FAA open for New Year’s deal party

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As anyone rushing to get aircraft transactions closed knows, there are just two weeks left of 2021. But last week the FAA gave the industry a big boost by agreeing to have a skeleton team working in its Oklahoma City offices on Friday, December 31st.

Because both Christmas and New Year’s Day are on weekends this year, the FAA registry was expected to be closed on the last two Fridays of 2021. There was also a risk that staff would also leave early on the last two Thursdays. This may not sound like a lot but would have been a huge blow to manufacturers squeezing in deliveries and pre-owned aircraft buyers trying to close deals before year end.

After hearing these concerns, the National Business Aviation Association (NBAA), the General Aviation Manufacturers Association (GAMA), the National Aircraft Finance Association (NAFA) and the International Aircraft Dealers Association (IADA) approached the FAA on behalf of their members. They asked that the FAA keep the registry fully staffed on December 30th and provide a small skeleton staff the following day to stamp documents submitted by email or through the public documents room.

“We are sensitive and we don’t want to take a holiday from anyone, but these days are really important to many people in business aviation,” said Scott O’Brien, senior director, Public Policy & Advocacy, NBAA. “It is great that the FAA has found solutions and acted so quickly. The FAA listened carefully to the arguments from NBAA, GAMA, IADA and NAFA and their dedicated employees agreed to help the industry in every way we asked.” 

In some ways, the biggest significance of this is how the FAA has shown how it is keen to work with the industry. Arguably OEMs and transactors could still have filed electronically but not everyone agrees.

“It helps enormously – especially for OEMs. Everyone deserves a day off, but December 31st is a darn important day and the registry really needed to be open. It is great that the FAA has acted like this,” says Clay Healey, CEO of AIC Title Service“The FAA may have a skeleton staff, but we  have our staff  at  the FAA Registry  to  make  sure that physical files go through the window and are available to be stamped.” 

It is important to note that the skeleton staff will only be stamping files not processing them. This means that it will not process imports or exports, issue temporary certificates of registration, process changes or register aircraft. This means lien searches and title transfers will not be up to date on December 31st (which also means that counsel cannot issue opinions).

“This means that the only real transactions that can be completed on Friday, December 31st, are those that were begun days prior,” says Jack Gilchrist, founding director of  Gilchrist Aviation Law. “The only task that can be done on December 31st is the filing of documents for which filing dates and times during 2021 are vital.” 

Scott McCreary, practice group leader of McAfee & Taft’s Aviation Group, agrees: “The FAA’s accommodation is certainly good news for some deals that have to close on December 31st, but the limited functionality won’t work for everyone.  If you really need to close this year I would still close on December 29th or 30th  if at all possible.” 

There is also still a risk that the registry could close early on Christmas Eve (December 24th).

Good luck to those still closing.

Christmas boost: FAA will run a skeleton team in its Oklahoma City offices on December 31st.

 

 

 

 

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