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FAA Proposes Changes to Aircraft Registration

by Greg Reigel 1. March 2008 00:00
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In a Notice of Proposed Rulemaking ("NPRM") published on February 28, 2008 in the Federal Register, the FAA is proposing significant changes to its aircraft registration requirements. At this point in time, the NPRM is merely a proposal and is not a final regulation. However, since these changes will affect current aircraft owners, as well as future aircraft transactions, I wanted to provide an overview of the proposed changes to assist interested parties in providing comments to the FAA.

The Purpose Of the Proposed Changes

According to the NPRM the changes are "based upon the need to increase and maintain the accuracy of aircraft registration information in the Civil Aviation Registry" and are intended to ensure that aircraft owners keep the Registry up-to-date regarding changes in aircraft registration. The NPRM also notes that "these amendments would respond to the concerns of law enforcement and other government agencies and would provide more accurate, up-to-date aircraft registration information to all users of the Civil Aviation Registry database."

Prior to issuing the NPRM, the FAA analyzed the Registry's aircraft registration data and determined that approximately 104,000 of the more than 343,000 U.S. registered aircraft may no longer be eligible for registration. The FAA's research disclosed that in recent years:

17,000 aircraft have been reported as sold by their former owners without the purchasers making application for registration (with about 15,900 being in the "sale-reported'' category for more than 6 months);

4,700 have started registration without completing the requirements (with about 2,100 being in the "registration-pending'' category for more than 12 months);

Approximately 30,100 aircraft are known to have bad addresses that have been incorrect far longer than the 30 days allowed for reporting change;

Close to 14,700 aircraft have had their certificates of registration revoked due to bad addresses, but remain in the system to prevent reassignment of their U.S. registration number ("N-Number") until the FAA is positive the aircraft is no longer operating with that N-Number; and Up to 41,000 additional unidentified aircraft are estimated to be inactive or possibly no longer eligible for registration.

Based upon these statistics, the FAA believes that the most cost-efficient way to weed out the questionable registrations and to increase the accuracy of the Registry is to limit the duration of an aircraft's registration certificate ("Certificate").

The Proposed Changes
The NPRM proposes:

  1. The expiration of all Certificates for currently registered aircraft with re-registration requirements for those aircraft that remain eligible for registration;
  2. The periodic expiration of all Certificates issued after the effective date of the proposed rule with a registration renewal process;
  3. Elimination of the present Triennial Aircraft Registration Report program in its entirety;
  4. Limits on the time an aircraft may remain in the "sale reported" category before its N-Number assignment is canceled ("Sale reported'' means the FAA has received notice of a sale from the last registered owner, but no application for registration has been filed, and the aircraft has not been registered to the new owner);
  5. Limits on the time an applicant or successive applicants for registration have to complete the registration process and provisions for reserving the aircraft's N-Number if the aircraft is not registered at the end of this time; and,
  6. Cancellation of the N-number of an aircraft registered under a Dealer's Aircraft Registration Certificate (Dealer's Certificate), if the Dealer's Certificate has expired and application for registration has not been made under FAR 47.31.

What does this generally mean to aircraft owners? Well, if the NPRM becomes a final rule, an aircraft owner who wants to maintain registration of his or her aircraft would have to re-register the aircraft within a specified time period. Once re-registered, the aircraft owner would receive a Certificate with an expiration date. New aircraft owners would automatically receive a Certificate issued with an expiration date. Once issued, whether through re-registration or new registration, the Certificate would expire three years from the date of issuance. However, the aircraft owner could renew the Certificate for successive three-year terms if he or she completes and submits a renewal request form and pays the applicable fee.

Although the FAA currently charges $5.00 to issue a new Certificate, the NPRM provides notice that this fee does not cover the FAA's costs and, if the FAA has its way, the fee will increase if and when the current FAA Authorization (yes, the one containing user fees) is approved by Congress. This isn't surprising and, providing any increase is reasonable, makes fiscal sense. Unfortunately, that would end the last great government deal!

Let's talk a little more specifically about some of these changes.

