Business aviation groups welcomed a letter from the FAA to the commissioner of internal revenue asking him to suspend implementation of new fuel tax rules that would impose a “significant administrative burden” on general aviation businesses and “create financial risk for the Airport and Airways Trust Fund.” The new rules would raise the tax rate on jet fuel to that of costlier highway diesel fuel but allow aviation jet fuel buyers to apply fo
Former insurance competitors Aero Insurance and AirSure have merged to form what officials say is now the “largest general aviation insurance broker in the world.”
After sustaining losses of C$116 million ($91.4 million) after 9/11, Nav Canada, the private, non-share corporation that owns and operates Canada’s civil air navigation system, saw its rate stabilization account–a financial savings buffer to offset downturns in revenue–return to the positive side of the ledger in April.
1. Don’t overinsure or underinsure your aircraft. Hull insurance policies are stated-value policies. In case of a total loss the insurance company pays the stated value of the policy. Be sure to know your aircraft’s true replacement cost and insure the aircraft for that amount. Overinsuring your aircraft results in higher premiums; underinsuring means you’ll need to pony up extra money to replace that aircraft if it’s lost.
After being forced into retirement at age 60, some former airline pilots turn to corporate aviation to continue their flying careers. It can become a problem for operators to obtain hull and liability coverage when these older corporate pilots reach age 70.
Various aviation insurance professionals seem to agree that the overall market has stabilized with premiums still significantly higher than pre-9/11 levels but with decreases in various segments. Some brokers have reported decreases in premiums as high as 25 percent, but those have turned out to be unusual cases. For those bizav operators who have seen decreases, the average reduction has been 5 to 10 percent.
Bank of America last month formed the Corporate Aircraft Finance Division, a group that combines The Private Bank’s Aviation Finance Division with the Bank of America Leasing Corporate Aircraft Finance strategic business unit. With creation of the new division, Bank of America has more than 700 clients and $4 billion in aircraft loans and leases.
In keeping with NBAA’s new effort to seek candidates who are familiar with business aviation through a “variety of professional skills and experiences,” three of the association’s four new board members are not directly from corporate flight departments. The new members are Thomas Frist, pilot and co-founder of Hospital Corporation of America. Dr. Frist is also the brother of Senate majority leader William Frist (R-Tenn.).
The 2004 American Jobs Creation Act could have entirely the opposite effect on business aviation due to an “overreaching” IRS interpretation that’s causing many companies to reconsider their corporate aircraft use.
If the provision is accepted by the House and the bill signed by the President, all aviation fuel will be taxed at the same rate as highway diesel fuel–24.4 cents per gallon. The purchaser would then have to submit a claim to the Internal Revenue Service to receive the difference between the 24.4 cents paid and the 21.8 cents per gallon actually owed.