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  • NAFA Administrator posted an article
    Learn top 5 benefits of this frequently misunderstood financing product for individuals and orgs. see more

    NAFA member Global Jet Capital discusses the top 5 benefits of this frequently misunderstood financing product for individuals and organizations.

    There is an unprecedented level of interest in business aviation. Thankfully, there are a range of options business aviation users can choose from to access an aircraft. Each conveys its own intrinsic benefits and drawbacks, and may be more or less attractive to the user based on their unique situation. Mindfully weighing these options – from charter, to fractional ownership, to operating leases, to traditional financing – is a crucially important process, especially since your choice can have far-reaching implications for your balance sheet.

    There are many strategic advantages to an operating lease that you should consider when making this choice. Here are the top 5 advantages that this frequently misunderstood financing product offers individuals and organizations:

    1. Built-in agility
    Yes, operating leases are contractual arrangements. The right lessor, however, can structure a lease that can adjust to changes in your mission.Depending on your needs, a lease can permit extensions, provide an early termination opportunity, or facilitate a move into a larger or smaller aircraft. In this framework, it’s easy to pivot to suit your unique situation.

    Read full article here

    This Global Jet Capital aricle was originally published by Business Jet Traveler in February 2022.

  • NAFA Administrator posted an article
    Avia Yacht Partners 360 Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE: April 13, 2022

    Contact: Tracey Cheek

    tlc@nafa.aero

    405.850.1292

     

    Avia Yacht Partners 360 Joins National Aircraft Finance Association

    Edgewater, MD – National Aircraft Finance Association (NAFA) is pleased to announce that Avia Yacht Partners 360 has recently joined its network of aviation professionals. Avia provides bespoke consulting and facilitation of acquisitions, sales and financing/leasing for preowned and new build business jets and superyachts worldwide.

    “NAFA members pride themselves on knowing their markets, and the luxury market is one of our most important verticals,” said Jim Blessing, president of NAFA. “As NAFA celebrates our 50th anniversary, we point to the many services our members offer to the public, including the work Avia Yacht Partners 360 does in the luxury aircraft world. Knowing the legal filings required is equally important as understanding the mechanics or routes for flight.”

    Founder and CEO Rolf Smith serves the luxury niche in both the aircraft and luxury watercraft markets. Because of his own insider insights as well as a network of trusted partners, Avia Yacht Partners 360 helps make the dream of custom aircraft ownership and charters a reality.

     

    Products & Services

    • Charter: planning and execution of for-hire air travel
    • Sales: for those acquiring or selling aircraft
    • Financing and leasing: facilitation of the purchase process
    • New builds: integration and management of new-build luxury aircraft

     

    About Avia Yacht Partners 360:

    Avia Yacht Partners 360 was founded by Rolf Smith and is based in Ft. Lauderdale, FL with locations in North America and Europe. The company provides a customized and bespoke approach to all the advisory, commercial, financial, legal, technical, and project management aspects of luxury aircraft acquisition. Avia is able to tailor services and components according to the needs of the client.

      

    About NAFA: The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members with the most up-to-date industry trends and best practices. Government legislation, market influences and industry insights allow member companies to provide the highest quality services the industry has to offer. 

  • NAFA Administrator posted an article
    Aircraft Executives Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE: March 16, 2022                                   

    Contact: Tracey Cheek 

    tlc@nafa.aero 

    405.850.1292 

      

    Aircraft Executives Joins National Aircraft Finance Association 

     

    Edgewater, MD – National Aircraft Finance Association (NAFA) is pleased to announce that Aircraft Executives has recently joined its network of aviation professionals. Aircraft Executives provides services focused on flight operations and aircraft acquisition transactions. 

    “NAFA members recognize the importance of flight operations and the data behind aircraft purchase transactions,” said Jim Blessing, president of NAFA. “Members with the type of expertise that Aircraft Executives possess are what make NAFA relevant and vital to the industry. We welcome Aircraft Executives to our organization as NAFA celebrates our 50th anniversary and look forward to their involvement in our upcoming conference and other events.” 

    Products & Services: 

    • Aircraft Brokerage and Acquisition Services  

    • Flight Operation Services  

    • Aviation Consulting Services 

      

    About Aircraft Executives: Based in Atlanta, Georgia, Aircraft Executives aims to ensure the best private aviation experience possible with transactions personalized to fit each client’s specific needs. The team can handle every step of the process from listing to closing and beyond with efficiency and professionalism. Aircraft Executives strives to continue relationships beyond the closing of the deal, whether to provide flight operation services or to simply be the trusted source for aviation questions.  

    Aircraft Executives services include research, valuation, selection, marketing and contracts for aircraft acquisition, flight department setup and crew staffing for operation services and aviation consulting services that include appraisals, delivery, leasing and charter brokering. 

    About NAFA: The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members with the most up-to-date industry trends and best practices. Government legislation, market influences and industry insights allow member companies to provide the highest quality services the industry has to offer. The company now has three offices: Geneva, New York City and Dubai. 

  • NAFA Administrator posted an article
    NAFA member, Clay Lacy Aviation, discusses private jet membership vs. custom jet charter services. see more

    Demand for flying by private jet increased significantly in the final quarter of 2020 as a result of the coronavirus pandemic and travelers looking for a more private way to travel. New entrants to the industry grew the customer base for both private jet membership and charter providers.

    These newcomers have three main private travel options to choose from, but which is best?

    The answer depends on these key factors:

    • Availability
    • Budget
    • Customer service

    Read full article here.

    This article was originally published by Clay Lacy Aviation on July 28, 2021.

  • NAFA Administrator posted an article
    Essex Aviation's Michael J. Moore discusses increase in charter demand and aircraft acquisition. see more

    NAFA member Michael J. Moore, Executive Vice President of Essex Aviation, discusses high charter demand and aircraft acquisition.

    It’s been over a year since the World Health Organization formally declared the novel coronavirus outbreak a global pandemic. The private aviation industry has been through some significant changes in that time period, with demand coming to an almost complete standstill in the early months of the pandemic. This steep decline in demand can be attributed to a number of factors, including domestic and international travel restrictions and personal safety concerns.

    Read full article here.

    This article was originally published by Essex Aviation on June 25, 2021.

  • NAFA Administrator posted an article
    Jet Card vs Fractional Ownership vs Charter: Which Is Best For You? see more

    NAFA member, Clay Lacy Aviation, discusses your options when it comes to jet cards, fractional ownership and charter.

    Jet cards, fractional ownership or private jet charter… which option is best for you? That’s the question we ask ourselves for each charter proposal we develop for our clients. Why? Because we want you to travel with confidence that you are flying with the program that makes the most sense for your budget and trip.

    In short, Clay Lacy Aviation charter might not always be the best travel solution for you – and we will make sure you know.

     

    Jet Card, Fractional Ownership or Charter

    Outside of owning your own aircraft, the best methods of experiencing private aviation are through jet card programs, fractional ownership or charter.