Aircraft Re-Registration/Renewal. Under the NPRM, Certificates would need to be "re-registered" and/or "renewed." "Re-registration'' would be the process for obtaining a new Certificate for an aircraft that was registered before the effective date of the rule and has a Certificate without an expiration date. "Renewal'' would be necessary for any aircraft that has a Certificate with an expiration date. Under the NPRM, all currently registered aircraft would need to be "re-registered" within a 3-year phase-in period. The month in which the aircraft was originally registered would dictate specifically when during that 3-year period the aircraft would need to be "re-registered" and each aircraft would have a 3-month window within which to accomplish the re-registration.

Aircraft owners would receive a notice from the Registry approximately 120 days before the expiration date on a Certificate along with the Aircraft Registration Renewal form. The aircraft owner could then either mail in the Aircraft Registration Renewal form and fee, or if there were no change in registration information, he or she could file the completed form and pay the fee electronically through the Registry's web site. If an aircraft owner does not "re-register" his or her aircraft within the time allowed, the aircraft's Certificate would expire and, after 30 days, the FAA could administratively cancel the aircraft's N-number.

Once issued, a new Certificate would expire 3 years from the last day of the month in which the certificate is issued. Any subsequent Certificates issued through "renewal" would expire 3 years after the expiration date of the previous certificate. Thus, aircraft owners would not be penalized for early renewal within the 3-month renewal period.

Sale Reported and Registration Pending. The NPRM also sets deadlines beyond which an aircraft registration may not remain in either the "sale reported" or "registration pending" categories. ("Registration pending'' means the FAA has received evidence of ownership change and an application for registration, but due to various reasons is not able to complete the registration of the aircraft). Under the NPRM, an aircraft registration could remain in the "sale reported'' category for 6 months, in the "registration pending'' category for 12 months and, since the categories are distinct, up to a maximum of 18 months between the two categories. If the time limits are exceeded, the FAA could cancel assignment of N-numbers.

Additionally, an aircraft owner would have 12 months as the maximum time that the pink copy of the application for registration, including any subsequently issued extensions, could be used as temporary authority to operate the aircraft after ownership has transferred, and registration requirements have not been met. If the aircraft owner does not complete the registration of the aircraft within the 12-month period, he or she would not be able to legally operate the aircraft.

Comments

Comments to the NPRM are due no later than May 28, 2008 and must be identified by Docket Number FAA-2008-0188. Comments may be sent using any of the following methods: Federal eRulemaking Portal at http://www.regulations.gov; U.S. Mail to Docket Operations, M-30, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., Room W12-140, West Building Ground Floor, Washington, DC 20590-0001; Hand Delivery or Courier to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays; or fax comments to Docket Operations at 202-493-2251.

Now is your chance to provide the FAA input and to have your voice heard.

If you need to check out your current status or review the title on your aircraft Globalair.com offers several types of Registration services at https://www.globalair.com/myflightdept/titleservices.asp

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Greg Reigel

VLJ Comparison

by Jeremy Cox 1. March 2008 00:00
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I have wanted to do an 'on-paper' comparison of the current production Very Light Jet Aircraft for quite some time now, and for this month's article I have achieved this ambition.

There are fifteen separate and independent VLJ manufacturing companies in existence. Some are close to certification and first delivery, while others struggle to keep their doors. The stakes are so high in the aircraft manufacturing industry that anyone making the attempt must get used to pitching for large gobs of cash from investors, just to be able to continue in their heady quest of designing, building and certifying a new jet aircraft. Two out of the fifteen want-to-be manufacturers have now received their Type and Production Certificates from the FAA. Now the cash is rolling back in a positive direction for these two companies while they enjoy the process of successfully delivering their certified production aircraft to their eager clients. These two companies are Eclipse Aviation and Cessna.

Let us take a closer look at these 'first of the breed' VLJ aircraft and make a direct comparison between the two. I will start with the Eclipse 500: Eclipse Aviation was established in 1998 by a maverick senior executive from Microsoft Corporation, Vern Raeburn. Success has been achieved by Raeburn's Eclipse because he took an entirely different approach in the way that he marketed his aircraft. Even long before any metal had been cut, it was through Raeburn's efforts that the terms or 'mini-jet' or 'VLJ' were coined and both have now become to a certain extent, household terms. Never before has the concept of a new aircraft been so far reaching into the imagination of the general public. The prototype Eclipse took to the skies of Albuquerque in August of 2002. The Raeburn design and engineering team further refined the technology of friction stir welding by incorporating this technique into their manufacturing process, effectively, according to Raeburn, making the labour cost a lot lower than what the conventional riveting method requires. Customer deliveries of the Eclipse 500 started in mid 2007.

