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4th Circuit Court Of Appeals Affirms NTSB's "Congested Area" Determination


In my article, Identification Of A "Congested Area" Under FAR § 91.119: Hindsight Is 20/20, I discussed an NTSB decision, Administrator v. Folk, in which the primary issue was whether the airmen's low-level flights occurred over a "congested area" as referenced in FAR § 91.119. In a recent unpublished decision, Folk v. Sturgell, the United States Court of Appeals, Fourth Circuit has affirmed the NTSB's determination that the area in question was in fact a "congested area."

The Case

In the Folk case, the FAA alleged that the airmen had both engaged in agricultural aircraft operations in violation of 14 C.F.R. §§ 137.51(b)(1) through (3)2 ( agricultural operations over congested areas); 91.119 (minimum safe altitudes); and 91.13(a) (careless and reckless). One of the main disputes in the case was whether the area over which the airmen had flown was a "congested area." At the hearing, the FAA argued that its case-by-case analysis of the facts and circumstances supported the conclusion that the area was indeed a "congested area." One of the airmen's arguments in response to the FAA's position was that the logical extension of the FAA's position that congested area determinations are made on a case-by-case basis is that nobody can know whether or not an area is congested until after their case has been decided.

During the hearing, the FAA inspector who investigated the allegations regarding the airmen testified that "if an operator conducts an application in an area the FAA might later determine to be a congested area, the operator ignores that potentiality at his or her peril." The inspector went on to say that he had warned the airmen that the area around their farm could be considered a congested area. When the airmen requested a definition of "congested area," the inspector told them there was no definition, and referred the airmen to FAA guidance, including an inspectors’ handbook. After studying the regulations and, apparently, finding no examples in the handbook that applied to their operations, the airmen then decided the area around their farm was not congested.

Unfortunately for the airmen, the ALJ agreed with the FAA. He concluded that the area over which the airmen had flown contained upwards of 30 homes, buildings, and structures and, as a result, was a "congested area." The ALJ also rejected a number of other defenses raised by the airmen and held that the airmen violated the regulations as alleged.

On appeal, the airmen renewed their argument that the area over which they had flown was not a "congested area." Initially, the Board observed that the FAA "has not pronounced a precise definition that includes the factors of the density of the population in an area; whether there is surface traffic in the vicinity; or the numbers and proximity of residences, buildings, or structures." It went on to note that "it is clear that the intent of the regulations is to protect persons and property on the ground and to fairly apply the rules to operators of aircraft, and, in the case of Part 137, to operators of agricultural aircraft." The Board then affirmed the ALJ's determination that the area over which the airmen had operated was a "congested area."

The Fourth Circuit's Decision

In their appeal of the NTSB's decision to the Fourth Circuit, the airmen argued that "the term 'congested area' violates the vagueness doctrine under the Due Process Clause (an argument the airmen were not able to make to the NTSB because the Board lacks jurisdiction to consider constitutional challenges), and that substantial evidence does not support the determination that they flew over a congested area."

With respect to the due process argument, the Court initially noted that a "statute is impermissibly vague if it either (1) fails to provide people of ordinary intelligence a reasonable opportunity to understand what conduct it prohibits or (2) authorizes or even encourages arbitrary and discriminatory enforcement." The Court then held that the airmen failed to show that they lacked a reasonable opportunity to understand what conduct FAR 137.51 prohibits. Rather, the Court found that the inspector's warnings put the airmen on notice that the area could be considered congested and the airmen could have resolved any doubt by filing a congested area plan and waited for the inspector's response.

Additionally, the Court determined that the airmen had not shown that FAR 137.51 "authorizes or even encourages arbitrary and discriminatory enforcement," or that the enforcement action against them was arbitrary. As a result, the Court concluded that FAR 137.51 was not unconstitutionally vague under the Due Process Clause.

Next, the Court reviewed the record to determine whether substantial evidence supported the NTSB's determination that the area was congested. The Court observed that approximately thirty houses are located in the general vicinity of the area and that the airmen's flights passed over corner sections of that area. Based upon that review, the Court concluded "that the area over which [the airmen] flew could reasonably be considered congested based on substantial evidence in the record."

Conclusion

Unfortunately, the Court's decision doesn't shed much light on the "congested area" issue nor does it provide any meaningful clarification. Because this type of case is decided on a "case by case" basis, I think the Court's decision relied heavily on the ALJ's and NTSB's factual findings. As a result, we still do not have a clear definition of what constitutes a "congested area."

The due process argument was an interesting defense. If the airmen hadn't been warned by the inspector or if the airmen had submitted a congested area plan but received not response from the FAA, perhaps then the Court may have been more sympathetic. On a positive note, it appears this argument could still be successful given the right set of facts.

