth e additiona l operation s b y FedEx , a s aresul t o f havin g th e airfiel dcost s sprea dove r mor e operations , an deve n i f

th e othe r carrier s actuall y pa y les s a s aresul t o f th e overal l deal
. Moreover , th e FA A ha s mad e clear

it i s no t reasonabl e fo

r th e cost s o f

eve n aone - o r

two-year promotiona l fe e waive r

t o b e born e b y othe r

carriers. Thu s i t

woul dclearl y b e unreasonabl e t o impos e th e muc h longer-termfacilit y ren t Credi t for FedE x a t IN D on

. , . 16 0 Othe r carriers
. Th e recor dreflect s tha t

FedE x i s spendin g $16 2 millio n t o ad d" a400,00 0 squar e foo t expansio n t o it s existin g sort building , a175,00 0 squar e foo t secondary sort

building , a 40,00 0 squar e foot

aircraf t maintenanc e building , an dan 8,00 0 squar e foo t buildin g for groun dsupport

equipment."'^ ' A s discusse di n Tabl e 1 [se e pag e 20] , th e Credi t fo r 201 2 woul db e take n in 201 3 b y creditin g th e $1,416,24 7 agains t th e Additiona l Special Facilitie s Rental
. Thi s i

n turn lower s Airpor t

Syste mOperatin g Revenu e unde r th e separat e Leas e Agreement , resultin g i n ahighe r Airport Syste mRequiremen t

o f $1,416,24 7 an dahighe r

landin g fee
. Accordingly , base do n thes e facts , th e Directo r finds th e Credi t

i s no t asubsid y becaus e i t i s apart o f acommitte dfinancial agreement . Amendmen t No
. 3 , for

th e developmen t

an d leas e o f airport facilities , wit

h th e provis o tha t

th e cost s o f

th e Credi t

canno t b e impose d o n othe r aeronautica l user s in contraventio n o f th e Revenu e Us e Policy
. Landin g Fee s In addition , th e Complainant s alleg e th e ren t Credi t cause s the mt o pa y for

th e FedE x apro n throug hhighe r

landin g fees
. Th e carrier s claim , "lAA' s arrangemen t with FedE x wil l burde n th e othe r

airline s at

IN D with payin g for

al l o r aver y substantia l part

o f th e cos t o f buildin g acarg o facilit

y fo r FedEx' s exclusiv e use , becaus e cost s lef t unreimburse ddu e t o th e ren t credit s wil l b e adde dt o th e airfiel dcos t cente r requirement , an dhenc e wil l requir e th e othe r airline s t o pa y highe r

landin g fee s tha n woul db e th e cas e in th e absenc e o f

th e ren t credi t arrangement . Th e amoun t o f thi s unlawfii l cos t

burde n wil l equal , th e differenc e betwee n (1 ) th e su mo f th e Additiona l Specia l Facilitie s Ren t an dlAA' s financing profi t an d(2 ) th e Landin g Fe e Ren t Credits."'^ ^

'^ ' Revenu e Us e Policy , Sectio n V I (B)(12 ) '* " Th e FA A evaluate s promotiona l fee waive r program s t o ensur e th e program s ar e no t unjustl y discriminatory an dthat

th e cost s o f

afe e waive r

ar e no t i n an y wa y passe do n t o othe r operators . Se e 6 9 F.R
. 61544-04 , Octobe r

19 , 200 4

'* ' FA A Exhibi t

1 , Ite m10 , Pag e 2
' " FAA Exhibi t

1 , Ite m1 , Pag e 1 5
40Th e Complainant s alleg e tha t thi s i s aviolatio n th e Rate s an dCharge s Policy
. The y state , "[a ] fundamental statutory principl e underlyin g FAA' s Rates/Charge s Polic y i s that airline s canno t

b e require dt o pay for

facilitie s use dexclusivel y b y others. " Th e Complainant s cite , "Je t 1 Center ; Inc
. v Naple s Airport Authority , FA A Docke t

