EBACE Convention News

EBAA Struggles To Get Consensus on Fractional Rules

 - November 28, 2006, 11:12 AM

As the debate within EBAA has raged over the past 12 months, opponents of the IWG-BAO’s recommendations for a European version of the Part 91K rules for fractional ownership have complained that the increased flexibility that these allow would give an unfair competitive advantage. They have contended that fractional providers, like the giant NetJets group, could actually kill off the independent executive air charter industry in Europe and they are adamant that EBAA should do nothing to help U.S. firms in this way.

The charter business in Europe is composed mainly of small- and medium-sized firms while NetJets is backed by the financial might of the U.S. Berkshire Hathaway group. But at least everyone agrees this is an economic issue, not a safety one.

Nonetheless, the dispute has resulted in deeply polarized positions and in NetJets being cast as a domineering bully in the marketplace. Several months ago, a whispering campaign began, alleging that NetJets Europe’s Portugal-based operating company, NetJets Transportes Aéreos (NTA), is illegal under European Commission transport rules on the grounds that it is not owned by European citizens. However, the critics produced no tangible evidence to substantiate their accusation, nor have they ever filed an official complaint to this effect. In fact, the confusion about NTA’s status appears to have been largely sparked by a misleading statement on the NetJets Europe Web Site, which the company has subsequently corrected.

EBAA chief executive Brian Humphries said that the association’s board has been given “assurances” by NetJets that its operation does meet EC ownership requirements. Some members of the board still had questions on the issue and so have sought further clarification as they debate whether to accept these assurances. Humphries said that he hopes the matter will be finally closed at the next EBAA board meeting on June 22. He added that NetJets has not been required to produce legal documents proving its ownership status because EBAA does not regard itself as being qualified to “police” the matter to this extent.

“If we have the assurance that a company meets the requirements of the EU on ownership than that should be the end of the matter. Anyone who doesn’t accept this should go to their national authority and lodge a complaint. It is not for us [EBAA] to do that,” Humphries concluded.