Illegal Charters Undercut Legitimate Operators in APAC

Illegal charter continues to pose a major challenge for Asia-Pacific’s business aviation market, where demand for private flights consistently outstrips available aircraft on an air operator certificate (AOC). The supply-demand imbalance creates fertile ground for noncompliant operations, with industry leaders estimating that roughly 30% of the regional market remains illicit—a figure highlighted in a 2021 study by global law firm Holman Fenwick Willan (HFW) and the Asian Business Aviation Association (AsBAA), and which has shown little improvement despite repeated warnings.

For Brendan Toomey, CEO of Air Charter Service (ACS) Singapore, illegal charter is a direct challenge to Part 135 operators. Operating in 21 countries with 41 offices—including seven in APAC—the firm handles private and commercial charters, cargo flights, and time-critical missions, giving it a direct view of how illegal Part 91 flights undercut legitimate operators.

“Industry estimates suggest this is still around 30% or slightly less,”  Toomey told AIN. “It has definitely improved in some countries like Malaysia, where the government has gone to some lengths to try and crack down on it. Unfortunately, it’s normally as a result of an accident that draws a country’s government to the problem.”

The CEO cited several factors that allow illegal charter to persist, starting with a fundamental lack of understanding of the Part 91/135 distinction. He explained that this gap exists on both sides of a transaction—aircraft owners may not grasp the legal implications of filing a commercial charter as a private Part 91 flight, while clients often don’t realize they must secure an aircraft with a valid AOC operating under Part 135 rules. The regulatory confusion significantly weakens safety oversight.

“An aircraft with a valid AOC for commercial charter must undergo significantly more stringent maintenance and safety checks than is required for Part 91 owner flights,” he explained. “Any accident on a flight where passengers have paid to be on board, and the flight is filed under Part 91, may potentially have insurance implications.” 

ACS’s standard, Toomey said, is to request copies of relevant AOCs from operators. He sees private aviation demand rising across Asia-Pacific as awareness grows, with his Singapore office handling 25% more private jet flights in 2025. Still, compliant charter aircraft remain in short supply—a gap that, combined with exploitative brokerage, allows for illegal charters.

“Perhaps the worst area of the sector are unscrupulous aircraft brokers presenting illegal charters as options to their customers, with the customer kept in the dark on the fact that the aircraft does not have an AOC and is not permitted to carry out commercial charter.” He added that Indonesia and China are among the hotspots for non-compliant operations.

Unable To Keep Pace

Like Toomey, Hibiki Umemoto, director of sales for Phenix Jet Hong Kong, has seen charter demand rise, especially after the third quarter of 2025. The Japanese-American Phenix Jet Group, with additional offices in Singapore and the Cayman Islands, manages the region’s largest Bombardier Global 7500 fleet, along with Global 6000/6500s, Gulfstream G650s and G600s, and Boeing BBJs.

Umemoto noted that fleet growth of charter-certified jets has not kept pace, creating a supply-demand gap that is easily exploited. With insurance policies voided, parties can be exposed to major liabilities, and financing arrangements may be canceled. He emphasized that illegal chartering directly harms legitimate operators by distorting the market, creating the false perception that chartering is cheap and instant while sidelining safety concerns.

“The surge in charter demand has opened a vacuum that illegal operators are ready to fill,” Umemoto told AIN, noting that “clean brokers” remain few. He added that digital platforms make booking flights easy, often without transparency on whether the flight is compliant.

The risks Toomey and Umemoto point to are real-world issues. In August 2023, a Beechcraft 390 Premier I, operated by Jet Valet and registered in the U.S., was flown under Part 91 despite carrying passengers for compensation. During the before landing checklist, the aircraft’s lift dump spoilers were inadvertently deployed, causing a loss of control. The Beechcraft crashed on a highway near Subang Airport in Kuala Lumpur, killing all eight on board and two on the ground.

