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PERMIT TO FLY
A Permit to Fly may be issued to an aircraft that does not, for a variety of reasons, fully comply for a Certificate of Airworthiness.
These reasons might be because the aircraft is a simple, kit-built design; a "one-off" imported aircraft; an ex-military machine being used in a limited manner for exhibitions/displays or even a microlight aircraft.
Provided the design meets the approval of the C.A.A. and, in the case of an aircraft that has been flown previously, that it has been maintained in a satisfactory manner, a Permit to Fly will be issued.
In addition to the Permit to Fly itself, a Flight Release Certificate must be issued to guarantee that the aircraft and its engine are 'fit for flight'. This certificate will be signed by an LAME, a 'person authorised by the C.A.A.' or a firm specifically approved by the C.A.A. to carry out the work. The permit will normally be validated for 12 months.
In most cases, the Permit will limit the operation of the aircraft. This can take the form of a flying-hours-per-year limit, a restriction on crew numbers, a 'day only & Visual Flight Rules' limitation or some other restriction imposed by the C.A.A.
Derive the functional relationship between the no-arbitrage values of the two vertical spreads.
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