Stay Out of the Illegal Charter Trap, Keep Your Leases Legal BY JACQUELINE E. ROSSER iven the costs of buying, maintaining and operating aircraft, owners naturally seek ways to lower their cost of ownership. One common method is to work with an FAA certificated-on-demand air charter operator (a “Part 135 operator”) who can not only manage the aircraft for the owner, but helps owners offset their costs by allowing use of the aircraft for charter trips. With properly executed agreements, the aircraft is still legally available for the owner to use under private rules (i.e. Part 91) (legally) while transi- tioning to the stricter Part 135 air carrier rules for charters. G SO, WHAT’S THE PROBLEM? The air charter market is highly competitive; the costs involved for owners, operators and customers are sig- nificant. These factors have contributed to the growth of persons seeking to cut corners, pay less or make more by engaging in deceptive, often convoluted and, ultimately, illegal operational agreements. The use of multiple docu- ments and other efforts to obscure the true nature of the transaction make these operations difficult to identify and stop. NATA encourages consumers, operators and aircraft owners to become aware of the problem to avoid engaging in illegal charter operations. The government, primarily through FAA and TSA, holds air carriers to a very high stan- dard. The carrier is accountable for their actions or omis- sions and those of pilots and technicians along with myriad requirements that result in safer, more secure operations. NATA members report that increasing numbers of aircraft owners are moving aircraft to “dry leasing arrange- ments” where they can forgo the oversight required of aircraft listed for air charter customers but still claim to be able to easily “lease” the airplane to others on an ad-hoc short-term basis. In simple terms, a dry lease is an airplane leased without crew. If you lease an airplane with crew, it’s considered a wet lease and, generally, an air carrier must operate the aircraft. This is an important distinction because when you dry lease an aircraft, for any duration, you become the operator. You become responsible for ensuring the maintenance, safe operation and regulatory compliance for your flight. You accept the legal and financial consequences for the operation of the aircraft. If you are not willing to assume these responsibilities and risks you should not lease an aircraft, but should charter from a licensed carrier. IT’S NOT JUST NATA MEMBERS NOTICING… The FAA updated Advisory Circular (AC) 91-37B, Truth In Leasing recently. In the AC, the FAA cautions that aircraft owners attempting to evade the need for air carrier certification are using devious leases to make it appear that the aircraft lessees are the responsible party when in fact they do not have that responsibility. SO, WHAT CAN YOU DO? CUSTOMERS—If you believe you are chartering, verify the operator’s legitimacy. Ask for copies of the air carrier certificate and for validation that your selected aircraft is authorized for charter use. If an operator is resistant to providing verification, you would be wise to consider another charter operator. When leasing an aircraft, recognize that you are assuming responsibility for all aspects of the aircraft’s operation. If the lessor is retaining responsibility, it may be an illegal charter. AIRCRAFT OWNERS—Ensure you fully understand the requirements for legitimate leases as explained in AC 91-37B. If you consider placing your aircraft in a “leasing pool” or “leasing program,” conduct an independent examination of the system to ensure you are not engaging in a disguised illegal charter system. (Article originally published in the BusinessAir Q2 2018 issue of Charter Today) 74 Aviation Business Journal | 2nd Quarter 2018
