United States: FAA Re-Registration Requirement

The FAA has issued a final rule requiring re-registration of all U.S.-registered aircraft on a periodic basis. We published a Legal News Alert in May 2010 describing the proposed FAA rule (http://tinyurl.com/foleyfaarule). This alert will summarize the key provisions of the final rule, which will be of interest to all owners, lessors, and lessees of U.S.-registered aircraft as well as to lenders and other financing parties engaged in the financing of U.S.-registered aircraft.

The rule terminates the registration of all U.S.-registered civil aircraft registered before October 1, 2010, on a specified date that corresponds to the date when the current registration was issued. The rule requires re-registration on the following staggered schedule over the next three years:

The two-month lag between the last day of each Filing Window and the certificate expiration date is intended to provide the FAA with sufficient time to process the application and deliver the new registration certificate to the registered owner. The new registration certificate will contain an expiration date that is the third anniversary of the last day of the calendar month during which the re-registration occurred. Re-registration of the aircraft will be required at the end of each three-year registration renewal period.

Initial registrations issued from and after October 1, 2010 also will contain an expiration date of the third anniversary of the last day of the calendar month during which the initial or, thereafter, the immediately preceding registration is issued.

The FAA will issue two reminder notices to each registered owner by mail to the address currently reflected in the FAA registry: The first will be sent 180 days prior to the registration's scheduled expiration date. If a re-registration application is not received by the FAA by the end of the Filing Window for the aircraft, a second notice will be sent at the end of the Filing Window. Re-registration applications received after the closing of the Filing Window will still be processed, but the registered owner will run the risk that the new registration certificate will not be received prior to the scheduled expiration date.

Re-registration can be accomplished online, if there will be no change in the registration information currently on file with the FAA, or by filing a hard copy application with the FAA. The FAA has developed a new form (AC Form 8050-1A) for re-registration applications. No "pink copy" of the re-registration application will be available to permit domestic operation of the aircraft pending receipt of the new registration certificate from the FAA.

The consequences of failing to re-register on a timely basis are potentially severe. The aircraft's registration will be cancelled on the scheduled expiration date (if no re-registration application has been received by that date). The cancellation will suspend the authority to operate the aircraft until it is properly registered and could trigger a default under existing loan and lease documents. The final rule contains a procedure under which the N-number for an aircraft whose registration is cancelled also will be cancelled. If an N-number is cancelled, it cannot be reissued for five years. If a new registration application is submitted for the aircraft after the N-number has been cancelled, a new N-number will be issued and must be painted on the aircraft.

Registration cancellation might adversely affect perfection of security interests held by a lender and/or lessor of the aircraft and also might jeopardize insurance coverage for the aircraft.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.