- 14 Jul 2021
- Andre Fodor
- Aircraft Ownership
Aircraft owners must be proactive to protect their aircraft ownership and operating information from public disclosure. James Janaitis, Counsel with Crowell & Moring’s Aviation Group, shares insights in this three-part series…
There are many companies and individuals that regularly monitor all publicly available aircraft ownership and operating information for purposes of selling or otherwise divulging that information to others. How can aircraft owners protect their privacy?
The persons who are interested in obtaining this information include vendors who are developing market intelligence, journalists looking for a juicy news story, or competitors seeking aircraft-related data that might evidence a major business transaction.
Fortunately, there are multiple scalable solutions to protect the identity of the owner of an aircraft from public disclosure and prevent the public tracking of aircraft movements. An aircraft owner must take intentional action to obtain this protection, and must weigh the cost to implement these solutions against the desired level of privacy.
All non-governmental aircraft must be registered with the Federal Aviation Administration’s (FAA) Civil Aircraft Registry (the FAA Registry). As part of the aircraft registration application an aircraft owner must provide the FAA with both its full legal name and an address where correspondence and notifications from the FAA can be received by the owner.
All of the information provided to the FAA on the aircraft registration application is uploaded to the FAA’s publicly available aircraft registration information database located at https://registry.faa.gov/aircraftinquiry/.
With a few keystrokes anyone can search this database and find the name and address of any aircraft owner using the aircraft registration number or other aircraft related data, such as its serial number.
Since the aircraft registration number is painted in large lettering on the tail of an aircraft and may also be provided by flight tracking software, even an unsophisticated party is able to quickly and easily identify the owner of an aircraft.
Publicly Available Information on Aircraft Owners
In addition to the aircraft registration, depending on the aircraft ownership, operation, and financing structure, the FAA may require that additional documents be filed with the FAA Registry.
Below is a list of these documents, along with a brief description of when they would need to be filed and the information contained in each:
Leases: In certain instances, particularly when using a financing lease or a long-term lease between unrelated parties, the lessor and lessee may elect to record the lease as a public document with the FAA Registry to provide a record of each party’s interests in the aircraft.
Although the parties may redact certain commercially-sensitive information (i.e. payment amounts, insurance limits, early termination payments, delivery and return conditions, etc.), this doesn’t apply to the parties’ names or other identifying information, including the parties’ contact information and the aircraft hangar location.
In certain circumstances owners of larger aircraft (greater than 12,500 lbs. maximum certificated take-off weight) may be required to file a lease with the FAA Registry’s ‘Technical Section’ to comply with the FAA’s truth in leasing requirements under 14 C.F.R. §91.23. However, for this type of filing, the FAA only retains basic information about the lease terms that is not available to the public.
LLC Statement: If the aircraft owner is an LLC, the FAA requires that the owner file a ‘Statement in Support of Registration of U.S. Civil Aircraft in the Name of an LLC’ (LLC Statement).
This form requires general information about the LLC, the name and US citizenship status of each member of the LLC, and the name, title, and US citizenship status of each manager or officer of the LLC. If the LLC is owned by one or more LLCs, separate LLC Statements must be filed for each LLC in the chain of ownership.
Security Agreement: In order to perfect a lender’s security interest in an aircraft, the parties must file the aircraft security agreement with the FAA. Similar to a lease, the FAA permits the redaction of certain commercially-sensitive information, but at a minimum an aircraft security agreement will include the parties’ names and contact information.
Trust Documents: In certain circumstances, particularly ownership of aircraft by non-US citizens or by a lender financing the purchase of the aircraft, the parties may transfer ownership of the aircraft to a trust.
All substantive documents related to the trust must be recorded with the FAA Registry as a public document, including the trust agreement and any aircraft lease or operating agreement transferring possession of the aircraft to a lessee or an operator.
At a minimum these documents will include the name of the trustee (a third party that maintains the trust), trustor (the party that directs the trustee and generally controls the trust), and their respective contact information.
Available Quickly and Cheaply
While the above documents are not accessible via an internet search like aircraft registration information, they are publicly available and easily obtained.
A member of the public can obtain copies of these documents by requesting them from the FAA Registry directly or through the use one of the many law firms, title companies or other vendors that will obtain any publicly available document filed with the FAA Registry within hours and for a minimal fee.
In addition to the FAA Registry, if the aircraft has eight or more seats (including crew), aircraft owners will generally register the purchase of the aircraft and any lease or security interests with the International Registry of Mobile Assets (International Registry) established pursuant to the Cape Town Convention. The International Registry doesn’t require the submission of documents like the FAA Registry, but does require the names of the parties and the type of interest being registered.
The information on the International Registry is available through a website search tied to the aircraft serial number. As is the case with public documents, numerous law firms and vendors such as aircraft title companies will perform these searches and provide near immediate results for a minimal fee.
Protecting an Aircraft Owner’s Information
Fortunately for aircraft owners concerned about the privacy of information regarding their aircraft ownership and operations, there are a number of solutions to mitigate those concerns.
With respect to aircraft ownership information, the owner can prevent their information from being easily accessible by maintaining the ownership of the aircraft in an entity that doesn’t include their name, which in most cases would be possible by utilizing a special purpose entity (SPE) or a trust.
Having outlined the information that is publicly available, next time we will discuss the strategies owners can take to prevent their information from being easily accessed, including an SPE and more. Stay tuned!
More information from www.crowell.com/practices/aviation
Read Privacy Considerations for Aircraft Owners (Part 2)
Read Privacy Considerations for Aircraft Owners (Part 3)
About the Author
Jim Janaitis is a counsel with Crowell & Moring’s Aviation practice group.
He focuses on helping Business Aviation clients navigate transactions and the complex regulatory challenges that come with owning, operating, and chartering aircraft.
He has extensive experience in the sale, purchase, leasing, and financing of aircraft, and implementing ownership and operational structures tailored to each individual client’s goals.