Fractional Aircraft Ownership

Fractional ownership operations began in 1986 with the creation of a program that offered aircraft owners increased flexibility in the ownership and operation of aircraft. This program used current aircraft acquisition concepts, including shared or joint aircraft ownership, and provided for the management of the aircraft by an aircraft management company.

The aircraft owners participating in the program agreed not only to share their own aircraft with others having a shared interest in that aircraft, but also to lease their aircraft to other owners in the program (dry lease exchange program). The aircraft owners used the common management company to provide aviation management services including maintenance of the aircraft, pilot training and assignment, and administration of the leasing of the aircraft among the owners.

During the 1990's the growth of fractional ownership programs was substantial and this growth is expected to continue. As these programs grew in size, complexity and number, there was considerable controversy within the aviation community as to their appropriate regulatory structure. Additionally, the FAA had evolving concerns regarding issues of accountability and responsibility for compliance (operational control).

The FAA created the Fractional Ownership Aviation Rulemaking Committee through an order dated October 6, 1999. The objective of the FOARC was to "propose such revisions to the Federal Aviation Regulations and associated guidance material as may be appropriate with respect to fractional ownership programs." On February 23, 2000, the FOARC presented its recommendations to the FAA in the format of a Notice of Proposed Rulemaking.