NAFA member, David G. Mayer, Partner at Shackelford, Bowen, McKinley & Norton, discusses how buying a charter operator bypasses a long application process.
Aviation entrepreneurs seem increasingly interested in purchasing aircraft charter companies opportunistically from the thousands that exist today. Others who want to enter the aircraft charter business believe the cleanest way to do so is to apply to the FAA for a new air carrier certificate authorizing operations under FAR Part 135.
In most cases, a potential buyer fares better by purchasing the legal entity (Part 135 operator) to which the FAA issued a certificate. That purchase may take several months to close, whereas an applicant may have to devote a year or more to obtaining two separate authorizations—one from the Department of Transportation (DOT) under FAR Part 119 and a related certificate from the FAA.
Although you may have heard or read that a buyer can purchase a 135 certificate itself from a Part 135 operator, the FAR does not allow such a direct purchase. However, using various structures, a buyer can purchase a Part 135 operator with the effect of transferring the certificate to the buyer.
This article was originally published by AINonline on November 10, 2023.