No
. 16-04-03 , "If..
. th e Authority i s makin g u p that los t revenu e b y spreadin g th e associate d cos t amon g th e remainin g tenants , i t coul db e in violatio n o f

th e FAA' s Polic y Regardin g Airport Rate s an dCharges , whic h states : Commo n cost s (cost s no t directl y attributabl e t o aspecifi c use r

grou p o r cos t center ) mus t

b e allocate daccordin g t o areasonable , transparen t

an dnot unjustl y discriminatory cos t allocatio n methodolog y tha t i s applie d consistently , an ddoe s no t requir e an y aeronautica l use r o r use r grou p t o pa y cost s properl y allocabl e t o othe r users o r use r groups."'^' * Th e Authorit y i n it s Answe r state s th e Complainant s wil l not b e burdene db y Amendmen t No
. 3 , an dtha t

therefore , i t

di dnot violat e th e Rate s an dCharge s Policy
. "O n th e contrary , th e self-correctin g mechanism s buil t int o Amendmen t

No
. 3 wer e expressl y intende dt o ensur e tha t

al l o f th e Signatory Airlines , includin g th e Complainin g Airlines , woul db e protecte dfroman y downsid e an dwoul dbenefi t fromth e upsid e o f

th e FedE x agreemen t

No
. 3. " '^

^ Th e Authority contend s thi s cas e i s differen t fromJe t 1
. I n Je t I , accordin g t o th e Authority , th e argumen t

centere daroun dth e Naple s Airport Authority' s failure t o enforc e contrac t terms . Th e Authorit y counter s tha t th e "los t revenue " i n Je t

1 Cente r constitute d fijel-flowage fee s tha t

th e sponso r

ha dacontractua l righ t

t o updat e eac h year , whic h it faile dt o exercise."'^ ^ Th e Authority claim s tha t a n "airport sponsor' s failur e t o exercis e existin g contrac t rights an dit s spreadin g o f

resultin g losse s amon g othe r airport tenant s i s afa

r cry fromwha t

th e Complainin g Airline s objec t t o here : th e Authority' s failur e t o negotiat e a n eve n bette r agreemen t

wit h FedE x tha n th e on e i t

actuall y wa s abl e t o negotiate. " '^ ^ Th e Complainant s i n thei r Repl y stat e the y wil l not benefi t fromth e term s o f

Amendmen t No
. 3
. Th e Airline s maintai n tha t "Th e Landin g Fe e Ren t

Credi t schem e wil l impos e substantia l additiona l burden s o n th e Carriers , with acumulativ e ne t cos t reachin g nearl y $38,000,000 , t o subsidiz e th e expansio n o f th e Carg o Apro n for

FedEx' s exclusiv e use " I n addition , accordin g t o th e Complainants , "[i] t i s irrelevan t

becaus e whethe r

o r not FedEx' s increase doperation s reduc e th e percentag e o f landin g fee s pai db y othe r airline s o r th e landin g fee rat e declines , othe r airline s wil l b e payin g cost s associate dwith buildin g FedEx' s exclusiv e us e facility throug h highe r landin g fee s tha n i n th e absenc e o f th e Ren t Credits , an dunde r

FA A polic y the y canno t b e force dt o d o so."'^ ^

' " FAA Exhibi t

1 , Ite m1 , Pag e 1 4 '* " FAA Exhibi t

1 , Ite m1 , Pag e 1 4 '* ^ FA A Exhibi t 1 , Ite m10 , Pag e 3 9 '* * FAA Exhibi t

1 , Ite m10 , Pag e 3 9 '* ' FA A Exhibi t 1 , Ite m10 , Pag e 3 9 '* ' FA A Exhibi t 1 , Ite m12 , Page s 3 4 '* ' FA A Exhibi t 1 , Ite m12 , Pag e 3 4

4 1Th e Authorit y rebut s thi s an dstate s th e Complainant s are unrealisti c in thei r projecte d increase s in landin g fees.' ^ Sinc e landin g fee s reflec t airfiel dcosts , it

i s unlikel y landin g fee s woul dincreas e sevenfol ddurin g th e 20-year termo f Amendmen t

