Trust, as you know, keeps any business going. Being fair in dealings and maintaining transparency in operations are the keys to cracking golden deals. Transactions pertaining to aircraft call for trusted aircraft trust companies to coordinate smooth sales and purchases among sellers and buyers. An aircraft owner trust establishes the legitimacy of business and helps a great deal in keeping malpractice at bay.
The idea of establishing an aircraft trust is rooted in selling products made by U.S. manufacturers to non-citizen buyers. Previously, the U.S. airlines were owned by more than one foreign equity partner and having a trust helped in sponsoring and leasing them out. Later, with the advent of globalization, the aircraft industry boomed, and in the current scenario, even smaller companies have started to deal in aircraft transactions. Therefore, it becomes essential to have a trustworthy agency to monitor and facilitate aircraft transactions.
The Federal Aviation Authority (FAA) is the apex organization that ensures fair play in the aviation business. The members of an FAA aircraft owner trust, or trustees, need to abide by the rules and regulations laid down by the trust. However, prior to this, they need to apply and go through a process of documentation to be a member of the trust. The points listed below are the credentials that applicants need to provide:
- Any proof of personal identity issued by the state, like a passport.
- Insurance-related documents that prove that the aircraft is being maintained according to FAA regulations.
- Copies of corporate documents (for foreign corporations only).
The Latest Clarification: The year 2013 witnessed intense reviewing of the FAA’s registering policies to recruit aircraft. Consequently, the FAA announced a policy clarification to ensure greater transparency in the aviation business. Accordingly, the FAA now keeps an eye on all the operating agreements and side agreements related to the transferring of rights to a beneficiary by a trustee. If there are no such agreements, then the member should provide adequate assurance based on the list of documents approved by the FAA. The latest policy clarification of 2013 makes it compulsory for trustees to provide the following information when requested for within two business days:
- Proof of identity of the person managing operations related to the aircraft.
- Proof of the current address of the place from where operations are managed.
- All records related to the aircraft and its maintenance.
- The usual location of the aircraft and place of operation.
The FAA also establishes that the documents mentioned below should be produced by the trustees within five business days:
- Records pertaining to the aircraft and its maintenance.
- The aircraft’s current airworthiness status.
- Information about the operator, crew and aircraft operations on specific dates.
The safety obligations levied upon trustees by the FAA are legally backed, and therefore all members need to abide by them duly. Thus, all trustees shall maintain the information related to the identity and whereabouts of the aircraft on a regular basis. It is also important for members or owner trustees to cooperate and respond to FAA enquiries in case of alleged safety breaches.
The coordination and cooperation among an FAA aircraft owner trust and the owner trustees help in building strong business relationships that are mutually beneficial. Thus, aircraft trusts serve as reliable sources of commercial transactions among buyers and sellers by getting authentic owners registered for aviation business in the country.