Business Aviation Advisor March-April 2019 by Business Aviation Advisor Magazine

MARCH / APRIL 2019

To ADS-B or Not To -B

Equip your aircraft now to avoid being grounded

Insurance Rates Take Off Upward trend in 2018, first in 16 years

DEALING WITH A FULL DECK CARE AND SHARE IN THE AIR OFFSHORE AIRCRAFT REGISTRY HIGH FLYING SHUTDOWN STUPIDITY A Business Aviation Media, Inc. Publication

W W W . B I Z AVA D V I S O R . C O M

It’s time. What are the most precious things in your life? Your family, your friends, your business? Whatever they are, the most precious resource that links them all together is time. That’s why CorporateCare® offers our customers the industry’s most comprehensive global service network and leading edge digital tools, all focused on getting you to your destination as planned. It’s time to protect your most precious resource. It’s time to consider CorporateCare®. For more information, email corporate.care@rolls-royce.com. The future. Rolls-Royce.

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F E AT U R E S

To ADS-B or Not To -B 06 Equip your aircraft now to avoid being grounded

• Volume 6 / I s sue 2

by ROLL AN D VIN C E NT

Insurance Rates Take Off 08 Upward trend in 2018, first in 16 years

Offshore Aircraft Registry

by R I C H AR D THO M P SON

High Flying

by DAVI D T. NOR TON , J D , M BA , ATP

Location can affect your aircraft maintenance

The new RVSM rule

by S TE PH E N P. J OHNS

Dealing With a Full Deck

Why to modernize your flight deck

Publisher’s Message 05 It’s About Time

by R AN DY D E AL

by G IL WOLIN

Care and Share in the Air Using your aircraft for charity

Washington Report

by G . R . S H APIRO

by DAVI D COLLOG AN

D E PA R T M E N T S

Shutdown Stupidity

Above and Beyond 2019:

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PUBLISHER’S MESSAGE ■ PUBLISHER Gil Wolin gwolin@bizavadvisor.com CRE ATIVE DIRECTOR Raymond F. Ringston rringston@bizavadvisor.com MANAGING EDITOR G.R. Shapiro gshapiro@bizavadvisor.com ASSISTANT EDITOR Michael B. Murphy mmurphy@bizavadvisor.com WASHINGTON EDITOR David Collogan dlcollogan@gmail.com CONTRIBUTORS Randy Deal Signature TECHNICAir randy.deal@technicair.com Stephen P. Johns LL Johns Aviation Insurance sjohns@lljohns.com David T. Norton, JD, MBA, ATP Shackelford, Bowen, McKinley & Norton, LLP dnorton@shackelford.law G.R. Shapiro BAA Managing Editor gshapiro@bizavadvisor.com Richard Thompson Jet Support Services, Inc. rthompson@jetsupport.com Rolland Vincent Rolland Vincent Associates rvincent@rollandvincent.com BUSINESS MANAGER JoAnn O’Keefe jokeefe@bizavadvisor.com BOARD OF ADVISORS Paul Cardarelli • Larry Flynn Anthony Kioussis • Dick Koenig Joe Moeggenberg • Louis C. Seno Nel Stubbs • Rolland Vincent John (Jack) M. Young BUSINESS AVIATION MEDIA , INC . PO Box 5512 • Wayland, MA 01778 Tel: (800) 655-8496 • Fax: (508) 499-2172 info@bizavadvisor.com • www.bizavadvisor.com Editorial contributions should be addressed to: Business Aviation Advisor, PO Box 5512, Wayland, MA 01778, and must be accompanied by return postage. Publisher assumes no responsibility for safety of artwork, photographs, or manuscripts. Permissions: Material in this publication may not be reproduced, stored in a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise) without the prior written permission of the publisher. The views and opinions expressed in Business Aviation Advisor are those of the authors and advertisers, and do not necessarily reflect the policy or position of Business Aviation Media, Inc. Articles presented in this publication are for general information and educational purposes and do not constitute legal or financial advice. Postmaster: Please send address changes to: Business Aviation Media, Inc., PO Box 5512 • Wayland, MA 01778, USA ©Copyright 2019 by Business Aviation Media, Inc. All rights reserved

