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Answers To Aircraft Dry-Lease Questions

by Greg Reigel 31. August 2011 14:21
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In an August 11, 2011 Legal Interpretation, the FAA discussed regulation of aircraft wet and dry leases. Under a dry lease of an aircraft the lessor provides the aircraft and the lessee supplies his or her own flight crew, retains operational control of the flight and may operate under FAR Part 91. Under a wet lease, the lessor provides both the aircraft and the crew and retains operational control of the flight, but the lessor is usually required to hold an operating certificate because the FAA considers it to be providing air transportation.

According to the Interpretation, "[a] key consideration in differentiating a dry lease from a wet lease is whether the aircraft and flight crew are obtained separately, or provided together as a package." For example, if the evidence shows that the parties are "acting in concert" to furnish an aircraft and crew, then the FAA would likely consider the arrangement a wet lease. However, whether an aircraft lease is a dry or wet lease is determined on a case-by-case basis.

The Interpretation goes on to state that the regulations do not limit the number of lessees that may lease an aircraft, nor do they establish hourly requirements for aircraft leases. Those issues are "contractual terms negotiated by the owner and the lessee." Additionally, a lessee may hire the same management company that is used by the owner, provided that the other facts and circumstances do not show that the arrangement is "merely a wet lease in disguise."

The interpretation also notes that a lessee may contract with the same flight crew that is contracted for by the aircraft owner. But again, only so long as the other evidence does not suggest that the arrangement is really a wet lease. The Interpretation states "[g]enerally the FAA would consider an arrangement where a person leases an aircraft from its owner, and secures the flight crew from another source to be a dry lease. If the aircraft and flight crew are provided as a package, the lease would be a wet-lease."

Finally, the Interpretation indicates that the FAA "does not have specific requirements regarding collection of payment for the flight crew. However, the method of payment may serve as indicia of whether the parties have entered into a wet- or dry-lease agreement."

If you enter into aircraft lease arrangements, you should become familiar with this Interpretation. However, the Interpretation only provides a general outline of how the FAA will review such arrangements. Since the "devil is in the detail," having an aviation attorney review the particular circumstances for each situation and then draft or review an appropriate written lease agreement can protect aircraft lessors, aircraft lessees, and the pilots who operate the aircraft, from FAA enforcement.

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Greg Reigel | Leasing

My first trip to Oshkosh EAA Airventure

by GlobalAir.com 8. August 2011 16:51
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Where does one begin to explain their first trip to Oshkosh, is it the journey, or the first moment they see how many people and planes there really are? My first memorable moment was the day we arrived and started the setup stage. There seemed to be an endless amount of booths, each booth filled with something aviation related. I was in awe of how many people were there and the show had not even started yet.

The story really begins on Sunday, the day we really began to get everything ready for the general populous. We woke early to drive to the lovely hangar D, where we would be spending the next week in a frenzy showing various people our new iPhone app and Max-Trax. After the first hour we were already done with the setup process so I went off with my camera to try to get some shots before the major crowds got there.

 The next day as my alarm woke me I knew the day was going to be hectic, getting into the truck I was nervous about what the day would bring. As soon as 9 o’clock came it seemed like an endless stream of people flowed into the hangar and I was forced to come out of my comfort zone and start selling. At first, I had no idea what I was doing. After a few potential customers, I soon got into the swing of things and became more comfortable talking and trying to talk up the Iphone app to complete strangers. Wow, never could I believe that many people were strolling by our booth at one time, talk about an endless stream.


 After everyone had left the hangar we prepared ourselves for the REO Speedwagon concert. It seemed as if every person that had been at the airventure that day had shown up for the concert, and were ready to get the show of their lives. Needless to say REO didn’t disappoint, by playing their greatest hits and sounding as good as they did twenty years ago.  As the day finally wound down to a close, I was relieved to be able to go back to the hotel and get off my feet for a few minutes.

Soon enough it became time for Jeff (the boss) and I to go eat lunch and venture out to look at the various thousands of airplanes inhabiting the Oshkosh area. I was overwhelmed, to say the least, I had never seen that many airplanes in one place in my entire life.  Line after line of single and twin piston aircraft as far as the eye could see and I mean that.  What they called the North 40 was over a quarter mile at least.  I saw one of my personal favorite airplanes of all time the Piaggio Avanti, a twin turbine airplane that is a pusher. In other words the props face backwards and they push the airplane instead of pulling it. What an awesome aircraft, fast but with style!