    Jet Card Programs allow you to purchase the future use of an aircraft. Costs are set at a fixed hourly rate, usually at market pricing, but can fluctuate based on your travel needs. Jet cards work well if you know exactly how many hours you plan to fly each year and if that amount is between 25 and 50 hours. Card programs do not include taxes and trip related expenses adding an additional cost to the pre-purchased flight hours.

    With Fractional Ownership, you purchase a portion of an aircraft or aircraft type to fly a specific number of hours a year. It’s often compared to a timeshare in real estate. Aviation companies specializing in fractional ownership sell these aircraft shares to jets they already own, which ensures an aircraft is nearly always available when you need it.

    In addition to the purchase price of the fractional share, you can expect to also pay a monthly management fee and an hourly fee to cover trip expenses, fuel taxes, and other variable fees. Many fractional and jet card programs have peak period prices, around holidays, that are higher than normal, and some have blackout days unless you purchase into a higher tier of membership.

    Charter differs from fractional ownership and jet cards in aircraft choice, pricing and availability. When you charter an aircraft with a company like Clay Lacy Aviation or through a charter broker – an individual who matches prospective travelers to available aircraft – you have a larger selection of models to choose from. Hourly charter prices are traditionally lower than jet cards, and significantly less than fractional ownership. And when you charter, you are only paying when you fly. There are no deposits, acquisition costs or membership fees.

     

    Trip Planning with Clay Lacy Aviation

    With Clay Lacy Aviation, you can rely on our straightforward approach to getting you the right aircraft solution for your flight. Like we said earlier, that does not necessarily mean us.

    When we do make the most sense for your needs, know that private jet charter with Clay Lacy Aviation offers these added benefits:

    • A large selection of aircraft which means you might fly a Phenom 300 for a regional business trip and the ultra-long range Gulfstream G650 to reach your international vacation destination. Additionally, if the aircraft you schedule suddenly becomes unavailable, we provide a replacement at no cost.
    • Pricing is flexible, and, while not always the least expensive of the three options, nearly always falls 20-45% below jet card pricing for round trip flights.
    • Taxes, fuel and fees are built into our charter quotes, so you know the exact amount you will pay before you ever take off.

    Plus, we promise not to take shortcuts with our aircraft – not just for our owners but also for your health and safety. Our philosophy is that an aircraft should fly no more than 400 hours a year, which benefits its health – and yours.

    We do not claim to be the best solution for every trip, but we can guarantee when you come to us, we will find the right solution for you.

    This article was originally published by Clay Lacy Aviation on March 16, 2021.

  • NAFA Administrator posted an article
    Why Do Companies Rely on Business Aviation? see more

    NAFA member, Western Aviation, discusses the benefits of business aviation.

    While companies that rely on business aviation represent many different professions and locations, they all have one thing in common: the need for fast, flexible, safe, secure and cost-effective access to destinations across the country and around the world. In many instances, business aviation is the appropriate transportation solution, opening the door to global commerce for small-community and rural populations by linking them directly to population centers and manufacturing facilities. The benefits of business aviation are clear:

    • Business aviation allows for efficient, flexible, safe, secure and cost-effective access to destinations across the country and around the world. Because employees can meet, plan and work with each other aboard business aircraft, productivity en route is greatly enhanced.
    • In many instances, business aviation is the best or only transportation option available, opening the door to global commerce for small-community and rural populations by linking them directly to population centers and manufacturing facilities. Studies have also shown that business aviation contributes greatly to local economies across the country.
    • Business aircraft allow employees to make a trip involving stops at several locations, then return to headquarters the same day. Hundreds or thousands of dollars can be saved on hotel rooms, rental cars, meals and other expenses that would be needed to make the same trip over several days via auto, train or airline transport.

    Industry Studies

    Business Aviation: An Enterprise Value Perspective – Small and Medium Size Enterprises

    This study, conducted by NEXA Advisors, examined whether the use of business aircraft provided benefits to small and medium businesses, measured in terms of shareholder and enterprise value. NEXA Advisors applied the same methodologies in its first volume “Business Aviation: An Enterprise Value Perspective,” published in 2009. With this study, NEXA has extended its sample size to examine small and medium enterprises that used business aviation to better compete and grow their businesses. The analysis showed that small and medium companies in America that used business aviation consistently outperformed nonusers.

    If you would like access to the study, email me at David@westernaviation.com.

    This article was originally published by Western Aviation on April 27, 2021.

  • Tracey Cheek posted an article
    What You Need to Know Before Choosing a Private Jet Charter Provider see more

    NAFA member, Essex Aviation, shares what you need to know before choose a private jet charter provider.

    If you frequently fly commercial for business or personal reasons, you might want to consider making the switch to private aircraft chartering. Compared to flying on commercial airlines (notorious for their unreliable flight schedules, long security lines and cramped quarters), private jet charter services provide the flexibility to travel almost anywhere in the world, often arriving at a location closer to your final destination, on your own schedule and in total comfort and convenience.

    Most air charter companies offer a wide variety of options, so you can choose the aircraft that best meets your specific aviation needs and the requirements of each individual trip. Chartering is also practical from a cost perspective because you pay on a trip-by-trip basis. Although chartering does not guarantee aircraft availability the way membership programs, fractional or whole aircraft ownership does, it’s still one of the most convenient means available to access private aviation.

    Before making the transition from commercial airline travel to a private aircraft charter, there are a few important things you should know. There are a few ways to charter a plane, including working directly with a charter operator or going through a charter broker.

    Charter operators are directly responsible for the on-going management and operation of the aircraft on their charter certificate, as well as staffing the plane. Charter operators are required to be certified by and receive regular oversight from the Federal Aviation Administration (FAA).

    Charter brokers are agents who act as liaisons between the client and the charter operator. If you choose to work with a charter broker, they will present you with a cost quote for your trip and, once you’re satisfied with the price and approve the quote, they will work with the multiple charter operators they have relationships with to secure the aircraft to complete the trip. A few days prior to your trip, your charter broker will send you the airplane tail number (the plane’s FAA registration number) and all other relevant information.

    Unlike charter operators, charter brokers aren’t required to be FAA licensed nor are they regulated — in fact, charter brokers aren’t even required to have any prior experience in the aviation industry. Although the majority of brokers are reputable professionals with extensive industry experience, it’s still important to do your due diligence before signing a charter contract through a charter broker. For example, if your broker is able to arrange an aircraft for charter but is reluctant to give you certain information about the plane (including the year, make and tail number) or who the actual charter operator is that will be completing the flight, it’s best to take your business elsewhere.

    Before working with a charter operator or broker — or even pursuing charter services at all — consider seeking the advice of a qualified private aviation consultant. Aviation consultants, such as the experts at Essex Aviation, use in-depth cost and usage analysis to help you determine which private aviation service or combination of private aviation services is the best fit for your specific needs. If you decide to pursue private jet chartering, your consultant will represent you throughout the charter evaluation and trip approval process and work closely with your charter operator of choice to secure the best value and safest charter aircraft solution possible.

