2025 April

In today’s owner-flown space, most current OEM products—Textron, Daher, Embraer, Pilatus, Piper, HondaJet, Cirrus and others—have an ‘owner pilot association,’ or OPA.

Membership in these aircraft-specific OPA groups is open to owners and operators, of course. But you’ll meet the various service providers you may cross paths with during your ownership experience. Those vendors include tax consultants, finance companies, insurance brokers, flight software tools, trip concierge services and parts/maintenance service providers. 

The trade group is a wonderful way to get connected to those that support your aircraft, but there can also be intangible aircraft insurance benefits to getting involved with your aircraft’s OPA organization.

Access Insurance Insights and Opportunities

Typically, you will see several insurance brokers and sometimes underwriting companies attending and participating in the OPA’s regional events and annual conventions.

In many cases, OPA groups host an annual convention, which will have insurance workshops or insurance panels composed of underwriting companies and insurance brokers. These panel discussions are a great way to glean details on the current insurance market conditions, similar to getting insider stock tips.

In years past, many OPA convention attendees who completed various safety and aircraft operation-focused seminars were eligible for insurance credits or discounts offered by some select underwriting carriers.

The insurance discounts offered by select underwriting companies have mostly subsided through the “hard” insurance market (2018-2024). However, some programs still exist that may positively impact your insurance rates.

CJP’s Gold Standard Award

One such discount program is the Citation Jet Pilots (CJP) Gold Standard Award. The award requires an application process and a few recurrent training sessions (in jets referred to as 61.58 checkrides) with approved training providers. The process also includes some courseware and incorporation of CJP’s standard operating procedures into your flying activities.

The Gold Standard award winner, may, in some cases, receive more competitive insurance rating when it comes time for policy renewal. The topic, however, is somewhat subjective as not all policies are identical. Certain risk categories may not recognize the Gold Standard as a premium-bearing incentive program.

Keeping Your Insurance Broker Informed

If you’re an owner/operator who’s involved in an OPA group, you should absolutely make your insurance broker aware. Plus, provide your broker with any ancillary safety or proficiency program that you’re participating in, specific to your make and model.

All additional training and seminar events you complete outside of your policy’s baseline requirements can positively impact how your insurance underwriter rates your risk. In turbine and pressurized aircraft, insurance usually only specifies that you complete recurrent training in the aircraft with an approved training provider. 

That said, involvement in an OPA group however does not guarantee lower premiums. After all, premiums are more heavily influenced by current market conditions rather than solely the additional training and safety-focused efforts you invest time into.

Aircraft owners who continually look to improve their skillset and knowledge base will stand out to underwriting carriers reviewing and rating risks.

So do yourself a favor. Get involved in your OEM’s OPA group and attend its annual convention. It’s time well spent—not just socially but potentially positively impacting your insurance program at renewal.

Fly Safe~

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When importing a multi-million-dollar aircraft, understanding both aircraft registration in its country of origin and compliance with FAA requirements is critical.

While the specifics of deregistration and registration vary globally, the core principles remain consistent. 

This process begins with a foundational rule every student pilot learns: a valid certificate of aircraft registration (like the FAA’s AC Form 8050-3) is mandatory to fly legally…

But how do you obtain one when buying a foreign-registered aircraft?

Aircraft Deregistration

An aircraft may only be registered with one country at a time. Therefore, the plane must be deregistered from the foreign jurisdiction.

Process

Many countries have their own forms that must be completed and submitted locally. Some may be submitted electronically, while others must be submitted in person.

For deregistration from the FAA on exports, a simple one-page deregistration request will suffice. It needs to be properly signed by the aircraft owner and filed with the FAA registry.

Timing

The timing of deregistration varies wildly by country. The FAA registry prioritizes import and export paperwork over regular filings, and deregistration usually occurs within a business day or two.

Some foreign countries issue deregistration certificates on the same day they are requested. Typically, they come within a few days to a week. But some countries take weeks or even longer to process the deregistration, therefore slowing down the whole import transaction process.

Stop! Considerations Before Deregistration

Deregistration is typically the penultimate step in the closing process, occurring immediately before the contemporaneous payment to the seller and filing the purchaser’s registration documents.

Once deregistration is complete, the plane is a glorified paperweight—it has no registration and cannot fly.

So, prior to deregistration, the plane better be in the location it belongs. This must be one that’s accessible by maintenance to modify the plane for the FAA and an FAA representative to confirm the plane is ready for an airworthiness certificate.

Once the plane is deregistered, its former registry no longer has jurisdiction over it. So, any paperwork that’s needed, such as an export certificate of airworthiness, also better be in hand.

A clear title must also be verified in the plane’s former jurisdiction before deregistration. Some countries will not issue a deregistration certificate if there’s a lien or mortgage filed, but some will. Some registries do not record liens or mortgages at all. Either way, a clear title in the foreign country must be verified before deregistration.

