Whether you are purchasing aircraft insurance for the first time or approaching your fifteenth insurance renewal, you face a decision about what is the most appropriate value for your Hull (Physical Damage) insurance. Too high a value and you increase the amount of premium unnecessarily. To low a value and you risk not getting what your aircraft is worth in the event of a total loss. But determining the right value isn't hard, it just takes a little time, research and thought.

There are, traditionally, three valuation types for insured property. Replacement Cost is where the insurance carrier pays to replace the destroyed property with a new like, kind and quality item(s) regardless of amount of age/use of the destroyed item. This is commonly available on home-owners insurance policies. Actual Cash Value is where depreciation is applied to the replacement value and the insurance carrier pays that amount for the destroyed property. This is commonly used in auto insurance policies. The third valuation method, and the one commonly used in aircraft hull insurance, is stated value or agreed value. This valuation method allows the owner of the aircraft to tell the insurance carrier what the aircraft is worth (within reason) and, in the event of a total loss, the insurance carrier agrees to pay that amount to the owner less any applicable deductible.

The stated value method works well for aircraft owners as it allows them to have some input into the value that is used and, therefore, to know exactly what they will get from the insurance carrier if their aircraft is destroyed or damaged beyond repair. However, this flexibility does give rise to the question "How do I determine what my aircraft is really worth?"

The first and most important thing to do is put your subjectivity aside. Most pilots love their aircraft and rightly so. It may be a new purchase with all the latest avionics (the envy of all your hangar-mates) or an old friend that has provided you with many years of faithful, reliable service. However, that does not mean that your aircraft is automatically worth twenty percent more than all other similar make and model ships just because it is yours. Take a step back from your personal feelings try to be as methodical as if you were performing a pre-flight check.

Step one in the process to a good valuation is to establish a baseline reference. There are some excellent industry resources available to you. Aircraft Blue Book and Vref are two highly respected sources that can be used to help establish an initial value. By looking across a wide volume of aircraft, these two entities provide an average value for most makes and models of aircraft and rotorcraft. You can also ask your insurance broker or underwriter as they typically have a good idea of what the current average value of a given make and model aircraft should be.

Now that you have a baseline, look at the variables with your own aircraft and be honest. Some items will reduce the value from the baseline average (like having an engine that is close to overhaul) and some will increase it (like the new avionics suite you just had installed). Certain items, like replacing a prop, may not have an appreciable impact on the value because, although they may be new parts, you cannot operate the aircraft without them. Once you have figured out the pluses and minuses of the variables which may affect your value, make adjustments to your baseline value accordingly.

Next, to test that value against the current market, take a look at some of the aircraft sales listings for similar aircraft to yours. There are lots of internet and print resources out there for you to use. By looking at comparable aircraft and the market pricing for those ships, you may be gain a more realistic idea of what your aircraft is worth at that particular time.

Once you have completed these steps, you should have a realistic and up to date valuation which you can use for your insurance policy. Supply this value to your broker and underwriter to make sure that they agree and are comfortable with this value. If the underwriter feels that the value is too high, he or she may ask for documentation of the equipment upgrades or other factors which have increased the value to that level. If he or she feels that the value is too low, they may not agree to use that value.

Underwriters are very wary of aircraft that dramatically over or under insured. If an aircraft is significantly over-insured (e.g. a $300,000 insured value on an aircraft that is really only worth $200,000), there is, potentially, a financial incentive for the Insured to have a total loss. This is called a moral hazard and goes against one of the fundamental principals of insurance: to make the insured whole after a loss, not to make a profit for the insured.

If an aircraft is dramatically under-insured, the owner faces potential financial loss. For example, let's say an aircraft is actually worth $500,000 but the owner opts to only insure it for $250,000 to save money on premium. Unfortunately, the aircraft is damaged and the cost to repair is $300,000. The insurance company will pay the owner $250,000 (less any deductibles) and take the aircraft. The owner will be stuck with no aircraft and only half of what it was worth to replace it. You can bet the owner will not be happy. In order to avoid this set of circumstances, many insurance carriers will not agree to a value that is more than 10% to 20% below the average value. In some cases, the insurance carrier will agree but will require a signed statement from the aircraft owner stating that they understand and agree to the potential consequences of underinsuring the aircraft.

The best way to avoid these two problems is to follow the three steps outlined above and use the most accurate value you can for your insurance coverage.

There is an alternative to taking the time and making the effort to determining the value of your aircraft for yourself and that is to hire a third party expert to determine the value for you. You can use a certified aircraft appraiser or other professional to do the leg work and save time and effort. They can furnish you with a report which you can supply to the insurance carrier as testimony to the stated value and how that value was determined.

