On July 3, 2008, at 0900 eastern daylight time, a Piper PA-18-150, N6851Z, call sign Sky 12, registered to Sky Signs LLC, operating as a Title 14 Code of Federal Regulations (CFR) Part 91 banner tow flight, had an in flight collision with a separated banner from another Piper PA-18-150, N2991Z, call sign Sky 7. The pilot made a forced landing to the Atlantic Ocean adjacent to the shoreline at North Myrtle Beach, South Carolina. Visual meteorological conditions prevailed and a company flight plan was filed. The airplane received substantial damage. The commercial pilot reported minor injuries. The flight originated from Sky Field, Conway, South Carolina, on July 8, 2008, at 0815. The pilot of Sky 12 stated he was at 500 feet, northeast bound parallel with the beach near Grand Strand Airport when he observed a banner floating directly in front of his airplane. He took evasive action by attempting to dive below the banner. The banner became entangled with the propeller and the engine stopped. He turned the airplane towards the beach, dropped his banner, made a May Day call, and initiated a forced landing near the surf line in the Atlantic Ocean. The airplane collided with the water, and nosed over inverted. The pilot of Sky 7 stated he flew up the beach about 4 to 5 miles north of Grand Strand Airport, turned out to sea, made a right turn, and proceeded back down the beach on a southwest heading parallel to the beach. While turning he called Sky 12 on an air-to-air frequency and they informed each other of their position. Sky 7 then switched his radio to the Grand Strand Airport air traffic control tower radio frequency, and continued the flight about 1,000 feet off the shore at 600 feet. When the airplane was abeam runway 23 at Grand Strand Airport he felt an increase in airspeed and looked back towards the rear of his airplane. His banner had separated aft of the main panel. An ocean breeze was blowing the separated banner inland towards the beach. He observed Sky 12, proceeding northeast bound, initiate a dive in an attempt to avoid the separated banner. The banner collided with Sky 12's propeller and the engine stopped. He heard Sky 12 declare an emergency and watched as the airplane made a forced landing to the water near the beach. Two Federal Aviation Administration (FAA) inspectors examined the separated banner. The FAA stated, "The banner was inspected and showed signs of material failure." A company employee and an FAA inspector were able to tear the accident banner with minimal effort after both had just stated, "the banner material looked new and strong and should not have torn easily." A company seamstress constructed the banner used by Sky Signs LLC, and there are no FAA written procedures concerning banner construction. Sky Signs LLC is not required nor does it maintain any records concerning the age of the banner, number of banner tows, or who inspects the banner prior to a banner tow flight. There was no evidence that the banner of the Sky 7 airplane was struck, and cut in half by the Sky 12 airplane, while Sky 7 was towing the banner.