Before I knew it, or was ready the alarm was doing what it does best and I was up and ready for another day.  At the hangar we ready ourselves for the onslaught of people that was soon to begin. As 9 o’clock came around sure enough a few thousand people lined up outside came pouring inside and the day really began. As the first wave of people died around eleven, I once again set out to see what kind of airplanes I could find in the few hours I was given. I learned fast the trams were the way to travel through Oshkosh, and boarded one to see where it would take me.

I lucked out because it took me to the place I most wanted to go, the warbirds section. Row after endless row of P-51’s, T-6’s, and everything else from Huey helicopters to Mig jets. Then I saw my favorite plane of all time, the famous F-4U Corsair. The design of this plane is astounding, the curve of the wings as they enter the fuselage, the huge propellers that drove it through the air, all in all it is one of the most beautiful and innovative planes of all time.  I could have spent the entire airventure there and not seen everything I wanted to see, but in the time I had, I got to see some of the most vicious looking planes ever designed.

Wednesday was for me the most intriguing day of the entire trip, the day Fifi flew in. Never in my life have I ever been so close to something that struck fear into so many people’s lives and at the same time, but on the other side of the line, gave inspiration to thousands. The B-29 Superfortress nicknamed Fifi is one of the most intimidating, and largest planes I have ever seen in person. The thought that four propellers could fling this mammoth into the air was a mind boggling fact, which was reinforced when I saw her flying into the airport. From the ground one cannot even begin to understand the actual size of this beast, it dwarfs even the larger airplanes sitting around it and makes them look like toys.

Standing next to it I realized just how enormous and impressive Fifi really was. Just about the second she landed the crowd engulfed the plane, each person taking hundreds of pictures and craning to get a better view and a better picture than the person next to them.

As the turning point of the week started I couldn’t believe that it was already Thursday, the week was flying by faster than I could keep track of. It finally got to my favorite time of the day, hunting for pictures.

 

I slowly made my way to the vintage section, taking in the wonder of the old biplanes and tail draggers. The massive radial engines and interesting designs that people came up with to make a large heavy object get off the ground were astounding. It was amazing how an aircraft that was almost one hundred years old still looked as if it came off the showroom floor days earlier. I then heard the news that made my heart drop; an F-16 had crashed. From what I heard the pilot came in for low passes with landing gear down, and had come a little too far down and tapped the ground with his gear, effectively destroying the hydraulics. As he came into land and the front gear hit the ground the gear collapsed and he went sliding into the ground a few hundred feet from touchdown.

Friday, down the home stretch, brought me one of the best experiences of the entire time. I was able to take a ride on the Ford Trimotor, built in 1929 the plane had as the name suggests three separate piston motors and was an amazing feat of engineering. With a single engine on both wings and then one more on the nose, the plane looked as if someone just decided to make something so out of this world and innovative that people would be in awe of its presence, that person succeeded in their goal. Shortly after getting off the plane I noticed people looking up, although it was normal with the thousands of planes constantly buzzing about, I knew something was different.

That was when I saw it, the Boeing 787 Dreamliner, a twin engine jet that made Fifi look like a midget. It seemed as if twenty people could fit inside just one of the engines, with room to spare. It was an astounding sight to see this absolutely huge airplane coming down and slowly touching down to the earth.

My second to last day at Oshkosh, a place I called home for a week already, was a bitter sweet moment. Although I loved the trip, home was starting to sound really nice to my feet but we had just a little bit of time to go. As I looked at the Airventure Today daily paper I saw what can only be described as the strangest flying machine I have ever seen.

Burt Rutan’s Boomerang, it has an engine on the nose like a typical airplane but then has another one on just one of the wings, making it a twin piston but a very strange one. The idea is actually ingenious, as one prop turns one way the other turns the opposite way, effectively eliminating torque effect and P factor.  At one point during the day I hear a big commotion and wonder to myself what it could be, only after going outside and seeing one of my favorite jets in the world hovering in one place did I realize what I had been missing out on. The Harrier, the Marine Corps signature jet, sits suspended in the air by the massive jets of hot air blowing straight down, I have seen this jet a few other times before this but every time I witness the astounding hovering ability of the plane I am in total awe of how it is even possible.

My final day at Oshkosh was one to remember for sure. All day long the booths near us were getting ready to tear down and go home. I took one last opportunity to go take pictures and look at the amazing airplanes that were all leaving before returning to the booth to aid in packing up our stuff. As the day drew to an end I had a feeling of joy, but also of regret because I know I was unable to see everything I had wanted to see. I guess I will just make this an annual event now (go figure). This trip will be forever engrained in my body and soul as the trip that totally sold me that my future was in aviation.  Never in my life have I enjoyed all the senses such as “The smell of Avgas in the morning” or the old adage of “Blueskies”.  What a wonderful feeling to have at attending the worlds largest aviation airshow and flyin known as EAA AirVenture 2011!

