Flags= Technical and Regulatory
Called Gray Market because hard to detect
Some Flags which Consumers can use
AINonline reports that “The FAA, highlighting its efforts to combat illegal charter, is warning the public of red flags involved in illegal operations. The agency also released a list of certified operators to enable consumers to verify their charter companies. Those warnings came as the agency has worked with industry organizations such as NATA and NBAA to step up its efforts to curtail illegal activity.”
Unfortunately the illegal flights are not festooned by Red Flags—what to do?
Below is the FAA press release which describes the “red Flags”. The advice relies on regulatory references which the average ordinary citizen could neither comprehend nor most significantly, engage in a probative dialogue with a prospective “charterer”.
The practices involving these dodgy transactions are labeled “Gray Market” charters because they are difficult tor the regulator to detect. The line between an illegal and legal operation requires an LLM in aviation law.
These flights are usually not advertised and you cannot find them on Craig’s List. The “contact” usually begins with a private business or personal relationship.
After a flight on XYZ’s King Air on which our “buyer” is a legitimate guest as part of a team to pitch a major contract, the host mentions to the guest “maybe you would like to use this plane on your upcoming family skiing vacation?” You think “It was a very comfortable trip and it would be great to avoid the TSA lines and the hassle/expense of paying for the skis as baggage. You say, “let me get back to you.”
At the 19th hole after a great round of golf, your partner says “I know that your college football team is going to the Toilet Bowl next week in Flushing, NY. I know your kids are huge fans of Alma Mater. I have a great Phenom 300 and it can fly everyone up to the game and back for the festivities—no hotel and you don’t have to traipse through the terminal. I have two awesome pilots and I can give you a good deal.” “That’s awesome let me check with my family.”
So, you being a subscriber to the FAA press releases, search the list of certificated carriers and in neither instance do you find a name which resembles the company/guy who is offering a plane. You cannot confront the acquaintance with “you’re not legal”. Further, you recognize that XYZ Corporation may be the shell name of the aircraft owner. Raising the FAA’s legal issue could destroy a relationship.
What can you do?
EASY ANSWER: my insurance agent told me that if I am paying for a flight either
- I need to have a real aviation attorney review the contract to assure that it meets the stricture of Part 91
- I have to get a copy of your Part 135 certificate, the plane’s listing on the Ops Specs and a document showing the pilots are authorized to fly this plane for the company.
A knowledgeable insurance should/might know that flying an “illegal flight” voids coverage for the plane liability.
These are Red Flags and legitimate questions to pose to the person offering the plane; it should not be considered an insult, but evidence of an informed consumer.
Not fully stop signs but things to raise your concern:
- There is NO Part 135 certificate on the hangar wall. It is a requirement that the document must be visible.
- The contract to “rent” the plane is short; the FAR requirements to be legal consume pages.
- The crew, air and ground, refer to you as the operator and/or ask you if you want to fly in these conditions. The certificate holder and the legal Part 91 flight must be under the control of an owner.
- A scenario not mentioned above: someone with the title of “agent” or “broker” is the initial contact or becomes part of the transaction. The legal documents and requirements require stricter.
- A truly compliant operation pays attention to details- clean interiors and exterior, no “gorilla” tape repairs, pilots bags are well organized and they are presentable. Not everyone thinks that cleanliness is close to airworthiness, but a sloppy appearance should signal asking more questions.
Valuable assets like aircraft require carefully constructed legal documents. The fly-by-night types are not inclined to be detail oriented.
At the end of the FAA Press Release, there are two useful telephone numbers to use if you have questions. It’s free and very valuable.
Illegal charter operations pose a serious safety hazard to the traveling public, and the FAA works aggressively to identify and shut down rogue operators. The agency also provides information and resources to help passengers ensure the company they hire is legitimate.
The FAA holds charter operators — who transport people and property for hire — to higher standards than private pilots, who are able to take their family or friends for an airplane ride. Illegal charter operations pose a serious safety hazard to the traveling public, and the FAA works aggressively to identify and shut down rogue operators.
Charter operations — also known as commuter and on demand operations — require a higher level of pilot training and certification, aircraft maintenance procedures, and operational safety rules than operations that private pilots conduct. Additionally, FAA inspectors perform more frequent periodic check on charter companies’ pilots, crewmembers and aircraft than they do on private pilot operations. And charter companies’ crewmembers must undergo regular proficiency checks to maintain their FAA certifications.
Illegal charters can take a variety of forms including but not limited to:
- companies that don’t have the required certificates;
- use aircraft that are not on their FAA-authorized aircraft list;
- use unqualified pilots;
- offer ride-sharing;
- try to transfer operational control of the flight to the customer;
- operate under one rule when they are required to operate under a different rule;
- when the customer and the company act in concert to sign a lease that doesn’t include crewmembers, but the company then directs the customer to use a specific flight crew.
The FAA has taken a number of actions to crack down on illegal charter operations. The agency formed a special-focus team to investigate complex cases; partners with the air charter industry to help identify possible illegal operations; and is standing up a new team to collaborate with industry trade associations to educate pilots and operators to ensure they understand all of the rules that apply to charter operations.
The FAA has taken enforcement action against scores of pilots, operators and others associated with illegal charter operations.
At the same time, the FAA also has taken steps to help customers identify both illegal and legitimate operators. The agency issued guidance to help people avoid illegal operators,
AC 91-37B – Truth in Leasing
91-37B – Truth in Leasing
February 10, 2016
This advisory circular (AC) provides information and guidance for lessees and conditional buyers of U.S.-registered aircraft. While truth-in-leasing requirements are required by regulation for aircraft weighing more than 12,500 pounds, the Federal Aviation Administration (FAA) prepared this AC to ensure any person who is seeking to lease an aircraft understands the meaning of operational control and does not enter into an agreement where operational control is not clearly maintained by the appropriate party.
and makes publicly available a current list of licensed operators and the tail numbers of the aircraft they operate (MS Excel).
Customers also can protect themselves by asking to see a company’s FAA-issued air carrier operating certificate, as well as its operations specifications, which will list the specific aircraft the operator has been approved to use.
Additionally, a number of red flags indicate a company may not be a legitimate operator. Among them:
- If the company provides the aircraft and at least one crewmember, yet attempts to transfer operational control to a customer via any document.
- A lack of Federal Excise Tax (FET) charged to the customer. Legitimate operators have to charge this. If the price is too good to be true, it probably is.
- Lack of a safety briefing or passenger briefing cards.
- Any evasiveness to questions or concerns. Legitimate operators should be transparent and helpful.
- 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.
The FAA encourages people to thoroughly research operators they are considering hiring, and to report any suspected illegal activities to the agency. If a member of the public has a concern about the legitimacy of a charter operator, they should contact their local FAA Flight Standards District Office (FSDO). People also can call the Air Charter Safety Foundation’s toll-free illegal charter reporting hotline at 888-SKY-FLT1 (888-759-3581).
 Test—write me an opinion letter on the firm’s letterhead that the contract meets 14 CFR §91.505. If the lawyer retains equanimity, likely to qualify.
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