Tag Archives: on-demand air charter

on-demand air charter

FAA Legal Interpretations: Five Things You Need to Know

My last post talked about a (sort of) new FAA legal interpretation regarding Part 135 rest requirements. Many Part 135 operators are uncertain of the relevance of legal interpretations (also called Chief Counsel’s Opinions) to their operations. Here’s what you need to know:

  1. Legal interpretations apply to the regulation in question, not a particular operator or individual.

Don’t dismiss a legal interpretation as being irrelevant to your operation simply because another company from a different FSDO in another region requested the interpretation. If you are subject to §135.267, the recent FAA interpretation regarding Part 135 rest applies to you, and so it goes with all legal interpretations.

  1. Legal interpretations are binding.

Some people believe compliance with a legal interpretation is optional. “I only have to do X if the regulations say so and the regulations don’t say I have to do X, so forget it.” An FAA legal interpretation is the FAA’s way of telling you what THEY think the regulations say. Their opinion is legally binding and you must comply.  (The only way a legal interpretation is not binding is if the NTSB determines an interpretation is “arbitrary, capricious, or otherwise not according to law”. I am not aware of a single example of this type of determination relating to a legal interpretation. If you know of one, share with the class!)

  1. Legal interpretations establish precedent.

Because Chief Counsel’s Opinions are legally binding, they also establish precedent for how the FAA will (should) enforce regulations in the future.

  1. Anyone can request a legal interpretation by writing a letter to the FAA. But maybe you shouldn’t.

Please, think long and hard before you request a legal interpretation. A request for interpretation can be a very public, very official confession of your own sins. There’s a reason why so many legal interpretations are addressed to law firms, trade associations and other third parties. Consider asking your friendly aviation attorney or consultant to write the letter for you. Confession (at least in this manner) isn’t always good for the soul.

  1. A request for interpretation should include detailed information.

Specify the exact regulation or regulations about which you are requesting clarification. Include a detailed scenario as an example. From time to time a legal interpretation goes very wrong because the requestor is too vague in the request letter. Then we’ve got a legally binding (#2) precedent (#3) that applies to everyone (#1) and probably a very public confession (#4) based on bad information. Be specific.

But mostly, I refer you back to #4…

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Compliance: A New Year’s Resolution

I know you are likely in the flurry of holiday festivities but let’s take a moment to look ahead to 2014. Over 40% of Americans make New Year’s resolutions – to lose weight, keep to a budget, spend more time with family, whatever it is. Do you make New Year’s resolutions for your company? You probably do, but you likely call them “goals”, “metrics”, or “performance indicators”.

I have a suggestion for one of your 2014 company goals: verify the regulatory compliance of your organization.

An individual seeking a Part 135 air carrier certificate must complete a letter or statement of compliance to prove their compliance to the FAA. The statement of compliance is essentially a table that lists each regulation applicable to the air carrier and also the manual or document location in which the operator demonstrates compliance. Many companies believe this statement of compliance is a one-time deal – once the air carrier obtains certification, the company never needs to look at the statement of compliance again. However, the FAA has indicated the letter of compliance should be a “living document” which should be updated when the operator makes changes to manuals and other documents. (And even if the FAA doesn’t require a new statement of compliance with every manual revision, wouldn’t it be great to say, “Here’s my new manual revision, Mr./Ms. POI. You’ll see the revisions are compliant with the regulations by referring to the handy dandy statement of compliance I’ve provided.” Then smile and offer the inspector a cookie. More on cookies in a future post.)

Many operators think their annual audit by XYZ Auditing Firm or their IS-BAO registration ensures their Part 135 regulatory compliance. That is a false and potentially costly assumption. The Air Charter Safety Foundation Industry Audit Standard is the most complete compliance audit currently available but for various reasons, only a handful of operators have completed that audit. Don’t assume you are compliant with Federal Aviation Regulations just because you have a fancy audit certificate in your lobby. Also don’t assume you are compliant just because your FAA-assigned inspectors have approved or accepted your manuals. (See the “My Inspector Said” post.)

I often see companies in business for many years that are on revision 30 or higher for operations and maintenance manuals but seldom have they updated their statement of compliance since certification. It’s not difficult for manuals to fall out of compliance. Occasionally companies that have experienced significant management or ownership changes or have had numerous manual revisions inadvertently drop manual language that is required by regulation. Federal Aviation Regulations change frequently and it can be difficult for operators to keep up. Many operators forget to make appropriate changes to Department of Transportation (DOT) regulations (hazardous materials, anyone?) and National Transportation Safety Board (NTSB) regulations. (Go look at your operations manual or whatever document outlines the NTSB accident reporting requirements. If the revision date of that section is older than June 22, 2010, your manual is out of date and you risk failing to submit a required report if you use your manual as a reference. Forgot about that one? You’re in good company. Most operators do. Don’t get me started on hazmat. The DOT seems to change 10 words every few years. Identifying those 10 words and revising your manual and training program is kind of like a riddle – but a riddle that could cost you big bucks if you mess up.)