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About the author:  Cody Snyder is an 18 year old senior at Clarksville High School in Clarksville, IN.  He is also attending one of the only Aviation programs in the country for high school students, Shawnee Aviation Program, based in Louisville, KY.  His passion is to one day fly for the US Marines and is considering Purdue University Aviation Management program and ROTC.  Currently he is working on his private license with approximately 10 of PIC time.  He also is an avid golfer.  He is the son of Jeni King and Chad Snyder.

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GlobalAir.com

Dear President Obama, Why are you killing the only industry that still shines?

by Jeremy Cox 3. August 2011 11:16
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The 44th President of the United States of America

Commander in Chief of the Armed Forces of the United States of America

Nobel Peace Prize Laureate

Author, Statesman and Business Aviation User

Mr. Barack Hussein Obama II

The White House

1600 Pennsylvania Avenue N.W.

Washington, DC  20500

Tele. +1.202.456.1414

Fax. +1.202.456.2883

president@whitehouse.gov

 

 

 

Dear Mr. President;

 

I wanted to take a moment to ask you 'man to man' why you have decided to single out the General Aviation Industry for your public vilification and attacks, when you yourself are such a heavy user of the services provided by this vital industry?

 

You might argue that you do not use General Aviation while fulfilling your role as the Commander in Chief of the United States as the aircraft that you predominantly use for state business are operated by both the Air Force and the Navy.  However as you know, there are only 180 Air Force Bases and 40 Naval Air Stations located within the Contiguous United States, while these potential destination landing sites for both Air Force One and Marine One are supplemented by only a further 70 airports that are currently served by Commercial Airline Service.

 

If you chose only to fly in-and-out-of these 'less-than' 300 specific airports-exclusively (which I know is not what you do), then I believe that you would agree that it would be impossible for you and your executives to accomplish many of the tasks set you by the U.S. Citizenry. This is because there are 5,261 general aviation airports that you can choose to fly in-and-out-of, depending on the size and type of aircraft that you elect to utilize on that day. These public use airports are the only available option for fast, reliable, flexible air transportation to small and rural communities in every corner of the country, providing jobs, serving as a lifeline for small to mid-sized businesses, and providing critical services to remote cities and towns in time of natural disaster or crisis. I am confident that you would agree that Transportation is the lifeblood of an economy and in many places around the world, general aviation plays a vital role in basic economic development.

 

In addition to your utilization of General Aviation Airports, you and your executives also fly Business and General Aviation Specific Aircraft that include:

 

1 x Gulfstream III

2 x Boeing 737

3 x Boeing 747

4 x Boeing 757

5 x Gulfstream V

 

The aforementioned aircraft are exclusively operated for you by the 89th Air Lift Wing based at Andrews AFB in Maryland, while there are other executive aircraft in-use all-through-out the United States Government. Also during your bid for the Presidency in 2008 you primarily used a Boeing 757-200ER during your campaign travels as well as other chartered aircraft. Lastly I know that you are quite familiar with several of the Beechcraft King Air fleet aircraft that are operated by the Illinois Department of Transportation that is based in Springfield, Illinois; therefore I contest that you are a heavy user of General Aviation. Unfortunately when you do choose to fly, the draconian security measures, namely the Temporary Flight Restriction System that has been adopted by your Transportation Security Administration (TSA), you personally cause significant direct financial loss to our industry members located along the paths of your chosen travel itineraries.

 

Now please don’t misread what I am trying to say in this letter by identifying a few of the General Aviation aircraft that you and your executives utilize, because if you didn’t use these aircraft, then it would be highly questionable how effective you and your people would be, if you all relied solely on Military and Airline service alone. All thinking people know that a Business Aircraft is 100% a business tool just the same as a Blackberry or Laptop Computer is, NOT a just a perk for 'fat-cats', 'big oil executives' and 'billionaires' as you appear to be characterizing them as such. This mischaracterization of the value of business and general aviation is now severely nobbling this country. Corporate jets are business tools with varied uses. About 74 percent of corporate jets carry sales, technical and middle-management employees to more airports domestically, none of which have airline service. It is a fact that you and your executives are very familiar with, that corporations that use General Aviation and are members of the National Business Aviation Association, earn annual revenues equal to one half of the $14.7 trillion dollar economy of the United States while they employ more than 19 million people worldwide, thus making General Aviation users the single largest economic driving force within this country.

 

Why then do you find it appropriate behavior for you to publically deride and denigrate such an important industry like General Aviation, especially when we are all living out a time when the entire world is struggling to claw its way out of the worst Global Financial Crisis in history?