While you may not choose to go through this process every year, it makes sense to do so at regular intervals so that, even if you do not update your insurance coverage level, you, as the aircraft owner, know what your aircraft is actually worth.

We are working with someone who has a long range business jet. Within the next five years that aircraft's engines will need overhauls, to the tune of almost one million dollars, each! We are looking at keeping versus selling that aircraft and the budget spike for those engines in year five is huge. That aircraft's engines are not on any guaranteed maintenance programs, so the owner pays 100% of whatever the costs are. Sell the aircraft before the overhaul, and it may lose a lot of value and take longer than average to sell.

Turboprop engine overhauls can run to $250,000 and turbojet engines, up to a million. Within the engine are a number of components that will have different cycle limits. Typically they can last to the second overhaul, or perhaps even the third. These turbine wheels, blades, etc can add significantly to the cost of the heavy maintenance. More and more turbine business aircraft are heading into their twenties and will be facing these cycle-limited items' additional expenses.

What are the advantages of these guaranteed engine maintenance programs?

Budgeting for these major cost events can be difficult. In good times, reserving cash can be difficult for a company, and in today's economy, the cash may not be available. All the major turbine engine manufacturers offer some form of a engine guaranteed maintenance program (GMP). Plus there is one major third party provider of these plans that cover most popular business turbine engines.

Under a GMP, the aircraft owner pays in an hourly set-aside to the plan provider. The monies go into an escrow account. As engine maintenance expenses occur, the money is drawn out to pay for the expense.

The amount to be paid in is set by contract, and thus, a GMP offers a stable budget. Accountants love stability in budgeting. So should you. Take the hourly rate times the number of hours to be flown, and your engine budget for next year is mostly done. Yes, you have some minor line maintenance, but that is minor. There are no unplanned for costs and no surprises. An engine GMP offers a financial peace of mind.

A GMP also offers insurance against the rare, but costly unscheduled maintenance event. Most turbine engines make it to overhaul, but some do not. Even on-condition engines face similar heavy maintenance events at some time in their life. Once an engine is opened for inspection, the cycle-limited components are also subject to replacement or repair. I've heard from a few operators who went in for a $50,000 Hot Section Inspection and came out with a $150,000 repair bill. While turbine engines are reliable, when an unscheduled event occurs, they can result in significant expenses. An engine GMP provides protection against unscheduled engine maintenance costs.

An engine GMP can also be less costly than a pay-as-you go engine. Even without the unscheduled coverage, there are other plusses that come with a GMP. Engine removal, shipping, and loaner engines can all be covered by a GMP. Loaner engines alone can run several hundred dollars an hour to rent. Also, until you get a quote on your engine, the "typical average overhaul cost" is just that, an average. An engine GMP will cover those items and pay the actual overhaul cost, even if those costs are over budget.

An engine GMP will add value to your aircraft. Aircraft sale price sources such as Vref and the Aircraft Bluebook Price Digest either include the GMP in their typical selling price and subtract for engines not on a program, or the program itself is a added value. If you are selling your aircraft, and the GMP has accrued $350,000 in its account, that is value added to the aircraft in two ways:

1. The cash value of the GMP account itself.
2. The reduction of risk to the buyer as to the status of the engines.

Remember that long range jet's $1.8 million overhauls? Over the next five years, they will be flying about 1,500 hours, so their "accrual" would be $1,200 per hour if they are to pay for a pair of overhauls in five years.

One last possible advantage to a business is that the cost of the GMP can be a tax deductable expense. In house cash accrual accounts are not "expenses." Consult with your tax advisor, but this can be a definite advantage for the GMP.

Lastly, many financial institutions may require that the engines be on a GMP to help guarantee the value of the asset. It is common for an end of lease requirement that all major components have at least 50% of their life remaining and an adjustment (to the detriment of the lessee) is made for less than half-life remaining components such as the engines. Guess what dollar value per hour they may use in adjusting for engines nearing the overhaul at the end of a lease?

Engine guaranteed maintenance programs are a good way to insure your aircraft value, provide stable budgeting and perhaps even save money over a pay as you go engine. You'd be wise to evaluate these programs for next aircraft.

rationale that might save you a lot of grief; some may even call it a "recession busting plan."

