Purchasing an Existing Part 121, 135, or 145 Certificate: Part 2 – Steps in Purchasing or Applying for a Certificate

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Purchasing an Existing Part 121, 135, or 145 Certificate: Part 2 – Steps in Purchasing or Applying for a Certificate

This is a post by guest author Dean Kantis, founder and owner of Micro Jet Network, Inc. Dean was asked to contribute to this blog because of his expertise in aircraft brokerage. Any thoughts expressed below are entirely Dean’s and do not necessarily reflect the views of Universal Weather and Aviation, Inc.

This business aviation blog post continues from our article last week, entitled "Purchasing an Existing Part 121, 135, or 145 Certificate: Part 1 – Knowing the Regulations."

There are many considerations to take into account prior to purchasing an existing 121/135/145 certificate. We recommend that you work with an experienced aviation law firm and understand the costs for this process up front.

The following is an overview of what you need to know:

1. The start of the FAA Part 135 application process

Anyone who wants to purchase or apply for a Part 135 certificate should spend a good deal of time going through the various forms and learning what’s involved in order to get approved for a Part 135. To help operators understand what information is needed, the Federal Aviation Administration (FAA) has published the "Certification Information for Operating Under Part 135."

2. Five phases to the Part 135 application process

The FAA has published an Advisory Circular entitled "Certification of Air Carriers," which outlines the five phases to consider for the Part 135 application process:

(1) Pre-Application
(2) Formal Application
(3) Document
(4) Demonstration and Inspection
(5) Certification

3. Estimated cost and timeframe for applying for an FAA Part 135 certificate

Below is an example to showcase the cost and timeframe for the Part 135 application process. This outlined example is based on a single pilot/basic certificate for a Hawker 800XP aircraft. The average timeframe is approximately two years* from start to finish.

Application/Law Firm: If you hire an experienced aviation law firm, expect to spend 35,000-90,000 USD, depending on what type of certificate you set up, how many aircraft you will have on the certificate, whether the aircraft is used for passenger or cargo transport, and to which geographical areas your certificate is allowed/approved to operate.

Proving Runs (proving and validation tests): To calculate you utilize the cost per flight hour (varies) multiplied by 25 hours, plus a check ride. The cost for this step is +/- 45,000 USD.

Conformity: Between 5,000 and 10,000 USD depending on aircraft.

Timeframe: Two years, according to information I have received from six individuals who have each been through this process. (Note: If your experience has been different, or if you have data that says otherwise, please let me know.)

4. Estimated cost and timeframe for purchasing an existing Part 135 certificate

Below is an example that outlines the costs for purchasing an existing Part 135 certificate. The example is based on a single-pilot/basic certificate for a Hawker 800XP aircraft.

Certificate with damage/incident/accident reports: Usually under 50,000 USD.

Basic certificate: Usually about 50,000 USD and up.

Up to a nine passenger basic certificate: Usually about 50,000 USD and up.

10 passengers or more, multiple aircraft, and worldwide territories: Varies between150,000 and 500,000 USD.

Timeframe: Micro Jet Network, Inc. has spent the past two years working with buyers/sellers of Part 135 businesses and has seen this process take from 10 days to several months. The process depends on how in-depth the entity is, whether or not there are any outstanding liens or loans, and how quickly the agreements are turned around by all involved.

You may or may not be required to pay out of pocket for "Proving Runs" or "Conformity," but those costs can add up very quickly. First, be certain to speak to the FAA Flight Standards District Office in the area to which you will be assigned, so that you know exactly what authorities require when changing or adding aircraft to an existing certificate. The benefit of course is that you immediately have an active Part 135. Just make sure you perform all due diligence in ensuring there are no surprises or liability issues with the prior Part 135 owner/operator. Again, we recommend that you hire the efforts of an experienced aviation firm that specializes in Part 135 startups as well as Part 135 entity acquisitions.

5. Key Part 135 positions and estimated monthly and annual costs

Keep in mind that each job position depends on criteria such as: what the job title/description involves, responsibilities, education, type ratings, and background experience of each aircraft personnel. Below are some general costs to consider:

Director of Maintenance (DOM): 50,000 to 85,000 USD +/- per year
Director of Operations (DOO): 50,000 to 85,000 USD +/- per year
Chief Pilot: 65,000 to 85,000 USD +/- per year
Citation: Micro Jet Network, Inc. has spent the past two years working with buyers/sellers of Part 135 businesses and has seen a multitude of salaried positions for the DOMs, DOOs, and chief pilots and the above are averages of the information compiled. The above are approximate salaries based on known Part 135/Entities/Businesses that Micro Jet Network, Inc. have worked on and based on what those owners/operators have stated to them.

With all Part 135s, there are too many factors to be able to provide a firm payment schedule, but you can definitely estimate how much to assume based on the operation that you are going to offer.

Additionally, you’re going to need to know the answers to questions such as:

  • What kind of aircraft will I have on my certificate?
  • How many aircraft will I have?
  • How many employees?
  • Can some employees consistently and proficiently perform multiple job tasks/titles and, if so, which ones so that I can be as efficient as possible?
  • How much per flight hour do I need to charge to break even on yearly expenses and how much in order to be in the black?
  • What are the terms of the aircraft management agreement?
  • How many flight hours will we be flying this year to break even and how many in order to get into the black?
  • How many pilots and airframe and/or powerplant mechanics do I need full-time?
  • How many contract pilots will I need to hire part-time?

