Regulation of Fractional Aircraft Ownership Programs and On-Demand Operations; Final Rule

on which they are passengers. The air carrier exercises control of the operation and bears responsibility for compliance with the regulations. Because the air carrier is a commercial enterprise in the business of air transportation for the public, the FAA imposes on the air carrier stringent regulations and oversight under part 121 or part 135, as appropriate. In contrast, aircraft owners flying aboard aircraft they own or lease exercise full control over and bear full responsibility for the airworthiness and operation of their aircraft. Under these circumstances, the FAA has determined that the appropriate level of oversight is provided by the regulations in part 91, which are generally less stringent than those of part 121 or part 135. Part 91 regulations cover what is commonly called general aviation, which includes individual pilot/owner operations and corporate owner operations. Business aviation in large and turbine-powered multiengine airplanes is regulated under part 91, subpart F. In creating subpart F (originally subpart D; 37 FR 14758, July 25, 1972), the FAA continued its long-standing policy that corporations may operate their aircraft under part 91. The FAA allowed for different arrangements in the loan, VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54521 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations exchange, and sharing of the aircraft. Current § 91.501(b)(4) allows a person to operate his or her aircraft ‘‘for his personal transportation, or the transportation of his guests when no charge, assessment, or fee is made for the transportation.’’ Current § 91.501(b)(5) allows for the carriage of ‘‘officials, employees, guests, and property of a company on an airplane operated by that company * * * when the carriage is within the scope of, and incidental to, the business of the company * * * Current § 91.501(b)(6) allows for time-sharing arrangements, interchange agreements, and joint ownership arrangements. Some of these arrangements include the use of a management company that provides maintenance and other services to the owners. A consideration for applicability under part 91 in any of these arrangements is that the corporation cannot be established solely for the purpose of providing transportation to a parent corporation, subsidiary, or other corporation. In such a case, the corporation operating the aircraft would be in the business of transportation and would have to hold an air carrier certificate under part 121 or part 135, as appropriate. Fractional ownership programs have some of the elements of traditional management services companies, but because of the size and complexity of today’s fractional ownership programs, the part 91 rules are not adequate. The part 121 and part 135 rules are not appropriate either because those rules are directed at air carriers and other entities that hold themselves out to provide transportation to the general public. Fractional Ownership Aviation Rulemaking Committee In October 1999, the FAA convened a special aviation rulemaking committee, the Fractional Ownership Aviation Rulemaking Committee (FOARC), pursuant to the Administrator’s authority under 49 U.S.C. 106(p)(5), to address the issues surrounding the regulation of fractional ownership program operations. Pursuant to the order of October 6, 1999, that established the FOARC, the committee’s objective was to ‘‘propose such revisions to the Federal Aviation Regulations and associated guidance material as may be appropriate with respect to fractional ownership programs.’’ The FOARC was comprised of 27 members selected by the FAA as representative of the various constituencies interested in regulation of fractional ownership program operations. Designated advisers and counsel assisted the FOARC. FOARC members represented on- demand charter operators, fractional ownership program managers and owners, aircraft manufacturers, corporate flight departments, traditional aircraft management companies, aircraft financing and insurance companies, and industry trade associations. Representatives of the FAA, the U.S. Department of Transportation and foreign civil aviation authorities were also included. The FOARC met for nine days in November and December 1999. Within the FOARC’s meeting schedule, two days were set aside for public hearings to provide the public an opportunity to comment or present positions on this issue. Notice of these public meetings was provided in the Federal Register (64 FR 66229, November 24, 1999) and through the media. The FAA reviewed and considered all material presented by participants at the public meetings. The FOARC presented its initial recommendations to the FAA on February 23, 2000. Those recommendations provided the basis of the FAA’s NPRM, published in the Federal Register on July 18, 2001 (66 FR 37520). The comment period for the NPRM ended on November 16, 2001. The FAA is issuing this final rule, based on the recommendations of the FOARC committee and the FAA’s consideration of the public comments received on the NPRM. Summary of Final Rule This rule establishes a new subpart K in part 91 to cover fractional ownership operations. The new Subpart K clarifies what qualifies as a fractional ownership program, clarifies who has operational control, defines operational control responsibilities, codifies many of the ‘‘best practices’’ now being used voluntarily in fractional ownership programs, and incorporates many of the safety standards of part 121 and part 135. By this rulemaking, the FAA establishes safety standards to maintain the safety record of current fractional ownership programs and to ensure that new fractional ownership programs will also meet a high level of safety. In brief, new subpart K accomplishes the following: (1) It establishes the criteria for qualifying as a fractional ownership program. (2) It establishes that fractional owners and the management company share operational control of the aircraft and delineates operational control responsibilities. (3) It establishes regulatory safety standards for operations under fractional ownership programs, including management operations, maintenance, training, crewmember flight and duty requirements, and others. This rulemaking also revises certain requirements in part 135 on-demand operations. Many of the requirements in new subpart K of part 91 are based on requirements for on-demand operations in part 135. In the process of reviewing part 135 requirements, the committee and the FAA determined that some of the current part 135 requirements needed to be updated in accordance with new technology and other changes. The FOARC studied the best practices of the fractional ownership programs to determine under what circumstances part 135 operations could use those practices as an alternate means of compliance with part 135 standards. For example, FOARC recommended that on- demand operators be allowed to land at airports without weather reporting facilities, provided the flight plan includes an alternate airport that has such facilities and they carry additional fuel to fly to that alternate airport. Further, this eligible on-demand operation must provide a 2-pilot crew with increased pilot experience and that meets crew pairing standards. In addition proving test requirements for both fractional ownership programs and part 135 on-demand operations were reviewed and amended. A proving test requirement was added for fractional ownership programs and the requirement for multiple proving tests for part 135 operations was amended. Specific requirements in subpart K and revisions to part 135 are discussed in detail in the public comment discussion that follows. Discussion of Public Comment The FAA received approximately 230 comments in response to the NPRM. Approximately 60 comments specifically address a concern related to noise and environmental issues at Santa Monica airport, 30 comments are from aircraft dispatchers, and 28 comments are from individual pilots. The rest of the comments are from major industry associations, aviation companies and interested individuals. The comments can be reviewed on the Internet at http://dms.dot.gov. Commenter Abbreviations Used in This Preamble ADF Airline Dispatchers Federation AOPA Aircraft Owners and Pilots Association VerDate jul<14>2003 18:05 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54522 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations Avex The New Avex, Inc. CAA Civil Aviation Authority of the United Kingdom EHANAC East Hampton Airport Noise Abatement Committee EJA Executive Jet Aviation, Inc. Flexjet Bombardier Business Jet Solutions, Inc. GAMA General Aviation Manufacturers Association GM General Motors Air Transportation Section IBT International Brotherhood of Teamsters, AFL–CIO NATA National Air Transportation Association NBAA National Business Aviation Association NWJ New World Jet Corporation PASS Professional Airways Systems Specialists SAMA Small Aircraft Manufacturers Association Teamsters Teamsters Miscellaneous and Industrial Workers Union, Local No. 284 General Support Several commenters express general support for the NPRM and for the work of the FOARC. Aviation Resources Management states that it fully supports the proposed rules and that the process used in their development was not only fair and impartial but was a remarkable example of accomplishment through cooperation between industry and government. Eclipse Aviation states that as a manufacturer of an aircraft that will be used extensively in fractional ownership programs, Eclipse strongly endorses the safety measures provided to the fractional customer by proposed subpart K to part 91. General Aviation Manufacturers Association (GAMA) states that as fractionally owned aircraft programs have already demonstrated their safety and efficiency while operating under part 91, it strongly supports the new rule. GAMA adds that these programs benefit the traveling public by dramatically increasing their options for air transportation and that the growth of these programs should not be hindered. Some commenters identified specific parts of the proposed rules that they believe will be particularly effective. Robert E. Breiling Associates believes the proposed landing requirements, weather criteria for approach and departure and more realistic night operation requirements would give new flexibility to part 135 operators. These proposed requirements would not only allow them to operate to and from many other airports and runways previously not available to them. The proposed requirements would also help reduce traffic at some of the more congested airports. Alpha Flying, Inc. strongly supports the flight and duty time requirements, and runway length and weather reporting requirements in the proposed rule. Alpha believes the proposed requirements could provide relief to charter operators who have been unnecessarily burdened operationally and economically by rules that are out-of-date. Alpha believes that weather reporting services now available, vast aircraft equipment improvements and aircraft certification rule changes that have been put in place since the runway length and weather reporting rules were written justify the proposed changes. A flight operations manager comments that it is important that the people who developed the proposed rule actively work with the FAA to develop Handbook guidance for compliance when the proposal becomes a final