I have heard a lot of debate this summer as to whether the used aircraft market is still getting worse, with values in free-fall; or whether it has hit hit bottom, with the market now stagnant; or whether yet, there are signs of improvement, with increased activity and the best valued aircraft being snatched up.
Regardless of the particular camp you side with, there is absolutely no doubt of two things:

Rather than continuing this debate which can be heard around any water cooler or on any shop floor across the country, I felt it better to work outside of the normal sphere by exploring what might constitute a suitable defence against the next recession and its impact upon business jet ownership. Before you bolt because you think this article is not worth your time, please at least let me stress to you that now is absolutely the best time for you to change your current strategy. If you will allow me, I will provide you with 5 ways to protect your investment: 1.) Separating Facts from Myths, 2.) Maintenance Tracking and Service Plans, 3.) Record Keeping and Historical Paper Trails, 4.) Cosmetic Design Schemes, and 5.) Safety Standards.

The Problem
Before jumping in with the solutions, first we need to understand the problem. I will assume that you currently own your aircraft and you have a mortgage on it. During the most recent conversation that you had with your lending bank, you may have gotten the distinct impression that they (your bank) were extremely nervous about your current holding, because the on-paper loan/value ratio on your aircraft has become quite ugly. I can assure you without any fear of contradiction, that unless you have purchased your current aircraft within the last six months, your current market value has plummeted between 40% and 60% since last summer.
Unfortunately, as far your lender is concerned, you may have now vacated the V.I.P. seats that they had figuratively placed you in when your loan was first underwritten and approved. Your bank is probably showing signs of buckling under the intense pressure that is being brought to bear upon them from their internal management groups, federal regulators and public opinion. If you provide them with any indication of not being able to send the monthly payment to their processing centre, you may well trigger a telephone call to you which may have an underlying but discernable edge of malice to it. This unfortunate type of call is now very common for many aircraft owners today.
Whatever you manage to work out with your bank is great. But don't play around with your agreed payment plan too much, because once your personal loan manager is replaced by a committee, your loan will be in grave danger of being placed into default, and the bank will force it to foreclosure. By saying this I am not targeting the people that loaned the money to you to buy your aircraft. I can honestly say that I've truly never met anyone in the aviation finance industry that would ever be considered to be spiteful or vindictive. The reality of the current situation is that they are dealing with a trickle down problem (actually more like a fire hose) that has impacted our industry based on the larger international financial crisis.
Now let's assume that you still have a firm grip on the title to your business jet instead of you living under the threat of it being snatched away. Unless you have absolutely no reason to move out of your present aircraft, now is the time for you to pay attention to the used and possibly even the new aircraft marketplace. There are deals out there today that probably will not be repeated for another 15 to 20 years, or more.
As much as we would all like to, even in this digital age, no one can stroll down to Macy's and buy themselves a time-machine or an oracle's hat to predict the future of the world's markets. The biggest challenge in digging out of the present value conundrum is the ability to successfully find the 'right' replacement aircraft to hold sufficient future equity performance for your bank to roll your existing loan over into a higher value aircraft today. What do I mean by higher value? Anything that is younger, has less total-time, is better equipped, and has a higher present-day book-value than what you currently have.
Once you have located the 'perfect' aircraft, probably with the expertise of a market-savvy broker, you will most likely have to provide an additional 15% to 20% of the trade aircraft's book/loan value on top of your existing loan. This will give your bank sufficient confidence to make a new loan with you against a better value aircraft today. No doubt that some negotiating will take place between you and your bank on how to handle the pre-payment penalty that is written into your current loan. Often this can be waived. Effectively everyone that has the foresight to follow this procedure, makes a step sideways and up, while the trade-ins move further down into the abyss. Some may actually go to the scrap yard.
Once you, your bank and the broker have closed the deal, celebration is in order. However don't rest on the laurels of this transaction and relax your grip, because you still need to keep a close scrutiny on how your aircraft is being operated and maintained if you want to recession-proof this aircraft purchase.