Finally, a buyer must confirm that any required customs process is completed prior to deregistration. If customs is overlooked, it will be too late to fly the plane back out of the country and re-import it through customs because the plane can’t fly after deregistration. Plus, the penalties can be staggering for failure to comply with customs.

Aircraft Registration

Deregistration was completed. Congratulations! The foreign registry sends a certificate of deregistration directly to the FAA either by fax, email or telex (I had to look that up!) The certificate should show up in the FAA registry’s files within a business day or two.

Now comes the easy part. Once the FAA receives the certificate of deregistration, the new owner may file their own FAA Aircraft Registration Application (form 8050-1). A temporary registration known as a “flywire” will quickly be issued, with the more permanent “hard card” registration to follow within a few months depending on the FAA registry’s backlog

Now that your plane is registered with the FAA, the next challenge is getting it ready to fly. Next month’s article will cover this final piece.

Stay tuned for upcoming articles that break down the challenges of buying a foreign aircraft—and how to navigate them with confidence.

Part 3: Airworthiness: How to Get the Aircraft Ready to Fly

Part 4: How to Balance Taxes Between Multiple Jurisdictions

Part 5: Logistics: Where to Inspect the Plane and Complete Closing?

Part 6: Contractual Quirks of Foreign Transactions

This article is not intended, nor should it be construed or relied upon, as legal advice. The comments, recommendations, and analysis expressed in this article are those of the individual author, John Farrish, and are purely informational. This article does not create an attorney-client relationship between you and the author or his law firm. If specific legal information is needed, each person should retain and consult an attorney with knowledge of the subject matter.

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You may have heard of a fly-away state or a resale exemption; these are just two examples of state exemptions for sales and use tax on an aircraft.

Last month, I mentioned that aircraft are mobile property and can be taxed in multiple jurisdictions. That’s why it’s important to understand the exemptions that are available to you and any limitations that apply.

Fly-Away Exemptions

Using a fly-away exemption is common practice for aircraft closings.  There are many states that provide an exemption from sales tax if certain conditions are met. If the conditions are met, the transaction can take place in a neutral location without incurring sales tax. However, this exemption only applies to the sale transaction in that state.  

Once the aircraft is removed from the fly-away state and moved to a permanent hangar, it’s highly likely that use tax will apply. Depending on the state and specific circumstances, there are often opportunities for deferring, or even avoiding the use tax all together under an exemption.

Resale Exemptions

Many states allow a resale exemption, which is the most common method we see to manage sales and use tax liabilities. If your aircraft is operated under a dry-lease—which many are—it may qualify as a purchase for resale. In this case, tax would not be due on the purchase. Instead, tax will be collected and remitted on the dry-lease payments over time.

Full Exemptions

Even better, many states provide full exemptions for sales and use tax on aircraft. Following are a few state-specific exemptions:

• Illinois exempts aircraft that are used more than 50% of the time in Part 135 operations.
• Texas has an exemption for aircraft purchased outside of the state that meet a departures test in the first 12 months of ownership.  
• California has an interstate commerce presumption and a common carrier exemption.

Some states provide exemptions for aircraft used in Part 135 operations, and some have exemptions for specific aircraft (e.g., large aircraft, helicopters, or fractional interests). And some states impose a maximum tax on aircraft between $500 and $2,500, while others, like New York, have exempt all aircraft without conditions.  

The key is to identify where the aircraft will be based, and it may be multiple locations, and research the exemptions available to you in those states.  

Many have state-specific requirements, including closing location, initial flights and reporting, so it’s imperative to address issues before taking delivery of the aircraft.

As always, be sure to consult your aviation tax expert to make sure you have everything covered.  

On April 2, the new tariff plans were made official. As we witness the initial market reactions, I think about all the market dynamics we’ve seen at Scope Aircraft Finance since 1975.  

As we celebrate 50 years, now under our third generation of leadership and staff, we have some incredible knowledge and history passed down through the generations. Some of that knowledge includes lending fundamentals, which have ensured that we were best able to weather the economic storms and changes over time.

As the market reacts to the tariffs, I continue to reflect on some of those lessons, especially given that we’re in the middle of a very unique economic period.

For example, when I was a young credit analyst, one of our most experienced lenders used to preach to me the importance of “proper, prudent loan structure.”  His point was that to be a successful lending organization in the long term, we must operate with “discipline.”

Operating with Discipline

Operating with discipline means many different things as you look at an aircraft loan. It can mean taking the time to making sure the borrower has the right down payment and note repayment structure (known as amortization). It also means making every effort to ensure equity is maintained through the life of the loan.

Discipline further involves staying consistent with our underwriting practices and standards. It means maintaining the same approach during both prosperous times and challenging times.

This concept of discipline isn’t just isolated to aircraft financing.

Across the industry, the most successful organizations are those that have a disciplined mindset to how they conduct business. Their mindset is vital in helping them navigate the economic changes that may result from as tariff and tax policies evolve.

These changing times can also bring incredible purchasing opportunities. If financing an aircraft is part of your purchase process, ensure that you’re working with an organization that understands how to navigate the dynamics of shifting economic conditions.

