MARCH / APRIL 2020
Piloting Your Own Aircraft Can an Owner-Pilot Be as Safe as a Professional?
Are You Covered?
The Insurance Risks of Illegal Charter
“NO MORE MR. NICE GUY” COMFORTABLY GREEN THE CLARITY OF 2020 VISION AVOIDING “RED EYE” OPERATIONS DIFFERENT YEAR, DIFFERENT CONCERNS A Business Aviation Media, Inc. Publication
W W W . B I Z AVA D V I S O R . C O M
PRAETOR 600: CERTIFIED OUTPERFORMANCE. Announcing the certified Praetor 600, the world’s most disruptive and technologically advanced super-midsize aircraft that leads the way in performance, comfort and technology. Unveiled at NBAA in October 2018 and now certified by ANAC, FAA and EASA, the Praetor 600 did not just meet initial expectations, it exceeded them. Named for the Latin root that means “lead the way,” the Praetor 600 is a jet of firsts. It is the first super-midsize jet certified since 2014. The first to fly beyond 3,700 nm at M0.80. The first with over 4,000 nm range at LRC. The first with full fly-by-wire. The first with turbulence reduction capability. The first with a cabin altitude as low as 5,800 feet. The first with high-capacity, ultra-high-speed connectivity from Viasat’s Ka-band. And all of this, backed by a top-ranked Customer Support network. Learn more at executive.embraer.com/praetor600.
L E ADI N G T H E WAY
M arch / April 2020 • Volume 7 / I s sue 2
6
10
F E AT U R E S
06 Piloting Your Own Aircraft
Can an Owner-Pilot Be as Safe as a Professional?
by JAC K LONG
08 Are You Covered?
The Insurance Risks of Illegal Charter
by S TE PH E N P. J OHNS
10
“No More Mr. Nice Guy”
Might You Be Breaking the Law Without Even Knowing It?
by AN DY PR IE S TE R
12
Comfortably Green
Creating a More Sustainable Aircraft Interior
by AUTU M N D UNT Z
12
14
The Clarity of 2020 Vision
by ROLL AN D VIN C E NT
17
Avoiding “Red Eye” Operations
by J E S S I C A N AOR
17
BizAv Looking Up Amid Change
Safety Depends on Crew Rest
D E PA R T M E N T S
05 Publisher’s Message
Going Green
by G IL WOLIN
18
Washington Report
by DAVI D COLLOG AN
Different Year, Different Concerns
18
Above and Beyond 2020:
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www.bizavadvisor.com/podcast
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Ma r c h /A p r i l 2 0 2 0 B U S I N E S S AV I AT I O N A DV I S O R 3
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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 Autumn Duntz Autumn Elizabeth Design autumn@autumnelizabethdesign.com Stephen P. Johns LL Johns Aviation Insurance sjohns@lljohns.com Jack Long Jessica Naor GrandView Aviation jessieb@flygv.com Andy Priester Priester Aviation andyp@priesterav.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.
Going Green
Fifty years ago, in a rare bipartisan effort sparked by grassroots concerns, 20 million Americans – 10% of the population – participated in peaceful demonstrations in support of environmental protection and reform. The first Earth Day celebration, held April 22, 1970, raised public consciousness and concern about our planet, and led to the eventual passage of the EPA, and the Clean Air, Clean Water, and Endangered Species Acts. The business aviation industry was still in its infancy in 1970, with fewer than 2,800 business turbine aircraft flying. Almost forty years later, more than ten times that number were flying an average of more than 300 hours annually. It was then, in 2009, that the General Aviation Manufacturers Association (GAMA) and the International Business Aviation Council (IBAC) launched the Business Aviation Commitment on Climate Change. Even though business aviation’s global CO2 emissions are only about 2% of all aviation and .04% of global man-made carbon emissions, the commitment is to reduce the industry’s fleetwide carbon footprint by 50% by 2050, relative to 2005. GAMA and IBAC since have been joined in this effort by fifteen other business aviation associations around the world, including NBAA, NATA, and EBAA. From Sustainable Jet Fuel made from feedstock, to aerodynamic improvements, more innovative engineering, and much more, business aviation is taking aggressive steps to become greener. In support of bizav’s efforts, and in honor of the 50th anniversary of Earth Day, this digital-only issue of Business Aviation Advisor features Autumn Duntz, who tells you how to create a more sustainable aircraft interior, from selecting renewable completion materials to sourcing them locally, in “Comfortably Green.” Rollie Vincent provides an industry update, including new green initiatives, in “The Clarity of 2020 Vision.” Operating in the “Green” was just one of three key challenges defined during GAMA’s annual 2020 State of the Industry event held February 19, the other two were securing the next generation of aviation talent and adapting to new technology. While the latter depends on acceptance by FAA and other international aviation authorities over time, Boomer generation retirements are creating a large personnel gap here and now. Our industry faces increased competition for skilled talent, and can no longer rely on a steady feed of pilots and technicians from the military. Commercial airlines compete with us for those same positions, offering long term employment security coupled with a predictable work schedule. For the next generation, the glamor of business aviation pales in comparison. Fortunately, GAMA, NBAA, and NATA are very aware of these challenges, and are working with your flight departments, management companies, and service providers to stay ahead of the curve. So stay tuned to BAA, in word and in podcast, to keep abreast of those challenges – and the solutions!
