Whose Letter of Authorization Is It Anyway?

by Greg Reigel
Attorney-At-Law
“Copyright 2017. All Rights Reserved”
Published in Midwest Flyer – October/November 2017

Ascenario I see more regularly than I would like involves an aircraft management company that manages a turbojet aircraft and provides pilot services to multiple users of the aircraft. Since the managed aircraft is capable of flight up to and beyond flight level 41,000 feet, the aircraft needs FAA approval to operate in the Reduced Vertical Separation Minimum (“RVSM”) flight levels from 29,000 to 41,000 feet. For reasons that are not always clear to me, the management company applies for and obtains an RVSM letter of authorization (“LOA”) in its own name for the aircraft, but then operates the aircraft on behalf of the operators. And, unfortunately, by doing so it has exposed not only itself, but also the operators to the wrath of the FAA for violations of the regulations.

In order to understand why this is the case, we need to first look at why an LOA, or its counterpart letter of deviation authority (“LODA”), is necessary. LOAs and LODAs are issued to Part 91 operators to provide authority to operate in a particular manner. An LOA authorizes an operator to engage in a particular activity, such as operation in RVSM airspace (although the need to have an RVSM LOA is subject to a notice of proposed rulemaking that may eliminate the requirement in lieu of having certain required ADS-B Out equipment).

A LODA permits an operator to deviate from a regulatory requirement with which the operator would otherwise be required to comply, such as permitting an instructor to operate an experimental aircraft for hire for the purposes of type-specific training. LOAs/LODAs are generally only applicable to Part 91 operators. (Operators under Parts 121, 133, 135, etc. receive similar authority in the form of operations specifications or waivers.)

LOAs and LODAs are “voluntary” and are issued by the FAA based on certain specific situations. That is, an operator doesn’t have to request an LOA or LODA unless the operator wants to do something that requires FAA authorization. In the RVSM context, if a Part 91 aircraft operator wants to operate in RVSM airspace, the operator will need to obtain the necessary LOA. But the aircraft operator is also free to avoid operating in RVSM airspace, in which case the operator would not need an RVSM LOA.

A Part 91 operator is the party who has “operational control” of the aircraft for a particular flight. What does that mean? Well, 14 C.F.R. 1.1 states “[o]perational control, with respect to a flight, means the exercise of authority over initiating, conducting or terminating a flight.” Thus, the FAA takes the position that the true operator of the aircraft is the party who has operational control for a particular flight.

Why does operational control matter when we are talking about LOAs and LODAs? Because LOAs/LODAs must be issued to the “operator” of the aircraft, i.e., the party that exercises operational control during the flight. And the party with operational control may not necessarily be the owner or manager of the aircraft.

For example, when we are looking at operation in RVSM airspace, 14 C.F.R. §§ 91.180 and 91.706 state in part:
“ . . . no person may operate a civil aircraft (of U.S. registry) in airspace designated as Reduced Vertical Separation Minimum (RVSM) airspace unless:
(1) The operator and the operator’s aircraft comply with the requirements of appendix G of [Part 91]; and
(2) The operator is authorized by the Administrator to conduct such operations.”

Thus, identifying the party who is the operator of the aircraft is critical because that dictates who must have the authorization.

So, who should apply for and be issued an LOA/LODA? Registered owners who are conducting personal or business flights under Part 91 for their non-air-transportation use; and parties assuming operational control under “dry” lease or use agreements, such as Part 91 and Part 135 operator lessees conducting operations under Part 91. Keep in mind that if multiple parties are operating the aircraft, multiple LOAs/LODAs may be required!

Who should not apply for or be issued an LOA/LODA? “Flight Department Companies” (e.g., holding companies/single purpose entities); Owner Trustees (e.g. where a trust is the registered owner of the aircraft, but the aircraft is operated by the party holding the beneficial interest in the trust); and Part 91 aircraft management companies that simply assist aircraft owners and Part 91 operators with their ownership and/or operation of the aircraft.

What can you as an operator do to make sure you have the necessary authority you may need or want from the FAA? First, do your research! Make sure you understand both your and the FAA’s obligations in the LOA/LODA process. Next, when you are applying for an LOA/LODA, ensure that your application is as complete and correct as possible. (Remember, garbage in = garbage out). If necessary, ask for a meeting with FAA personnel to submit an application in person. And finally, follow-up with the FAA on a regular basis to confirm the status of your application and whether the FAA has questions or needs additional information to process the application.

EDITOR’S NOTE: Greg Reigel is an attorney with Shackelford, Melton, McKinley & Norton, LLP, and represents clients throughout the country in aviation and business law matters. For assistance, call 214-780-1482, email greigel@shackelfordlaw.net, or Twitter @ReigelLaw.

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