November	19,	2012

Docket	Management	Facility U.S.	Department	of	Transportation 1200	New	Jersey	Avenue	SE,	West	Building Ground	Floor,	Room	W12

– 140 Washington	DC	20590

– 0001

RE: Docket	no.	FAA

- 2009

- 1144:	Application	of	the	Puerto	Rico	Ports	Authority
and	Puerto	Rico	Public

- Private	Partnerships	Authority	for	the	Participation	of	Luis Muñoz	Marín	International	Airport,	San	Juan,	Puerto	Rico	(SJU)	in	the	Airport
Privatization	Pil ot	Program

The	National	Business	Aviation	Association	(NBAA)	submits	this	letter	with	respect	to the	pending	application	to	privatize	Luis	Muñoz	Marín	International	Airport	(SJU), pursuant	to	the	requirements	of	the	Airport	Privatization	Pilot	Program	(4 9	U.S.C.	§ 47134).		NBAA	represents	the	interests	of	more	than	8,000	companies	that	operate general	aviation	aircraft	as	an	aid	in	the	conduct	of	their	business	or	that	are otherwise	involved	in	business	aviation.		NBAA’s	membership	includes	companies
that are	based	at	SJU,	as	well	as	companies	that	utilize	SJU	on	a	transient	basis,	and thus	NBAA	and	its	members	have	a	direct	interest	in	the	pending	application.

NBAA	supports	the	FAA’s	ongoing	efforts	to	improve	the	national	aviation	system,
and	understand s	that	the	privatization	of	SJU	could	be	beneficial	for	general	aviation
users	and	other	users

– as	long	as	certain	requirements	are	met.		The	statutory requirements	for	the	privatization	of	an	airport	through	the	pilot	program	begin	with the	requirement	t hat	the	privatized	airport	must	remain	open	for	“public	use	on reasonable	terms	and	conditions	and	without	unjust	discrimination.” See § 47134(c)(1).		In	addition,	steps	must	be	taken	to	ensure	that	“the	interests	of	general aviation	users	of	the	airport are	not	adversely	affected.” See §	47134(f).		Another set	of	provisions	places	a	inflation

- based	cap	on	landing	and	other	fees	for	air carriers	(absent	the	consent	of	a	supermajority	thereof)	and	extends	that	cap	to general	aviation	by	providing	that	the percentage	increase	in	fees	imposed	on general	aviation	operators	will	not	exceed	the	percentage	increase	in	fees	imposed

on	air	carriers. See §	47134(c)(4)	and	(5).

The	application	confirms	that	the	proposed	SJU	concessionaire,	Aerostar	Airport Holdings, LLC	(“Aerostar”),	has	agreed	to	abide	by	these	and	all	other	statutory requirements.		Aerostar	also	has	promised	to	establish	a	liaison	as	a	point	of	contactNovember	19,	2012
Docket	No.	FAA

- 2009

- 1144 Page 2 of 3

for	general	aviation	users,	both	during	the	management	transition	and	thereafter,
and	stated	that it	will	invest	in	capital	improvements	of	benefit	to	general	aviation users.		NBAA	appreciates	these	commitments

– but	presumes	that	FAA	will	monitor Aerostar’s	compliance	with	them	on	a	going

- forward	basis,	under	the	authority	of	(i) the	privatization	st atute;	(ii)	the	AIP	grant	assurances,	which	will	continue	to	apply	to SJU;	and	(iii)	the	agency’s	general	oversight	authority.

There	are	two	general	aviation

- related	issues	that	should	be	addressed	at	this	time. The	first	concerns	the	very	real	possibili ty	that	the	economies	of	privatization	will produce	lower	landing	fees	at	SJU.		Indeed,	at	the	hearing	held	on	September	28, 2012,	Emmett	McCann

– the	Managing	Director	of	Highstar	Capital	(one	of	the venture	partners	in	Aerostar)

– stated	that	airlines	co uld	look	forward	to	a	reduction in	their	current	fees	under	Aerostar’s	management	of	SJU.		That	would	be	good news	for	the	airlines,	but	it	also	should	be	good	news	for	general	aviation.		The privatization	statute	does	not	give	an	airport	operator	the	abil ity	to	create	a	tiered landing	fee	structure.		All	users	must	be	treated	in	the	same,	non

- discriminatory fashion.		If	landing	fees	go	up,	they	go	up	for all users;	if	they	go	down,	they	go	down
for all users.		The	statutory	and	assurance	language,	as	well as	the	FAA’s	Policy Regarding	Airport	Rates	and	Charges,	is	clear	on	this.		Nonetheless,	to	avoid confusion	NBAA	recommends	that	approval	of	the	application	include	an	explicit
condition	that	both	fee	increases	and decreases must	apply	equally	to	air	carri ers and	to	general	aviation.

Second,	NBAA	is	concerned	that	the	SJU	privatization	could,	indirectly,	cause	the rates	for	general	aviation	users	at	other	airports	in	Puerto	Rico	to	increase,	and recommends	that	this	issue	be	given	careful	consideration	by FAA	before	the application	is	approved.		The	lease	agreement	between	Aerostar	and	the	Ports Authority	provides	that	at	least	$25	million	(and	possibly	more)	will	be	designated for	the	improvement	of	the	regional	airports	which	will	continue	to	be	administe red by	the	Ports	Authority.		But	it	is	not	clear	that	this	set

- aside	will	be	enough	to prevent	a	long

- term	decline	in	the	funds	available	to	regional	airports,	which currently	benefit	from	being	part	of	the	same	airport	system	as	SJU.		That	loss,	in
turn, could	require	significant	increases	in	rates	at	the	remaining	airports

– primarily for	general	aviation	users,	because	the	regional	airports	have	only	limited	air	carrier services	(and	section	3.22	of	the	lease	provides	a	disincentive	to	the	development	of air	carrier	services	at	regional	airports	presently	unserved).November	19,	2012
Docket	No.	FAA

- 2009

- 1144 Page 3 of 3

The	Ports	Authority	describes	its	current	regional	airport	rates	as	“well	below	cost

recovery.”	NBAA	does	not	dispute	that	the	Ports	Authority	has	a	grant	assurance

based	obligation	to	set	fe es	at	sustainable	levels,	but	at	the	same	time	the privatization	of	SJU	and	loss	of	its	revenues	should	not	be	structured	to	cause	a “system	shock”	that	will	have	a	deleterious	effect	on	general	aviation	elsewhere. NBAA	recommends	that	careful	analysis	by FAA	is	needed	of	to	what	extent	regional airports	in	Puerto	Rico	currently	benefit	from	part	of	the	same	airport	system	as	SJU, and	whether	the	proposed	Regional	Airport	Support	Fund	will	be	an	adequate replacement.

NBAA	appreciates	the	opportunity	to	su bmit	these	comments,	and	looks	forward	to continuing	to	work	with	the	FAA. Please	let	us	know	if	we	can	provide	any	addition al information	or	perspectives.

Sincerely,

Douglas	Carr
Vice	President Safety,	Security	&	Regulation