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Whose Letter Of Authorization Is It Anyway?

by Greg Reigel 30. June 2017 13:41
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A scenario I see more regularly than I would like involves an aircraft management company that manages a turbojet aircraft and provides pilot services to multiple users of the aircraft. Since the managed aircraft is capable of flight up to and beyond flight level 41,000, the aircraft needs FAA approval to operate in the Reduced Vertical Separation Minimum (“RVSM”) flight levels from 29,000 feet to 41,000 feet. For reasons that are not always clear to me, the management company applies for and obtains an RVSM letter of authorization (“LOA”) in its own name for the aircraft, but then operates the aircraft on behalf of the operators. And, unfortunately, by doing so it has exposed not only itself, but also the operators to the wrath of the FAA for violations of the regulations.

In order to understand why this is the case, we need to first look at why an LOA, or its counterpart letter of deviation authority (“LODA”), is necessary. LOAs and LODAs are issued to Part 91 operators to provide authority to operate in a particular manner. An LOA authorizes an operator to engage in a particular activity, such as operation in RVSM airspace. A LODA permits an operator to deviate from a regulatory requirement with which the operator would otherwise be required to comply, such as permitting an instructor to operate an experimental aircraft for hire for the purposes of type-specific training. LOAs/LODAs are generally only applicable to Part 91 operators. (Operators under Parts 121, 133, 135 etc. receive similar authority in the form of operations specifications or waivers.)

LOAs and LODAs are “voluntary” and are issued by the FAA based on certain specific situations. That is, an operator doesn’t have to request an LOA or LODA unless the operator wants to do something that requires FAA authorization. In the RVSM context, if a Part 91 aircraft operator wants to operate in RVSM airspace, the operator will need to obtain the necessary LOA. But the aircraft operator is also free to avoid operating in RVSM airspace, in which case the operator would not need an RVSM LOA.

A Part 91 operator is the party who has “operational control” of the aircraft for a particular flight. What does that mean? Well, 14 C.F.R. 1.1 states “[o]perational control, with respect to a flight, means the exercise of authority over initiating, conducting or terminating a flight.” Thus, the FAA takes the position that the true operator of the aircraft is the party who has operational control for a particular flight.

Why does operational control matter when we are talking about LOAs and LODAs? Because LOAs/LODAs must be issued to the “operator” of the aircraft, i.e., the party that exercises operational control during the flight. And the party with operational control may not necessarily be the owner or manager of the aircraft.

For example, when we are looking at operation in RVSM airspace, 14 C.F.R. §§ 91.180 and 91.706 state in part:

“ . . . no person may operate a civil aircraft (of U.S. registry) in airspace designated as Reduced Vertical Separation Minimum (RVSM) airspace unless:

  1. The operator and the operator’s aircraft comply with the requirements of appendix G of [Part 91]; and

  2. The operator is authorized by the Administrator to conduct such operations.”

Thus, identifying the party who is the operator of the aircraft is critical because that dictates who must have the authorization.

So, who should apply for and be issued an LOA/LODA? Registered owners who are conducting personal or business flights under Part 91 for their non-air-transportation use; and parties assuming operational control under “dry” lease or use agreements such as Part 91 and Part 135 operator lessees conducting operations under Part 91. Keep in mind that if multiple parties are operating the aircraft, multiple LOAs/LODAs may be required!

Who should not apply for or be issued an LOA/LODA? “Flight Department Companies” (e.g., holding companies/single purpose entities); Owner Trustees (e.g. where a trust is the registered owner of the aircraft but the aircraft is operated by the party holding the beneficial interest in the trust); and Part 91 aircraft management companies that simply assist aircraft owners and Part 91 operators with their ownership and/or operation of the aircraft.

What can you as an operator do to make sure you have the necessary authority you may need or want from the FAA? First, do your research! Make sure you understand both your and the FAA’s obligations in the LOA/LODA process. Next, when you are applying for an LOA/LODA ensure that your application is as complete and correct as possible. (Remember, garbage in = garbage out). If necessary, ask for meeting with FAA personnel to submit your application in person. And finally, follow-up with the FAA on a regular basis to confirm the status of your application and whether the FAA has questions or needs additional information to process the application.

