Robust sales of new and pre-owned business aircraft have led to a sizable backlog at the FAA Civil Aviation Registry in Oklahoma City, OK. Operators should be mindful of delays of up to six months when registering a newly purchased aircraft.
Scott McCreary, aviation group leader for McAfee & Taft and a member of the NBAA Tax Committee, noted the importance of operators doing all they can to minimize their chances of encountering further delays.
“People should reach out immediately to their title companies and law firms assisting them and make sure all their documentation is in order,” he said. “Even a small mistake may cause longer delays in the processing of documents and the registration of the aircraft.”
“People should reach out immediately to their title companies and law firms assisting them and make sure all their documentation is in order.”
Scott McCreary Aviation Group Leader, McAfee & Taft / NBAA Tax Committee
Parties to the transaction must also take that backlog into account when structuring and documenting the transaction, as waiting for legal consultations on leases or an ownership trust, resolving maintenance squawks and numerous other factors can lead to even longer delays and additional headaches.
Transactions may also involve changing the aircraft’s current registration number, with the sale paperwork reflecting the new registration. “That process may take anywhere from six months to a year, and there’s really no way to expedite that,” McCreary said. “All sides must plan accordingly.”
Another factor potentially affecting processing times is the FAA’s Dec. 12 announcement that access to “ancillary documents” related to aircraft transactions will be restricted to federal employees and contractors. McCreary noted those documents would typically include previously filed statements in support of registration, powers of attorney, name change and merger documents and trust documents.
“While this announcement could lead to some additional delays, limiting access to agency personnel is also part of the FAA’s effort to address this ongoing backlog,” said Brian Koester, CAM, NBAA’s director of flight operations and regulations. “The agency has also hired additional personnel to process registrations and is moving to extend the validity period for aircraft registrations going forward.”
NBAA remains in communication with the FAA on backlog delays, Koester added, “and we’re optimistic this situation will be resolved in the coming months.”
Until then, “all parties must be realistic in their expectations,” McCreary emphasized. “The biggest problem I see is when someone assumes they can make things happen sooner and push a registration through. Most of the time, they can’t.
“However, if they factor in the backlog and the additional time that may be needed, they’re normally fine,” he concluded.
Review NBAA’s aircraft transactions resources at nbaa.org/transactions.
When structuring and documenting aircraft transactions, all parties must factor in impacts from expected delays of up to six months due to a continued backlog at the FAA Civil Aviation Registry.
NBAA continues to maintain regular contact with the FAA regarding continued backlog delays at the aircraft registry and will keep members posted on related developments.