What's Happening?
The Federal Aviation Administration (FAA) has grounded N-registered aircraft held in trust with Southern Aircraft Consultancy Inc (SACI) after determining that their Certificates of Aircraft Registration
are invalid. The FAA found that SACI did not comply with U.S. citizenship requirements when submitting aircraft registration applications using Non-Citizen Trust (NCT) arrangements. Consequently, the FAA has instructed SACI to surrender all affected registration certificates. This decision impacts aircraft registered through SACI, as they are now considered to have invalid Certificates of Registration, removing the legal basis for flight. The Civil Aviation Authority has confirmed that this status affects flights both in the UK and elsewhere. Aircraft owners must either re-register their aircraft in another country or apply for re-registration in the U.S. using a compliant trust structure. The FAA has given SACI 21 days to surrender the affected certificates, but the grounding is effective immediately.
Why It's Important?
This development has significant implications for aircraft owners and operators who rely on N-registration for their aircraft, particularly those based outside the U.S. The grounding affects the legal ability to fly these aircraft, potentially disrupting operations and financial planning for owners. The situation underscores the importance of compliance with FAA regulations, particularly concerning citizenship requirements for aircraft registration. The decision also highlights the complexities of using Non-Citizen Trust arrangements for aircraft registration, which have been a popular route for non-U.S. owners seeking N-registration. The grounding could lead to increased scrutiny of similar arrangements and may prompt other aircraft owners to reassess their registration strategies to ensure compliance with U.S. regulations.
What's Next?
Aircraft owners affected by the FAA's decision must act quickly to resolve their registration issues. Options include re-registering the aircraft in another country's registry or applying for re-registration in the U.S. using a compliant trust structure. While the FAA allows temporary authority to operate within the U.S. during re-registration, this does not extend to international operations. Owners intending to operate outside the U.S. must submit a Declaration of International Operations for expedited processing. The situation may lead to legal challenges or appeals from affected parties seeking to overturn or mitigate the FAA's decision. Additionally, the FAA's actions could prompt regulatory reviews or changes to ensure clearer guidelines and compliance pathways for Non-Citizen Trust arrangements.