6. FAA answers to many commonly asked Part 121, 135, and 145 questions

1. If my company holds a Part 119 certificate, with the authority to operate under Part 135, and a Part 145 repair station certificate, can we cover all our safety-sensitive employees under one combined drug and alcohol testing program?

Yes. It is possible for you to combine your testing program under your Part 135 operation. To do this, please contact your Federal Aviation Administration (FAA) principal maintenance inspector and …

For the full answer, please see the FAA website.

2. Can a Part 121 or Part 135 operator that also conducts air tour operations (as defined under § 91.147) have a combined FAA-mandated drug and alcohol testing program?

Yes. To do this, the Part 121 or Part 135 operator must contact its FAA Principal Operations Inspector (POI) and give notification that it plans to manage a combined drug and alcohol testing program …

For the full answer, please see the FAA website.

3. Is a manufacturer who tests a component to determine the extent of needed repairs or to determine the serviceability required to be covered under a drug and alcohol program when performing work for a 14 CFR Part 121/135 air carrier?

Yes, because the testing is being performed to a standard required by the manufacturer or other standards acceptable to or approved by the Federal Aviation Administrator. The testing standard …

For the full answer, please see the FAA website.

4. What is the process of setting up a Federal Aviation Administration (FAA)-mandated drug and alcohol testing program?

According to the FAA’s drug and alcohol testing regulation (14 CFR part 120), an employer (i.e., a Part 119 certificate holder with authority to operate under Parts 121 and/or 135, an operator as …

For the full answer, please see the FAA website.

5. When an air carrier hires a repair station to perform maintenance, how can it ensure that the repair station’s safety-sensitive employees are covered under a FAA drug & alcohol testing program?

The Federal Aviation Administration’s (FAA’s) drug and alcohol testing regulations (14 CFR part 120) require any Part 119 certificate holder that is authorized to operate under Parts 121 and/or 135 …

For the full answer, please see the FAA website.

6. How does an employer submit a voluntary disclosure for an apparent violation of the drug and alcohol testing regulations (14 CFR Part 120 and 49 CFR Part 40)?

If the employer holds either a Part 119 certificate with authority to operate under Parts 121 and/or 135 or a Part 145 repair station certificate, it may voluntarily disclose an apparent violation in …

For the full answer, please see the FAA website.

7. I operate a flight school. Does instruction in a flight simulator qualify as a safety-sensitive function?

Yes. A flight instructor who provides Instruction in a flight simulator qualifies as a safety-sensitive function when the instruction is provided to individuals who perform directly or by contract …

For the full answer, please see the FAA website.

8. What are the crewmember flight and duty time and rest requirements?

General aviation operations conducted under 14 CFR Part 91 are not subject to flight and duty time and rest requirements, except flight instruction ( 14 CFR Section 61.195 ) …

For the full answer, please see the FAA website.

9. How can I get an answer to a medical question relating to obtaining a pilot medical certification?

You can find out how to get an answer to your medical question on our Aerospace Medicine website.

For the full answer, please see the FAA website.

10. What is the maximum age a pilot can fly an airplane?

In the U.S., there are no FAA age limits for pilots except for commercial airline pilots employed by airlines certificated under 14 CFR Part 121 . These airlines cannot employ pilots after they …

For the full answer, please see the FAA website.

7. Additional information

You can contact your FSDO office to obtain more information. On this list, you can find the specific district office assigned to each air carrier.

The National Business Aviation Association has published information on operations specifications and certification for Part 135 operators. That information can be found here.

Questions on new Part 135 applications/implementation process can be answered by the FAA. Contact information is below:

FAA:
Attn: Ms. Cindy Logan
Application Development Branch, AQS-230
cindy.logan@faa.gov

For any additional questions, contact the FAA administration office:

135 Air Carrier Operations Branch (AFS-250)
Room # 831
800 Independence Avenue, S.W.
Washington, DC 20591
Phone: (202) 267-8166
Fax: (202) 267-5229

Attn: Ms. Kathleen Bergen
FAA Communications
(404) 305-5100 – 24/7
kathleen.bergen@faa.gov

For complaints on a particular Part 135 operator:

The FAA investigates all safety complaints it receives. If the agency finds violations of the Federal Aviation Regulations (FARs), it can take enforcement action against the certificate holder. To report such complaints, please contact the FAA toll-free: 1-866-TELL-FAA

The following are the types of complaints you may file:

  • Specific violations (hazardous materials)
  • Information related to air carrier safety or other protection activities (aviation industry employees only)
  • Aviation safety issues (you may also fill out the dk@microjetnetwork.com.

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About

Dean Andrew Kantis is the CEO/Founder of Charter My Jet, a Fort Lauderdale, Fla.-based company that “matches” both aircraft owners with Part 135 charter operators who are the best match for their clientele. Kantis, also founded Micro Jet Network in 2006, is a licensed aircraft consultant/broker and an expert in selling jet aircraft as well as “matching” buyers and sellers of Part 135 charter companies. In 1999, Kantis experienced complications to his eyesight following LASIK surgery and is still searching for a cure. Kantis can be reached at dk@microjetnetwork.com.

This guest author’s views are entirely her own and do not necessarily reflect the views of Universal Weather and Aviation, Inc.

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