Business aircraft owners around the globe constantly risk exposure of their personal information on the ground and in the air. The consequences could result in threats to their safety and security or cause the loss of opportunities for them or their enterprises. For large corporations, even the optics of operating business aircraft may invite unwanted public scrutiny.
In light of these risks, aircraft owners and operators (owners) should, with their best advisors, apply technology tools to thwart breaches of privacy, create legal ownership structures to protect their identity, and implement security and aircraft use plans to mitigate these risks. They should also monitor and adapt to changes in laws that affect access to personal information, such as the FAA’s controversial pivot on December 12 to enhance privacy—at a potentially burdensome cost.
When and How Privacy Breaches Can Occur
Aircraft Registry Searches. The U.S. has an “owner registry” system, meaning a qualified owner of an aircraft registers it at the FAA’s Civil Aircraft Registry. In contrast, other nations have an “operator registry” requiring the aircraft’s operator to register the aircraft it operates. Some registries may make personal information, often called “personally identifiable information,” or PII, in the U.S., readily available to the public, while others limit access to aircraft-only registration filings.
Flight Trackers. Flight trackers or airplane spotters function for such reasons as aircraft photography, investigative reporting, aviation hobbies, and even corporate espionage. They can identify and obtain data on aircraft in the air using ADS-B Out data, but they cannot easily identify passengers on board.
ADS-B enthusiasts and groups exist—such as ADSBExchange—that spot aircraft around the world and widely share their information with other interested parties. Through these groups and further investigation, even hobbyists may discover a wide band of aircraft and owner information.
Public Information. Owners may include their initials as part of the tail number of their aircraft or sign publicly available documents such as local or state aircraft or tax permits. A stranger may photograph the owner near her/his aircraft without the owner realizing the photographer posted the pictures online. For large corporations, public financial reporting may reveal the ownership or leasing of business aircraft. Owners may have conversations in the marketplace with other parties about aviation matters without obtaining a non-disclosure or confidentiality agreement from them. Each situation allows for the identification of the aircraft, the owners and sometimes the passengers.
Freedom of Information Act. In the U.S., those seeking information about an owner from the FAA may use the Freedom of Information Act (FOIA) to access information the FAA will not otherwise make freely available to the public. Fortunately, FOIA has exemptions from the required disclosure, such as trade secrets, commercial information, and “personnel and medical files and similar files, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.”
Available Technology To Limit Aircraft Detection
Two main technology options exist in the U.S. to enhance privacy. The Limited Aircraft Data Displayed (LADD) program filters aircraft ownership data shared with third parties by the FAA from its ADS-B feeds.
The Privacy ICAO Address (PIA) program enables aircraft owners to request an alternate, temporary ICAO aircraft address not assigned to the owner. PIA is not available internationally. Trackers can and do rely on sources other than FAA feeds to capture ADS-B Out data, which detracts from the desired privacy.
Legal Structures To Protect Owner Privacy
Various structures can limit access to the identity of aircraft owners (true owners) and thereby protect their privacy. One of the most common methods is using a limited liability company (LLC) to own the aircraft, directly or indirectly.
For example, an LLC with a name that does not identify the true owner can take title to the aircraft, and an unrelated manager can exclusively handle the affairs of the LLC without using the name or signature of the true owner/LLC member.
Another common structure involves forming an owner trust that takes legal title to the aircraft. A second trust acquires the beneficial interest in the owner trust, as its “trustor,” in this “double trust” structure. The trustees will not release information without owner approval except to the FAA or other governmental agencies. An LLC rather than the owner can hold the beneficial interest in the trustor.
FAA’s Privacy Surprise
The FAA Civil Aircraft Registry collects the information necessary to establish and maintain the records for all U.S. civil aircraft. Categorically, the U.S. aircraft records system covers aircraft owners, lien holders, and lessees, along with their related aircraft registration documents and instruments.
In what I call the “December surprise,” the FAA announced on December 12 a policy change on privacy as part of its “Civil Aircraft Registry Electronic System” (Cares) initiative. The FAA immediately limited registry professionals from accessing most “ancillary documents” to prevent the disclosure of personal information contained in those documents. Ancillary documents might include powers of attorney, name change and merger documents, and trust documents; just not primary aircraft records.
The FAA explained this change arose out “of concern about the inadvertent release of proprietary data and personally identifiable information.” It also stated: “This decision is being made after careful legal review regarding privacy concerns under the Trade Secrets Act (18 U.S.C. 1905)[i] that prohibits disclosure of proprietary data, and the Privacy Act (5 U.S.C. 552a(b)) that prohibits disclosure of sensitive PII.”
In the U.S. government, PII generally refers to information identifying individuals such as aircraft owners, including their names, addresses, social security, driver’s license, passport, telephone, and alien registration numbers.
Ironically, owners who benefit from the FAA’s privacy change may be forced to delay or forego transactions because of the potentially lengthy delay caused by the FAA’s requirement that it review and redact certain PII before releasing the ancillary documents to anyone. Compounding the FAA delay, aviation transactions may suffer from inadequate due diligence and inaccessible information required to close aviation transactions.
Security Protection Plan and Aircraft-use Policy
An owner’s comprehensive travel and security policy can identify those individuals who require security on the ground or in the air. They also may establish procedures to mitigate the risk of violating personal security, privacy, and safety of passengers and the aircraft.
For example, the aircraft travel policy may dictate the use of a non-owned aircraft available through charter companies, jet cards, or fractional share ownership in situations where identifying an executive or aircraft may jeopardize personal safety or expose secret corporate activity.
Privacy Uncertainty in Business Aviation
Aircraft privacy is not and will not be absolute; no single solution can stop breaches of privacy or prevent related threats. Still, owners and operators deserve and are entitled to expect privacy, safety, and security in their aviation activities.
As technology and human ingenuity advance, so will the challenges to privacy. But the proper execution of a comprehensive defense plan by the right team should provide a sturdy wall against the invaders.
David G. Mayer is a partner in the global Aviation Practice Group at Shackelford, Bowen, McKinley & Norton in Dallas, which handles private aircraft matters, including regulatory compliance, tax planning, purchases, sales, leasing and financing, risk management, insurance, aircraft management and operations, hangar leasing, and related corporate work. Mayer frequently represents corporations and high and ultra-high-net worth individuals and other aircraft owners, flight departments, lessees, borrowers, operators, sellers, purchasers, corporations and managers, as well as lessors and lenders. He can be contacted at [email protected], LinkedIn, or by telephone at (214) 780-1306.
None of the discussions in this blog creates an attorney-client relationship or provides legal advice of any kind. Readers should consult their trusted aviation advisors for transaction and other assistance in matters contemplated in this blog. The opinions expressed in this column are those of the author and not necessarily endorsed by AIN Media Group.