The Problem of Illegal Charter Continued from page 31 that the FAA strongly opposes com- mercial operations conducted without having the appropriate authority to do so. Such activity can, therefore, lead to some of the highest civil penalties available under the FAR— meaning penalties that can be in the tens-of-thousands to hundreds-of- thousands of dollars by the time you are through. Moreover, depending on the particular circumstances, the FAA could also turn to certificate suspensions or even revocations for the airmen and agencies involved, and if the activity is intentional and egregious enough, the guilty indi- viduals could be even looking at a visit to the local federal prison. With respect to civil liability consequences, if an accident or incident occurs during a flight that is supposedly conducted under a dry lease that is later determined to be wet, that operator may very well find itself in state court defend- ing against significant claims for damages. Most states impose the highest standard of care against common carriers, such as those operators that are acting as com- mercial operators (whether they know it or not), which in turn makes it easier to find liability against, and to assess higher damages on, those operators. Now put on top of that the question of whether or not that operator’s insurance carrier will stand up and provide coverage under the operator’s non-commer- cial or business-and-personal use insurance policy after the FAA has determined that the flight in ques- tion was actually an illegal charter flight, and the operator could end up being in a very bad place. Aviation Business Journal | 1st Quarter 2018 Finally, illegal charter activity creates a significant threat to the air charter industry, and, therefore, to the entire traveling public. It creates an unfair playing field that arguably encourages people to not follow the rules, or drives those operators who are trying to follow the rules out of business because they cannot com- pete with the operators who do not. That, in turn, reduces the relative number of safe charter operators that are available for the traveling public to pick from. Again, this is not to say that all appropriate dry leasing is bad. But sham dry leasing can be very bad for those persons who have no idea what is going on with the aircraft and simply want to pay someone to get them from point A to point B. CONCLUSION What is one to do? First and foremost, educate yourself enough to know what the proper parameters are for true dry leasing. Second, if you are inadvertently conducting flights under Part 91 through improper wet leases that should be flown under Part 135, either fix it or stop conduct- ing those flights for all of the reasons noted above. Finally, if it appears that someone else is conducting Part 91 flights under what are really wet leases in disguise, then call the FAA and let them know. One of the FAA’s key responsibilities is to enforce its own regulations, and this is one of the most important regulations in place. But FAA aviation safety inspectors are not, and cannot be, everywhere at once; they often need a hand if there are bad actors out there who are not doing it right. At the end of the day, for the sake of the safety of the traveling public—and for the sake of those industry members who are actually doing it right—let the FAA know of potential violators so they can check to see if, in fact, those dry leases are just a little too damp. David T. Norton is a partner and head of the aviation practice at the law firm of Shackelford, Bowen, McKinley & Norton, LLP, in Dallas, Texas. He holds a B.S. from the USAF Academy, an M.B.A. from the Louisiana Tech University, and a J.D. from the Southern Methodist University Law School. He has an internationally recog- nized practice that focuses exclusively on business aviation industry regulatory, transactional, tax, dispute resolution and risk management issues. He is very active in many business aviation indus- try-related committees and groups, such as serving as Industry Co-Chair of the joint FAA/Industry RVSM LOA Process Enhancement Team of the Performance based Advisory Rule Marketing Committee. He was a regular commis- sioned officer in the U.S. Air Force from 1984 to 1993, serving primarily as a KC-10A pilot and aircraft commander, and currently holds FAA certification as an airline transport pilot (multi-engine land) with a DC-10 type rating, a com- mercial pilot (single-engine land), and as certified flight instructor, instru- ment and multi-engine, and advanced ground and instrument instructor. Please feel free to call him directly at (214) 780-1407, or email him at [email protected], if you have any questions concerning the article. 33
