AVIATION LAW FINAL
What is a security interest? - Answer-A legal interest in an item of personal property
that secures the payment of a debt and can take possession without a court
order....collateral
What right does the holder of a security interest have that other creditors do not? -
Answer-If the owner doesn't pay, a holder of a security interest can take possession
of a debt without judicial process
Will a title search at the FAA Aircraft Registry in Oklahoma City reveal all kinds of
valid security interests in aircraft? - Answer-Yes
What is the difference between a lease and a leaseback? - Answer-a. Lease: permits
someone to use an owner's aircraft
b. Leaseback: Buyer purchases from a seller then leases it back to him
Distinguish the primary motivation of the lessee in a lease ("lease forward") from that
of the seller-lessee in a sale with leaseback. - Answer-a. In a lease, the lessee's
primary motive is to use aircraft without having to purchase one
b. In a leaseback, the primary motive is the sale of aircraft
3. Explain how that difference in primary motivations may lead the seller-lessee in a
leaseback to act in a manner that may be contrary to the owner-lessor's best
interests - Answer-a. The sales price usually becomes non-negotiable
b. They show how it can make money monthly, but it is not guaranteed
4. You are an aircraft owner and hold a commercial pilot certificate, but do not hold a
Part 135 certificate. Can you legally rent or lease your aircraft to others and then
allow them to hire you as their personal pilot to fly the aircraft for them in their
travels? Explain. - Answer-a. No
b. Wet lease: you lease an aircraft and provide a pilot
5. How can you save money on attorney fees in the drafting of an aircraft lease? -
Answer-a. Agreeing with the other party to as many of the details of the lease as
possible before going to the attorney
b. Work out the details yourself
6. You own an aircraft. A person you have seen around the airport but don't know
very well approaches you with a business proposition. She informs you that she is
starting a commercial flying club and would like to lease your aircraft. What will you
do to decide whether you want to do business with this person? - Answer-a.
Carefully check their credit rating and experience. Note their timely payments and
aircraft care and maintenance.
b. Get their records
c. Go to local aviation bar and find out about the person
, 7. You are approached by a pilot who says he owns the same make and model of
general aviation aircraft as yours. He says that his annual inspection is taking longer
than expected, interfering with his family's long-scheduled vacation plans. He asks to
lease your aircraft for their planned two-week family vacation trip. He offers you a
good price and even offers to pay cash in advance. You have had some major
unexpected family expenses and could really use the money, but you are left with
the uneasy feeling that a family vacation may not really be what the pilot intends. If
you decide to just take the money and not ask any pointed questions or otherwise
check this person out, are you running any special risks? Explain. - Answer-a. Yes
b. If the person is involved in illegal activities your insurance won't cover it and the
government could cease the aircraft
8. You have been using your aircraft only for your own personal business and
pleasure flying. To produce some income, you decide to lease it to an FBO that will
use it for student instruction and rental. Will this require any changes in your aircraft
insurance coverage? If so, describe. - Answer-a. Yes, your purpose of use has
changed
b. You'll need to add limited commercial
9. What is fractional ownership? - Answer-a. A type of co-ownership in which each
owner buys a percentage expected to equal its annual use
10. What advantages do fractional ownership programs offer air travelers as
compared to chartering or purchasing similar aircraft as sole owners? - Answer-a. It
can be cheaper depending on how much you fly it
11. What legal documents are necessary components of a fractional ownership
program? - Answer-a. Contract of Sale
b. Agreement between parties
c. Aircraft management agreement
d. Master Interchange Agreement
12. What users will find fractional ownership more economical than either charter or
outright sole ownership of an aircraft? - Answer-a. Someone that flies at least 50
hours but less than 200 hours annually
1. What two areas of concern have been the focus of most litigation regarding
airports and airspace? - Answer-Noise and obstacle clearance
2. What is the power of eminent domain? - Answer-a. Governments have the right to
take private land within their jurisdiction for public use and pay for it (whether the
owner sells it or not)
3. How does a government normally exercise its power of eminent domain? -
Answer-They make an offer and if it is not taken, they go to court and decide a fair
market price.
