Hangar Use Issues at Airports That Receive Federal Grants

Banterra Aircraft
Posted in Aircraft Financing News

Public use airports that have accepted grants under the Airport Improvement Program (AIP) must comply with certain Federal policies included in each grant agreement as “Sponsor Assurances”. An airport Sponsor can simply be described as any entity operating and/or managing a federally obligated public use airport such as a municipality, county government, state, etc.

Noted in the Federal Registry / Vol. 81, No. 115, June 15, 2016/Rules and Regulations under The Department of Transportation, Federal Aviation Administration, 14 CFR Chapter 1 (Docket No. FAA 2014-0463), “Policy on the Non-Aeronautical Use of Airport Hangars” with the latest policy effective date, July, 1 2017. Unfortunately, the policy also effects owners of privately owned hangars on leased land. It should be noted that the policy does not apply to privately owned airports or public use airports that have not received Federal grant money.

The purpose of the policy is to assure is that airports who have accepted AIP Grants, operate facilities exclusively for aeronautical purposes. One of the Sponsors responsibilities is to develop an acceptable policy of their own from FAA minimum guidelines for “Non-Aeronautical Use” of airport hangars to comply with their AIP commitments. The FAA has set minimum requirements that Sponsors must adhere to regarding hangar use issues but does allows for Sponsor discretion regarding activities that do
not impact other aeronautical uses and do not create unjustly discriminatory conditions at the airport.

Failure to follow FAA policy guidelines and the Sponsor airport policy may result in violations and jeopardize current and future grant funding of airports not in compliance.

The FAA Policy is specific with certain aeronautical and non-aeronautical usage of hangars and allows Sponsors to create their own policy above and beyond FAA requirements to meet local and state codes and regulations as deemed necessary.

The FAA has published a “Frequently Asked Questions & Answers on FAA Policy on Use of Hangars at Obligated Airports located online at https://www.faa.gov/airports/airport_compliance/hangar_use/#q2

To summarize what the FAA considers as “Aeronautical Use”:

  • Storage of aircraft
  • Sheltering aircraft for maintenance, repair, or refurbishment but not indefinitely storing non-
    operational aircraft
  • Non-commercial building of amateur / experimental aircraft
  • Storing aircraft handling equipment, tools, tow bars, work benches, materials to service aircraft,
    items related to ancillary or incidental uses that do not affect a hangars primary use
  • Storage of materials related to aeronautical activities, i.e., office equipment, teaching tools, &
    items related to ancillary or incidental uses that do not affect a hangars primary use
  • Parking a vehicle at the hangar while the aircraft usually stored in that hangar is flying
  • Storing non-aeronautical items that do not interfere with the primary use of the hangar
    The following uses are not permissible under the FAA policy:
  • Use as a residence
  • Operation of a non-aeronautical business
  • Activities that impede the movement of aircraft in and out of the hangar or other aeronautical
    contents of the hangar
  • Activities that displace the aeronautical contents or impede access to aircraft or other
    aeronautical contents of the hangar
  • Long term storage of derelict aircraft
  • Storage of items or activities prohibited by local and state law
  • Storage of municipality inventory or equipment unrelated to aeronautical use
    Airport Sponsor Responsibilities
  • Develop an airport policy that at least meets the FAA’s policy minimum requirements
  • Allows Sponsor discretion to manage and address A.) adopting rules covering the different uses
    of hangars B.) Mitigating related safety concerns (fire codes, emergency access, etc) C.)
    Managing airport planning D.) Preserving airport efficiency E.) Managing funding aspects of
    airport management
  • Provides protection against claims of discrimination by imposing consistent rules for incidental
    storage in all similar facilities at the airport;
  • Provides airport sponsors with the ability to permit certain non-aeronautical items to be stored
    in hangars provided the items do not interfere with the aeronautical use of the hangar;
  • Allows an airport sponsor to request FAA approval of an interim use of a hangar for non-
    aeronautical purposes for a period of 3 to 5 years; and
  • Allows an airport sponsor to request FAA approval of a leasing plan for the lease of vacant
    hangars for non-aeronautical use on a month-to-month basis.

Banterra Bank Aircraft Finance Now Offers Loans for Experimental Aircraft

Banterra Aircraft
Posted in Aircraft Financing News

The Banterra Bank Aircraft Finance Division is now offering competitive loan options for fully constructed and airworthy popular experimental aircraft including; Van’s RV series, GlassAir, Lancair, Kit Fox, along with several other that have manufacturer support and parts availability.

Because experimental aircraft are not listed in any industry price guides, comparable aircraft for sale in the U.S. will be reviewed to assist in determining values. Highly competitive rates and terms are based on
amount borrowed, engine times, and applicant’s needs. Credit approvals can be accomplished in most cases in one business day if all requested items are included with Credit Applications. The lender does not charge an application fee and offers 90 day credit “pre-approvals” to qualified applicants. Kits themselves, amateur designed and built from non-manufactured kit parts, gyrocopters, and sailplanes are excluded in the Banterra Bank program.

Contact the Banterra Bank Aircraft Team at (888) 254-5731 for more information and current financing options.

Banterra Bank Now Offers Light Sport (LSA) Aircraft Financing

Banterra Aircraft
Posted in Aircraft Financing News

Banterra Bank Aircraft Finance Division announces its entrance into the Light Sport (LSA) financing arena with very competitive loan terms and interest rates. Our aircraft lending staff has over 70 years combined aircraft financing experience and offers “Hassle Free” service along with expedited credit decisions to get you in the air fast!

The FAA defines a light sport aircraft as an aircraft, other than a helicopter or Powered-lift, that since its original certification, has continued to meet the following:

Max. Gross Takeoff Weight: 1,320 lbs (600 kg) or 1,430 lbs for seaplanes (650 kg)
Max. Stall Speed: 51 mph / 45 knots CAS
Max. Speed in Level Flight (at sea level In the US Standard Atmosphere):138 mph / 120 knots CAS
Max. Seats: Two
Max. Engines / Motors: One (if powered)
Propeller: Fixed-pitch or ground adjustable
Cabin: Unpressurized
Fixed-pitch, semi-rigid or teetering
Landing Gear: Fixed (except for seaplanes and gliders)

Contact the Aircraft Finance Department at (888) 254-5731 for our highly competitive rates and terms!

ADS-B Out Inexpensive Solution Now Available

Banterra Aircraft
Posted in Aircraft Financing News

Every aircraft owner is aware of the looming 2020 ADS-B requirement for operations in controlled
airspace. Avionic shops are backlogged with appointments for upgrades to panels and many owners of
older generation aircraft have been hoping for a low-cost solution to allow them to keep flying beyond
2020.

The uAvionix Corporation located in Bigfork, Montana has the perfect solution. You can learn more
about them by visiting their website, www.uavionix.com, or give them a call at 844-827-2372.
We’ve been informed that they are currently taking orders for end of August deliveries of the all new
SkyBeacon at a cost under $2,000. The SkyBeacon mounts in ten minutes to where your existing left
(red) navigation/strobe light is located and can be installed by any A & P mechanic. The unit has a built
in LED red navigation light, strobe light, WAAS GPS and ADS-B “Out” transmitter and you don’t even
have to change your panel mounted transponder.

The unit is in the process of being TSO’d and STC’s will be expedited for manufacture’s fleets versus
single aircraft to help speed up the STC process.

Banterra Aircraft Finance offers financing solutions for both general aviation and business aircraft for
purchases, refinancing, engine overhauls, and avionics upgrades. Visit www.BanterraAircraft.com or call
us at 888-254-5731.

Aircraft Financing – Insurance Requirements

Banterra Aircraft
Posted in Aircraft Financing News

When financing an aircraft, lenders will require full “in-motion” and “not in-motion” insurance coverage
for both the hull value and liability for the duration of the loan until paid off. Aircraft owners have the
option of purchasing insurance through specialty aircraft insurance brokers or through a very limited
number of direct underwriters. Aircraft insurance brokers give owners more options on coverages,
deductibles, and premiums versus direct underwriters as the “shop the market” to actual indirect
aviation underwriters.

In general, most aircraft lenders will require low deductibles and policy requirements notifying the
lender with a 30-day cancellation notice along with a 90% Breach of Warranty (BOW) clause. The BOW
basically guarantees the lender payment from any insurance proceeds in the event of claims where the
aircraft owners violated covenant(s) and terms as outlined within their policies. If a claim is filed where
a BOW is required, the underwriting insurance company can subrogate the amount as a claim against
the actual insured.

Most airplane insurance liability coverage starts at a total of one million dollars and higher amounts are
available upon request. Students, low-time pilots, and those inexperienced in higher performance
aircraft can limit liability coverage to $100,000 per passenger. The additional premium cost to upgrade
to a combined single limit “smooth” liability provision will be determined by the insurance underwriter
based on experience levels of the insured. Lenders generally do not specify what level of liability
coverage would be required but pilots may want to see if they qualify for the higher combined single
limit for liability purposes.

Typically with any collateral based loan transaction, aircraft lenders would place more costly force
placed aircraft hull and liability coverage in the event borrowers do not have the proper and required
insurance policy in place at all times.

Banterra Aircraft Finance offers financing solutions for both general aviation and business aircraft for
purchases, refinancing, engine overhauls, and avionics upgrades. Visit www.BanterraAircraft.com or call
us at888-254-5731.