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What Do You Do When The FAA Denies Your Medical Application Because Your Doctor Made The Wrong Diagnosis?

I was recently asked this question by an airman in this very difficult situation. When the airman was younger, the airman was diagnosed as having bipolar disorder. More recently the airman was evaluated by a new doctor who told the airman that, in the doctor’s opinion, the previous diagnosis was wrong and the airman did not, in fact, have bipolar disorder.

Based upon the current doctor’s opinion, the airman applied for a medical certificate. However, despite submitting all of the airman’s medical records, including the earlier bipolar diagnosis as well as the current doctor’s opinion and evaluation, the FAA denied the airman’s application.

So, what are the airman’s options? Well, an airman may appeal the FAA's denial of a medical certificate by filing a petition with the NTSB requesting a hearing before an administrative law judge ("ALJ"). But an airman may only appeal the denial of an unrestricted medical certificate. Since the decision to grant a special issuance is at the discretion of the FAA, the NTSB will not entertain an appeal of the denial of a special issuance.

A hearing is then held at which both the airman and the FAA present evidence through documents and testimony from doctors, medical experts, the FAA and the airman. Oftentimes the airman's treating physician(s), who usually don't have aviation medicine training or experience, will testify that the symptoms and/or condition do not pose a threat to aviation safety and that the airman should be able to fly safely. However, when this type of opinion is presented at the hearing in contradiction to the FAA's expert witnesses, the Board will usually give greater weight to the FAA's expert witnesses based upon the Board’s perception that they have "superior" qualifications in aviation medical standards.

Also, depending upon the condition, an actual diagnosis of a disqualifying medical condition may not be required for the FAA to deny a medical application. Simply presenting with the disqualifying symptoms or condition, or having experienced the symptoms or condition in the past, regardless of whether the airman currently has the symptoms or condition, may be sufficient justification for the FAA to deny the medical certificate.

In order for the ALJ to reverse the FAA's denial, the airman must prove by substantial, reliable and probative evidence that the airman is qualified for the medical certificate for which he or she applied, without limitations. In light of the NTSB's deference to the FAA's medical experts, this can be a very difficult burden to meet. Additionally, an appeal is expensive: Expert medical testimony and attorney fees required for the appeal process can be quite costly.

In this airman's situation, bipolar disorder is a disqualifying condition that prevents the FAA from issuing an unrestricted medical certificate. While the FAA may consider the airman for a special issuance, that decision is solely up to the FAA and may not be appealed. So, the airman would have to fight the FAA's determination that the airman has bipolar disorder.

In order to have the FAA’s denial reversed, the airman has to convince the ALJ. This means the airman would need to have the current doctor testify not only that the airman does not suffer from bipolar disorder, but also that the airman’s current condition, to extent the airman has other disclosed medical conditions, still meets the standards for issuance of an unrestricted medical certificate. It may also be beneficial to have an independent doctor evaluate the airman and provide an opinion that athe airman does not have bipolar disorder.

Additionally, the current doctor would need to explain why the earlier bipolar diagnosis was incorrect. Depending upon the circumstances, this can be a very tough battle for the airman to win.

Unfortunately, at a time when more and more doctors are “diagnosing” kids with ADD, ADHD and other such conditions, this situation is becoming more and more common. And as we have seen, a misdiagnosis as a youth may come back to haunt an adult who wants to become a pilot and needs a medical certificate.

If you find yourself in this situation or have a medical condition that may disqualify you from obtaining a medical certificate, get help BEFORE you apply for a medical certificate. Talk to an aviation attorney or the medical certification professionals at AOPA or NBAA.

By taking a pro-active approach and getting help, you will be able to "pick your battles" wisely to maximize your chances of being able to earn your wings and/or successfully obtaining a medical certificate if necessary.

The Aircraft Acquisition Plan

 

There are two fundamental reasons for acquiring new or different aircraft: (1) the current aircraft can no longer perform the mission and/or (2) the current aircraft is no longer the most cost effective solution.

Changes in mission need to be both quantified and qualified. For example, one client in the Southwest US was looking at significantly more travel to the West Coast. Their turboprop could not do the trip nonstop with the required passenger load. Their travel pattern was changing. Another client was looking at non-stop from the US to Asia. But this client was only flying that trip four to six times per year. 