Separating Fact from Myth
FACT: Business Jet Aircraft values mirror the Dow-Jones Industrial Average trends. I can prove it to you, if you contact me at my office at JetBrokers.
MYTH: You will never make money on an aircraft purchase. I have several clients that would strongly disagree with this statement.
FACT: The secret to making money is simple - buy low, and sell high. This sounds silly I know, but how often is this rule broken?
MYTH: If it Flies or Floats, lease it! This motto cannot be generalized. Everyone's economic position and goals are different. From an hourly cost perspective, the following 'Fact' completely refutes it.
FACT: The hourly flight cost of trips aboard a business jet, in order of expense from 'high-to-low' is as follows: Fractional (most expensive per hour) - Charter - Leasing - Ownership (least expensive per hour).
MYTH: You will make money, or at least your own flying will cost you nothing, if you place your aircraft into a managed charter program. You might defray your overall expense, but just like perpetual motion, 'free' does not exist. Is the reduction in your annual expense worth the diminished value from the added wear-and-tear?
FACT: People (buyers) don't like old and high-time aircraft. There was a time when charter companies thrived on them, but the fractional and independent audit companies have put paid to that. Now the resale market for vintage (older than 25 years) business jets is growing daily, while the number of willing buyers is shrinking at a greater rate.
MYTH: The factory did not make a mistake when they built your aircraft 'by building it better' than all of the other aircraft that came off the same production line. This is just posturing and hyperbole that buyers immediately see through. It is how the aircraft is treated through its operational career that determines its true value-enhancing pedigree.
FACT: Paying for and having accomplished maintenance, service bulletins, and industry standard up-grades on your aircraft while it is in your custody will not add value or enhance the price of your aircraft. It will merely maintain its natural market value. Failure to have any of these items accomplished in accordance with the manufacturer's mandated schedule will actually cause a reduction in value.

Maintenance Tracking and Service Plans
It is extremely important to either start, or keep your aircraft enrolled onto a computerized maintenance tracking program. If you don't keep pace with the multitude of calendar and hourly inspection, servicing, overhaul and replacement items that are required on your aircraft, safety along with your aircraft value is severely compromised. The same applies to the applicable manufacturer's engine service plan on your engines, though it is exclusively an issue of value, not safety. When the time comes to sell, if your aircraft is not enrolled in an available service plan, many buyers will not give your aircraft a moment of consideration. At a minimum, you may have to discount your asking price by the plan's quoted enrolment cost. In a tough market, this strategy might prevent your aircraft from attracting sufficient interest from buyers to actually make it to a sales transaction.

Record Keeping and Historical Paper Trails
Keep all maintenance records, logbooks, warranties, airworthiness tags, work order packages, invoices, etc., in a secure, fire and waterproof safe. Consider access to them on the same level as you would if you owned an original copy of the Declaration of Independence. If anyone other than you, your pilots or your Director of Maintenance wants to handle your documents, make that person justify why they need your records before you let them out of your safe keeping. Never ship your records either. The best way for your records to travel, when it is necessary for them to do so, is to be carried on-board the aircraft or, at the very least, 'hand-delivered' by someone that you trust. It is also vital that you take an active role in how, and what, entries are made in the logs as routine maintenance and inspections are accomplished and recorded. The erroneous stroke of a pen could cost you thousands later on. Content and form of entries are extremely important. So often a simple miscalculation of total-time in a log book entry can span thousands of hours before it is caught by a diligent inspector. If this happens, the pedigree of your aircraft is severely reduced. Lastly, don't limit your accumulated historical paper trail to only airworthiness records. Invoices, receipts and work order copies all add to the pedigree of your aircraft, thus ensuring a higher resale value.

Cosmetic Design Schemes
When you are ready to refurbish both the interior and the exterior of the replacement aircraft, don't allow your wife or girlfriend to make their mark as an amateur designer. Remember that beauty is always in the eye of the beholder, but your eye is unlikely to be in the same taste of the next buyer of your aircraft. Wild, gaudy, lavishly over-the-top styling and flamboyance will only reap you a lower selling price later on. Many of the aircraft that are selling today are what I like to refer to as 'ghosts', i.e. they are painted all white with absolutely no design stripes to turn a buyer off. A clean canvas, so to speak. I'm not suggesting that you ride around in a 'ghost' yourself, but at least try and keep your appreciation of Jackson Pollock's work in your home and not on your aircraft exterior.

Safety Standards
If you decide to upgrade your aircraft to a higher safety standard than what is currently mandated by the FAA, it is my professional opinion that the best blueprint that you can use is the specified requirements presented within the European JAR-OPS-1 document. Over the years we have seen a gradual shift of safety philosophy from Washington, DC over to mainland Europe. There are a lot of changes afoot in European regulatory circles now that the European Aviation Safety Agency (EASA) has been established. It is highly likely that JAR-OPS-1 will be superseded by a new document in the not-too-distant future. I suggest that you keep on the look-out for this change. In the meantime, I want to stress that when it comes to guaranteeing yourself the highest possible resale value, 'less is most definitely not more' when you are specifying planned equipment and safety upgrades.