rule. FAA Response: The FAA appreciates the support of these commenters. In the final rule the FAA has tried to achieve the goals of FOARC, while carefully considering the comments from both supporters and those who oppose the FOARC proposals. After considering all the comments on the specific proposals and further research by FAA experts, the FAA has made some changes in the final rule. These changes and the reasons for each are discussed below under the specific topics. In regard to implementation of the final rule, the FAA has set up an implementation team to plan for development of guidance material, inspector training, inspector assignment, and oversight and surveillance policies. The FAA plans to complete these products by the effective date of this rule. The FAA is committed to working closely with industry to implement this final rule. General Opposition Most of the commenters who state general opposition to the proposed rule take the position that fractional ownership programs are essentially on- demand operations that the FAA should regulate under part 135. Generally, these commenters believe that the Committee and the FAA fail to recognize that the program manager of a fractional ownership program is essentially promoting on-demand service. In the NPRM, the program manager is the entity that sets up a fractional ownership program and that hires an individual to run the program. Approximately 28 commenters identify themselves as pilots with fractional ownership programs, of whom at least 10 are with EJA. Most of the pilots oppose the proposed inclusion of fractional ownership in part 91. They believe the FAA should require fractional ownership programs to operate under part 135. In addition to general opposition, some pilots made specific comments that the FAA addresses under the appropriate issue or section. The Civil Aviation Authority of the United Kingdom (CAA) states that ‘‘. . .the proposal appears to be contrary to the provisions of the Chicago Convention which defines a commercial transport operation as an aircraft operation involving transport of passengers, cargo or mail for remuneration or hire.’’ The French Direction Ge´ne´rale de l’Aviation Civile submitted a similar comment. One commenter cites a U.S. Federal Circuit court ruling that held a fractional ownership program to be a ‘‘commercial operation’’ for certain tax purposes and questions how the FAA can ignore this ruling. Jet Sales & Services, Inc., states that the preamble states no justification to require increased regulation. This commenter states that a group of aircraft owners should have the same rights and privileges as those who can afford total and individual ownership. While not opposing the entire NPRM, the National Transportation Safety Board (NTSB) states its concern for any part 135 changes in this rulemaking. The NTSB states that it will withhold judgment about the adequacy and appropriateness of the proposed subpart K requirements until it has had the opportunity to monitor accidents, incidents, and other developments related to fractional ownership. Some commenters state that the FAA should issue another NPRM before issuing a final rule on fractional ownership. Commenters think this is necessary for various reasons, including the size of the NPRM and the lack of balance of the FOARC. FAA Response: The FAA carefully considered the question of where to place the rules governing fractional ownership programs. It studied current fractional ownership programs, finding that this segment of aviation has a very high safety record through compliance with voluntary safety standards that in many cases exceed the regulatory standards. It is the FAA’s goal in this rulemaking to maintain this safety record. In determining the appropriate regulatory part for fractional ownership programs, the FAA recognizes that fractional ownership programs contain elements of private ownership and use of a management company that are similar to a traditional management company operation under part 91. The VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54523 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations role of the management company is to provide aviation expertise and services to the owner and the program manager does not hold out to the public to provide air transportation. Fractional ownership programs differ from the traditional management company model in the size and complexity of the program operations, reducing the individual owner’s ability to exercise operational control. Therefore, the FAA determined that the appropriate approach is to regulate fractional ownership programs under part 91, but to define operational control responsibilities and procedures and to prescribe added safety requirements appropriate to the size and complexity of those operations. These standards mirror corporate best practices, the voluntary standards used by existing fractional ownership programs, and the regulatory standards of part 121 and 135, as appropriate. In response to the CAA and the French Direction Generale de l’Aviation Civile comments, the FAA views fractional ownership programs to be private operations and therefore not subject to the commercial transport standards and definition. A U.S. federal circuit court determined fractional ownership programs are commercial operations for tax purposes. See Executive Jet Aviation, Inc. v. U.S., 125 F.2d 1463 (Fed. Cir. 1997). Tax law does not govern safety rules. The FAA considers fractional ownership programs private operations for safety and operational control purposes. The changes made to part 135 in this rulemaking are based on a comparison of current part 135 requirements to part 91 fractional ownership and corporate programs. Part 135 was amended where safety could be maintained while offering an alternative method to achieve the same safety goal. These procedures and amendments were based in part on the best practices and demonstrated safety record of corporate aviation and fractional ownership programs. Like the NTSB, the FAA intends to closely monitor both part 91, subpart K, and part 135 operations following the implementation of this rule to identify any trends or safety concerns related to the requirements of this rule. Some commenters encouraged the FAA to issue a supplemental NPRM. The FAA is issuing a final rule because the changes made to the rule language are within the scope of what the FAA proposed in the NPRM. Commenters made many helpful suggestions, including suggested technical edits and cross-references, some of which the FAA has incorporated into the rule. Comments that are beyond the scope of the NPRM, would result in a substantive change to the rules, or identify new issues are being considered for future rulemaking. The FAA has determined that it is in the public interest to publish a final rule now to establish and maintain a safety standard for fractional ownership programs. Extension of Comment Period Several commenters asked the FAA to extend the comment period to allow more time for public input. NTSB stated that the September 11, 2001, events have raised public concern about the security of air carrier operations and will likely further increase the demand for fractional ownership and the potential for safety issues associated with expanded operations. The NTSB asked for a 90-day extension of time to evaluate the proposed changes and the related safety issues. The National Business Aviation Association (NBAA) and the National Air Transportation Association (NATA) noted that since September 11, the Nation, and the aviation community in particular, have directed many resources to restore our air transportation system. NBAA and NATA requested an extra 30 days to allow all interested parties more time to prepare well-developed, thoughtful comments on the proposed regulation. An individual sought a nine-month time extension to allow the pilots affected by these proposed changes, but excluded from FOARC, to adequately review the safety implications of this NPRM and suggest changes. FAA Response: In response to the commenter requests, the FAA extended the comment period to November 16, 2001 (66 FR 52878, October 18, 2001). FOARC’s Membership Balance Many commenters state that the Committee did not represent all potentially interested parties. They specifically mentioned pilots, fractional owners, airports and airport community interest groups. They also wrote that publication of a Notice of Proposed Rulemaking by itself did not overcome the built in bias of the Committee. One commenter states that the FOARC was not ‘‘fairly balanced’’ as required by 14 CFR 11.27 and the Federal Advisory Committee Act (FACA) because pilots did not participate in the process. The Teamsters state that the FOARC consisted essentially of three groups. First, fractional providers who feared that they would be regulated under part 135. Second, on-demand part 135 operators that see fractional owners as running a similar operation but under less stringent, and therefore less costly, rules. Third, corporate flight departments and their trade organizations that feared negative consequences for them if the FAA were to choose to regulate fractional operators under part 135. This commenter suggests there would have been no committee consensus without the proposed changes to part 135 that benefited persons currently operating under that part. This commenter also questions why a committee set up to address the issue of fractional ownership would have anything to do with part 135 operations. Other commenters make the same point. NATA states that a notice of public meetings was published in the Federal Register. NATA also states that inferences made by some commenters to this rulemaking about ‘‘backroom’’ deals are misleading. The commenter points out that such inferences ignore the opportunity for public involvement in the process and the presence of DOT and FAA representatives at all FOARC meetings. FAA Response: The Fractional Ownership Aviation Rulemaking Committee was established by an order issued by the FAA Administrator on October 6, 1999, pursuant to the Administrator’s authority under 49 U.S.C. 106(p)(5). This section states that ‘‘The Federal Advisory Committee Act (5 U.S.C. App.) does not apply to the Council or such aviation rulemaking committees as the Administrator shall designate.’’ Therefore the activities of the FOARC were not subject to the requirements of the Federal Advisory Committee Act. Nevertheless, the FAA balanced the makeup of the committee so that the FAA could learn the various perspectives of persons involved in fractional ownership operations and other segments of the aviation community that the proposed regulations may affect. This included part 135 operators, aircraft manufacturers, corporate flight departments, aircraft financing and insurance companies, and industry trade associations. About the issue of pilot representation, to the FAA’s knowledge, only one fractional ownership program has union representatives for a portion of its pilots. Therefore, there is no single, recognized organization that could speak for fractional ownership pilots across-the- board. Nevertheless, there were individual pilots on the FOARC, representing both fractional ownership programs and part 135 operators. In addition, as described earlier in this preamble, the FAA held a public meeting to invite the views of other interested parties. Finally, the FAA VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54524 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations published the NPRM and provided a public comment period in accordance with the Administrative Procedure Act. This comment period allowed all interested parties, whether they were FOARC members or not, to provide added insight, comments, and suggestions for changes to the proposal. The FAA received over 230 public comments and has carefully reviewed the many views and suggestions provided in those comments. Therefore, the FAA does not agree that this rulemaking suffered from a lack of balance or a lack of opportunity for all interested parties to express their views. Environment and Noise Many commenters are concerned about the environmental and noise impacts of this proposed rule on local airports. Most of these comments (approximately 60) are from organizations and individuals in the neighborhood of the Santa Monica, CA, Airport. Commenters from the vicinity of Flying Cloud Airport in Minnesota and East Hampton Airport in New York also address this issue. Most of these commenters state that the FAA must comply with the National Environmental Policy Act (NEPA) before proceeding to a final rule. An individual asks that the FAA conduct ‘‘an environmental assessment or environmental impact statement to fully and fairly define and disclose the environmental impacts that will flow’’ from the proposed rule. Santa Monica Airport, the North Westdale Neighborhood Association, the East Hampton Airport Noise Abatement Committee (EHANAC), and Friends of Sunset Park Neighborhood Association believe that the FAA should study the impact of fractional ownership on communities and schools that are near general aviation airports. Residents of Sunset Park are concerned that altering the 60 percent rule and creating subpart K will significantly increase the volume of business jet traffic, bringing with it an increase in air and noise pollution. The Los Angeles Unified School District is concerned about regulatory changes that may increase noise levels and air emissions at several of their schools underlying the approach to Santa Monica Airport. An individual states that relaxing an existing limit on runway use and requirement for instrument flight rules (IFR) destination airport weather reporting would authorize a whole new class of airports to be opened to a new class of aircraft. This would increase noise and adversely impact the quality of the human environment for unknown numbers of individuals. This commenter does not believe that this rulemaking qualifies for a ‘‘categorical exclusion’’ from the requirements of NEPA, stating that ‘‘The FAA has an affirmative obligation to disclose adverse environmental impacts that will flow from an agency action.’’ NATA submitted a comment in response to these comments stating that the FAA was not obligated to do an environmental assessment or prepare an environmental impact statement in situations where the FAA is promulgating safety rules that are not likely to have a significant impact on the environment. The commenter points out that the FAA is not responsible for the growth of fractional ownership programs. According to the commenter, if the rulemaking results in a greater use of small airports, this may have a positive effect because of a more efficient allocation of aircraft activity among large and small airports. FAA Response: The FAA understands its obligations under NEPA and takes its responsibilities seriously. The FAA based its determination that this rulemaking qualifies for a categorical exclusion from the requirement to prepare an Environmental Assessment under NEPA on the instructions in FAA Order 1050.1D, Policies and Procedures for Considering Environmental Impacts. Appendix 4, section 4, lists issuance of ‘‘regulations, standards, and exemptions’’ as one of the categorically excluded actions that the FAA’s Associate Administrator for Regulation and Certification may take. As with most of FAA’s operating rules, any environmental impact would come not from issuing the rule, but from approving specific operations under the rules. For example, Order 1050.1D spells out how the FAA considers environmental impacts when issuing operations specifications for part 121 and part 135 operators. The FAA normally prepares an environmental assessment before issuing operations specifications for scheduled operations. For on-demand operations, an environmental assessment would not be prepared unless the proposed operation would significantly change the operating environment of the airport that serves as the home base for the operator. NEPA requires the FAA to consider the ‘‘foreseeable environmental impacts’’ of its actions. Therefore it is difficult for the FAA to assess impacts on destination airports for particular on- demand operators, because those destinations are unknown at the time of the approval. Similarly, for fractional ownership programs, it would be difficult to identify destination airports, since fractional owners may choose to go to any airport. Again, the FAA can only look at the potential impacts on the home base airports. It has been determined that management specifications will be treated the same as operations specifications for NEPA purposes. Therefore, the same principles will apply. On the weather reporting issue, the FAA does not expect a significant impact because the number of part 135 operators who can do this will be limited. The rule applies only if the airport has no weather reporting but has instrument approach procedures, the operator is authorized to conduct IFR operations, the weather is instrument meteorological conditions, and the operator meets the eligible on-demand conditions. Therefore the FAA cannot make an estimate of the number of operations that would be increased. Fractional ownership programs can currently operate into airports without weather reporting. This rulemaking imposes extra restrictions that could limit some operations. The requirements for performance planning could potentially increase the number of airports that part 135 operators could use, but would impose limits on some part 91 fractional operations that can currently use any suitable airport runway. Under the final rule, only eligible on-demand operators under part 135 would be able to take advantage of reduced runway requirements and only under certain conditions. The changes to the performance rules will restrict some fractional ownership operations, which currently have no regulatory limits. The FAA cannot estimate the number of airports or operations that would be affected, as performance planning incorporates many variables and, because of the on-demand nature of these operations. FAA Oversight and Staffing Professional Airways System Specialists (PASS) is concerned that the proposed rule would not require the necessary oversight and surveillance by FAA safety inspectors to ensure the level of safety desired. The management specifications, training manual and program managers operating manual need to be clear and approved by the Administrator so there is little controversy on what the program managers, flightcrews, maintenance personnel and fractional owners are required to do to ensure compliance with the regulations. Similarly, Style Air comments that the FAA currently does not have sufficient staff to service part 135 operators efficiently. This commenter believes that the addition of VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54525 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations trained inspectors should be addressed before any implementation of new regulations, and that specific procedures for FAA oversight and enforcement should be provided in the new regulations. An FAA inspector expresses concern over ‘‘how the field inspection will make a determination as to the type of operator he/she is conducting a surveillance on * * *’’ FAA Response: The FAA agrees that the success of these regulations is dependent on the quality of the oversight and surveillance provided by FAA inspectors and local Flight Standards District Offices (FSDO’s). Therefore the FAA has established an implementation team that is developing standards and guidance for the use of both Headquarters and field personnel who will be responsible for reviewing fractional ownership programs policies and procedures, approving training programs, and issuing management specifications. The implementation team has reviewed staffing levels and qualification standards for aviation safety inspectors and made recommendations to ensure that inspectors have the necessary knowledge, skills, and abilities to oversee fractional ownership programs. The implementation team is working with PASS on assessing these staffing needs. In addition, the team is drafting specific guidance for field offices and inspectors to provide instructions and criteria for conducting the reviews and approvals required before fractional ownership programs may operate under subpart K. The level of oversight and surveillance and inspection activities provided to specific companies will be appropriate to the size and complexity of the operations being conducted and will be comparable to that provided to part 135 on-demand operations. The FAA believes that these implementation plans and products fully address the concerns expressed by the commenters. Owner-Piloted Multiple-Owner Aircraft (See also § 91.1001) Several comments focus on how the rule would affect co-ownership arrangements of aircraft by pilots, and owner/pilot operation of aircraft. Four commenters (Aircraft Owners and Pilots Association (AOPA), GAMA, Lawyer Pilots Bar Assoc. and NATA), state that the rule or the preamble should clearly distinguish between the multiple owner/pilot and similar arrangements that would continue to be regulated under the existing part 91 and those arrangements that would be considered fractional ownership programs and be regulated under the proposed subpart K. NBAA states that the FAA should account for aircraft ownership mechanisms other than fractional ownership programs in the final rule. NBAA believes that any programs that do not precisely fall within the definition of fractional ownership should be subject to regulations other than subpart K. An example would be a company that provides aircraft management services for aircraft that are flown solely by the owner. NBAA is concerned that the qualifications under § 91.1001(b) would inadvertently require owner-flown shared aircraft programs that use a management company to schedule aircraft among owners to comply with subpart K, when they would be better addressed as flying clubs. NBAA provides regulatory changes that would further clarify the types of operations subject to subpart K and prevent the inadvertent application of this regulation on other ownership and service options such as flying clubs, joint ownerships, time-shares and traditional aircraft management. Another commenter, the Small Aircraft Manufacturers Association (SAMA), notes that the proposed subpart K defines a fractional ownership program in a way that would include owner-pilot shared ownership programs in which the program manager does not offer or provide the flightcrews. According to the commenter, owner- pilot shared ownership programs that would technically meet the proposed definition of a fractional ownership program under § 91.1001(b) did not exist when the FOARC made its recommendations to FAA in early 2000. The FOARC did not hypothesize their formation and therefore did not consider their appropriate regulation. These owner-pilot