[Federal Register Volume 70, Number 24 (Monday, February 7, 2005)]
[Proposed Rules]
[Pages 6382-6386]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-2035]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

14 CFR Part 375

[Docket No. OST-2003-15511]
RIN 2105-AD39


Certain Business Aviation Activities Using U.S.-Registered 
Foreign Civil Aircraft

AGENCY: Office of the Secretary, Department of Transportation.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: Under Part 375 of the Department's regulations, 14 CFR part 
375, which provides for the operation in the United States of ``foreign 
civil aircraft'' which are not engaged in common carriage, persons or 
entities seeking to operate foreign civil aircraft within the United 
States involving the carriage of persons, property and mail ``for 
remuneration or hire'' must obtain a ``foreign aircraft permit'' from 
the Department of Transportation under that Part. On May 16, 2003, the 
National Business Aircraft Association (NBAA), a trade association that 
represents many business aircraft operators throughout the United 
States, wrote to the Department requesting a policy determination that 
certain types of operations that its representative companies might 
perform using U.S.-registered foreign civil aircraft (such as carriage 
of a company's own officials and guests, or aircraft time-sharing, 
interchange or joint ownership arrangements between companies) do not, 
in fact, constitute operations ``for remuneration or hire'' within the 
meaning of Part 375. The NBAA noted that a favorable response would 
eliminate the need for the companies involved to secure a permit for 
such operations. The Department of Transportation is now proposing to 
amend 14 CFR part 375 to clarify those circumstances under which 
companies operating U.S.-registered foreign civil aircraft are not 
deemed to be involved in air commerce for remuneration or hire and, 
therefore, are not required under Part 375 to obtain a foreign aircraft 
permit.
    On July 7, 2003, the Department solicited comments on the NBAA 
request (see 68 FR 40321 (July 7, 2003)). Pursuant to the Department's 
request, comments were filed by interested parties. The Department has 
reviewed the comments filed in Docket OST-2003-15511 and now proposes 
to amend Part 375 of our regulations as described below.

DATES: Comments on the proposal must be received by April 8, 2005. 
Late-filed comments will be considered to the extent practicable.

ADDRESSES: You may submit comments identified by DOT DMS Docket Number 
OST-2003-15511 by any of the following methods:
    <bullet> Web site: http://dms.dot.gov. Follow the instructions for 
submitting comments on the DOT electronic docket site.
    <bullet> Fax: 1-202-493-2251.
    <bullet> Mail: Docket Management Facility; U.S. Department of 
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, 
Washington, DC 20590-001.
    <bullet> Hand Delivery: Room PL-401 on the plaza level of the 
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    <bullet> Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
    Instructions: All submissions must include the agency name and 
docket number or Regulatory Identification Number (RIN) for this 
rulemaking. For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the

[[Page 6383]]

Public Participation heading of the Supplementary Information section 
of this document. Note that all comments received will be posted 
without change to http://dms.dot.gov including any personal information 
provided. Please see the Privacy Act heading under Regulatory Notices.
    Docket: For access to the docket to read background documents or 
comments received, go to http://dms.dot.gov at any time or to Room PL-
401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: David Modesitt, Chief, Europe 
Division, Office of International Aviation (X-40), U.S. Department of 
Transportation, 400 7th Street, SW., Washington, DC 20590; (202) 366-
2384.

SUPPLEMENTARY INFORMATION: The issue here is whether, and under what 
circumstances, companies operating U.S.-registered foreign civil 
aircraft are engaged in commercial air operations for remuneration or 
hire to, from, and within the United States. Part 375 defines ``foreign 
civil aircraft'' as ``(a) an aircraft of foreign registry that is not 
part of the armed forces of a foreign nation, or (b) a U.S.-registered 
aircraft owned, controlled or operated by persons who are not citizens 
or permanent residents of the United States.'' 49 U.S.C. 40102(a)(15) 
defines ``citizen of the United States'' as, among other things, ``a 
corporation or association organized under the laws of the United 
States or a State, the District of Columbia, or a territory or 
possession of the United States, of which the president and at least 
two-thirds of the board of directors and other managing officers are 
citizens of the United States, which is under the actual control of 
citizens of the United States, and in which at least 75 percent of the 
voting interest is owned or controlled by persons that are citizens of 
the United States.'' Thus, if a company that does not meet the 
definition of a citizen of the United States (for example, if its 
president is not a U.S. citizen) owns, directly or through a parent or 
subsidiary, a corporate aircraft, that aircraft is considered to be a 
``foreign civil aircraft'' under Part 375, even if it is U.S.-
registered.
    The Department has addressed this issue in limited fashion in past 
interpretations of Part 375 as it pertains to demonstration flights 
performed on a chargeback basis related to the sale of aircraft and 
chargeback operations conducted by a parent for its wholly-owned 
subsidiary under circumstances where the management and/or board of 
directors and management of the corporation were not entirely composed 
of U.S. citizens. In both instances the Department indicated that such 
operations, within the confines of the record of those interpretations, 
did not constitute operations for remuneration or hire, and, therefore, 
a foreign aircraft permit would not be required under Part 375 of the 
Department's regulations.

