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The Same, But Different

by Jeremy Cox 1. May 2005 00:00
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I was becoming increasingly homesick last month and therefore I decided that it was time for me to go home to England and visit my family there. Since the term ‘Pleasure Travel' is not normally in my vocabulary, I decided to combine a visit home with a business visit to EBACE which was going to be held in Geneva, Switzerland on May 18, 19 and 20.

I departed St. Louis on the 11th and flew to London's Heathrow Airport from Chicago on a B777. I missed my original flight from Chicago to Heathrow because we were on a weather hold out of St. Louis. My newly assigned flight to the UK (the last that night) finally got air beneath the tires of its main wheels shortly before 10 PM local. The flight across, Michigan, Nova Scotia and the North Atlantic was both uneventful and smooth. Daybreak came rapidly only three plus hours into the flight. After eight hours and fifteen minutes in the air we landed at London's Heathrow airport. After arrival in London I took a Train down to my Parents home in Dorset. The weather in the UK for the majority of my stay was very good. The temperatures ranged between the forties and the low seventies. The weather in Switzerland was fabulous. After taking three or four days to do some house painting for mum and dad, my brother Justin had arranged for me to do an Annual Inspection for him before I blasted over to Switzerland. He has had his A&P for three years and is now eligible to take his IA, but has not had any free time to get this additional qualification under his belt. My brother splits his time between flying Charter and doing maintenance on various aircraft. The recipient of the annual inspection was a US Registered, 1999 Maule Rocket which only has 230 hours on it since new. Nothing much had changed since I signed the annual off last year, other than what a good indicator this aircraft is of how corrosive the Equatorial Maritime climate of Britain can be. The corrosion protection applied by the 'good old boys' in rural Georgia is sadly not quite up to the salty and humid climate of the British Isles. My best recommendation to my brother as a condition of the freshness of my sign-off was to have the aircraft treated with ACF50. Yes, I did wrestle the crew seats in and out of the Maule myself to look under the floor and to verify the accomplishment of an AD on the Cables. What a nightmare this procedure is. You engineers in Georgia please take note: "There has got to be a better design than what you now have!"

The day that I did the Annual for my brother, Steve Loverage, the Managing Director of Xclusive Charter called me to get my security information to satisfy the UK's Special Branch requirements that must be followed in order to comply with the UK's Prevention of Terrorism ACT. Steve, who was the assigned person arranging all of the ‘handling' required for the flight that I had been invited to take to Geneva by King Air, was required to obtain the following information from me:

My Full Name, my Address, my Passport Number, my Place of Birth and my Date of Birth.

This preceding information is used by the UK's Special Branch (similar to our FBI) to track all flights into and within the United Kingdom. The rest of Europe doesn't appear to have any similar requirements and as I found out when I passed through Passport Control zone at Jet Aviation in Geneva, movement all-through-out the main EEC countries is not formally tracked.

Last year I had the absolute pleasure of transacting the sale of a King Air C90-1 to an existing client in the UK. John Sirett, the Aviation Manager for this client, was planning on attending EBACE. He very kindly invited me to ride along with both him and Steve on the King Air to EBACE, hence this latest article.