No
. 3
. Th e Complainant s stat e thei r projectio n i s conservativ e becaus e th e increase dFedE x acfivit y woul daccelerat e airfiel dexpenditures." ' Th e Complainant s stat e th e addifional landin g fee s tha t

FedE x woul dpay i s no t

th e point
. I t

i s th e Credi t

the y objec t

t o no t th e additiona l fee s tha t

FedE x woul dpay . The y stat e that an y carrie r

with agrowin g operatio n woul dpa y additiona l landin g fee s fromthei r additional frights, an dFedE x shoul dno t

hav e thei r

additiona l fee s reduce db y th e Credit.'^ ^ Th e Authorit y state s th e Complainant s di dno t

conside r th e benefit s t o th e othe r

airline s fromth e additiona l landin g fee s FedE x woul dpay fromit s additiona l flights t o IND.'^ ^ Th e Complainant s cite dfromearlie r FA A decision s t o suppor t thei r allegatio n that Amendmen t

No
. 3 violate s th e Rate s an dCharge s Policy
. Th e Complainant s cite d Naple s an dBombardie r

fo r proposition s that ,

• "airline s canno t

b e require dt o pa y for

facilitie s use dexclusivel y b y others ; ''' *
• "aeronautica l fee s may no t excee dth e cost s allocate dt o tha t use r o r use r group "
• "th e airport

canno t requir e an y use r

t o pay cost s properl y allocabl e t o anothe r user. " '^ ' Th e Complainant s conclud e that , "[h]ere , th e beneficiary i s FedEx , whic h effectivel y get s t o us e an denjo y a

n exclusiv e facility , whil e th e othe r airline s at

IN D wil l pa y fo

r avery substantia l par t

o f th e cos t o f tha t facility , becaus e eac h dolla r o f Landin g Fe e Ren t

Credi t wil l b e adde dt o th e airfiel dcos t cente r requirement , an dhenc e pai db y th e othe r airline s throug hhighe r

landin g fee s tha n woul db e th e cas e i n th e absenc e o f th e Landin g Fe e Ren t Credits
. In sum , tha t

schem e violate s th e FAA' s Rates/Charge s Policy , an d Respondents ' ineffectiv e rebutta l o n thi s poin t doe s not alte r tha t conclusion. " " ^ Th e Authority i n it s Rebutta l restate dit s contentio n tha t Amendmen t

No
. 3 wil l benefit , no t hai mth e Complainant s b y reducin g th e landin g fe e rat e the y wil l b e require dt o pay . I t stated,"..
. th e Complainin g Airline s wil l no t b e burdene dwit h payin g for FedEx ' s facilitie s becaus e FedE x wil l pa y fo r it s ow n facilities. " '''' ' Th e Authorit y further

explaine dtha t

th e Complainants , s o far , hav e benefite dfromth e Amendmen t

No
. 3 financial arrangements , "th e 200 8 landin g fe e rat e calculation s wer e performe din Jul y o f

2007 , in suc h away tha t the y gav e th e Signator y Airline s th e benefi t

' TM FAA Exhibi t

1 , Ite m10 , Pag e 3 0
' " FAA Exhibi t

1 , Ite m12 , Pag e 2 1
" ^ FA A Exhibi t

1 , Ite m12 , Pag e 2 3
' " FA A Exhibi t 1 , Ite m10 , Pag e 30-3 1
" " FA A Exhibi t 1 , Ite m12 , Pag e 3 4 '^ ^ FAA Exhibi t

