Goldilocks and the Broker Proposed Rule: Too Far, Not Far Enough, or Just Right?

The Department of Transportation (DOT) has published a Notice of Proposed Rulemaking (NPRM) regarding air charter brokers. The DOT’s goal is to strengthen legal protections to air charter customers. The long-awaited NPRM is the result of National Transportation Safety Board (NTSB) recommendations and, to some degree, charter operator requests. It will be interesting to see industry comments on the NPRM. Did the DOT go too far? Not far enough? Or is the proposed rule (porridge) just right?

In 2005, the NTSB made several recommendations to the DOT as a result of the 2004 Montrose, Colorado Challenger 601 fatal accident. The air carrier originally contracted to operate the flight had sold the trip to another carrier. The NTSB had trouble sorting out details of who was responsible for the flight and although the accident was related to icing and the crew’s lack of experience in winter weather, the NTSB issued some business and operational control-type recommendations. (Don’t forget the political climate of the time. These recommendations were issued after the infamous Challenger accident at Teterboro which prompted the operational control debacle.) Specifically, the Board recommended that customers of on-demand air taxi services be advised, at the time they contract for a flight, of: the name of the company with operational control of the flight; any “doing business as” (DBAs) names contained in such company’s Operations Specifications (OpSpecs); the name of the aircraft owner; and the name of any broker involved in arranging the flight.  The NTSB also recommended the customer be informed of any changes made to the details listed above.

DOT’s NPRM is essentially a disclosure rule. Brokers – including charter operators who sell off trips due to fleet demand or other issues – would be required to disclose to the customer the name of the direct air carrier in operational control of the aircraft as well as any DBAs; the capacity in which the original operator is acting in contracting for air transportation; the existence of any corporate or pre-existing business relationship with the direct air carrier that will be in operational control of the aircraft; the make and model of the aircraft to be used for the air transportation; the total cost of the transportation; and the existence and amount, if known, of any other fees, such as fuel or landing fees, for which the customer will be responsible to pay directly. The customer would also have to be notified in a “reasonable” period of time if the intended air carrier changes after a contract is arranged.

The DOT specifically asks for feedback on the definition of “reasonable” period of time but seems to think 24 hours is “reasonable”. Further, the customer would be eligible for a refund if any of the above details change during that “reasonable” period of time. Ponder that one for a second. Let’s say you have an aircraft positioned at Centennial Airport in Denver for a flight later today. The pilots discover a mechanical issue while they are conducting the pre-flight. You are able to recover the flight with another Part 135 operator’s aircraft – same make, model, and year as your aircraft – which happens to be in Colorado Springs and could arrive at Centennial in time for the scheduled departure. Under this proposed rule you would definitely be required to disclose to the customer that you “sold off” the trip to another air carrier (and in fact Part 135 operational control rules already require the disclosure of the actual air carrier to the customer) but are you obligated to give the customer a refund? What if the customer accepts the replacement aircraft and takes the trip? What if this is third leg of a series of flights? How much of a refund is the customer entitled to, if any? The proposed rule is not clear on these and other issues.

The DOT specifically requested industry feedback on a number of topics in the proposed rule. The rulemaking process is open and participatory by design; industry feedback can help ensure the final rule is something we are all able to live with. I encourage you to review the proposed rule and think about how it will impact your operation. If you’ve never submitted comments on a proposed rule, see if your trade association (NATA, NBAA, or whichever association with which you affiliate) provides guidance on submitting comments. It’s also a good idea to review comments submitted by other operators or trade associations to see if someone else has spotted a concern you missed.

Comments are due on November 29, 2013, so don’t delay!

Click here for the full NPRM and comment submission link.

Click here to visit or return to McFarren Aviation Consulting’s homepage.

Advertisements

Have some thoughts on today's post? Leave me a comment! All comments will be moderated to avoid spam or inappropriate comments so don't worry if you don't see your comments right away!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s