Aug. 12, 2024
As an air charter broker or air charter operator, are you confident in your compliance with U.S. Department of Transportation (DOT) rules for air charter brokering? The updated “NBAA Best Practices for Air Charter Brokering” is now available, providing guidance and addressing frequently asked questions for brokers and charter operators.
In 2019, 14 Code of Federal Regulations (CFR) Part 295, Air Charter Brokers, and revisions to 14 CFR Part 298, Exemptions for Air Taxi and Commuter Air Carrier Operations, became effective. The new and revised regulations were in response to consumer protection-related recommendations by the NTSB following accidents involving brokered flights.
Benefitting from five years of industry experience under the new rules, the revamped guide provides brokers and charter operators updated guidance related to solicitation materials, required disclosures and more.
Aaron Goerlich of the Law Offices of Garofalo Goerlich Hainbach PC said the regulations provide clearer requirements for air charter brokering activities.
“Until 2019, there was no DOT regulation specific to the broker community, although there had been enforcement actions against brokers where the DOT found that brokers were holding themselves out as air carriers,” said Goerlich.
Part 295 is largely a disclosure rule. Specifically, it:
- Allows “air charter brokers” as principals or bona fide agents to provide single entity charter air transportation of passengers operated by Part 135 air carriers (among other types of carriers)
- Requires air charter brokers to make certain disclosures to consumers in all cases and other disclosures in response to a consumer’s request
- Describes certain practices by air charter brokers as prohibited or unfair practices or unfair methods of competition
Similarly, the revisions to Part 298:
- Require air taxis and commuter air carriers, when acting as brokers in the sale of charter air transportation, to make the same disclosures to consumers as required by Part 295
- Describe certain practices by an air taxi or commuter air carrier as prohibited or unfair practices or unfair methods of competition
“These regulations are the first to set standards for air charter brokers. Part 295 provides more concrete requirements for brokers to follow,” said Melanie Hight Viau, co-chair of NBAA’s Domestic Operations Part 135 Subcommittee.
The updated NBAA guide encourages brokers and charter operators to know their role, whether it’s as agent of the charterer, agent of the direct air carrier or as an indirect air carrier.
“Each option presents different legal structures and different risks so it’s important to know the capacity in which you are acting, and to memorialize it in your agreements with customers,” said Goerlich.
When 14 CFR Part 295 took effect, so did some changes to 14 CFR Part 298 applicable to air taxis, because the DOT recognized it is not unusual for one air taxi to act as a broker to another air taxi. The revised Part 298 provisions apply to charter operators that broker out a flight to another operator, for example, when an aircraft is unexpectedly unavailable, or the operator does not have FAA authority to conduct a Part 135 flight in the desired aircraft.
“All such operators are governed by Part 298 of the DOT regulations, Exemptions for Air Taxi and Commuter Air Carrier Operations, which incorporates portions of Part 295 to require Part 135 direct air carriers, when acting as brokers, to make certain broker-oriented disclosures to customers,” the guide explains.
To date, there have been no known DOT enforcement cases related to noncompliance with the rules.
“The regulations are not complicated,” Goerlich said. “In my view, the absence of DOT enforcement action to date can be taken as an indicator there’s a pretty good understanding in the industry of what’s required.”
International Business Aviation Council Ltd.