BarbriSFCourseDetails

Course Details

This CLE webinar will discuss aircraft dry leasing, a legally effective but complex way to transfer the possession and control of an aircraft and to defray expenses. The panel will address when to use aviation dry leases, how to properly structure them, how to fix those that are not, and what to do if an “illegal” charter operation exists. The panel will discuss the concept of operational control, exclusive and non-exclusive dry leases, insurance and insurability, and how to avoid pitfalls in this complex area.

Faculty

Description

Operating an aircraft pursuant to Part 91 is expensive, so it is no wonder that aircraft owners would like to recoup some of that cost if possible. Although dry leasing the aircraft to third parties might seem like a good idea, those arrangements can turn out to be illegal charters that lead to serious trouble with insurance coverage, the FAA, the IRS, and the TSA. Furthermore, insurance underwriters may refuse to write policies for aircraft with a suspicious number of dry leases and insurers may deny coverage for illegal charter operators.

Dry leases have their proper uses and can be either exclusive or non-exclusive. Structuring non-exclusive dry leases correctly is particularly challenging, and multiple dry leases will frequently draw the attention of the FAA.

The situation is further complicated when the aircraft is owned by a sole purpose limited liability company. Although that arrangement can have financial or tax benefits, the structure of the ownership and operation of the aircraft must comply with relevant FARs.

Listen as the panel of experts reviews and describes the proper uses of dry leases, why they are on the FAA’s radar, and how to avoid the perils and pitfalls.

Outline

  1. Wet vs. dry leases and concept of operational control
  2. Proper use of aviation dry leases
  3. How to properly structure dry leases
    1. FARs
    2. Exclusive and non-exclusive leases
    3. Truth in leasing
    4. The LLC problem
    5. Documentation
  4. Insurance and Insurability
  5. Illegal charters
    1. Common fact patterns
    2. Consequences of being deemed an illegal charter operator
    3. What to do if an illegal charter operation exists
      1. Before FAA involvement
      2. Resolving FAA investigations
      3. Defending FAA enforcement action

Benefits

The panel will review these and other key issues:

  • Will insurance be vitiated if there is an illegal charter?
  • Why are dry leases on the FAA's radar?
  • What happens if documentation and/or operations are faulty?