While the longest partial government shutdown in history is over for now, the potential for a second round looms large. The agreement reached will only reopen the government until February 15th. To avoid delays or downtime, owners and operators should act now to address any structure or operational changes that may require FAA approval.
How the Shutdown Impacted Business Aviation Transactions
During the shutdown many FAA departments were only partially operational, and this level of service could return if we face another partial shutdown in February. The FAA Aircraft Registry is an example of how the shutdown affected routine business aviation transactions. The Registry itself remained open, but the Aeronautical Center Counsel’s office was closed. The ACC normally provides opinions on aircraft registration matters involving owner trusts, certain LLCs, and other complex ownership structures. The lack of these opinions impacted closings and structure changes during the shutdown.
Operational Impacts of the Shutdown
Even though aviation safety inspectors were recalled to work on January 15th, their focus was on safety surveillance, not new certification. Requests to add new aircraft to Part 135 Operations Specifications, for new Letters of Authorization for certain types of operations, and for other new operational authorizations were not accepted during the shutdown. For some owners and operators this meant that aircraft were essentially grounded, or were only partially available for use.
What To Do To Prepare for February 16th
If you are contemplating the purchase of an aircraft, or any changes to the ownership structure for your aircraft, you should work with aviation counsel to identify any FAA review or authorization you may need now. If you act quickly, requests for these reviews or authorizations may be able to be submitted and processed prior to February 16th.
Lori McGee is a Partner with the aviation law firm of Jetstream Aviation Law, P.A. and counsel clients on the acquisition, financing and operation of corporate jets operated under Part 91 and Part 135 of the US Federal Aviation Regulations. Jetstream Aviation Law can be found at www.JetstreamLaw.com.