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 2020 by Business Aviation Media, Inc. All rights reserved
Gil Wolin — Publisher gwolin@bizavadvisor.com
Printed in the USA Ma r c h /A p r i l 2 0 2 0 B U S I N E S S AV I AT I O N A DV I S O R 5
■ FLIGHT OPERATIONS
Piloting Your Own Aircraft P
BY JACK LONG
erhaps you spend a lot of time in the back of a high-performance business aircraft as an owner and wonder if it would be possible for you to move into the cockpit as pilot-in-command. Most importantly, could you do this with safety margins comparable to the paid professionals who now pilot your aircraft, and what three elements would that take? ■ Commitment – Becoming a proficient and safe pilot of a highperformance business aircraft is not a casual undertaking. You need commitment. The path to sitting in the captain’s seat of your own turboprop or jet aircraft certainly is attainable, but count on hundreds of hours of training starting with small, simpler aircraft and working into more complex planes. In theory, starting from zero flight time, one could accumulate the required licenses, ratings, training, and hours in about two years if fully committed. Most people spread out building that experience over a much longer period, but it can be done intensively. ■ Passion – Making this level of commitment requires a true 6 B U S I N E S S AV I AT I O N A DV I S O R Ma r c h /A p r i l 2 0 2 0
passion for piloting. If you are not highly motivated by the challenge of mastering the art and science of piloting, you are better off leaving the cockpit to paid professionals. ■ Discipline – Safe piloting is not a creative endeavor. It requires discipline: following standard operating procedures and adhering strictly to rules proven over many decades to contribute to safe operations. However, unlike a paid professional pilot, an owner-pilot tempted to bend those rules is unlikely to lose his or her job. The deadliest form of lack of discipline is what pilots refer to as “get-there-itis.” On the morning of a scheduled return from a conference it is snowing heavily. You’ve hangared the plane overnight, and pulling it out of the warmth into the snow causes the snow falling on the plane to initially melt and then refreeze. Under FAR Part 91, which governs private operators, getting the wing treated with anti-icing fluid prior to departure is not required, but you were trained that attempting to takeoff with any frozen precipitation adhering to the wing can be dangerous. However, this w w w. B i z AvA d v i s o r. c o m
PIL ATUS AIRCR AF T LTD
Can an Owner-Pilot Be as Safe as a Professional?
airport does not have anti-ice treatment capabilities. Your passengers are gathered in the small terminal building, anxious to get on the plane and fly home after a long week away. From a safety perspective, the right decision is clear. As the pilotin-command, you need to tell them the flight is cancelled, and you’ll try again tomorrow. Sadly, too many owner-pilots fall victim to wishful thinking, bend to the pressure, and take the risk. Sometimes it works out fine – which only reinforces that behavior in the future. Having the self-discipline to say “no” to a flight and not succumbing to impatience is a critical trait in any pilot and sometimes is difficult for an owner-pilot.
