Chapter 11 Review Questions

1. Why is a company-owned aircraft the most flexible method of business aviation? What are timesharing and interchange agreements? List some of the advantages of company-owned aircraft operated by a management company. What are some of the pros and cons of joint owner-ship?

2. Finance charges on aircraft loans are primarily base on four factors. What are they? What is the reason for the strong competition in the field of aircraft finance in recent years? Describe four methods owners may use in selling their aircraft. What are some of the areas to be considered in evaluating the purchase of a used aircraft? Define: FAA Form 337; airworthiness directives, and airworthiness certificates.

3. What are the major points covered in an aircraft sales contract? Distinguish between simple and add-on interest. What is floor planning? Give an example of the retail price of an aircraft including all of the items in the markup formula.

4. Why is leasing an aircraft not as popular as it was in the early 1990s? Distinguish between a dry and wet lease. List four distinct advantages in leasing an aircraft. What is the primary disadvantage of leasing? What is a capital lease? How does this differ from an opening lease? What are synthetic lease?

5. How was the concept of fractional ownership started? What are fractional ownership programs? Who are the major fractional providers? What is the function of FAR Part 91, Subpart K? Discuss some of the reasons for the tremendous growth in fractional owners during the late 1990s. what is meant by the term "supplemental lift"?