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Fractional Aircraft Ownership News
Tips for Certificate Holders: Managing and Enhancing Your FSDO Relationship
October 30, 2006
As a certificate holder, you have to stay safe, compliant, and make enough money to stay in business. Are those goals mutually exclusive? Much of the answer to that question depends on your relationship with your FAA Flight Standards District Office (FSDO) and, in particular, Inspectors. A new article prepared for NBAA Members, entitled "Tips for Certificate Holders: Managing and Enhancing Your FSDO Relationship," offers extremely useful advice for certificate holders, including fractional programs, charter operators and repair stations on how to manage and enhance your FSDO Relationships. The author, a Member of NBAA's Part 135 Committee, has experience as both an FAA Inspector and a certificate holder. View the article at: http://web.nbaa.org/member/ops/part135/20061030fsdo.php
Braking Action Common Terms Recommended by Industry-FAA Workgroup
October 5, 2006
Due in part to industry requests for standardized guidance and concerns over adequately maintained winter runways, last August the FAA hosted a Runway Condition Determination, Reporting and Report Dissemination Workshop. The workshop's Common Terms and Definition Working Group developed a braking action document of standardized definitions and estimated correlations based on runway surface conditions and runway friction Mu values. The workgroup has requested all operators to voluntarily incorporate these definitions into their operations manuals for this winter season. The FAA continues its work with landing-distance issues. Turbojet fractional and charter operators have been encouraged by the FAA to review a safety alert for operators (SAFO) related to landing performance assessments at time of arrival, and to voluntarily comply with a new OpSpec/MSpec C382 on the same topic. NBAA has announced a discussion group to meet on October 18 from 1:30 to 3:00 p.m. during NBAA2006. To attend this session, RSVP to NBAA's Mike Nichols at mnichols@nbaa.org. Review the braking action terms and the SAFO. (27KB, PDF)
FAA Issues Pre-Takeoff Safety Alert for Operators
September 18, 2006
Following the tragic airline accident in Lexington, KY as a result of the aircraft departing from the wrong runway, FAA issued a Safety Alert for Operators (SAFO) regarding flight crew techniques and procedures that enhance pre-takeoff and takeoff safety. Flight crews and flight operations managers and trainers should be familiar with the content of this SAFO and work to ensure that the content of this SAFO is provided to pilots during ground training, and that the techniques are reinforced in flight training, supervised operating experience, line checks and proficiency checks. Read the SAFO at: http://web.nbaa.org/public/ops/safety/SAFO06013.pdf
FAA Drops Landing Distance Assessment OpSpec to Pursue Rulemaking
September 1, 2006
The FAA has issued a safety alert for operators (SAFO) regarding "Landing Performance Assessment at Time of Arrival" for turbojet aircraft. The SAFO is based on the FAA policy statement on this topic that was published on June 7, 2006, and applies to air carriers, including business aviation operating under Part 135, Part 91 Subpart K or Part 125. While not mandatory, the FAA strongly encourages operators to voluntarily comply with a new C382 Operations Specification (OpSpec), which is similar to the draft C082 that will no longer be mandatory this year. NBAA will continue to press FAA to obtain answers to questions that the industry posed this summer, and NBAA will participate in the rulemaking process. Read the SAFO.
NBAA Schedules Landing Distance Assessment Discussion at Convention
September 1, 2006
Business aviation commercial operators affected by the landing distance SAFO/voluntary OpSpec and pending rulemaking initiative (affecting Part 135, Part 91 Subpart K and Part 125 operations) are encouraged to participate in a new discussion session scheduled for Wednesday, October 18, during the NBAA 59th Annual Meeting & Convention (NBAA2006) in Orlando, FL. This session will be an opportunity for operators to discuss the SAFO, ask implementation questions and share lessons learned while working to implement the voluntary OpSpec. Available information on FAA's progress towards a rulemaking initiative will be discussed by NBAA staff. To RSVP for this session and obtain the meeting details, e-mail NBAA's Mike Nichols at mnichols@nbaa.org. For more information about NBAA2006 or to register, visit: http://www.nbaa.org/2006.
ECAC Discusses Fractional Operations
On December 7, 2005, the members of the European Civil Aviation Conference (ECAC) met in Paris, France, with a full agenda that included briefings on recent progress related to fractional aircraft programs. A recent letter sent from TSA Administrator Kip Hawley to ECAC Executive Secretary Raymond Benjamin stating TSA intention to establish a security protocol for fractional operations appeared to answer questions regarding the U.S. commitment to security. Additionally, ECAC agreed to establish a task force to review and implement a European fractional regulation. NBAA remains close to the issue and will assist the task force as it begins its work. For additional information, contact NBAA's Doug Carr at dcarr@nbaa.org.
