Shared Ownership of Airplanes: Understand the New Rules

Shared Ownership of Airplanes: Understand the New Rules

Shared ownership of airplanes, also known as fractional ownership, has become increasingly popular in recent years as a way for individuals and businesses to access private aviation without the full cost and responsibility of owning an entire aircraft. However, with the growth of this industry, new rules and regulations have emerged to govern shared ownership arrangements. Let’s delve into the new rules surrounding shared ownership of airplanes:

1. FAA Regulations:

• The Federal Aviation Administration (FAA) oversees all aspects of aviation in the United States, including shared ownership arrangements. The FAA has specific regulations governing fractional ownership programs, ensuring that they meet safety standards and operational requirements.

2. Ownership Structure:

• Shared ownership typically involves multiple individuals or entities owning a percentage of an aircraft. Each owner pays a share of the purchase price and ongoing operating costs, such as maintenance, insurance, and fuel. Ownership structures can vary, ranging from simple co-ownership agreements to more complex fractional ownership programs managed by aviation companies.

3. Operational Control:

• One of the key considerations in shared ownership is the issue of operational control. The FAA requires that the entity with operational control of the aircraft hold the necessary certificates and approvals to ensure safe flight operations. In shared ownership arrangements, this responsibility may lie with the managing entity or the individual owners, depending on the structure of the program.

4. Management Companies:

• Many shared ownership programs are managed by aviation management companies that handle the day-to-day operations of the aircraft, including maintenance, scheduling, and crew management. These companies ensure compliance with regulatory requirements and provide support services to the individual owners.

5. Usage Agreements:

• Shared ownership agreements typically outline the rights and responsibilities of each owner regarding aircraft usage, scheduling, and maintenance. These agreements specify the terms of use, such as scheduling procedures, reservation policies, and cost-sharing arrangements.

6. Liability and Insurance:

• Owners in a shared ownership program are typically liable for their share of any damages or accidents involving the aircraft. It’s essential for owners to have adequate insurance coverage to protect against potential liabilities. Aviation insurance policies can cover a range of risks, including damage to the aircraft, bodily injury, and property damage.

7. Regulatory Compliance:

• Owners and operators of shared ownership aircraft must adhere to all relevant regulations and requirements set forth by the FAA and other governing bodies. This includes compliance with maintenance schedules, crew training standards, and safety protocols to ensure the safe operation of the aircraft.

In conclusion, shared ownership of airplanes offers a flexible and cost-effective way to access private aviation. However, it’s essential for participants to understand the new rules and regulations governing these arrangements to ensure compliance and mitigate risk. By working with reputable management companies and legal advisors, individuals and businesses can navigate the complexities of shared ownership and enjoy the benefits of private air travel.