    Essex Aviation Group, Inc. was founded in 2013 with the primary goal of providing clients with the best, most current industry knowledge and experience, a vital component in evaluating the many options available to meet their business and private aviation needs. Essex has experience advising and representing clients in a wide range of services, including: new or pre-owned aircraft acquisitions, new aircraft completion management, pre-owned aircraft refurbishment and upgrade management, block and ad hoc charter services and more. If you’d like to learn more about Essex Aviation and the services we provide, contact us today.

    This original blog article was published by Essex Aviation

  • NAFA Administrator posted an article
    COVID-19 Opened the Door to Private Jet Ownership see more

    NAFA member, PNC Aviation Finance, discusses how business travelers and some individuals have bumped up against the limits of charter and fractional private aircraft services and are now pivoting to ownership.

    It's no secret that 2020 changed the landscape of the aviation industry. According to data from the Los Angeles Times[1], 2020 forecasts show that this will be the worst year in the history of commercial aviation with the industry poised to post a net loss of $84.3 billion. Consumer air travel revenue is expected to drop from $876 billion in 2019 to $434 billion in 2020. Initially many individuals considered charter services or fractional shares like JetLinx and NetJets but quickly ran up against usage limits and health concerns as the planes are still shared. As a result, more people are considering direct ownership. Airline brokers have noticed a significant uptick in business. "We're on pace to have one of our best years ever," says David G. Coleman, of Duncan Aviation a private aircraft sales, brokerage and consultancy.[2]

    Key Insights

    • Charter and fractional shares can lower risk compared to commercial airlines but they aren't risk free. Private ownership provides end-to-end control of cleaning, crew health and safety checks as well as limited use of the aircraft.

    • Aviation finance is a fragmented industry. It's important to engage veteran professionals who understand aircraft mechanics as well as financing options.

    • Individuals interested in owning an aircraft should have a clear understanding of the aircraft they are purchasing and be prepared to provide that information to lenders as well. Leasing is also an option, but individuals will want to make sure they've planned for any additional costs and are also well versed in the terms of their lease.

    Charter and Timeshare Services See a Short-term Boost

    While surging in popularity, many corporate travelers are realizing that chartered and shared services only offer limited flexibility in terms of schedule and personal safety standards. "What we're talking about is still a form of mass transit," says Jeff Wieand of Boston Jet Search, a private aircraft broker and consultancy.[3]"There are fewer people involved but the questions remain the same - are they cleaning the plane in between? When was the staff tested? Individuals in these kinds of arrangements don't have much control over the aircraft or the process. The lack of control was a driver toward ownership before the pandemic and more so now."

    Charter and timeshare services also require passengers to book in advance just like conventional travel, which may result in a bit of jostling if your travel schedule doesn't already line up with that of the service provider. While this may not matter much during a normal week, scheduling issues could become especially acute during high travel periods like around the holidays or ahead of virus lockdowns when many people are trying to get to more remote locations.

    Pivot to Ownership

    Historically, owning an aircraft was an all-cash process with a naturally limited audience. But as access to capital has improved, aircraft costs have come down and interest rates have remained low, aircraft ownership is possible for more people.

    "To my mind, what has happened with the pandemic really accelerated trends that were already happening in the private aircraft market. As major carriers continue to cut back on services, if you're someone who needs to be on the road a lot it's a problem," says Coleman. "What we're really in the business of is giving people their time back. And now, with growing health concerns we're helping them find an option that eliminates more of the risk."

    Navigating the Private Aircraft Marketplace

    There is a robust secondary sales market within aircraft that allows people to invest in pre-owned planes that are in working condition and on established maintenance programs that lenders are willing to underwrite. New planes are also available and financeable.

    For those that are new to ownership, both Coleman and Wieand suggest that it's important to work closely with veteran aviation professionals that can correctly assess the plane itself and the financing options.

    "This isn't like buying a car or a house where you can just compare across and get a sense for what things generally cost," explains Coleman. "You really need to understand the life of the aircraft in terms of where it is coming from, the state of the equipment, and maintenance schedules. And, you have to understand that not every bank is going to finance so you're going to want to engage with brokers and financing almost before you choose the plane so that people are on the same page early."

    Avoid Common Leasing and Owning Aircraft Pitfalls

    For those that want to invest in aircraft ownership, they can choose to lease their own planes or buy them outright. The financing considerations for both options differ.

    Leasing requires careful financing. With a lease, it's important for individuals to understand that they are going to be locked into an aircraft for a period of time even if problems with the aircraft arise. Wieand suggests that it's important to consider the potential for those additional costs when determining whether a lease makes the most sense. A close read of the lease terms is also a good way to ensure that there aren't any surprises if problems arise or if someone needs to break the lease for any reason.

    Focus on alignment first and financing second when taking out a loan. Taking out a loan to cover the cost of an aircraft can remove some obstacles like being locked into a lease period, but individuals will make sure that they are working with well respected financing teams that are familiar with these kinds of transactions. Coleman notes that if you're financing before you buy, lenders will typically want to be clear on the results of a pre-buy inspection so that there aren't any discrepancies with aircraft components or functionality. Appraisals and inspections can vary widely provider to provider so potential owners can avoid problems by working with appraisers and inspection teams that the lender is already familiar with and trusts. Coleman adds that some lenders will not finance specific types of planes so it is important to make sure that individuals align their desires with a finance team that is willing to support them.

    "I have seen people get into situations where they find out that they can't get the financing they were counting on because they didn't do the pre-work," Coleman says. "A seasoned aviation finance team will work closely with you on finding solutions but it's best when they are included early on in the process."

    Ready to Help

    PNC Aviation Finance offers knowledgeable financing solutions to make private aircraft ownership possible and affordable.

    We offer custom-tailored financing packages based on business needs and circumstances. Our experienced aviation finance team understands and has extensive knowledge regarding private aircraft ownership requirements, FAA, insurance, operating leases, etc.

    We can help you look at the implications of each option and help you decide on the best option for you or your business.

    Learn how PNC Aviation Finance can help you fly higher by visiting pnc.com/aviation.


    Sources
    1. Los Angeles Times (July 10, 2020) The rich are flying again -- in the comfort of their private jets - https://www.latimes.com/business/story/2020-07-10/charter-private-jet-flight-covid-19-coronavirus
    2. CEO David G. Coleman, Duncan Aviation (November 2020) Interview
    3. CEO Jeff Wieand, Boston Jet Search (November 2020) Interview


    This article was originally published by PNC Aviation Finance on December 17, 2020.

  • NAFA Administrator posted an article
    AINsight: How Dry Leases Can Prevent Illegal Charter see more

    NAFA member, David G. Mayer, Partner at Shackelford, Bowen, McKinley & Norton, LLP, discusses how dry leases can prevent illegal charter.

