BACKGROUND

The Fractional Ownership Rule, published on September 17, 2003, identifies fractional ownership programs as private, general aviation programs conducted under Title 14 of the Code of Federal Regulations (14 CFR) part 91 subpart K (part 91K). This subpart provides the regulatory definitions and safety standards for fractional ownership programs. Additional information can be found in Advisory Circular (AC) 91-84, Fractional Ownership Programs. 

A fractional ownership program is a program of shared aircraft ownership that is conducted under the requirements of part 91. As defined in part 91K, a fractional ownership program must contain all of the following elements:

1. The provision for fractional ownership program management services by a single fractional ownership program manager on behalf of the fractional owners.
2. Two or more airworthy aircraft.
3. One or more fractional owners per program aircraft, with at least one program aircraft having more than one owner.
4. Possession of at least a minimum fractional ownership interest in one or more program aircraft by each fractional owner (1/16th for airplanes/1/32nd for helicopters).
5. Dry-lease exchange agreements among all of the fractional owners.
6. Multiyear contracts or program agreements for management services and aircraft dry lease exchange.

Management Specifications (MSpecs). A person seeking to operate under part 91K applies to the FAA for MSpecs, not for an operating certificate. MSpecs are authorizing documents that serve a similar purpose under part 91K as Operations Specifications (OpSpecs) do under 14 CFR part 119. Unlike air carriers, air operators, and air agencies, a part 91K fractional ownership program manager is not a certificate holder. Therefore, the term “certification” does not apply to part 91K. Instead, the FAA uses the terms “application approval process” or “application project”.

FIVE PHASES

The application approval process is a series of steps outlined in five phases:

• Preapplication;
• Formal Application;
• Design Assessment;
• Performance Assessment; and
• Administrative Functions.

Phase One—Preapplication

Initial Inquiry. 
A potential applicant for MSpecs should conduct an initial inquiry by contacting the applicable Flight Standards office nearest to their proposed base of operations. A listing of Flight Standards offices may be found at https://www.faa.gov/about/office_org/field_offices/fsdo. The initial inquiry activity is informational only and does not initiate the application approval process. 

Submission of Preapplication Information. 
A potential applicant should submit the preapplication information listed in FAA Notice 8900.766, Appendix A. Applicant Readiness Checklist for part 91K, using the Safety Assurance System (SAS) External Portal. The “Safety Assurance System (SAS) External Portal Information Guide” may be found at https://www.faa.gov/sasdeployment/sas-external-portal-information-guide.

Phase Two—Formal Application. 

When the FAA determines the potential applicant is ready to begin the application approval process and resources are available, they will schedule a formal application meeting. The FAA will fully discuss and explain the subsequent phases of the application process. The applicant should ask for clarification of any item or event that is not clearly understood.

Phase Three—Design Assessment. 

The design assessment phase is when an applicant’s manuals and other documents are reviewed in-depth to ensure compliance with applicable regulations, policy, and conformity to safe operating practices.

Note that part 91K program managers may use certain part 121 or 135 programs. If the applicant is a 14 CFR Part 121 or part 135 certificate holder, and chooses to use their previously approved or accepted 14 CFR Part 121 or part 135 programs to satisfy part 91K requirements, the FAA need not evaluate those programs.

Phase Four—Performance Assessment.

The performance assessment phase is when the FAA observes and monitors many types of applicant activities to determine whether their proposed procedures and programs comply with regulations, their own written procedures, and safe operating practices. 

Note that if the applicant is a 14 CFR Part 121 or part 135 certificate holder, and chooses to use their previously approved or accepted 14 CFR Part 121 or part 135 programs to satisfy part 91K requirements, the FAA need not evaluate those programs.

Phase Five—Administrative Functions. 

In this phase, the FAA will issue the applicable MSpecs to the applicant once it has been determined that all regulatory requirements have been met. This action completes the application approval process. 

REFERENCES

Advisory Circular (AC) 91-84, Fractional Ownership Programs

Dynamic Regulatory System (DRS)

Advisory Circular (AC) 120-92, Safety Management Systems for Aviation Service Providers

Advisory Circular (AC) 91-79, Aircraft Landing Performance and Runway Excursion Mitigation

Advisory Circular (AC) 91-90, Part 91 Approved Inspection Programs

Advisory Circular (AC) 120-124, Continuous Airworthiness Maintenance Program (CAMP) Training Program

Advisory Circular (AC) 120-72, Maintenance Human Factors Training.

Advisory Circular (AC) 120-125, Development and Use of an Operator’s MEL, NEF Program, and CDL for Operations Under 14 CFR Parts 91K, 121, 125, and 135.

Advisory Circular (AC) 120-68, Pilot Records Database and Pilot Records Improvement Act

Pilot Records Database (PRD)

Advisory Circular (AC) 120-106, Scope and Recommended Content for an Airworthiness Agreement Between a Certificate Holder and a Maintenance Provider