 

Residual Values To Drop for Non-ADS-B-equipped Aircraft

by GlobalAir.com 12. June 2017 17:05
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Owners of business aircraft that are not ADS-B-compliant or in the queue to have equipment installed risk seeing already depressed residual values fall even further in advance of FAA’s Jan. 1, 2020 deadline, according to GAMA president and CEO Pete Bunce. “The value of your asset is going to start dropping even before 2020—this is for rotorcraft and fixed-wing—if you don’t have a slot to upgrade,” he said last week during a panel at the National Air Transportation Association’s Business Aviation Conference. “If you’re in the business aviation category and you hit 2020 [without an upgrade], the price [of your aircraft] is going to just plummet.”

While the FAA is adamant that the ADS-B deadline will not be pushed back, Bunce said that too many operators are holding out hope that the date will slip. “Because of that belief, right now, we are not on pace to get the fleet equipped by the 2020 mandate,” he warned.

GAMA is working with the aircraft-valuation community to collect data that will help quantify the problem, Bunce said. The association plans to make the data available to encourage equipage while there is still time to shift momentum. “We have the industrial capacity to get the fleet modified,” Bunce said. But, he cautioned, “If everybody waits until 2019, then it’s not going to happen."

By Sean Broderick – June 8, 2017
AINOnline

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Co-ownership Tips

by David Wyndham 12. June 2017 14:49
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When I was in high school I worked as line crew at an FBO at the small airport in Rochester, NH. When I started work, my employer rented out Cessna 150s for $19 per hour and a Cessna 172 for $29 per hour. AvGas was less than a dollar per gallon. One local pilot owned a mid-1960s Cessna 172. He flew only on severe-clear days, which in New England was infrequent. At best he maybe flew 40 hours per year. I asked him why didn’t he just rent. He replied that he could buy AvGas to fly 3.5 hours for the cost of one hour of a rental. I did some quick math as I knew what his recent annual cost and what he paid for the tie-down space he rented. Throw in a wild guess for insurance and I came up with over $100 per hour for his 40-hour “bargain.” I asked about these costs. A few months later he took on a partner to co-own his plane.

Most turbine aircraft fly less than 400 hours per year. Many operators since 2008 have reduced their flight activity and it is not uncommon to see utilization below 300 or even below 200 annual hours. For private owners, the 200 annual hours is maybe toward the high side. If you are flying 200 annual hours, your aircraft is sitting idle most of the time. 

Aircraft are also expensive. Fixed expenses like crew salaries, hangar and insurance when the are spread over a small number of hours drive up the average hourly total costs. If you are not using your aircraft, why not get some revenues by having someone else use it? Putting your aircraft onto a charter operator’s certificate receives a lot of attention and is the first thing I think of for helping to offset the total costs of owning your own aircraft. But there are other options like my long-ago Cessna 172 owner found out.

My general discussion will use co-ownership and joint-ownership interchangeably as it involves the day-to-day functioning of the shared arrangement. We do define them slightly different. Co-Ownership is when two or more organizations share the use and expenses of an aircraft but the aircraft is operated by a management company. Joint Ownership is when two or more organizations share the use and expenses of an aircraft and the aircraft is operated by one of these organizations (not a management company). There are legal and tax subtleties between the two that I won’t cover.

The significant advantage of co-ownership is that the two individuals share not only the costs of operation, but also the acquisition cost. Thus, a $1 million acquisition budget is all that is needed for a $2 million aircraft. You can either get a larger aircraft for the money or apply it to a newer model of the desired aircraft. Which leads me to tip number one.

Don’t buy more aircraft as a co-owner than you can afford to buy alone. 

Co-ownership works best when both partners are financially sound enough not to “need” the other in order to make the payments or pay the bills. When (not if) one of the two of you wants to sell, when you can afford the whole aircraft then the negotiations can be less stressful and less likely to result in the complete sale of the aircraft. Maintain your financial independence with respect to the aircraft. Look for a co-owner who also has the financial resources to operate the aircraft.

