Governor Whitmer’s “charter” brings light to CONSUMERS about the illegal GRAY MARKET

legal v. illegal market
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Governor “charters” and pays for Flight 

FAA says neither Operator nor Plane had authority

Prominent story will effectively make consumers aware of legal/safety issue

The Governor “unwittingly” “chartered” a plane which was not authorized to accept compensation from the general public. The facts are a classic example of a Gray Market and those responsible owners/pilots will likely pay the price. However, this example is more likely to reach the consumer side of the transaction. People, with the means to charter an airplane, are more likely to read an article with a headline reading FAA investigates Gov. Whitmer’s trip to Florida than XYZ company sanctioned for violating the FARs.

There have been a number of high profile FAA actions against private entities using the vagaries of “the Gray Market” as cover for their actions:

These highly publicized penalties have not had the level of deterrence sought. These operators must be doing a cost/benefit analysis to get the revenue based on a low likelihood of detection. As the opening graphic shows, it is virtually impossible to tell the difference between these two planes.

The FAA is a safety regulatory agency. It writes rules that are supposed to be enforceable. It depends on the certificate holder to voluntarily comply with the FARs. Especially with the definitions which distinguish between permissible Part 91 flights and illegal uncertificated Part 135 operations, it appears that reliance, here, on the aircraft operator is not as reliable. The standard for  “HOLDING OUT” is complex and the indicia for this prohibited conduct under Part 91 are almost exclusively within the purview of owner/operator/crew.

The FAA, AOPA, NATA and NBAA  have instituted a more aggressive campaign to find and fine these illegal flights.

All involved in these efforts have also reached out to the consumer side of the transaction:

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;

and

  • 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.

FAA Safe Charter

The Whitmer case is being published in the news media where consumers with the pocketbook to charter a flight. This notoriety makes it more likely that a person, considering a flight on a business aircraft, will ask the right questions. Reaching the buyers of the verboten flights may minimize or eliminate ignorance about the rules and their related safety risks.

Of course, the most direct means for an owner/operator is to seek a Part 135 certificate. The bark is worse than the bite associated with applying for the safety and economic authorities,

NATA list


 

FAA: Company that flew Whitmer to Florida not authorized to operate charter flights

Paul Egan

Detroit Free Press

Detroit Free Press

 

 

LANSING – The Federal Aviation Administration is investigating after determining that a company hired to fly Gov. Gretchen Whitmer to Florida is not authorized to operate charter flights.

Gov. Whitmer and Gulfstream

The possible violation of FAA rules by Air Eagle LLC[1], the Detroit company that owns the plane Whitmer flew on to visit her father in March, adds a new level of controversy to concerns about the flight.

Until now, concerns about the flight related mainly to whether Whitmer was following the travel advice her administration was asking Michiganders to observe, and how Whitmer paid for the flight.

But charter flight operators are subject to more rigorous maintenance, pilot training, insurance, and other requirements than other flight companies.

In a Friday memo that disclosed details about the cost of the controversial flight and how the governor’s office says it paid for the flight[2], Whitmer chief of staff JoAnne Huls said Whitmer’s officials “made a decision to use a chartered flight for this trip” because of ongoing security concerns.

“The cost to charter the flight was paid for by the Michigan Transition 2019,” a nonprofit corporation controlled by the governor, Huls said.

Elizabeth Isham Cory, a spokeswoman for the FAA, said companies that operate charter flights must have a Part 135 certificate issued by the federal agency. Other aircraft companies have a Part 91 certificate, she said.Gulfstream

The Gulfstream G280 Whitmer’s office confirmed she flew on “is not on a 135 certificate and Air Eagle does not have a Part 135 certificate,” Cory said in an email to the Free Press.

Another FAA spokesperson said later on Monday that it is premature to conclude that a violation occurred, but “the FAA is looking into the matter.”

A phone message left with Air Eagle seeking comment was not immediately returned.

Whitmer spokesman Bobby Leddy said Whitmer “needed secure transportation, the company was able to provide that, and the trip was paid for.”

…Aircraft owners can fly themselves and can in some cases fly friends at no charge under a Part 91 certificate, but if they are going to fly others for a fee they require a Part 135 certificate

pilots fine

It’s pretty serious” in terms of potential civil penalties for both the company that owns the aircraft and the pilot,…The FAA has made cracking down on unauthorized charter flights a priority, he said.

Huls said a nonprofit corporation, Michigan Transition 2019, doing business as Executive Office Account, paid the $27,521 cost of Whitmer’s contentious private plane trip to visit her father, her office said Friday.

Whitmer used her personal funds to pay the $855 cost of her seat, calculated based on the comparable cost of a first-class ticket, spokeswoman Tiffany Brown told the Free Press.

Whitmer PAYING for flight

…But, according to the FAA, the charter flight restrictions apply to the airplane’s owner and pilot, not the passengers.

…It was not immediately clear why the cost of the plane and Whitmer’s $855 contribution were listed as May expenditures and revenues for the fund, rather than being recorded in March, when the plane was hired.

“The flight was paid immediately upon receiving receipt of the cost,” said Brown, without providing further explanation.

[1] According to one report, the LLC is owned by three of Michigan’s most prominent political donors. Those donors are the Nicholson family of PVS Chemicals, the Moroun family of the trucking company Central Transport and the Cotton family, which formerly ran Meridian Health

[2] While this article focuses on possible FAA violations, there may also be an investigation by the Federal Elections Commission. For example, the FEC is concerned whether the candidate paid for her flight; whereas, the FAA sees the compensation as a prime example of a violation.

 

Michigan capitol and seal



 

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