Safe Flying Requires More
One key is operating the aircraft as closely as possible to the standards of a paid professional pilot working within the structure of an airline. You can emulate many but not every one of these essentials. What are they? ■ Proficiency – Proficiency means flying often in a variety of conditions. Flying, especially instrument flying, is a highly perishable skill. Even a few weeks downtime can erode your skills. w w w. B i z AvA d v i s o r. c o m
DA HER-S O CATA
Pursuing Your Dream
Assuming you have the commitment, passion, and discipline to pursue your goal, what is the process to reach your goal? The first step is obtaining a private pilot license (PPL). Under FAA rules, a PPL requires a written exam and a minimum of 40 hours of flight time. The basic PPL gives you the ability to fly only in visual conditions (not through clouds), and thus is of limited utility for cross country travel. Next is obtaining an instrument rating (IR), which allows you to fly in conditions of limited or no visibility using only the aircraft instruments for reference. The FAA also requires a written exam, a minimum of 40 hours flight time in actual or simulated instrument weather conditions (no outside visibility), and 50 hours of crosscountry flight time to obtain an IR. In theory, with a carefully crafted training program of about 150 flight hours and two written exams, one could be fully FAA qualified to fly a Pilatus PC-12 turboprop or comparable aircraft with just the PPL and IR. With total focus, that could be accomplished in about four months. If you want to fly a jet aircraft or a large turboprop aircraft, a multi-engine and type rating would take about three to four additional weeks. However, most insurance carriers would not insure a pilot with just these bare minimum qualifications, and for good reason. A more realistic path would involve accumulating a lot more experience in simpler aircraft before moving to more complex equipment. With intense effort, you might be able to become proficient and safe enough to be insurable with 1,000 flight hours. This could be accomplished in fewer than two years if you devote at least three days a week to flying, not always feasible while you’re also running your business. Assume you’ve accomplished the required training and additional experience to be “signed-off” for flying your own high-performance business aircraft as pilot-in-command.
Experienced pilots suggest to never let more than two weeks pass without flying, and to conduct at least 75 flights a year (about 150 hours of flight time) in variety of conditions to stay sharp. ■ Recurrent Training – While maintaining proficiency helps keep routine piloting skills sharp, you also want to remain well versed in emergency procedures and the systems in your complex aircraft. Since these are not part of routine flying, regular “recurrent” training is essential. Most commercial operators require a multi-day annual recurrent training event with a shorter proficiency check in between each annual recurrent: hence some sort of structured training at least every six months. Plan to budget five days a year for training. ■ Standard Operating Procedures – Developing and adhering to standard operating procedures (SOPs) probably is one of the more difficult things for many owner-pilots. You value the freedom of piloting your own plane and may see SOPs as needless paperwork. However, decades of experience have proven that using SOPs – which cover rules for many piloting decisions such as fuel reserves, minimum weather conditions, runway lengths, pilot daily flight time, and other decisions – consistently improves safety. Using SOPs removes as many judgment calls from the aeronautical decision-making process as possible. While commercial operations are required to have an FAA-approved operations manual, Part 91 owner-pilots do not, so developing and using your operations manual is a matter of best practice. Only you can assess whether you have commitment, passion, and discipline. If so, then piloting your own aircraft can be an extremely rewarding endeavor without undue risk. If not, continue to enjoy your business aircraft from the back seat and leave the flying to the pros. BAA JACK LONG is an entrepreneur by profession and a pilot by
passion. He is an Airline Transport rated pilot with 5,000 hours of total pilot time and 3,000 hours in his beloved Pilatus PC-12. He is a Past President of the Pilatus Owners and Pilots Association.
