FAA Rules Against Santa Monica in Airport Revenue Surplus Complaint | Aviation International News

Regulations and Government

FAA Rules Against Santa Monica’s Airport Revenue Surplus

City must adhere to federal law on airport revenue use

Santa Monica, California city hall — The city of Santa Monica, California, has run afoul of FAA regulations with its plan to withhold surplus airport revenues for municipal use after the scheduled closure of beleaguered Santa Monica Municipal Airport at the end of 2028. © Matt Thurber/AIN

By Curt Epstein • Business Aviation Services Editor

January 6, 2026

The FAA has found the city of Santa Monica, California, in violation of grant assurances as it stockpiled surplus revenues generated by Santa Monica Municipal Airport (KSMO), which is scheduled to close on Dec. 31, 2028. By accumulating surplus airport revenues it intended to spend on general city services after KSMO’s closure, FAA director Michael Helvey ruled the city had violated federal law, which requires all airport revenues collected from aeronautical and non-aeronautical activities, such as airport real estate leases, to be spent on airport operations or improvements.

In 2024, a complaint filed by a pilot and a KSMO-based repair station, with support from NBAA, accused the city of failing to use the entire airport revenue surplus to reduce rates charged to aviation users. While the city slashed KSMO’s aeronautical use rates, the airport is slated to close with a non-aeronautical surplus of approximately $19 million, which it believed could be used for municipal expenditures.

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