 

Surely you should know from reading that General Aviation itself as a stand-alone industry directly contributes to the country in all of the following ways:

 

According to the Federal Aviation Administration (FAA), the United States has nearly 600,000 pilots, including over 222,000 private pilots, 124,000 commercial pilots and 146,000 air transport pilots.

 

In 2005, a comprehensive study by Merge Global, Inc. concluded that employment from General Aviation totaled 1,265,000 jobs in that year.

 

That same study pegged the national total economic contribution of General Aviation at $150 billion annually.

 

Additional economic impact can be inferred from the 2,200 charter flight companies, 4,144 repair stations, and 569 flight schools operating 4,653 aircraft. There are 3,330 fixed based operators, 18 “fractional” ownership providers and 261,806 airframe and power plant specialists.

 

Over 320,000 general aviation airplanes worldwide, ranging from two-seat training aircraft to intercontinental business jets, are flying today; 231,000 of those airplanes are based in the United States.

 

In the U.S., general aviation aircraft fly over 27 million hours and carry 166 million passengers annually.

 

Nearly two-thirds of all the hours flown by general aviation aircraft are for business purposes.

 

General aviation is the primary training ground for most commercial airline pilots. The United States used to be the largest trainer of pilots the world over, until the TSA put this segment of the General Aviation Industry into rapid decline because of their extreme vetting procedures.

 

The general aviation aircraft manufacturing industry remains a bright spot in U.S. manufacturing exports and continues to contribute positively to the U.S. trade balance. As an example, in 2008 it generated $5.9 billion in new airplane export revenue for the United States. Unfortunately sales are on the decline, thus your comments should be words of encouragement and pride instead of the current poison that you have been orating of late.

 

In the time period between 1994 and 2008, manufacturers of general aviation aircraft produced and shipped over 41,000 type certificated, fixed-wing general aviation aircraft worth over $182 billion. During this same period, the size of the piston engine aircraft manufacturing  industry grew by over  240 percent, generating tens-of-thousands of high-tech manufacturing jobs in the United States and around the world.

 

In the United States there are well over 230,000 active aircraft which are used in corporate and business aviation, in emergency medical service and for personal recreation. These aircraft fly over 27 million hours each year, two-thirds of which are for business purposes. around the world, an estimated 320,000 general aviation aircraft are in operation, flying in excess of 35 million hours per year.

 

U.S.-made business aircraft dominate here and abroad, helping our nations' balance of trade and keeping Americans in high-paying manufacturing jobs. Last October you proposed and wrote into law a bill that accelerated depreciation schedules for business aircraft purchases made by corporations to encourage companies to invest in new aircraft by reducing their tax burden. Now you propose reversing this sound economic policy.

 

We should be encouraging growth. General aviation manufacturers have lost 13,000 jobs, aircraft sales have fallen 7 percent, one manufacturer has filed for bankruptcy and banks have all but made aircraft loans impossible to get. We don't need tax changes to drive our industry farther into despair; we need support from our elected officials and government regulators to foster growth in business aviation.

 

An aspect of your Budget Deficit increase debacle is the issue of the appropriate way of funding the FAA. This issue has made the FAA a political football that has been kicked around 21 times now, with no goal scored! Worse I am fearful that you are leaning towards a user-fee system to replace the current funding through federal Excise tax charged on Aviation Fuel sales and Commercial Flight Segments, all supplemented by the interest earned by the Aviation Trust-Fund.

  

MYTH: GENERAL AVIATION DOES NOT PAY ITS FAIR SHARE

In reality, General Aviation makes up only about 3 percent of the operations at our busiest and costliest airports.  The system was designed for the commercial airlines.  The entire size, complexity and cost of the system are driven by airline operations.  NASAO, as one of the many advocates for reopening Ronald Reagan Washington National Airport in the wake of 9/11, knows that that airport was closed to General Aviation for four years.  Yet, FAA’s costs at the airport did not decline; controllers were not laid-off or transferred.  General Aviation is obviously not a major cost driver.

 

MYTH: USER FEES ARE BETTER THAN THE EXISTING FUEL TAXES FOR GENERAL  AVIATION

In reality, user fees would require the creation of a new, expensive and unnecessary federal bureaucracy which would need to raise fees simply to sustain itself.  NASAO has watched user fee systems in other countries.  They do not seem as effective or efficient as fuel taxes.  During economic downturns – government bailouts have been necessary.  The current fuel tax system is elegant in its simplicity.  General Aviation pays at the pump.  The larger the aircraft or the farther it flies– the more it pays.