It’s About Time

A small red number just popped up over the “App Store” button on my smart phone, indicating that one or more of my apps needs updating – or maybe it’s the phone’s entire operating system. Developers, it seems, have figured out yet another improvement to my near instantaneous worldwide access to people, information … and, of course, to shopping. These updates invariably offer increased speed and stability, because that quest for communications speed drives all 2.5 billion of the world’s smartphone users. That number is cited by the Global System for Mobile Communications Association, and it represents more than twenty percent of the world’s population. That need for speed drives business aircraft users as well, though the “app” updates don’t come quite as frequently. It took almost 50 years for business aviation to move from piston to turboprop to turbojet and turbofan-powered aircraft. The flight from New York to Paris that took Lindbergh 33.5 hours to complete? Today’s business jets fly it routinely in fewer than six hours, and have done so for more than 40 years. But that’s not fast enough. From 1976 to 2003, the Concorde SST made that same flight in 3.5 hours. That’s a little more than a tenth of Lindbergh’s record flight time, available to commercial airline travelers willing to pay the $24,000 per person round trip fare. Unlike smartphone apps, the upgrades and improvements in the speed and reliability of flight are not free. Our need for speed now has inspired several companies to pursue development of business jet SSTs. Reno-based Aerion, whose AS2 jet is projected to fly for the first time in 2023, was just joined by Boeing in development, and fractional operator Flexjet has committed to purchasing 20 aircraft. Spike Aerospace projects its S-512 SST also will fly in 2023. Boom Technology targets 2021 for test flights of its Overture commercial airliner, with orders in hand from Virgin Atlantic and Japan Air Lines – which also will be available in business jet interior configurations. Now a nine-figure business jet may seem extravagant, but so did six figures for a bizjet in 1964. The retail price on a new Lear Jet 23 back then was about $500,000: unheard of for an aircraft at the time. We’ve become spoiled these past 20 years, as communications and data manipulation via PDAs, tablets, smartphones, and apps keep getting faster and faster and more reliable, saving you more and more time. But you can’t “save” time; you can only reallocate it into more productive uses. And that is the real value of the new, improved, or upgraded business aircraft, whether subsonic or supersonic, transcontinental, or intercontinental. Whether asked in 1964, 2019, or 2023, the question that using business aircraft answers remains the same: What is your time worth? Thanks for reading!

Gil Wolin — Publisher gwolin@bizavadvisor.com

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■ INDUSTRY UPDATE

To ADS-B or Not To -B I

BY ROLLAND VINCENT Rolland Vincent Associates / rvincent@rollandvincent.com

n a year that is already witness to the longest-ever shutdown of vital agencies of the U.S. federal government, and the very real potential for a “no-deal” Brexit, 2019 will almost certainly be remembered as a year of living dangerously – a year of self-inflicted wounds that even Hamlet would consider newsworthy. Across the business aviation industry, the potential for further injury lies in the hands of a broad spectrum of general aviation aircraft owners and operators who are facing a wall that is not built of concrete or steel but rather of a more formidable material – that is, regulatory paperwork. More than eleven years have passed since the U.S. Federal Aviation Administration published a Notice of Proposed Rulemaking regarding its Automatic Dependent Surveillance-Broadcast Out (ADS-B Out) proposal. With the final rule issued in August 2010, the Federal Aviation Regulation (FAR) outlining the rule changes for transponder-equipped aircraft is a major building block towards enhanced safety, efficiency, and productivity in the air. The 6 B U S I N E S S AV I AT I O N A DV I S O R

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modernization of the National Airspace System (NAS), a program known as NextGen, set to launch in 2025, involves a transition from ground-based radar to satellite-based GPS signaling, and is the first major upgrade to the NAS since 1993. Aircraft owners and operators currently ADS-B Out equipped already are reaping the benefits. For others planning to fly in Instrument Flight Rules (IFR) airspace, which includes Class A airspace above 18,000 feet as well as Classes B and C airspace around high and medium-trafficked airports, on or after January 1, 2020, it’s imperative to take prompt action to schedule the necessary equipment installation and ensure operational compliance, to avoid being unnecessarily grounded (See “Time Flies – Will Your Aircraft?” BAA January/ February 2018). With so many priorities competing for our attention, deadlines are surely helpful, especially when they don’t move. With hopes that the U.S. federal government’s partial shutdown will not be repeated, the good folks who manage the FAA are getting back to work to once again ensure aviation safety and security, and a return to normalcy across the vast NAS. w w w. B i z AvA d v i s o r. c o m

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Equip Your Aircraft Now to Avoid Being Grounded