    Is it possible that a subtle shift is occurring away from the pervasive and persistent menace of illegal charter operations? Anecdotally, and perhaps for me just hopefully, I am seeing more aircraft owners, operators, lessees, and lessors asking whether they need some type of leasing or other structure to avoid FAA scrutiny or personal liability.

    Leasing enables a lessee, which may be an individual or entity (person), to lawfully “operate” and thereby exercise “operational control” over an aircraft under the FARs. Only one person has operational control. Leasing offers a broad array of benefits and structures to direct cash flow from lessees to lessors and vendors, manage risk, minimize certain taxes, share aircraft use and cost among unrelated and affiliated parties, and facilitate commercial operations under FAR Part 135.

    But leasing is not an incidental subject, as explained in the General Aviation Dry Leasing Guide developed by NBAA and several other aviation alphabet groups. This 17-page publication informs aircraft buyers, owners, lessors, lessees, lenders, brokers, lawyers, and other advisors about the flexibility, utility, regulatory aspects, and complexity of leasing.

    Key FAA Leases: Dry and Wet

    It is essential first to understand that a “lease” under the Uniform Commercial Code in part means a transfer by a “lessor” to a “lessee” of the right to possession and use of an aircraft for a term in return for consideration—usually hourly, fixed, and/or variable rent payments.

    In contrast, a true lease might exist when the lessor retains residual value risk—the remaining value of the aircraft at the end of the lease term. Sellers do not take this risk. Finally, a charter is not a lease; it is a service, with no change of aircraft possession.

    Under FAR 91.23, “a lease means any agreement by a person to furnish an aircraft to another person for “compensation or hire, with or without flight crewmembers, that is not a contract of conditional sale.” In this context, the FAA identifies two extremely important categories of leases in Order 8900.1: dry leases and wet leases.

    Dry lease refers to an aircraft transaction in which the lessor provides the aircraft, the lessee independently supplies the crewmembers, and the lessee retains operational control of the flight. FAR 1.1 defines a core regulatory concept of operational control with respect to a flight as “the exercise of authority over initiating, conducting, or terminating a flight.”

    Illegal or unsafe operations may occur when leases or other contracts do not specify who is responsible for operational control of the aircraft and in other circumstances. As such, the FAA focuses on operational control in assessing whether a flight operation is an illegal charter or valid Part 91 operation.

    Operational control under Part 91 does not mean the traveler must fly the aircraft personally. An aircraft owner or lessee typically delegates that responsibility to pilots under Part 91 or charter operator under Part 135. I sometimes refer to the one person that exercises operational control as having the liability target on the person’s back.

    For example, in one of the most common uses of dry leases, an owner enters into a dry lease between a limited liability company (LLC), as the single-purpose aircraft owner entity, to put operational control of flight operations into the hands of one person as the lessee in compliance with Part 91.

    A major business enterprise for profit may be an appropriate dry lessee if the aircraft serves the business of the enterprise whose operations generate substantially more revenue than the operating costs of the aircraft. The LLC owner/member may also agree to an “exclusive dry lease,” with one lessee/operator or “non-exclusive leases” with multiple aircraft lessees/operators under their separate non-exclusive leases.

    The finance world routinely uses exclusive dry leases of various types to enable a lessor to buy an aircraft and lease it to a lessee without crew under a long-term lease. Here, the lessee similarly supplies the crew and assumes all obligations under the lease for the care, custody, and control of the aircraft during the term, including for its maintenance, crewing, operations, cost payments, insurance, and taxes.

    Despite the availability of leasing, new and current aircraft owners still frequently violate the FARs when their LLCs operate the aircraft but have no business other than to own and operate their aircraft, converting the LLCs into illegal “flight department companies.” Such a single-purpose LLC cannot lawfully conduct these operations, share the aircraft for any compensation (anything of value), or offer the aircraft for hire to others unless the LLC obtains an air carrier certificate under Part 119 and operates the aircraft under Part 135. It is quite feasible to use non-exclusive or exclusive dry leases to rectify or avoid these violations.

    In contrast to a dry lease, the FAA defines a wet lease in FAR 110.2 as an aircraft lease whereby the lessor provides both an entire aircraft and at least one crewmember to a lessee. The lessor retains operational control of the flight, unlike a dry lease where the dry lessee supplies its own crew, directs many aspects of flight operations, and retains operational control.

    Another significant distinction exists between Part 91 private operations and Part 135 commercial operations conducted by the air carrier that influences lease structuring. The air carrier (charterer) has the liability target on its back instead of the person that would otherwise exercise operational control under Part 91. This feature appeals to risk-averse Part 91 lessees or owners that want to mitigate the risk of liability for accidents involving their aircraft under their operational control of the aircraft.

    When the Rubber Hits the Runway

    When the conduct of flights blurs the line in determining whether one lessee/passenger has operational control or the lessor/aircraft provider has operational control under Part 91, illegal charter operations may be occurring. Lessees normally must understand and accept operational control and related obligations.

    Although the FAA has no specific criteria to determine when Part 91 dry leases morph into illegal wet leases, lessees should be wary of lessors that offer leases to multiple unrelated parties, induce the parties to hire the lessor’s pilots, and usurp the lessee’s independence in exercising operational control.

    Importantly, the lease parties of large civil aircraft (over 12,500 pounds mtow) must comply with FAR 91.23, the Truth-in-Leasing rules. These rules, which protect and inform lessees, require the filing with the FAA of a copy of the lease within 24 hours of signing and notice to the local FAA Flight Standards office at least 48 hours before the first flight under the lease.

    Conclusion

    There is no excuse for operating an aircraft as an illegal charter, especially when leasing aircraft provides a reasonable way to transfer rights to lessees to possess and use an aircraft under the lessee’s operational control. With the guidance of knowledgeable aviation counsel, individuals and entities can operate safely, lawfully, and knowledgeably under the FARs using leases and other related documentation that will survive FAA scrutiny.

    This article was originally published on AINonline on January 15, 2021.

     

  • NAFA Administrator posted an article
    Insights From An FAA Illegal Charter Investigation see more

    NAFA member, Greg Reigel, Partner at Shackelford, Bowen, McKinley & Norton, shares insights from an FAA illegal charter investigation. 

    Recent FAA press releases have publicized the enforcement actions the agency is taking against those involved in illegal charter.  However, what is not publicized is how the FAA is investigating these cases.  A recent case in the U.S. District Court for the Southern District of Indiana provides an interesting glimpse into one such investigation.

    The Case

    In Elwell v. Bade et al., the FAA received complaints regarding alleged illegal charter activity.  In response, the FAA opened what has turned out to be a six year investigation.

    During its investigation, the FAA issued three sets of subpoenas over a three year period.  The last set asked for production of all documents related to agreements associated with use, ownership, and/or leasehold interest in certain aircraft under investigation for a specified period of time.  The recipients of the subpoenas (the “Respondents”) objected and refused to produce any documents.

