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| There are only two fundamental reasons for acquiring new or different aircraft. Either the current aircraft can no longer perform the mission due to changes in the mission or the aircraft's operating conditions (obsolescence, costs, performance etc) or due to the fact that the current aircraft is no longer cost effective in terms of the company's required parameters. By Bill de Decker & Al Conklin |
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| Why would you need to replace or acquire another aircraft? There are only two fundamental reasons for acquiring new or different aircraft: 1. The current aircraft can no longer perform the mission. 2. The current aircraft is no longer cost effective. By David Wyndham |
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| When do you replace an aircraft because of age? As with pilots, there no set answer. For a few aircraft, the answer becomes obvious such as discovering corrosion in a structural member that will cost almost as much as the aircraft is worth. Many aircraft have manufacturer’s defined life limits in terms of cycles and hours. However, unless your aircraft is an airliner, it is unlikely that it will ever see its airframe life limit on total cycles or hours. By David Wyndham |
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| The FAA in their “Truth-in-Leasing” Advisory Circular (AC 91-37A) defines a wet lease as “a lease in which the lessor provides both the aircraft and the crew….” Leasing of an aircraft without crew is considered to be a dry lease. The IRS typically imposes the commercial Federal Excise Tax (FET) on wet leases AND the noncommercial Federal fuel tax on dry leases. By Nel Stubbs |
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| Getting a loan from a bank can be a real problem. The reason often is that the operator and the banker don’t speak the same language when it comes to money. The operator’s focus is on revenue and profit. The banker’s focus is to get back the money loaned. By Bill de Decker |
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| Cost for the operators because fixed expenses accrue whether the aircraft flies or not. By Bill De Decker |
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| Aircraft, like cars, require more maintenance as they get older. This increased maintenance has a major impact on operating cost, reliability, availability and, at some point, continued viability as part of a fleet. But how old is too old? By Bill de Decker |
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| We will examine inventory by answering the following questions: Why do we have inventory? What factors can influence the levels of inventory? What are the costs associated with inventory? What are some techniques for managing inventory? By Brandon Battles |
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| Let’s explore some of the underlying principles that are often associated with an organization’s salaries or personnel costs. By Brandon Battles |
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| If I were to walk into a room full of maintenance folks and utter the “B” word, nine out of ten people would role their eyes and emit sounds of protest. By Brandon Battles |
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| Everyone agrees that to maintain aircraft you need spare parts. Almost everyone also agrees that to minimize down time caused by a lack spares requires you keep some spares in inventory. By Bill De Decker |
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| With operating costs, two things are certain. Everyone who operates a helicopter experiences them and everyone has an opinion about them. By Brandon Battles |
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Regardless of the type of industry or the type of organization, every manager shares a common ground. While performing management tasks, each manager depends upon the same four basic principles – planning, organizing, directing, and controlling. By Brandon Battles |
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| Let’s look at a frequently overlooked situation, when a technician is promoted to a management position. By Brandon Battles |
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| Many years ago, the Chairman of the Federal Reserve was giving a presentation to the Senate Finance and Budget Committee on the state of the economy. As part of his opening statement he said that the country was experiencing a recession. By Bill de Decker |
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| As a manager in aviation maintenance, you probably followed the typical career path of most of your peers. By Brandon Battles |
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| As we all know, time waits for no one. No matter how well we use our time, there just doesn’t seem to ever be enough of it. By Brandon Battles |
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| When operations are considered "commercial" for Internal Revenue Service (IRS) purposes, the are subject either to the transportation of persons tax of 7.5%, plus the $3 per person, per leg segment fee, the transportation of property tax of 6.25% and/or the international facilities tax of $13.20 per person. by Nel Stubbs |
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| When acquiring an aircraft most people are looking for ways to minimize their state taxes. While there are many options available to accomplish this, there are also a lot of traps for the unwary. by Nel Stubbs |
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| Once a decision is made to purchase an aircraft the next issue is usually how is the ownership of the aircraft going to be structured. One of the options usually leads to setting up a separate company to own and operate the aircraft. Although liability concerns and corporate planning generally motivate this decision, it causes major concerns from the perspective of the FAA. by Nel Stubbs |
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| When most entities are purchasing an aircraft they are aware of the state and local sales taxes, however aircraft registration fees and personal property taxes are often overlooked. by Nel Stubbs |
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| When dealing with the application of the Federal excise taxes to any aviation activity, you need to consider not only how the Federal Aviation Administration (FAA) defines the activity, but also how the Internal Revenue Service (IRS) views it as well. by Nel Stubbs |
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| What are differences and similarities between "affiliated groups" and "brother-sister companies" and how are they treated both from the IRS and the FAA perspective. by Nel Stubbs |
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| States' differ in their application of the various tax laws on business aviation. In this month's article I will show how some of the states look to tax certain transactions and how to minimize your state tax exposure. by Nel Stubbs |
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| The IRS's method of calculating a fair valuation on non-business use of an employer provided aircraft is the "Noncommercial Flight Valuation Rule" (IRC 1.61-21(g)), otherwise known as the "SIFL" rule or the "Charter Valuation Rule". This rule may be used to value flights on all types of aircraft, including helicopters, as well as international flights. by Nel Stubbs |