1 , Ite m12 , Pag e 3 4
' TM FAA Exhibi t

1 , Ite m12 , Pag e 3 6 '^ ' FAA Exhibi t

1 , Ite m13 , Pag e 3 3
42o f

increase dFedE x lande dweigh t bu t di dno t includ e in 200 8 landin g fee rate s an y FedE x ren t

reductio n resultin g fromth e ren t credit
. Specifically , whe n th e Authority staf f budgete dth e landin g fee rate s fo r 2008 , staf

f conservativel y assume dtha t FedE x woul dno t qualif y for th e credi t

and , thus , woul dpay th e ftill amoun t o f th e Additiona l Special Facilitie s Ren t

in 2008
. In othe r

words , th e 200 8 Airport

Syste mrequiremen t wa s no t increase dt o accoun t

for ren t credi t reduction s t o FedEx' s rent . O n th e othe r hand , th e lande dweigh t

projection s use db y th e Authority staf f (for purpose s o f

estimatin g 200 8 landin g fe e rates ) wer e base don , amon g othe r things , FedEx' s increase dlande d weigh t (th e ver y sam e incrementa l lande dweigh t tha t resulte di n FedEx' s qualifyin g fo r th e credi t in th e first

place)."'^ ^ Th e Respondent s maintai n that "Th e ne t resul t i s that , in 2008 , th e Signatory Airlines , includin g th e Complainin g Airlines , ar e receivin g th e benefit—throug h lowe r landin g fe e rates—o f a n estimate dAirpor t

Syste mrequiremen t

(numerator ) tha t

doe s no t reflec t FedEx ' s reduce dAdditiona l Special Facilitie s Ren t cause db y th e ren t

credit , but

doe s reflec t FedEx' s increase dlande dweigh t in th e tota l lande dweigh t (denominator)
. Th e reconciliatio n t o th e actua l Airport Syste mrequirement , a s adjuste db y th e effec t o f FedEx' s ren t

credit , woul dnormall y b e include di n th e landin g fe e rat e estimate s for 2009
. However , th e Authorit y ha s offered , an dth e Signatory Airline s hav e indicate d unanimousl y tha t

the y wis h t o accept , anegotiate dfixedlandin g fe e rat e for th e balanc e o f th e termo f

th e Signatory Agreemen t basedo n 200 8 levels...A s aresult , th e Signatory Airline s wil l hav e "frozen " i n plac e th e advantage s stemmin g fromth e timin g o f th e landin g fee rat e calculafion s for 2008."" ^ Th e Directo r

conclude s tha t

th e benefit s o f

FedEx' s landin g fee s for th e ne w operation s d o no t cance l ou t

th e issu e o f

chargin g FedEx' s facility cost s t o th e othe r carriers
. FedEx' s additiona l operation s wil l impos e cost s o n th e airfiel dproportionat e t o th e additiona l fee s i t

i s payin g in th e for

mo f pavemen t

wear an dairpor t

operation s cost . Th e Rate s an dCharge s Polic y recognize s tha t th e FA A wil l appl y th e polic y guidanc e i n al l case s i n whic h th e agenc y i s calle dupo n t o determin e i f a n airpor t sponso r i s carryin g ou t it s obligatio n t o mak e th e airport availabl e o n reasonabl e terms . Th e FAA' s rol e i n matter s i n whic h suc h adisput e i s processe dunde r Part 1 6 i s t o determin e whethe r th e airpor t proprieto r

i s in complianc e with it s gran t obligation s an dstatutory obligation s relatin g t o airport

fees
. Th e FA A proceedin g i s not intende dt o provid e amechanis mfor adjudicatin g th e respectiv e right s o f th e partie s t o afe e dispute. ' ° No r i s i t th e forumfor revie w o f contractua l disputes
. Suc h issue s ar e matter s o f stat e contrac t

law an dare no t reviewabl e in aPart

1 6 proceeding
. Thi s i s consisten t wit h th e positio n th e FA A ha s take n on prio r

case s raisin g stat e contrac t claims
. Se e Consolidate dService s v . City o f Pal mSprings
. FA A Docke t No
. 16-03-0 5 (Jun e 10 , 2004)
. Boc aAirport
. Inc
. v . Boc a Rato n Airport

Authority
. FA A Docke t

No
. 16-00-1 0 (Apri l 26 , 2001) , an dMorri s Walle r an dM& M Transportatio n v . Wichit aAirpor t Authority , FA A Docke t No
. 16-98-1 3 (Marc h12 , 1999)
.