    The FAA filed a petition with the U.S. District Court requesting enforcement of the subpoenas.  The Respondents objected to the subpoena by filing a motion to quash the subpoenas.  The Court refused to quash the FAA’s administrative subpoenas and ordered their enforcement.

    The Court concluded that “(a) the matter under investigation is within the authority of the issuing agency, (b) the information sought is reasonably relevant to that inquiry, and (c) the requests are not too indefinite.” However, the Court’s analysis and rationale also provide insight into some of the things the FAA can do, and when it can do them, in an illegal charter investigation.

    Here are some of the key takeaways:

    The FAA Has Authority To Issue Subpoenas In Connection With An Investigation

    Under 49 U.S.C. § 46101(a), the FAA may investigate violations as long as the agency has “reasonable grounds.”  Neither an enforcement action nor a lawsuit is necessary.  When a court reviews an agency’s subpoena requests, the court must make sure the agency does not exceed its authority.  And the threshold for the relevance of the documents/information requested by the administrative subpoenas is relatively low. The court must also confirm that the requests are not for an illegitimate purpose.

    In illegal charter investigations such as the Bade case, the FAA typically asks for

    • aircraft flight logs
    • flight summaries
    • aircraft lease agreements
    • operating agreements
    • interchange agreements
    • pilot services agreements
    • pilot payrolls
    • operating invoices
    • receipts etc.

    And, as in Bade, a court will likely hold that such requests are proper and do not exceed the FAA’s authority.

    Stale Complaint Rules Do Not Bar Subpoenas During An Investigation

    As you may know, stale complaint rules act to bar the FAA from acting in certain situations after a period of time.  For example, in certificate actions heard before a National Transportation Safety Board Administrative Law Judge, 49 C.F.R. § 821.33 may prevent the FAA from acting if it does not initiate the case within six months of advising the respondent of the reasons for the proposed action.  Similarly, in a civil penalty case, a case may be dismissed under 14 C.F.R Part 13.208(d) if the FAA does not initiate action within two years.

    However, these stale complaint rules do not apply to ongoing investigations where no action has been initiated.  According to the Bade court, the “FAA may conduct an investigation to assure itself that its regulations are being followed, regardless if it ultimately determines civil enforcement or formal charges are not warranted.”

    Similarly, the FAA may investigate a target who is “engaged in a continuing violation of [FAA’s] safety regulations.”  In Bade, the FAA argued it was not investigating stale claims.  Rather, it believed the respondents were engaged in continuing violations where “the statute of limitations restarts every day.”  And the Court agreed.

    (Interestingly, the Court did not address whether this analysis, and its decision, would have changed if the aircraft involved had been sold and/or the flight operations had ceased.  As a result, it is unclear whether the investigation would have been moot if applicable stale complaint rules prohibited enforcement action.)

    The FAA Does Not Have To Tell The Target Of An Investigation About Subpoenas

    Under 49 U.S.C. § 46104(c), an agency must only give notice to “the opposing party or the attorney of record of that party.”  However, an investigation has no “record.” As a result, since the target of the investigation is not the one being deposed nor is counsel to those targets being deposed, the target does not have a statutory right to receive notice of third-party depositions.

    The Bade court also noted that “’failing to receive notice of one or more depositions does not prove that the FAA’s investigation is a sham,’ and has ‘nothing to do with the enforceability of the Subpoenas or the motive of the FAA in conducting this investigation.’”

    So, potential respondents do not get to participate at third-party depositions or receive copies of documents produced in response to subpoenas. This certainly makes defending against an illegal charter investigation a more difficult task.

    The FAA’s Order 2150.3C Is Only “Guidance”

    In Bade the Respondents argued that the FAA had not followed its own policies when conducting the investigation.  Specifically, they argued the FAA failed to follow FAA Order 2150.3 – FAA’s Compliance and Enforcement Program. However, the Court rejected the argument.  It observed that Order 2150.3 is not regulatory.

    Rather, Order 2150.3 merely provides guidelines to FAA personnel for performing their duties. Thus, the Court concluded that the FAA’s failure to strictly adhere to Order 2150.3’s “guidance” did not negate its authority to investigate. Nor did it mean the FAA was pursuing the investigation for an improper purpose.

    Conclusion

    Illegal charter is a high priority for the FAA at the moment, and will be for the foreseeable future.  As a result, the agency will continue to investigate complaints of illegal charter.  It is important to understand how the FAA conducts these investigations and the extent of its authority.

    And it is imperative for aircraft owner or operator who is the target of an illegal charter investigation to know its rights. If you believe you are the target of an illegal charter investigation, contact us now so we can help you navigate the investigation and protect your rights.

    This article was originally published by Shackelford, Bowen, McKinley & Norton, LLP on June 23, 2020.  

  • NAFA Administrator posted an article
    How to Rent a Private Jet: Everything You Need to Know About Private Jet Charter Services see more

    NAFA member, H. Lee Rohde, III, President & CEO of Essex Aviation, shares what you need to know about private jet charter services.

    Wouldn’t it be great to be able to just rent a jet? Well, with private jet charter services, you can.

    Private aircraft charter is an on-demand service that enables passengers to select the aircraft model that most closely meets their travel needs and book a flight in much the same way they’d book a seat on a commercial flight.

    Read on to explore private aircraft charter options, expenses, safety considerations and more.

    Table of Contents

    Different Types of Private Jet Charter Services

    Private jet charter services typically fall into one of two broad categories: private jets for business and private jets for leisure.

    Private aircraft charter is an attractive option to businesses because it enables them to:

    • Arrange flights to multiple cities within a single day according to your schedule, rather than a commercial airline’s
    • Bypass long check-in and security lines by boarding through private terminals
    • Arrive on-time to important meetings by flying to an airport closer to their final destination
    • Access airports often having less ground and air traffic, thereby reducing the potential for delays
    • Transport larger groups at a potentially lower overall cost than commercial airfare
    • Avoid costly downtime associated with commercial flight delays, layovers and connecting flights
    • Support in-flight productivity by eliminating unnecessary distractions and increasing overall travel efficiency
    • Conduct onboard business meetings without having to worry about other passengers listening in on sensitive conversations
    • Enable team members to travel in a comfortable, inviting atmosphere so that they arrive to their final destination refreshed and prepared

    Private air charter is similarly appealing to those who fly primarily for leisure purposes. Private aviation enables such individuals to effectively extend their holiday experience by flying aboard aircraft appointed with the finest luxury amenities, including full-service kitchens, state-of-the-art in-flight entertainment systems and dedicated bedrooms. Private terminals at commercial airports offer a secure, comfortable and relaxed environment, far from the hustle and bustle of the main commercial airport concourse. Local, non-commercially serviced airports enable travelers to arrive closer to their final destination, so they can start their holiday that much sooner. Ultimately, private jet charter can make even the longest haul flightfeel like an escape.

    Read the full article here

    This article was originally published by Essex Aviation in October 2020.