One day into EBACE; Wednesday the 19th, my dad chauffeured me down to Bournemouth Hurn International Airport (EGHH) where I met Steve and Kevin Amrose-Hunt, the captain for this flight. The King Air is normally operated on Steve's Aircraft Operating Certificate (AOC), which is the UK's equivalent to a 135 Certificate. The flight to Geneva was going to be a private (part 91) flight. Our first leg of this journey required a short 30 minute flight to the NE to Cranfield (EGTC.) As a commercially rated pilot/passenger, I got to sit in the front right seat where I tried to do everything that I could to minimize Kevin's Single-Pilot IFR workload. With the checklist completed and a successful rotation and climb-out from Hurn's runway 26, we punched into the drizzling 400 foot overcast. As soon as we did this and after I had complied with the ‘gear-up' command, Kevin reported to departure control that we were established in a climb on an assigned heading, passing 700 feet heading for the assigned initial altitude of 2000 feet VFR. When I heard the words ‘VFR' spoken while we were deep within the visually impenetrable grey of rain clouds I knew that this was going to be a very different flight procedures experience than what I had grown used to in the US. First, we were deep in the belly of rain clouds happily complying with Visual Flight Rules. Second, the Departure Controller immediately after saying "hello, I have you Radar Contact 4 miles from the Airport; please climb and maintain Flight Level 30 and turn to a heading of...", "Hang on a minute Kevin, how can we be assigned a Flight Level at only 3000 feet approx above MSL?." While he was dialing in 1013 mb (29.92 Hg.) into his Altimeter and I was following suite with mine, he replied: "Oh this is standard procedure here in the UK old chap. We are being tracked by Bournemouth's Secondary Surveillance Radar System (SSR) and will be handed over to a couple more SSR ATCO sites so traffic separation is not an issue, and the Flight Levels in the UK start at 3,000 feet." I should have remembered this having grown up and learn't to fly in England, but I have been living and flying in the US for more than 15 years now.

Kevin kindly gave me a quick review:

VFR operations in the UK mandate that all selected direction of flight headings conform to and remain within the 'Quadrantal Rule, if an Altitude or Flight Level is not assigned' i.e. 000 to 089 Odd Thousands of Feet; 090 to 179 Odd Plus 500 feet; 180 to 269 Even Thousands of Feet; and 270 to 360 Even Plus 500 Feet. The Airway System in the UK and Europe is separated into two distinct zones: Low Level and High Level, i.e. In the UK Low Level begins at FL30 and changes to High Level at or above FL245, while on the continent the High Level Airways start at FL195.

I also learn't that if you are flying VFR on an Airway, you will most likely ‘Not' be billed any Navigation charges by either Eurocontrol or the country which controls the airspace that you are flying in. However IFR Flight on an Airway can rack up some pretty healthy charges which Eurocontrol tracks, invoices and mails to you through the Operator information that is discretely and automatically broadcast to ATC by your on-board ‘Mode S' Transponder (I always thought that these type of transponders were designed to prevent in-flight collisions by providing autonomous data to on-board TCAS systems? Fellow Americans, watch your back because user fees might eventually migrate across the pond and if so, will probably be billed to you through the same method of collection! Pretty sneaky, eh?) By the way, our Airway fees for the Round Trip flight to Geneva were approximately £300 or in USD: $600.

We had a brief, un-eventful trip up to Cranfield to pick up John. We only shut the #1 Engine down to facilitate a less windy boarding for him and as soon as he was settled in his seat and the door was closed and locked, we were off again, this time fast taxi-ing to get to the Departure end of the runway at Cranfield before our assigned Slot Time arrived. At airports all-through-out Europe that experience traffic congestion, Eurocontrol have assigned a Slot Program. When Steve filed our flight plan with Eurocontrol for this jaunt to Geneva from Cranfield, we were assigned a departure slot time which we had to be ‘on-station' ready for departure at that time, otherwise we would have been held for a considerable amount of time before being re-released.

Another thing that my memory spat out from the mists of time, while I was performing my co-pilot duties was that even on a short flight you can expect to change your transponder squawk code at least two or three times. This is because most of the controllers that are responsible for their patch of the sky, prior to your entering it, will assign you their own chosen squawk code. The leg from Cranfield to Geneva with a routing over Dover – Dunkerque and Brussels was approximately 450 NM. We had a variable Groundspeed which was caused by several course changes so our ‘chock to chock' time was 2 ½ hours. Over the course of this leg of our journey, my wrist became sore after making all of the frequency and transponder code changes. Additionally, even though we maintained a constant low-level route flight level of FL170, we had to split our attention between both the Low and High Level Airway Maps to anticipate which fixes should be entered into the GNS530 before they were actually issued to us by ATC. This is because in Europe and especially in France, the Airway system is undergoing a fairly radical overhaul of its structure with a lot of mixing and merging of route fixes by Eurocontrol. We were vectored around for the approach into Geneva and then cleared for landing. The weather was severe clear which was the complete opposite from the conditions that we left in England. When we had cleared the runway, switched to ground freq. and were cleaning the aircraft up, a ‘Follow Me' van from Jet Aviation led us to our own hard standing (Ramp) which we shared with another King Air. The handling that we received at Jet Aviation Geneva, was attentive, courteous and patient. I don't know what their fees totaled up to be after the airport landing fee had been added, but their Fuel price did impress me at £1.20 approx. per Liter ($7.50 per USG.) Our Passports received a quick glance from the Immigration and Passport Control officer on duty in Jet's terminal and then we were whisked to our hotel by the hotel's courtesy van. This years EBACE made a new attendance record, 7,600 delegates which was about 1,100 people up from last year. According to the Exhibitor Directory that I received upon check-in at the show, there were 246 paid Exhibitors on display in the EBACE, Palexpo Exhibit Hall and on the Ramp outside. When I stopped on top of the temporary skybridge that was erected to get people from the Exhibit hall side of the security fence over onto the Static Display Ramp and back, I counted 43 fixed wing and 2 rotary wing aircraft that were on static display. These included an executive Airbus A319 and a BBJ.

Amongst the multitude of companies, devices, systems and equipment on display, the following are in my opinion deserving of my time to write about them:

Gulfstream and BAe had their ‘Matador' Infra Red Business Jet Defense System prominently on display. This system has been successfully installed and deployed on Gulfstream, Boeing and various US Navy aircraft. It is designed to fool ‘Heat Seeking' missiles away from the aircraft that it is bolted to and protecting, by emitting a focused, high intensity IR beam of light which is stronger than the hot Jet-Pipe exhausts of the engines.

Lufthansa Technik and Airbus unveiled their design of the A380 Mega-Liner as a ‘large-scale' VIP aircraft. Both Lufthansa and Jet Aviation have been reported as having firm orders from three separate middle-eastern clients that have ordered A380 aircraft in VIP configuration for personal use.

Dassault expect their new 7X high speed, ultra-long range Tri-Jet to be the quietest business aircraft ever flown after all of their current testing and acoustic system changes have been completed. They have now achieved measured levels as low as 52 decibels in cruise flight. This is the equivalent of the sound level normally found in luxury car traveling at 68 mph.

Embraer unveiled their latest future products: a midsize and Very Light Jet (VLJ) while Cessna, Adam Aircraft, Sino Swearingen and Eclipse all had strong displays of their own VLJ's. Cessna's own President and CEO, Jack Pelton was quoted as saying at this years show that Cessna's market research projects that a conservative estimate of 3,000 units of VLJ aircraft will be needed in that market during the next ten years. He did qualify this number by also saying that most other market delivery estimates assume a large number of air-taxi orders. However, Cessna he say's, is not targeting the air-taxi market at all with its Mustang VLJ. Instead it is only targeting the ‘step-up' self flown owners who are looking for a more affordable entry into the Cessna Citation family. Meanwhile I learn't after speaking with the Marketing Manager at Eclipse, that they have taken deposits for more than 100 aircraft in Europe, with the majority of them going to the United Kingdom.

Raytheon had a comprehensive line-up of its products out at the static display including a B200 King Air, a Hawker 400XP, a Hawker 800XPi, a Beech 1900, a Premier and a Horizon. There was much talk whispered by many of the delegates that I spoke to at the show that indicates that the vote is still out on whether Raytheon's all-composite structures have the ability to structurally hold up over time. The recent fleet-wide scrapping by Raytheon of the Starship, has placed some series doubt in minds of many people in our industry (especially across the pond.)

