Government Shutdown Halts Aircraft Sales Transactions

AINalerts » October 3, 2013
Business aviation is just one of the many industries being affected by the partial U.S. government shutdown, which was caused by a budget impasse in Congress. Notably, the aircraft registration office has been mothballed, putting sales transactions for both new and pre-owned aircraft on hold. Deliveries of some 123 new general aviation aircraft worth more than $1.38 billion could be at risk over the coming weeks if the situation drags on. (Photo: Fotolia/trekandshoot)
October 3, 2013, 4:07 PM

The “partial” U.S. government shutdown that began on Tuesday as a result of a congressional budget impasse has had a more profound effect on business aviation than initially anticipated by industry watchers. What caught observers, including GAMA, off guard was the closure of the aircraft registration office in Oklahoma City, a move that has paralyzed both new and pre-owned aircraft sales transactions.

“Even the FAA staff at the Oklahoma City office didn’t know ahead of time that they were being shut down, so they were surprised, too,” Charles “Bucky” Oliver, founder and chairman of aircraft sales brokerage firm Jetcraft, told AIN. “Essential services were supposed to be exempt from the shutdown, but the problem is the interpretation of ‘essential.’”

He noted that there is a push to get the FAA to recognize aircraft registrations as an essential service, especially since shuttering this function could in fact violate several ICAO treaties, an assertion also echoed to AIN by the National Aircraft Resale Association. But for the time being, without aircraft registration and title search services available, “There can be no aircraft purchases, sales, recording of liens and export/import of any aircraft in the U.S.,” Oliver said.

GAMA is especially concerned about the registration office closure because 35 percent of annual aircraft deliveries by manufacturers occur in the fourth quarter. So far, GAMA said 12 new aircraft deliveries have been put on hold due to the office’s closure; over the next couple of weeks, 123 deliveries worth more than $1.38 billion are at risk if the situation drags on. GAMA is lobbying the FAA to label aircraft registration as an essential function.

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