Company A has an operating certificate, operations manual, maintenace manual and training manual approved by TC for Class B aircraft. Company B which is good friends with Company A suddendly gets a great contract to fly items in Class B aircraft but has no operating certificate or operations manual approved yet.
Company A registers Company's B airplane under Company A then leases the airplane back to Company B so it can fly the contract.
This is confusing as I am trying to wonder why would Company A do this, did Company A "buy" the airplane or is company B using A for its operating certificate and paying company A money under the table as Company A is already having financial trouble in the beginning why would they "register" another aircraft as they already own a PIper Navajo.
Can anybody explain this or has heard of anything like this before?
thanks guys
Helinas
Crooked or smart?
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fougapilot
- Rank 7
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Helinas,
Very few companies actually own the airplanes they fly. Most airplanes are owned by another company and leased to the company that actually fly them. Nothing new here. Many company like SkyService, Execaire, CMP Aviation (and many more) operate other people's airplane on the certificate. They are called management companies. It is much easier for someone who only owns 1 airplane to put it on someone else certificate instead of going through the pain of getting one from TC. Nothing wrong here. Happens all the time.
Hope it helps,
D
Very few companies actually own the airplanes they fly. Most airplanes are owned by another company and leased to the company that actually fly them. Nothing new here. Many company like SkyService, Execaire, CMP Aviation (and many more) operate other people's airplane on the certificate. They are called management companies. It is much easier for someone who only owns 1 airplane to put it on someone else certificate instead of going through the pain of getting one from TC. Nothing wrong here. Happens all the time.
Hope it helps,
D
We thought about starting a company flying Navahos. The first thing we did was find a company under which certificate we could operate. It is expensive, but can be done. I am sure a lot of operators do it.
Cheers,
Bob
Cheers,
Bob
Success in life is when the cognac that you drink is older than the women you drink it with.
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fougapilot
- Rank 7
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Company A owns the airplane,
Company B operates the airplane
Rental agreement:
Usualy company A will received $X per month plus engine/propeller reserves from company B. Some "A" will prefer to receive $X per hour, but the industry standard for aircraft leases is per month. They have a legal renting agreement based on which TC has issued a new CofR for the airplane. Company B is now listed as the owner/operator on the CofA.
If company A whishes to take the airplane flying, it can but has to charter it from company B
Management agreement:
Company A and B still have the same legal rental agreement. CofR is in "B"'s name. Company A is the largest user of the airplane. Company A will pay for all relevant airplane expenses, crew, hanger, insurance, maintenance... and pay company B a management fee. Should company B be allowed to charter the airplane, it will then pay company A $X per flying hour it does on company A airplane.
The hourly rate you are referring to is for the engine /propeller reserve. For example, if my memory serves me right, we used to lease a Navajo for somewhere around $5000/month. Wether it flew or not! but every time it flew, we had to flip the hourly cost for engine/propeller replacement. So hevery hour we had to pay the owner a couple more $$ so he could change the engines and props when they were due.
Hope this helps,
D
Company B operates the airplane
Rental agreement:
Usualy company A will received $X per month plus engine/propeller reserves from company B. Some "A" will prefer to receive $X per hour, but the industry standard for aircraft leases is per month. They have a legal renting agreement based on which TC has issued a new CofR for the airplane. Company B is now listed as the owner/operator on the CofA.
If company A whishes to take the airplane flying, it can but has to charter it from company B
Management agreement:
Company A and B still have the same legal rental agreement. CofR is in "B"'s name. Company A is the largest user of the airplane. Company A will pay for all relevant airplane expenses, crew, hanger, insurance, maintenance... and pay company B a management fee. Should company B be allowed to charter the airplane, it will then pay company A $X per flying hour it does on company A airplane.
The hourly rate you are referring to is for the engine /propeller reserve. For example, if my memory serves me right, we used to lease a Navajo for somewhere around $5000/month. Wether it flew or not! but every time it flew, we had to flip the hourly cost for engine/propeller replacement. So hevery hour we had to pay the owner a couple more $$ so he could change the engines and props when they were due.
Hope this helps,
D
How about this senario:
Company A owns all the airplanes.
Company B operates the airplanes and employs all of the employees.
Company B goes bankrupt.
Company A and Company B are owned by the same person, but Company A's assets are untouchable by Company B's creditors and employees.
The employees get screwed while the owner still has enough assets and airplanes to start up a new airline.
Can this senario really happen to almost any airline employee with the way the majority of airlines are legally set-up?