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■ AIRCRAFT FINANCE
Are You Covered? The Insurance Risks of Illegal Charter
ou’ve read about the safety and financial risks of illegal charter. (See: “Global Warning,” BAA Jan/Feb 2020) What impact might these activities have on your aircraft insurance coverage? Generally, illegal charter operations fall into four buckets: 1. Certificated charter companies operating outside of the regulations 2. Management companies operating under FAR Part 91 which may be using dry-lease agreements improperly 3. Aircraft owners who are letting a friend use their airplane and accepting compensation, and 4. Flight department companies operating under FAR Part 91 that exist solely to own and operate the aircraft but which receive money from an outside source. So if the FAA determines that the aircraft operator did not have the proper certification and an incident or accident occurs, will it be covered by your insurance? Maybe, but it’s not guaranteed. You’ve likely heard about the “hardening” of the aviation insurance market. (See: “Insurance Rates Take Off,” BAA April/May 2019). Since last spring, this hardening has accelerated, and the projected increases of “15% or more” has turned into “more.” Although the impact is different on the various segments of the aviation community, bizav owners should plan to budget 30-40% premium increases for 2020. This figure assumes a highly qualified and annually trained crew, an airplane that is not too old, and – of course – a clean loss record. This recent insurance market is characterized by: ■ Increasing prices ■ Coverage and limit reductions (or “rationalizations” as one underwriter calls it), and ■ Tightening of approvals and policy language. This last point overlays the intersection of illegal charter and potential insurance problems. Over the past sixteen years, insurance companies have been quite generous in the “Approved Use” wording on their policies. On many policies, the language is comparable to “All operations of the Named Insured.” In this hardening market, underwriters are increasingly scrutinizing applicants suspected of operations that border illegal charter. Furthermore, if a policy is offered, insurance companies are using wording that specifically identifies the Approved Use as non-commercial. So an operator skirting the line on illegal charter may just find that their coverage is invalid if it’s determined they violated the Approved Use clause. Not every insurance policy carries an Illegal Operations exclusion. One underwriter explained that they are responsible to 8 B U S I N E S S AV I AT I O N A DV I S O R Ma r c h /A p r i l 2 0 2 0
carefully underwrite every applicant. So when they offer a policy, they don’t want an Illegal Operations exclusion calling coverage into question. Other companies include an exclusion such as: “The insurance provided by the Policy shall not apply to illegal, criminal or dishonest acts or activities, alleged or otherwise, committed by or at the direction of or with the knowledge and consent of directors or officers of the insured and with the knowledge at the time that such act was illegal or criminal…” This exclusion leaves room for coverage if the insured did not have knowledge at the time that such act was illegal or criminal. What you should do: ■ Seek the advice of expert council with respect to your ownership structure and operations. ■ Identify and use an insurance broker who understands the charter segment, has the network and resources to assist you, and facilitates good communication with the insurance company. ■ Communicate openly, honestly, and frequently. Make sure your insurance broker and underwriter are aware of the structure of your entity and the way you use your aircraft. Any time money changes hands or you receive any compensation for the use of your aircraft, be sure to disclose that to your insurance company. ■ Read your insurance policy carefully to be sure you are aware of the Approved Use(s) of your airplane. Also be aware of any exclusion your policy may contain for illegal, criminal, or dishonest activities. Of course, your best option might just be to avoid these activities altogether. 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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BY STEPHEN P. JOHNS LL Johns Aviation Insurance / sjohns@lljohns.com
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■ ALTERNATIVE LIFT
“No More Mr. Nice Guy” Might You Be Breaking the Law Without Even Knowing It? BY ANDY PRIESTER hen you operate your aircraft under FAR Part 91 (noncommercial, owner-only flying), and loan it out, with only a very few specific exceptions, money cannot change hands. If it does, you may be participating in illegal charter. (See: “Global Warning,” BAA, Jan/Feb 2020). Illegal aircraft charter, while not new, recently has gained regulators’ attention, largely due to the proliferation of start-up businesses offering “ride-sharing” aircraft options. Compared with ground ride-sharing services, the complexities of corporate aviation pose vastly different safety and security concerns, according to the FAA. That agency rightly holds that the flight sharing model can place the public at risk. Owners of non-charter aircraft often dismiss this topic because they “don’t rent out their plane.” But these same owners may field requests from their “inner circle” to borrow their aircraft. The requester usually offers to reimburse all the expenses or maybe to repay the owner by offering their aircraft in the