According to an AIN Online Article, the International Business Aviation Council (IBAC) intends to propose standardization of international regulations governing fractional ownership operations at the upcoming International Civil Aviation Organization (ICAO) meeting in Montreal. This could spell trouble for U.S. fractional programs.
Currently, the U.S. does not consider fractional operations to be commercial operations. However, many European countries are moving in the direction of treating fractional operations as commercial operations. If fractional operations were classified as commercial operations, fractional operators would be severely restricted in their international operations by the existing cabotage regulations.
Under the existing regulations, a private operator (including fractional operators as they are currently classified) can make multiple stops within a foreign country where foreign nationals of that country are carried between two points within the foreign country without violating the cabotage regulations. However, if fractional operations are characterized as commercial operations, fractional operators would be faced with the lengthy processes of obtaining an entry permit for each visit to a foreign country and the FAA would have to provide an aircraft operating certificate for each U.S. aircraft likely to be used overseas, in order to avoid violations of the cabotage regulations.
You can expect some serious lobbying by the fractional operators and by business aviation organizations such as NBAA. For more information, the IBAC has published a working paper on the subject that can be obtained online here.
