hard to get a grip on Gray Charter Market
FAA and Industry in midst of campaign to stop illegal flights
Who did $1.2 M fine announcement reach?
What’s up with the Whitmer No Charge decision?
The FAA and industry have engaged in a very aggressive campaign against the gray charter market and a headline like
is likely to catch the attention of the public, but who reacted to it?
The trade press recognized the significance of a collective seven figure fine-here are a full story and then five examples of other aviation-related articles:
August 10, 2021
The FAA sent a strong message last week that it would come down hard on operators who carry passengers for hire without all the appropriate certification or qualifications. So-called “gray charter” is cited as a major problem within the air charter industry. It is identified as operators claiming flights that are actually revenue-generating operations are misrepresented as either sales demos or some other dodge to get around the strict (and costly) federal requirements of commercial flying for hire. Legitimate charter operators have long complained that gray charter has been financially undercutting their legal operations.
The agency last week proposed more than $1.2 million in fines against five separate operators it alleges conducted the illegal flights, which it called “careless and reckless, endangering lives or property.” They include
Pottco Airlease of Council Bluffs, Iowa, being charged $344,672 in civil penalties for 16 passenger revenue flights flown in a Cessna Conquest turboprop “without a required air carrier or operating certificate.”
Also on the list is sister company
Pottco Tactical Air, being charged $301,676 in fines for 43 flights flown in a Conquest from airports in eight Midwest states between July and November 2019. The company also lacked required personnel, including a qualified director of operations, a chief pilot and a director of maintenance, according to the FAA’s allegations. The company also “employed pilots who had not passed the required written or oral tests, competency and proficiency checks, including passing a check ride during the preceding 12 months,” the agency said.
Other companies facing six-figure fines for multiple illegal charter flights include
Wikert Air and Oracle Aviation, both based in Omaha, Nebraska; and
East Shore Aviation of North Charleston, South Carolina.
All five companies have been in contact with the FAA about their cases.
Underscoring the importance of combating illegal charter, the rules of which can sometimes be confusing for brokers, passengers and others, the FAA is conducting an online seminar for operators, mechanics, schedulers and passengers on the topic, titled “Preventing and Identifying Illegal Air Charters—Learn How to Prevent and Avoid an Illegal Air Charter Flight”—on Monday, Aug. 23, at 19:00 Eastern Daylight Time.
While the readership of these four publications is likely to include the operators, the audience would not reach those who might purchase the gray market flight; however, one internet resource, Private Jet Club, which includes subscribers on the buy side, issued this story and a follow-up:
These are the readers who have the greatest need-to-know about the illegality of these flights; they obviously can afford them and also sophisticated enough to know that the potential operator’s insurance would deny liability coverage due the policies’ exclusions.
Only the Sioux Falls media, among the places of business for the other sanctioned entities, covered the $1.2M in civil penalty.
“SIOUX CITY — For allegedly conducting illegal charter flights more than two years ago, the Federal Aviation Administration has proposed civil penalties against Oracle Aviation, LLC, Sioux City’s new partner for a flight school.
Oracle Aviation of Omaha is one of five companies the FAA is proposing a total of $1.2 million in civil penalties. The FAA proposes a $191,536 civil penalty against Oracle Aviation, according to a news release.
The FFA [SIC] said the company allegedly used pilots who had not passed required written or oral tests, competency and proficiency checks and had not completed required training. The FAA further alleges that Oracle Aviation lacked required personnel, including a director of operations, a chief pilot and a director of maintenance…”
As of August 16,2021, at 16:00 none of these newspapers had mentioned that a business in their communities had been put on notice of substantial, substantial fines.
Curiously, the FAA contemporaneously decided not to take action against Air Eagle LLC. The Detroit Free Press reported :
“The FAA investigated and made clear to the operator what the rules are for chartered flights,” the agency said in an email to the Free Press. “The operator took steps so a similar situation won’t occur in the future.”
The owner of the aircraft flew Gov. Gretchen Whitmer to Florida without the requisite economic or safety authorities. It is interesting that the newspaper featured the decision not to sanction the flight operation.
 FAA Should Increase The VOLUME On Its Attack Of The GRAY CHARTER MARKET; FAA’s $1,000,000 CP Should Deter The Gray Charter Market: GRAY CHARTER MARKET: 2 More FAA Actions Against Illegal Flights And 1 Proactive Addition To The NBAA Small Aircraft Exemption; Governor Whitmer’s “Charter” Brings Light To CONSUMERS About The Illegal GRAY MARKET
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