Summary of Comments Filed

    Pursuant to the Department's request for comments on NBAA's 
proposal, the Department received comments from several parties.

Comments in Support of NBAA's Request

    Comments in support of NBAA's request were filed by NBAA, Dassault 
Falcon Jet Corporation, Carnival Cruise Lines, and Ford Motor Company. 
In its comments, NBAA strongly supports a policy determination that 
makes it clear that the business operations at issue here are non-
commercial in nature, and are not subject to the prior approval 
requirements of Part 375. NBAA maintains that application of the Part 
375 prior approval requirements to such operations does not make 
practical sense and serves only as an impediment to efficient business 
aviation operations. NBAA further states that business aircraft 
operations are non-commercial in nature because they: are not for 
remuneration or hire; are conducted entirely incidental to the 
principal business of the company; are not a business per se; and, 
contain no elements of holding out to the general public. Such 
services, NBAA says, are without compensation in most cases other than 
limited and defined reimbursement of expenses. Finally, NBAA maintains 
that application of Part 375's prior approval requirements to these 
operations, particularly if due to the involvement of one or more non-
U.S. citizens, would restrict the free flow of business aviation, and 
that doing so sets a bad precedent for other countries' assessment of 
whether to restrict U.S. general aviation operations for business-
related purposes.
    Dassault Falcon Jet Corp., a major manufacturer of business 
aircraft, filed comments that strongly supported the NBAA position and 
asked the Department to extend the current interpretation of Part 375 
beyond aircraft demonstration flights and parent/wholly-owned 
subsidiary situations to include other related business activities, 
such as aircraft time-sharing, aircraft interchanges, joint ownership 
of aircraft by multiple business, and the full scope of intra-corporate 
family operations. Dassault notes that most businesses operating 
aircraft carry employees, customers, and other persons with whom they 
conduct business. These activities, Dassault maintains, are incidental 
to, and in support of, a company's primary businesses, as opposed to 
being a business in and of itself. Dassault notes that a broader 
interpretation by the Department of Part 375 similar to that requested 
by NBAA will result in conformity with the manner in which the Federal 
Aviation Administration treats these activities under 14 CFR Part 91 
for the purposes of aircraft certification.
    Carnival Corporation, a/k/a Carnival Cruise Lines, also filed 
comments that supported DOT issuance of the policy determination 
requested by NBAA. Carnival sees no useful purpose for the Department 
to consider the activities at issue to be commercial in nature when 
they are conducted entirely for the benefit of business-related 
participants, with no elements of holding out for sale, and without 
compensation other than limited and defined reimbursement of expenses. 
Nor does Carnival believe that such operations should be restricted 
because one of the participants in not a U.S. citizen, as doing so 
would restrict the free flow of business aviation due to the burden of 
regulatory approvals. Carnival also noted that the NBAA request would 
more closely align the way the Department treats such business 
activities with the FAA's regulations.

