SPE Anyone? What the FAA’s Single Pilot Exemption Change Means for Your Insurance
Tom Hauge breaks down the FAA’s removal of the Single Pilot Exemption for legacy Citations and why finding an SIC your insurer will actually approve is now the urgent part.
The FAA recently removed the ability of operators of legacy Citation 500s and 550/560s to operate under a Single Pilot Exemption (SPE) for aircraft that were not Type Certified (TC’d) at the factory to be flown single-pilot. Not to get into the weeds on disputing this action, but it has left a significant number of operators with a requirement to fly with a co-pilot (SIC) to remain compliant with the FARs. This action has also left operators scrambling to find suitable SIC’s – more so ones that would be approved by their insurance carrier (underwriter) to function in the SIC capacity and not compromise the operators’ insurance coverage. Insurance and FARs are two completely separate streets, but both (FARs and insurance policy requirements) must be followed strictly to avoid coverage issues or potential FAR violations.
Depending on the insurer, there can be a variance in minimums the insurers wish to see for an SIC. Some insurers have been willing to accept any pilot ‘approved by the PIC’ who meets the requirements of part 61.55. So in these cases there would be no minimum hourly requirements, just that the pilot is properly category and class rated (Commercial pilot (if flying for hire), MEL rated and as noted meeting the requirements of 61.55). Other insurers might require a minimum number of total flight hours, a multi-engine rating, minimum multi-engine hours, and potentially a more formal training requirement outside of FAR 61.55. If you own and/or operate the affected legacy Citations previously operated under an SPE, you should speak with your insurance broker/underwriter to develop a plan for SIC approval. As noted, results may differ depending on the limits carried and the policy’s insurance carrier.
It’s very important to get in front of this issue with your insurance policy if you are an impacted operator, as it may require you to pivot your insurance contract if your insurer is somewhat unreasonable about what they are offering, given that these are legacy jets in some cases almost 50 years old – where limited or nil simulators exist in today’s training landscape – and the SIC flying under 61.55 may make the most sense (in receiving the proper training ‘in airplane’).
Why Finance in a High-Rate Environment?
Brian Finley uses two mountain climbs to make a case most buyers miss, the headline rate isn’t the number that matters. What your cash could earn somewhere else is.
I climbed a mountain in the Smokies last month, reaching the peak at 6,594 feet. By the time this article is published, I’ll hopefully have completed hiking my first two 14ers in the Rocky Mountains (mountain tops above 14,000’). So is my climb in the Rockies that much more difficult, or does the challenge depend on distance and the field elevation at the start of the climb?
Many people are contemplating how higher interest rates today (compared to the past decade but much closer to long-term historical averages) will affect business and whether customers choose to finance. Higher rates will definitely require a harder look at how one deploys their cash. Just as a mountain's summit elevation doesn't tell the whole story, the stated interest rate alone shouldn't determine whether financing makes sense.
When purchasing a strategic asset like an aircraft (or any large piece of equipment, for that matter) and deciding whether to finance, regardless of the interest rate environment, one should ask about the opportunity cost of deploying their cash elsewhere. The question isn't simply, "What will this loan cost me?" But rather, "What return could that capital generate elsewhere?"
Customers have told me they’re making 10, 12, 15, sometimes 20% on the cash they invest into their businesses. If this is the case and cash is parked in an asset, one could be missing out on larger returns elsewhere.
Or perhaps there’s a large liquidity event like a sale of a business, property, or stock in the foreseeable future. Deploying money in an all-cash purchase may not be available or could substantially deplete the company’s working capital.
Financing doesn’t have to always be a traditional 80-85% advance. Lower LTVs could make the most sense in these scenarios. A good aircraft lender should be able to structure financing to fit a customer’s cash flow, liquidity needs, and capital events.
So just because the Rockies offer higher mountain tops doesn’t mean it’s a more impressive hike. In fact, my climb in the Smokies does indeed have more elevation gain and a longer distance hike than the Rockies. The headline of higher interest rates doesn’t take financing off the table either; it just makes one take a harder look at where the best use of their capital should be. As for the better hike, we’ll let the pictures be the judge.
The Independent Operator's Squeeze Is a Leadership Problem
Dustin Cordier digs into the private equity roll-ups, tight inventory, and staffing shortages pressuring independent operators and argues the hardest part isn’t the market, it’s the owner who never stopped being the company’s operating system.