future. Although arranged by two friendly parties in an innocent arrangement, this scenario may represent illegal charter. Why are the FAA and NTSB concerned? Among other government regulatory agencies, the FAA is charged with operating and auditing the system that ensures the safety of the flying public. They do so by certifying commercial charter operators under Part 135, holding them to an operating standard higher than that of owner-only aircraft, and providing oversight to verify compliance. Specifically, according to the FAA, air charter requires “a higher level of FAA pilot training and certification, aircraft maintenance procedures, and operational safety rules.” In addition, FAA inspectors perform more frequent checks on pilots, crewmembers, and aircraft; and to maintain their FAA certifications, crewmembers are required to undergo regular, more frequent proficiency checks than do owner-only pilots. For certificated charter operators, ensuring safety doesn’t stop there. Most preferred carriers also are checked by at least one independent, third-party safety auditor (Argus, Wyvern, or the Air Charter Safety Foundation) to ensure regulatory compliance. While there are many high-quality owner-only operations, by regulation the standard is lower, and the FAA does not provide the same oversight. Many owners are therefore surprised to learn that by loaning their aircraft to a friend who offers simply to reimburses expenses, that friend is viewed by the FAA as the “flying public” – and subject to its protection. 10 B U S I N E S S AV I AT I O N A DV I S O R Ma r c h /A p r i l 2 0 2 0
Liability also is an issue. Every owner likely believes that he or she employs the finest pilots, performs the best maintenance, and owns the safest aircraft in the sky. Should an accident occur, the NTSB may conclude that rigorous safety standards were indeed in place and the accident unavoidable. But, imagine the nightmare if this was your aircraft, “loaned” to a friend. The law is clear. When your aircraft flies under Part 91, even if you’re not on it, you are responsible. And your insurance may not cover the costs (See “Are You Covered?,” BAA March/April 2020). The only two ways to legally be absolved of that responsibility is through a dry lease (See “Taxing Leases,” BAA Sept/Oct 2018) or by legally chartering. Absent one of those legal options, you are in violation of Federal regulations and subject to Federal Excise Tax. Avoiding a legal arrangement leaves you subject to very significant fines. The FAA publishes guidelines for legitimate leases in its Advisory Circular AC 91-37B. The FAA and the NTSB are concerned that there are significant safety risks allowing the public to access aircraft that aren’t subject to rigorous safety standards required in commercial operations. The FAA publishes legal interpretations on peer-to-peer flight sharing, offers guidance for both pilots and passengers, and spells out applicable flight sharing regulations. Visit www.faa.gov/about/initiatives/safe_charter_operations to stay safe and within the law. BAA ANDY PRIE STER is President/CEO of Priester Aviation. With
more than 20 years in aviation, he has held many leadership roles in aviation safety associations, and is past Chairman of the National Air Transportation Association (NATA).
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Priester Aviation / andyp@priesterav.com
■ AIRCRAFT MAINTENANCE
Comfortably Green Creating a More Sustainable Aircraft Interior BY AUTUMN DUNTZ Autumn Elizabeth Design / autumn@autumnelizabethdesign.com
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Repair, rather than replace, when it’s possible to do so. For example, can you restore existing seat leather instead of installing new? (See “Something to Hide,” BAA Nov/Dec 2016). ■ Seek third-party certification (such as Cradle-to-Cradle or Greenguard) to help guide your decisions. While unlike buildings, there currently is no specific environmental certification for aircraft, many textile and material manufactures have eco-friendly products that feature safe dyes and rapidly renewable resources. ■ Stock your galley with non-disposable plates, flatware, and coffee mugs, rather than paper, Styrofoam, or single-use plastic. Small choices matter. ■ Enjoy the process. Designing the interior of your aircraft should be a great experience and selecting an eco-friendly option doesn’t mean you need to compromise on style or luxury. Aviation suppliers increasingly are providing green alternatives and operating in a more sustainable way. Many of the options and requirements for your aircraft interior still have a way to go before they’re considered green or sustainable, but you can do your part by making a conscious decision to create designs and select materials that are more eco-friendly. As you design and select materials for your new interior, consider the chemical impacts, such as human toxicity, and ozone depletion; the physical impacts on deforestation, and loss of natural habitats; and ways to reduce resource consumption, by using renewables, and less water, energy, and soil. Your aircraft interior can be both beautiful and eco-friendly. As the business aviation industry pushes toward being more sustainable, consider making more sustainable choices for your interior. BAA ■
AUTUMN DUNTZ , principal of Autumn Elizabeth Design,
specializes in Aviation Interior Design. Formerly Sales Development Specialist and Interior Designer for Gulfstream Aerospace, she holds a MA in Design Management, and a BS in Interior Design.