Comments Opposing NBAA's Request

    In filed comments, the Air Transport Association of America, Inc., 
(ATA) asked the Department to deny NBAA's request. ATA stated that 
because the NBAA's request raises cabotage and bilateral international 
aviation issues, it seeks relief than cannot be considered properly and 
granted through a regulatory interpretation. ATA stated that it does 
not object to a previous Departmental interpretation of Part 375 saying 
that authority is not required for certain operations by a parent 
company on behalf of a wholly-owned subsidiary and vice versa. ATA's 
concern, however, is about a broadening of that interpretation to 
involve non-related companies with unrestricted involvement of non-U.S. 
citizens. ATA expressed concern that granting the relief sought by NBAA 
would generate incentives for foreign companies to pool U.S.-registered 
aircraft in order to get additional compensation and, therefore, a 
better return on their aircraft investment that would otherwise not be

[[Page 6384]]

available, and that the bigger the pool of such participants the 
greater the risk that such arrangements would involve true commercial 
operations. ATA also stated that the NBAA proposal would allow such 
foreign entities to circumvent their home countries' restrictive 
bilateral agreements with the United States, thereby allowing foreign 
entities to avoid longstanding U.S. statutory prohibitions against 
cabotage. ATA expressed concern that under the NBAA proposal there 
would be no assurance of reciprocity by foreign governments in their 
treatment of similar operations of U.S. citizens operating in foreign 
countries. Finally, with respect to time share operations, ATA 
maintains one element of the cost recovery allowance, namely the 
ability to charge in addition to other specifically allowed incremental 
cost recoveries, a 100% fee of fuel, oil and lubrication expenses, 
provides a return above marginal operating costs and therefore would 
allow a profit for time share operations on a marginal cost basis.

NBAA Reply

    On August 27, 2003, NBAA requested leave to submit a reply to the 
comments of ATA. In the interest of a complete record, we accepted 
NBAA's reply comments, as well as the surreply comments of ATA and NBAA 
discussed below. In its reply, NBAA stated that ATA's concerns are 
unfounded. NBAA believed that ATA misunderstands crucial concepts that 
distinguish corporate aviation from common carriage. NBAA cited as 
distinctions the requirement that the transportation be merely 
incidental to the corporate operator's principal business, that the 
corporate operator engage in no holding out or other indicia of common 
carriage, and that any payments made to corporate operators do not 
exceed costs. These distinctions, NBAA maintained, assure that the 
worst-case scenario envisioned by ATA--that foreign corporations would 
join together to secure economic benefits under the NBAA proposal--
would not happen, just as it has not happened with respect to U.S. 
corporations during the more than thirty years they have operated under 
comparable FAA provisions. NBAA stated further that its proposal is not 
contrary to the U.S. statutory prohibition against cabotage, and does 
not diminish Departmental oversight responsibility of foreign 
commercial air service. Concerning ATA concerns that time share 
operators cost recovery allowances could potentially involve a profit 
for the aircraft operator, NBAA states that the allowable cost recovery 
consistently falls short of a fully-allocated cost recovery, much less 
a profit.

ATA Surreply

    On October 2, 2003, ATA filed a motion for leave to file a 
surreply. ATA stated that the issues of cabotage and international 
reciprocity that are implicated here are irrefutable. ATA also stated 
that the distinction drawn by the NBAA between corporate aircraft 
operations and commercial operations or common carriage is a moot 
point, as the issue is whether companies can operate in air commerce 
without being common carriers. ATA stated that the question of whether 
corporate aircraft operations are incidental to a business is of no 
consequence, because the services involved are performed by a third 
party and the third party would be receiving compensation.

NBAA Surreply

    On October 3, 2003, NBAA filed a motion for leave to file a 
surreply. NBAA stated that the issue of whether general aviation 
operations of corporate aircraft operators are conducted for commercial 
benefit has been addressed numerous times, and that ATA is mistaken in 
its belief that aircraft time-sharing, joint ownership, and interchange 
operations constitute operations for compensation or hire.

