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Aviation History
2003
2003 - 2128.PDF
Fractionals It has been a painfully long wait for publication of US Federal Aviation Regulation Part 91 Subpart K, the new rules governing fractional ownership operations. And when it finally appeared in the federal register on 17 September, the fractionals were in no mood to celebrate. Not only did the published rule throw up a couple of unexpected and unwelcome changes, it also brought to the fore the protracted dispute between the USA and the UK over the operation of US-registered fractional aircraft in the UK. Although pressure is building on the two nations to reach a consensus, the stakes are high for the business aviation industry, whatever the outcome. Central to the debate is the differing interpretation of a private aircraft operation versus a commercial one and, in particular, the role of the management company. The US Federal Aviation Administration has always regarded the relationship bet ween the fractional aircraft owner and its management company as private, whereas in Europe a management company is deemed commercial because it is being paid to operate the aircraft. Consequently, European fractionals are regulated under the Joint Aviation Authority JAR OPS 1 reg ulations, as public transport, and are sub jected to more restrictive operating and administrative practices than their corpo rate counterparts. Bob Blouin, senior vice-president opera tions for the US National Business Aviation Association (NBAA), says: "The USA has grown up with an evolutionary exposure to fractional ownership. Now the idea has come to Europe all at once and they don't know how to deal with it". Surprising growth The growth in fractional ownership pro grammes did, however, take the US indus try by surprise. According to aviation research data issued by leading fractional Netjets, there are over 4,850 companies or individuals who own aircraft through frac tional ownership programmes in the USA. These numbers are predicted to grow to 1,600 aircraft and 13,500 owners by 2006. In 1999, prompted by a growing need to regulate this burgeoning sector and appease a growing army of disgruntled Part 135 ad hoc charter companies calling for a level operating and commercial playing field with fractionals, the FAA formed the Fractional Ownership Rulemaking Comm ittee (FOARC) to reach a consensus on the differing demands of corporate flight dep artments, charter operators and fractionals. "The UK government was invited to sit on the 27-member committee, but its rep resentatives chose to attend only one of 34 30 SEPTEMBER - 6 OCTOBER 2003 FLIGHT INTERNATIONAL www.flightinternational.com
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