TSA Offers Plan on Fractional Aircraft Security
On November 22, 2005, the Transportation Security Administration (TSA) sent a letter to European Civil Aviation Conference (ECAC) Executive Secretary Raymond Benjamin outlining the TSA's plan to address security for fractional flights operating into Europe. TSA's letter notes that the Twelve-Five Standard Security Program (TFSSP) provides a foundation for many of the possible requirements and that the industry could easily adopt many of the measures. ECAC will meet December 7 and 8 in Paris and likely will finalize any decisions on this issue. For additional information, contact NBAA's Doug Carr at dcarr@nbaa.org. Review the TSA letter at:
http://web.nbaa.org/member/ops/security/TSALetter20051122.pdf
Industry Working Group Finalizes Proposal for European Fractional Regulations
An international industry working group (IWG) has finalized a proposal that outlines a framework for European regulators considering formal regulations for fractional ownership programs. The IWG, formed at the request of the ECAC Special Task Force on Fractional Ownership, focused on the economic and safety regulation of business aircraft in both private and public transport operations. The working group's recommendations address a variety of issues in addition to fractional aircraft operations, including foreign on-demand operations into the U.S. and Fifth Freedom issues. The report will be delivered to the ECAC Special Task Force in preparation for the ECAC Directors General meeting next week in Paris. For additional information, contact NBAA's Doug Carr at dcarr@nbaa.org.
FAA Provides NBAA with Job Aids for OpSpec and MSpec Approvals
Part 135 operators pursuing the opportunities outlined in the new FAR Part 135.4 - Eligible On-Demand Operations - may have encountered obstacles obtaining FSDO approval. NBAA Members reported that some FSDOs have not approved Eligible On-Demand Operations because no final guidance is available from FAA headquarters. However, several 135 operators have been approved for Eligible On-Demand Operations. FAA headquarters staff provided NBAA with JobAids containing a sample of the OpSpec paragraphs that are in the automated OPSS.
Operators may then provide this information to their FSDO to assure them this is official FAA guidance and that using these JobAids and the OpSpecs in the OPSS, the FSDO may issue the authorization. This information will eventually be published in FAA Inspector Handbook 8400.10. Fractional program managers may also use the Destination Airport Analysis Program JobAid for MSpec approval in accordance with FARs 91.1053 and 91.1055.
Eligible On-demand Operation
In addition to creating Subpart K of Part 91, the Final Rule "Regulation of Fractional Aircraft Ownership Programs and On-Demand Operations" changes certain Part 135 regulations. 14 CFR 135.4 defines a new type of operator known as an "eligible on-demand operation." An eligible on-demand operation is allowed more lenient destination airport effective runway length performance and the opportunity to conduct an instrument approach at an airport with no weather reporting with certain qualifiers. These alternatives are only available to an eligible on-demand operation. One requirement of an eligible on-demand operation is that the flightcrew must consist of at least two qualified pilots. Part 135 operations choosing to not meet these requirements can still operate under Part 135, but will not be able to use these alternatives.
Fractional Aircraft Ownership Regulation Background & Rulemaking
Fractional ownership operations began in 1986 with the creation of a program that offered aircraft owners increased flexibility in the ownership and operation of aircraft. This program used current aircraft acquisition concepts, including shared or joint aircraft ownership, and provided for the management of the aircraft by an aircraft management company.
The aircraft owners participating in the program agreed not only to share their own aircraft with others having a shared interest in that aircraft, but also to lease their aircraft to other owners in the program (dry lease exchange program). The aircraft owners used the common management company to provide aviation management services including maintenance of the aircraft, pilot training and assignment, and administration of the leasing of the aircraft among the owners.
During the 1990's the growth of fractional ownership programs was substantial and this growth is expected to continue. As these programs grew in size, complexity and number, there was considerable controversy within the aviation community as to their appropriate regulatory structure. Additionally, the FAA had evolving concerns regarding issues of accountability and responsibility for compliance (operational control).
FAA Amends Regulatory Compliance Date for Fractional Operations
On December 14, 2004 the FAA issued a notice that corrects the date by which all fractional operations must be in compliance with FAR Part 91, Subpart K. NBAA was expecting the correction that changes an incorrect December 17, 2004, compliance date to February 17, 2005. All fractional operations will be in compliance with the new rule by the February 2005 deadline.
Federal Register Publishes Fractional Ownership Final Rule
September 17, 2003
On September 17, the FAA's final rule "Regulation of Fractional Aircraft Ownership Programs and On-Demand Operations" was published. The rule sets regulatory standards for fractional ownership operations (Part 91, Subpart K) and updates requirements for on-demand charter operations (Part 135).