Discussion

    It is our tentative view that NBAA has made a persuasive case for 
the changes to Part 375 that it seeks, and we are proposing to amend 
our regulations to effect those changes.
    As NBAA notes, pursuant to 14 CFR 91.501 of the FAA's regulations, 
U.S. citizen operators of U.S.-registered aircraft now perform, without 
prior Department approval, the kinds of intracorporate, interchange, 
joint ownership, and time-sharing operations that are the subject of 
this proceeding. Such operations are more problematic for companies 
operating U.S.-registered foreign civil aircraft under the current Part 
375, which defines ``commercial air operations'' (requiring specific 
Department approval) as ``any operations for remuneration or hire to, 
from, or within the United States * * *,'' and which makes no 
distinction for the kinds of business-oriented transportation provided 
for under the FAA's regulations.
    As the U.S. economy has become more global and companies more 
multinational in character, more and more businesses find it difficult 
or impossible to operate separate corporate flight departments or 
conduct the range of services that they could provide if their aircraft 
were not considered to be ``foreign civil aircraft'' under Part 375. 
This situation, in our view, significantly hampers the companies' 
flexibility, and puts them at a competitive disadvantage compared with 
companies that qualify as U.S. citizens.
    We believe, in the context of the limited business-related 
activities raised by NBAA, that public interest considerations warrant 
treating U.S. and foreign-citizen companies operating U.S. registered 
aircraft the same way. Specifically, we believe that reimbursement 
should not be considered remuneration or hire within the context of 
Part 375 where a company operating a U.S.-registered foreign civil 
aircraft engages in the kinds of business air service transactions as 
defined below, and is reimbursed for its expenses as set forth in our 
proposed amendments. As such, the operations would be authorized by 
regulation and would no longer require prior approval in the form of a 
foreign aircraft permit under Part 375. Our decision to level the 
playing field in this instance by placing U.S. and foreign-citizen 
companies on the same footing has the added practical advantage of 
treating U.S.-registered foreign civil aircraft in our regulations 
similarly to U.S.-registered civil aircraft in FAA regulations.\1\
---------------------------------------------------------------------------

    \1\ We wish to make clear, however, that nothing in our proposed 
change to Part 375 would in any way serve to alter any orders, 
regulations, or requirements, or interpretations thereof, of the 
Federal Aviation Administration.
---------------------------------------------------------------------------

    We propose to implement the proposed changes by adding a new 
section to subpart D, of part 375. That new section, ``Certain business 
aviation activities using U.S.-registered foreign civil aircraft'', 
would authorize those operations that NBAA requested to be covered. We 
are also proposing a minor technical amendment to the existing language 
in Sec.  375.1 to reflect the recodification of Title 49 of the U.S. 
Code, changing the current reference of ``section 402 of the Federal 
Aviation Act of 1958, as amended'' to ``49 U.S.C. 41301.'' We are also 
updating the authority citation for Part 375 to reflect recodification 
of Title 49.
    In making this proposal, we are mindful of the concerns raised by 
the parties filing pleadings in opposition to NBAA's proposal. We 
believe, however, that the public benefits to be gained from this 
regulation would outweigh those concerns. We concur with ATA's view 
that the relief NBAA seeks cannot be accomplished merely through 
interpretation of existing rules, and it is

[[Page 6385]]

for this reason that we are inviting public comment through this NPRM.
    We do not believe that the very limited changes we are proposing 
here will result in a circumvention of bilateral aviation agreements, 
or raise any cabotage concerns. With respect to bilateral issues, we 
see the changes we are proposing as having the potential to assist U.S. 
corporate operators abroad, as it will indicate U.S. willingness to 
accord reciprocity for these sorts of business-related transportation 
arrangements. Still, if problems should occur, and reciprocity should 
be denied to U.S. operators, we have ample tools to seek resolution of 
such access problems.
    Moreover, we do not see that the changes we are proposing raise any 
cabotage issues. As noted, our proposed changes merely find that 
certain limited reimbursements made in connection with corporate-
related travel do not constitute remuneration within the context of 
Part 375, and put all operators of U.S-registered aircraft on the same 
economic regulatory footing. It should be noted that we made a similar 
change to Part 375 in 1986 with respect to expense-related 
reimbursements for demonstration flights by foreign civil aircraft, 
finding that those reimbursements did not constitute remuneration.\2\ 
In our view, neither forms of business-related reimbursement raise any 
problems with the statutory provisions of 49 U.S.C. 41703.
---------------------------------------------------------------------------

    \2\ See 51 FR 7251 (Mar. 3, 1986).
---------------------------------------------------------------------------

    With respect to concerns raised about operators pooling aircraft 
and arranging their operations so as to become common carriers without 
requisite Department authority, we must emphasize that such operations 
are not permissible today, nor have they been under longstanding rules 
(FAA's Part 91). Also, in detailing in this rulemaking under Part 375 
those expense elements that can be considered for purposes of 
reimbursement, we are specifically excluding profit, which should 
additionally serve to meet the concerns raised by ATA. In any event, we 
are in a position to monitor such activities. If any operations develop 
that would constitute, in our view, common carrier operations by one of 
the companies operating under the amended rule we are proposing, we 
have adequate enforcement powers to assure that the operator involved 
complies with all relevant statutory and regulatory requirements.