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GULFSTRE A M A ERO SPACE
usiness aviation is working toward creating more sustainable options for aircraft. Industry initiatives, such as the Business Aviation Commitment on Climate Change, aim to reduce carbon emissions by 50% by 2050, relative to 2005. Both by the increasing use of sustainable fuels (See “Clearing the Air,” BAA May/ June 2019) and innovative engineering, such as aerodynamic improvements and engine technology which mean more efficient aircraft, we are seeing a dedication to reducing the industry’s carbon footprint. What can you do to support these efforts? Whether you are buying a new aircraft, refurbishing a newly purchased preowned model, or updating your existing aircraft, the design options and materials you select for the interior of your cabin can contribute toward a more eco-friendly aircraft. If creating a more sustainable aircraft interior is important to you, here are some points to consider: ■ Convey your wishes to your interior designer at the start of your work together so he or she can help you navigate all the available options. ■ Rethink heavy design selections. Elements like stone floors and quartz countertops, although beautiful, add extra weight to your aircraft. Using lighter alternatives will make it more fuel efficient. ■ Source materials as locally as possible to the aircraft refurbishment facility to help eliminate the environmental impact of transporting goods across the world. Many fine carpet and textile manufacturers catering to the aviation industry are sprinkled across the globe. ■ Consider a refurbished aircraft instead of buying new to decrease waste. Not only are there financial advantages to purchasing a preowned aircraft, but after a refurbishment it can feel virtually new. ■ Select materials with increased durability to enhance the longevity of the interior of your aircraft. This is especially true if your aircraft will be available for commercial charter. ■ Choose fabrics composed of natural fibers, which are more suitable for the stringent burn regulations for aircraft interiors. By selecting fabrics with natural fibers there is less off-gassing of harmful VOCs (Volatile Organic Compounds) in the cabin. When possible, choose suppliers that produce under socially fair conditions. ■ Use reconstituted veneer on desks, tables, and cabinetry. A common wood fiber from well managed and plantation-grown forests, it has no impact on old growth forests.
don’t get fueled. Did you know you do have a choice in aviation fuels and can make a difference today by flying with the sustainable alternative to petroleum-based jet fuels? Since 2011, Gevo has been producing renewable bio jet fuel that not only has zero sulphur emissions, but also enhanced thermal stability and higher energy density. Learn more about the better low carbon jet fuel solution at gevo.com and ask your Fuel Manager and FBO to source Sustainable Aviation Fuel.
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■ INDUSTRY UPDATE
The Clarity of 2020 Vision BizAv Looking Up Amid Change BY ROLLAND VINCENT Rolland Vincent Associates / rvincent@rollandvincent.com
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businesses yet generating the free cash flow that investors and other stakeholders have come to expect, these consolidation initiatives will seek to lower costs, enhance pricing and production discipline, grow market share, and ultimately improve profit margins. Amid the recent uptick in fortunes at several OEMs, customer sentiment of business aircraft owners and operators has shifted steadily downwards over the past six quarters, based on the results of ongoing JETNET iQ surveys and market research. Uncertainty about the future has increased, which some regard as a sign of caution and reason to delay decision-making – at the same time others see opportunity in what is clearly a buyer’s market. Although progress is being made on multiple fronts, the business aviation industry is only just beginning to prepare for the inevitable scrutiny regarding its carbon footprint. Encouragingly, demand for sustainable aviation fuels (SAF) is on the rise, with more than one third of respondents to the Q4 2019 JETNET iQ Survey indicating that they will consider flying with SAF in 2020. Much more progress will be needed to increase SAF supply and bring prices more closely in line with existing fuels. We believe that 2020 will be remembered as a watershed year when stars aligned to drive fundamental change in the industry – change for good. BAA ROLLAND VINCENT is President of Rolland Vincent Associates,
an aviation and aerospace market research, forecasting, and strategic planning firm. His 30+ years’ experience includes work with manufacturers, commercial operators, and international organizations.
