Win-Win-Win Corporate Charter Arrangements
Eliminating Fines and Jail Time for Operational Control and Compliance Issues - Part 91 Operators

For many years, business aircraft owners have placed their aircraft on a Part 135 charter certificate so that the aircraft could be offered to the public for charter. This has resulted in a win-win-win arrangement for charter operators, business owners and charter passengers. The owner gets revenue when the aircraft is not being used for business travel. The charter operator generates revenue without having to bear the cost of aircraft ownership. Charter passengers get greater availability of charter aircraft for transportation at reduced cost. Is it too good to be true? Sometimes it is not.

The FAA has concluded that the arrangement between the business aircraft owner and the charter operator can sometimes be referred to ". . . as little more than a rent-a-certificate sham . . ."  In these instances the FAA determined that the operator could not demonstrate that it had operational control over the aircraft being operated. As a result, during the past two years there have been record fines, certificate suspensions and revocations, and the threat of jail time for flying illegal Part 135 flights.

The FAA revoked the certificate of American Flight Group (AFG) and administered an enforcement action against Darby Aviation and American Air Network. In these cases, the 135 certificate holder permitted non certificated companies to operate under their certificates without the certificate holders having operational control over the flights.

Recently the U.S. Attorney in Newark, NJ announced the indictments of several Platinum Jet executives for operating passenger-carrying aircraft for compensation or hire without a Part 135 certificate. Platinum Jet operated a Challenger 600 that crashed in 2005 on takeoff from Teterboro Airport. The aircraft plowed through a fence, across a highway and into a warehouse and caught fire. No one on the aircraft was seriously injured but a man driving to work was critically hurt. The accident caught the attention of the FAA and opened a Pandora's Box of Part 135 operational control problems.

Four years after the accident the Platinum Jet executives were arrested. This should be a wake-up call to all Part 91 aircraft owners who put their aircraft on Part 135 OpSpecs but retain operational control.

The FAA took a lot of flack when its investigation of Platinum Jet opened the lid on operational control problems. In many cases the industry's response was an elaborate papering over of the issue. So-called "agency agreements" drafted by highly paid lawyers flourished, some say with the FAA's complicity.

Everyone–pilots, mechanics, service providers–had an agency agreement. Many of these were reviewed and at least tacitly approved by local FAA field offices. Notwithstanding all the elaborate paperwork agreements, some of which were explicitly approved by local FAA officials, the FAA took action. For example, the agency suspended and then revoked AMI's Part 135 certificate and levied a record $10 million civil penalty against TAG Aviation.

In the case of the AMI certificate revocation, few people focused on the FAA's allegation that the aircraft were operated either by AMI or the aircraft owners. The FAA's Order listed the aircraft–and owners–on AMI's Part 135 certificate, and it read like a who's who of corporate America. If these aircraft have shifted to other Part 135 OpSpecs in the wake of AMI's revocation, the aircraft owners, corporate titans or not, need to look closely at whether their operations should be certified under Part 135. And aircraft owners listed on other Part 135 OpSpecs whose pilots and mechanics effectively control the operation of their aircraft aren't off the hook. 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 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.

So how can an aircraft owner profit from a win-win-win charter arrangement? Obtain a Part 135 certificate! Earning your own certificate avoids regulatory issues, improves safety and makes business much more cost effective and profitable in the long run.

FAA Shifting to Full Electronic Distribution of Airworthiness Directives (ADs)

The Federal Aviation Administration (FAA) published a notice of policy change announcing the FAA's schedule for transitioning to full electronic distribution of airworthiness directives (ADs). On March 1, 2007 the FAA published a notice in the Federal Register (72 FR 9394) announcing their e-mail subscription service for ADs and SAIBs. The service, known as GovDelivery, was activated in May 2007 and is accessible from the Regulatory and Guidance Library (RGL) homepage.

The service is free of charge and allows any interested party to subscribe. Subscribers may choose to receive all published documents or only those pertaining to a specific product make and model. They also may choose to receive all published documents for general categories such as 'small airplane' or 'engine.' The subscription service sends ADs and SAIBs to the e-mail address of each subscriber within minutes after publication in the RGL.

In September of 2007, the FAA stopped mailing paper copies of ADs and SAIBs to all owners and operators of transport airplanes and engines installed on transport airplanes.

The FAA will stop mailing paper copies to the remaining owners according to the following schedule: 

 --Transport rotorcraft and rotorcraft engines - October 1, 2009.
 --All other rotorcraft and rotorcraft engines - January 1, 2010.
 --All aircraft, engines, and propellers - March 1, 2010.

H.R. 3371
Airline Safety and Pilot Training Improvement Act of 2009

H.R.3371, the proposed, Airline Safety and Pilot Training Improvement Act of 2009, adopts the FAA Advisory Circular (AC) 120-92 definition of a Safety Management System (SMS) and states in part:

The Administrator of the Federal Aviation Administration shall conduct a rulemaking proceeding to require all part 121 air carriers to implement a safety management system. In conducting the rulemaking, the Administrator shall consider including each of the following as a part of the safety management system:

(1) An aviation safety action program (ASAP).
(2) A flight operational quality assurance (FOQA) program.
(3) A line operations safety audit (LOSA).
(4) An advanced qualification program (AQP)

The Administrator shall issue --.

(1) Not later than 90 days after the date of enactment of this Act, a notice of proposed rulemaking and
(2) Not later than 24 months after the date of enactment of this Act, a final rule.

For the full text of H.R. 3371 click here: H.R. 3371 

Current JDA Projects:

Airspace and obstruction evaluation services for 18 building and tower development firms.

Airspace and surveillance impact analysis for Reagan National Airport (DCA) in support of the Arlington County redevelopment plan.

Conducting a maintenance program assessment for Sundance Helicopter.

Developing airport obstacle clearance standards in accordance with AC 150/5300-13 Airport Design Standards for two firms proposing development projects adjacent to airports.

New Part 121 Operating Certificate and associated operating manuals
for a Part 135 operator.

New Part 145 Operating Certificate and associated manuals for an avionics maintenance facility.

Obstacle evaluation (Part 77 and TERPS) surface development for Jack Edwards Airport, Gulf Shores, Alabama.

Operations, Safety, Maintenance and Culture Assessment and Survey
for a Part 121 operator.

RNAV procedure design and validation in support of airspace mitigation efforts in Tampa, Florida.

Site planning and airspace analysis for a major wind turbine development firm.