Two Europe only, regulatory issues that were being discussed at this years show included: the imminent approval by the JAA of Single Engine IFR Charter Operations. Pilatus, Socata and Cessna have all been lobbying the JAA for years to approve their aircraft for these operations; now it looks like their efforts will be rewarded. The United Kingdom's Department of Transportation is pushing for more stringent aircraft exhaust emission laws. They believe that CO2 emission trading as mandated by the Kyoto Treaty should be extended to Aviation. It is their belief that 35% of the UK's climate change is due to air traffic.

Finally I would be remiss if I did not give an honorable mention to the Cigar and Champagne shindig that Geneva based, Burnett Interiors threw for the fourth year running. I and my colleagues enjoyed a great dinner in a small lakeside restaurant that had a great view of the water spout. We then took a taxi to the secluded ‘La Reserve' hotel and spa where 300 Havana Cigars and 64 Deutz and Bollinger bottles of Champagne where uncorked and distributed to the many guests that attended; us included. The party ran down when the clock descended past midnight. It was a very special experience that we consider ourselves fortunate to have attended.

The return trip back to England followed a Dijon – Abbeville – London, direct to Cranfield routing. Our assigned Level was FL180. We had better winds and made it back to the UK with a chock-to-chock time of 2 ¼ hours. After helping Kevin and Steve put the C90-1 to bed at Hurn, we said our good-byes and then I got to enjoy one more day with mum and dad before returning home on Sunday, May 22nd.

Many of you reading this article may have attended the NBAA Meeting and Convention here in the US; many may have even done some flying in Europe as well. Those of you that have, will probably agree and understand what I mean by the term: It's the same, but different. EBACE is fast becoming very like our NBAA show, but it is still different. Flying in European airspace is the same as flying in US airspace, however it is also different.

What regulatory and cultural differences have you seen while flying outside of the USA? I know that your fellow readers and I will be very interested in reading your response to this question.

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Jeremy Cox

Aircraft Co-Ownership

by Greg Reigel 1. May 2005 00:00
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Making The Relationship Work

Co-ownership of an aircraft can be a beneficial relationship for individuals who would like to share the aircraft ownership experience. However, it is a lot like a marriage. Compromise and some give and take are necessary to make it work. Open and honest communication regarding expectations is critical. Co-owners must also be compatible. At the end of the day, just like marriage, the arrangement is right for some people and wrong for others. Before you jump into an aircraft co-ownership situation, you need to do some research and planning to determine whether it is the right arrangement for you and to ensure that if you do enter into a co-ownership arrangement, it will be a happy marriage rather than simply a honeymoon before an ugly divorce.

Owner Compatibility. To determine the compatibility of prospective co-owners, you will need to ask and honestly answer a number of questions. Will each owner be flying for business, pleasure or both? What kind of aircraft does each co-owner want? Is it the same aircraft? Will it perform the missions desired by each co-owner? Can each prospective co-owner really afford to be a co-owner? Do the co-owners get along? These may seem like obvious questions, but more than a few people have ventured into aircraft co-ownership arrangements without asking these questions and have ended up in a less than pleasant situation. The answers to these questions will help you determine whether you and your prospective co-owners will have similar goals and expectations.

Formation of a Legal Entity. Once you have determined that you and your prospective co-owners are compatible, you will need to address the legal relationship between the co-owners. Will it be a partnership or perhaps some type of limited liability entity, such as a corporation or a limited liability company? I usually recommend that co-owners form a limited liability type entity for liability protection. It is not mandatory to form such an entity. However, unless you can insure for the full potential liability you might be exposed to if an accident or injury occurs, the protection of such an entity is likely worth effort and expense.

Besides, in today's aircraft insurance market, most aircraft insurance policies only provide limits of liability of $100,000 per passenger and $1,000,000.00 per accident. If a serious injury or death occurs, the potential damages will be well in excess of these limits. Although it may be possible to obtain higher liability limits, the premiums for such limits are exponentially more costly, downright unaffordable or, in some situations, just not available.