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s we think about the rapidly evolving environment for business aviation in the Year 2020, it is certainly high time to prepare ourselves and our organizations for change – some of which we will control, but much of which could alter the competitive landscapes we face for years to come. Although year-end data are still being reported and analyzed, 2019 will be long remembered as a watershed year for the business aviation industry. While the post-2008 bifurcation of the market continued – with the market for larger aircraft remaining relatively active while the lower end stayed quiet – last year was witness to another dichotomy. Relatively strong new aircraft orders and deliveries, driven by new model introductions, contrasted with a double-digit percentage slowdown in the sales volume of preowned business aircraft. New aircraft order backlogs at most of the business aircraft original equipment manufacturers (OEMs) grew or at least stabilized throughout most of 2019, after having eroded for most of the post-recession period. This was welcome news indeed, as OEMs are anxious to transition into production ramp-up mode to begin to generate returns on all those hundreds of millions – and in some cases, billions – of investment capital. We are witnessing a transition from an unprecedented era of heavy research & development spending, with workforce adjustments already quietly underway. With flat overall utilization and little fleet growth (the latter held back by an acceleration of retirements of older model aircraft linked to noncompliance with ADS-B Out mandates), we believe that the 2020 table is set for what could be some much needed industry consolidation. Coupled with unprecedented geopolitical uncertainty with another contentious U.S. Presidential election, unresolved Brexit negotiations, international trade tensions, and as-yet unknown implications of the coronavirus, the industry table is already set for a round of consolidation that could change business jet markets for years to come. At the OEMs, we suspect that consolidation will result in fewer in-production models, fewer manufacturers, and generally lower factory deliveries for the next several years, beginning after 2020. What we do know for certain is that there will be both movers and shakers – and the moved and the shaken. Conditions also favor consolidation in other areas of what is in many ways a very fragmented business aviation marketplace, including the maintenance/repair/overhaul (MRO), FBO, and air charter operator sectors. This should improve overall service standards, enhance quality and safety, and reduce the prevalence of noncompliant operations, including illegal charter. With too few
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C O M PA R E D T O N AV I G AT I N G C O N G R E S S . When “Lucky” Lindy made his transatlantic crossing, he didn’t have to deal with an ocean of congressional wrangling (maybe that’s why they called him “Lucky”). The prevailing winds blew in his favor. But today, those winds have changed. Flying for business is more scrutinized than ever. Luckily, there’s NBAA. We’ve made a home on the Hill, so that our members can make a living in the sky. Because business aviation enables economic growth. And at NBAA, we enable business aviation.
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FLIGHT OPERATIONS ■
Avoiding “Red Eye” Operations Safety Depends on Crew Rest BY JESSICA NAOR
ISTO CKPHOTO
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GrandView Aviation / jessieb@flygv.com
rofessional pilots must eat well, exercise regularly, sleep well, and, to ensure optimal safety, work for an air carrier that provides a reasonable schedule allowing them to get that needed high-quality rest (See: “Good Nights Equal Safe Flights,” BAA May/June 2015). For years, Federal Aviation Regulations (FARs) have defined how air carriers schedule crews. There are limitations on flight time, days off per year, time on duty, and the all-important concept of “prospective rest”: that is, time off, undisturbed and long enough to get a solid eight hours of sleep. Through the FARs and countless legal interpretations from FAA headquarters, pilots cannot be on call, on standby, or required to perform any duties for an operator during their assigned, known-in-advance rest period. There are two, and only two, states of being for commercial pilots: duty or rest. Yet, industry insiders know that a significant portion of operators do have pilots in an illegal “not duty/not rest” state of limbo. It even has a name: rolling rest. It’s become a logical fallacy that because it’s so common, and it goes legally unchecked so often, that it’s OK. According to the National Transportation Safety Board, fatigue is the cause of or a contributing factor to 20% of aviation accidents. “Pilots and other aviation safety-critical personnel may not recognize the effects of fatigue until it’s too late,” it reports. In fatal accidents, investigators cannot go back and ask the flight crew how tired they were, and even if they could, personal assessments of fatigue often are inaccurate. Fatigue and its dangerous impacts may go unreported. While the FARs state that flight crew members must have ten hours of prospective rest to fly passengers, there is no explicit requirement in Part 135.63 (Record Keeping Requirements) for operators to keep records of their duty and rest (and when each was assigned), only for flight time. This lack of reporting makes it extremely difficult to police bad operators who are not compliant with the rest requirement and, as a result, it appears that presently there is inadequate enforcement of the law. Just how common is this illegal practice among charter operators? In a recent informal survey of more than 130 pilots currently flying for Part 135 operations, 43% reported that they do not receive scheduled, assigned rest before a flight. Nearly 60% admitted having flown for a carrier that previously has knowingly operated an illegal rolling-rest policy. Data like these put the onus on you to do proper research on your air carriers and how they assign crew members. Providing scenarios like, “If I need a flight at 6 am, can you do that?” and then asking w w w. B i z AvA d v i s o r. c o m
how the operator assigns rest can clue you in as to how seriously the company takes fatigue. An operator running a 24-hour availability schedule needs to staff at least two crew (four pilots for an aircraft flown with a Captain and Copilot) for a single aircraft, if not more. Crews are required by regulation to have at least ten hours of assigned rest, and their duty time is limited to fourteen hours in a shift. Crew-per-plane ratios offer great insight on how policy translates to operational reality. Operators that are proud of their crew scheduling policies will jump at the opportunity to share how they manage fatigue and crew rest. If you are using a broker to book your flights, ask how they are vetting their operators for duty and rest compliance. Both you and your flight crew deserve a higher standard of care than many operators provide today. Poor scheduling and resulting fatigue likely will result in more accidents. While it should not have to fall on you to do the research needed for your own safety, unfortunately that is the status quo today. BAA JE SSICA NAOR , Chief Operating Officer, GrandView Aviation,
serves on NATA’s Part 135 Committee and the FAA’s Rest & Duty Aviation Rulemaking Committee. She holds an MBA from Johns Hopkins and a BA from and Embry-Riddle Aeronautical University.
