A September 15, 2009 USA Today article written by Alan Levin claimed to expose failures in Federal Aviation Administration (FAA) oversight of on-demand charter operators. Citing six fatal accidents over a six-year period, the article states that "aviation regulators have missed blatant pilot training violations, failed to identify illegal charter flights and allowed planes to fly that should have been grounded." There is no doubt that these are legitimate issues that need to be continually addressed. Some very positive steps have already been taken by the National Business Aviation Association (NBAA), National Air Transport Association (NATA), National Transportation Safety Board (NTSB), Air Charter Safety Foundation (ACSF) and the FAA to address these issues. As it pertains to illegal charters, JDA recently posted a White paper titled "Operational Control" on its website. This article will chronicle the illegal charter issue while pointing to several Web resources on the topic.

The FAA's focus on Operational Control started in 2004 with the investigation of American Air Network, Inc. (AAN) in Chesterfield, MO. The FAA found that AAN entered agreements with various aircraft owners that allowed/permitted the aircraft owners to fly illegal charter flights. AAN's Part 135 certificate was revoked in 2005. The FAA continued its Operational Control investigation in 2005 with the crash of a Bombardier Challenger at the Teterboro, New Jersey airport. In its investigation, the NTSB found that the flight was not in compliance with FAR Part 135 and "The FAA said it had 'become aware' of business practices calling into question 'whether an air carrier has control of its operations purportedly conducted under the authority of its certificate.'" In 2006, American Flight Group's Part 135 certificate was revoked for renting out its certificate to numerous aircraft owners. As a result of the 2004 and 2005 investigation and revocations of several Part 135 certificates, the FAA established a National Operational Control review team in 2006. The national review led to record fines, suspensions and revocations of Part 135 certificates. In response, NATA and the NBAA began working with its membership and the FAA to help both sides understand the relevant issues. There was a year-long process where industry and the FAA worked together and in December of 2006, the FAA published operations specifications (OpSpec A008) for Part 135 charter operators. The FAA felt that the OpSpec was needed to address the Operational Control issues that had come to light. In January 2007, NBAA President and CEO Ed Bolen was cited in The Weekly of Business Aviation from a letter to his membership: "FAA has been aggressively pursuing enforcement actions against charter operators who have relinquished, surrendered or lost operational control. Don't let this happen to you."

Though it seemed clear by this time that charter operators needed to ensure compliance with OpSpec 008, not all operators were in compliance. On October 4, 2007, the FAA first suspended and then revoked the Part 135 air taxi certificate of AMI Jet Charter. The AMI order listed 70 N-numbered aircraft and sent major ripples through the industry.

But the ripples caused by the AMI revocation were nothing compared to the Teterboro crash indictments and arrests on February 4, 2009. Among other things, the United States Department of Justice press release states that "The Indictment alleges a conspiracy to commit continuous willful violations of regulatory requirements for the operation of commercial charter aircraft." The news release goes on to detail the allegations against six individuals including company founders, senior leaders and pilots. In a blog post about the press release and 35-page indictment, Mark Fava, an aviation lawyer, notes that "the 'criminalization' of responsibility related to civil aviation accidents demonstrates that those who allegedly run illegal Part 135 charter operations that result in accidents can be indicted criminally for those operations and for alleged false post-accident statements given to the FAA and the NTSB." And it did indeed happen, according to an article written by Greg Cirillo a Wiley Rein attorney, the co-founders plead guilty in June and July of 2009 and one of them will serve at least four years in federal prison plus the potential of a $250,000 fine. The remaining individuals' criminal trials will begin in January 2010 if they do not reach plea agreements.

Yet, in another blog post, Mark Fava, writes this regarding non-compliant charter operations, "I have before advised some inquirers and potential clients what it takes to do so legally and they say they just don't want to do that." Given the fact that illegal Part 135 operations could result in jail time and large fines, this can be a bit difficult to believe. Yet according to an AIN Online article, many of the AMI corporate aircraft were "cleverly concealed behind cutely named LLCs or listed as owned by banks as trustees." Perhaps the owners of charter aircraft believe that they can hide behind complicated paper trails. Or, maybe they don't understand that renting a certificate or "certificate franchising" is illegal. They might not even understand the basics of Operational Control. Possibly they believe that the FAA's notoriously slow pace will never catch up to them.

Yes, it is taking time, but as the FAA works its way through its OpSpec 008 compliance inspections, industry is working towards solutions to these complex issues. More and more resources are becoming available that make Part 135 compliance and the reporting of illegal charters easier. NATA has an Illegal Charter Hotline; ACSF has an Industry Audit Standard Program; the NBAA has numerous Operational Control resources; NATA has what they call Operational Control Compliance Tools; and JDA has developed 135Pro^TM, which is a simple low-cost way to obtain a basic Part 135 certificate. Use these tools and resources. Ascertain that you are legal, and don't count on the FAA to fail to identify you if you are operating illegal charter flights. As stated in an AIN Online article, "Operational control is serious business to the government. Operators have a whole lot at stake, and they shouldn't look at papering over the problem because it will cost more in the end. If the FAA's arrows–fines, certificate suspensions/revocations, aircraft seizures–aren't scary enough, the government has upped the ante with the specter of jail time. Time in a cell wreaks havoc with any bottom line–not to mention your free time." 


Are you a at Risk?

JDA Aviation Technology Solutions is offering free 30-minute consultations to individuals who would like a quick way to know if they are at risk and could possibly fall under the FAA's scrutiny regarding Operational Control. Contact Tom Stuckey for a consultation either by e-mail or by telephone at 301-941-1460 ext. 210.