4. What is inverse condemnation? - Answer-a. The government took the land and
haven't paid for it yet
What is a security interest? - Answer-A legal interest in an item of personal property
that secures the payment of a debt and can take possession without a court
order....collateral
What right does the holder of a security interest have that other creditors do not? -
Answer-If the owner doesn't pay, a holder of a security interest can take possession
of a debt without judicial process
Will a title search at the FAA Aircraft Registry in Oklahoma City reveal all kinds of
valid security interests in aircraft? - Answer-Yes
What is the difference between a lease and a leaseback? - Answer-a. Lease: permits
someone to use an owner's aircraft
b. Leaseback: Buyer purchases from a seller then leases it back to him
Distinguish the primary motivation of the lessee in a lease ("lease forward") from that
of the seller-lessee in a sale with leaseback. - Answer-a. In a lease, the lessee's
primary motive is to use aircraft without having to purchase one
b. In a leaseback, the primary motive is the sale of aircraft
3. Explain how that difference in primary motivations may lead the seller-lessee in a
leaseback to act in a manner that may be contrary to the owner-lessor's best
interests - Answer-a. The sales price usually becomes non-negotiable
b. They show how it can make money monthly, but it is not guaranteed
4. You are an aircraft owner and hold a commercial pilot certificate, but do not hold a
Part 135 certificate. Can you legally rent or lease your aircraft to others and then
allow them to hire you as their personal pilot to fly the aircraft for them in their
travels? Explain. - Answer-a. No
b. Wet lease: you lease an aircraft and provide a pilot
5. How can you save money on attorney fees in the drafting of an aircraft lease? -
Answer-a. Agreeing with the other party to as many of the details of the lease as
possible before going to the attorney
b. Work out the details yourself
6. You own an aircraft. A person you have seen around the airport but don't know
very well approaches you with a business proposition. She informs you that she is
starting a commercial flying club and would like to lease your aircraft. What will you
do to decide whether you want to do business with this person? - Answer-a.
Carefully check their credit rating and experience. Note their timely payments and
aircraft care and maintenance.
b. Get their records
c. Go to local aviation bar and find out about the person
, 7. You are approached by a pilot who says he owns the same make and model of
general aviation aircraft as yours. He says that his annual inspection is taking longer
than expected, interfering with his family's long-scheduled vacation plans. He asks to
lease your aircraft for their planned two-week family vacation trip. He offers you a
good price and even offers to pay cash in advance. You have had some major
unexpected family expenses and could really use the money, but you are left with
the uneasy feeling that a family vacation may not really be what the pilot intends. If
you decide to just take the money and not ask any pointed questions or otherwise
check this person out, are you running any special risks? Explain. - Answer-a. Yes
b. If the person is involved in illegal activities your insurance won't cover it and the
government could cease the aircraft
8. You have been using your aircraft only for your own personal business and
pleasure flying. To produce some income, you decide to lease it to an FBO that will
use it for student instruction and rental. Will this require any changes in your aircraft
insurance coverage? If so, describe. - Answer-a. Yes, your purpose of use has
changed
b. You'll need to add limited commercial
9. What is fractional ownership? - Answer-a. A type of co-ownership in which each
owner buys a percentage expected to equal its annual use
10. What advantages do fractional ownership programs offer air travelers as
compared to chartering or purchasing similar aircraft as sole owners? - Answer-a. It
can be cheaper depending on how much you fly it
11. What legal documents are necessary components of a fractional ownership
program? - Answer-a. Contract of Sale
b. Agreement between parties
c. Aircraft management agreement
d. Master Interchange Agreement
12. What users will find fractional ownership more economical than either charter or
outright sole ownership of an aircraft? - Answer-a. Someone that flies at least 50
hours but less than 200 hours annually
1. What two areas of concern have been the focus of most litigation regarding
airports and airspace? - Answer-Noise and obstacle clearance
2. What is the power of eminent domain? - Answer-a. Governments have the right to
take private land within their jurisdiction for public use and pay for it (whether the
owner sells it or not)
3. How does a government normally exercise its power of eminent domain? -
Answer-They make an offer and if it is not taken, they go to court and decide a fair
market price.
4. What is inverse condemnation? - Answer-a. The government took the land and
haven't paid for it yet
