Defining and creating safety guidelines for fractional ownership are helping to cool a regulation debate
BY Monica L. Rausch, Associate Editor
While fractional ownership programs continue to be a catalyst of growth, they continue to spark debate among charter operators, corporate flight deparments, and others regarding how they should be regulated.
Do fractional ownership programs fall under FAR Part 91 for corporate operators or FAR Part 135 for charters? Are program managers managing the aircraft for the owners, or are they doing more than that? Who is in operational control — the ownership program managers or the fractional owners?
Although around since 1986, the programs really matured in the past few years, attracting the attention of investors such as Warren Buffet, who spent $3 billion at the 1998 National Business Aviation Association's (NBAA) convention on aircraft for his newest investment, Executive Jet Aviation. It stands to reason that an industry presence of this magnitude could not go unnoticed by FAA.
"The indication was that the FAA (was) starting to look more intensely at fractional ownership ... even though it has been regulated under Part 91 since 1986. They were just doing a reality check," says Pete West, senior VP for government and public affairs at NBAA.
Building on FAR Part 91
In September, 1998, FAA requested input from NBAA on the safety aspects of fractional ownership. One month later, the association sent Administrator Jane Garvey a letter stating that NBAA supported regulating the programs under FAR Part 91 but would draw up more stringent safety standards for fractionals that both owners and program managers would have to meet if they wanted to be members of NBAA.
In creating these standards for fractional ownership programs and owners, NBAA contacted two other associations for input: the General Aviation Manufacturers Association (GAMA) and the National Air Transportation Association (NATA), which were also in turmoil on the topic of regulating fractional ownership.
The standards the associations produced, entitled "Safety Guidelines and Responsibilities for Fractional Aircraft Owners and Fractional Aircraft Program Managers," use Part 91 as their basis and include definitions of operational control, dry-lease aircraft exchange, and fractional program management services — some of the grey areas in the regulation debate.
Limits or recommendations are given for program managers on such items as flight, duty, and rest time; training; flight crew experience; and minimum approach standards. The guidelines set procedures for filing and investigating concerns by owners on whether a fractional program is in regulatory compliance.
"What we have done is provided this to the FAA, saying, ’This is our analysis of it, our understanding of it. This is what we believe will strengthen, through a peer-oriented approach, the already existing excellent safety record and safety culture for business aviation, including fractional ownership activity,'" says West. "There's no need to change Part 91, but we're going to use Part 91 as the foundation."
In the interests of safety
Before creating the standard, NBAA had already supported the status quo of regulating fractional ownership programs under Part 91. Along with a copy of his letter to Garvey, Tom Myers, chairman of NBAA, sent a letter of his own to all members, explaining the background behind NBAA's posture.
"The NBAA Board of Directors and Staff are very much aware of Members' sensitivity, concern, and passionate dissatisfaction with certain market issues that have resulted from the emergence of the fractional alternative," wrote Myers.
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