Your New Year’s resolution for 2014 should be to assess your manuals and documents by completing a new statement of compliance. Then identify any omissions or inconsistencies and make appropriate corrections to ensure your company is in compliance. It is best for YOU to identify these gaps before another party (*cough cough* the FAA) does.

“But Lindsey, why do I need to be concerned about regulatory compliance if the FAA has approved or accepted my manuals?” I refer you once again to the “My Inspector Said” post, not to mention the fact inspectors are human too and mistakes happen. Plus there are some situations that prompt “special” FAA surveillance. The sale of a company that holds a Part 135 air carrier certificate, significant management or business model changes, financial hardship/bankruptcy of an air carrier, and a number of other scenarios can trigger in-depth FAA inspections, including detailed manual reviews. Certainly a significant accident can prompt an investigation of your compliance by the FAA, NTSB, and even plaintiffs’ attorneys. Aside from the desire to keep the FAA happily at bay, you should consider completing a new statement of compliance or revising your current statement of compliance if you’ve been in operation for a long period of time (say 10 or more years) or you are considering selling your company.

Are you sure your company is in compliance with all applicable FAA, DOT, and NTSB regulations? Pretty sure? Maybe? Have I mentioned OSHA compliance? Now there’s the holiday spirit!

Give me a call (703-445-2450) or send me an email if you have compliance questions or want to start off the new year with a clean statement of compliance. Then if you don’t lose weight, stick to your budget, or spend more time with the kids in 2014, at least one resolution was successful!

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Smart Supplemental Lift

Every Part 135 operator is a charter broker at some point. A crewmember gets sick, an airplane breaks, or demand simply exceeds your fleet capabilities and you’re out looking for another charter operator to pick up a flight for you. How do you choose your supplemental lift providers? Do you have a vetting process in place or will any operator with a 135 certificate on the wall do in a pinch? Developing and consistently using a documented vetting process can help limit your liability when sending a customer to another air carrier.

To develop an evaluation process, start with the simplest aspects of Part 135 operations.

Is the air carrier legal? That is, do they have a valid Part 135 certificate to conduct the specific type of operation? Many charter operators stop there. Obviously the FAA wouldn’t certificate a company that isn’t really competent to run a Part 135 operation. Right? Well… I’ll let you ponder that one. But just remember – a Part 135 certificate is merely a passing grade. It’s a pretty low bar compared to where the industry really is in terms of safety, security, and efficiency. Do you want your customers flying with the operator who only got a “D” in Part 135 operations? A “D” is a passing grade and personally I don’t want the “D” pilot, the “D” charter operator, or the “D” brain surgeon. Achieving a passing grade really isn’t saying much.

Most operators go beyond the Part 135 certificate and require proof of certain insurance limits. While it’s certainly prudent to verify insurance coverage, that’s like putting on your seatbelt after the car has struck a tree. It’s far better to exercise due diligence and mitigate risk prior to starting the car.

Some charter operators very proudly only use companies with an ARG/US or Wyvern rating or a successful IS-BAO or Air Charter Safety Foundation registration. These ratings and registrations only have value if you know what they mean. What does it take for an operator to earn a particular rating? Is there an on-site safety and operations audit or does the operator just submit data about their fleet and pilots? If an audit is required, what standards must the operator meet in order to be registered? Do findings or concerns have to be addressed before being registered or rated?  All “XYZ Rated!” logos are not equal. I’m not saying one audit or rating is superior to another. They all have some value in our industry. The individual rating or registration’s value depends on your needs and your expectations for your customers but if you don’t know what’s behind the rating, it’s meaningless.

Even an operator’s audit status shouldn’t be a single decision point for choosing supplemental lift. Audits are basically the gym membership of aviation. There are people who buy a gym membership and go work out regularly. Others get the membership and kick themselves every time the monthly fee shows up on their credit card statement because they don’t even remember how to get to the gym. And still other people are very fit and healthy but choose not to have a gym membership.  The operators who work out at the gym regularly not only put themselves out to be evaluated by third party auditors but also strive to keep the audit standards and intent alive and well in between audits. Those who buy memberships and never go back are the operators who pretty up their manuals and bring in donuts for a two or three day audit but if you go back next week, no one knows where the new manuals ended up and the donuts are moldy. (That is purely for illustration purposes, of course. I know no charter operator would do such a thing…) And there are certainly operators who choose not to have a third party evaluation but are still safe, conscientious operators.