TM FA A Exhibi t

1 , Ite m20 , Page s 8- 9
' TM FAA Exhibi t

1 , Ite m20 , Pag e 9 18 0 Rate s an dCharge s Policy , Sectio n C
4 3Onc e th e Leas e Agreemen t expire s an dassumin g it

i s no t renegotiated , i f

th e Authority wer e t o unilaterall y impos e th e cos t o f th e Credi t

o n th e Airline s servin g th e Airport , thos e Airline s coul dthe n seek relie f unde r th e Rate s an dCharge s Polic y becaus e thei r rate s an dcharge s woul dn o longe r b e set b y awritte n agreement , an dth e Credi t woul d the n b e subjec t

t o th e Policy
. Th e Rate s an dCharge s Polic y offer s th e airline s tw o significan t

protections : a

n airpor t ma y no t withou t writte n agreemen t

includ e exclusiv e us e facilitie s i n it s rat e base,' ^ andlimit s cost s that can b e include din it s commo n us e rat e base.'^ ^ I n addition , th e Complainant s may hav e recours e i n other venue s t o adjudicat e dispute s arisin g ou t o f th e Leas e Agreement
. Summar y Th e disput e i n thi s Complain t i s whethe r

th e Authorit y wa s require dt o obtai n th e approva l o f

th e Signatory Airline s prio r t o enterin g int o Amendmen t No
. 3
. Th e Complainant s stat e the y di dno t giv e thei r

approval , whic h th e Authority disputes
. Unde r th e maste r

Leas e Agreement , approva l i s not require dfor

aSpecia l Us e Facility wher e th e sol e cos t

i s at th e expens e o f

th e aeronautica l tenan t

tha t wil l us e th e facility
. I f

cost s are t o b e passe don , the n i t doe s no t appear tha t th e requirement s fo

r aSpecial Us e Facility ar e me t

an dth e Airline s mus t

agre e t o an y additional costs . Th e Directo r

conclude s that

th e Authorit y ha s ye t

t o impos e afinancial requiremen t t o cove r th e cos t o f th e FedE x Credi t

o n th e Complainants
. Th e Directo r finds th e Airline s d o no t nee dPart

1 6 t o determin e th e Respondents ' gran t complianc e a s th e Authority ha s ye t t o unilaterall y impos e th e provision s o f Amendmen t

No
. 3 o n th e term s o f

th e Leas e Agreement
. Moreover , sectio n 8.01(D ) an d8.0 3 o f th e Leas e Agreemen t

provid e th e Complainant s with substantia l protectio n i n acivi l proceedin g a s wel l a s unde r sectio n 17.04 , whic hstipulate s th e law s o f th e Stat e o f

Indian aan dFedera l law govern th e Leas e Agreement
. A s discusse dextensivel y herein , th e evidenc e doe s no t suppor t afinding o f

aviolatio n o f Gran t Assuranc e Nos
. 22 , 23 , 24 , an d25
. In thi s case , th e cost s for th e Credi t

wil l no t b e imposed , i t

at all , unti l a

t leas t th e expiratio n o f

th e Leas e Agreemen t

i n Decembe r

201 0 s o ther e i s n o controvers y rip e for revie w b y FAA
. I f

th e partie s hav e adisput e regardin g thei r signatory Leas e Agreement , Part 1 6 i s not th e prope r

venu e fo r resolvin g thes e type s o f contrac t disputes ; othe r

civi l remedie s ar e availabl e t o th e Complainant s t o addres s dispute s relate dt o th e Leas e Agreemen t an dth e FedE x Credit
. VIII
. FINDING S AN D CONCLUSION S Th e Directo r

finds th e Authority di dno t violate :