NBAA Submits Comments on Fractional Ownership
On November 16, 2001, NBAA delivered comments on the FAA’s proposed rules for fractional ownership and on-demand air charter operations to the Federal Aviation Administration. NBAA made several recommendations to clarify and revise the proposed rules. The Association also addressed emerging security issues following the events of September 11.
Fractional Ownership Aviation Rulemaking Committee
The FAA created the Fractional Ownership Aviation Rulemaking Committee through an order dated October 6, 1999. The objective of the FOARC was to "propose such revisions to the Federal Aviation Regulations and associated guidance material as may be appropriate with respect to fractional ownership programs." On February 23, 2000, the FOARC presented its recommendations to the FAA in the format of a Notice of Proposed Rulemaking. More.
Fractional Ownership Presentations
NBAA Fractional Ownership & Part 135 Seminar
Operational Control of Business Aircraft in the New Environment
December 5, 2003 • White Plains, NY
- Overview of Fractional Rule & Part 135 Changes (84 KB, PowerPoint), Katherine Perfetti, Federal Aviation Administration
- The New World of Subpart K Compared with Part 135 (2.9 MB, PowerPoint), Aaron Goerlich, Garofalo Goerlich Hainbach PC, and Craig Weller, Galland, Kharasch, Greenberg, Fellman & Swirsky, PC
- Is Fractional Ownership the Right Choice for You? Tax and Financing Ramifications of Fractional Aircraft Ownership (555 KB, PowerPoint), Ed Kammerer, Edwards & Angell, LLP
- Tax-Free Exchanges Under IRC 1031 (1.4 MB, PowerPoint), Keith Swirsky, Galland, Kharasch, Greenberg, Fellman & Swirsky, PC
- Fractional Contracts (237 KB, PowerPoint), Kent Jackson, Jackson and Wade, L.L.C.
- Managing Aircraft Fractional Ownership Under FAR Part 91, Subpart K: Ten Reasons Not To Charter (320 KB, PowerPoint), Gary Arber, Arber, Lannik & Badolato, LLP
NBAA Fractional Ownership & Part 135 Seminar
Operational Control of Business Aircraft in the New Environment
January 20, 2004 • Van Nuys, CA
- Overview of Fractional Rule & Part 135 Changes (100 KB, PowerPoint), Katherine Perfetti, Federal Aviation Administration
- The New World of Subpart K Compared with Part 135 (2.8 MB, PowerPoint), Aaron Goerlich, Garofalo Goerlich Hainbach PC, and Eileen Gleimer, Crowell & Moring, LLP
- Fractional Ownership Tax and Financial Issues (666 KB, PowerPoint), Alvaro Pascotto, Morrison & Foerster, LLP
- Fractional Contracts (256 KB, PowerPoint), Kent Jackson, Jackson and Wade, L.L.C.
- Managing Aircraft Fractional Ownership Under FAR Part 91, Subpart K: Ten Reasons Not To Charter (328 KB, PowerPoint), Gary Arber, Arber, Lannik & Badolato, LLP
- Operator and Management Company Responsibilities: Business Effects of Adoption of Part 91, Subpart K (385 KB, PowerPoint), Stephen Hofer, Bailey and Partners
- Fractional Ownership Tax and Financial Issues Panel Discussion (510 KB, PowerPoint), Alvaro Pascotto, Morrison & Foerster, LLP
- International Operation Considerations (38 KB, PowerPoint), Douglas Carr, NBAA
NBAA Fractional Ownership & Part 135 Seminar
Operational Control of Business Aircraft in the New Environment
February 20, 2004 • Dallas, TX
- Overview of Fractional Rule & Part 135 Changes (84 KB, PowerPoint), Katherine Perfetti, Federal Aviation Administration
- The New World of Subpart K Compared with Part 135 (2.8 MB, PowerPoint), Aaron Goerlich, Garofalo Goerlich Hainbach PC, and David Norton, Akin Gump Strauss Hauer & Feld LLP
- Financial Considerations: Is Fractional Ownership the Right Choice for You? (443 KB, PowerPoint), Phil Crowther, Law Offices of Phil Crowther
- Fractional Ownership: Understanding the Insurance (72 KB, PowerPoint), Melissa Harder
- Fractional Contracts (256 KB, PowerPoint), Kent Jackson, Jackson and Wade, L.L.C.
- International Operation Considerations (41 KB, PowerPoint), Douglas Carr, NBAA
Fractional Ownership Resources
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