If your company downsized or just sold the international division, then why continue to operate a long range aircraft? Maybe the mission has grown in a different direction. Rather than carrying a family of four on a heli-tour, you have an opportunity for electronic news gathering or have won a contract to haul a geological team to a remote site. The aircraft is a tool that enables you to get the job done. Sometimes, you need a different tool. 

You need to quantify to magnitude of the change. And, for the purchaser, what sort of value will changing aircraft the ability of the company (or individual) to be  successful? How important is non-stop versus one-stop? How much value is added by having a couple ore passenger seats? 

Economics also come into play. While the mission remains essentially the same, maybe your current aircraft is facing significant costs. Our studies and many others indicate that as aircraft age, the costs to maintain it increase. Along with the increase in cost comes an increase in the number of days per year the aircraft is in for maintenance. Additionally, for out of production aircraft, especially those with limited production runs or from manufacturers who no longer build aircraft, the availability and pricing of spares can be a serious issue. For a commercial operator, the loss of revenue from not being able to fly as many days can be worse than the added cost of maintenance. 

What is the long term cost of keeping the current aircraft versus replacing it with a newer one? I’ll discuss how to do this costing in a future article.

Whatever the reason for suggesting an equipment change and before making recommendations to senior management it pays to have a good Aircraft Acquisition Plan

To build up justification for changing or even acquiring an aircraft, you must have a plan. An aircraft acquisition plan must at a minimum:

- Identify and quantify the air transportation needs.

- Differentiate between "required" (or must have) criteria and "desired" (or nice to have) criteria.

>- Identify the aircraft best capable of meeting the transportation needs.

- Compare each of the aircraft against the requirements and rank order them.

- Contain an analysis of all the costs involved with acquiring an aircraft: acquisition, operating, and residual values. Also needed to be considered are taxes and market depreciation.

Just as a successful business has a plan for the future, so should the aviation operation. Once an aircraft is in operation, it usually is there for at least five years and often for much longer. Therefore your Aircraft Acquisition Plan should look out for at least a minimum of five years, or as long as you expect to operate that model. 

Your plan should be void of emotional issues and stay as far from subjective criteria as possible. Having firm numbers doesn't remove all questions, but it does offer a justification based on reasoned thought. If someone wants to adjust the numbers, it is far easier to reflect that change in an updated plan and to see the effect on the results. 

The final decision maker may make a final decision that leaves us pondering the result. Those emotion-led decisions are are fine to those who can accept 100% of the risk and 100% of the reward. As an advisor, we need to have a well thought out, analytical plan. 

In detail, an effective plan consists of the following elements:

- The organization's real aircraft needs.

- Key missions and evaluation parameters.

- Sources of information.

- Technical analysis and ranking.

- Fleet size.

- Financial alternatives.

- Financial analysis and ranking.

- Tax Planning.

I'll address all these over the next months as a continuing series. 

 

Aviation Gifts for Every Budget

We are officially one month and 23 days away from Christmas! Now is definitely the best time to start looking at what gifts to buy loved ones, as Black Friday and other special discount days are coming soon. Thankfully, aviation enthusiasts can be the easiest people to shop for if you know where to look. I would like to share some of the best aviation gift ideas I have come across thus far, including an option for every budget. After all, most pilots spend all their money on airplane fuel and being budget conscious is important!

$10 or Less

Finding a great aviation gift for under $10 is usually more a matter of keeping your eyes peeled during the year for items that are branded in such a way that it appeals to aviators. For example, Starbucks had a gift card design that featured a small white airplane and "Let’s Fly Away" in a fancy font for several months last year. Buying one of those and loading up $10 for your gift recipient is the perfect way to show you were thinking of them when you saw it. I have seen makeup and body wash products that were branded with airplanes or aviation themes as well. Don’t be afraid to browse and wait for the item to present itself!

$20-$50

This price range includes the majority of aviation-themed t-shirts, airplane jewelry, and hats. These are great options if you really understand the recipient’s personal style and aircraft preferences. Would they rather have an "Eat, Sleep, Fly" t-shirt or one of these neat Airport Identifier t-shirts? Aligning the gift to their taste is important, and thankfully there are hundreds of styles of aviation apparel to choose from.

