For economic and health reasons, it seems that business and personal travel by private aircraft is at an all-time high. While the appeal of this form of travel tempts many people, passengers should be aware that there is more to private flying than showing up at an airport with bags in hand. Safety, legal and financial considerations must also be taken into account. Navigating through these considerations requires a level of experience and sophistication that is often beyond the typical traveler’s reach. Accordingly, it is imperative for individuals and businesses wishing to travel on private aircraft to assemble the right team before embarking on a venture into the wild blue yonder.
Most often, flying a non-owned, private aircraft is accomplished through “dry leasing” an airplane from an owner who wishes to offset operational costs. In short, this means that the lessee directly hires the flight crew and is ultimately responsible for initiating, conducting and terminating any given flight. Collectively, these responsibilities are defined as exercising “operational control.” And although a written dry lease will usually be drafted to define the rights and responsibilities of the parties, the Federal Aviation Administration (“FAA”) makes it clear that even more important than what’s in a written dry lease is how the aircraft is operated. Specifically, the FAA released an Advisory Circular, 91-37B, meant to give lessees information in order to recognize and avoid agreements where operational control is not clearly maintained by the lessee.
Using AC91-37B as the gold standard, the FAA has increased its enforcement efforts against parties entering into “sham dry leases.” Such leases are meant to give the appearance of a true dry lease; however, the intent of the parties may be to evade FAA scrutiny over the safe operation of air travel that might otherwise fall under commercial air travel. Where the FAA suspects sham dry leases and/or illegal commercial charter operations, the FAA has the authority to investigate and penalize violators through civil, and sometimes criminal penalties. Additionally, the FAA can suspend or revoke certificates of involved flight crew members. Hence, it’s not just lessors and lessees who should be concerned about compliance with FAA regulations when private air travel is concerned.
At Erickson|Sederstrom, our aviation group has the tools to help clients involved in private air travel. From consulting to acquisition and operation, we can guide you through this complex area of law safely and effectively. Call today to see how we can help.