In the meantime, make sure you are familiar with area over which you fly if you want to push the limits of 91.119 and remember that the FAA, NTSB and the Court will judge your flight using 20/20 hindsight.

The information contained in this article is intended for your education and benefit and should not be relied upon as advice to help you with your specific issue. Each case is unique and must be analyzed by an attorney licensed to practice in your area with respect to the particular facts and applicable current law before any advice can be given. Posting a comment to this article does not create an attorney-client relationship and advice will not be given until an attorney-client relationship has been established.

You Need A Methodology For Comparing Aircraft Costs

When comparing aircraft costs, it is important to understand what costs are included and what aren't. Otherwise, you can end up comparing "apples and oranges." This can lead to making a decision with wrong or incomplete information. What we often see if that the "number" is smaller than the total cost. The big items are usually included, but adding up a lot of smaller numbers can alter the total cost considerably.

What is a good methodology to use when analyzing the cost of an aircraft? I’m glad you asked. Life Cycle Costing can ensure that all appropriate costs are considered.

Life Cycle Costing includes acquisition, operating costs, depreciation, and the cost of capital.

Amortization, interest, depreciation, and taxes also play a part in what it costs to own and operate an aircraft and can be included in the Life Cycle Costing as appropriate. As the term Life Cycle implies, it looks at a length of time versus a snapshot in time.

How long of a cycle depends on how long you plan on operating the aircraft.

If you plan on keeping the aircraft 10 years, then that is the length of the Life Cycle to use.

The costs should cover the period of ownership and take into account an expected aircraft value at the end of the term. Comparisons of two or more options should also cover the same period of time and utilization. Taxes should be included. Depending on where and how the aircraft is operated will determine the tax impact.

Leases, loans and cash purchases also change the cash flow and total cost.

If you are looking at those options, then you should account for the time-value of money. A Life Cycle Cost can also account for this in a Net Present Value (NPV) analysis. This way, the differing cash flows form two or more options that can be compared and analyzed from a fair and complete perspective.

As an aside, what is NPV? An NPV analysis takes into account the time value of money, as well as income and expense cash flows, type of depreciation, tax consequences, and residual value of the various options under consideration. When an expense (or revenue) occurs can be as important as the total amount of that item. Paying cash is cheaper in total dollars, except that you have all that cash tied up in the aircraft. A lease or loan allows the cash to flow out over time. NPV runs on the assumption that a dollar today can be worth more than a dollar a year from now. Thus, implicit in the NPV is a time cost of money, called an internal rate of return (IRR) or return on investment (ROI).

Life Cycle Costing allows you to compare different aircraft, or different types of acquiring and operating an aircraft. Using the same period and general assumptions with the analysis of different options gives you a balanced comparison of those options. Regardless of the complexity of the aircraft deal, the Life Cycle Cost method should yield a useful result provided you populate it with as accurate a data as you can.

What sort of tool(s) do you use to compare aircraft costs?

 

Star of "Air Force One," pilot of Millenium Falcon promotes GA in Washington

Indiana Jones traveled to Capitol Hill on Tuesday, saying show business has been good to him.

So has the spirit of flying, apparently, as Harrison Ford met with Congressional members alongside AOPA President Craig Fuller. Among the talking points, a big thank you to lawmakers for not imposing user fees in this year's FAA budget.

Read more on the visit via General Aviation News.

EBACE 2010 (May 4th, 5th & 6th, 2010) On-The-Convention Floor-Update

Greetings all of you Global Air Blog-o-sphere readers. Today is Thursday, April 29th. I am sitting at my desk in my JetBrokers office at the Spirit of St. Louis Airport (KSUS), just West of St. Louis in Missouri. On Saturday I and my esteemed colleague, Tom Crowell, Jr shall be departing KSTL on a Boeing that is bound for Geneva via Chicago and London.

Why am I telling you this you might ask? Well the fact is, as long as Jeff and his technical boffins at Globalair.Com are able to hook me up with a means to adding to this Blog by Blackberry, I will be bringing you various 'roving reports' from both the convention floor and the static display all-through-out EBACE.

Of course you will not only find the commentary interesting and insightful regarding the aircraft and services that are on display at this years convention; you will also get to go to (through me) all of the same parties, seminars and meetings that I go to. The next week should see this Blog groaning from data, because Tom and I have a lot of people to see, and events to attend, including meeting with our European Group: JetBrokers Europe, and attending the Epicurean RDV and Dassault Parties to name three of our pre-planned events.

So might I suggest that you sit-back, relax, and enjoy your "from the Convention Floor" coverage provided to you by Globalair.Com and JetBrokers, Inc. I will see you in Geneva.

MONDAY MAY 3, 2010 - EBACE EVE

Gulfstream G650 is now the World's Fastest Business Jet after reaching 0.925 Mach yesterday.

