FAA rule mandates aircraft reregistration

 - August 2, 2010, 5:27 AM

Starting this fall, U.S. aircraft owners will be required to reregister their aircraft after the FAA issued its final ruling on the matter last month. The agency issued an NPRM in 2008, which was approved in June by the Office of Management and Budget, and establishes specific certificate expiration dates over a three-year period for all aircraft registered before Oct. 1, 2010. 

The FAA, which maintains information on approximately 357,000 aircraft in its registry, says that nearly one-third are no longer eligible for registration due to old addresses or other registration errors, aircraft inactivity or disposal and/or revoked certificates. Registered owners are required to notify the FAA of these and other registration-related changes. Incorrect addresses are a particular problem, and the FAA believes as many as 45,000 aircraft registrations could be affected. According to the agency, many orders revoking an owner’s certificate of registration are returned as undeliverable, but the FAA must keep the aircraft in the system to prevent reassignment of the N number to a second active aircraft.

Trimming the Registry

The ruling–which takes effect in October–could result in the cancellation of more than 100,000 aircraft registrations over the next three years. “These improvements will give us more up-to-date registration data and better information about the state of the aviation industry,” said FAA Administrator Randy Babbitt. Along with establishing clear rules for canceling N-number assignments when a registration expires or otherwise ends, the new rule will also provide up-to-date information on aircraft ownership to law enforcement and other government agencies, as well as manufacturers, which rely on the accuracy of the FAA database. Under the new system, questionable or erroneous aircraft registrations are expected to drop from the current 36.5 percent to approximately 5.7 percent.

The rule establishes an expiration date for aircraft registration along with a mandated reregistration every three years. The first aircraft to be affected are those whose certificates were issued in March of any year, whose current registration will expire on March 31, 2011. Owners will be permitted to reregister their aircraft only within a specific 90-day window determined by the month in which the original registration certificate was issued. 

Owners with no changes on their certificates can complete the process online. For those with changes to submit, filing the application within the assigned window will enable the new registration certificate to arrive before the previous one expires. While owners have a 90-day window to submit their applications and the $5 registration fee, industry experts advise them to submit their documentation to the FAA as soon as possible in that period to give the agency time to process it and address any errors. For the initial March expiration, that reregistration window begins on November 1 and ends on January 31, to give the agency two months in which to process and mail the new certificates before the March expiration date.

The rolling reregistration process will continue for the next three years, until all aircraft have been reprocessed. For aircraft registered or reregistered after October 1, the expiration date will be three years from the last day of the month when registration occurred and will be printed on the new registration certificate. Owners with current addresses in the FAA database will also receive reminder notices before the scheduled expiration date of their aircraft’s registration. Owners who miss the close of their reregistration window will still have their applications processed, but the agency warns there may be a lapse in registration and authorization to operate the aircraft. 

For the first time, the FAA has established standard criteria for the cancellation of N numbers as a result of improper sale notification. Approximately 17,000 aircraft currently on the registry are reported as sold but have remained in a “sale reported” status for more than six months. The vast majority of those have had that status for almost 20 years. Without a process for canceling their N number, those aircraft could still operate under “Pink Copy” temporary authority at any time if an application for registration is made. 

Cancellation of N Numbers

Under the new rule, the agency will cancel the N number under the following criteria: if six months have passed since notification to the FAA of transfer and no application for registration has been filed; if one year has passed since the application for registration was made, but the applicant or successive applicants have failed to meet the registration requirements; or if six months have passed since an aircraft dealer filed evidence of ownership in accord with FAR 47.67 that did not meet registration requirements, and these requirements have remained unmet. If the N number is to be cancelled, the agency will attempt to notify the last registered owner, and the aircraft will be placed on the registry’s Web page list of aircraft pending cancellation. Once cancellation is complete, the N number will  be unavailable for assignment for five years.

For financial institutions dealing with large numbers of aircraft in their portfolios, the new ruling is a potential nightmare. As they begin to prepare for the onslaught some are considering adding staff to complete the applications in the allotted times. “We have about 130 airplanes coming up for January registration,” said Amy Rhodes, associate general counsel for GE Capital’s corporate aircraft finance division, at the Corporate Aircraft Transactions conference in June. “We’ll be happy if we get the first half done in those first 15 days. This is going to be a full-time job at GE for a few people for the next three years to get through the whole portfolio.”