• Gran t Assuranc e 2 2 Economi c Nondiscrimination , becaus e (i ) th e Authority ha s ye t t o impose th e cos t

o f th e Credi t

i n calculatin g th e landin g fee rat e unde r th e

'* ' Rate s an dCharge s Policy , Sectio n D
. '^ ^ Rate s an dCharge s Policy , Section s C & D an dsubsectio n 2

4 4• Leas e Agreemen t andha s offere dno t

t o impos e suc h acos t

durin g th e termo f th e Leas e Agreement
. Gran t Assuranc e 2 3 Exclusiv e Rights , a s th e Credi t doe s no t exclud e Complainant s fromany permitte daeronautica l activity , an dth e Authority ha s not denie dth e Complainant s similar opportunitie s t o ear

n renta l Credits
. Gran t Assuranc e 24 , Fe e an dRenta l Structure , becaus e th e Complainant s are no t currentl y payin g th e cost s for afacilit y whic h wil l b e exclusivel y use db y FedEx
. Gran t Assuranc e 2 5 Airport

Revenues , becaus e th e Credi t i s no t asubsidy ; n o showin g o f

unlawfu l revenu e diversio n ha s bee n establishe dsinc e al l Airport Syste mOperatin g Revenue s remai n o n th e Airport regardles s o f

th e impositio n o f th e Credit , whic h ha s ye t t o occur . ORDE R ACCORDINGLY , it

i s ordere dthat : 1
. Th e Complain t

i s dismissed
. 2
. Al l motion s no t

specificall y grante dherei n ar e denied
. RIGH T T O APPEA L Thi s Director' s Determinatio n i s a n initia l agenc y determinatio n an ddoe s no t constitut e final agenc y actio n subjec t t o judicia l revie w unde r

4 9 U.S.C
. § 46110.'^ ' A part y t o thi s proceedin g adversel y affecte db y th e Director' s Determinatio n may appea l thi s initia l determinatio n t o th e FA A Associat e Administrato r fo r Airport s pursuan t

t o 1 4 CF R§ 16.33(b ) withi n thirty (30 ) day s after servic e o f

th e Director' s Determination
.

Randal l S
. Fiert z Dat e Directo r Airport Complianc e & Fiel dOperation s

183 Se e als o 1 4 CFR§ 16.24 7
4 5Exhibi t 1 Northwes t

Airlines , Inc. , Delt aAirlines , Inc
. AirTra n Airway s Inc. , Continenta l Airlines , Inc
.

Southwes t

Airlines , Inc
. Indianapoli s Airpor t

Authority , Indianapoli s Internationa l Airport , BAA-Indianapoli s

Docke t No
. 16-07-0 4 INDE X O FTH E ADMINISTRATIV E RECOR D Th e followin g item s constitut e th e administrativ e recor di n thi s proceeding : FA A Exhibi t

1 Item l Complain t

No
. 16-07-0 4 date dApri l 13,2007 , includin g appendice s containin g th e followin g documents :
aExhibi t

1 Amendmen t

No
. 3 t o Amende dan drestate dLan dLeas e Agreemen t Betwee n Indianapoli s Airpor t Authority an dFedera l Expres s Corporation , date dApri l 14 , 2006
. Q Exhibi t

2 IN D FedE x Sor

t Facility Apron-Airport

Leas e Dea l - Projections
.

• Exhibit s Declaratio n o f Eri n L
. Heitkamp , Apri l 12 , 2007
. • Exhibi t

4 Lette r

fromEri n L
. Heitkamp , Chairperso n IN D AAA C t o Mr
. Lac y Johnson , Boar dPresident , Indianapoli s Airport Authority , Ma

y 5 , 2006
. Ite m2 Motio n o f

Continenta l Airlines , In c t o Joi n Complain t a s aJoin t

Complainant , Apri l 20 , 2007
. Ite m3 Answe r t o Motio n o f

Continenta l Airlines , Inc
. t o Joi n Complain t a s aJoin t

Complainan t

Ma y 1 2007
. Ite m4 Motio n Requestin g Extensio n o f Time , Ma y 1 , 2007
. Ite m5


