FAA tech issue kills aircraft deals until shutdown ends

Alasdair Whyte
By Alasdair Whyte January 11, 2019 19:21

FAA tech issue kills aircraft deals until shutdown ends

A technical problem involving the US Federal Aviation Administration’s aircraft registry system and the government shutdown means that it may now be impossible for many aircraft transactions involving US registered aircraft to close. 

Although selected employees at the Aircraft Registry Office in Oklahoma City are exempt from the shutdown, specifically to allow aircraft transactions to happen, the problem involves the Registry Modernization System (RMS) in Kansas City. A technical issue has stopped the system from updating records and workers who could fix it are on furlough following the government shutdown. They are not expected to return to work until the shutdown ends.

The title service industry can conduct title searches on aircraft in Oklahoma, but because the RMS system holds the latest information on aircraft they cannot see if a lien has been added in the last 180 days.  The technical fault was identified today.

“This development may stop aircraft closings because title searches can’t be updated to the date of closing to ensure that no other filings were submitted between the date of the initial search and closing,” says Bruce Marshall, executive vice president and general counsel at AIC Title Service. 

The FAA Reauthorization Act of 2018 (H.R.302) which was signed by President Donald Trump on October 5, 2018 allowed the FAA Administrator to designate employees the Aircraft Registry Office in Oklahoma City, Oklahoma as exempted employees in the event of a shutdown or emergency furlough to ensure that aircraft transactions could be closed. It does not cover employees in Kansas.

Today is the 21stday of theUS government shutdown – tying with the record for the longest ever.

“If this had happened in December it would have been a disaster for anyone looking to close a deal before year end,” says Clays Healy, president of AIC Title Search. “However, AvSure will provide title insurance for any aircraft we are already working on – as part of their existing policy – so these deals can close. But we can only do it where we have conducted the search. New transactions are effectively closed until the shutdown ends.”

The FAA said: “Due to the lapse in government funding, we are unable to respond to media questions at this time.”

Alasdair Whyte
By Alasdair Whyte January 11, 2019 19:21

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