Etsy.com is a goldmine of unique and memorable aviation-themed gifts in this price range. They have an option on the left sidebar to search by price brackets as well, to ensure you don’t fall in love with an item only to realize it is hundreds of dollars.

$50-$100

Getting a little more on the expensive side, there are still very nice gift options under $100. For example, this gorgeous laser engraved genuine leather logbook is $65. (I can vouch for the quality of that particular item because I purchased one for my husband a few years back and we both love it.) Sporty’s has a nice selection of home décor items with an aviation theme. This is also typically the range of home study materials for ratings or add-ons. You may consider giving them the gift of knowledge by helping them achieve their next rating sooner!

$100+

When you get up into $100 or more, the pieces of serious aviation memorabilia and antiques that you could buy skyrocket. These wooden airplane propellers from A Simpler Time would look amazing in any home. Watches from Abingdon Co. are gorgeous and functional for all lady pilots. You could get the recipient a customized model of their personal aircraft to put on their desk. On the more practical side, you could get them a handheld radio, headset, kneeboard, or gadget for mounting their iPad inside the cockpit. Another option is to buy them a plane ride in an aircraft they've never been in before. Seaplane? Warbird? Helicopter? Having an experience in a new plane will be unforgettable.

At the end of the day, it does not matter how much you spend on the gift. All that matters is your love for the other person and celebrating your special friendship and passion for aviation. Don’t stress too much over if the gift is the perfect one, because when it comes from you it definitely will be.

Do you have a favorite aviation-themed gift that you’ve received? A gift that you were proud to have found for someone else? Let me know in the comments below!

Are You Using A Limited Liability Company To Own An Aircraft And Fly The Company’s Members/Guests? Be Careful.

Aircraft owners regularly use limited liability companies (an “LLC”) to hold legal title to an aircraft. An LLC can help limit an owner’s personal liability, and it may also assist an owner with his or her tax planning. But using an LLC to hold title to an aircraft may also create problems for the aircraft owner if he or she does not structure the ownership appropriately.

In order to understand the potential risks of using an LLC to own an aircraft, a brief explanation of how an LLC is viewed and organized under the law is in order. First, an LLC is a type of business entity that has distinct legal personality from its owners/members and managers. An LLC is treated as a separate “person” in the eyes of the law with an independent existence from its members. Thus, if the owner/member of an LLC dies, the entity continues to exist (although an LLC needs to specifically elect to have this continuity of existence).

Next, LLC members each hold a membership interest in the LLC that is represented by the members’ capital accounts. The LLC members have full ownership and control of, and sole possessory interest in, their membership interests of the LLC, and not the individual assets owned by the LLC. Similar to a corporation, the LLC has managers to handle the day-to-day business of the LLC who are oftentimes also the members of the LLC. Additionally, the laws governing LLC’s require that certain formalities be observed (e.g. annual meetings, separate checking accounts, maintaining corporate/company books and records etc.). LLCs should not be construed to be alter egos of their members, even when they are structured as closely held companies.

Thus, when an LLC owns an aircraft, the LLC’s members do not actually own an interest in the aircraft. Rather, the aircraft is an asset of the LLC and is managed by the managers of the LLC, on behalf and in the best interest of the LLC. So, while the LLC members may own the LLC, they do not have a direct interest in the aircraft that is owned by the LLC. This is an important distinction that is often misunderstood by LLC members.

You might be wondering then whether an LLC may be operated under 14 C.F.R. § 91.501(b)(4) for the personal transportation of its members and their guests. Under Section 14 C.F.R. § 91.501(b)(4), the operator of an aircraft may conduct flights “for his personal transportation, or the transportation of his guests when no charge, assessment, or fee is made for the transportation.”

However, in the context of this regulation the FAA views the term “operator” as applying to the personal use of an individual or his or her guests, the term “operator” would not apply to an LLC that is a business entity existing for “business purposes” rather than “personal purposes.” Additionally, even if the LLC does not directly charge the members or guests for the flight(s), if the members make capital contributions to the LLC to pay the cost of ownership and operation of the aircraft, that would constitute “compensation” (in the FAA’s broad interpretation of that word) for the personal transportation of the member and its guests. As a result, Section 14 C.F.R. § 91.501(b)(4) would not be available to the members of the LLC.