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The partial government shutdown, which lasted a record 35 days, interrupted the livelihoods of some 800,000 federal employees, including air traffic controllers, Transportation Security Administration (TSA) screeners, National Transportation Safety Board (NTSB) investigators, FAA certification experts, and authorized maintenance inspectors, among many others. Fortunately, the FAA Registry in Oklahoma City is deemed essential and remained open, enabling most aircraft registrations, renewals, and other critical registry functions to continue. But the FAA Aeronautical Central Counsel office was not, meaning no legal opinions could be rendered on registrations involving certain trusts and LLCs or other complex ownership structures. That closure created a backlog on some more intricate transactions, which still are being sorted out. The National Business Aviation Association is monitoring possible future effects, and up-to-date information is available on the NBAA website (www.nbaa.org). Despite any resulting long term issues, it is unlikely that the FAA will extend the midnight deadline on December 31, 2019 for the implementation of its ADS-B Out rules, and the vast majority of aircraft owners/operators recently polled would seem to agree. Fully 84% of the more than 500 respondents to the Q4 2018 JETNET iQ Global Business Aviation Survey, representing owners/operators of fixed-wing turbine powered business aircraft in 60 countries, agreed with the statement that all of their aircraft would be ADS-B Out compliant by December 31, 2019. Among U.S. and Canadian respondents, expectations for ADS-B Out compliance by year-end 2019 were even higher at 87%. While this sounds encouraging, it is important to note that 6% of Q4 2018 survey respondents “strongly disagreed” with the statement, while 4% “somewhat disagreed,” and another 6% were “uncertain” or “did not know.” With an estimated 13,500 unique operators of fixed wing turbine aircraft on the U.S. registry, it is almost certain that a sizable fleet – perhaps as many as 2,000 aircraft and quite possibly even more – will not meet the deadline. To put the numbers in some perspective, this is about 50% larger than the number of in-operation aircraft in Mexico, the world’s second-largest fleet. For owners and operators who either are unprepared for the deadline or expecting to sell their aircraft to avoid the upgrade expense and hassle, this could be shaping up to be a self-inflicted wound of historic proportions. While there may be a ready secondary market for non-compliant aircraft, sellers almost certainly will be unimpressed with the price or terms they are offered by bargainseekers. With vast swaths of the world already or soon to be ADS-B Out ready, buyers naturally will be reticent to take possession of an aircraft that is not equipped to fly in IFR airspace. According to the most recent available report from the FAA’s Equip 2020 Partnership Team, as of November 1, 2018, 48% of the U.S. turbojet and turboprop general aviation fleet of 23,300 aircraft was ADS-B Out compliant. At a rate of almost 500 newly compliant aircraft in October 2018, the Equip 2020 Team projects that the U.S. fleet will be between 82% and 100% compliant as of the looming deadline.

But with more than 12,000 aircraft – or 52% of the U.S. fleet – still non-compliant as of November 1, the rate of compliance will have to accelerate by 75% and be sustained for the rest of the year over the most recent performance to reach a 100% target. With Maintenance, Repair and Overhaul (MRO) facilities’ capacity already heavily booked through 2019, the time to schedule shop visits and get in line ahead of the regulatory deadline is rapidly closing as the clock ticks towards the deadline. Business aircraft charter and leasing services across the U.S. are anticipating a spike in demand for their services to provide interim lift while aircraft are worked on well past the deadline. Some charter operators may have a challenge meeting that increased demand, with a percentage of the charter fleet also experiencing ADS-B Out installation delays. All this means that a “business as usual in 2019” approach to planning won’t work for aircraft owners and charter users. In the U.S., the looming ADS-B Out mandate should not be seen as a line in the sand, a moveable “deadline” in a dare/double-dare game of one-upmanship. This is smart policy, long ago considered and communicated, that is part of the foundation for a better and vastly more efficient air navigation system, both in the U.S. and across the globe. The dysfunctional federal governments that are headline-grabbing today are in sharp contrast to the carefully considered, meticulously planned, and multi-partisan legislative processes that have generated NextGen and Future Air Navigation Systems (FANS) legislation. It’s about time we bring it on, and it’s about time to be ready for – and be compliant with – the better way to collectively manage our airspace. Don’t wait – don’t be late. BAA ROLL AND VINCENT is President of Rolland Vincent Associates,

an aviation and aerospace market research, forecasting, and strategic planning firm. His more than 35 years of experience includes work with manufacturers, commercial operators, and international organizations.

