Humanitarian Flights Not Automatically Granted State Status

1353209In a recent legal opinion, the FAA has refused to extend a provision in the Chicago Convention which deems aircraft used in police and military services as “state aircraft” to include those used for medical services and disaster relief.  Pointing to a draft version of FAA Advisory Circular AC00-1.1A, in which it was recognized that the list of missions undertaken by state aircraft in the Chicago Convention is not comprehensive, a humanitarian relief organization argued that medical and disaster relief flights should be granted state status.  However, the FAA noted that this draft language was not adopted in the final Advisory Circular and that due to increased security measures and shifting regulatory oversight to host nations, extension of the Chicago Convention to automatically include medical and disaster relief flights would be imprudent.  Despite foreclosing an automatic grant of state status to such flights, the FAA left open the option to apply for state status on a flight-by-flight basis by following proper diplomatic channels and securing necessary approvals from both U.S. and foreign authorities.

Will the FAA Grant a C of A on Foreign Soil?

FAAIn a late-2014 legal opinion, the FAA claimed its authority to deny the issuance of a certificate of airworthiness (“C of A”) to an aircraft located outside the United States in cases where it determines that the issuance of such presents an undue burden to the agency.  Specifically, the FAA suggested that it may invoke the “undue burden” test to deny the issuance of a C of A to an aircraft registered to a U.S. bank, but located on foreign soil.  The agency’s test is derived from FAR 21.325, which states that “if the FAA finds no undue burden in administering the applicable [statutes and regulations], an export airworthiness approval may be issued for a product or article located outside of the United States.”

Even in cases where the owner or purchaser of an aircraft utilizes the services of a Designated Airworthiness Representative (“DAR”), the FAA claims that due to its oversight responsibilities involving DARs, the use of a DAR does not eliminate the “undue burden” to the agency and a C of A may still be properly denied.  Clearly, this is a troubling development in the already complex maze of aircraft transactions which include an import or export of the subject airplane.  Engaging experienced legal counsel early in the process will help to avoid the many pitfalls inherent in these types of transactions.

FAA Announces Unmanned Aircraft Testing Sites

quadcopter-droneThe FAA recently announced the congressionally-mandated research and test sites for unmanned aircraft systems (“UAS”).  The test site operators selected by the FAA are:

The University of Alaska;

The state of Nevada;

Griffiss International Airport (RME) (New York);

The North Dakota Department of Commerce;

Texas A&M University – Corpus Christi; and

Virginia Polytechnic Institute and State University.

In announcing its selections, the FAA stated that “each test site operator will manage the test site in a way that will give access to parties interested in using the site.”  However, the agency has yet to announce rules or procedures by which it will ensure that UAS will avoid and not enter the same airspace as manned aircraft, or whether UAS operating at these test sites will meet the same certification and airworthiness standards as manned aircraft.

Facilitating a Charitable Donation – Not a Charitable Passenger-Carrying Flight

Charity

In a recent legal opinion, the FAA cautioned that offering free seats to non-business passengers on private flights while encouraging those passengers to make charitable donations may be contrary to Federal Aviation Regulations.  The seats in question are on aircraft which are owned by a company that is not engaged in air transportation, but uses its fleet of aircraft in furtherance of its business.  The company allows individuals to occupy any unused seats on its aircraft when the transportation of those individuals is not within the scope of or incidental to the company’s business.  The company does not charge the individuals for access to those seats, but offers to facilitate a donation by the individuals to one or more local charities.

Encouraging or facilitating donations for transportation on flights may be considered the carriage of persons for compensation or hire, requiring the operator to hold a part 119 air carrier or commercial operator certificate to operate these flights under part 121 or 135 rules.  Because the FAA defines “compensation” in very broad terms, it does not require profit, a profit motive, or the actual payment of funds to determine that compensation was exchanged.  Under the FAA’s definition, valuable good will can be considered compensation.  Although charitable donations are not a requirement to obtain transportation on the company’s aircraft, encouraging or facilitating donations in exchange for transportation may result in the receipt of valuable good will.  Therefore receipt of good will through facilitation of charitable donations in some circumstances may be construed as compensation, and thus would be in violation of FAR part 91.

The FAA distinguished this scenario from those flights authorized under FAR 91.146 – flights for the benefit of a charitable, nonprofit, or community event.  Because the company merely encourages charitable donations, but does not conduct flights directly for charitable purposes, its flights fall outside this exception.  Conducting charitable operations under the FAA’s narrow regulatory exceptions is complex and should be guided by experienced legal counsel.

Adding New Aircraft Type to Air Taxi Operations Requires Attention to Order

AirTaxiLogo

Part 135 air taxi operators seeking to add a new aircraft type to their operations need not wait until they receive notice that their amended Air Taxi Registration form (4507) has been approved before commencing operations with the new aircraft.  A recent FAA legal opinion acknowledged that filing the amended registration pursuant to 14 CFR 298.23, within 30 days after a change occurs, is sufficient to commence or continue operations after adding a new aircraft type.  However, the FAA cautioned that the filing of an amended registration does not relieve the operator of the requirement to obtain approval for any necessary amendment to its operations specifications pursuant to FAR 119.51.  The certificate holder is required to file an application to amend its operations specifications prior to the desired effective date of the amendment, but the amendment is not effective until approved by the FAA.