Regulatory Analyses and Notices

    All comments received before the close of business on the comment 
closing date indicated above will be considered and will be available 
for examination in the docket at the above address. Comments received 
after the comment closing date will be filed in the docket and will be 
considered to the extent practicable. In addition to late comments, the 
Department will also continue to file relevant information in the 
docket as it becomes available after the comment period closing date, 
and interested persons should continue to examine the docket for new 
material. A final rule may be issued at any time after close of the 
comment period.

Executive Order 12866 and DOT Regulatory Policies and Provisions

    This rule is a significant regulation under Executive Order 12866 
and DOT Regulatory Policies and Provisions because of industry 
interest.
    The economic impact of the implementation of the proposed rule is 
not considered to be significant. The rule would save certain U.S. 
companies the legal expenses and data-preparation expenses of 
submitting and processing requests for DOT authority to conduct 
specified types of intracorporate flight operations. In turn, the 
Department would save staff expense by not having to process additional 
foreign air carrier permit applications.
    Until recently, management in American companies was far more 
substantially composed of American citizens, and therefore U.S. 
companies operating non-commercial general aviation aircraft for parent 
or subsidiary companies on a cost-reimbursement basis did not 
experience difficulty in satisfying Departmental rules on citizenship. 
(Although the citizenship rules were intended to apply primarily to 
commercial operators, they also apply to many general aviation 
operations of U.S. companies.) With economic globalization, more non-
U.S. citizens have become members of management in U.S. companies, and 
in a number of instances those companies now fail to qualify under 
Departmental citizenship rules for the reimbursable operation of 
general aircraft. They accordingly must seek Department approval to 
perform such operations. The proposed rule would remove the regulatory 
burden these companies now face of having to obtain Department approval 
for flight operations involving intracorporate reimbursement of 
expenses. Further, the rule provides a rational methodology for such 
reimbursement. This is consistent with sound accounting practices, as 
well as recent actions in industry and governmental policy seeking 
improved corporate accounting practices.

Federalism

    The Department has analyzed this rulemaking action in accordance 
with the principles and criteria set forth in Executive Order 13132 and 
has determined that it does not have sufficient federalism implications 
to warrant consultation with State and local officials. The Department 
anticipates that any action taken will not preempt a State law or State 
regulation or affect the States' ability to discharge traditional State 
government functions. We encourage commenters to consider these issues, 
as well as matters concerning any costs or burdens that might be 
imposed on the States as a result of actions considered here.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601, et seq, as amended by 
the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 
requires an agency to review regulations to assess their impact on 
small businesses. The Department certifies that this rule will not have 
a significant economic impact on a substantial number of small 
entities. The rule would almost exclusively affect only large 
corporations. In addition, we anticipate the rule would have little, if 
any, economic impact.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520, 
Federal agencies must obtain approval from the Office of Management and 
Budget (OMB) for each collection of information they conduct, sponsor, 
or require through regulations. This rule contains information 
collection requirements. As required by the Paperwork Reduction Act, 
the Department will submit this requirement to the Office of 
Information and Regulatory Affairs of the OMB for review, and 
reinstatement, with change of a previously approved collection for 
which approval has expired.
    OST Form 4509 is a required application for foreign aircraft permit 
or special authorization. The Department requires operators of foreign 
civil aircraft to obtain the permits before conducting certain flight 
operations within U.S. airspace. In granting such permits, the 
Department determines that the proposed operation is consistent with 
the applicable law, that the applicant's homeland grants a similar 
privilege to U.S. registered aircraft, and that the proposed operation 
is in the

[[Page 6386]]

interest of the public of the United States.
    OMB Number: 2106-0007.
    Title: 14 CFR part 375 Navigation of Foreign Civil Aircraft Within 
the United States.
    Burden Hours: 13.
    Affected Public: Business or other for-profit.
    Description of Paperwork: The proposed changes to the rulemaking 
are intended to save certain U.S. companies the legal expenses and data 
preparation expenses of submitting and processing requests for DOT 
authority to conduct special types of intracorporate flight operations. 
The Department would also save staff expenses by not having to process 
additional permit applications.

Unfunded Mandates Reform Act

    This rule, if adopted as proposed, would not impose an unfunded 
mandate for the purposes of the Unfunded Mandates Reform Act of 1995.