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■ AIRCRAFT FINANCE

Insurance Rates Take Off Upward Trend in 2018, First in 16 years

BY STEPHEN P. JOHNS LL Johns Aviation Insurance / sjohns@lljohns.com

n early 2018, most buyers began hearing that their aircraft insurance rates would be increasing for the first time in years. Rate increases of 3-5% for operators with clean loss records were common, and 15% for those who’d had claims. By the end of 2018, claims-free operators were seeing 10-15% rate increases, and those with claims history even higher.

What Precipitated the Rise?

What Can You Expect in 2019?

The hard market will remain and rates will continue to increase for most operators, at the rate of 15% or more. The potential loss of 8 B U S I N E S S AV I AT I O N A DV I S O R

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market share will begin to test the resolve of the insurance companies and determine whether these increases will continue throughout the year. Back to that operator whose premium nearly doubled from 2000 to 2002. While he’d benefited from the “soft market,” by December 2018, he was paying less than $44,000 in premium for the same coverage limits. If this aircraft operator’s rate increases by the expected 15%, he still will be at only $50,600, approximately 15% below the rate level he paid in 2000.

What Can You Do?

Even top flight departments with no claims should expect some upward movement in rates, so budget accordingly. Particularly if your operation has a loss history, start the renewal process early – about 120 days before policy expiration – providing updated information on the aircraft, pilot hours and training, and evidence of the safety and professionalism of your operation. This gives your broker time to approach new markets on your behalf, or to suggest you stay longterm with one underwriter, as there are costs other than the premium to consider. As Colin Powell once said, “Bad news isn’t wine. It doesn’t get better with age.” An experienced and trusted broker with good underwriter relationships will help you navigate the process. Finally, keep the increases in perspective. While no buyer likes to see prices going up, it’s remarkable that aircraft insurance in 2019 may cost less than it did in 2000! BAA STEPHEN P. JOHNS is President of LL Johns Aviation Insurance, a business aircraft insurance brokerage. Holding both Property & Casualty Agent and Surplus Lines licenses, he is a Certified Insurance Counselor, and active in the aviation community.

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After some upward movement in 2000-2001, the events of 9/11 had a significant impact on rates, especially on war-risk pricing and availability. One business jet operator watched premiums rise from $59,000 in December 2000 to more than $113,000 in December 2002. By early 2003, rates began to plateau and then trend downward. For much of the aviation industry, the ensuing “soft market” – rate reductions and broadening of coverages – continued uninterrupted for almost 16 years. From 2005 through 2010, the number of insurers providing aviation insurance in the U.S. grew from 9 to more than 20. These new entrants were not new to the insurance business – most were sizeable companies electing to enter the aviation segment. As new and longer-standing aviation insurers scrambled to gain and maintain market-share, rates fell, limits increased, contract language broadened, and underwriting disciplines relaxed. Why the excess capacity in the aviation insurance market during the last decade? Is it the faltering economy and stock market that caused investors seeking a safe haven to infuse capital in the market? Is it that better technology and improved safety systems have resulted in safer operations and reduced claims? Whatever the reasons, rates were reduced to artificially low levels, unsustainable over time. In 2018, six reinsurance companies and a number of underwriting companies pulled out of the market. Those remaining are consistently seeking rate increases, limit reductions, and tightening of underwriting standards. And it’s not only the rates that are changing. Underwriters also are becoming more judicious with limits offered and other policy provisions. Since it’s now harder to hire and retain pilots, underwriters are giving more scrutiny to pilot experience and training. There’s a move back toward the “12 month motion based simulator” training requirements that were non-negotiable in the 80s and 90s.

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■ FLIGHT OPERATIONS

Dealing With a Full Deck Why To Modernize Your Flight Deck he sky is undergoing an invisible construction project. The aerial overhaul NextGen uses new technologies to modernize the U.S. National Airspace System. Bouncing radio waves off fast-moving objects over great distances is no longer the best way to track aircraft. Today’s GPS systems and autopilots offer a compelling new self-awareness for aircraft and crew. Sharing precisely with others where they are and what they’re doing results in a significantly more efficient – and safer – sky. Imagine a crowd of people leaving a stadium, each with his or her own larger or smaller personal space, and where no one can ever touch! Those needing more personal space block the flow of the crowd and slow the exodus. They’re like aircraft with older equipment relying on older technologies. While their whereabouts are generally known, they must be given space or risk a collision. Those requiring smaller space are like modern or upgraded aircraft flown by well-trained crews. Their position and movement are communicated automatically and accurately to controllers and nearby aircraft, allowing other aircraft so-equipped to be safely spaced closer together, increasing the efficiency of the airspace and the volume of traffic that can be handled.

