EBACE Convention News

U.S. Charter Thrives Post-Part 91K, Says Bolen

 - November 28, 2006, 11:40 AM

A decade ago, many U.S. charter operators were voicing the same anxieties that their European counterparts are expressing today in their opposition to proposed new part-private part-commercial operating rules for fractional ownership. In short, they too believed that the major fractional providers would wipe them off the face of the earth, having been handed an unfair competitive advantage.

But 10 years after the adoption of U.S. Part 91K rules, the country’s U.S. executive charter sector is alive and kicking, according to Ed Bolen, president of the National Business Aviation Association. “Part 91K allowed us to modify fractional ownership and charter to allow a level playing field that is good for everyone,” he told EBACE Convention News. “It was an opportunity to rationalize the way fractional ownership is regulated, and also to rationalize some of the irrational things about the way charter was regulated.”

“Fractional ownership and charter does compete in a sense but they are also very complementary,” Bolen argued. For instance, NetJets Europe is understood to have spent around $25 million buying additional charter capacity to cover the flight requirements of its owners last year.

In Bolen’s view, European firms are beginning to comprehend the U.S. understanding of what constitutes a private aircraft operation. However, he also acknowledged that the transatlantic ill-feeling caused by the debate would be eased significantly if U.S. authorities would adopt a more user-friendly approach to foreign operators.

“I am guardedly optimistic that we will find a fair and equitable solution for the whole of business aviation,” he said, referring to efforts to ease restrictions on European charter operators’ access to the U.S.

Bolen also advised the European business aviation community to engage in the current U.S. debate over proposals to introduce flat-rate user fees for U.S. airspace. In his view this is a bad idea that all too easily could spread across the Atlantic.

The user fee plan–which has the enthusiastic backing of the U.S. airline industry– would take no account of the weight of an aircraft in calculating the amount due. “Under this argument, a blip [on the ATC radar screen] is just a blip, regardless of whether there are three, 30 or 300 passengers on board,” Bolen said.

NBAA firmly believes that fuel taxes are a much more fiscally efficient way of funding ATC infrastructure because they directly relate to how much flying an operator is doing. Also, there is no bureaucracy because the tax is collected for the government at the point of fuel purchase.