Company A owns all the airplanes.
Company B operates the airplanes and employs all of the employees.
Company B goes bankrupt.
Company A and Company B are owned by the same person, but Company A's assets are untouchable by Company B's creditors and employees.
The employees get screwed while the owner still has enough assets and airplanes to start up a new airline.
Can this senario really happen to almost any airline employee with the way the majority of airlines are legally set-up?
Talk to any Skyward pilots who are still owed training bonds, or other long term employees that got robbed pension and holidays and severance pay. Look around for the pissed of guy who got screwed by the (still) wealthy owners (in new cars, fancy pickups and sports cars). I promise you won't have to look far.....
Everything comes in threes....
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fougapilot
- Rank 7
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Yup! But is it not the real reason it is done this way. Agreed it happens too often the way you discribe it, but here is the real logic behind it.Ludacris wrote:Can this senario really happen to almost any airline employee with the way the majority of airlines are legally set-up?
Company A operates airplane leased from company B. Company A has the bad luck of having a bad crash where one of its airplane ends up crashing downtown (insert name of big US city here). Lawyers are having sooooo much fun with this one thinking they are going to rack millions in legal fees (they most likely will...). Company A now faces $100millions in legal actions and only has $50millions in liability insurance. Company A loose in court and all asset are seized. Official show to company A office only to realize they can only seize office furniture and perhaps a couple of tools. Company B being not involved with A beyond its leasing agreement is free to lease it airplane to company C which just happened to start in the same hanger then A was...
My 2cents, your milleage may vary...
D
Let me get this straight, here is my view
Company A owns a light twin airplane such as a Navajo. Company A gets lucky and is awarded a contract to transport goods for a freight operator. Company A does not have an operating certificate to begin flying the freight. The guy that owns Company A along with the Navajo goes to his buddy who I will call company B who owns a Navajo himself and holds a TC operating certificate to operate for business. The two agree to have Company A's Navajo registered under Company's B Business name and that is it, company B will not fly company A's navajo or receive money from the freight operator. Simply put company A now has "2" navajos registered under company A's company but is not involved in providing crews, maintenance, etc or other daily expenses.
Could somebody just register the airplane under their company but not get rewarded from Company B's business ventures. Why would Company A register Company's B airplane in the first place?
Seems a little funny for me anyway but not for the experts out there.
Any other info on this would be greatly appreciated.
Helinas
Company A owns a light twin airplane such as a Navajo. Company A gets lucky and is awarded a contract to transport goods for a freight operator. Company A does not have an operating certificate to begin flying the freight. The guy that owns Company A along with the Navajo goes to his buddy who I will call company B who owns a Navajo himself and holds a TC operating certificate to operate for business. The two agree to have Company A's Navajo registered under Company's B Business name and that is it, company B will not fly company A's navajo or receive money from the freight operator. Simply put company A now has "2" navajos registered under company A's company but is not involved in providing crews, maintenance, etc or other daily expenses.
Could somebody just register the airplane under their company but not get rewarded from Company B's business ventures. Why would Company A register Company's B airplane in the first place?
Seems a little funny for me anyway but not for the experts out there.
Any other info on this would be greatly appreciated.
Helinas
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co-joe
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It makes sense to operate under someone else's OC while you are waiting for the 2 year application process for a 704 OC from TC.
I think Peace Air and Mikisew both operated under Bar XH's OC at one time or another. There's a few other examples I can think of and really it allows company A to gain experience from company B while trying out the whole thing. And while waiting for the existing CP Ops manager and AMO to gain the required experience to qualify for those positions on the upgraded OC.
I think Peace Air and Mikisew both operated under Bar XH's OC at one time or another. There's a few other examples I can think of and really it allows company A to gain experience from company B while trying out the whole thing. And while waiting for the existing CP Ops manager and AMO to gain the required experience to qualify for those positions on the upgraded OC.
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co-joe
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Check yer PM's.
I'd imagine the almgihty TC gets their talons in there... and I'd imagine some mutual back scratching happens.
Folks, sometimes people help eachother out in this business, I know it's rare, but it does happen...
Incidentally if you want an OC it may actually be easier to buy one that has already been approved than make a new one.
I'd imagine the almgihty TC gets their talons in there... and I'd imagine some mutual back scratching happens.
Folks, sometimes people help eachother out in this business, I know it's rare, but it does happen...
Incidentally if you want an OC it may actually be easier to buy one that has already been approved than make a new one.