Regulation Identifier (RIN)

    A regulation identifier (RIN) is assigned to each regulatory action 
listed in the United Agenda of Federal Regulations. The Regulatory 
Information Service Center publishes the Unified Agenda in April and 
October of each year. The RIN contained in the heading of this document 
can be used to cross-reference this action with the Unified Agenda.

List of Subjects in 14 CFR Part 375

    Aircraft, Airmen, Foreign relations, Reporting and recordkeeping 
requirements.

PART 375-NAVIGATION OF FOREIGN CIVIL AIRCRAFT WITHIN THE UNITED 
STATES

    For the reasons set forth in the preamble, the Department of 
Transportation proposes to amend 14 CFR part 375 as follows:
    1. The authority citation for 14 CFR Part 375 would be amended by 
revising the citation to read as follows:

    Authority: 49 U.S.C. 40102, 40103, and 41703.

    2. The definition of ``Commercial air operations'' in Sec.  375.1 
would be revised to read as follows:


Sec.  375.1  Definitions.

* * * * *
    Commercial air operations shall mean operations by foreign civil 
aircraft engaged in flights for the purpose of crop dusting, pest 
control, pipeline patrol, mapping, surveying, banner towing, 
skywriting, or similar agricultural and industrial operations performed 
in the United States, and any operations for remuneration or hire to, 
from or within the United States including air carriage involving the 
discharging or taking on of passengers or cargo at one or more points 
in the United States, including carriage of cargo for the operator's 
own account if the cargo is to be resold or otherwise used in the 
furtherance of a business other than the business of providing carriage 
by aircraft, but excluding operations pursuant to foreign air carrier 
permits issued under 49 U.S.C. 41301, exemptions, and all other 
operations in air transportation.
* * * * *
    3. A new section, Sec.  375.37, would be added to read as follows:


Sec.  375.37  Certain business aviation activities using U.S.-
registered foreign civil aircraft.

    For purposes of this section, ``company'' is defined as one that 
operates civil aircraft in furtherance of a business other than air 
transportation. U.S.-registered foreign civil aircraft that are not 
otherwise engaged in commercial air operations, or foreign air 
transportation, and which are operated by a company in the furtherance 
of a business other than transportation by air, when the carriage is 
within the scope of, and incidental to, the business of the company 
(other than transportation by air), may be operated to, from, and 
within the United States as follows:
    (a) Intracorporate operations: A company operating a U.S.-
registered foreign civil aircraft may conduct operations for a 
corporate subsidiary or parent on a fully-allocated cost reimbursable 
basis; provided, that the operator of the U.S.-registered foreign civil 
aircraft must hold majority ownership, or be majority owned by, the 
relevant subsidiary or parent company;
    (b) Interchange operations: A company may lease a U.S.-registered 
foreign civil aircraft to another company, in exchange for equal time, 
when needed on the other company's U.S. registered aircraft, where no 
charge, assessment, or fee is made, except that a charge may be made 
not to exceed the difference between the cost of owning, operating, and 
maintaining the two aircraft;
    (c) Joint ownership operations: A company that jointly owns a U.S.-
registered foreign civil aircraft and furnishes the flight crew for 
that aircraft may collect from the other joint owners of that aircraft 
a share of the actual costs involved in the operation of the aircraft; 
and
    (d) Time-sharing operations: A company may lease a U.S.-registered 
foreign civil aircraft, with crew, to another company; provided, that 
the operator may collect no charge for the operation of the aircraft 
except reimbursement for:
    (1) Fuel, oil, lubricants, and other additives.
    (2) Travel expenses of the crew, including food, lodging, and 
ground transportation.
    (3) Hanger and tie-down costs away from the aircraft's base of 
operations.
    (4) Insurance obtained for the specific flight.
    (5) Landing fees, airport taxes, and similar assessments.
    (6) Customs, foreign permit, and similar fees directly related to 
the flight.
    (7) In flight food and beverages.
    (8) Passenger ground transportation.
    (9) Flight planning and weather contract services.
    (10) An additional charge equal to 100 percent of the expenses for 
fuel, oil, lubricants, and other additives.

    Issued under authority delegated in 49 CFR 1.56a this 28th day 
of January, 2005, in Washington, DC.
Karan K. Bhatia,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. 05-2035 Filed 2-4-05; 8:45 am]
BILLING CODE 4910-62-P