Rather, in these situations the FAA takes the position that the LLC is the actual operator of the aircraft. The FAA would consider the LLC to be a “flight-department company” that is conducting commercial operations requiring an air carrier certificate under 14 C.F.R. Part 119. As such, any operation of the aircraft by the LLC on behalf of the members or their guests without an air carrier certificate could subject the pilot(s) actually flying the aircraft to an FAA enforcement action and subject the LLC that owns and operates the aircraft to a civil penalty action. The Internal Revenue Service could also view the LLC’s operation of the aircraft as a commercial operation requiring the collection and payment of Federal Excise Tax on any flights performed on behalf of the LLC’s members or guests.

Does this mean you can’t use an LLC to own your aircraft? No, not at all. However, each situation is unique and must be analyzed to confirm that the aircraft owner will actually receive the benefits expected and that the ownership arrangement will comply with the regulatory requirements anticipated by the aircraft buyer for operations under 14 C.F.R. Part 91.

With the appropriate use of a dry lease or use agreement, and pilot agency and service agreement, it is possible to structure the ownership and operation of your aircraft to comply with the regulations, and to also satisfy the FAA’s operational control and other concerns. If you want to use an LLC to own and hold title to an aircraft, contact us and we will work with you to ensure that the transaction is structured appropriately to meet the regulatory requirements applicable to your particular situation.

Leading Edge Aviation Solutions - Teams up to provide key benefits to clients

KEY PLAYERS IN THE AVIATION INDUSTRY COLLABORATE WITH BROKER/DEALER LEADING EDGE AVIATION SOLUTIONS TO PROVIDE BENEFITS TO LEADING EDGE CLIENTS

Some of the most prestigious aviation firms in our industry--Argus, FlightSafety International, Marsh, and MedAire—together with broker/dealer Leading Edge Aviation Solutions announced at the National Business Aviation Association Exhibition and Convention in Las Vegas on Wednesday, October 11, 2017 that they have collaborated with Leading Edge Aviation Solutions in an exclusive benefits program. All were present at MedAire’s booth at the NBAA convention to make the announcement.

This program will offer discounts or other benefits for certain of their products or services to Leading Edge Aviation Solutions’ clients who are buying or selling their aircraft through Leading Edge and/or utilizing Leading Edge technical or consulting services in the buy/sell process. Leading Edge calls this benefits opportunity for their clients “THE EDGE – Benefits”

Leading Edge Aviation Solutions

THE EDGE® is Leading Edge Aviation Solutions’ complete suite of services for buying, selling, technical services, and consulting for aviation. We couldn’t be prouder to now include “THE EDGE-Benefits” in our service offering.

Joe Carfagna, Jr., President of Leading Edge Aviation Solutions said, “We are proud of THE EDGE-Benefits program for our clients, and most especially we are delighted and privileged to work with some of our industry’s key players in effecting and maintaining the program.“

“MedAire is excited to offer industry-leading travel safety solutions to THE EDGE--Benefits program,” said Vice President Strategic Partnerships, Jeffrey Dickey. MedAire has over 30 years of expertise providing medical and security advisory services, medical kits, and first responder training to give you the resources to take the best possible care of passengers and crew members — wherever you travel, whatever may happen."

“ARGUS is proud to be part of this exciting program”, said Joe Moeggenberg, President & CEO of ARGUS International. “THE EDGE--Benefits will continue to provide value added products and services to Leading Edge clients long after the transaction is completed.”

Dave Davenport, Executive Vice President, Commercial said “FlightSafety International is pleased to serve as the preferred training provider for THE EDGE--Benefits program . We look forward to providing Leading Edge customers with the highest quality training, outstanding service, and value they deserve and expect from FlightSafety.”

Joseph Braunstein, General Aviation Practice Leader, for Marsh, said: “Marsh is proud to be the preferred insurance broker for Leading Edge and assist its clients in the placement and servicing of their aircraft hull and liability insurance.”

Leading Edge Aviation Solutions is one of the aviation industry’s premier private aviation broker/dealers with over 28 years of experience in the aviation marketplace. Leading Edge is a leading expert in the sale, purchase and valuation of corporate, business and private aircraft with over $10 billion in total aircraft sales,acquisitions and new aircraft deliveries and acceptances in that period. We also offer consulting and technical services where we advise some of the world’s most successful people and companies in various aspects of private aviation.

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