FAA Proposes Another Enforcement for Illegal Charter

As part of an ongoing effort to combat the issue of illegal "gray" charter operations, the FAA proposed yet another enforcement action last month; a $1.5 million civil penalty against B E L Aviation in Odessa, Texas. According to the agency, B E L Aviation allegedly conducted 114 unauthorized flights for hire in a Piaggio P-180 Avanti II between September 2016 and July 2108 throughout the U.S. and Mexico. B E L Aviation did not have an air carrier or air operator certificate when it conducted those flights, the agency said.

Calling the operations “careless or reckless,” the FAA additionally alleged that the pilot conducting the flights did not meet the training required for the flights in question. B E L Aviation, which was unavailable for comment at press time, was given 30 days to respond to the proposed enforcement action.

An Industrywide Effort

The proposed enforcement action is the latest in a series of actions the agency is taking as it steps up its efforts to clamp down on illegal charter. These include outreach to the aviation community along with the traveling public on what constitutes legal and illegal activity, as well as increasing enforcement. In March, the FAA issued an emergency revocation of the operating certificate of Paradigm Air Operators for allegedly conducting dozens of unauthorized charter flights, including for major sports teams.

Randy DeBerry, manager of the FAA's South Carolina Flight Standards District Office, warns that much more needs to be done to combat gray charter and what he has seen in the field is “frightening.”

DeBerry gave an overview of ongoing efforts during the Air Charter Safety Foundation’s 2020 Air Charter Safety Symposium in March, crediting the efforts of his team and of industry stakeholders, including the National Air Transportation Association (NATA), in spreading the word to educate about what constitutes legal and illegal activity. His interest piqued when, after first taking the manager’s role as the South Carolina FSDO, he found the leading complaint from operators was their inability to compete against local illegal operations. 

“One thing I found alarming was what I didn’t know,” he said. When he began looking into activity, he found that, in South Carolina, illegal activity was fairly rampant. He discovered some airplanes with anywhere between 40 to 100 dry leases—a clear indicator that “something is not right.”

When asked what he has seen that is frightening, DeBerry responded that John Deere tractor equipment does not belong on airplanes. He has also heard stories about pilots being pressured to fly even though there was an equipment failure. And, he added there is no way with illegal operators to ensure they are meeting flight and duty or drug testing regulations.

He began to hold industry meetings on the subject and has worked with stakeholders on an educational campaign to help inform operators who might have unwittingly strayed into illegal territory, as well as the traveling public who might not know any better. “If you know better, you can do better,” he said.

The effort has led to a number of investigations and several enforcements.

DeBerry said he reached out to airport and FBO managers throughout the state—"anyone who would listen”—in this educational campaign and has been distributing posters on the subject. Those meetings, initially in South Carolina, have to spread throughout the country, and DeBerry stressed that the FSDO managers are now talking to each other. A slate of future meetings on the issue is being organized throughout the U.S.

“I can assure you it is being addressed across the U.S.,” he said, telling the operators at the safety symposium. “I get that you have to earn a living. I get that you have to pay insurers…[Part] 135 is in jeopardy because people don’t want to do it right.”

Paul D’Allura, assistant manager for the FAA’s Special Emphasis Investigations Team (SEIC), urged the audience to reach out with as much information as possible to enable FAA investigators to track down illegal activity. DeBerry agreed, saying one of the problems is the reticence of operators to provide much information. But he said his office takes every tip seriously; one of the first it received included only a tail number, and that is still an active investigation.

Don Riley, operations safety inspector with the FAA’s SEIC, cautioned that these investigations take time because the FAA needs to gather evidence such as statements from passengers, invoices, and proof of payment. “I know people get frustrated. It takes a long time because it is due process. We’ve got to get it right.”

The FAA has to be very careful that any precedents it sets in enforcement action “will be in our favor down the road,” added D’Allura. But, he said, more is going to come out publicly as a result. 

One area the agency is paying particular attention is online: social media solicitations and apps, D’Allura said, noting some operators hide behind the app. “We’re watching them,” he said.

Ryan Waguespack, NATA's v-p of aircraft management for air charter services and MROs, said he has seen a difference with the FAA activity. However, he added that with the “Uber-ization” cultural shift, there will always be the draw for potential illegal activity.

Big Fish in the Net

And it's not just small operators that are running afoul of the rules. In March, the FAA issued an emergency revocation of the operating certificate of Paradigm Air Operators for allegedly conducting dozens of unauthorized charter flights, including for major sports teams, using two Boeing 757s and a 737.

According to the agency, Paradigm used pilots who were not properly qualified, and it lacked air carrier management and safety personnel. The operator further did not have U.S. Department of Transportation economic authority for the flights.

The company was authorized to conduct private and “non-common carriage,” including air transportation services for one or several selected customers, generally on a long-term basis. “However, Paradigm does not have a certificate allowing it to advertise for-hire charter flights to the public, or to solicit or conduct such ‘common carriage’ flights,” the agency reported.

Between June 2013 and March 2018, Paradigm conducted at least 34 common carriage charter flights for customers that included the Arizona Diamondbacks, Cleveland Indians, Oakland Athletics, and Texas Rangers baseball teams, as well as the New York Rangers and Toronto Maple Leafs hockey teams, the agency alleged.

Paradigm paid $101,320 in commissions to a consultant for 28 of the flights and received payments totaling $652,500 from an air charter broker for six flights. “On at least 11 of these occasions, Paradigm claimed the operations were demonstration flights to prospective aircraft buyers when the actual purpose of the flights was paid air transportation,” the FAA further alleged.

Pilots used during the 34 flights had not completed requisite training and proficiency checks for common-carriage operators. Further, Paradigm lacked directors of safety, maintenance, and operations, as well as a chief pilot and chief inspector.

Paradigm also used a consultant to obtain long-term contracts with the Diamondbacks, Rockies, and Mariners, paying $272,646 for those contracts, the FAA alleged.

Under the FAA’s emergency revocation order, it ordered Paradigm to immediately surrender its operating certificate or face a civil penalty of $13,669 for each day it fails to do so.