Source: www.nbaa.org., New Editor, First Published Jan 16, 2026
The recent grounding by the FAA of approximately 800 general aviation aircraft registered through a U.K.-based trustee highlights the need for operators to conduct thorough due diligence when utilizing an owner trust to facilitate U.S. aircraft registrations.
On Jan. 13, the FAA invalidated all aircraft registrations through Southern Aircraft Consultancy Inc. (SACI), due to unspecified violations of U.S. citizenship requirements for trustees involved in aircraft registrations. These aircraft, including several dozen turbine-powered business aircraft, may not be operated unless reregistered, potentially through a valid trustee, or placed under a different country’s registry.
The FAA has long supported use of non-citizen trusts (NCTs) allowing non-U.S. owners to obtain an N-number registration for their aircraft. NBAA’s engagement on this matter resulted in a 2013 policy clarification by the agency that established detailed requirements for both the owner trustee and the underlying trust structure. Those include:
- Clearly stating where the trustee entity is formed.
- Verification of citizenship for all executives and voting entities.
- Confirmation U.S. citizens hold actual control of the aircraft registered.
Such information is required to be publicly available to those seeking to place their aircraft under an NCT.
“When choosing a trust company, you want to thoroughly investigate and understand that the company does meet the FAA’s citizenship requirements,” said Benjamin Schwalen, NBAA general counsel and corporate secretary and staff liaison to the NBAA Tax Committee.
“Anyone who engages with a trust company should carefully vet that entity,” added Scott McCreary, vice president for McAfee & Taft and member of the NBAA Tax Committee. “You need to understand who they are and what their reputation is. And that’s not just a one-time thing; it should be monitored frequently, like you would any other asset.”
McCreary’s assessment about the SACI matter, and its broader implications for operators and other parties to aircraft ownership, is further detailed in a Jan. 14 LinkedIn summary he authored, FAA Invalidates Aircraft Registrations Issued to One Owner Trustee: What Owners Need to Know.
One possible bright spot, McCreary noted, comes from reports that SACI has entered into an agreement to be purchased by a U.S.-based trust company. While that should satisfy the citizenship requirement, it’s unclear how the FAA would handle reregistration of the affected aircraft.
There is also the potential for greater attention by the FAA on other trust companies based outside the U.S.
“The agency has always held trust companies under close scrutiny,” McCreary said. “However, trusts are valid and legal ways to register an aircraft and they’re absolutely critical to the industry. The FAA is not calling that into question.”
