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What Will the FAA Say About You?

by Greg Reigel 1. August 2005 00:00
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If you are a pilot or hold any other airman or medical certificate, the FAA has personal information about you. Depending upon how many certificates and/or ratings you hold, or if you have been involved in any type of enforcement proceeding, the FAA could have a significant amount of your personal information. The question many people ask is "If asked, what will the FAA tell someone about me"? That will depend upon who is asking the FAA for the information and how the FAA is being asked.

A request to the FAA for information regarding an airman can generally be made under one of three statutes: (1) the Pilot Records Improvement Act ("PRIA"); (2) the Freedom of Information Act ("FOIA"); or (3) the Privacy Act. The type and quantity of information released by the FAA will depend upon which type of request it receives and from whom it receives the request.

Pilot Records Improvement Act

If a pilot is applying for a position with an air carrier, that air carrier is required, among other things, to make a PRIA request to the FAA. Advisory Circular (AC) 120-68C sets forth not only guidance to air carriers for compliance with the PRIA, but it also identifies the information that the FAA will disclose in response to a PRIA request. The FAA will disclose (1) current airman certificates with associated type ratings and limitations; (2) current airman medical certificate including any limitations; and (3) summaries of FAA legal enforcement actions resulting in a finding by the Administrator of a violation that was not subsequently overturned. That means the FAA is only required to disclose fully adjudicated and closed enforcement cases in response to a PRIA request.

The FAA will not provide information concerning accidents or incidents in which the airman may have been involved, nor will it release information regarding open, pending, cases under appeal, or reopened enforcement cases. According to the FAA's Office of Chief Council release of this information would be unfair to the pilot because: (1) the reports may or may not involve pilot error; (2) airmen identified in accident and incident reports do not receive the same due process protections as they receive in a legal enforcement action; and (3) the outcome of open cases that have not been fully reviewed by FAA, NTSB, or possibly by a U.S. Court of Appeals, is uncertain because such cases could eventually be dropped or dismissed by the court.

Freedom of Information Act

FAA Order 1270.1 details the FAA's requirements and responsibilities for responding to FOIA requests. Under FOIA, the FAA will disclose information regarding accidents, incidents and enforcement actions. Any enforcement action will be disclosed, including cases that are still open, as well as those that are fully adjudicated and closed. However, "proposed" or "alleged" information contained in an open or pending case may be withheld until the case has been fully adjudicated and closed if the case is still in the investigatory stage and FOIA exemption 7 applies. Such "proposed" or "alleged" information may include the proposed enforcement action(s) against the alleged violator, the sanction(s) being considered as a result of the alleged violation(s), and the regulation(s) that was/were violated.

If the person requesting the information follows the proper guidelines when making the request, and one of the nine FOIA exemptions for denial does not apply, the FAA will disclose the information requested. The FOIA request must be made in an acceptable and appropriate manner and must positively identify the person who is the subject of the request. A FOIA request should clearly identify that the request is being made under FOIA by including the words "FREEDOM OF INFORMATION ACT" in plain sight within the request, and it should also include specific details concerning the information being requested.

Interestingly, under FOIA the subject of the request does not have to give consent for the release of the information, nor does the FAA have to notify the subject of the request. Also, the FAA is not required to provide the subject with a copy of the information sent to the requestor, as is required with a PRIA request, nor is the FAA required to provide any accounting to an airman who desires to know if another person has made a request concerning his or her records.

Privacy Act

FAA Order 1280.1 explains the procedures and duties for the FAA to follow in processing an information request under the Privacy Act. The FAA's release of information under the Privacy Act will depend upon who is making the request.

Upon request by an "Individual," the FAA will release information concerning accidents, incidents, or FAA enforcement information involving the individual, verification of the individual's medical certification information, and verification of the individual's airman certification information. A "Third Party (Company)" may request records including verification of the medical certificate, pilot or mechanic certificate, or any other authorized certificate held by an airman, accident and incident information, and FAA enforcement information.

The requester must provide identification proving that the requester is the person he or she says. Additionally, unlike the PRIA or FOIA, the Privacy Act provides the subject airman with the right to request the identities of persons outside of U.S. Government agencies who have requested and received information pertaining to that individual.

Conclusion

With the privilege of an airman's certificate comes concern regarding the FAA's maintenance and retention of your personal information. Unfortunately, the FAA is required to disclose some, if not all, of that personal information depending upon the type of request it receives. The FAA will disclose a great deal more information in response to a FOIA or Privacy Act request than it will to a PRIA request. As a result, employers requesting information as required by the PRIA are often also making a concurrent FOIA or Privacy Act request in order to obtain more information about their applicants.