shared ownership programs have since been established, generally providing piston-powered single engine airplanes, and currently are appropriately regulated under part 91, without reference to subpart F. It appears that neither the FOARC nor the FAA intended to regulate these programs under subpart K. According to the commenter, these programs are similar to flying clubs, partnerships and management services arrangements, but do not exactly match any of these traditional forms of shared aircraft ownership. The goal of this commenter’s proposed amendment is to avoid changing the regulation of owner-pilot shared ownership programs that are permissible today under part 91. Because these programs provide safety benefits, the FAA should facilitate the emergence of these forms of small aircraft ownership and operation by clearly describing in the rule and in related guidance materials activities under such programs. This commenter suggests specific final rule preamble language that would clarify that the intent of the rule is not to cover the types of operations described by the commenter. In contrast, The New Avex, Inc., (AVEX) states that the proposal is short sighted because it excludes the opportunity for individuals to share ownership of light, single-engine turboprops. Similarly, NATA and Bombardier Business Jet Solutions, Inc., (Flexjet) understand that some systems of aircraft ownership and use have been created, or soon will be created, that involve only owners that intend to act as the pilot during the owner’s use of the aircraft. Some of these programs may include elements commonly found in fractional ownership programs, such as multiple owners of an individual aircraft, a single aircraft manager, and a dry-lease pool of multiple aircraft. Although these programs may technically fit the applicability requirements of subpart K, these commenters do not believe that such programs should be subject to subpart K. According to the commenters, a program that consists solely of owners that will always be the pilots when they use their aircraft is likely to appeal to a far different owner than would the fractional ownership programs that were the focus of FOARC’s and FAA’s review. Such a program does not require the enhanced provisions of subpart K and would more appropriately be regulated under existing regulations. SAMA, NATA and Flexjet believe that the fundamental difference between a pilot-owner program and fractional programs as envisioned by subpart K is that the program manager in a pilot- owner program is not responsible for providing any pilots. One of these commenters recommends excluding exclusively pilot-owner programs from subpart K by revising the definition of fractional ownership program management services in proposed § 91.1001(b)(7). Under this recommended definition, subpart K would apply if the manager provided even a single pilot to any aircraft owner. However, if one of the owners served as the pilot in all program operations, the program would not be subject to subpart K. Another commenter recommends amending § 91.1001(b)(7) to include ‘‘the offering or provision of flight crews’’ as well as providing related guidance material that would apply subpart K only to shared ownership programs where the program manager offers or provides the flight crew. VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54526 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations Similarly, AOPA states that, while there is a presumption that subpart K operations include or require a professional flight crew provided by the program manager, this is not specifically stated in the regulation. Therefore, AOPA proposes that a sixth criteria be added under § 91.1001(b)(1) to state the requirement that professional flight crew services must be provided by the program manager. In support of this sixth criteria, AOPA also proposes that § 91.1001(b)(7) be further defined to include a provision for a professional flight crew. AOPA believes that the development of subpart K did not envision or intend to regulate smaller piston powered single- and multi-engine aircraft that otherwise meet the five criteria of § 91.1001, but do not use professional program pilots and that providing a flight crew is an important distinction between a multiple aircraft ownership arrangement versus a fractional ownership program. The Lawyer Pilots Bar Association states that the NPRM clearly intends to apply to fractional programs in which paid professional crews are employed to fly the aircraft. This Association says that the NPRM was not intended to apply to limited co-ownership arrangements of small aircraft that do not involve a management company and in which one or more of the co-owners are commercial-pilots and provide the piloting. According to this commenter, the rule is not clear whether pilots may participate as owners-pilots in subpart K fractional programs without being subject to the increased crew requirements while they are piloting their co-owned aircraft for their own personal and business transportation. The commenter urges the FAA to make the final rules of subpart K clear so that a pilot co-owner may participate in a fractional ownership program without having to meet the additional crew requirements. Eclipse Aviation mentions that proposed subpart K sets forth very specific crew pairing, experience, flight, duty and rest time requirements, and that for the owner-pilot, many of whom will be qualified to conduct single-pilot operations, the crew pairing requirements of proposed § 91.1055 are unnecessary. Further, for the single- pilot operator, or one who chooses to utilize a second in command (SIC), either by insurance or regulatory necessity, or simply for the sake of added safety, the experience, training and testing, proficiency, flight, duty, and rest time provisions of proposed §§ 91.1053, 91.1057, 91.1059, 91.1063, 91.1065, 91.1069, 91.1081, and other related sections are overly burdensome. Clearly, these safety provisions are appropriate for true fractional program operations. The traditional experience, training, testing, proficiency, flight, duty and rest time provisions, as well as the other safety related provisions of part 91 are sufficient for owner-operated personal or business flights. FAA Response: The FAA agrees that the proposed applicability section and definitions do not adequately delineate fractional ownership programs intended to be covered by subpart K from other shared aircraft programs or aircraft management programs conducted under part 91. These include operations such as traditional management companies providing services to aircraft owners absent the dry lease exchange provision of subpart K; joint ownership, time- share, or interchange operations under § 91.501; flying clubs; or other shared aircraft ownership options. Each shared ownership arrangement should be reviewed on a case by case basis to determine the appropriate regulatory requirements. The FAA has amended § 91.1001 to more clearly define the elements of fractional ownership programs and the aviation services provided under those programs. This includes the provision, furnishing, or contracting of crews and the training and qualification of crews and other personnel, as suggested by some of the commenters. The FAA disagrees with comments that a pilot co-owner should be allowed to participate in a fractional ownership program without having to meet the additional crew requirements. A fractional owner who desires to act as a flight crewmember on a program flight may do so only if the owner meets the pilot experience and qualification requirements of subpart K and is designated as a crewmember for that flight. These pilot requirements are necessary to maintain the safety and integrity of the fractional ownership programs and protect the property interests of all owners in the program. Some of the commenters on this issue address a situation in a shared aircraft arrangement where the owners do pilot their own aircraft and may use management services for scheduling and maintaining the aircraft or providing occasional pilot services such as flight instruction. These types of programs might more appropriately fit the definition of a flying club or other ownership option not subject to this rule. Likewise, traditional management companies and other management arrangements may not meet all of the definitional elements of a fractional program under subpart K, i.e., dry lease aircraft exchange arrangement, provision of pilots and other crewmembers, etc., and therefore would not be subject to regulation under subpart K. The FAA recognizes that some entities have marketed or otherwise referred to themselves as ‘‘fractional ownership’’ programs prior to this rulemaking, but do not meet all of the elements of the new regulatory definition. The FAA recommends that such programs discontinue the use of the term ‘‘fractional ownership’’ to avoid confusion. Runway Length Required for Landing (§§ 91.1037 and 135.385) GAMA, NATA, Flexjet and an individual support the proposed rule changes, stating that they would not reduce the margin of safety for operations of fractionally owned aircraft under part 91 or operations under part 135. The proposed runway length requirements provide an adequate margin of safety for the reasons stated in the NPRM. Spirit Aviation and NATA support the change from requiring the airplane to be capable of landing within 60 percent of the available runway length to 85 percent of the available runway length because of the advancements in technology. Spirit Aviation states that § 135.385 was promulgated before the development of pavement standards at airports and landing strips. In addition, the development of aircraft braking and other performance systems have made the 60 percent factored landing distance requirement antiquated and unnecessary. As reasons to change the requirement from 60 to 85 percent, NATA also mentions improvements in brake certification, changes in the method of calculating Aircraft Flight Manual (AFM) landing distances, and changes in landing distance information for different runway conditions contained in the AFM. Spirit Aviation and NATA also state that the proposed changes to § 135.385 would enable part 135 operators to better compete with part 91 operators. Spirit Aviation, a part 135 operator, comments that the proposed changes would enable it to more effectively serve its clientele, as well as compete fairly with part 91 competitors. This operator argues that the experience of its pilots, as well as the quality of its training is equal if not superior to that of the corporate aviation community. Spirit Aviation claims that all aviation safety data covering the previous decade show that accident rates under part 91 and part 135 have been nearly identical. NATA, a FOARC member, (as well as Flexjet) supports the justification VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54527 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations provided in the preamble for the proposed change in runway length. This commenter states that the proposed 85 percent runway length dispatch rule provides a comfortable safety margin for 91 subpart K operations and much needed relief from a redundant and unnecessary restriction for eligible part 135 on-demand operators. NBAA and New World Jet Corporation (NWJ) support the 85 percent margin, but only under certain conditions. NBAA, a FOARC member, supports the proposal as an available planning option only under optimum conditions for both fractional aircraft ownership operations and for qualified commercial on-demand operations conducted under part 135. NWJ notes that daylight operations, an experienced crew, and glide slope guidance on the landing runway are examples of conditions meriting the 85 percent runway margin. To maintain an even playing field and level of risk, specific guidance should be provided to the FSDO Inspectors on how to qualify operators according to these conditions. This commenter believes that without such conditions some operators may be too aggressive when applying this rule. The Teamsters quote from the NPRM, ‘‘Aviation safety data indicate that the landing accident rates under part 91 and part 135 during the previous twelve- year period were nearly identical.’’ The commenter asserts that the NPRM in effect provides no justification for changing the 60 percent rule, arguing that the quoted data, if true, argues more for the safety record of part 91 operators than of part 135 operators. One commenter states that the FOARC’s proposed change to runway length does not respect the existing industry best practices regarding the use of thrust reversers. An Aircraft Flight Manual (AFM) typically determines landing distance without the use of thrust reversers. An operator under current part 91, attempting to meet minimum compliance, could land within 85 percent of the effective runway without thrust reversers installed or with the thrust reversers deferred in accordance with an MEL. But this would not be in accordance with the best practices of the fractional program industry. According to the commenter, a reputable fractional program operator would never think of dispatching a pilot into a runway with only a 15 percent margin of error without operable thrust reversers. However, the proposed rule would allow this under subpart K of part 91 and under part 135. The commenter states that several on demand air taxi operators that do not have thrust reversers installed might require pilots to land at the minimum allowed by regulation. If air taxi operators want to land on such runways, this commenter suggests that they have the aircraft manufacturers include reverse thrust in the AFM landing data as long as such data can comply with the provisions in 14 CFR 25.125. These provisions state that aircraft manufacturers may use reverse thrust to calculate landing data if ‘‘[reverse thrust] is safe and reliable; is used so that consistent results can be expected in service; and is such that exceptional skill is not required to control the airplane.’’ The commenter also offers the following example: ‘‘* * * when I land at KHXD I can typically stop the Cessna Citation Excel I fly in 2400 feet using reverse thrust. The AFM data indicates that the landing distance should have been 3090 feet.’’ The commenter attributes the difference to the use of reverse thrust because he duplicated all other conditions that the AFM specifies. Two neighborhood associations, EHANAC and Friends of Sunset Park Neighborhood Assoc., submitted comments stating that they oppose the proposed 85 percent rule for part 135 operations because they believe it will create a grave safety hazard at East Hampton Airport, which does not have runway safety areas. Similar concerns were raised by other commenters. North Westdale Neighborhood Association and Santa Monica Airport worried about the impact of increased traffic at the Santa Monica airport and other similar small airports if the proposed changes to part 135 are imposed. These commenters state that the reduction of the landing runway length required under the 60 percent runway rule will increase access by part 135 business aircraft to thousands of additional airports and increase the weight/size capacity of existing aircraft at many general aviation airports. One commenter states that the proposed 85 percent rule would carry a great risk because it would allow large jets to land at airports where homes and businesses, including gas stations, are only 100 feet from the runway. Another commenter states that this broad change in the regulation is being proposed without considering the environmental impact or the opinions of the general public. For example, Santa Monica Airport (SMO) has a runway with no safety areas and the runway is no more than 5,000 feet long. Under the proposed change, larger jets requiring more runway length will now be allowed to land. Even though the airport has noise restrictions, any jets that meet the noise abatement requirements will be allowed to fly over nearby homes and businesses, stretching the parameters of safety to the limit. PASS, an EJA pilot, and an individual mention the existence of several overruns while using a 60 percent margin as a reason to oppose the change to an 85 percent margin. One individual commenter states that currently several fractional operators utilize part 135 landing requirements (60 percent). To the best of this commenter’s knowledge, each of the fractional operators and many part 135 operators have had overrun incidents utilizing the current 60 percent rule. Based upon this history, the commenter does not believe it is wise to further reduce the safety margins for required runway lengths. An EJA pilot states that regardless of FOARC’s assumptions of pilot techniques and brake wear, there are pilots who fly the airplane at speeds above VREF (which is the designated landing approach speed) across the landing threshold with worn brakes. This causes a dramatic increase in landing distances, well beyond that recommended by the FOARC. The commenter concludes that there is not enough safety margin available using the 85 percent rule and recommends that the 60 percent rule be applied to fractional operators. A pilot states that while he can fully appreciate the evidence presented by the FOARC committee for changing the ‘‘60 percent rule’’ to 85 percent, he has serious reservations about allowing a reduction below 85 percent as proposed §§ 135.23(r) and 135.385(g) would allow. The commenter believes that even with the stipulated Destination Airport Analysis procedures, the human factor for error will remain and is not quantifiable. Recent part 121 accidents show that landing accidents still happen under what is supposed to be more stringent regulations. The commenter states, ‘‘Let’s not deny our passengers, whether he/she is a charter customer or fractional owner, the extra margin of safety that 15 percent affords.’’ Executive Jet Aviation, Inc., (EJA) states that the proposed rule needs to be clarified to ensure that while the Destination Airport Analysis program contained in the operations manual must be approved, the operations manual itself does not require approval in that it is an accepted document. Additionally, EJA states that the method of approval (operations specifications) should be indicated. Kaiser Air, Inc. suggests that § 135.385 (f) (1) and (2) be amended to use consistent terminology (for example, VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54528 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations ‘‘still air’’ vs. ‘‘probable wind’’ and ‘‘most favorable’’ vs. ‘‘most suitable.’’) FAA Response: The FAA has studied the discussion in the NPRM preamble, the comments received on proposed § 91.1037 and the proposed changes to § 135.385, the background of the runway limitations for various types of operations, and the relationship between the performance rules in the certification standards and the landing and takeoff requirements in the operating rules. Based on this review, the FAA has decided to modify the proposed 85 percent requirement and to withdraw the proposal to allow a higher takeoff weight than would be permitted under the 85 percent standard if the operator prepares an approved Destination Airport Analysis. The FAA has determined that the arguments presented in the NPRM preamble for reducing the current part 135 safety margins indicate a misconception regarding the basis and evolution of the current landing distance requirements. The landing distance margin requirements contained in the operating rules applicable to large transport category airplanes are intended to take into account those items that are not included or are not fully addressed in the part 25 airplane type certification landing distance requirements used to determine the landing distances provided in Airplane Flight Manuals. These factors include steady-state variables that are not required to be taken into account in the landing distances determined under part 25, differences in operational procedures and techniques used in actual operations from those used in determining the part 25 landing distances, non steady-state variables, and differences in the conditions forecast at dispatch and those existing at the time of landing. Examples of each of these categories include: Steady-state variables Non steady-state variables Actual operations vs. flight test Actual vs. forecast conditions Runway slope ................................ Wind gusts/turbulence .................. Flare technique ............................. Runway or direction (affecting slope). Temperature .................................. Flight path deviations ................... Time to activate deceleration de- vices. Airplane weight. Runway surface condition (dry, wet, icy, texture). ....................................................... Flight path angle ........................... Approach speed. Brake/tire condition ........................ ....................................................... Rate of descent at touchdown ..... Environmental conditions (for ex- ample, temperature, wind, pres- sure altitude). Speed additives ............................. ....................................................... Approach/touchdown speed ......... Engine failure. Crosswinds .................................... ....................................................... Height at threshold Speed control. Although this is not intended to be an exhaustive list of variables to be considered, any program to reduce the current landing distance margins, for example, through the use of a Destination Airport Analysis, should address at least these items, and should be substantiated by actual operational landing data. No evidence exists to show that the current landing distance margin required by § 135.385 was established to compensate for deficiencies in predicting landing performance in the 1930’s and 1940’s that have since been rectified. One of the primary difficulties in establishing a safe landing distance margin, both now and at the time the landing distance limitations were originally developed, is that it depends on forecasting the landing conditions at the time of dispatch. The landing conditions must be forecast at the time of dispatch because the landing distance limitation is applied as a limitation on the allowable takeoff weight at the time of dispatch such that a safe landing can be made at either the destination or alternate airport. Safety margins are necessary to allow for differences between the conditions forecast at the time of dispatch and the conditions existing at the time of landing. In addition, since the actual landing distance achieved depends on pilot technique and environmental conditions (for example, crosswinds, gusts), the safety margins must allow for variations in these parameters. Lastly, the procedures and techniques used in flight tests of transport category airplanes to determine AFM landing distances differ from those used operationally (notwithstanding the requirement in § 25.101(f) that states that ‘‘changes in the airplane’s configuration, speed, power, and thrust, must be made in accordance with procedures established * * * for operation in service’’). The flight tests to determine landing distances under § 25.125 are generally treated as demonstrations of the maximum performance (i.e., minimum landing distance) that can possibly be obtained within the constraints of the certification requirements. Especially for large transport category airplanes, but also for many smaller transport category airplanes, the landing distance safety margins required by parts 121 and 135 are relied upon to provide realistic landing distances for use in the operating environment. FAA policy does not permit consideration of the effect of thrust reverse in calculating landing distances. Part 25 allows means other than wheel brakes to be taken into account if that means is safe and reliable, is used so that consistent results can be expected in service, and is such that exceptional skill is not required to control the airplane. Nevertheless, the FAA has not found thrust reversers reliable enough to allow landing distances to be based on their use. This policy provides some additional safety margin for airplanes with reversers that are operable and used in combination with (not in lieu of) maximum braking from wheel brakes and spoilers. If the FAA were to allow the use of reverse thrust as a condition for using, for example, an 85 percent factor for calculating landing distances, the result would be to assign an arbitrary performance capability to reverse thrust, which may or may not be met by different airplane/engine/reverse thrust combinations. Also, it would be inconsistent with the treatment of reverse thrust by the FAA for airplane type certification purposes, which has not allowed landing distances to be based on the use of reverse thrust. In regard to the NPRM discussion of improved airplane certification guidelines, many of the guidelines referenced as improvements either date back to the era when the 60 percent rule was implemented or were put in place to limit the use of potentially hazardous flight test techniques to demonstrate short landing distances. For example, the limitations on approach angles and touchdown rates of descent were instituted in response to the steep approaches and hard landings used to VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54529 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations obtain shorter landing distances. Although that type of flight test demonstration of maximum performance is no longer considered acceptable, the methods of determining the resulting landing distance parameters used to calculate the AFM landing distances still result in the same distances as had been obtained with that type of demonstration. Therefore, although the risk in flight testing has been reduced and any further deterioration in safety margin prevented, landing distances atypical of actual operations are still being achieved under part 25. This holds true for all part 25 airplanes, independent of size or intended type of operation. The claim that improvements in certification guidelines have reduced the need for the current part 135 (or part 121) safety margin is incorrect. The current certification guidelines for transport category airplanes were established assuming the use of the 60 percent rule, which ensures a margin of safety consistent with the number of variables and the degree of variation that might occur in actual operations. For example, in certification of one large transport category airplane, data showed that the safety margin would only allow for either a rate of sink at touchdown of no less than 3 ft/sec, a glideslope of no less than 2 degrees, or a speed no more than about 10 percent higher than the designated approach speed. In this case, the 60 percent margin would be entirely used up for a rate of descent at touchdown of 4 ft/sec, a glideslope of 2.5 degrees, and an approach speed 5 knots higher than the no wind approach speed, all of which may be reasonably expected to occur in operational landings. A table similar to that shown in the NPRM, but highlighting issues that may result in longer landing distances, illustrates the necessity of an adequate operational safety margin: Certification criteria Operational consideration Effect on safety margin 3.5 degree glideslope angle ............................... 2.5 to 3 degrees typical ................................... Actual landing distance will be longer than calculated landing distance. 8 ft/sec touchdown rate of descent .................... 2 to 4 ft/sec typical ........................................... Actual landing distance will be longer than calculated landing distance. Assumes all approach speed additives bled off before reaching the 50 foot height. 5 to 10 knots exceedances not uncommon .... Actual landing distance will be longer than calculated landing distance. Longer flare distance (‘‘float’’) .......................... Actual landing distance will be longer than calculated landing distance. Less than full braking effort ............................. Actual landing distance will be longer than calculated landing distance. Delays in obtaining full braking configuration .. Actual landing distance will be longer than calculated landing distance. Higher temperatures not accounted for (tem- perature accountability not required). Actual landing distance will be longer than calculated landing distance. Downhill runway slope not accounted for (run- way slope accountability not required. Actual landing distance will be longer than calculated distance.distance Icy, slippery, or contaminated runway surface Actual landing distance will be longer than calculated distance. Airplane heavier at time of landing than pre- dicted at time of dispatch. Actual landing distance will be longer than calculated distance. Airplane higher than 50 feet over the thresh- old. Actual landing distance will be longer than calculated distance. Airport pressure altitude higher than predicted at time of dispatch. Actual landing distance will be longer than calculated distance. The NPRM preamble states that if the 60 percent requirement were necessary for part 91 operations, business jets operated under part 91 should have a higher rate of runway overshoot events than on-demand operators have under part 135. The preamble states that such a difference has not been observed, and that landing accident rates under part 91 and part 135 have been nearly identical during the previous 12-years. The preamble cites a report prepared by Robert E. Breiling Associates of Boca Raton, Florida. The report concludes, ‘‘it would appear that the 40 percent safety factor in present use for FAR 135 is excessive. A factor based on actual aircraft performance on contaminated runways with the inclusion of a 10 percent to 20 percent safety factor would be more appropriate.’’ However, a closer look at the Breiling report reveals that 73.8 percent of all business jet accidents/incidents occurring in the landing phase involved part 91 operations, while 26.2 percent involved part 135 operations. Accident/incident rates cannot be inferred directly from this information, however, as the number of operations conducted under these respective operating rules is not known. Additional problems in trying to draw conclusions from generalized accident statistics like these are that: (1) Many part 91 operators apply part 135 landing distance margins even though they are not required to do so by regulation, and (2) most operations are conducted on runways that are longer than the minimum length necessary to comply with the landing distance limitations. In 1985, there was a fatal landing overrun of a Lear 24, operating under part 91, at Catalina Airport on Santa Catalina Island, Avalon, California. The runway length at Catalina Airport is 3,240 feet long. Without any safety margin, the Lear 24 needs a landing distance of 3,100 feet at the conditions present in the accident. If the 60 percent rule were applied, a landing distance of 5,167 feet would have been required. As a result of the accident, the NTSB recommended that the FAA issue an operations bulletin directing general aviation safety inspectors and accident prevention specialists to urge operators of transport category airplanes to use safety margins consistent with those required by part 135, or at least a margin consistent with the performance of the emergency brake system on the airplane. The FAA responded to the Board’s safety recommendation by issuing Operations Bulletin 86–2, which described the above accident and directed general aviation safety inspectors and accident prevention specialists to take actions in accordance with the Board’s recommendation. (This information appears in the current issue VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54530 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations of the General Aviation Safety Inspector’s Handbook, Order 8700.1 Change 9, as Paragraph 19 in Volume 2.) The NPRM notes that a reduced margin would allow a substantial expansion of opportunities for on- demand operators, particularly at airports with a single short runway. The FAA does not believe that the effect would be as large as the NPRM suggests. Although it depends on the specific airplane’s performance capabilities, the takeoff distance requirements are usually more limiting than the landing distance requirements, even under the ‘‘60 percent rule.’’ For operations predicated on the use of a single runway, a reduction in the landing distance required would not ensure the viability of an operation into an airport. The airplane may not be able to make a subsequent takeoff, or the allowable takeoff weight may be significantly below the weight at which the airplane landed. For example, in the case of the accident at Catalina Island noted previously, if the airplane had landed safely, it would not have been able to take off again at the same weight because it would have needed a longer takeoff distance than was available. Generally, unless the purpose of the flight was to drop off payload, the allowable takeoff weight will need to be higher than the weight at which the airplane landed due to the need to load additional fuel for the return trip. Based on its consideration of the above issues, the FAA has made changes in the final rule that maintain the level of safety provided by the current 60 percent rule, while providing operators an alternative for seeking approval to use a higher percentage under certain conditions that maintain the level of safety deemed appropriate for these types of operations. The changes are as follows: 1. The FAA withdraws the proposal to allow a landing distance in excess of 85 percent of the effective runway length if appropriate planning, documented in an approved Destination Airport Analysis, shows no compromise of safety. The FAA has determined that planning for landing distances in excess of 85 percent of the effective runway length would not provide an adequate margin of safety. 2. The final rule requires that both fractional ownership programs under subpart K of part 91 and operations conducted under part 135 must, for planning purposes, show that a turbine engine powered large transport category airplane is able make a full stop landing at the intended destination airport within 60 percent of the effective length of the runway. This maintains the safety level provided by the current 60 percent in part 135 and codifies for fractional ownership programs the FAA’s recommendation in Operations Bulletin 86–2 that general aviation operators of transport category airplanes use safety margins consistent with those required by part 135. 