What Technology Makes This Possible? What Does Your Flight Deck Need? WAAS (Wide Area Augmentation System) – Combining GPS satellites with ground stations that check and correct the aircraft’s position makes a WAAS GPS accurate to within three meters. The revolutionary improvement over legacy ground-based radar tracking methods allows controllers to trust in your position, enabling more direct flight routing. Without the old-school zig-zagging over ground radio stations, your flight time is shorter, your fuel bill and carbon footprint are smaller, and you’ll have a lower time aircraft incurring fewer routine inspections while commanding a higher resale value. ■■ LPV (Localizer Performance with Vertical Guidance) uses WAAS for landing. The accurate GPS signal and a database of virtual programmed approaches in three dimensions typically leads your flight crew to just 200-250 feet above the runway. The precision gets you as close to home as possible, even in bad weather, avoiding diversions to larger airports and time-consuming ground transportation. ■■ RNP (Required Navigational Performance) defines the accuracy necessary to access certain airspace and perform specific procedures. The aircraft’s navigation system must be able to calculate and ■■

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monitor its position relative to other aircraft within a defined distance. The higher the air space traffic density, the smaller the distance required. With an accurate RNP approval, you are allowed into the desired airspace, and can expect direct routing without time-consuming step-downs and circling approaches. ■■ Both FANS (Future Air Navigation System) and CPDLC (Controller Pilot Data Link Communications) are about texting for aircraft. Trying to figure out a fast-talking controller with a regional accent over a squelchy radio in a noisy cabin introduces multiple opportunities for error. Digital communication is easier, safer, and more accurate, as your pilots get a text with the exact ATC clearance. They can press a button to acknowledge and load ATC clearances to the navigation system directly. ■■ ADS-B (Automatic Dependent Surveillance-Broadcast) – Installing equipment that combines the accurate signal of a WAAS GPS with a transponder that automatically communicates position, altitude, velocity, and flight ID to Air Traffic Control, makes your aircraft in compliance with the upcoming mandate, ADS-B Out. Controllers get updates every second versus five to twelve seconds, to safely route aircraft closer together. The resulting airspace capacity increase means fewer holds, diversions, and problems, with better routing to save time and money. ADS-B In follows and adds communicating with nearby aircraft as well as with free traffic and weather information. Pilots can be only as accurate as the instruments available to them. The technology you install on the flight deck has a growing impact on the capabilities of your aircraft. BAA R ANDY DE AL is Business Development and Marketing

Director at Signature TECHNICAir. With 20 years of maintenance and modification expertise, he holds a BS in Aeronautical Technology, Airframe & Powerplant license, and a private pilot certificate.

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■ AIRCRAFT MANAGEMENT

Care and Share in the Air Using Your Aircraft for Charity

ou are busy, generous by nature, and want to do good. You care about social justice and about preserving institutions important to you, your family, and your community. You want to solve pressing personal, neighborhood, or worldwide problems. You may be interested in working on behalf of a particular population, such as the elderly, veterans, or those with disabilities. At the same time, you definitely want accountability for your charitable gifts, and want to know their impact. Currently, you may make most of your charitable donations in response to personal requests from colleagues and friends, or via a corporate or private foundation, if you’ve created one. Have You Considered Using Your Aircraft for Charitable Purposes? Here are just four of several different ways you might be able to donate to charity using your business aircraft: ■■ Fly a humanitarian mission: donate the aircraft only, or aircraft plus crew, and/or you flying your own aircraft. ■■ Register your aircraft with a charity that arranges flights for a specific mission. ■■ Donate flight hours to a charity for its own use. ■■ If your aircraft is older, and specifically if you don’t plan to make it ADS-B compliant, consider donating it to an organization that will use it, refurbish it, or part it out. But with more than 3,400 U.S. aviation-related charities registered with the IRS, how will you decide which to support, and how? 12 B U S I N E S S AV I AT I O N A DV I S O R

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Business Aviation Advisor Managing Editor G .R . SHAPIRO directs the Business Aviation Media Corporate Charitable Giving Program. Named as a Daily Point of Light by President George H.W. Bush, she spent 35 years in the nonprofit sector.

