FAA: SMA should pay past due ASAP

The Federal Aviation Administration has finally issued a decision in Star Marianas Airlines’ complaint against the Commonwealth Port Authority regarding its fee and methodology rate and has found CPA to be in compliance with federal laws and therefore SMA must pay its past dues of over $3 million as soon as possible.

Back in January 2022, SMA sent out an informal complaint to the FAA accusing CPA of unilaterally imposing new rates in October 2021 and that CPA allegedly violated its federal obligation to impose reasonable rates and charges pursuant to FAA policy regarding airport rates and charges.

According to a letter issued by FAA’s Brian Armstrong to SMA president Shaun Christian, the FAA has determined that CPA did not violate its grant obligations as it relates to reasonableness of the fees CPA charges.

Specifically, the FAA found that there is no federal regulation requiring any single approach to rate setting other than that the methodology be applied consistently to similarly situated aeronautical users and conforms to the U.S. Department of Transportation’s Policy regarding airport rates and charges.

Additionally, Armstrong said, the policy only states that airline rates and fees may not unjustly discriminate against aeronautical users.

“United States code requires airports to, at a minimum, be as self-sustaining as possible when entering into new agreements or establishing rates, charges and fees,” he said.

Because of these findings, SMA has been instructed to resolve all delinquent accounts with CPA and to pay all its past due fees.

“The Policy Regarding Airport Rates and Charges (78 FR 55330, September 10, 2013) Local Negotiation and Resolution Section 1.1.6 provides that any newly established fee or fee increase that is subject of a complaint under Title 49 USC 47129, that is not dismissed by the Secretary, must be paid to the airport proprietor under protest by the complainant. SMA should pay any past due fees to the airport as soon as possible to resolve any delinquent accounts on SMA’s part,” he said.

The FAA has also found that the informal complaint requires no further action on FAA’s part.

“Based on our investigation, the FAA finds this informal complaint warrants no further FAA action. This preliminary determination is not a final agency decision subject to judicial review. If you believe this office has erred, you may file a formal complaint under 14 Code of Federal Regulations (CFR) Part 16, Rules of Practice for Federally Assisted Airport Enforcement Proceedings,” said Armstrong.

According to data acquired from the CPA, as of Jan. 31, 2023, SMA owes CPA $3,179,150.64 in fees.

In addition, SMA also owes CPA $1,579,953.35 in interest, bringing the overall total balance to $4,759,103.99.

The aviation fees included in CPA’s report dates back to February 2014.

SMA allegedly made its last partial payment in May 2015.