  • NAFA Administrator posted an article
    Four Actions to Increase Quality Charter Revenue for Your Aircraft see more

    NAFA member, Clay Lacy Aviation shares ways to increase your aircraft's charter revenue.

    Aircraft owners routinely ask aircraft management companies: How can I maximize charter revenue for my aircraft? The most common answer is often something like “charter the aircraft more hours.” It is a simple answer—it is also wrong. While flying more hours increases gross revenue, you will sacrifice hourly profit margin which does not maximize revenue for the aircraft owner. Why? The rules of supply and demand, and variable expenses. The largest variable cost, accounting for 51 percent, is fuel. More fuel is burned in the first hour of flight, due to climb, than in hours two, three, four and so on, which means the owner earns less revenue on that first hour. Monitoring average leg segments is something your manager needs to manage.

    Historically, aircraft owners will require approval for each charter before it happens—often adding surcharges to make the trip more profitable. This owner release, as it is known in the industry, makes the plane less competitive in the market and drives charter customers to the next best alternative.

    The recent introduction of the branded charter model (Wheels Up, XO, VistaJet) has made owner approval charters even less competitive. Branded charter jets are owned by the company, dedicated to charter and do not need additional barriers. It is an attractive proposition for the customer.

    So how can aircraft owners maximize charter revenue and compete in the current market? Here are four actions to take.

    One: Establish clear revenue expectations.

    Establish clear revenue expectations for each annual period, with your management company. Then ask for quarterly reports to track how the aircraft is performing. Quality management companies will dynamically flex pricing on a trip-by-trip basis.  Giving the company this flexibility will ultimately provide the aircraft owner with higher hourly returns, more consistent revenue and allow the aircraft to compete in a rapidly changing market.

    For each aircraft, there is an optimal rate where the contribution margin is highest and most efficient. But owners have two options to pursue when offering their aircraft for charter: One, the optimal margin or two, operating cashflow goals. Just be aware that adding hours beyond the most efficient price will diminish returns.

    Two: Keep restrictions to a minimum.

    The more restrictions you place on the aircraft and management company, the less attractive your aircraft will be in the highly competitive charter market. A long, detailed list prohibiting things like red wine, children under eight, pets, short cycles and so forth will make your aircraft nearly impossible to charter. Instead, trust your management company to protect and maintain your aircraft properly. If the plane requires additional cleaning or a repair, the management company should cover the cost and charge the charter customer accordingly. Lastly, check your aviation services agreement to make sure that is defined for your protection.

    Three: Co-locate your pilots with your aircraft.

    Owners often allow their pilots to live in cities far from where the aircraft is located. While this is a perk for the pilots, it means they must fly commercially to and from the jet’s location before and after every charter flight. This not only adds additional cost to the charter, making it less competitive, it also significantly reduces the duty time and/or availability of the aircraft. The smarter and far more profitable move is to co-locate plane and pilots. If your aircraft is based in a city with multiple airports, there is usually one airport with significantly higher demand, but correspondingly higher parking and fuel prices.  Your manager can provide an airport base comparison to help you make an informed decision (demand, fuel, hangar, maintenance resources and repositioning costs) if that relocation would help achieve your goals.

    Four: Release owner approval of individual charters

    Finally, remove the sales barrier created by owner releases. Instead, require quarterly trend analysis on the hourly contribution margins. This simple and profound adjustment allows flexibility of the sales process, optimizes availability and allows adequate time to generate trends. In today’s highly competitive “look-and-book” market, where charters are increasingly confirmed online in real time, this gives your aircraft a competitive advantage.

    This article was originally published by Clay Lacy Aviation on November 2, 2020.

  • NAFA Administrator posted an article
    To Charter or Not see more

    NAFA member, Brian Proctor, CEO of Mente Group, discusses the benefits of charter.  

    There have been numerous articles exploring the benefits of charter.

    There have been innumerable cases of management companies telling owners and potential owners that they will “make money” owning and chartering a jet.

    In this article we will review a client case where we studied the true marginal return of chartering, explore the “make money” assertion, and analyze the situations when operating Part 135, in a charter environment truly makes sense.

    The Client Case:  To Charter or Not to Charter

    Recently, we were approached by a long-time client who owns a Challenger 604.  The client was approached out of the blue by an aggressive management operation, offering to manage the client’s aircraft, put it on a Part 135 certificate and to hold it out to third-party users of the aircraft.  The manager provided a very detailed operating proforma showing the “profits” that the client would make, along with a slick brochure indicating that the aircraft would “pay for itself”.

    We recommended to the client that we perform a true “Margin Analysis” based on a per-hour return.  In the analysis, we assumed three-hundred charter hours per year.  We factored in the Charter Revenue and Fuel Surcharge, along with the Direct Operating Costs and brokerage Fees for the aircraft.  In addition, we factored in non-cash costs associated with each hour of flying, including:

    • Blue Book based residual value charge per hour
    • Wear and Tear to the Paint allocated per charter hour
    • Wear and Tear to the Interior allocated per charter hour

    As part of the analysis, we did not factor in any costs relative to fixed maintenance for the aircraft, including the 96 Month Inspection, lesser inspections, gear overhaul, etc.

    As a net result, the client would receive Five-Hundred Eleven ($511) Dollars per hour of net charter margin, or $153,300 on an annual basis.  When compared to the owner’s fixed cost of operations, approximately $600,000 annually, the charter margin offset approximately one-quarter of the fixed costs.  When factoring capital (or a better analysis of residual value loss), chartering does not come close to “making money”

    “Making Money”

    As you can imagine, Mente Group is often asked to study charter as a way to “have the aircraft pay for itself”.  We’ve run hundreds of scenarios.  Most typically, we will be asked to review 150-250 hours of owner usage, augmented with 100-200 hours of third-party charter.  The findings generally point to the same conclusion.  Under most usage patterns, we’ve found that, at best, chartering your aircraft helps to offset the fixed cost burden of the aircraft.

    So, you’re probably asking, “at what point does charter pay for the plane?”  We’ve done the analysis.  But, before we go to the answer, you must remember that as utilization increases, pilot staffing needs to increase as well.  So, based on the findings, a 4.5 pilot organization, flying 100 owner hours a year and 700-750 hours of charter comes close to covering the owner’s usage and covering the fixed costs.  (it still won’t cover the major fixed maintenance inspections.)  Not until you approach 1000-1200 hours of charter alone (depending on aircraft type) do you approach break even. To approach this level of utilization, along with the increased crewing requirements, your airplane must ‘float’ becoming nomadic without a traditional home base or hangar.  Additionally, your aircraft becomes part of the wholesale market, with a client base focused on the lowest price, not the best aircraft.  Clearly, it is very difficult under normal operations to ever make money chartering an aircraft.