The final report concluded that the operator appeared to be “exploiting regulatory gray areas, thereby avoiding stringent oversight and necessary approvals.”

“The main risks are the lack of insurance coverage—and, of course, death,” said Stefan Wood, CEO of Singapore Air Charter. As head of an aircraft brokerage and management company, he observes a market driven by simple availability.

“People want to fly, and they will take what is available,” Wood told AIN, noting that “the final end user has no idea they are flying on an illegal charter.” When a compliant aircraft cannot be found, he explained, the broker’s role becomes the critical gatekeeper.

“It is up to the brokers and the private aircraft management companies. The end user never asks if it’s a legal or illegal booking. As a broker, we sight AOCs prior to booking a new operator.” In this environment, Wood suggested, the lack of legal options can itself become a cover for bad actors.

“Ideally,” Umemoto added, “operators and brokers must refuse commercial Part 91 requests, owners must understand the liability of accepting revenue, and regulators must actively enforce rules rather than just auditing paperwork. However, we believe the critical gap stems from the specific scale of the industry in APAC. There is sufficient inventory to facilitate occasional ‘private charters,’ yet the market remains too niche for regulators to justify the heavy investment of resources required to strictly police it.”

Umemoto pointed out that some Southeast Asian markets are particularly exposed to illegal charters, often due to gaps in regulatory oversight. In certain regions, authorities or handling entities may even advise that flights be declared private. Broker involvement in such flights is usually a red flag, he explained.

“With so few commercially certified jets in APAC, it can be obvious when a private jet is operating commercially.” The challenge, Umemoto said, is legally confirming passenger affiliation or proving that the owner received revenue.

“Business aviation in APAC is a niche sector compared to the commercial airline market. The complexity of identifying and proving illegal charter requires significant investigative resources, acting as a major disincentive for regulators to prioritize it.”

Regulatory Fragmentation

According to Umemoto, regulatory fragmentation is a major hurdle, with each jurisdiction taking its own stance and limited cross-border cooperation, because regulators often lack the budget or methodology to coordinate. The absence of reliable statistics further complicates efforts, making it difficult for regulators and the industry to gauge the full scale of illegal charter.

“Given the vast array of registered aircraft across the region, enforcement is further complicated, and we have seen cases where authorities were reluctant to take action against non-local registered aircraft.”

Wood agreed that the “APAC problem” stems from the fact that aircraft from multiple regulators operate across the region.

“Take Singapore alone, you have both charter and private aircraft operating under the American, Australian, Cayman, San Marino, Maltese, Guernsey, Bermuda flags. The reason for this is that Singapore has no viable private aviation registration option, so legitimate operators operate under a foreign permit based on their country’s regulations. This then becomes very hard to police, as who polices it?”

Toomey added that authorities have historically shown little interest in pursuing illegal charters on foreign-registered aircraft. Still, he pointed to a shift over the past year, with increased ramp checks at Seletar Airport in response to tip-offs—a regulatory development he views as a positive step. He emphasized that jurisdictional complexity does not absolve regulators of their fundamental duty. 

“Whether the aircraft is from a local or foreign registry, the local enforcers should know that if the aircraft is to fly in their airspace, it is ultimately their responsibility, as the safety of the people flying through that airspace is their responsibility.”

Translating accountability into action requires a multi-pronged approach, Toomey argued.

Measures could include a public list to name and shame violators—like financial industry alerts—and better use of ground-handling networks that process flight permits. Raising passenger awareness about the necessity of an AOC could curb demand. He stressed that these efforts must be paired with visible enforcement—more ramp checks and public examples of violators—to create a meaningful deterrent.

Building on this, Umemoto emphasized penalties and cross-jurisdiction collaboration to tackle illegal charter. He called for harmonized ramp checks, stricter verification of passenger affiliations, coordinated tax audits, and streamlined regulatory bureaucracy.

“Reducing the administrative lead time for charter permits would certainly lower the number of commercial flights being declared as private,” he said.