3. The final rule modifies the 85 percent proposal. Fractional ownership program managers under subpart K of part 91 and eligible on-demand operators under part 135 may apply for approval to plan for a full stop landing at the intended destination airport within 80 percent of the effective length of the runway if the program manager or certificate holder has an approved Destination Airport Analysis in its operating manual. The rule further modifies the alternate airport requirement and provides an 80 percent planning requirement at the alternate airport. The Destination Airport Analysis would establish additional runway safety margins to be applied when the planned landing weight would use more than 60 percent, but less than 80 percent, of the effective runway length, and would be based on analysis of such factors as pilot qualifications and experience, airplane performance data, airport facilities and topography, runway conditions, airport or area weather reporting, appropriate additional runway safety margins, if required, or any other criteria that may affect airplane performance. The Analysis must be approved by the Administrator, not just ‘‘accepted,’’ and the operation must be authorized in the management specifications or operations specifications, as applicable. Operational Control Ten of the comments on the issue of operational control question the concept, set out in proposed §§ 91.1009 though 91.1013, that a fractional owner is in operational control of an aircraft being operated in a fractional ownership program. These commenters question the NPRM concept of fractional owner operational control from a legal, practical, or technical viewpoint, or from some combination of these viewpoints. Since a significant number of comments, many from individual dispatchers, focus on the need to have qualified dispatchers as part of the operational control team, we have treated the dispatch issue separately in the following section. In questioning the legal basis for asserting that a fractional owner has operational control, the Teamsters cite a Federal court decision (Executive Jet Aviation, Inc. v. The United States) that held that for certain tax purposes fractional ownership operators are considered to be commercial rather than non-commercial operations. Many of the negative comments on the issue of operational control, including those by PASS, cite practical and technical reasons why fractional owners cannot be considered to have operational control. Examples are: 1. The International Brotherhood of Teamsters, AFL–CIO (IBT) states that ‘‘most fractional owners know little about the aircraft, of which they own a part, and they comprehend even less the responsibilities and accountability associated with aircraft airworthiness, safety of flight issues, or the knowledge and accountability associated with the release of or the redirection of a flight for operational or safety reasons.’’ 2. Jet Sales & Services, Inc. states ‘‘In the real world, it is naı¨ve to think that under any circumstances the owner of the fractional share has operational control other than the scheduling of his or her itinerary. In most cases, that fractional participant has never even seen the aircraft that they own or lease.’’ 3. The CAA states ‘‘it seems to us that, in practice, the fractional owner will have little or no involvement in the operation other than selecting a competent fractional ownership program manager.’’ 4. Style Air states that aircraft owners who operate under part 91 ‘‘are usually familiar with who crews and maintains their airplanes’’ and that often these owners ‘‘are involved with the decision making process for acquisition, budgets, equipment procurement, and employee issues.’’ Style Air states that ‘‘The fractional owner generally has no interest in the specifics of aircraft management,’’ and that ‘‘The benefit of the fractional program is to relieve the aircraft owner of these responsibilities.’’ 5. The Teamsters state that ‘‘the most telling of all parts of a fractional owner’s lack of the most basic operational control resides in the management agreements’’ and that the ‘‘so-called owner of an aircraft in the program cannot even sell ‘his’ share of ‘his’ aircraft to anyone without permission of the program manager.’’ FAA Response: Fractional ownership is based on models of traditional aircraft management or corporate aviation in which an owner directly or indirectly employs an individual or entity to provide aviation expertise and services. It is also based on principles of shared aircraft operations defined in part 91. In these models the owner may or may not have the aviation expertise to conduct the operation, but retains the operational control responsibility to ensure the operation is conducted VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54531 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations within the scope and context of the regulations. The size and complexity of the program, the number of owners, and elements such as the dry lease aircraft exchange and aircraft and crew positioning that are unique to fractional ownership programs limit the ability of an individual owner to direct the operation. Therefore, elements and conduct of the program must be established and agreed to by the owners and implemented by regulatory requirements and contractual agreement. Further, the FAA is defining operational control responsibilities and safety standards appropriate to these operations that enable an owner to effectively exercise operational control. The FAA disagrees with the CAA comment that the fractional owner will have little or no involvement other than selecting a competent fractional ownership program manager. An individual or a corporation has many options to meet their transportation needs. This could include airlines, charter, their own flight department or aircraft, fractional ownership, or others. Each option has benefits and limitations, including costs, operational control responsibilities, flexibility, risk levels, liability, and other factors. These criteria are weighed against the individual’s operational needs to make business decisions about which form or forms of air travel best meet their requirements. Once a person makes a decision to enter into a fractional ownership program as a transportation option, he or she then makes decisions as to the aircraft type, management company, program elements, safety compliance, and size of share to meet their individual travel needs. Moreover, fractional owners may use their own flight crew, provided they meet the requirements of the program and this rule. The fractional owner has the ultimate responsibility to ensure the safety of the operation and compliance with the rules. This regulation specifies the program requirements and assigns responsibilities for these requirements. Owners have a responsibility not only to choose a program and a program manager, but also to ensure that the tasks are completed in accordance with the regulations and the contractual agreements. The owners have a right to inspect and audit the records of program manager pertaining to the operational safety of the program and regulatory compliance. Enforcement of violations of the regulations could penalize the fractional owner, the program manager, or both, depending on the nature of the violation. Based on the comments, the FAA amended the operational control sections to clarify operational control responsibilities and delegation of task performance. See the discussion below under §§ 91.1003 and 91.1009–91.1013. Aircraft Dispatchers The Airline Dispatchers Federation (ADF), Teamsters, and at least 30 individual dispatchers state that a full aircraft dispatching system, as required under part 121, is needed to ensure adequate operational control. One individual commenter states that Executive Jet, the ‘‘founder’’ firm of fractional ownership, has, in the interest of the highest level of safety, instituted a dispatch and flight following system. This commenter included a list of operational control considerations (for example continuing weather evaluation, appropriate aircraft performance computations) that warrant requiring a qualified dispatcher. ADF believes that the NPRM’s greatest fault concerns operational control, defined by the FAA as the authority over initiating, conducting, and terminating a flight. Although many years of operating experience has shown that the safest aviation operations utilize positive operational control through the joint responsibility of the Aircraft Dispatcher and Pilot-in-Command (PIC), this NPRM does not require this type of operational control. As an example, perhaps one of the most important Federal Aviation Regulations governing airline operations is § 121.601(c), which requires the aircraft dispatcher, during flight, to provide the PIC any additional information that may affect the safety of the flight. This NPRM does not require this in-flight monitoring/ communication for Fractional Operators. NBAA opposes the mandatory use of FAA-certified dispatchers for fractional aircraft ownership programs. NATA states that commenters who recommend aircraft dispatchers in fractional ownership programs are not considering the safety record of these programs or the burden dispatcher requirements would place on small businesses entering the market. According to Alpha Flying, Inc., dispatcher certification would be an unfair burden on fractional programs which already would be required to comply with requirements far beyond existing part 91 and even some part 119/ 135 requirements. The FAA dispatcher exam also bears no relevance to today’s business and private aircraft management practices, especially those of fractional ownership. It should be noted here, again, that the practices of existing fractional ownership programs have led to the best safety record of any segment of aviation. FAA Response: The FAA agrees with the commenters that aircraft dispatchers provide benefits with respect to safety and efficiency. The FAA also supports the use of aircraft dispatchers in fractional ownership programs as a program option and safety benefit. However, the final rule does not apply a mandatory requirement for certificated aircraft dispatchers in subpart K. Certificated aircraft dispatchers and dispatch systems are currently required for part 121 domestic and flag operations. They are not required for any operation under part 91, part 135, or for supplemental operations under part 121. The final rule requires a flight locating system in § 91.1029 of subpart K, comparable to that required in § 135.79. Section 91.1029 further requires a system for scheduling and releasing program aircraft. The size and complexity of the operation will dictate the level of sophistication and adequacy of the system. In addition § 91.1049(e) requires that the program manager ensure that trained and qualified scheduling or flight release personnel are on duty to schedule and release program aircraft during all hours that such aircraft are available for program operations. The FAA recognizes that some companies have employed certificated aircraft dispatchers to accomplish these duties, however the final rule allows the flexibility for the program manager to determine the qualification of the scheduling or release personnel as appropriate to the aircraft, size and complexity of the operation, and the geographical area served. In all cases the program must provide adequate procedures for locating each flight, if a flight plan is not filed. Night Currency (§§ 61.57 and 135.247) Seven commenters (two individuals, NBAA, NATA, Flexjet, Kaiser Air Inc., and General Motors Air Transportation Section (GM)) that address the proposed changes to these sections generally support the proposed changes. Kaiser questions whether the words ‘‘requires more than one pilot’’ relates to type design requirements or operating rule requirements. An individual commenter suggests that the ‘‘preceding six months’’ requirement be changed to ‘‘seven months’’ to cover the possibility that a pilot might, under § 135.297, take a check ride one grace month early and the following check ride one grace month late. VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54532 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations FAA Response: In response to operator safety concerns, the FAA amended § 61.57(e) on April 30, 1999, to provide an alternate means of compliance for meeting FAA’s night currency requirement. This alternative allows operators to maintain currency by using both the aircraft and part 142 approved training programs. The applicability of the alternative is unclear, however, because in order to qualify for the alternate means of compliance, a pilot must ‘‘operate more than one type of aircraft.’’ Under this definition, operators are uncertain how to determine if a pilot ‘‘operates’’ more than one type of aircraft. The change to § 61.57(e) in this final rule clarifies the existing alternative and provides a second alternate means of compliance for pilots of turbine- powered aircraft that require more than one pilot and that meet additional experience requirements. The first alternative allows pilots to maintain night currency through the performance of three takeoffs and landings to a full stop over a 6-month period. The second alternative allows pilots to maintain night currency through the performance of 6 takeoffs and landings to a full stop in a simulator training program approved under part 142 of this chapter. The FAA believes these alternatives provide an equivalent level of safety for night flying operations and that because of the similar nature of operations and aircraft used, pilots used for on-demand part 135 operations also should be allowed to maintain night recency of experience using this alternate means of compliance. In response to the question about the meaning of ‘‘requires more than one pilot,’’ the FAA has changed the final rule to clarify that the requirements of §§ 61.57(e)(3) and 135.247(a)(3) apply to airplanes that are type certificated for more than one pilot crewmember and to pilots qualifying in each airplane type. The FAA has not changed the time frame for the ‘‘preceding six month’’ requirement to ‘‘preceding seven months’’ because the grace period requirement (§ 135.301(a)) does not apply to requirements tied to a preceding number of months. Security NBAA, AOPA and several individual pilots point out that while FOARC and therefore the NPRM did not address security issues, this rule should make recommendations concerning potential security measures that might be adopted in the wake of September 11, 2001. NBAA recommends caution and restraint in the deployment of new security regulations. AOPA recommends that any new security mandates for part 135 on-demand charter operations apply to operations covered under proposed subpart K. With the focus on safeguarding commercial carriers, many experts believe that private charter and corporate aircraft are now more vulnerable than ever at small airports that have virtually no security. Small airports lack measures like security fences, lights or guards; there is no security to guard parked planes; small planes could be stolen and loaded with dangerous chemicals; small planes can also skim treetops and avoid radar detection. Yet the FAA wants to increase business operations at small airports with these new rule changes. Several other commenters also raise the security issue. NATA does not think that this rulemaking is the appropriate situation for discussing security issues. According to the commenter, there needs to be an industry-wide, comprehensive examination of security issues. FAA Response: No new security requirements were proposed in the NPRM and no security requirements have been added to the final rule, because that would be outside the scope of this rulemaking. However, the FAA is working with the Transportation Security Administration, aviation associations, and airports to improve security procedures for general aviation and in the areas of airports that serve general aviation. Any new security requirements that would apply to fractional ownership programs would be issued by the Transportation Security Administration. International Operations NATA and Flexjet describe a problem concerning international operations under fractional ownership when there has been a change in ownership requiring changes in aircraft registration. Because current rules prohibit operations outside the United States under a ‘‘pink slip’’ (temporary registration), these commenters recommend that a more formal temporary registration system be established that would allow international flight. This system could use aircraft registration designees who could function in a manner similar to Designated International Representatives and Designated Examiners. FAA Response: The FAA does not agree that the registration function of the Aircraft Registry in Oklahoma City can be delegated to non-governmental persons as is done in other areas. International law forbids the operation of an aircraft outside the U.S. without an official registration certificate, so a temporary certificate would not be acceptable. Fractional owners who wish to travel outside the U.S. must be aware of this obligation and ensure that the aircraft being used for such a flight is properly registered. There are private businesses located in Oklahoma City that assist those who need to obtain a new aircraft certificate because of a change in ownership. These services are often used when there are changes in ownership of aircraft operated by part 119 certificate holders. FAA: Voluntary Disclosure Reporting Program NATA and Flexjet recommend that the FAA amend AC No. 00–58 to clarify that the FAA’s voluntary disclosure program ‘‘applies to fractional ownership program managers to the same extent that it applies to certificate holders, indirect air carriers, foreign air carriers, and production approval holders.’’ FAA Response: The FAA is considering changes to Advisory Circular 00–58, but any revision will not occur until after the publication of this final rule. This topic will also be addressed in the fractional ownership implementation planning. Illegal Commercial Use Marc Fruchter Aviation states that an issue not adequately addressed by the NPRM is the issue of share owners using their shares to provide illegal commercial aircraft travel for others. Fruchter Aviation suggests two additions to the rule language to address this problem. First, all solicitations for share purchases should be mandated to contain exact definitions of and explicit warnings about the legal and economic consequences of illegal commercial use of fractional share flights and the possibility of a forfeiture of insurance coverage should be detailed as well. Second, the rules should be strengthened to spell out penalties against the share owner and fractional provider should this activity occur. Significant penalties against both entities would go far to deter this practice. FAA Response: The FAA agrees there is a potential for illegal commercial use of aircraft being operated under fractional ownership programs. Section 91.1005 addresses this issue. In the final rule we have retitled the section from ‘‘Owner’s use of program aircraft’’ to ‘‘Prohibitions and limitations’’ and amended the text to more clearly state that a fractional owner may not use a VerDate jul<14>2003 16:49 Sep 16, 2003 Jkt 200001 PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 E:\FR\FM\17SER2.SGM 17SER2 54533 Federal Register / Vol. 68, No. 180 / Wednesday, September 17, 2003 / Rules and Regulations program aircraft to provide transportation to others for compensation or hire. In addition, we have added a new paragraph (c) to § 91.1005 addressing the sale or sublease of an aircraft interest by either a program manager or fractional owner. This paragraph would make it clear that if the sale or sublease of an aircraft interest would result in less than the minimum aircraft interest prescribed in § 91.1001(b)(10), then subpart K does not apply. Flights conducted for associated reduced share sizes are required to be conducted under part 121 or part 135, as appropriate, by a part 119 certificate holder. Further, the FAA added a new paragraph (c) to § 91.1001 to clarify that the rules of subpart K apply to persons who engage in programs meeting the new definitions of this subpart without first obtaining management specifications under subpart K. Any penalties for non-compliance with this rule and all other FAA rules are explained in 14 CFR part 13, subpart C, Legal Enforcement Actions. In addition, we note that any unlawful commercial operations may also be subject to enforcement action by the Office of the Secretary for violations associated with its economic licensing requirements. (See 49 U.S.C. 46101 and 46301.) Further, § 91.1013 requires each owner to sign an acknowledgment of the fractional owner’s operational control responsibilities, including compliance with management specifications and applicable regulations and penalties for non-compliance. Over-water Operations (§§ 91.509 and 135.167) Several comments were received on the proposal to revise part 91 and part 135 equipment requirements for over- water operations. NATA, Flexjet, and a flight operations manager state that they support the revision because the proven reliability of turbine engines shows that there would be no compromise of safety. Columbia Helicopters supports the provisions for part 91 because of the altitude requirement, but not for part 135. According to the commenter, the current part 135 provisions are for ‘‘extended over-water operations,’’ which is defined in 14 CFR part 1. (The definition in part 1 for ‘‘extended over- water operations’’ for aircraft other than helicopters is more than 50 nautical miles from the nearest shoreline; for helicopters it is more than 50 nautical miles from the nearest shoreline or from an offshore heliport structure.) The commenter states that the revision would make an exception to the part 1 definition and that such an exception should be done by exemption. The commenter believes that the change will jeopardize lives because any survivors of a ditching would have no means of surviving in the water until they are rescued. Two commenters support the amendments, but want stipulations or clarifications based on the type of engine. One of these commenters would change ‘‘turbine-powered aircraft’’ to ‘‘turbine-powered multiengine aircraft.’’ Since there are pressurized single engine turbine-powered aircraft in fractional programs, the commenter hopes that FOARC and the FAA did not intend to allow single engine turbine- powered aircraft to operate without app