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<br />general aviation activity. These uses <br />accounted for 21.2 percent of general <br />aviation activity in 1997. <br /> <br />The most striking industry trend is the <br />continued growth in fractional <br />ownership programs. Fractional <br />ownership programs allow businesses <br />and individuals to purchase an interest <br />in an aircraft and pay for only the time <br />that they use the aircraft. This has <br />allowed many businesses and <br />individuals, who might not otherwise, to <br />own and use general aviation aircraft <br />for business and corporate uses. The <br />five major companies in this industry <br />are Executive Jets' N etj ets, <br />Bombardier's Flexjet, Raytheon's Travel <br />Air, Flight Options and TAB aviation. <br />Between 1993 and 1998, these <br />companies expanded their fleet and <br />shareholders by 65.2 percent and 66.1 <br />percent, respectively. In 1999, the <br />fractional jet fleet totaled 329 and <br />shareholders totaled 1,567. Since 1993, <br />Executive Jet has ordered 368 new <br />aircraft and is purportedly the single <br />largest nonmilitary purchaser of <br />aircraft. <br /> <br />While the fractional jet ownership <br />industry is rapidly expanding, new <br />attention has been given the regulatory <br />oversight of the industry. Presently, <br />fractional jet providers operate under <br />Federal Aviation Regulation (FAR) Part <br />91 which governs general aviation <br />aircraft. Industry pressure is for <br />fractional ownership providers to <br />operate under FAR Part 135 which <br />govern commercial operations for air <br />carriers, air taxi and air charter <br />companies. Part 135 operators believe <br />the fractional ownership providers <br />benefit from the less restrictive FAR <br /> <br />Part 91 standards. The FAA <br />commissioned a formal rulemaking <br />committee to analyze regulatory <br />requirements for the industry. Their <br />report, released in Spring 2000, <br />recommended that fractional ownership <br />providers operate under a new subpart <br />of FAR 91. The FAA is now reviewing <br />this proposal. A formal rulemaking <br />proposal could be made within a year. <br /> <br />The fractional ownership providers are <br />concerned about a move to regulate <br />them as FAR Part 135 operators. FAR <br />Part 135 standards would restrict the <br />number and type of airports which <br />could be operated at by requiring longer <br />runways and airports with approved <br />weather reporting. If these providers <br />were required to operate under FAR <br />Part 135, fractional would not be <br />treated as private owners in foreign <br />countries, and the fractionals would be <br />governed by international bilateral <br />agreements. <br /> <br />Exhibit 2A depicts the FAA forecast for <br />active general aviation aircraft in the <br />United States. The FAA forecasts <br />general aviation active aircraft to <br />increase at an average annual rate of <br />0.9 percent over the 13 year planning <br />period for general aviation aircraft. <br />General aviation aircraft are projected <br />to increase from 204,710 in 1998 to <br />230,995 in 2011. <br /> <br />Turbine-powered aircraft are projected <br />to grow faster than all other segments <br />of the national fleet and grow at 3.2 <br />percent annually through the year <br />2011. Turbojet aircraft are projected to <br />provide the largest portion of this <br />growth and grow at 4.9 percent <br />annually. Turboprop aircraft are <br /> <br />2-8 <br />