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PATIENT AIRLIF T SERVIES

BY G.R. SHAPIRO BAA Managing Editor / gshapiro@bizavadvisor.com

Among these charities are national and regional aviation museums and those seeking to preserve aviation heritage, trade associations, organizations with religious missions, and schools and colleges and programs that aim to inspire the next generation of pilots. Some serve disaster victims, rescuing people and animals. Some do other humanitarian work, transporting the sick and injured – and within that category, serving wounded veterans, children, or cancer patients. So consider: What are your giving goals? How can you best use your aircraft to meet them? To locate an aviation-related charity that meets your goals, using the searchable database of all IRS-registered charities at Guidestar by Candid (www.guidestar.org) can be a good first step. Because aviation giving can be complicated, and so much depends on your individual circumstance, it is imperative to consult with an aviation attorney, tax advisor, and/or charitable giving consultant before making your gift. For example: ■■ If you donate the use of your aircraft, any deduction likely would be limited to the direct cost of the flight(s). That is, you cannot deduct a portion of fixed costs such as hangar, maintenance, insurance, etc. as you would treat a business deduction. ■■ Your gift must satisfy the terms of both the FAA and the IRS – and they do not always agree. ■■ Donated flights sometimes need to meet commercial certificate requirements and aircraft inspections. ■■ Some states will not allow a deduction for a contribution to an organization located outside your state. ■■ If you are donating a flight and you are the pilot, you cannot receive any compensation. And depending on the purpose and nature of the flight, your aircraft may need to be operated under FAR part 135. ■■ If you plan to donate the aircraft – or aircraft parts – to a charity, and hope to get a deduction, you’ll need an appraisal, for which you’ll pay. But if the aircraft is fully depreciated (likely the case with an aircraft old enough to be donated), there may be no tax benefit to you. And be sure to treat the donation as a sale. That is, the organization should take possession of the aircraft on an “as-is” basis, so you will not be responsible nor liable for any future use. Good legal and tax advice can help you make good use of your aircraft and your generous charitable impulse. Happy giving! BAA

■ AIRCRAFT MAINTENANCE

Offshore Aircraft Registry Location Can Affect Your Aircraft Maintenance and the nationality of the owner, offshore registration may offer you tax advantages. ■■ Legal and Liability – Depending on your circumstances, offshore registration may reduce your liability exposure. ■■ Insurance Requirements, and ■■ Personal Preference. In addition to these factors, working to maintain, repair, or modify a business jet registered outside the U.S. can be challenging, so consider these maintenance factors, both pro and con.

Offshore Aircraft Registry Pros

Less Paperwork – Aircraft replacement parts sometimes can be installed with less paperwork on foreign-registered aircraft, saving time and expense. ■■ One-time Authorization – Often, allocations will be available for a quality manager to perform a one-time government authorization of component replacements. ■■ Expedited Processing – Some countries have privatized aircraft registration. These nations – as well as smaller government entities – often offer better customer service than do larger governments. ■■

he global business aviation market continues to grow along with the dynamic landscape of international business, driving demand for more choices for aircraft registration than ever before. The location of your aircraft’s registration can have an impact on many factors, including how quickly you can sell your aircraft and for how much. It also affects the way you operate and maintain your aircraft. Every civil aircraft must be marked prominently on its exterior with an alphanumeric string to indicate its country of registration and a unique registration number, either randomly assigned or designed by you. This code also must appear in the aircraft’s Certificate of Registration. It can have only one registration in one jurisdiction. Aircraft most often are registered in the jurisdiction in which the owner is a resident or is based. Given that a majority of business jets flying today are U.S. based, it makes sense that approximately 70% of them are registered in the U.S., requiring a tail number beginning with an N. However, some owners choose to register their aircraft in other countries which provide open aircraft registrations. What do you need to consider as you choose the registration country for your new aircraft? Your advisor will help you answer important questions, such as how the aircraft will be used (i.e., corporate, personal, and/or charter), to which countries the aircraft will fly frequently, and the duration of a typical trip. There are many valid reasons for registering an aircraft offshore, including: ■■ Privacy – In the U.S., aircraft ownership is a public record, easily obtainable online; offshore registration generally is confidential. ■■ Need for Neutral Nationality – Whether for political, security, or corporate reasons, offshore registration may be important to you. ■■ Taxation – Depending upon where your aircraft will be operated, 14 B U S I N E S S AV I AT I O N A DV I S O R