Hawker Beechcraft announces New Single Turbo-prop is in-work. It will compete with the likes of the TMB850, the Caravan and the PC12.

Bombardier Stand-Down attracts many attendees to the Crowne Plaza Hotel at the Palexpo Centre.

Rain was forecasted for the entire week; today though was a puffy white/gray cumulus cloud day with blue skies and alpine sunshine. Let's hope the meteorologists are wrong on all of their predictions!

JetBrokers and JetBrokers Europe hold a very productive summit meeting in Montreaux.

The convention hotel bar is burgeoning with eager delegates all wanting to do business!

The plot thickens tomorrow...watch this space.

Ciao,

Jeremy

 

TUESDAY MAY 4TH, 2010 - EBACE DAY ONE

Even though we all woke to the news that the airspace over Ireland and the Western portions of Scotland was closed due again to ash-cloud activity, the convention hall was buzzing with expectant optimism. This is rather jumping about a bit, by my typing this, but I heard a comment from one of my fellow party revelers at the Altitudes Cigar, Champagne and Jazz affair tonight that "...with EBACE, we no longer need to attend the NBAA show in the U.S." A little narcissistic possibly, especially since EBACE is probably only 3/8's of the size of our home-grown NBAA convention, however the Static Display is almost as big as the one in the U.S.A; I did feel that this comment was too good not to share. Talking about the static display, the rain again held off, but there was a pretty icy wind cutting through the packed apron outside of the convention halls, that kept many inside instead of walking the lines of aircraft that are on show here.

Even though Honda is very much evident again at this year's EBACE, many of their sales execs are having to deliver the bad news of more delays with their aircraft to their clients, with the GE/Honda engine being the continuing cause of the delay - 2012 is now projected, but as my mum always say's "we'll see..."

The exhibit hall is populated by many familiar companies who are the main-stay's of the NBAA convention. Interestingly Cessna prominently featured a display of all of their piston/light aircraft models in the forecourt of their booth display. Indispersed amongst the booth aisles are companies that we never get to see or hear about when back on U.S. soil. Charter/management is heavily represented here making it appear that aircraft ownership is still a tough sell on this side of the Atlantic. Of course many here at this show live in the hope of meeting the Russian Oligarch, or the Arabian Sheikh who will be the 'golden customer' that will bring riches through their cash tills. Dassault announced that they delivered the first of a four-aircraft order today at the show - a Falcon 7X which will work in the private jet program that is now being offered by Saudi Arabian Airlines; the only Russians I saw were wearing micro skirts and gargantuanly tall high-heels as they clicked about the exhibit halls advertising FBO's and Handling Agents that are sprouting-up behind the former 'iron curtain.'

Something else not as evident at the big NBAA show, but prominently featured here, were all of the various helicopters that are on offer as a real solution to the overpopulated urban streets and the inter-city short hops that are so common on this side of the Atlantic.

At the sophisticated and swanky reception hosted by Dassault in the historic Edouard Sarasin Manor House, glasses of Chateau Dassault, Perrier champagne and various tray-bourne confections were passed out, while distinguished guests jostled and danced for eating and drinking room. After being greeted by the stoic Jean Rosanvallon on the doorsteps of the manor house, we got to meet a French America's Cup winner, a Collegiate Chief of Staff, an Aviation Museum Director of great note, plus other illustrious people. Two relevant conversations were with EBAA Chief Executive Brian Humphries, and our own NBAA President Ed Bolen. Both industry association leaders were quite vocal on the issue of Carbon Credits and how they are preparing to work against their implementation; also how they are each individually trying to promote the benefits of business aviation. Brian finds the science of global warming to be extremely questionable, while Ed would love to see Warren Buffett to become one of business aviations' most prominent advocates to promote the benefits of business aviation.

By 11:30 back at the lobby bar at the Crowne Plaza, the crowd re-took their seats to wind-down from the excitement of the various parties that closed the night of Day One at EBACE. This was a day where more than 10,000 attendees walked through the exhibit halls. More tomorrow. 

 

 WEDNESDAY MAY 5TH, 2010 - EBACE DAY TWO

The rain finally hit us today, thus everything became extremely soggy including many of the delegates. Before the rain rolled in, we got to do the 'meet and greet' around the static display. The CJ4 was popular, and so were the Embraer Phenoms (100 and 300.) The same Legacy that was provided by Embraer to transport the Greater St. Louis Business Aviation Association lobbyists (that included both TJ and I) from St. Louis to the Missouri state capitol, was the large aircraft on display there for Embraer. The sight of that lovely aircraft brought back a fond memory of a successful day back in March. St. Louis local Mike Press was there with one of his EA500 Eclipse's (he formed the group that purchased the bankrupt assets of Eclipse Aviation.) He was there to promote and sell their: "virtually new aircraft." Interestingly the example at EBACE was the first example to be approved for known icing operations, and the static vent areas were coated with a rough paint, so as to negate any ice from building around the vents. Surprising because this approach fly's in the face of the philosophy that the static ports on all other aircraft are a 'critical area' that cannot withstand paint cracks, blemishes, etc. around the ports because they cause position errors. Interesting.

