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How to Start An Aviation Business: Choice of Entity
 

By Jason Dickstein and Jessica Stubbs


           

So you are thinking of starting an aviation business of some kind, such as a repair station, FBO, air taxi provider or a manufacturing facility.  What do you need to do to protect yourself financially and to maximize your potential for success?  There are a few different forms of business that you could choose for your aviation company.

The choice of entity will depend in part on state law, since most entity-specific laws are state laws.  This article will briefly discuss the types of business entities available, but please remember that the specifics privileges and liabilities of different entity types (particularly LLCs) may depend on your state law.

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Aviation Insurance Articles

So, you want to be in the aviation business???

First in a series discussing aviation insurance and risk management

 

As you start to explore the options and opportunities available to those who choose to make aviation a career, it will quickly become apparent that one of the largest fixed costs any aviation business has to deal with after payroll and sometimes fuel is insurance.

 

Like the old saying goes, aviation may not be inherently dangerous but it is terribly unforgiving of any carelessness, incapacity or neglect. One thing that it definitely is and becomes more so every day is very litigious. The general populace assumes because airplanes are expensive and are often associated with rich and glamorous people, that anyone or any thing associated with airplanes must have a lot of money and be a great target for a lawsuit.

 

Most aircraft crashes are high profile events that make the evening news and therefore attract high profile attorneys. This creates the exposure and thus the need for broad insurance protection for aviation businesses.

 

The purpose of this series of articles will be to help you identify the exposures and risks that you may face as an aviation entrepreneur and explain some of the risk management and insurance solutions available to address those exposures.

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Aviation Regulation Articles


 

Paper or Plastic: how do you like your regulations?

Having access to the aviation regulations is fundamental for all aviation businesses.  They not only provide the guidance for the performance of tasks but in many cases the regulations provide guidance on the organization and operation of aviation businesses.  Knowing the regulations and having access to the Federal Aviation Regulations are essential for every aviation business.

 

The question is: do you want to keep them in paper or plastic?  The aviation regulations are available in traditional paper format or electronic format: in either CD/DVD format or internet format.

 

Following a survey of business owners, managers and regulators it is clear that each format offers advantages and disadvantages.  This article describes the benefits of each format.

 

The scope of the aviation regulations you need will be based on the scope of your business.  Before you can decide which format is desirable, an understanding of the regulations themselves may be in order.

 

If you are interested in the freebies, you can access the Federal Aviation Regulations for free in the library of Aviation Entrepreneur Magazine.

 

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Have you ever wondered who makes airplanes fly?

 

Some would immediately focus on the pilot, others might say the mechanics, and others might offer the flight attendants, without whom commercial aviation could not exist.  When one looks beyond flight, there are hundreds of specialty trades that support aviation in all areas and without each and every one of them, airplanes, airlines, and the traveling public simply could not fly.  The headline grabbing airlines, with their layoffs, restructuring and huge losses, represents only a fraction of the aviation industries.  There are literally hundreds of trades and specialties that represent successful, profit making endeavors.  This magazine is dedicated to them: the entrepreneurs that make up the aviation industry – beyond flight.


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Washing isn’t Washing: Aircraft Cleaning and Detailing

 When asked if cleaning an aircraft is maintenance or preventative maintenance, the Federal Aviation Administration (FAA) responded that “The regulations do not consider physical cleaning of an aircraft as maintenance or preventative maintenance.”  The FAA continues that they “do not consider cleaning seat cushions/covers maintenance or preventative maintenance” either.

Unfortunately, that answer is a bit misleading and if you don’t read the entire comment, you may be led to actually violating the aviation regulations.

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The Business Plan: Mining for Data

Y
our business plan provides the roadmap of your current business or your future vision.  The roadmap is probably the single most important tool you can develop.  This article will help you locate the data you will need to mine to better define and structure your business potential.

As anyone in the industry will tell you that while there are dozens of parallel businesses for each aviation unique occupation aviation is still unique.  The better you can translate “aviation-ese” in to the language of business the more opportunities you will create.

How big is aviation? 
“Big” is a relative term.  How big is the overall industry?  How many aircraft are there?  How many employees?  How many different types of businesses?

This article will help you mine the data to answer these questions.

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