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©
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.
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