Cessna is probably the single most successful general aviation and business jet manufacturer in the world. Specializing in the design, manufacture and marketing of an entire family of aircraft that range from ab-initio basic training aircraft, all the way up to the worlds fastest general aviation aircraft, the Citation X. In response to the success that Raeburn and his team were meeting our in Albuquerque at their start-up operation at Eclipse Aviation, it was a simple procedure for Cessna to stretch the design and construction rationale that they had developed with their CJ line. In the autumn of 2002, Cessna entered the newly developing VLJ race with their announcement at that years NBAA convention, that they were committing resources to the design and building of the Cessna Mustang; the smallest in their line of business jet aircraft. The prototype Mustang quickly took to the skies of Wichita in April of 2005. Customer deliveries of the Mustang started in late 2007. The sales race between these two competing VLJ aircraft has advanced into maturity.

So how do these two compare on paper, against the first VLJ from the 1960s, the Learjet 23?

Model Eclipse 500 Mustang Lear 23
New Price/Year $1,310,000 in 2006 $2,345,000 in 2006 $595,000 in 1965
Engine PW 610F-A PW 615F-A GE CJ-610-1
T/O Thrust 950 lbs 1460 lbs 2850 lbs
Wingspan 37.4 feet 43.16 feet 35.6 feet
Length 33.1 feet 40.58 feet 47.6 feet
Tail Height 11 feet 13.42 feet 12.3 feet
Cubic Feet 160 cubic feet 140 cubic feet 192 cubic feet
Baggage 16 cubic feet 63 cubic feet 40 cubic feet
Number of Seats 6 Souls 6 Souls 8 Souls
Max Altitude 41000 feet 41000 feet 41000 feet
Cruise 360 KTAS 340 KTAS 440 KTAS
Stall 69 Kts 70 Kts 83 Kts
Range 1100 Nm 1150 Nm 1000 Nm
Fuel Capacity 224 USG 383 USG 815 USG
Fuel Consumption 66 USG 90 USG 316 USG
DOC $595 $945 $2,057
MGTOW 5760 lbs 8645 lbs 12500 lbs
ZFW 4860 lbs 6750 lbs 9000 lbs
Payload (Full Fuel) 702 lbs 600 lbs 342 lbs

I think that when all of the numbers are placed into a matrix, as they are above, one see's some interesting correlations emerging: The new VLJ's are both smaller and slower than their grandfather VLJ, the Learjet 23. However the operating cost has been slashed by 60 to 70% off what the older aircraft demands from its owner. It will be very interesting to see what the other VLJ's will do in this direct comparison, as they slowly meet certification and start delivering. We shall revisit this topic next year.

Okay, I will see you next month and please remember that any input that you care to make will be of great interest to all of the readers here at Globalair.com. So please don't be bashful and go ahead and write your comments and suggestions here. Please don't forget that whatever you write here, can be seen publicly by everyone that visits this page, so please be funny, be inspired, but most importantly of all, please be nice.

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Jeremy Cox

Is It Worthwhile to Upgrade Older Aircraft?

by David Wyndham 1. March 2008 00:00
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Used aircraft can cost a fraction to acquire compared to their new counterparts. Throw on some new bells and whistles, recover the seats and a new paint job, and voila - a new plane. Is it worth it?

First off, remember older aircraft cost more to maintain than newer ones. Wear and tear items, aging aircraft issues, second or third engine overhauls all drive the cost up. Before you go spending all kinds of hard earned cash on upgrades, mare sure the aircraft you are considering is worth the expense. The aircraft in question must be in sound mechanical condition and essentially free of corrosion.

Second, some upgrades add value to the marketability of the aircraft, while others add value only to you. Unless you plan to keep your aircraft a long time, avoid the latter unless they are easy to change for a nominal cost. Take a look at aircraft for sale and see who has what mod or upgrade. Refer to Vref, The Aircraft Bluebook Price Digest, or HeliValue$ to see if your mod is listed as adding value.

