Congress Mandates ADS-B Loan Program
The head of a private sector ADS-B loan fund says he hopes the FAA moves quickly to get the system running in time to avoid a "train wreck" before the 2020 equipage deadline. As part of the 2016 omnibus appropriations bill passed just before Christmas, Congress directed the FAA to figure out how a federal loan-guarantee program approved in 2012 can help ensure about 150,000 GA aircraft meet the minimum ADS-B Out requirements by 2020. Michael Dyment, general partner for the NextGen GA Fund, says his organization has about $550 million available to provide low-interest, federally guaranteed loans to aircraft owners who don't have the cash to equip their aircraft. What it needs to start issuing the loans is the organizational structure that Congress has mandated the FAA to create. "I would think the FAA would be heavily incentivized" to make the program a priority, Dyment told AVweb. He said that although various tax breaks and other schemes were considered, the loan-guarantee route was picked by Congress. "It's the only incentive program available," Dyment said. Congress has given the FAA until June to come up with a plan for the loans.
Dyment said it's estimated that about half of aircraft owners don't have the financial ability to equip their aircraft and will have to borrow the money. Installation costs vary greatly but in some aircraft would represent a big part of the aircraft's total value. Dyment said he believes low-interest loans will ease the financial pain for tens of thousands of aircraft owners and convince them to equip. Traditional lenders require the aircraft be used as security but Dyment said that under the loan-guarantee program, no security will be required. And because the loans will be federally guaranteed, the lenders can afford to offer them at lower interest rates. Dyment said that as the deadline looms, there will be huge demand for the loans and that's why he hopes the FAA moves quickly to set up the program. Meanwhile, Dyment said the pace of installations is a fraction of what's needed to ensure all aircraft meet the deadline, which the FAA says is firm. "There are about 30 installations being done every day and while that might seem like a lot, the rate needs to be 150 a day," Dyment said. As of Jan. 1, 2020, aircraft not equipped with ADS-B Out will not be allowed in Class A, B or C airspace and most Class E airspace.