AeroOne™ Newsletter
August 2025
Dear Aeros:
Let's talk about cabotage--the right to operate sea, air, or other transport services within a particular territory [country]. In aviation, private aircraft operations (US FAR Part 91 and Canadian CAR Part 702) permit US flagged aircraft to operate point to point within Canada with minimal restriction and vice versa. AeroOne is all US registered but owners regularly fly within Canada.
On demand charter operations (US FAR Part 135 and CAR Part 703), on the other hand, are restricted from flying point to point in foreign jurisdictions. Same goes for commercial airlines (US FAR Part 121 and CAR Part 705).
But what about fractional programs? Are they treated like Part 91 or equivalent because shares are "owned" by private owners? Or are they considered commercial in nature because an owner does not necessarily fly on their own jet? Well the answer to that is not so clear, nor is it the same in both jurisdictions. US flagged fractional operators such as Netjets are restricted in Canada whereas we are advised that Sprint, a Canadian fractional operator, is not restricted in the US. Perhaps this is why the Netjets debut party in YVR a few weeks ago was so poorly attended? (We were there.) Hard to say.
And is this fair? Well, let's ponder what could potentially happen when President Trump discovers the current situation. A Big Beautiful Sanction? Bottom line, if you are considering a fractional program do your homework. This should also include assessing whether you will need to pay the 8 percent US Federal Excise Tax on fractional trips, something that is also applied to chartered flights but is exempt on private flights.
One last thing...The Canadian government is currently considering relaxing its regulations to allow US operators to fly point to point domestically. What could possibly possess Canada to do that? Well let's compare a United Airlines full fare LAX to EWE return business class ticket to Air Canada's equivalent YVR to YYZ return ticket. Both airlines are founding members of Star Alliance, both offer similar service standard with lie-flat seat comfort and both trips are comparable in length.
After converting to USD, Air Canada's airfare is a full 83 percent more expensive! Canada need more competition. Passengers (ie voters) are fed up with high travel cost. Period, full stop.
Happy Flying
Roger Proctor, CEO
PS: AeroOne is a private ownership model that offers maximum flexibility without fear of cabotage or Federal Excise Tax.
PPS: Congratulations to Stan N. and Dave D. who responded to last month's challenge and offered suggestions on future topics. Prizes will be sent shortly. Stay tuned for our next challenge coming soon.
Topic of the Month - Pre-Owned Aircraft Market (Past 12 Months)
Over the past 12 months inventories in all pre-owned aircraft segments have gone up and are currently significantly above the 5 year average. The only segment that is currently trending down is the super mid jet market. See the Globeair July 2025 Report.
Obviously this is a look in the rear view mirror at a time of great uncertainty in the US both economically and also tax wise. You will recall in our last issue we mentioned President Trump's recent budget success whereby the 100 percent depreciation first year write down would be carried over. Many believed it would not. Will see what happens over the next 12 months.
Bottom line, the market is good if you are looking to buy now.
Getting there is half the fun? Business demands the most efficient transportation tools. Business is money.
Two weeks ago our director attended a client matter and brought along his son. There and back same day. ...
...A mission that would not be possible flying commercial given the remoteness of the destination.
Jet of the Month