### '"''Time , Ma y 2,200 7Ite m6

Motio n o f

Southwes t

Airline s Co
. t o Joi n Complain t a s aJoin t Complainant , May 4 , 2007
. Ite m7 FAA Orde r

t o gran t Continental' s Motio n t o joi n Complain t a s aJoin t Complainant , May 4 , 2007
. Item s Answe r t o Motio n t o Southwes t

Airline s Co
. t o Joi n Complain t a s aJoin t

Complainant , May 9 , 2007
. Ite m9 Notic e t o Al l Partie s t o delet e Ro n Rick s an dDeborahAckerma n a s representative s o f Southwes t Airlines , Co. , Jun e 4 , 2007
. Ite m1 0 Answe r an dMotio n t o Dismiss , Jun e 4 , 2007 , includin g th e followin g exhibits :
aExhibi t

A Affidavi t

o f Joh n J
. Kish , Jun e 1 , 2007
. • Exhibi t

B Federa l Expres s Apro n Expansio n (Draft) , Apri l 3 , 2006 , Lette r from Patric k F
. Dooley , SCMD , Airport Director , BA A Indianapoli s LL C t o Mr
. Dan Hindes , Northwes t Airlines , Inc , Apri l 5 , 2006 , an d Agreemen t

an dLeas e o f

Premise s a

t Indianapoli s Internationa l Airport withIndianapoli s Airpor t Authority , Indiana , Marc h15 , 2001
. • Exhibi t

C Amende dan dRestatedLan dLeas e Agreemen t an dexhibits , Augus t 19 , 1993 , Amendmen t

No
. 1 t o Amende dan dRestate dLan dLeas e Agreemen t

an dexhibits , Octobe r

26 , 1994 , an dAmendmen t No
. 2 t o Amende dan dRestate dLan dLeas e Agreemen t an dexhibits , Jun e 5 , 2000
. • Exhibi t

D Amendmen t

No
. 3 t o Amende dan drestate dLan dLeas e Agreemen t Betwee n Indianapoli s Airport Authorit y an dFedera l Expres s Corporation , date dApri l 14 , 2006
. • Exhibi t

E Airlin e Activit y Report , Decembe r 2006
. aExhibi t

FE-mai l Heitkamp , Eri n t o Patric k Dooley , February 8 , 2007
. Include s tabl e attachment
. • Exhibi t

GE-mai l exchang e betwee n Heitkamp , Eri n an dPatric k Dooley , January 31,2007
. Include s tabl e insert
. aExhibi t

H None , aExhibi t

I Indianapoli s Airport Authorit y Analysi s o f

FEDE X Amendmen t

Ju n 2007
. (Table)
. • Exhibi t

J Indianapoli s Airpor t Authorit y Analysi s o f

FEDE X Lande dWeight s Fo r th e Perio d200 5 throug hMarc h2007
. (Table)
. • Exhibi t

K Affidavit , Joh n George , Jun e 1 , 2007
. • Exhibi t

L Lette r

fromPatric k

F
. Dooley , SCMD , Airpor t Director , BA A Indianapoli s LL C t o Eri n Heitkamp , Northwes t Airlines , Inc. , May 3 ,

472006 , an dLeas e Synopsi s Federal Expres s [1 3 pages]
. Report date d January 31 , 2007
. aExhibi t

M IN D Lande dWeights , Passenge r v . cargo , 1990-2005
. Q Exhibi t

N Lette r

fromDavi dL
. Bennett , Assistan t Chie f Counse l for

Airport s an dEnvironmenta l Law , FAA , t o Josep hR
. Niemann , General Counsel , Cit

y o f St
. Loui s Airport

Authority , Decembe r

2 , 1993
. aExhibi t

H New s Articl e entitle dAddin g Multimedi aFedE x Express , Indianapoli s Airport Authority Unvei l Plan s for Expansio n o f