Second, find someone who flies “not like you” to co-own. Best case is owner A flies for business during the week and owner B takes the aircraft on vacations and holidays. You will need to schedule your travel. Avoid disputes over needing the aircraft at the same time but having complimentary schedules.

Speaking of scheduling, “first come, first served” is not likely to be successful all on its own. I saw one partnership come unraveled when scheduling issues turned into one owner scheduling the aircraft every other week for the entire year. All week. One thing to consider is “on and off” weeks. When its your “on week” you get priority scheduling and when you are “off” the other owner gets first use. To make things work, you’ll both want to accommodate each other.  

Best scheduling tip is to both have travel schedules set well in advance with limited conflicts. Agree up front about who pays what costs when the aircraft is away for several nights. Owner A takes the aircraft away and plans to on vacation for two weeks. Owner B needs the aircraft during the interim while owner A isn’t needing to fly. Who pays for the repositioning trip?  Have an agreement that spells out all use and scheduling policies.

Make sure that both owners share similar financial goals with respect to the aircraft. Want the aircraft cosmetics maintained to the highest standards? Maintained only at the service center? Spell out the level of maintenance and upkeep of the aircraft. Also spell out exactly how expenses are to be shared. Separately discuss fixed cost sharing like hangar and insurance versus variable costs like fuel and maintenance. Set up a maintenance reserve account and possibly put the aircraft on a guaranteed hourly maintenance program for at least the engines. Have a budget.

Last tip is to plan for the sale of the aircraft and terms for the sale. A long running partnership may see another aircraft. Partnerships dissolve with the current aircraft when needs and finances of one owner change. Again, if both co-owners can afford the aircraft, the loss of one owner is inconvenient but not disastrous. 

A successful co-ownership lets two owners get 80% to 90% of their aircraft needs met for 50% of the cost. Advanced planning and written agreements along with both parties being transparent with respect to the aircraft are critical, but it can work. It worked for a Cessna 172 and it can work for a much bigger aircraft, too.

 

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Aircraft Sales | David Wyndham | Flying

5 Major Items Pilots Miss During Their Preflight Inspection

by GlobalAir.com 5. June 2017 17:02
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Perhaps the most critical part of any general aviation flight is the preflight inspection of the aircraft. For most pilots, the preflight inspection follows a checklist along with a routine flow around the aircraft. Most pilots and student pilots perform what would be considered a sufficient inspection, following their checklist and routine items.

Surely 100% of pilots would be able to find discrepancies if they were present right?

Well...not exactly. Sit down, strap yourself in and get ready to read some interesting real-life statistics!

Every year at the Sun N Fun airshow the FAA partners with a local flight school to host the Project Preflight event. The purpose of the event is to test the preflight efficiency of pilots and student pilots of all ages, hours and experience. A flight school volunteers one of their airplanes for the event. Participants are invited to preflight the aircraft like they would before any other flight – checking the fuel, oil, tire pressure and anything with blue tape is unnecessary. The catch is, the aircraft has several intentional discrepancies, some are major squawks! This year we hosted the event and gathered the data from 144 total participants.

Here are the results...

Water Bottle Lodged Behind Rudder Pedals – Out of 144 participants only 30% found this major discrepancy.

Cotter Pin Missing In Right Wheel – Only 28% found this one!

Elevator Nut Missing – 39% found the nut to missing from the right side of the elevator.

Rag Behind The Alternator – Easy to spot but only 63% of participants found the rag!

Cotter Pin In Control Lock – Only 42% found a small cotter pin in place of the control lock, hard to miss but deadly if left in.

Interesting right?! The statistics are concerning to say the least, but what a great insight into a previously unknown sector of general aviation that can be used to educate pilots and future pilots.

So how can we improve these statistics?

Yes, of course we can say “pilots need to be more thorough in their inspections” or “we need to apply more focus and attention to detail during a preflight” but what are some other realistic strategies we can implement to actually achieve that?! Here’s one – maybe it’s extreme and definitely hypothetical but it’s worth pondering.