Looking Forward
How long will you have to hold on to this replacement aircraft before cashing in? Remember my earlier statement about Macy's? Without an oracle hat myself, I am willing to make a prediction based upon my experience. I believe that your new loan should run for at least the next 60 months before it is allowed to come due, because you probably have longer to wait before we reach the stratospheric pricing that we saw in 2007. Also remember that during this holding period, it is best to try and keep your flight-hours under control and within reason, because 10% or more of the subsequent sales price realized will depend upon the total-time on your aircraft. The average rate that a business jet is flown here in the United States is 450 hours per year which equates to 8.65 hours per week.
I sincerely wish you the very best of luck with successfully beating the next recession by using this, or a similar rationale to recession-proof your next aircraft purchase. I am always available for consultation at JetBrokers, if you need any help or advice on this topic.
See you next month.

What happens if someone records, or threatens to record, a mechanic's lien against an aircraft and the aircraft's owner believes the lien is improper? After all, once recorded, a lien is a "cloud" on the title to the aircraft and, typically, a release or a court order is required to clear the aircraft's title.

So, how does the aircraft owner dispute the lien or have it released if it has been recorded? Fortunately, several options and/or strategies are available for dealing with the situation.

Resolution Through Negotiation

If the dispute is about the amount of money owed, the best way for the aircraft owner to resolve the situation is to try and reach some agreement with the lien claimant regarding the amount owed. This will certainly save both parties money in the long run. If the lien claimant refuses to settle, the lien claimant will incur significant expense if he or she has to initiate a lien foreclosure action.

Additionally, the lien claimant may also have exposure for slander of title if a court determines that the lien was improper. This could mean that the lien claimant would be required to pay not only the aircraft owner's costs and attorney's fees, but also any losses incurred by the aircraft owner if the lien prevented a sale of the aircraft or forced the aircraft owner to accept less in a sale than he or she would have in the absence of the lien.

Similarly, the aircraft owner will incur significant expense to defend against a mechanic's lien foreclosure action and, if unsuccessful, the aircraft owner could ultimately be required to pay the full amount of the lien plus the lien claimant's costs and attorney's fees. Also, in the meantime, the lien could prevent the aircraft owner from selling the aircraft.

Clearly, both parties have incentives to try and settle the lien claim to avoid the risks and expense associated with litigating the claim. However, if the parties cannot reach an agreement, litigation is available and may be required to resolve the situation.

Resolution Through Litigation

The Mechanic's Lien Foreclosure Action. To enforce a mechanic's lien against an aircraft, a lien claimant must start a lien foreclosure action. In the foreclosure action, the lien claimant asks the court to validate his or her lien and order the aircraft sold to pay the lien claimant the amount owed.

Once the foreclosure action is started, many jurisdictions allow the aircraft owner to post a bond or deposit money with the court to obtain a release of the mechanic's lien before the lawsuit is decided. The amount of the bond or deposit will vary, but is usually the amount of the lien claim plus some additional percentage of the claim (e.g. 125%-150%). The bond or deposit replaces the aircraft as security for the lien claimant's claim. When the court receives the bond or deposit, it then issues an order discharging or releasing the lien. A certified copy of the order must then be filed with the FAA Registry to clear the aircraft's title.

The aircraft owner also has the opportunity to defend against the lien claim in the foreclosure action and to assert any claims the aircraft owner may have against the lien claimant. One common defense to an aircraft mechanic's lien foreclosure action is that the lien was not properly perfected. In this situation, the aircraft owner asserts that the lien statement was not filed within the proper time period after the last day of work or that the lien claimant did not follow the proper procedures to perfect the lien. Similarly, if the foreclosure proceeding was not initiated within the time period allowed by law, the aircraft owner may also assert that defense.

Another defense an aircraft owner may assert is that the lien is invalid because the lien claimant is knowingly demanding an amount in excess of what is justly due. This defense is very common in situations where the aircraft owner initially disputed the amount being charged by the lien claimant. However, this defense usually requires that the aircraft owner show bad faith on the part of the lien claimant or that the lien claimant knew the lien statement was overstated.

If the aircraft owner is successful in defending against the foreclosure proceeding, the aircraft owner will also probably succeed in a slander of title claim against the lien claimant. An aircraft owner asserting a slander of title claim alleges that the lien claimant improperly encumbered the aircraft with an invalid lien. A slander of title claim could have serious and expensive implications for the lien claimant if the improper lien prevented a sale of the aircraft or forced the aircraft owner to accept less in a sale than he or she would have in the absence of a lien.

As a practical matter, a lien claimant does not foreclose on its lien as often as you might think. Oftentimes, the aircraft has a mortgage that takes priority over the lien claimant's claim. As a result, even if the lien claimant succeeded in his or her foreclosure action, the lien claimant would still have to deal with or pay off the lender who holds the mortgage.

