““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
TSA security proposal could hamper bizav
A new Transportation Security Administration notice of proposed rulemaking (NPRM) aims to curb terrorism but could also put the brakes on business aviation. The proposal has the potential to ground every general aviation aircraft with a maximum takeoff weight of more than 12,500 pounds-in other words, the vast majority of the current business aviation fleet. Only by complying with the new Large Aircraft Security Program (LASP) would some 10,000 aircraft operators be allowed to fly, and the group most affected would be those operating under Federal Aviation Regulations Part 91.
To comply with the TSA's proposed rules, operators would have to:
• Implement the LASP program.
• Complete a third-party audit of that program six months after TSA approval of it and every two years thereafter.
• Appoint an in-house security coordinator who is provided with initial and annual recurrent training.
• Complete background checks of all pilots, including FBI criminal-records checks and security-threat assessments.
• Submit passenger lists for all flights for comparison with terrorist watch lists. (This would be done through TSA-approved third parties. Watch lists would no longer be released to operators.)
Some examples of what you could not do if the rules become law:
• Fly your spouse or children in your single-pilot Citation S/II without first having them cleared against the TSA watch list.
• Fly to a business meeting in your company Hawker 800 without being personally cleared against the watch list.
• Fly your own Super King Air 300 without having your in-house security coordinator (which could be you) check the airplane for stowaways.
• Fly as pilot in your own Premier IA without getting yourself vetted with a fingerprint and criminal-history records check.
The NPRM wasn't unexpected. Ever since the TSA conducted its threat assessment of general aviation, its intention to someday regulate general aviation security has been clear. "This has been in the making for several years," said Jens Hennig, a vice president at the General Aviation Manufacturers Association, which represents the manufacturers of general aviation aircraft, engines and avionics. To its credit, said Hennig, "The TSA has kept industry well in the loop with its development."
But that doesn't mean the industry is happy. On the contrary, general aviation operators for the most part oppose the rules as unnecessary, costly, difficult to implement and impossible to enforce.
Said Andy Cebula, executive vice president for government affairs for aviation lobby group the Aircraft Owners and Pilots Association: "The real frustration is after all that time spent talking about it and us trying to explain business aviation and general aviation to them, after having worked with them on airport vulnerabilities and all the dialog we had with the general aviation coalition, we now get a 260-page rule that doesn't seem to reflect how Part 91 operations really work, who they are and why they're so fundamentally different from a commercial operation. At its most basic level, what they're essentially saying is that one size fits all."
Industry groups will make their dissatisfaction with the TSA's proposal known during a 60-day comment period. The groups have already asked TSA to extend this, contending that it allows insufficient time for public response.
For additional information and to view and comment on the proposal, visit: