Many times, an aircraft owner who is not fully utilizing the owner’s aircraft will lease the aircraft to maximize the use of the aircraft and to recover some of the aircraft owner’s overhead expenses. A lessee operating under a properly-structured aircraft “dry” lease is permitted to operate under the FAA’s non-commercial rules found at 14 C.F.R. Part 91 and is not required to comply with many of the more restrictive and costly requirements of 14 C.F.R. Parts 121 or 135, the Federal Aviation Administration’s rules that apply to commercial scheduled and on-demand aircraft operations. Also, the additional federal excise tax that would normally apply to commercial operations will not be due on the amounts paid by the lessee to the lessor under a properly structured dry lease, although sales tax is often assessed on the lease rate.
While these Part 91 leasing arrangements need to be structured and documented correctly, they quite often are not. Improper structuring, documentation, or operation can result in the FAA taking the position that the aircraft lessor is conducting operations that require a Part 135 certificate, and without such a certificate are illegal charter operations.
This course will provide details on the various FAA rules that have a significant impact on how businesses or individuals can utilize private aircraft, as well as how counsel can properly structure Part 91 dry-leasing arrangements and avoid the consequences of improper structure and conduct of illegal charter flights.
David T. Norton is a partner and head of the aviation practice at the law firm of SHACKELFORD, BOWEN, MCKINLEY & NORTON, LLP, in Dallas, Texas. He has an internationally recognized practice that encompasses a broad range of business aviation industry regulatory, transactional, tax, commercial dispute resolution, and general risk management issues. His clients include fortune 50 businesses and high-net-worth individuals operating complex jet aircraft to all kinds of aviation support businesses and individual pilots flying small aircraft, and everything in between.
Mr. Norton received his B.A. from the USAF Academy, his M.B.A. from Louisiana Tech University and his J.D., cum laude, from Southern Methodist University, where he was Editor-in-Chief of the Journal of Air Law & Commerce, published by the SMU Law Review Association. While his firm offers a broad array of legal services, Mr. Norton focuses solely on aviation law and has an internationally recognized practice that encompasses a broad range of business aviation regulatory, risk management, transactional, tax, and commercial dispute resolution matters. He actively participates in many business aviation industry-related committees and groups, including previously serving as Manager of the 2015 Fair Sales Tax Initiative for Texas Aircraft, LLC, a coalition that interfaced with the Texas Comptroller of Public Accounts and resulted in new statutory provisions designed to bring much more clarity and fairness to the assessment of sales/use taxes on aircraft in Texas; Industry Co-Chair of the joint FAA/Industry RVSM LOA Process Enhancement Team of the Performance-based Advisory Rule Marketing Committee and the subsequent related efforts to re-write AC 91-85; a member of the Applicability Working Group of the Federal Aviation Administration’s Part 135/125 Advisory Rulemaking Committee; and as the founding Chair of the National Business Aviation Association’s Domestic Operations Committee. He currently serves as a member of the American Bar Association’s General Aviation Committee; the National Air Transportation Association’s President’s Council, Air Charter Committee and Illegal Charter Task Force; the NBAA’s Tax Committee and Regulatory Issues Advisory Group and Chair of the NBAA’s Operational Excellence Strategic Focus Team; and as a member and Secretary of Texans for General Aviation. He is a past Chair of the Aviation Section of the State Bar of Texas and is an advisory board member for the Journal of Air Law & Commerce, published by the Law Review Association of the Southern Methodist University Dedman School of Law. Mr. Norton is a Life Fellow of the Texas Bar Foundation. He is also active in many community organizations, previously serving, for example, as Chair of the Board of Trustees of the Frontiers of Flight Museum, located at the Dallas Love Field Airport.
Mr. Norton was a regular commissioned officer in the U.S. Air Force from 1984 to 1993, serving primarily as a KC-10A pilot and aircraft commander. Before becoming a pilot, he also briefly served as a KC-135A navigator. Mr. Norton currently holds many civil certificates issued by the Federal Aviation Administration. He is an airline transport pilot (multi-engine land) with a DC-10 type rating, and a commercial pilot (single-engine land). He also maintains certification as a certified flight instructor, instrument, and multi-engine, as well as an advanced ground and instrument instructor.