 

Instead of asking you to 'cease and desist' with your targeted abuse against my industry and my livelihood, I will close with an analogy that I have extrapolated from history to apply to you and government:

 

The German Tiger Tank was the most feared piece of artillery in World War II, however due to the size and weight of its gun, it could not fire while moving. It's armor could deflect multiple rocket attacks and shelling and in hindsight it seems that the most effective way of killing the Tiger Tank was to not engage them and instead to make them travel some distances on the hunt for action until they inevitably died from mechanical breakdowns, which were unfortunately a common occurrence for the German offensive force.

 

It is easy to view your current government in the same way as the Tiger Tank, i.e. you and your executives share the same characteristics by holding the reins of the most fearsome world power on the planet today, which unfortunately cannot act while moving, and instead you spend weeks, months and sometimes years of sitting in your offices debating without acting, because to do so might damage your nicely engineered condition which affords you all  life-time health and pension benefits in recompense for only a single term of service in public office.

 

Eventually your government, just like the Tiger Tank, will eventually grind to a standstill due to infrastructure breakdowns, and then ultimately we as a nation will be picked-off by lesser forces because of your inane system of movement and fire. China is watching and waiting…

 

On the evening of November 4th, 2008 in the capacious Park in Chicago that was named after General Ulysses Grant, you gave a momentous victory speech after winning the Presidency. During this speech you said: "This is our chance to answer that call. This is our moment. This is our time – to put our people back to work and open doors of opportunity for our kids; to restore prosperity and promote the cause of peace; to reclaim the American Dream and reaffirm that fundamental truth – that out of many, we are one; that while we breathe, we hope, and where we are met with cynicism, and doubt, and those who tell us that we can't, we will respond with that timeless creed that sums up the spirit of a people: Yes We Can." 

 

We the people of General Aviation are also your people.

 

Sincerely,

 

 

Jeremy Raymond Courtney Cox

Employee within the General Aviation Industry, U.S. Citizen, Voter and Very Disappointed

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Jeremy Cox | Fixed Based Operators (FBO) | Airports

NTSB Rejects Fatigue As A Defense For Violations Of Federal Aviation Regulations

by Greg Reigel 2. August 2011 15:45
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In a recent FAA enforcement action, Administrator v. Kooistra, the FAA alleged the airman committed a number of operational errors in violation of FARs 91.9(a) (requiring compliance with an aircraft's operating limitations), 91.13(a) (careless and reckless), 91.117(a)91.123(b) (requiring compliance with ATC instructions), and 91.703(a)(3) (requiring a person operating an aircraft of U.S. registry outside the United States to comply with FAR Part 91 to the extent that it is not inconsistent with the applicable regulations of the foreign country where the aircraft is operated). The FAA issued an order suspending the airman's airline transport certificate for 60 days and the airman appealed to the NTSB.

At the hearing before the administrative law judge ("ALJ"), the airman did not deny the operational errors, but rather asserted a number of affirmative defenses including that his violations were justifiable based on the fact that he was suffering from fatigue. At the end of the hearing, the ALJ acknowledged the airman's fatigue defense, but stated "[t]he aspect of fatigue...cannot excuse an Airline Transport rated pilot who at all times must exercise the very highest standard of care, judgment and responsibility which the complete record shows that was not exercised by [the airman]." The ALJ affirmed the FAA's order and the airman then appealed to the full Board.

On appeal, the Board rejected the airman's fatigue defense. It acknowledged "the tremendous effects fatigue may have on virtually all major aspects of a pilot's behavior in the cockpit" and observed that "pilot fatigue has consequently been a noteworthy aviation safety issue in the past year." And although the airman relied upon a FAA Notice of Proposed Rulemaking, Flightcrew Member Duty and Rest Requirements, that describes how fatigue can adversely affect several aspects of a pilot's conduct, the Board observed that the Notice, which is a proposed rule and not yet in effect, "does not state that the FAA's policy is to allow fatigue to serve as an affirmative defense, whereby it excuses regulatory violations." As a result, the Board concluded that the airman had provided "no authority for his proposition that fatigue should serve as an affirmative defense to excuse a pilot of violating operational regulations."

Interesting defense. Unfortunately, the airman didn't have any law to back it up. Certainly fatigue is currently a hot button for the FAA and the industry. But, for now, the onus of regulatory compliance will remain with the airman, regardless of whether he or she is suffering from fatigue. Thus, the airman will need to determine whether he or she is too fatigued to comply with the regulations BEFORE the airman operates an aircraft.
(prohibiting operation of an aircraft below 10,000 feet mean sea level at an indicated airspeed of more than 250 knots),

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Greg Reigel



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