Therefore, when adding a new aircraft type to its operations, an air taxi operator should obtain approval for any necessary amendment to its operations specifications prior to commencing operations with the new aircraft, but it may file its registration amendment within 30 days after the change occurs and still maintain its exemption.  Any failure to strictly comply with these regulations will likely result in the operator losing its exemption and becoming the subject of an enforcement action.  To avoid these pitfalls, operators should consult with experienced aviation counsel when changing their operations in order to ensure compliance.

When Exclusive Use Really Means Exclusive Use

FAAIn a recent legal interpretation, the FAA weighed in on the requirement that a Part 135 operator have “exclusive use” of at least one aircraft that meets the requirements for at least one kind of operation authorized in the certificate holder’s operations specifications.  [14 C.F.R. 135.25(b)].  The legal interpretation analyzed a scenario where the Part 135 operator’s exclusive use aircraft is owned by a limited liability company which also uses the aircraft to conduct Part 91 operators.  Distinguishing this aircraft use from aircraft shared solely between Part 135 operators, the FAA reiterated that the term “exclusive use” means “the sole possession, control,and use of the exclusive use aircraft.”  The FAA concluded that allowing a Part 135 operator’s exclusive use aircraft to be shared with Part 91 operations would render the Part 135 operator’s use non-exclusive and, therefore, in violation of the regulations.

Pilot Duty Period Does Not Include Working at a Restaurant

In its response to a request for legal opinion, the FAA concluded that a pilot working for a part 135 certificate holder cannot perform work for that certificate holder, whether directly or indirectly through a related business or corporation owned by the certificate holder, during the pilot’s mandatory rest period.  Although the certificate holder is not required to monitor employee activity that takes place after release from work, such as in the case of work at a restaurant or some other business, including flying for another certificate holder, the FAA cautioned that both the flight crewmember and certificate holder would be in violation of FAR 91.13 if a flight crewmember flies when his lack of rest would endanger others.

Time Spent Observing or Resting May Not Count Towards Operating Experience

sleeping-pilot2In a recent legal interpretation, the FAA clarified the permissible methods by which pilots in command (PICs) and second in command (SICs) may log operating experience pursuant to FAR 121.434.  Subsection 121.434(c) sets forth the parameters by which PICs and SICs may gain operating experience.  Paragraph (c)(l)(i) specifically provides that a PIC “must perform the duties of a pilot in command under the supervision of a check pilot,” and paragraph (c)(2) specifies that a SIC “must perform the duties of a second in command under the supervision of an appropriately qualified check pilot” to acquire operating experience.

In 1995, the FAA amended the operating experience requirements of FAR 121.434 in response to a series of accidents that had occurred at least, in part, due to the inexperience of flightcrew members.   As part of the amended rule, the option allowing SIC’s to earn operating experience through observation was removed from the regulation.

In its legal interpretation, the FAA concluded that the plain language of the regulation, as well as the rulemaking history, require that PICs and SICs must actually be “seated at the controls of the airplane” and “perform the duties required of a PIC or SIC” to acquire operating experience.  Accordingly, time spent by a pilot while not seated at the controls, including time spent resting, cannot be counted to satisfy the pilot operating experience requirements of FAR 121.434 for a PIC or SIC.

Certificate Requirements Not Avoided by Creative Corporate Structure

two-faced-liar-Obama-promises-1billion-private-jet-subsidies

In a recent memorandum, the FAA scrutinized two complex aircraft lease arrangements involving multiple corporate entities to find that the corporations engaged in wet leasing without the requisite Part 119 certificates.  Although the situations analyzed in the memorandum were hypothetical, they reflect real-world issues that arise when subsidiaries or shell entities are formed for the sole purpose of leasing aircraft within the company or to closely related entities.  Corporations seeking to own or lease aircraft should consult with an aviation attorney experienced in ownership and leasing issues.

Sequestration Comes to New Jersey

The FAA has released it schedule of tower closings due to federal sequestration.  According to statistics provided by  AOPA, the FAA is being forced to cut $600 million, about 5 percent of its budget, and the Contract Tower Program is slated to take a 75-percent cut.  On the list of tower closings is Trenton Mercer Airport (TTN) in Ewing, New Jersey.  Situated on the edge of the Philadelphia Class B airspace, Trenton Mercer Tower provides key coordination and separation services for both air carrier and general aviation operations.  Pilots should check the tower closing list and call ahead to verify whether ATC services will be available at their destination.  For safety and compliance, pilots who do not regularly operate at uncontrolled airports should review non-towered airport procedures prior to departure.