How to Avoid the Illegal Air Charter Operator
IS YOUR CHARTER DEAL TOO GOOD TO BE TRUE?
Then it probably is an illegal charter, one operated by an aircraft owner/operator that has not undergone all the rigorous inspections, testing, training for its pilots and aircraft, carries all the required insurances etc.. because its a very hard and time-consuming to be awarded an FAA Air Carrier Certificate. Only a few are handed out a year because of this reason.
Most of the smaller aircraft (31 passenger seats or less) are operated under CFR Part 91, those that choose to charge a consumer to fly them to a particular place are required to obtain a CFR 135 DOT certificate. (similar to CFR 121 for the likes of Delta/American/United etc..)
The FAA recently proposed a $3.3 million civil penalty against The Hinman Co., alleging that its subsidiary, Hincojet LLC, conducted hundreds of commercial aircraft operations in violation of FAA regulations. The agency contends that the company failed to hold the required operator certificate for the flights being performed. Specifically, the FAA alleges that because Hinman was charging more than the expenses allowed under Part 91, the company should have been operating these flights under Part 135.
As a consumer, it sometimes hard to distinguish who is legal and who is not. Some due-Diligence is required on the part of the charter customer.
Verify the operator has an Air carrier Certificate (AOC) issued via the FAA and its number.
Verify the aircraft that you wish to use, is indeed on their AOC, and the pilot/pilots are too! D085
Many legal operators have the AOC, its number and its Operations Specifications D085 on their websites.
You can also verify with the local FAA in the area that in fact, the operator is who they say they are.
Ask to see these documents, if the operator is resistant to provide verification, it might be wise to use another charter operator.
Forms of Illegal Charter and the Pitfalls of doing so
Illegal charter operations can take many forms. Some of the more formal types of illegal charters include “flight department companies,” illegal dry leases or excessive timeshare agreements, which exceed the FAA’s rules as outlined in 14 CFR 91.501.
Informal illegal charters can occur when an aircraft owner has a casual agreement with a friend, family member, or colleague that provides the aircraft owner with compensation for the flight operation exceeding the allowances in 14 CFR 91.501.
Another form of illegal charter occurs when an air charter broker appears to be the actual air carrier, instead of an agent for either the air carrier or the customer.
Part 91 operators are not the only ones that fly illegal charters. Part 135 carriers may be conducting illegal charters if they fly any commercial operation outside the scope of the air carrier’s authority, such as performing a charter in a larger aircraft than the air carrier is authorized to fly, or when a flight is conducted outside of the air carrier’s authorized areas of operations.
Certification Issues
The biggest risk of flying with an illegal charter operator is that they are not certificated by the FAA. Since Part 135 operators transport passengers or property for hire, they are subject to more stringent regulations. While many Part 91 operators adhere to similar standards, they have not gone through the FAA certification process to carry passengers and property for hire.
Also, a noncommercial operator typically doesn’t carry the same type of insurance as a commercial operator. In the event of an accident or incident, it’s possible an insurance carrier would not cover a claim if the insurer believes the flight was actually for compensation or hire. If you own an aircraft that is used in illegal charter operations, whether you know about the illegal activity or not, an accident claim may be denied, and your coverage cancelled.
Consumers of illegal charter operations also face potential Internal Revenue Service and Customs and Border Protection (CBP) problems as well. While most non-commercial operations are not subject to federal excise tax (FET), if the IRS determines that an operator is providing commercial air transportation, there can be FET liability. Commercial operations also are subject to additional fees when using CBP services, and the agency is cracking down on operators that inadvertently or intentionally circumvent the fees levied on commercial operations (see sidebar on collecting and remitting fees).
Finally, illegal charter operations can result in other serious sanctions. In 2005, Platinum Jet Management and Darby Aviation faced civil penalties, revocation of FAA certificates and even prison sentences for some executives and employees for conducting illegal charter activities.
How to Identify a Suspected Illegal Charter
Unfortunately, most charter passengers don’t know how to vet operators properly.
However, a charter customer can verify if an operator has the authorization to conduct commercial flights in a specific aircraft by visiting the FAA’s website.
Passengers also should exercise due diligence before engaging an operator for air transportation. Ask your intended charter provider for a copy of its air carrier certificate, or at least its air carrier number. If the operator refuses to provide this information, illegal charter activity should be suspected.
After a flight is conducted, passengers may see signs that indicate they flew on an illegal charter. Receiving multiple bills for a single flight can indicate illegal activity. For example, receiving one bill for use of the aircraft and another bill for pilot services may indicate suspicious activity. Consumers should also review invoices for FET charges. An operator conducting an illegal charter will not typically charge FET.
Exceptionally low prices or fees significantly out of line with other charter quotes should be questioned. As the FAA warns, “If the price is too good to be true, it probably is.”
“Another warning sign is if the pilot or someone associated with the company coaches passengers on what to say or do if an FAA inspector meets the aircraft at its destination,” said an FAA representative.
Pilots should also be attentive to suspicious activity.
Pilots are the first line of defense.
Some pilots do not understand the risks to their own airman certificate – and career – by intentionally or inadvertently conducting illegal charter flights.
For example, a pilot might think they’re conducting Part 91 operations under a timeshare agreement or other legal arrangement under 14 CFR 91.501, but they notice that different trips involve unrelated passengers. Flying multiple unrelated passengers from multiple unrelated companies might be a sign of questionable activity.
Be Informed and Be Safe!
Please visit www.FAA.Gov for more information.
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