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Offshore Aircraft Registry Cons

Additional Time and Expense – As technology evolves from both mandated regulatory requirements and elective convenience amenities, modifications and upgrades performed on foreign-registered aircraft may require temporarily de-registering the aircraft, then re-registering it upon completion, adding substantial time and expense to return the aircraft to an airworthy condition. ■■ Proving Airworthiness – Typically renewed annually, inspection requirements for airworthiness vary and can be a time- and cost-consuming task that usually involves the owner paying for the inspector’s transportation expenses to and from the aircraft when not performed in the country of registration. ■■ Limitations and Exclusions – Some registries, including the U.S., have specific charter limitations or exclusions (cabotage), which may apply even for inter-divisional chargebacks, so it is important to evaluate foreign registries based upon your anticipated use of the aircraft. Like all critical aircraft decisions, developing a plan with a trusted advisor to qualify and weigh the options always is your best first step. BAA ■■

RICHARD THOMPSON is the Director of Advisory Services

at Jet Support Services, Inc. (JSSI). He has more than 25 years of experience providing consulting services focused on aircraft appraisals, technical oversight, and safety.

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BY RICHARD THOMPSON

Jet Support Services, Inc. / rthompson@jetsupport.com

“Knowing more has helped us become the world leader in advanced winglet technology, so we rely on JETNET’s worldleading information for market research and prospecting.”

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FLIGHT OPERATIONS ■

High Flying The New RVSM Rule BY DAVID T. NORTON, JD, MBA, ATP

Shackelford, Bowen, McKinley & Norton, LLP dnorton@shackelford.law

he FAA just made your life a little easier. As of January 22, if your aircraft is properly equipped with ADS-B Out, you are automatically authorized to fly in domestic RVSM airspace.

What Does That Mean?

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improve the overall safety and efficiency of the U.S. air traffic control system. Key to this effort is “Automatic Dependent Surveillance-Broadcast Out” (ADS-B Out), which is much more accurate than groundbased radar, and which allows the FAA to track very accurately the aircraft’s actual position, altitude, velocity, identification, etc. – in real time. Federal Aviation Regulation (FAR) 91.225 governing ADSB Out equipment and use requires that all aircraft operating in U.S. airspace have a certified GPS position source teamed with a transponder that is capable of automatically transmitting data from the aircraft to the ATC without input from the pilot. ADS-B also gives pilots immediate access to air traffic and weather services. To its great credit, the FAA realized that, as aircraft operators install this new ADS-B Out technology, it can safely and automatically grant permission to those operators to fly in domestic RVSM airspace. This saves both the FAA and each operator an enormous amount of time and energy, reducing paperwork and processing requirements, while maintaining a higher level of safety, better situational awareness, and more efficient, direct routing. The new RVSM rule is a further great incentive to encourage you to install ADS-B Out in your aircraft before the January 1, 2020 deadline. BAA DAVID T. NORTON, JD, MBA, ATP, a graduate of the USAF Academy, heads the aviation law practice at Shackelford, Bowen, McKinley & Norton, LLP, and is an internationally recognized aviation lawyer and an active pilot.

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GULFSTRE A M

A key air traffic control function is to keep aircraft safely separated. A basic way of doing so is to have aircraft fly at different altitudes. But this works only if everyone’s aircraft altimeter – the instrument that tells you your altitude – is accurate. Altimeters originally were very accurate at lower altitudes; less so the higher you flew. So the norm was for air traffic control (ATC) to instruct different aircraft to fly at specific altitudes that were at least 1,000 feet apart from each other when flying below 28,000 feet, and at least 2,000 feet apart when flying above 28,000 feet. That would ensure enough of a safety buffer between what the altimeter was saying and what the aircraft’s actual altitude might be, to be sure two airplanes were not inadvertently flying at the same altitude (even if their instruments said they were 2,000 feet apart) when above 28,000 feet. But flying above 28,000 feet, where half as much airspace is available, typically is where you want your jet aircraft to be in order to maximize air speed and fuel efficiency. By the early 2000s, technology had improved to the point that ATC could begin to use only a 1,000 foot separation above 28,000 feet (thus doubling the airspace available to jet aircraft), but this would work only if all aircraft in that airspace had the new, more accurate technology. The FAA therefore issued a rule stating that if an operator wanted to fly in this newly “reduced vertical separation minimum” (RVSM) airspace, that is, the airspace above 28,000 feet and below 43,000 feet, then specific permission was needed. If the operator demonstrated an ability to meet all applicable technical requirements, the FAA would grant a “letter of authorization” (LOA). Periodically, the operator would have to fly over specific ground stations able to measure the actual altitude of the aircraft, to confirm that the technology was actually working. Unfortunately, the ongoing problem has been that obtaining these LOAs can be extremely difficult and time consuming, and you can’t cruise in RVSM airspace until you have one. During the last ten years, however, two key things have happened. First, most of today’s aircraft meet all of the original RVSM requirements. Second has been the simultaneous development of a much larger, more comprehensive set of technologies to significantly

