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Member Poll Is ". . . Vote of Confidence in NBAA Board's Position" on Fractionals

"A tremendous vote of confidence in the NBAA board's position" is how Jack Olcott, president of the National Business Aviation Association, describes the membership poll on the contentious and emotional issue of fractional ownership of business jets.

At a press conference shortly before the NBAA convention here he showed relief that members were not demanding drastic and immediate action -- but they were demanding a solution to the new phenomena of fractional ownership they perceive as a threat to their traditional, airplane-owning flight departments.

If anything, though, early returns in the poll by Hickman-Brown Opinion Research show the fractional ownership problem -- if indeed there is one -- to be virtually insoluble.

NBAA members want to have their cake and eat it too.

"They are telling us they want to retain all the operational flexibility of chartering, joint ownership, and time-sharing and chargebacks offered in FAA Part 91 (under which fractional ownership programs operate), yet they don't want any of those options moved into the stricter FAA Part 135 rules," Olcott said. "They just want the fractionals surgically removed," he said -- and placed in Part 135 without changing any rules that affect the traditional flight departments themselves.

But how? Olcott sees great danger in asking the FAA to change Part 135 rules to embrace fractional ownership, as once the door is opened, many other rules in that section will likely be changed to the detriment of existing business jet operators.

"Our membership says it doesn't want to see regulatory change," Olcott declared. While 63% of respondents voted to put fractionals into Part 135 (but with no hint of how soon), 88% voted for no changes in the rules at all.

That 153% response suggests a great muddled middle ground embracing the NBAA's position that the FAA adopt the NBAA's guidelines on safe operations for Part 91 operators while everyone cools off and takes their time to address how to regulate fractional ownership programs.

Olcott stressed that while the NBAA represents the interests of all business aircraft operators, there are fewer than 50 fractional-only flight departments among its 6,015 members and the association remains focused on the traditional flight department. Indeed, the NBAA has just modified its bylaws to ensure that governance remains firmly in the hands of corporate members who fully own or lease the majority of the aircraft they operate.

How much more regulating the fractional ownership operators need is another issue. While traditional flight departments perceive them as a threat to their existence, latest information from AvData shows the number of traditional flight departments has soared by 22% in the last five years, and to 8,625 this year (of which only five are the fractional providers), up from 8,236 in 1998. At the same time, it can identify only 18 traditional flight departments that have closed as their companies replaced them with fractional ownership plans.

Another analysis by Robert E. Breiling Associates suggests that over the last five years business jet operators complying with FAR Part 135 requirements experienced over 10 times the accident rate as that of business jets operating in compliance with FAR Part 91.

"People say safety is the issue in wanting stricter regulations for fractional ownership programs, but there is no safety reason to suggest FAR Part 91 isn't a tight enough environment," to ensure safe operations, Olcott said.

So, faced with the debunking of members' claims that fractional ownership programs threaten their existence and are less safe, NBAA continues to promote "a safety culture" among all business aircraft users rather than call for changes to the rules. "You cannot legislate good judgement" in the cockpit, Olcott said.

By John Morris

NBAA 1999, Atlanta, Ga.


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