While no one can predict the future, surrounding yourself with a team who operates with a disciplined mindset will help you set yourself up for the best ownership experience possible.

When I think about the second quarter, my first thought is always “Conference Season.” Typically, the stretch from mid-March to Memorial Day is busy with industry conferences and seminars.

Whether it’s the National Aircraft Finance Association Annual Conference, the International Aircraft Dealers Association Spring Meeting or NBAA Tax Seminar, there’s always something going on.

When we gather at these industry events, there’s certainly plenty to talk about. Following are just a few of the topics regarding privacy, tariffs and transaction trends.

Privacy News

One item of note is that the FAA announced that aircraft owners will now have the ability to keep their registration information private from the public view.

While this a positive step for privacy, it raises several questions when it comes to aircraft transactions:

• How do you validate the aircraft title if the public cannot view ownership details?
• Am I permitted to submit a privacy request on behalf of a buyer during closing?
• How will lenders and insurers adapt to reduced transparency?

While this added privacy layer is beneficial for owners, this change may introduce unforeseen complications, much like the ongoing tariff discussion.

Tariffs: The Endless Debate

Speaking of tariffs—are you already as weary of the topic as I am?

Recently, here at Aero-Space Reports, we just experienced a canceled transaction with a Canadian-owned aircraft due to buyer uncertainty about tariff impacts. Will this become a trend or remain an isolated case?

While many predict negative industry effects, tangible impacts on my transactions remain minimal. 

Transaction Trends

Here’s a surprising data point: Q2 consistently outpaces Q4 in the number of closed transactions for us. While December is the busiest month, April and May follow closely behind. One reason for the Q2 surge is that it’s the only time of year when both the piston and jet markets hit simultaneously.

Warmer weather, approaching school breaks and travel for sports or vacations drive this activity, making Q2 both rewarding and demanding.

Looking Ahead

For those attending industry events, I’m eager to connect and hear your perspectives on these evolving challenges.

At Aero-Space Reports, we remain committed to navigating these shifts while prioritizing customer service. 

And, if you see me at a conference, don’t hesitate to say hello—let’s discuss how we can tackle these changes together.

A client once told me the best business advice he ever received: run a business that impresses your accountant, not your spouse. 

In the pursuit of business excellence, it’s easy to get caught up in chasing bold visions, ambitious ideals and sexy product lines. But too often, we forget the fundamentals—making more money than we spend. 

The real power lies in building consistent discipline around daily habits and incremental progress. 

After all, success doesn't come from occasional grand gestures; it emerges from small, intentional actions executed consistently over time. 

As author James Clear explains in "Atomic Habits," lasting results stem from incremental improvements that compound continuously.

The Power of Process

Consider elite athletes like Tom Brady, who often speak of falling in love with the “process.” Brady’s process involved a rigorous system of mental preparation, physical conditioning and disciplined routines. 

He understood that while he couldn’t control game outcomes directly, he could meticulously control his daily habits and preparation. 

This approach maximized his chances of success. His seven Super Bowl victories are a testament to the power of consistent adherence to a disciplined, habit-driven system.

Avoiding “The Gap” Trap

Even highly driven businesses can fall into what author and business coach Dan Sullivan describes as “the gap” in his book, "The Gap and the Gain." Sullivan explains that many measure success by comparing their current state to an ideal vision rather than celebrating tangible progress made. 

For instance, a company might agonize over not being No. 1 in aircraft charter sales while failing to celebrate progress made moving from No. 10 to No. 4. 

Measuring success by this "gap" creates frustration, impatience and dissatisfaction—not just for leaders but also for employees. And who wants to work for a boss where nothing is ever good enough?

Focus on “The Gain”

Businesses thrive when leaders shift their focus to "the gain." This means celebrating real achievements and recognizing incremental advancements from their starting points. Those who adopt this mindset foster motivation, buy-in and a deeper sense of fulfillment among their teams.

To embed this perspective into your business, I recommend adopting a structured system that balances your aspirational goals with practical steps toward progress. 

A comprehensive approach will ensure that both milestones and long-term objectives are celebrated and achieved.

Building a System for Success

The most effective way to integrate this mindset is by implementing tools like:

• Accountability Charts: Clearly define roles so everyone understands their responsibilities without ambiguity.
  
  
• Structured Weekly Meetings: Maintain focus and alignment while reinforcing habit-driven behaviors through regular feedback loops.
  
  
• Quarterly Goal-Setting Sessions: Balance aspirational vision with measurable benchmarks to emphasize genuine progress and gains.
  

These tools create clarity, remove ambiguity and reinforce accountability across your organization. Structured weekly meetings will also help you stay aligned on priorities, while quarterly sessions ensure you’re celebrating achievements along the way—not just chasing perfection.

Progress Over Perfection

Integrating these principles fosters an environment of continuous improvement and sustainable growth—where progress is prioritized over perfection. 

By focusing on gains rather than gaps, you’ll not only impress your accountant but also earn the admiration of your spouse. And your team will thank you, too!