Carrier' s Hub , Ma

y 4 , 2006
. Ite m1 1 Unoppose dMotio n for

Extensio n o f

Time , Jun e 8 , 2007
. Ite m1 2 Repl y an dAnswe r

t o Motio n t o Dismis s o f

Northwes t

Airlines , Inc. , Delt aAi r

Lines , Inc. , Airtran Airways , Inc. , Continenta l Airlines , Inc. , an dSouthwes t Airlines , Inc. , Jun e 25 , 2007
. Include dDeclaratio n o f

Eri n L
. Heitkamp , Jun e 22 , 2007
. Ite m1 3 Rebuttal , Jul y 16 , 2007 , includin g th e followin g exhibits :
aExhib hA Rebutta l Affidavi t o f Joh n J
. Kish , Jul y 12 , 2007
. aExhibi t

B Financia l tables , numbere dExhibit s C throug hG
. aExhibi t

C Indianapoli s Internationa l Airport , Mem o fromJeanni e Weis s t o Bo b Duncan , (undated ) Q Exhibi t

D Signatory Airlin e Rate s an dCharge s for th e Las t Te n Year s Ende d Decembe r

31
. aExhibi t

E Lette r

fromJoh n J
. Kish , Midfiel dProjec t Director , Ne w Indianapoli s Airport , t o Eri n Heitkamp , Northwes t Airlines , Inc. , Jun e 13 , 2007
. Include s tw o financial tables
. Ite m1 4 Motio n fo r Leav e t o Fil e an dRespons e o f Northwes t

Airlines , Inc. , Delt aAi r

Lines , Inc. , Airtran Airways , Inc. , Continenta l Airlines , Inc. , an dSouthwes t Airline s Co. , Jul y 30 , 2007
. Ite m1 5 Respondent' s Answe r

t o Complainin g Airlines ' Motio n for Leav e t o Fil e an dResponse , Augus t 9 , 2007
. Ite m1 6 FAA For m5010 , date dNovembe r 14 , 200 7 Ite m1 7 Notic e o f Extensio n o f

Time , Decembe r

5 , 2007
.
4 8CERTIFICAT E O FSERVIC E
I HEREB Y CERTIF Y tha t o n AU G 1 , I cause dt o b e place di n th e Unite dState s mai l (firs t clas s mail , postag e paid ) atru e cop y o f th e Director' s Determinatio n date d< g | \ q|Q S an daddresse dto :

Pabl o O
. Niiesc h Jeffrey A
. Schwar z Spiege l & McDiarmi d 133 3 Ne w Hampshir e Ave. , N W Washington , D C 2003 6 Gar y Bunce , Assistan t

Genera l Counse l Eri n Heitkamp , Reg' l Director/Airport Affair s Northwes t

Airlines , Inc
. 270 0 Lon g Oak

Parkwa y Eagan,M N 5512 1 Josep hZang , Assistan t

General Counse l Rebecc aBays , Genera l Attorne y Delt aAi r Lines , Inc
. 103 0 Delt aBoulevar d Atlanta, GA 3032 0 Richar dP
. Magun p Senio r Vic e Presiden t

& Genera l Counse l AirTra n Airways , In c 995 5 Airtra n Boulevar d Oriando,F L 3282 7 Thoma s Newto n Boilin g Managin g Attorney , Regulatory Affair s Continenta l Airlines , Inc
. P.O
. Bo x 460 7 - HQSL G Houston , TX 77210-460 7 Robert W
. Kneisley , Associat e Gen
. Counse l Lesli e Carr , Attorne y Southwes t

Airline s Co
. 1901LSn-eet,N.W
. Suit e 64 0 Washington , D C 2003 6 Lorrain e B
. Hallowa y Crowel l & Morin g LL P 100 1 Pennsylvani aAvenue , N W Washington , D C 20004-259 5
Robert E
. Coh n Jonatha n L
. Abram Patric k R
. Rizz i Hoga n & Hartson , L.L.P
. 55 5 ThirteenthStreet , N W Washington , D C 2000 4

FA A Par t

1 6 Airpor t

Proceeding s Docke t

Airpor t Complianc e an dFiel dOperation s