If you are concerned with who may have requested information about you from the FAA, you can certainly make a request under the Privacy Act to find out whether anyone has made a Privacy Act request about you. Or if you believe that too much or the wrong information was disclosed, consult with the applicable FAA orders to determine whether the FAA followed proper procedures.

At the end of the day, an airman's personal information is available to the inquiring public. People can find out about you and you can find out about other airmen. Just ask the FAA.

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Greg Reigel

Comparing Costs

by David Wyndham 1. August 2005 00:00
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It All Depends On How You Look At It.

About a year ago, my wife and I started keeping a detailed accounting of where we spent our money. Rather than just looking at the bills, we wanted to understand where the money went and to better control our spending. Initially, my categories and Laurie's differed. I was looking at it from the "give me the big picture" point of view and had six categories. Laurie wanted more detail because she wanted more specific knowledge, and control. As usual, the smarter person (Laurie) won out and we've been satisfied with the results.

When looking at the aviation-related costs, it also helps to know what results you are looking for and who is doing the looking:

· The Maintenance Director looks at what it takes to maintain the aircraft in an airworthy condition. The maintenance director can bid out major repairs to get the best price for quality work. Talk to maintenance professional and he/she will take that one "maintenance cost" item and really go into detail. Maintenance for the King Air is about $283 per hour ($142 for parts and labor, and $142 for the engine reserves).

· The Pilot is responsible for the safe and efficient operation of the aircraft. That person is usually most concerned with fuel, maintenance (as one number), and travel expenses. The pilot can choose fuel vendors who have competitive prices. For a King Air, that operating cost figure would amount to about $710 per hour. What else might be missing?

· The Aviation Department Manager is concerned with the cost of the aircraft, plus the fixed overhead items such as hangar, training, insurance, and pilot salaries. Those items for a King Air can be about $300,000 per year, plus the hourly cost of the aircraft. For a nominal 400 hours per year operation, the Aviation Department Manager's budget for a King Air is $584,000 annually, or $1,460 per hour average.

· Lastly, the Executive/CFO is concerned with acquisition costs, amortization, interest, depreciation, taxes and the cost of capital. That can easily add as much as 60% onto the Aviation Department Manager's "costs" depending on the value of the aircraft. If the aircraft is operated for business use, the corporation has the ability to write off the expenses of ownership and operation. After taxes and depreciation, the total figure to own and operate an aircraft can change dramatically. An educated Executive will also consider not only what the costs are, but when they occur and the value of the aircraft at the end of a specified amount of time.

Comparing Two or More Acquisition Options

When comparing different forms of ownership, all costs need to be factored in. Typically done over a defined period, Life Cycle Costing accounts for the value of any owned aircraft at the end of the term. Life Cycle Costing can also involve the time-value of money.

An aircraft acquisition involves a very complex financial decision. Accurately judging the financial impact of such a major acquisition project can best be done with a Net Present Value (NPV) analysis. A NPV analysis takes into account the cost of money, as well as income and expense cash flows, type of depreciation, tax consequences, and residual value of the various options under consideration. This type of analysis is also the only effective way of judging whether it is better to purchase, finance, or lease, even if different conditions and interest rates apply to each alternative, and is the standard financial analysis technique used by the chief financial officers of major organizations.

Many organizations have a published internal rate of return (IRR) or return on investment (ROI) target. For those that don't, a way to estimate it is by dividing the profit before taxes of the organization by the equity and expressing as a percentage the return the organization expects to make on the money it invests in the enterprise. For many organizations, such as Fortune 500 companies, this is typically from 10% to 25%.

By using the time-value of money, an organization can thus judge whether a project will yield a better or worse return than the average return experienced on a company-wide basis. Thus, the NPV analysis allows the comparison of different cash flows based on a set target return.

Business aircraft do not directly generate revenue except for the sale of the aircraft. Thus, the NPV results are typically negative. When comparing negative NPVs, the "least negative NPV" is the more favorable. In other words, if option A has an NPV of ($5,000,000) and the NPV of Option B is ($6,000,000), Option A has the better NPV.

Even though acquiring an aircraft for personal use is more of an "I want it but can I afford it?" question, you still need to know all the costs and when they occur. Whether it is a used Cessna 172 for $50,000 or a business jet for $5,000,000, the methodology is the same, just with more zeroes.



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