Business aviation glossary: Technical terms for non-technical people

Alasdair Whyte
By Alasdair Whyte May 8, 2010 20:16

Business aviation glossary: Technical terms for non-technical people

Every industry has its own expressions and terms. The following is our first start at building a guide to some of the terms associated with business aviation and aircraft finance. 

ABACE Asian Business Aviation Convention & Exhibition.

ACARS Aircraft communications addressing and reporting system.

ADS-B Automatic Dependant Survielance – BroadcastA system that periodically sends short data busts from the aircraft. It includes flight and location details, as well as unique Mode-S code that identifies the aircraft.

ACAS Airborne collision avoidance system.

ACJ Airbus Corporate Jet.

ACMI lease An operating lease which includes aircraft, crew, maintenance and insurance. Also known as a ‘wet lease.’

Aircraft on ground (AOG) A term commonly used to refer to an aircraft that is grounded due to a technical problem. It is occasionally used by leasing companies to refer to aircraft that are not on lease.

Airworthy aircraft An aircraft which conforms to its Type Design, as approved under the Type Certificate or a Supplemental Type Certificate, to all applicable Airworthiness Directives; and which is able to operate without significant hazard to aircrew, ground crew, passengers or the general public.

Airworthiness Directive (AD) AD’s are used by the certifying authority to notify aircraft owners and operators of unsafe conditions and to require their correction. Sometimes during service the aircraft may encounter problems that may compromise the aircraft’s safety. The certifying authority (CAA) issues an AD which normally consists of additional maintenance or design actions that are necessary to restore the type’s airworthiness. Compliance is mandatory and thus if an operator does not comply with an AD, then the datum aircraft is not considered airworthy.

Airworthiness Review Certificate (ARC) Issued after satisfactory completion of an airworthiness review and serves as evidence of continuing validity of Certificate of Airworthiness issued for each individual aircraft. An Airworthiness Review Certificate is issued by the competent CAA of the EASA member state of registry or by and EASA approved CAMO (subject to special conditions).

Air Operator’s Certificate (AOC) The approval granted from a national aviation authority (NAA) to an aircraft operator to allow it to use aircraft for commercial purposes such as charter.

Altitude The height at which an aircraft flies.

Appraiser A person or organisation which values (appraises) aircraft. In the US they are usually members of the American Society of Appraisers.

AMA – Aircraft management agreement

APU (Auxiliary power unit) A generator used to provide power to aircraft on the ground.

ASF (Authorised service facility) A maintenance facility that is affiliated with a particular aircraft manufacturer.

ATP Airline transport pilot certificate issued by the US FAA.

ATPL Airline transport pilots license

Avinode An international organisation and online marketplace for air charter.

BBJ Boeing Business Jet.

Business liner Also known as a corporate airliner. A term given to a business jet that is sold as new to be used as a corporate jet but has been adapted from a model available for commercial airlines. Airbus Corporate Jetliners, Boeing Business Jets and Embraer’s Lineage 1000 all fit into this category.

Broker A professional buyer and seller of aircraft.

Call option The right to buy. An operating lease with a call option gives the lessee (or operator) the right to buy the aircraft or helicopter at the end of the lease. The opposite of a call option is a put option (the right to force someone to buy something).

Certificate of Airworthiness (C of A) A Certificate of Airworthiness (C of A) is issued for an aircraft by the national aviation authority of the state in which the aircraft is registered. The airworthiness certificate attests that the aircraft is airworthy. Periodical Airworthiness Reviews are typically required by the CAA’s in order to ensure the validity of aircraft C of A. This could be performed by surveyors designated by the CAA or in case of EASA countries also by an approved CAMO.

Continuing airworthiness
A continuous status of compliance with all valid airworthiness requirements at the given time during the in-service life of the aircraft.

The Continuing Airworthiness Management Organisation (CAMO) The organisation responsible for the management and coordination of all continuing airworthiness requirements. The term CAMO was implemented by the European Aviation Safety Agency (EASA) within Part M of the European Commission Regulation EC No. 2042/2003 (Continuing Airworthiness Requirements). This regulation is mandatory law for all EASA member states (all EU states, Switzerland, Liechtenstein, Norway, Iceland). Further, the institution of CAMO is mandated by civil authorities of Bermuda and Cayman Islands under Overseas Territories Aviation Regulations (OTAR’s) Part 39. Recently some Middle East CAA’s (UAE, Oman, Qatar) as well as India started to implement requirements for structured airworthiness management. Other ICAO air authorities worldwide are likely to follow. Aircraft registers of Aruba and Isle of Man do not require the formalized institution of CAMO, however they do require so called Designated Airworthiness Representative or Technical Coordinator. The nature, responsibilities and duties of this function are identical with CAMO.