Last month I wrote that Kenn Ricci was playing with fire when he floated an operator-only lobby on The VIP Seat. Here’s a deeper dive into the truths of what he described, even if I don’t agree with the remedy.
The squeeze is real
At NBAA’s Schedulers & Dispatchers Conference in March, Ricci told the room that private equity was driving up costs at maintenance shops and FBOs, and that maintenance cycles were stretching because profit now ranks ahead of efficiency. Since then, Bain Capital moved to take majority control of parts distributor FDH Aero, adding it to a portfolio that already held APP Jet Center, ATG and a stake in MRO Holdings. Solairus agreed to buy Clay Lacy’s management and charter divisions and now runs a fleet north of 500 aircraft, and smaller roll-ups keep closing across the Midwest, leaving operators fewer places to take their business when the invoice climbs.
Listed turbine inventory sat at 5.8% of the active fleet at the end of June, the lowest reading since early 2024, and new aircraft supply looks constrained through 2027. An operator who needs to add lift this year should expect to pay close to asking price and wait for it.
NBAA’s Safety Committee found that 53% of respondents see pilot roles as the hardest hit by shortages, and 41% expect the safety picture to get worse. More flight departments are now filling seats with contract labor to stay staffed.
None of that is going away in the next year, so the question for every independent owner is how you plan to respond.
How some owners have responded
Clay Lacy carved out its management and charter divisions and sold them to Solairus. In Wisconsin, Heartland Aviation’s owners sold to SC Aviation, and Heartland keeps its name and its team. SC Aviation took the other side of that trade, growing by acquisition with the backing of Colony Brands, the family company behind The Swiss Colony. flyExclusive went in a different direction, growing second-quarter revenue while flying 6% fewer aircraft.
Ricci’s own response is to own the parts of the experience his customers notice. His LVMH-backed investors told him to control the product and the distribution because luxury can’t be outsourced, so Flexjet has invested in its own maintenance and terminals.
Setting up for a sale
Every roll-up in the news is also a buyer, and buyers pay more for an operation that keeps working after the founder walks away. That means documenting how the operation actually runs, so a buyer isn’t paying for the contents of your head, and keeping a team in place through the transition. Expect diligence to go straight to your training and maintenance records, since they are the proof that pilots were qualified and aircraft were airworthy.
Retention pays off before the sale too. Every pilot or mechanic who leaves gets replaced in a tight market, often with contract labor, and a buyer prices that churn into the offer.
The cheapest edge a small operator has is a mechanic who turns down the recruiter’s call.
Setting up to scale
Scaling sits on the same foundation with more weight on it. Ricci built Flexjet on fixed-cost math, figuring a fractional program needed about 12 aircraft just to function and only turned real profit past a tipping point. Outside capital got him there, and culture kept the company together on the way up. Rebuilding enough trust with Flexjet pilots to decertify their union ran from 2012 to 2018, and the company still leans on weekly audio updates and an Instagram feed aimed mainly at its own employees and future hires.
For an owner who wants to be the acquirer, the hard part is personal. You can’t integrate a second operation while you’re still the one approving every crew schedule and vendor invoice. Whether you sell or scale, the owner has to stop being the company’s operating system, and most owners put that work off until a buyer or a crisis forces it.
Fight it inside NBAA
Ricci’s grievances on source data, event fees, and aftermarket competition deserve a louder operator voice. I’d rather see that voice organized as an operator coalition inside NBAA, where the whole general aviation alliance carries the fight.
NBAA-BACE runs October 20 to 22 in Las Vegas, and the Flight Deck program covers workforce, regulation, and marketplace issues. Bring your actual maintenance turn times and fee increases and put them in front of NBAA staff. If the leadership side of this hits closer to home, the 2027 NBAA Leadership Conference, hosted by the Business Aviation Management Committee, is where owners work through it with peers facing the same pressure.
Full disclosure: I serve as Vice Chair of NBAA’s Business Aviation Management Committee. The views here are my own.
Sources: The VIP Seat interview with Kenn Ricci; Doug Gollan’s write-up of Ricci’s SDC2026 keynote (Private Jet Card Comparisons); AIN; AVI-GO; GlobalAir; AMSTAT Q2 2026 data; NBAA Safety Committee. Watch the episode