In most cases, this doesn't make financial sense for the lien claimant and the lien claimant does not intend to foreclose on its lien. Rather, the lien claimant records the lien with the hope that the aircraft will be sold in the future and the lien claimant will receive some payment in exchange for a release of its mechanic's lien.

The Declaratory Judgment Action. In situations where the lien claimant does not initiate a foreclosure action, an aircraft owner may file a declaratory judgment action to ask the court to determine the validity of the lien. The aircraft owner would raise the same defenses to the lien as in a foreclosure action and would be able to assert any additional claims the aircraft owner may have against the lien claimant (e.g. slander of title). The opportunity for the aircraft owner to post a bond or deposit with the court in order to obtain a discharge or release is also available in a declaratory judgment action. The only real difference from the foreclosure action is that the aircraft owner is initiating the lawsuit rather than the lien claimant.

Conclusion

Once a lien is asserted against an aircraft, an aircraft owner isn't without options. Unfortunately, each of the options available to an aircraft owner has a cost, both in time and money. If you find yourself in this situation, I recommend that you contact an aviation attorney familiar with your state's aircraft mechanic's lien laws to analyze your situation and help you choose the best course of action.

Do you have addition helpful information about this topic? Please discuss it with us!

This month's article is about Owner Performed Aircraft Maintenance in honour of the Experimental Aircraft Associations' Annual Convention which will be held at Wittman Regional Airport, and on the West Shore of Lake Winnebago, on July 27 through August 2, 2009. Back in 2000 I was scheduled to make a power point presentation at that year's Air Venture, but unfortunately an aircraft deal took me to another place instead of Oshkosh. Well I have dusted off the power point, updated it and made it more like an article. So please enjoy.

Experimental versus Certificated Aircraft
Experimental:
An aircraft that has had an Experimental certificate issued for one of following purposes:

1. Operating amateur-built aircraft. Operating an aircraft the major portion of which has been fabricated and assembled by persons who undertook the construction project solely for their own education or recreation.
2. Operating kit-built aircraft. Operating a primary category aircraft that meets the criteria of § 21.24(a) that was assembled by a person from a kit manufactured by the holder of a production certificate for that kit, without the supervision and quality control of the production certificate holder under § 21.184(a).

Ref. Cfr 14, FAR Part 21.191 - Experimental Certificates.
Type Certificated:
An aircraft in the normal, utility, acrobatic and commuter category that conforms to the airworthiness standards prescribed for the issue of a type certificates and changes to those certificates.
Ref. Cfr 14, FAR Part 23.1 - Applicability.

What is a Repairman's Certificate?
Repairman Certificate (Experimental Aircraft Builder and/or Light Sport Aircraft Owner) \ Eligibility,
Privileges and Limitations. Reference cfr 14, FAR Section 65.104
To be eligible for a repairman certificate (experimental aircraft builder), an individual must:

1. Be at least 18 years of age;
2. Be the primary builder of the aircraft to which the privileges of the certificate are applicable in the case of an Experimental Aircraft. In the case of a Light Sport Aircraft the applicant must undergo 120 hours of classroom training for an Airplane, 104 hours for a Weight-shift Control or Powered Parachute, and 80 hours for a Lighter than Air, or Glider;
3. Show to the satisfaction of the Administrator that the individual has the requisite skill to determine whether the aircraft is in a condition for safe operations; and Be a citizen of the United States or an individual citizen of a foreign country who has lawfully been admitted for permanent residence in the United States.

The holder of a repairman certificate (experimental aircraft builder) may perform condition inspections on the aircraft constructed by the holder in accordance with the operating limitations of that aircraft, ONLY.

It's an Experimental, but I didn't build it myself.
Regarding Maintenance, if you didn't build it then there is NO difference between this aircraft and a Type Certificated Aircraft.
Further more, you are NOT eligible to become a Repairman for this aircraft as you did not originally construct it yourself; you can however perform Preventative Maintenance on this aircraft I.A.W. cfr. 14, FAR 43, Appendix A.
All subsequent Annual Condition Inspections and any associated repair work, can ONLY be performed by either an A & P Mechanic, or a Repair Station.

I am NOT an A&P or a Repairman, Am I still Legally Qualified?
If you currently hold a pilot certificate issued under part 61, you may perform PREVENTATIVE MAINTENANCE on your own aircraft as long as you do not operate your aircraft under part 121, 127, 129, or 135.
However, unless you already hold either a valid Mechanics or Repairmans Certificate, you only qualify to perform all other maintenance and alteration work only under the direct supervision of an A&P mechanic or a repairman who personally observes your work. However you are not authorized to perform any inspection required by part 91 or part 125 of this chapter or any inspection performed after a major repair or alteration.

What is Preventative Maintenance?
"Preventive maintenance" means:
simple or minor preservation operations and the replacement of small standard parts not involving complex assembly operations.

The 31 items that you CAN do yourself
1. Removal, installation, and repair of landing gear tires.
2. Replacing elastic shock absorber cords on landing gear.
3. Servicing landing gear shock struts by adding oil, air, or both.
4. Servicing landing gear wheel bearings, such as cleaning and greasing.
5. Replacing defective safety wiring or cotter keys.
6. Lubrication not requiring disassembly other than removal of nonstructural items such as cover plates, cowlings, and fairings.
7. Making simple fabric patches not requiring rib stitching or the removal of structural parts or control surfaces. In the case of balloons, the making of small fabric repairs to envelopes (as defined in, and in accordance with, the balloon manufacturers' instructions) not requiring load tape repair or replacement.
8. Replenishing hydraulic fluid in the hydraulic reservoir.
9. Refinishing decorative coating of fuselage, balloon baskets, wings tail group surfaces (excluding balanced control surfaces), fairings, cowlings, landing gear, cabin, or cockpit interior when removal or disassembly of any primary structure or operating system is not required.
10. Applying preservative or protective material to components where no disassembly of any primary structure or operating system is involved and where such coating is not prohibited or is not contrary to good practices.
11. Repairing upholstery and decorative furnishings of the cabin, cockpit, or balloon basket interior when the repairing does not require disassembly of any primary structure or operating system or interfere with an operating system or affect the primary structure of the aircraft.
12. Making small simple repairs to fairings, nonstructural cover plates, cowlings, and small patches and reinforcements not changing the contour so as to interfere with proper air flow.
13. Replacing side windows where that work does not interfere with the structure or any operating system such as controls, electrical equipment, etc.
14. Replacing safety belts.
15. Replacing seats or seat parts with replacement parts approved for the aircraft, not involving disassembly of any primary structure or operating system.
16. Trouble shooting and repairing broken circuits in landing light wiring circuits.
17. Replacing bulbs, reflectors, and lenses of position and landing lights.
18. Replacing wheels and skis where no weight and balance computation is involved.
19. Replacing any cowling not requiring removal of the propeller or disconnection of flight controls.
20. Replacing or cleaning spark plugs and setting of spark plug gap clearance.
21. Replacing any hose connection except hydraulic connections.
22. Replacing prefabricated fuel lines.
23. Cleaning or replacing fuel and oil strainers or filter elements.
24. Replacing and servicing batteries.
25. Cleaning of balloon burner pilot and main nozzles in accordance with the balloon manufacturer's instructions.
26. Replacement or adjustment of nonstructural standard fasteners incidental to operations.
27. The interchange of balloon baskets and burners on envelopes when the basket or burner is designated as interchangeable in the balloon type certificate data and the baskets and burners are specifically designed for quick removal and installation.
28. The installations of anti-misfueling devices to reduce the diameter of fuel tank filler openings provided the specific device has been made a part of the aircraft type certificate data by the aircraft manufacturer, the aircraft manufacturer has provided FAA-approved instructions for installation of the specific device, and installation does not involve the disassembly of the existing tank filler opening.
29. Removing, checking, and replacing magnetic chip detectors.
30. Removing and replacing self-contained, front instrument panel-mounted navigation and communication devices that employ tray-mounted connectors that connect the unit when the unit is installed into the instrument panel, (excluding automatic flight control systems, transponders and microwave frequency distance measuring equipment (DME)). The approved unit must be designed to be readily and repeatedly removed and replaced, and pertinent instructions must be provided. Prior to the unit's intended use, an operational check must be performed in accordance with the applicable sections of part 91.
31. Updating self-contained, front instrument panel-mounted Air Traffic Control (ATC) navigational software data bases (excluding those of automatic flight control systems, transponders and microwave frequency distance measuring equipment (DME), provided no disassembly of the unit is required and pertinent instructions are provided. Prior to the unit's intended use, an operational check must be performed in accordance with applicable sections of part 91.

What will I need?
APPROVED DATA
i.e. Maintenance or Service Manuals for your aircraft, any pertinent Advisory Circulars like AC43.13 1B, AD's, and any Special Instructions provided for the Continuing Airworthiness of Supplemental Type Certificate.
SUITABLE WORKING CONDITIONS
Perform the work at a location where all removed parts are protected from dust, dirt or damage.
TOOLS APPROPRIATE FOR THE WORK BEING PERFORMED
May include jacks, air tools, multi-meter, wrenches, sockets and special tools specific for the work, etc.
ABILITY
If the preventative maintenance work that you intend to perform is not simple in nature and is beyond your ability, you are not qualified to continue and must seek the assistance of a certified Mechanic.

