© 1998 By Michael P. Fleming

Conclusion

Corporate aircraft can provide great advantages in meeting business transportation needs. Sharing them allows companies and individuals to find the most efficient operational and financial structure. But the obvious complexities require the unfamiliar to proceed cautiously and carefully. To anyone contemplate sharing, I would recommend that they plan very carefully, and plan as early in the process as possible. Planning even prior to acquisition is advisable. The choice of structure will drive the proper acquisition vehicle, the ownership and lease structure, aircraft registration, and insurance requirements. It can even influence the type of aircraft chosen by impacting the economics.

Early planning also reduces overall transaction costs. It is often more expensive to modify existing structures that have been poorly planned than to plan thoroughly from the outset. This is particularly true if adjustments require transfer of the aircraft from one company to another, potentially creating a tax liability. Most importantly, early and thorough planning will allow the corporate aircraft user to identify and limit risks in its use of business aircraft.

About the Author

Michael Fleming is a partner and shareholder in Galland, Kharasch & Garfinkle, P.C., a Washington, DC transportation law firm with a strong aviation concentration. He practices exclusively in aviation, primarily corporate aircraft transactions including planning, structuring, transaction negotiation and documentation, finance/lease arrangements, and the like.

Michael began his career with a company marketing and selling business aircraft. He then moved to United Airlines, where he negotiated United’s aircraft transactions and performed related financial analyses. At Galland, Michael has conducted scores of aircraft transactions, representing, among others, flight departments, charter and management companies, and fractional programs.

Michael holds a J.D., magna cum laude and M.B.A. in Finance from the University of Georgia. He is an instrument-rated private pilot, a member of many industry groups, a frequent author on business aviation matters, and speaks frequently at industry events. Michael is also a Managing Director of GKMG Consulting Services, Inc., an affiliate of the Galland firm that concentrates in economic and strategic consulting in the aviation sector. In this capacity, Michael provides strategic planning, business planning, financial analysis and acquisition consulting for companies involved in the business aviation industry.