Certificate of Registration Certifies that an individual aircraft (serial number) was entered in to the particular national register under the assigned registration mark (M-XXXX).

Concierge services Charter and fractional jet owners will often offer this extra service to customers (as do the hotels these customers stay in.

Cross-border deal Where a financier leases an aircraft from one country to another.

Cruising altitude The height aircraft climb to.

Deadleg A term used in charter and fractional ownership to refer to a route where a flight is empty.  For example, if a customer charters a flight from Madrid to Rome, and the aircraft flies from Geneva to Madrid it is referred to as a dead-leg.

Designated Airworthiness Representative Aircraft registers of Aruba and Isle of Man do not require the formalised institution of CAMO, however they do require so called Designated Airworthiness Representative or Technical Coordinator. The nature, responsibilities and duties of this function are identical with CAMO.

Distressed value The value of an aircraft in a distressed market. Apraisers define a distressed value as one where more than 10% of that aircraft type is avialable for sale.

EBACE or European Business Convention and Exhibition Europe’s largest business aviation event. Runs in May next to Geneva Airport.

Electronic flight bag – Digital alternative to the real flight bags containing paper pilots carry. Includes flight plans, taxi routes at airports, aircraft operating handbooks, airplane operation manuals etc. Now may be carried on an iPad.

Emergency medical services (EMS) Sometimes referred to as Air medical services (AMS). A common type of mission for helicopters, where aircraft are used to transport patients between healthcare facilities.

Enhanced Vision System – External real-time imaging using vision sensors such as infrared to allow a pilot to see better

Ex-Im Bank Export Import Bank. Typically used to refer to the Export-Import Bank of the US.

Export credit guarantees/ export credit Governments will often help their own exporters by  guaranteeing customer’s debt. Banks typically lend the money to help foreign companies buy aircraft but the export credit agency pays them bank if a deal fails.

Fixed base operator (FBO) A provider of support services such as fueling, hangaring, parking, aircraft maintenance permanently based at an airport.

FOD Foreign object damage.

Fractional ownership
Where a customer buys a ‘time share’ (usually an amount of hours per year) of an aircraft e.g. NetJets.

General Aviation Manufacturers Association (GAMA) A trade body representing over 60 manufacturers of general aviation aircraft, parts and components. Publishes useful statistics on deliveries.

GPWS Ground Proximity Warning System. A flight control system that alerts the PIC when the aircraft is close to coming into contact with another object.

Green jet An aircraft that has been built but still needs furnishing at a completion centre.

HDD (Heads Down Display) – a flat panel cockpit or electronic flight bag

HNWI High-net-worth individual

HUD Heads Up Display – a display system in the cockpit that shows what is going on, on the window of the cockpit

Hybrid lease Usually an operating lease where the lessee can get some benefit from upside

Instructions for Continuing Airworthiness (ICA’s) Instructions on how to maintain the airworthiness of the aircraft, engine or propeller issued by the TC holder (manufacturer) or by the STC holder for modifications installed on the aircraft. This includes Maintenance Manuals, Structure Repair Manuals, Flight Manuals, Drawings and Wiring Diagrams, Maintenance Planning Documents, Maintenance Steering Group Reports, etc. All such instructions are continuously amended and the changes are to be considered and implemented during continuing airworthiness management.

Investment of passion
Cap Gemini and Merrill Lynch use this grouping for yachts, jets, cars, jewellery in their annual World Wealth Report.

KYC (Know your customer) Where banks, OEMs or other companies verify their clients.

LOI (Letter of intent) A non-legally binding contract signed by two or more parties to an outline an agreement (e.g. the agreement to buy or sell an aircraft) before it has been finalised.

Maintenance Program (MP) As an aircraft enters into service, it is subject to operational wear and tear which may cause performance degradations. The maintenance program serves to maintain the aircraft airworthiness. It is a summary of all relevant ICA’s compiled for each individual aircraft (serial number) or fleet of the same type operated by one unique operator. The MP is always subject to approval and subsequent auditing by the competent CAA. As an important part of Continuing Airworthiness Management the MP must be continuously monitored, reviewed and amended to reflect any changes to the ICA’s or new requirement issued by the competent authorities.