Once you have determined that the potential co-owners are compatible and decided upon the legal structure of your co-ownership arrangement, you will need to discuss the details of that relationship. Some, but certainly not all, of the issues that should be addressed and questions that need to be answered include the following:

Owner Information. Who will be the owners? Will each owner be an individual or maybe an entity owned by the individual? How much is each contributing? What percentage of ownership will each owner hold? Are all of the owners, whether individuals or entities, U.S. citizens? You will need this information to form your entity and to ensure that you are able to properly register your aircraft.

Management/Administration. Who will handle the administrative and management functions relating to the aircraft? Will it be the same person or will it rotate between owners? Who will keep the books and records, pay the bills, and report on financial matters to the other co-owners? How detailed and in what form will these records be maintained? Will this person maintain custody of all of the documents relating to the aircraft? Will decisions regarding ownership of the aircraft be made by majority vote or unanimous vote of the co-owners? Agreeing upon how these tasks will be handled is critical to ensuring that the business aspects of owing an aircraft will run smoothly. Documenting these tasks is equally important to provide written guidance for all of the co-owners' use and reference.

Insurance. What limits of liability do the owners want or, more importantly, can they afford? Will any of the co-owners need additional training or ratings to qualify for coverage under the aircraft's insurance policy? Is an umbrella policy or excess coverage desired or an option? Although the answers to these questions may be dictated by the current aircraft insurance market and qualifications of each co-owner, I recommend that you purchase as much insurance as you can afford.

Aircraft Use and Limitations on Use. How will the aircraft be scheduled? Will each co-owner's use be limited by a minimum or maximum number of flight hours per year? Will you have restrictions upon where or under what weather conditions the aircraft can and cannot be flown? Will you have currency requirements that are more restrictive than the aircraft insurer or FAA impose? May an owner use the aircraft for flight instruction or some other commercial use? Will you allow someone other than a co-owner to operate the aircraft? Who will perform the maintenance for the aircraft? At what intervals and to what standards will the maintenance be performed? Here again, a written document delineating the co-owners' agreements regarding use and limitations on use is essential to avoid future misunderstandings.

Expenses. What will you charge for use of the aircraft? How will the co-owners pay fixed expenses such as hangar, insurance etc. be paid? How will the co-owners pay operating expenses such as fuel, oil, reserve for maintenance etc.? When will the expenses be paid? Who will pay the insurance deductible if a claim is made to the aircraft insurer? What happens if a co-owner does not pay the amounts he or she owes when due? Aircraft ownership is not cheap. By addressing these issues in advance both verbally and in a written agreement, you will hopefully limit the money disputes that could arise down the road.

Dispute Resolution. If disagreements arise between the co-owners, how will they be resolved? Do you want to provide for formal procedures short of civil litigation such as mediation or arbitration? If the dispute involves the payment of money, will the co-owner who has not paid sums allegedly due be able to fly the aircraft before the dispute is resolved? Because co-ownership is similar to a marriage, the last thing you want to do when a dispute arises is run to the courthouse. Having written, non-litigation, dispute resolution procedures established in advance will hopefully provide a mechanism for the co-owners to resolve disputes without necessarily ending the co-ownership relationship.

Exit Strategies. What happens if a co-owner wants or is forced to sell his or her interest in the aircraft? Must the remaining co-owners consent? Will the remaining co-owners have a right of first refusal? What happens if a co-owner dies, becomes unable to fly, files for bankruptcy or is divorced? Will the departing co-owner's interest be purchased with cash or financed? The answers to these questions will give remaining co-owners security in knowing that a new co-owner will not be forced upon them and that they will be able to continue their co-ownership arrangement in spite of the departure of one of the co-owners.

Although the issues that arise between co-owners are similar to other co-ownership situations, how they are resolved is as unique as each co-ownership arrangement. The best approach is for you and our fellow aircraft co-owners to discuss and agree on these issues and as many others as you can think of and then to meet with an aviation attorney who can then draft a document formalizing your agreements.