■ WASHINGTON REPORT

Shutdown Stupidity Air Safety Takes a Back Seat BY DAVID COLLOGAN he national air transportation system is way too important to let heedless politicians keep disrupting it. Back in the day, Congress held timely budget and appropriations hearings, legislation got marked up and passed before the 11th hour, and most elected officials were serious about making sure “the people’s business” got done. But of course that was before House and Senate leaders decided to permit live radio and television coverage of floor action in the Capitol. Each chamber started moving in that direction in the mid1970s. The first government shutdown began Sept. 30, 1976 and lasted for 11 days. Coincidence? A government shutdown is an open-ended period when elected officials – who are still getting paid! – posture and preen, and taxpayers are compelled to keep paying taxes for services they are not receiving. The latest and longest (35 days) began Dec. 22 because President Trump and congressional Democrats were fighting over funding for a wall at the Mexican border. Some 800,000 federal workers were furloughed. Tens of thousands of federal employees – including TSA screeners and FAA air traffic controllers – were forced to work even though they were not being paid. Some TSA workers began calling in sick, telling reporters they didn’t have enough money to buy gas to drive to work. Absenteeism among the controller workforce also was rising, but air traffic was still moving. Tensions were mounting, but the politicians remained at an impasse. No one knew how long the government shutdown might last. Then dramatically, on Friday January 25, President Trump announced a short-term agreement with Congress to fund all government operations through Feb 15, and quickly get federal workers their back pay. (January 25 just happened to mark the second consecutive missed payday for furloughed air traffic controllers.) Earlier that day, flight delays and cancellations had begun building in the Northeast, with airports in the New York area particularly affected. The cable news channels were showing airport terminals filling up with disgruntled passengers and reporting LaGuardia was closed to arriving flights. The problem, according to FAA, was staffing shortages at Air Route Traffic Control Centers near Jacksonville, FL and Washington, D.C., which forced re-routing of flights between Florida and the Northeast. President Trump is known for many things – a preference for long, red neckties, a short attention span, a unique coiffure, a voracious appetite for cable news programming … and a propensity for reacting to what he just watched. Do you suppose the sight of all 18 B U S I N E S S AV I AT I O N A DV I S O R

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Stranded LaGuardia Airport passengers waiting for news about when services will be restored during the shutdown.

those stranded passengers and parked airplanes was the final catalyst convincing Trump to break the impasse and get everyone back to work? It would only be fitting if a few stressed-out controllers calling in sick that Friday were the lever that compelled our national political leaders to cut a deal and re-open the government. The aviation industry and its employees had been suffering since Day 1 of the shutdown. Manufacturers were unable to get new products certificated. NTSB did not have staff to investigate accidents. Training of new air traffic controllers – who are urgently needed to buttress a chronically under-staffed workforce – was suspended. The list was painfully long. By February 15, Trump seemed poised to sign a bill Congress passed overwhelmingly, restoring funding to FAA through September 30. But the shutdown made one thing clear: it is absolutely reckless and stupid for politicians to keep disrupting the safest air traffic control system in the world. Heaping needless worries about their paychecks on the backs of a dedicated workforce already dealing with constant job stress is cruel and dangerous. The president, Congress, and millions of air travelers dodged a bullet for 35 days. If the venal politicians pull the rug out from under air traffic controllers and TSA screeners again, the entire country should start raising unmitigated Hell. BAA DAVID COLLOGAN has covered aviation in Washington, DC

for more than four decades. This award-wining journalist is known as one of the most knowledgeable, balanced, wary, and trusted journalists in the aviation community.

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BA A STAFF PHOTO

dlcollogan@gmail.com

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