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Totaled Aircraft: A Total Waste of Time?

AOPA occasionally receives questions from pilots considering the purchase of a destroyed or scrapped aircraft. Often, the pilot has stumbled upon what appears to be a great deal, at least at first glance. A common scenario is that the would-be purchaser has found a nearly complete project up for auction, or a former owner is considering repurchasing an aircraft from the insurance company after suffering a total loss. Either way, a worse for wear aircraft is for sale and the pilot is hoping to restore the aircraft to her former glory at bargain rates. But is this endeavor a total waste of time or a totally great idea? As is often the case, the answer depends on a host of factors. 

First, let’s clear the air. The terms “destroyed,” “salvaged,” “scrapped,” and “totaled” are often used interchangeably to describe an aircraft that has seen better days and is in dire need of repair (get your Form 337s handy). While these terms may be thrown around a lot and have similar colloquial definitions, the term “totaled” has some independent legal significance as it relates to insurance. “Totaled” is insurance industry shorthand for a total loss which occurs when, after suffering damage, the cost of repair exceeds the aircraft’s insured value. Since “totaled” is purely an insurance-related concept, it does not factor into any FAA analysis of the aircraft's status.

For the purposes of the Federal Aviation Regulations (FAR), the only recognized phrase is “totally destroyed or scrapped” and appears in FAR § 47.41(a)(2). While the FARs fail to specify what constitutes an aircraft that is totally destroyed or scrapped, FAA Order 8100.19 defines the terms “destroyed” and “scrapped”:

The FAA considers an aircraft to be destroyed if all of its primary structure is damaged to the extent that it would be impracticable to return the aircraft to an airworthy condition by repair.

 

The FAA considers an aircraft to be scrapped when it has been discarded and disposed of in a manner that it cannot be repaired to an airworthy condition.

The key consideration here is whether the worse for wear aircraft can legally be repaired. The basic premise is that so long as there exists one primary structure around which a repair can be performed, the aircraft may be repaired and need not be declared destroyed or scrapped. If all primary structures must be replaced, the aircraft is not repairable and must be declared destroyed or scrapped.

Pursuant to FAR § 47.41, a destroyed or scrapped aircraft’s registration is immediately ineffective and the owner must notify the FAA by returning the Certificate of Aircraft Registration to the Aircraft Registration Branch within 21 days. Thereafter, the aircraft will be deregistered, and the registration will be canceled. Additionally, FAA guidance states that a destroyed or scrapped aircraft’s identity plate “when available, must be voluntarily surrendered to the local FAA office.” FAA Order 8100.19, Chapter 3, paragraph 2(e).

While the requirement to declare an aircraft destroyed or scrapped may appear high, any aircraft can be voluntarily declared destroyed or scrapped, and once done, it is very difficult to undo. If destroyed or scrapped, the aircraft cannot be reregistered until the owner repairs the aircraft according to a repair scheme approved by a Flight Standards District Office or Aircraft Certification Office. For such a scheme to be approved, the owner must prove the aircraft is repairable in the first place (see above). Finally, the aircraft must be registered and inspected for airworthiness.

Another consideration is the aircraft’s identification plate. Except in limited circumstances, FAR 45.11 requires all aircraft to be marked with a fireproof identification plate. The identification plate can only come from the aircraft’s manufacturer, and if lost or damaged, a replacement identification plate can only be reissued by the manufacturer. Importantly, pursuant to FAR 45.13, an identification plate may only be removed for necessary maintenance performed under FAR Part 43. FAR 45.13(e) explicitly prohibits any person from installing a properly removed identity plate on an aircraft other than the aircraft from which it was removed. For examples of cases where the FAA has alleged an aircraft’s identification plate was improperly removed or installed, see NTSB Case Nos. EA-3937, EA-4787, and EA-5722.

If these procedures are not strictly followed, you might end up with a glorified paperweight. In true FAA fashion, it could look like an airplane, sound like an airplane, and even walk like an airplane, but legally speaking, it is nothing more than a conglomeration of parts called aircraft scrap. If the identity plate is missing or if there is no primary structure which can be traced back to the “original” aircraft, it is not an aircraft and it certainly will not be certificated in the standard category. Worse yet, you may not be able to certificate the aircraft as experimental amateur-built unless you can complete the major portion test (i.e., the “51% rule”). Putting together prefabricated or used parts to look like a certificated aircraft is a surefire way to draw scrutiny from your Designated Airworthiness Representative.

So, how can you tell if an aircraft has been declared totally destroyed or scrapped? While those poor earthbound vehicles (i.e., cars & trucks) typically have a title document which indicates if the vehicle was previously salvaged or totaled, the kind of vehicles without earthly limitations do not. Instead, the FAA’s Aircraft Registration Branch will keep a record of whether a particular aircraft has ever been declared totally destroyed or scrapped. Therefore, it is vital to inspect the aircraft’s documents prior to buying so you know exactly what you are getting yourself into.

One final consideration before you buy that project: insurance. If the aircraft was previously destroyed or scrapped, you may have to pay an increased premium. Be sure to speak with your prospective insurance provider before making your decision.

The decision to purchase a destroyed, salvaged, scrapped, or totaled aircraft should not be made lightly. In the end, whether such a project is a total waste of time depends on many factors, including the aircraft’s condition and its legal status.

photos of AOPA employee Ian Arendt

Ian Arendt

Ian Arendt is an in-house attorney with AOPA’s Legal Services Plan. The AOPA Legal Services plan is offered as part of AOPA’s Pilot Protection Services.

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