Market Value The value of an aircraft if the market is trading in normal conditions. A normal market is usually one where less than 10% of the fleet of that particular aircraft type is available for sale.

Maximum take-off weight (MTOW) The maximum weight than an aircraft at sea-level can weigh at take-off.

Mode-S code A unique hexidecimal code assigned to an aircraft, which is transmitted by ADS-B.

OEM Original equipment manufacturer (an aircraft, engine or helicopter manufacturer).

OEW Operationg Empty Weight.

Operating lease An operating lessor owns the aircraft or helicopter and leases it to the operator. Similar to the concept of car hire leases are typically one to five years.

Private bank A bank that specialises in helping private individuals. Often a subsidiary of a major banking group.

Purchase and lease back The same as a sale and leaseback, but from the perspective of the operating lessor.

Put option The right to force someone to buy something. Fractional ownership deals typically give owners the right to sell their share back at the end of a lease.

Residual value risk An aircraft’s residual value is what it is worth at the end of a finance deal. Operating lessors, that own the aircraft, take this on operating leases. On finance leases it is the owner.

RunwayA bit of concreate that aircraft are supposed to land on.

SAJFSustainable Aviation Jet Fuel.

Sale/leaseback Where the business jet or helicopter sells the aircraft to an operating lessor and leases it back. At the end of the lease term the operating lessor owns the corporate aircraft or helicopter.

Sale and Leaseback The same as sale/leaseback.

Search and rescue (SAR or S&R) A type of helicopter mission carried out to search for and provide aid to people in distress or danger. Missions carried out helicopters belonging to coast guards or maritime agencies would fall into this category.

Service Bulletin (SB) With increasing in-service experience, the type certificate holder (manufacturer) may find ways to improve the original design resulting in either lower maintenance costs or increased performance. These improvements (normally involving some alterations) are suggested through service bulletins to their customers as optional (and may be extra cost) items. The customers may exercise their discretion whether or not to incorporate the bulletins. However incorporation of some SB’s may have an impact on existing of future warranties. Sometimes SBs can become mandated by relevant AD’s.

Super mid-size jet (SMJ) A medium-size jets that offers a far greater range and more cabin space. Examples include the Bombardier Challenger 300, Dassault Falcon 2000, Embraer Legacy 600 and the Gulfstream G450.

Supplemental Type Certificate (STC) Issued by the CAA to approving a modification to an product (aircraft, engine, or propeller). The STC defines the product design change and states how the modification affects the existing type design. It also identifies the certification basis by listing the specific regulatory compliance for the design change. Such modifications and applications for STC’s can be designed and filed not only by the original product manufacturer but as well by third parties (as long as they hold the appropriate qualification- CAA design approval).

Sweetheart deal
or Sweetheart lease Where a manufacturer or lessor enters into a deal that is very attractive for the client. Sweetheart deals are common when manufacturers are trying to break into a market like China.

Synthetic Vision System – Computer generated images using the aircraft’s altitude, attitude and current position

TAS True air speed.

TAT Total air temperature.

TAWS Terrain awareness and warning system.

TCAS Traffic alert and collision avoidance system.

TODA Take-off distance available.

TORA Take-off run available.

Tripartite Agreement – An agreement between three parties. Tripartite agreements between the lender, the aircraft buyer and the operator are common. Financiers like these because it makes getting an aircraft back easier if the buyer defaults.

Type certificate (TC) A design approval issued by the Civil Aviation Authority (CAA) of a given country (such as the US FAA and EU EASA) when the manufacturer demonstrates that a product complies with the applicable regulations. The TC normally includes the type design, the operating limitations, the Type Certificate Data Sheet (TCDS), the applicable regulations, and other conditions or limitations prescribed by the CAA. TC’s are normally issued for airframes, engines and propellers.

Ultra-high-net-worth individual (UHNWI) What most high net worth individuals want to be.

ULD Unitary load device (baggage/cargo container).

VHF Very high frequency.

VLJ Very light jet e.g Cessna Mustang, Beechcraft Premier IA.

XP Extra performance.

XR Extra range.

ZT Zulu time (=GMT, UTC)

Alasdair Whyte
By Alasdair Whyte May 8, 2010 20:16

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