    When Chartering Makes Sense

    As we’ve worked with clients all over the US, we’ve come across several situations where chartering does make sense:

    1. Sales/Use Tax Mitigation: There are several US states that waive sales / use tax on aircraft used primarily in commercial operations.  Some of the states call this a “Rolling Stock Exemption”.  In this case, the owner is advised to work closely with aviation tax counsel to structure an operating model that not only exceeds the requirements, but also has appropriate record keeping systems in place to defend against almost certain audit.
    2. Property Tax Mitigation: Like sales tax, certain property taxing authorities around the country waive or significantly reduce property tax on aircraft used in commercial operations.  Taxing authorities vary greatly on this, and the analysis needs to be conducted at the state, county and even the city level.
    3. Related Party Usage and Reimbursement: In a situation where an owner wants to allow a related party (friends, colleagues, a business, etc.) use of an aircraft and get reimbursed, operating Part 135 and chartering the aircraft to them is an easy way to achieve the desired results.  This avoids the pitfalls of unintentional illegal charter –a hot issue today with the regulatory authorities
    4. Optics: Often times, client companies will charter their aircraft to improve the optics of ownership by having the aircraft “making money” when the corporation isn’t using it.
    5. Liability: This ties back to an FAA concept of “Operational Control”.  When a Part 135 Operator is operating your aircraft, operational control of the aircraft shifts from the owner to the operator.  Theoretically, this then shifts liability in case of an accident or incident to the operator.
    6. Fixed Cost Offset: As mentioned above, chartering allows an owner to reduce the fixed cost of ownership, but rarely eliminates them.

    Obviously, the decision to hold-out your aircraft for charter is a complex decision.  In many ways, it can simplify operations and reduce the cost of ownership, but there’s no way to eliminate it.  Much like renting out your vacation home, once you make the purchase decision, you can consider whether you want to rent it out to offset some of your costs.  But it won’t pay for the asset – including capital and operating expenses – much less make money.  Otherwise, we’d all own money-making charter airplanes as part of our investment portfolio.  And we don’t.  Feel free to reach out to the team at Mente and we can help you explore this topic in greater detail.

    This article was originally published by Mente Group on October 30, 2020.

  • NAFA Administrator posted an article
    How to Rent a Private Jet: Everything You Need to Know About Private Jet Charter Services see more

    NAFA member, H. Lee Rohde, III, President and CEO of Essex Aviation, discusses private jet charter services. 

    Wouldn’t it be great to be able to just rent a jet? Well, with private jet charter services, you can.

    Private aircraft charter is an on-demand service that enables passengers to select the aircraft model that most closely meets their travel needs and book a flight in much the same way they’d book a seat on a commercial flight.

    Read on to explore private aircraft charter options, expenses, safety considerations and more.

    Table of Contents

    Different Types of Private Jet Charter Services

    Private jet charter services typically fall into one of two broad categories: private jets for business and private jets for leisure.

    Private aircraft charter is an attractive option to businesses because it enables them to:

    • Arrange flights to multiple cities within a single day according to your schedule, rather than a commercial airline’s
    • Bypass long check-in and security lines by boarding through private terminals
    • Arrive on-time to important meetings by flying to an airport closer to their final destination
    • Access airports often having less ground and air traffic, thereby reducing the potential for delays
    • Transport larger groups at a potentially lower overall cost than commercial airfare
    • Avoid costly downtime associated with commercial flight delays, layovers and connecting flights
    • Support in-flight productivity by eliminating unnecessary distractions and increasing overall travel efficiency
    • Conduct onboard business meetings without having to worry about other passengers listening in on sensitive conversations
    • Enable team members to travel in a comfortable, inviting atmosphere so that they arrive to their final destination refreshed and prepared

    Private air charter is similarly appealing to those who fly primarily for leisure purposes. Private aviation enables such individuals to effectively extend their holiday experience by flying aboard aircraft appointed with the finest luxury amenities, including full-service kitchens, state-of-the-art in-flight entertainment systems and dedicated bedrooms. Private terminals at commercial airports offer a secure, comfortable and relaxed environment, far from the hustle and bustle of the main commercial airport concourse. Local, non-commercially serviced airports enable travelers to arrive closer to their final destination, so they can start their holiday that much sooner. Ultimately, private jet charter can make even the longest haul flightfeel like an escape.

    Private Aircraft Charter Amenities

    We’ve already touched upon some of the amenities that travelers can expect when they charter a private jet aircraft, but let’s take a closer look at some of the comforts and conveniences passengers enjoy while onboard:

    • Open spaces designed with legroom, storage space and aesthetics in mind
    • Private lounges featuring plush seating arrangements upholstered with high-end materials
    • Personal flight attendant crew members ready to tend to each individual passenger’s needs
    • Full-service galleys stocked with a variety of fine foods and beverages
    • In-flight food and drink services, including meal catering or onboard personal chef services
    • State-of-the-art in-flight entertainment systems featuring cutting-edge audio and visual equipment
    • Full-size lavatories, including mirrors, storage and, depending on the aircraft, shower facilities
    • Depending on the aircraft, dedicated bedrooms replete with full master suite
    • Private conference rooms fitted with built-in video systems, surround sound and Wi-Fi access
    • Special accommodations for passengers who wish to fly with pets

    Every aspect of the private jet charter experience is designed to accommodate the passenger’s unique needs.

    When Does It Makes Sense to Rent a Jet?

    Private jet charter services have long been popular amongst travelers who want the experience of private aviation without the long-term commitment associated with dedicated or fractional aircraft ownership. It’s an especially practical option for those who are dealing with a smaller number of trips, or who require flexibility in terms of aircraft size and destination. Interest in private aircraft charter has also increased significantly in light of COVID-19, as travelers seek to find safer alternatives to commercial flights. Travelers who are curious about the prospect of chartering a private aircraft but unsure whether it makes the most sense based on their needs are encouraged to discuss their operations with a private aviation consultant.

    How Much Does It Cost to Charter an Airplane?

    Unfortunately, there is no one simple answer to this question — the expense of chartering a private aircraft varies substantially based on a number of factors:

    • Number of Passengers: This dictates the size of the aircraft (light jet, midsize jet, long range or ultra-long range) and, therefore, available aircraft models from which to choose.
    • Dates of Travel and Scheduling: If you primarily charter on holidays and during peak travel times, this can affect your cost. General limited availability and the location of available aircraft can also affect your ability to travel on your desired dates, so it’s best practice to book charter flights as far in advance as possible.
    • Flight Route and Destination: More distant destinations with longer flight routes require long range or ultra-long range aircraft models; longer journeys may also require stops to refuel and change crew if required per the Federal Aviation Administration’s (FAA) Pilot Fatigue Rules.
    • Length of Time on the Ground: Most private jet charter service providers require an equivalent of two hours per day of flight time. That said, it does not matter how this time is spread out. For example, if a traveler were to depart on a four day trip, they would be required to fly a minimum of eight hours during that trip; however, they could divvy this up by flying two hours each day of the trip, or four hours each during the first and last days of the trip with the aircraft parked during days two and three.
    • Round-trip vs. One-way: Round-trip flights are generally more cost effective than one-way trips. The reason for this is that a one-way trip typically requires the aircraft to complete additional flights in order to support a one-way trip request. As a result, most charter providers will actually quote the cost of a round-trip flight, even for a one-way trip. Charter providers that quote a one-way trip will effectively quote, in some form or another, the cost for the flight time of repositioning the aircraft back to its home base. For travelers interested in booking either a one-way or round-trip flight, a private aviation consultant is an invaluable resource because they can help you better understand pricing.
    • One-way Options: Although it’s certainly possible to request a one-way trip, from a traditional charter perspective, the cost will likely compare to the cost of a round-trip flight. Therefore, travelers who frequently make one-way trips would probably be best served by looking into a jet card program as opposed to chartering because jet cards tend to cater more to one-way requirements.