Another sight at the static display that could be classified as being labeled "bizarre" is the "Air Deck" Platform that extends from the floor below the cargo door on the Avro RJ70 Business Jet (BAe 146.)

 

Mr. Brian Barents was manning an impressively large booth at EBACE this year, to again ask for deposits so his Aerion Super Sonic Business Jet (SSBJ) design might one-day leave the drawing board and finally be manifested as cut, bolted and riveted metal that really can fly! It's still a great concept, but will probably take $20+ Billion to get it to that stage. Another concept that never really found success, as yet is the "Air-Taxi." Well since the demise of the Adam 700 and DayJet's Eclipse program, many could easily believe that this idea is dead. Not so at EBACE. Now it looks like the "Air Taxi" program will be London based and will operate with Phenom 100's and Citation Mustangs. I hope that it works. I also saw a fractional program being operated for the yet-to-be built D-Jet as well. This is all good stuff in a quarter hemisphere of the world (Europe) that is probably better suited for King Air and Helicopter Operations, to be setting its sights on all-jet operations instead?!?!...

Lunch at the Dassault booth was very civilized. Thanks again Dassault Falcon Jet (I didn't like the foie gras flavoured creme brulee last night, but your sandwiches today were excellent!) Dinner by Lake Geneva with the great folks at World Aircraft Sales Magazine tonight was unforgettable. I recommend the Perch if ever you come to EBACE (Casanova's Restaurant - Great.) We were sorry to see that most of Geneva shut down at 1AM this morning, however it has allowed me to get to this blog sooner.

See you this time tomorrow for the Last EBACE Report.

Arrivederci!

Jeremy

THURSDAY MAY 6TH, 2010 - EBACE DAY THREE - CLOSING

Well we actually had some sunshine today!! As you can see, the rain clouds rolled back, and so have the volcanic ash clouds too:

 

 

It looks like the flight home will be okay, even though the NOTAM's show that we shall probably have to take a Southerly North Atlantic Track and add time to our London-Chicago leg. Hey-ho, at least we wont be shut down because the God of Fire deems it to so be not.

The biggest news at this year's EBACE is the attendance. According to the gate receipts, more than 13,000 badges were scanned/passed out. By noon today, as with any convention on it's last day, the halls began spewing delegates, and the aisles became wider and wider with fewer and fewer people. According to Sandy Wirtz, the Seminars Director at the NBAA, this is the second best attended EBACE ever, with 2008 being the most attended. Of course that was weeks before the walls of Jericho figuratively came tumbling down in the world's financial markets. 

JetBrokers was in the news two out of the three days, as follows:

From AIN and BCA...

JetBrokers Seeks New Clients in Germany and Italy
JetBrokers Europe has appointed Ilaria Cicchetti to spearhead a push to acquire new clients in Germany and Italy. Cicchetti will be based at the company’s office in Berlin, where she has lived for the past seven years. “I think of myself as an Italian from Berlin and I’m looking forward to generating a strong network in this market as there is great potential,” said Cicchetti, who is fluent in German, Italian and English.

JetBrokers Europe managing director Tim Barber believes in dealing with clients in their mother tongues, and to this end the JetBrokers Web site will be updated with versions in English, French, German, Italian and Spanish in the next few days. Barber hopes to add Russian to his team’s language capabilities in the near future.
The company, whose European division is headed by Switzerland-based chairman John Merry, has reported increased activity in the pre-owned aircraft market since the beginning of this year, with more than 30 aircraft available for sale at any one time in conjunction with its U.S. parent JetBrokers Inc. Barber said, however, that “it will be a long time before there is a return to the premium pricing in certain sectors.”

From the International Herald Tribune...

I.H.T Special Report: Business Aviation

Forecast for Business Jets: Slow Climb

Tim Barber, managing director of JetBrokers Europe, which trades in used business aircraft, said his company was seeing the same split between the high and low ends of the market.

“Older, less desirable aircraft continue to decline in value, but we are seeing a genuine increase for aircraft like the Gulfstream 550 and Bombardier Global XRS,” Mr. Barber said, referring to two of the latest generation of large long-distance business jets. “There are lots of distressed sellers, while the financially stronger types are buying.”

As everything winds-down here in Geneva, everyone agrees that this year's show is a very strong indication that economy is bouncing back towards a recovery, quicker than many had first believed to be possible. I know that from our perspective, we are very glad that we attended this year. We have definitely come away from this year's EBACE with more business than which we came with on Sunday.

This entry is the last, and therefore concludes this Blog.

 

 

 

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