October 1, 2018—After nearly five years of deliberation, the United States Department of Transportation (“DOT”) issued final rules regarding air charter brokers. DOT accomplished this through the development of a new 14 CFR Part 295 and regarding air taxi/air commuter operations through the revision of 14 CFR Part 298. While the final rules closely follow the Notice of Proposed Rulemaking (“NPRM”) published in 2013, there are some notable differences in how the DOT addressed certain issues. The new rules will take effect on February 14, 2019.
Under the new rules, air charter brokers will now be able to provide single-entity charter air services as principles or as bona fide agents. This is a significant change from the 2013 NPRM, under which air charter brokers would have only been able to act as an agent of the air carrier or the passengers. Brokers will now be able to resell charters after contracting with the air carrier directly.
The new rule also lists the particular disclosures that must be made by air charter brokers by default, and which disclosures must be made upon request by the customer. Originally, the NPRM would have required brokers to make seven disclosures to customers. Under the published final rule, brokers will only be required to make three disclosures, while another three must be made upon a customer’s request. Additionally, the NPRM would have required the disclosure of any business relationship between the broker and air carrier, while the final rule only requires disclosure of relationships that have some bearing on the transaction.
A number of broker practices will now be forbidden as unfair or deceptive as part of the new rules. While the NPRM enumerated ten specific prohibited business practices, the final rule was changed to harmonize the language in the new Part 295 with the prohibited practices by air taxis and commuter air carriers contained in the new 14 CFR Part 298.90. The new rule lists specific practices of air taxis and commuter air carriers that will be prohibited, including misrepresentation of the qualifications and the safety records of pilots, aircraft, and air carriers. It also clarifies practices related to: membership in, involvement with, and standards set by auditing organizations; the requirements that charterers must meet to qualify for charter flights; and the use of names, trade names or slogans.
Despite considerable support from the industry, the DOT did not include specific rules for air ambulance services. As noted in the final rule, air ambulance services are covered under a blanket exemption granted by a Civil Aeronautics Board Order in 1983. While air ambulance services are not being addressed in this final rule, the DOT also notes that it will study this issue further.
The Wicks Group is a multi-disciplinary legal and consulting firm that provides a wide range of services to clients with aviation and transportation-related interests. The firm regularly assists airports, parts manufacturers, and governments achieve their aviation development objectives, including coming into compliance with regulations and international safety standards, by providing specialized technical and management consulting services as well as legal counsel.
For more information regarding The Wicks Group’s services to air charter brokers and operators, please contact Michael Fleming at email@example.com or by phone at 202-457-7790.