Although most business attorneys can probably document your agreement for you, hiring an aviation attorney who understands these types of arrangements is usually more efficient because you won't have to educate the attorney. Additionally, an experienced aviation attorney will be able to point out issues you may not have discussed with your co-owners and help make sure that your written agreement addresses all of the key issues.

Finally, if you are considering a co-ownership arrangement, a variety of resources are readily available on the subject. AOPA and EAA both have information available for their members. Additionally, several books have been published on the subject that provide further insight into aircraft co-ownership arrangements and the potential advantages and disadvantages of this type of aircraft ownership. With the proper research and planning, you can make sure your co-ownership of an aircraft is a marriage made in heaven.

In-House or Outsource?

by David Wyndham 1. May 2005 00:00
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We had an interesting question from a client the other day. He was evaluating his aircraft operation and asked whether doing maintenance in-house versus outsourcing will affect costs.

In our Aircraft Cost Evaluator, our maintenance labor hours per flight hour are based on "billable hours" or "wrench on airplane time." The rate per labor is a typical rate for airframe maintenance. The maintenance is for routine scheduled and unscheduled and does not include off-aircraft overhauls or life-limited components such as landing gear overhaul, rotor blade overhaul, etc. If in-house maintenance staff does the routine scheduled and unscheduled maintenance, then their salary replaces the hourly maintenance charge.

In house versus outsourcing costs will vary. For example, if the nearest service center is next door, it is cost effective for a single-ship operator to simply have the service center perform the maintenance rather than employ a full-time maintenance staff. Especially if that service center operates around the clock, or close to it. If the service center is 400 miles away, then you have the added cost of maintenance ferry flights and a grounded aircraft at home waiting for the A&P to show up can be a real problem. As you add aircraft in the flight operation, the cost effectiveness and fast response of in-house maintenance staff is valuable.

Having in-house maintenance staff is sort of like having the fire department split into several small companies. Your taxes may be less if there was one large, central fire department in the center of the city, but when you have a fire; you want a response time of now. In-house maintenance staff gives you the dedicated response and also gives you someone who know your aircraft intimately.

With small flight departments (1 - 2 aircraft) that have good maintenance service at home station generally can get away without in-house maintenance and still maintain a high level of service. An example of this was a client of ours in Houston. His hangar for the Lear was next to Garrett, so he was never more than five minutes away from his maintenance facility. He had high dispatch reliability and reasonably fast response times from Garrett.

Another client of ours with one aircraft is based at a small airport in CT. The preferred service station for their aircraft is a service center in Wilmington, Delaware. So, they keep a mechanic on staff for the routine stuff and schedule major inspections with the service center. While the cost per aircraft flight hour of the A&P's annual salary exceeds the Conklin & de Decker maintenance labor cost per hour, the flight operation maintains the required high level of service and avoids the added cost of extra maintenance ferry flights at about $1,000/hour.

Larger operators and those smaller operators lacking qualified and responsive maintenance at home station generally are better served by in-house maintenance staffs. Also with a large operator's fleet of aircraft, the learning curve is such that in-house staff can become very proficient at the routine tasks, know the aircraft history and will be there when you need them to be there.

So I think the answer regarding the impact on cost is "it depends." That is where some life cycle costing can help. Calculate the total cost with in-house maintenance (salaries and overhead) versus out sourcing (perhaps added flight hours for ferry flights).

Also to include in the analysis is the impact on the level of service. When your aircraft is in for major maintenance, such as a 12-year airframe inspection, having your in-house A&P work with the service center typically results in jobs being completed on time and close to budget. "The squeaky wheel gets the grease." While the dollars may not favor the in-house approach, the aircraft availability and level of service may make in-house maintenance a must.

If you operate a corporate flight department, charter, or managed aircraft, how and where do you do your aircraft maintenance? At what level do you out-source? Drop me a line and let me know.



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