Again, hypothetical but let’s break it down. We need pilots to perform thorough inspections, how can you put yourself in that “attentive” frame of mind? If you’ve ever rotated the tires on your vehicle yourself, isn’t it likely that you’ll double check and triple check the tightness of the lug nuts before you call it a job done? The theory is that you’ll be taking more responsibility for the state of the aircraft rather than assuming the mechanic or previous pilot left the aircraft in an airworthy condition. This doesn’t mean you should become an aircraft mechanic or add an hour to your preflight, the goal is to find a way to improve our attention and focus when preflighting an airplane.

Project Preflight was certainly educational and we had an absolute blast hosting the event. On behalf of SunState Aviation we would like to thank all of the 144 participants for stopping by and giving us your time, without you this educational piece and the safety of future pilots would not be a reality!

By Alec Larson – May 8, 2017
Flight Training, SunState Aviation

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Aviation Technology | GlobalAir.com | News

Top 5 Reasons YOU Should go to EAA AirVenture This Year

by Tori Williams 2. June 2017 16:21
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I am excited to report that we are officially less than two months away from the start of EAA AirVenture Oshkosh 2017! Dubbed “The World’s Greatest Aviation Celebration,” AirVenture is hosted annually by the Experimental Aircraft Association near the end of July in Oshkosh, Wisconsin. This year the dates run from July 24th -30th. I have been lucky to be able to attend Oshkosh three times before, including flying in twice.

One thing that has surprised me while studying aviation in college is that very few of my classmates have gone to AirVenture. A few of them had not even heard of it before! I am here to tell you about how AirVenture is a must-do for any aviation enthusiast, and how it can be affordable and fun for anyone – including college students!

(Note for the pilots: Maybe you have been going to Oshkosh for years, but have never tried to fly in. This year you should consider pushing yourself and flying in! It may seem overwhelming at first but the tower and ground personnel are extremely skilled at helping first-timers during their entrance. Read up on the NOTAM and imagine the sense of accomplishment you will when you can proudly say you flew into AirVenture!)

Without further ado, here are my top five reasons you should visit Oshkosh this year.

1. It’s Affordable

One of the biggest reasons my college friends haven’t been to AirVenture is because they think that it is not affordable. Let me tell you, EAA has thought about that. They want as many people as possible to experience the week so they have made ways for even the most frugal people to come. Although the cost of admission and camping out usually add up to less than the cost of one Spring Break trip, EAA also has a whole host of opportunities for visitors to volunteer during the week and get free admission, meals, and even accommodations.

2. It’s a Great Learning Experience

A good aviator never stops learning, and there are thousands of ways you can learn new things while at Oshkosh. Head over to the forums to learn about everything from TIG welding to the complete history of a specific aircraft. Additionally, there are over 800 exhibitors to visit and learn about. The cutting edge of technology is always on display at AirVenture, and attendees will be able to see things they never would have otherwise.

3. It’s Great for Networking

Whether you are a business owner, a college student, a professional pilot, or anything in between, there is going to be someone at AirVenture that you need to meet and talk to. I have made lasting friendships with people I have camped beside, and I have made professional connections with vendors that I can use throughout my whole career. The best part is: you don’t even realize you’re networking! You are all just there to have fun and enjoy the week. It never feels forced or awkward, as some networking events can tend to be.

4.It’s Unlike any Other Event

An “air show” by the classic definition would include unique airplanes doing stunts and wowing the crowd. However, AirVenture is so much more than just an air show. They call it an aviation celebration because there is no better way to describe all that happens. You are able to pick and choose from hundreds of ways to spend your time. If you want a relaxed day at the museum, take a free tram over there and spend the day indoors. If you want an unforgettable airplane ride in a B-17 or Ford Tri-Motor, go ahead and do it! There’s international food, games, and so many ways to customize the week to your desires.

5. It’s FUN

Starting with the opening night concert featuring Barenaked Ladies, AirVenture is determined to have every single attendee have a great time. Air shows featured throughout the day will amaze even the most experienced pilot. At night, the Fly-In Theater is scheduled to play several popular movies, including Sully and Rogue One. Although it can be exhausting trying to see everything you want in one day, it is worth every second and you will leave with unforgettable memories.

What is your favorite part of Oshkosh? Are you attending this year? Let me know in the comments below!

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Flying | Tori Williams | Vintage Aircraft



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