Here are some value adding upgrades to consider:

Update the avionics. There are impressive upgrades that can turn your old analog cockpit into a glass heaven. The prices are impressive, too. Evaluate what you need (8.33 radios, RVSM e.g.) versus what you want. Also, consider updating your 19XX aircraft's avionics to come close to that your aircraft currently has in the new models.

Cabin and In Flight Entertainment. If your aircraft is a business aircraft, it is the passengers who pay the bills. Keeping them comfortable and happy is important. Interior upgrades are many. Updated fabrics, headliners, carpets can add significant appeal and comfort. Be careful of complexity and weight.

Performance enhancements can range from winglets to engine retrofits. Given the cost of fuel, things that make the aircraft go faster on the same fuel, or engines that burn less fuel, can be desirable. Do the math to see what the payoff is. If the mod saves 3% in fuel consumption, but takes five years of fuel savings to pay off the cost of the mod, is it really worth it? Maybe, if you plan on keeping the aircraft that long.

When evaluating performance enhancements, be wary of the claims to accompany them. Can they be verified? Does the vendor supply references? Has the vendor done significant testing on the mod? How popular is that mod on your type of aircraft? Make sure the facility doing the work is qualified and intimately familiar with your particular model. Remember, if it seems too good to be true…

Last, be aware of the cost of the upgrades. It should enhance the value of your aircraft to the market as a whole. Factor in the cost in downtime of waiting for the upgrade to be done. Not all upgrades return their value, so make sure they add value to your mission.

Supplemental Lift

by David Wyndham 1. March 2008 00:00
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If your needs are either short term lift or a limited number of hours; charter, jets cards, or fractional ownership all offer a modest number of flight hours without the costs associated with a whole aircraft. When do these make sense?

It is not unusual for major maintenance to be combined with refurbishment or upgrades. These can take an aircraft out of service for a few months. Charter or jet cards can provide the short term lift with no commitment beyond the hours purchased.

You need simultaneous aircraft on occasion. A couple of times per month you find multiple requests for the aircraft that overlap. Rather than refuse or force one of your clients to reschedule, it would be nice to have that second aircraft available. Provided this isn't routine, charter, jet cards, and fractional all might make sense.

You have a mission requirement that falls outside the capability of the current aircraft. Supplemental lift providers have a variety of aircraft available, allowing you to tailor an aircraft to fit an infrequent, but important mission.

When does each of these make sense? While you need to evaluate your individual needs, here are a few rules of thumb to consider:

Charter works well if there are a number of well qualified providers with the aircraft types you need close to your location. With charter, you pay the entire time the aircraft is flying, whether occupied or not. Charter costs are minimized with round trip travel. Charter can make financial sense anywhere from a few hours to about 100 hours per year.

Jet cards are a form of pre-purchased charter. Some of these programs are aligned with a major fractional company such as NetJets, FlexJets or Flight Options. Most offer one-way or round trip pricing. Typical cards start with 25-hours of flying, with 10 hours offered. Jet cards make financial sense from 25 to 100 hours.

A fractional share may be a way to bridge the inability to meet current demand with growing into enough demand to justify a whole aircraft. For example, what if your current aircraft is essentially at full utilization given its type of operation and mission requirements? But, demand is increasing and you'd really love 80 - 120 hours more per year. That is insufficient to justify another aircraft acquisition, but fractional may be just the ticket. Fractional makes financial sense in the 50 to 300 hours per year realm with the caveat that the upper end may be as low as 200 hours for getting into whole aircraft ownership.

As fractional contracts are for five years, this form of supplemental lift has significant commitments compared to charter and jet cards. Also, your use needs to be predictable and stable otherwise you can end up with a quarter, an eighth, and a sixteenth share all under different contact start dates. Given the long lead times on new turbine aircraft, fractional may just get you to the new aircraft delivery.

Any utilization over 150 to 200 hours per year should include whole aircraft ownership as an option. Adding another aircraft will have different costs versus getting your first. You need to run the numbers and consider all your options.

What are your options? Are you using any of these supplemental lifts and what have your experiences been? Does it fit your missions profile? Your comments here will help others with guidelines.

For a list of companies which can help you fulfill your requirements use the Globalair.com Aviation Directories - Charter section



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