NBAA 2010 was a great experience for me. This having been my first show, I was able to learn so much about our industry and the people who are involved with it. Several of us from our organization participated in the Tax and Regulatory conference during the convention to stay on top of issues that are important to our clients. We always advise our clients to employ the help of legal, tax and insurance professionals, but it is important for us to understand the issues they face. Two issues discussed during the conference that really stood out were FAA re-registration requirements and making sure to match insurance amounts against the current fair market value of your asset. Included in this blog post are links to articles written by industry professionals on each topic. There are several great aviation attorneys and insurance experts in our industry and we always provide multiple names when giving referrals. The people whose articles we have included spoke on the respective topics at the Tax and Regulatory conference and these are just two of the leading experts for our industry in their respective fields.
The first issue that I want to highlight is FAA re-registration. A new process has recently been instituted and mandated and as of October 1, 2010 all aircraft owners who have purchased their aircraft before October 1, 2010 have to re-register their aircraft with the FAA on a pre-determined schedule. It is crucial to make sure you follow the FAA guidelines and time frame regarding this new policy. All aircraft that have been initially registered after October 1, 2010 will have to re-register in three years and the expiration date will be clear on your first registration. One of the presenters at the tax conference was Joanne Barbera of Barbera & Watkins, LLC. Please follow this link to read a fact sheet about re-registration that she wrote that will give you much more detailed information about the issue and provide an easy to read schedule for registration. Don’t forget to re-register or it won’t be wheels-up until you do!
The second issue that seemed very important in today’s environment of decreased aircraft value is insurance. It is necessary to have insurance for your aircraft, but what was made clear at the tax conference is how important it is to have the right amount of insurance. As your aircraft value changes, it is important to adjust the amount of coverage you carry. If your plane were to incur major damage to a degree that it might otherwise be scrapped and the aircraft is over insured, the insurance company will have an incentive to repair the aircraft, rather than scrap the aircraft. So be sure to adjust your insurance value to the current market value of your aircraft each year. Please follow this link to an article that Stuart Hope of Hope Aviation Insurance, one of our presenters at the conference, wrote for Business Jet Traveler about the six steps to buying the right policy. Step 3 specifically relates to the issue I’ve brought up.
I hope this information helps you regarding some of the big issues related to aircraft ownership that we found to be of significant importance during the NBAA 2010 Tax and Regulatory conference.