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COMPLIANCE ISSUES RAISED 9-25-17 LMS

Representatives from Gem Air Aviation met with the Lemhi County Commissioners and County Attorney Bruce Withers Monday, September 25, to report that their locally based aviation service is struggling with some of the recent decisions made by the Lemhi County Airport Board. They also said the Airport Board is not acting in compliance with the Federal Aviation Administration Airport Compliance Manual.

Representative for Gem Air, Jo Schroeder, said while the company needs the airport and wants it to be successful she feels the board is expecting Gem Air to contribute an unfair share of the revenue required to run the public facility. Of equal importance she said the airport is partially funded by federal dollars and part of the requirements for federal funding is compliance with the FAA Airport Compliance Manual, specifically the prices Gem Air is being charged for fuel.

Under the heading “Comparable Rules and Rates,” the Compliance Manual states “…regardless of whether an air carrier or user is a tenant, subtenant, or non-tenant the sponsor must impose nondiscriminatory and substantially comparable rates, fees, rentals, and charges on all air carriers and users that assume similar obligations, use similar facilities and make similar use of the airport.” She said the rates that are being charged Gem Air are, “…blatantly discriminatory and not comparable in any way, shape or form.”

Schroeder believes recent board actions are a reaction to the Gem Air’s decision to buy its own fuel rather than purchase county fuel. The local fuel flowage fee was $0.25 per gallon until it was raised to $.78 per gallon last August by the Airport Board.

By comparison the fuel flowage fee in Challis is $.03, in Boise its $.05 and in McCall $.08. She said the current Lemhi County Airport fuel rates are over eight times what they would pay in McCall and are 27 times what Gem Air would pay in Challis.

Schroeder said there are alternate ways to generate revenues other than the fees being imposed on just one company. She suggested charging an equal flowage fee to all users including the Forest Service who now pays on a flat fee basis. She said, “Basically, our argument is that with these rates and this fee structure, we’re being expected to pay what would have come out last year to around 45 percent of the operating revenue for the airport.” She said that asking one operator to pay that much of the operational percentage is asking one business to fund public use of the airport for everyone else that uses it.

Gem Air’s David Shroeder said that taking a regulatory view; having two flowage fees, one for private contractors and one for Gem Air, is a violation of non-discrimination which puts the airport in jeopardy. He said the airport’s future plans for improvement projects such as ramps and taxiways make federal funds very important.

He said as a business climate it has become so expensive for Gem Air to do business in Salmon it would be more cost effective to base its operations in Challis or Boise. He said that revenue generation here is so heavily weighted towards fuel sales the actual costs of the airport are not being split among the true users.

The County Commissioners took the matter under advisement and referred the information presented by Gem Air to the County Prosecutor. They asked Withers to check on FAA rules of compliance and in the interest of making sure everyone is following the same rules they also asked him to obtain a list of other contractors with fuel trucks at the airport.

As to how the goal of providing commuter service to the rural Salmon area is progressing, the commissioners were told that Gem Air LLC is 18 months into a three-year, $150,000 Small Community Air Service Development grant and has used half of the available funds. The purpose of the grant is to help develop sustainable commuter services and the only flights that are grant -reimbursable are the commuter trips. Summer-season recreational and scenic flights are not considered as ‘commuter.’

Jo Schroeder reported that in March, April and May of 2016 there were 60 commuter passengers and during the same months in 2017 there were 111. She said the numbers will have to continue to go up in order to make commuter service sustainable but, “We are making progress.”

The company has recently instated a 10-pack program in which if 10 one-way tickets are bought, which equals five round trips; there is a savings of over $700. She said there are a number of Salmon businesses using the package plan.


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