    That said, some charter providers offer one-way options in which the traveler can take advantage of a positioning flight (that has no passengers) required by another client’s scheduled trip. These opportunities utilize what are referred to as “deadhead flights,” while positioning the aircraft to its primary departure point or returning it to its home base at the end of a primary charter trip. Should your travel needs coincide with a deadhead flight — also known as an “empty leg flight” — this can be a good option, one that is often offered at a discounted rate. It’s important to note, though, that the cost savings associated with deadhead flights pose risks in terms of flexibility because these flights have a predetermined departure date, time and schedule, all based on the schedule — and sometimes changing needs — of the primary charter customer.

    On the whole, private jet charter services are less expensive than most other private aviation options because they’re booked on a trip-by-trip basis with no ongoing ownership or program costs.

    For private jet charter cost estimates, please refer to the chart below:

    Charter Operators vs. Charter Brokers 

    There are a few different ways to charter a private jet aircraft, including working directly with a charter operator or going through a charter broker.

    Charter operators are FAA Part 135 Certified Air Carriers who are directly responsible for the ongoing management and operation of the aircraft on their charter certificate, including staffing, and require FAA certification. Charter brokers are third-party agents that act as liaisons between a client and the FAA Part 135 charter operator chosen to be utilized for the trip. A charter broker will work with their client to secure representation for the booking of the trip and then work with different charter operators to determine which option they believe best meets the trip requirements.

    It’s important to note that, unlike Part 135 charter operators, charter brokers are not required to be FAA certified and operate with limited regulatory oversight. That isn’t to say that there aren’t reputable brokers in the market, rather that it’s important to thoroughly vet brokers before choosing to partner with one; a private aviation consultant can prove to be a valuable asset in this review and selection process.

    For a more detailed explanation of the difference between charter operators and charter brokers, please refer to our blog post on the subject.

    How to Identify a Private Jet to Charter

    When determining which type of private jet aircraft model to reserve for a trip, travelers are advised to consider the following:

    • How many passengers will be on the flight?
    • Do any of those passengers require special accommodations? (For example, a passenger with a wheelchair may need additional space.)
    • How much total luggage needs to carried?
    • Are there any larger luggage items (golf clubs, skis, bikes, etc.)?
    • What is the desired departure airport or location?
    • What is the desired arrival airport or destination?
    • What is the length of the trip?
    • Will the aircraft be repositioned on certain days during the trip? If so, where and for how long?
    • Do the passengers require any special amenities (internet service, certain floorplan seating options, etc.)?

    Each of these factors plays an important role in determining the necessary size, equipment capability and performance capabilities of the aircraft.

    Private Aircraft Charter Safety Considerations

    In addition to FAA regulations, there are numerous other industry standards and ratings designed to audit the safety of private aviation companies. The three most well-known are the International Standard for Business Aircraft Operations (IS-BAO), the Aviation Research Group/US (ARGUS) rating system and the Wyvern Wingman Certification program.

    IS-BAO was founded by the International Business Aviation Council in an effort to “build a culture that continuously strives for a better, safer way of operating by identifying areas where better risk management will improve safety.” The IS-BAO auditing process consists of three stages designed to verify that safety management activities are appropriately targeted and integrated within an operator’s business. IS-BAO was developed by operators, for operators and is based on the standards outlined by the Standards and Recommended Practices outlined by the International Civil Aviation Organization.

    Developed by ARGUS International, the ARGUS rating system is designed to confirm the legitimacy of a charter operator based on their safety record, whether they have liability insurance, pilot training, experience and certifications, pilot background checks and more.

    ARGUS ratings break down into four categories, shown in the table below:

    Some private jet charter providers will claim that they’re “ARGUS Rated,” but there’s a significant difference between being an ARGUS Gold Rated and ARGUS Platinum Rated operator, so it’s in the travelers’ best interest to partner with a private aviation consultant who can help them understand the difference.

    As the first private aircraft safety auditing firm in the country, WYVERN Consulting has garnered a great deal of respect, and its WYVERN Wingman Certification is considered one of the most reputable in the industry. WYVERN audits are governed by six principles: integrity, fair presentation, due professional care, confidentiality, independence and an evidence-based approach. Wingman Certified operators gain an exclusive listing on The Wingman Report, WYVERN’s directory of premier operators, access to WYVERN’s safety data platform and round-the-clock support from the WYVERN team.

    Any private aircraft charter company that boasts one or more of these ratings or certifications in addition to meeting FAA regulations would be a preferred option to consider, though it doesn’t hurt to consult a private aviation expert for peace of mind.

    Private Jet Charter Alternatives

    For those who aren’t sure whether renting a jet is right for them, there’s a world of other private aviation options in store, including:

    • Membership Programs: With a membership program, members agree to a fixed cost per hour charter rate at the start of the contract and are billed after each flight. Members typically pay either a monthly management or annual membership fee in addition to the cost per flight.
    • Jet Card Program: Jet card program members have their pick of a dedicated service with a predetermined number of hours on a specific aircraft type or size category or a debit card service in which they establish a travel fund account and pay on a trip-by-trip basis using that account.
    • Fractional Aircraft Ownership: Fractional owners purchase a share of a specific aircraft type and agree to an annual number of allotted flight hours. Most fractional aircraft ownership programs require a minimum size share of 50 hours of flight time per year, though this can vary depending on the provider.
    • Pre-Owned Aircraft Acquisition: Travelers who for a variety of reasons want their own private aircraft without the capital investment of a new aircraft acquisition are advised to consider purchasing pre-owned and investing in aircraft refurbishment services to breathe new life into an existing aircraft.
    • New Aircraft Acquisition: The ultimate in luxury, travelers can purchase a new aircraft tailored to their exact requirements and specifications.

    If you’re considering private jet charter services or evaluating alternatives, talk to the experts first — specifically, the experts at Essex Aviation Group. With a combined 95 years of aviation experience, we have longstanding private aviation industry connections that we can leverage to your advantage. We’re also intimately familiar with different private aircraft charter companies’ vetting processes, so we can help ensure that every flight you take is a safe flight.

    Ready to get started? Contact us today to let us know your unique travel requirements and we’ll help you determine whether private air charter services are right for you.

    This article was originally published by Essex Aviation on August 13, 2020.