The Sign-Off
Ref. Cfr 14 FAR 43.9 - Content, Form, and Disposition of Maintenance, Preventive
Maintenance, Rebuilding, and Alteration Records
Each person who maintains, performs preventive maintenance, rebuilds, or alters an aircraft, airframe, aircraft engine, propeller, appliance, or component part shall make an entry in the maintenance record of that equipment containing the following information:
(1) A description (or reference to data acceptable to the Administrator) of work performed.
(2) The date of completion of the work performed.
(3) The name of the person performing the work if other than the person making the entry.
(4) If the work performed on the aircraft, airframe, aircraft engine, propeller, appliance, or component part has been performed satisfactorily, the signature, certificate number, and kind of certificate held by the person approving the work. The signature constitutes the approval for return to service only for the work performed.
In the case of a Repairman who performs his own Condition Inspection, the Logbook Entry must also include:
(5) The type of inspection and a brief description of the extent of the inspection.
(6) The date of the inspection and aircraft total time in service.

Owner Assisted Annuals
Annual Time always provides an excellent opportunity for an aircraft owner to become better acquainted with his/her aircraft. Obviously in the case of a Type Certificated Aircraft, an A&P Mechanic with an Inspection Authorization or a Certified Repair Station, are the only entities that are normally authorized to perform your Annual Inspection. However with careful coordination with the Inspector, it is usually possible for you to assist, not only by removing panels, seats, etc., but also to actually perform some of the required maintenance and repair tasks (under the supervision of an A&P Mechanic) that may result from the inspection.
Don't expect to save yourself much money by talking your Inspector into letting you assist, as I have found from personal experience that by asking your chosen Inspector to supervise you and to also answer your questions, he/she is spending a not inconsiderable amount of time in providing you with Training. As we all know, Training Consumes both Time and Money, when it is done Right.

Airworthiness Directives
Airworthiness Directives are published in the Federal Register as amendments to part 39.
Each AD contains an applicability statement specifying the product (aircraft, aircraft engine, propeller, or appliance) to which it applies. Some aircraft owners and operators mistakenly assume that AD's do not apply to aircraft with other than standard airworthiness certificates, i.e., special airworthiness certificates in the restricted, limited, or experimental category. Unless specifically stated, AD's apply to the make and model set forth in the applicability statement regardless of the classification or category of the airworthiness certificate issued for the aircraft. Type certificate and airworthiness certification information are used to identify the product affected. Limitations may be placed on applicability by specifying the serial number or number series to which the AD is applicable. When there is no reference to serial numbers, all serial numbers are affected. The following are examples of AD applicability statements:
The registered owner or operator of an aircraft is responsible for compliance with AD's applicable to the airframe, engine, propeller, appliances, and parts and components thereof for all aircraft it owns or operates. Maintenance personnel are responsible for determining that all applicable airworthiness requirements are met when they accomplish an inspection in accordance with part 43.

Experimental Liability
This is a very misunderstood subject that deserves at least a very short mention, even though it does not entirely relate to Owner Maintenance.
When selling a Homebuilt/Experimental Aircraft, the seller has a legal duty to the buyer as legally the Homebuilder is the Manufacturer with all of the potential liability of any other manufacturer for Negligence, Product Liability and Warranty Exposure when the aircraft is sold.
Based upon the legal principles of Negligence, if the aircraft or a component of it fails, or if the aircraft crashes because the builder didn't use Reasonable Care in Design, Construction or Maintenance, the Builder will be liable EVEN IF THE AIRCRAFT IS PARTIALLY DISASSEMBLED BEFORE BEING SOLD. This is called TORT LIABILITY.
All you can do is minimize the risk of liability based upon the total circumstances of the sale and purchase of a particular homebuilt/experimental aircraft. This can be done by reading the EAA publications that have been written on this subject and also by hiring the services of a good aviation lawyer.

Get to know your Local FAA FISDO Personnel
There are nine domestic FAA Regions that are home to 83 Flight Standards District Offices (FSDO's) in the U.S.A.
Each FSDO is staffed by knowledgeable Maintenance Inspectors, who have been trained to oversee, assist and provide you with guidance in the field of aircraft maintenance.
To get the location of your FSDO office, call the FAA Aviation Safety Hotline at:
1-866-835-53222.

See you all next month.

Have you had experience with this topic or a similar one? Please discuss it with us!