USAC provides the procedures, manuals, legal documentation, advertising, training, and operational support services to maintain the USAC air carrier. Tasks that are common to all owners and all USAC air carriers are performed by USAC; however, in many cases the air carrier resources are used to conduct the daily business.

Legal and Contracting

The tasks described in this section are supported by USAC and address the activities required to establish the aircraft under a lease agreement and establish the aircraft owner as a required company manager with an interest in the air carrier. This will culminate in an IRS Private Letter Ruling that provides recognition by the IRS that their position will support their intended tax benefit.

Owner Recruit Documents: USAC has prepared a number of legal documents that have established air carriers in the State of Delaware. USAC continues to maintain these legal documents and they are available upon signing a letter of intent to purchase an interest in one of the USAC air carriers.

Letter of Intent to Purchase an Interest – This letter of intent will provide an overview of the purchase terms and conditions. When the letter of intent is signed and a deposit received, the planning process will begin. This will involve the Director of Operation, Chief Pilot, Director of Maintenance, FAA Principal Operations Inspector, Principal Maintenance Inspector, Principal Aviationics Inspector, and the FAA district office manager. The result will be a schedule of events that outline the technical details of adding the owner's aircraft to the air carrier certificate. This typically takes about six weeks to complete assuming that no issues with the aircraft are identified. USAC will prepare the letter of intent and negotiate the terms and conditions with the new member.

Membership Interest Purchase Agreement – This is a comprehensive document that stipulates the purchase and sale, warranties of the seller, warranties of the purchaser, indemnification, conditionsl of closing, and other legal items. It is very comprehensive and intented to protect the interests of the new member as well as all other members of the company. USAC has prepared this agreement.

Aircraft Lease Agreement – This is a standard lease agreement that specifies that the air carrier will have operational control of the aircraft and provide services to support both charter flights and owner-flown flights. All aircraft lease agreements are reviewed by the FAA counsel and are kept on file with the FAA. USAC has an aircraft lease agreement that has proven satisfactory to aircraft owners, the FAA, and the companies involved.

Private Letter Ruling – An IRS private letter ruling is a request to the IRS to rule on a tax issue before a taxpayer takes certain action. The IRS private letter ruling is applicable to that tax situation and that taxpayer only. You should consider requesting an IRS private letter ruling to reduce your risk. USAC Aviation counsel has experience in applying for an IRS private letter ruling.

Company Legal Documents: There are several company documents that are available for review upon request and upon sonsumation of the letter of intent. USAC maintains these documents. They are summarized briefly below.

Company Agreement – These are the corporate articles of formation filed is Delaware to establish each air carrier as a limited liability corporation. This document is relatively generic and allows for the air carrier to conduct business as an air carrier and pursue any other reasonable activities necessary to fulfill its mission.

Company By-Laws – I'm not sure if this is needed.

General Operations Manual (FAA Approved) – The General Operations Manual (GOM) is one of several documents that are submitted and approved (or accepted) by the FAA. It defines the roles, responsibilities, and procedures that company personnel will follow in conducting business as an air carrier. The GOM is provided and maintained by USAC and provides well established methods and procedures that are accepted in the aviation community. This document, along with the Operations Specifications, establishes the concept of oeprational control for the air carrier.

Franchise Agreement – This is a document that states that the air carrier will follow the policy, procedures, and requirements specified in their General Operations Manual, General Maintenance Manual, International Flight Operations Manual, RVSM Operations Manual, and Operations Specifications. It further stipulates that the company's FAA accepted software will be used to schedule, dispatch, track pilot currency, maintain company records, track aircraft airworthiness, and perform other important tasks. USAC uses this software to support all USAC air carriers and provides support for both the manuals and the software. USAC also provides company procedures training for all personnel. This agreement provides for franchise fees in exchange for advertising, operations software, recordkeeping, technology, and services that make the business cost effective as these costs are shared by all participating air carriers.

Marketing and Sales

Marketing: Marketing and sales, as described below, will be supported by USAC and subsidized by the Franchise fees. This will be done in collaboration with the air charter company management personnel and the aircraft owners.

Market Analysis – USAC will determine market trends and determine a competitive price. A strategy for positioning our charter service will be deterined to achieve maximum effectiveness with our advertising material. Data will be gathered to objectively determine the effectiveness of advertising campaigns.

Web Advertising – USAC is experienced in web development and will create a website that will be used to describe the charter aircraft. Additional features will allow clients to obtain charter quotes and additional information pertinent to their flight. Web advertising will include subscribing to websites that promote our business such as the Air Charter Guide, CharterX, and other similar websites.

Direct Mailing – USAC will establish and conduct advertising, sales promotion, publicity, and personal selling, branding and in general promote the air carrier and charter business. Direct mailing will be targeted toward soliciting business from the end client. This is considered to attract a small but important part of our customer base.

Magazine Ads – USAC will design, develop, and manage magazine advertisements as the business develops.

Selling: USAC will support the selling of charter business through developing technology and instruments that facilitate selling.

Flight Quoting – USAC has developed and will maintain charter quote software that is available on the company website. The current method for preparing a domestic quote is highly automated and will be refined in the near future with expectations of completely automating this process. Quotes for international flights currently involve manual labor to prepare such an estimate and expect to be supported by more sophisticated software in the near future.

Charter Booking – USAC will support the charter booking. Our policy that has worked very well in the past is to collect the full amount of a charter flight prior to dispatch. The signed charter agreement initiates the dispatch process and evokes the procedures documented in the General Operations Manual. The charter agreement is an important legal document for tax purposes and is the only record that is kept for a period of time that meets the IRS requirements.

Client Billing – Clients are billed for expenses such as catering, changes to flight itineraries, and other expenses incurred after the aircraft is dispatched. USAC will provide a method for cost accounting associated with client billing and support the collection of money from the client.

Cost Accounting – USAC will use generally accepted accounting procedures to document the financial transactions for which it is responsible. USAC will support the collection and payment of Federal Excise Tax when applicable.

Flight Support

Standards:

Dispatch Support:

Client Support:

Ground Support

Company Manuals:

Maintenance:

Records: