Part 135

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Webinar Navigates Complexities of Charter, Broker Regulations

May 11, 2011

Question: Can air charter brokers ask a Part 135 operator to display business cards with the broker’s name and logo on the aircraft for brand reinforcement?

Answer: It depends on whether the wording honestly represents who you are.

For example, a message that says, "We have the best fleet of aircraft chartered through us every time", might give passengers the impression that you're a charter operator, which wouldn't be allowed. However, if the message says, "We're the best broker," and provides contact information, it probably would be acceptable.

These differences may sound trivial, but given the complexities of the regulatory environment, one small slip in wording, no matter how unintentional, might generate a huge fine for charter brokers and operators. This was just one of the many issues covered during a May 5 NBAA Webinar entitled, "Trends in Air Charter."

Topics for the one-hour session, moderated by Mike Nichols, NBAA Vice President for Operations, Education and Economics, were:

  • Air charter brokers;
  • FAA regulations on scheduled flights, and how brokers and operators can avoid crossing the line between on-demand and scheduled service;
  • Selling individual seats on chartered business aircraft, and;
  • How to avoid challenges in collecting/remitting Federal Excise Tax (FET).

So technical are these issues that three of nation's leading aviation attorneys were recruited to join Nichols for the presentation.

"The [air charter] industry has seen a lot of changes over the past several years, much of which has been stressful," said Nichols at the start of the session. "Our goal today is to clarify the regulatory construct we all live in, discuss some critical issues we're all facing, and answer questions that have been plaguing the industry."

Nichols discussed the role of the U.S. Department of Transportation's (DOT) in regulating air charter brokers, and provided an overview of DOT's rules governing the industry. Kent Jackson of Jackson & Wade, LLC, gave examples of DOT enforcement activity and various rulings involving air charter brokers that have led to sometimes hefty fines. Nichols also directed listeners to NBAA's Best Practices For Air Charter Brokering handbook as a resource for understanding the often complex rules involved.

Looking at the topic of scheduled flights, Gerry Murphy, of Crowell & Moring, LLP, discussed DOT and FAA rules covering charter operators and flight scheduling. Among his many points, Murphy noted that operators must comply with both Part 110/119 of FAA’s Federal Aviation Regulations and Part 298 of DOT’s Economic Regulations, which often are inconsistent. He also said that the development of new charter business models, such as per-seat on-demand, fractional charter and membership programs, as well as new aircraft designs, "do not mean that the rules have changed."

On the topic of the sale of Individual Seats on Charter Flights:14 CFR Part 380-Public Charters, Aaron Goerlich, of Goerlich, Garofalo Goerlich Hainbach PC, provided an overview of various licensing requirements and public charter prospectus and amendments issues, as well as other topics of interest to operators.

Finally, Kent Jackson looked at a variety of Federal Excise Tax issues and challenges, affecting charter brokers and operators. For more information on these and other issues related to air charter brokers and operators, members can visit www.nbaa.org/part135.