Ma r c h /A p r i l 2 0 2 0 B U S I N E S S AV I AT I O N A DV I S O R 17
■ WASHINGTON REPORT
Different Year, Different Concerns Market Conditions Aren’t Ideal, But Business Aviation Was Facing Much Bigger Challenges Not Long Ago BY DAVID COLLOGAN hree years ago the business aviation industry had a pile of worries on its plate. Donald J. Trump, the wild-card Republican candidate, had just been sworn into office as president – and no one had any idea what to expect. * Would Trump support a House initiative to privatize the U.S. air traffic control system and impose a new system of user fees on business aviation? The nation’s scheduled airlines were pushing hard for adoption of the privatization bill, introduced by the powerful Republican chairman of the House Transportation & Infrastructure Committee. Another concern was whom Trump might name to be FAA Administrator when incumbent Michael Huerta’s term expired in early 2018. Trump had suggested he might select his own personal pilot for the job, even though that individual had no leadership experience in a large organization like FAA. Trump also pointedly noted his personal pilot was critical of FAA’s NextGen ATC modernization plan – a massive undertaking launched a decade earlier, which had already cost billions of dollars. It was truly frightening to think FAA might find itself overseen by a board of directors controlled by the scheduled airlines, headed by an inexperienced manager, and contemplating disruptive changes to a consensus-driven and carefully-crafted NextGen program. This spring, different uncertainties lie ahead. But ATC privatization is no longer a threat. A five-year FAA reauthorization bill was enacted in 2018, so no pressing aviation legislation needs to be debated by a sharply divided, post-impeachment Congress. Stephen Dickson, who won Senate confirmation as FAA Administrator last year, is demonstrating on a daily basis he has the experience and the chops to succeed in his new job. And the NextGen program marked a major milestone at the end of 2019: the conclusion of a 10-year window set by FAA for owners to install ADS-B units in their aircraft in order to continue flying in controlled airspace. According to the aircraft-tracking web site FlightAware, the percentage of U.S.-registered, turbine-powered, business aircraft equipped with ADS-B soared from just 25 percent in October 2016 to 90 percent in December 2019. The surprisingly strong U.S. economy and a robust stock market bode well for business aviation. But there are significant concerns to offset the domestic financial optimism. Chief among them is the coronavirus outbreak in mainland China, which is disrupting travel and trade throughout the Far 18 B U S I N E S S AV I AT I O N A DV I S O R Ma r c h /A p r i l 2 0 2 0
East. On Feb. 7, NBAA cancelled this year’s Asian Business Aviation Conference & Exhibition (ABACE), “given health concerns and other special challenges for event participants.” ABACE 2020 was to take place April 21-23 in Shanghai. The annual event is a major business aviation showcase and important marketing opportunity for the industry in the region. NBAA’s announcement came after U.S. airlines and others around the world halted or radically reduced flights to and from mainland China. Travel disruptions, falling demand for goods and services, and health concerns in Asia are expected to negatively affect the global economy for months. The hotly contested U.S. 2020 presidential election is another question mark for business aviation. Proposals by candidates Bernie Sanders and Elizabeth Warren calling for imposition of severely higher income and “wealth” taxes are scary. The prospect that such measures might be enacted would almost certainly disrupt the stock markets and dampen demand for business aircraft. The muddled results dribbling out of the Democratic caucus debacle in Iowa certainly did not provide much clarity about who that party’s nominee will be. Nor did the Feb. 11 New Hampshire primary – still lots of candidates and highly fragmented results. That uncertainty could persist for months, and uncertainty tends to make potential buyers defer big-ticket purchases. It’s a concern, but certainly a less daunting environment than the industry was facing just three years ago. BAA
* President Trump remains completely unpredictable.
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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THE WHITE HOUSE
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dlcollogan@gmail.com
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