Tag Archives: New York

FAA – Protecting Our Airspace, Sending a Message, or Both?

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Drone RestrictionsAccording to a recent agency press release, the FAA on Tuesday issued a $1.9 million fine for Chicago-based drone operator, SkyPan, for allegedly “endangering the safety of our airspace” during unauthorized flights over New York City and Chicago.  The FAA claims SkyPan’s 65 offending flights took place between March 2012 and December 2014 “in some of our most congested airspace and heavily populated cities, violating airspace regulations and various operating rules,” and that, “These operations were illegal and not without risk.”

Forty-three of the alleged incursions took place in the New York Class B airspace.  In addition, the agency says SkyPan flew its unmanned aerial vehicles (UAVs) without equipment required for Class B airspace operations, including a two-way radio and a transponder with altitude reporting capability.  FAA Administrator, Michael Huerta said, “Flying unmanned aircraft in violation of the Federal Aviation Regulations is illegal and can be dangerous,” noting that “We have the safest airspace in the world, and everyone who uses it must understand and observe our comprehensive set of rules and regulations.”

This civil penalty action comes in the midst of the agency’s work to compile a comprehensive set of rules for the commercial operation of UAVs in U.S. airspace. Until those regulations are in place, the FAA will continue to issue permits to UAV operators on a case by case basis.  About 1,800 such permits have been granted to date.  However, with the holiday season rapidly approaching, retailers estimate adding approximately one-million new UAVs to the civilian market before the end of the year.  Perhaps in the near future, the FAA will be issuing additional large civil penalties to ignorant drone operators more for shock and deterrence value than anything else.

The regulatory landscape governing unmanned aerial vehicles is unsettled and largely uncharted territory.  We recommend that all operators and potential operators seek the advice of experienced aviation counsel before conducting flights with any unmanned devices.

New York Passes Aviation Tax Reform

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downloadThe New York State Legislature recently passed significant tax reform which brings the Empire State’s aviation tax requirements in line with neighboring jurisdictions.  Through its budget process, the State legislature exempted general aviation aircraft from its sales and use tax.  The measure is aimed at attracting aviation-related jobs and business to New York, which has long been devoid of such economic resources.  The State legislature also removed onerous requirements on leasing structures used by aircraft owners and other businesses.

Once signed by the governor, the reforms will exempt general aviation aircraft, machinery and equipment installed on such aircraft from New York sales and use tax, beginning on Sept. 1, 2015.  The exact level of impact on the State’s economy and aircraft owners, as well as the legal implications for aircraft transactions remain to be seen.

Due to the complexity of aircraft transactions, potential buyers and sellers should consult with experienced legal counsel as early as possible in the deal process.