This post isn’t intended to tell you how to evaluate charter operators used for supplemental lift. The intent is to get all of us thinking about how and why we choose companies to work with. I get a little knot in my stomach every time an operator says they use any XYZ-rated operator for supplemental lift with no further evaluation beyond verification of the pretty logo. Aside from the personal guilt most of us would feel if we sent a customer to another operator and that flight was involved in an accident, you can limit your legal liability by exercising due diligence prior to choosing supplemental lift providers. You owe it to your employees to protect the company from unnecessary legal risk. You owe it to your customers to put them with carefully chosen air carriers.

I encourage you to develop a detailed, documented process for evaluating your supplemental lift providers and use it for each and every trip you have to send to another air carrier. If you already have a process, give it a good hard look. Is it still valuable? Is it enough? Once you have a reasonable process in place, use it consistently and conscientiously. Be smart about supplemental lift.

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“My Inspector Said…”

If there is one phrase I would ban from the Part 135 lexicon, it would be “My inspector said it was okay.” I have (hypothetically) seen Part 135 operators conducting all sorts of activities ranging from “in the grey area” to “clearly non-compliant” and if I had a quarter for every time an operator says, “My inspector said it was okay”, I’d be rich.

First, a quick caveat: This post is not meant to be a slam against the FAA or the individuals who represent the agency. There are some really intelligent, well-meaning people working at the FAA. This post is meant to serve as a wake-up call to operators about the ramifications an operator could face because of misunderstandings and inconsistencies within the agency and the ignorance (no offense – requirements change so frequently it can be hard to keep up) of the operator. Unfortunately the agency seems to be allowed misunderstandings and inconsistencies while the operator is not permitted to be ignorant.

Second caveat: There are big legal words and concepts ahead; however, I am still not an attorney.

Here’s how the conversation goes with the operator who says, “My inspector said it was okay.”

“Just because your inspector says you can do it [whatever ‘it’ is – log duty time a certain way, skip certain training requirements, use creative solutions for augmented crews, whatever] doesn’t mean it’s okay. You can even have your inspector’s signature approving or accepting an activity or an entire manual and if a different department, FSDO, or even individual within the FAA thinks your activities aren’t compliant with regulations, you could find yourself in a bit of a pickle.”

Usually at this point in the discussion the operator is looking at me like I’m Chicken Little. “The sky is falling! The sky is falling!”

Here are a couple of precedents that should give you a clear understanding of how the FAA feels about inspector “misunderstandings” or errors by any other name.

Relevant Precedents

One operator was recently the subject of FAA enforcement action. (The operator’s wounds are probably still fresh so I’m not listing the name here. Enforcement actions are public information and Google is your friend if you’re that interested. Some of these things could happen to any one of us. And yes, if you are the subject of this type of action and I blog about it shortly after your enforcement, I’ll withhold your name too. You’re welcome.) An FAA certificate holder who is the subject of an order of suspension, revocation, or a civil penalty may appeal the FAA’s decision to an administrative law judge (ALJ) of the National Transportation Safety Board (NTSB). This operator used this mechanism to appeal the FAA’s motion for civil penalty. The operator’s main defense was their POI was aware of the activity in question and even approved it. The ALJ took a dim view of the operator’s argument that their POI had approved their activities. The ALJ based his decision on a legal concept known as “estoppel”. “Estoppel” is defined as: “A bar preventing one from making an allegation or a denial that contradicts what one has previously stated as the truth.” For purposes of this discussion, estoppel would prevent the FAA from alleging a certificate holder violated regulations while conducting activities the certificate holder believed were acceptable based on statements made by an FAA representative. Estoppel can be thought of as a “good faith” concept – an operator can reasonably rely on an inspector’s word. Unfortunately it’s not that simple.

Essentially, existing precedents hold the only way an inspector’s approval of a certificate holder’s activities could alleviate the certificate holder of legal liability to comply with regulations is if the inspector deliberately lied. The ALJ upheld these precedents, dismissing the operator’s defense that the operator shouldn’t face enforcement because the POI had approved the activities in question. The NTSB has also consistently held this position on estoppel.

Darby Aviation

Darby Aviation was the subject of FAA enforcement action following the Challenger accident at Teterboro Airport in 2005. In this case, Darby Aviation was issued an emergency order of suspension of their air carrier certificate. The FAA claimed, “Darby Aviation has failed to produce an acceptable Operations Manual or an approvable training program despite repeated FAA efforts to inform the company of the required changes in those documents. As a result, the company has no accepted Operations Manual or approved training program.”

Darby’s main defense was its positive relationship with its POI and FSDO staff, as well as written acceptance or approval of company manuals, policies, and procedures. Darby published a written statement in rebuttal:

“This suspension action revolves around a manual that the FAA has claimed is insufficient, however it is the same manual that has been approved since 1992 and incorporates all changes required and approved by six (6) prior FAA inspectors. In fact, the present Front Line Manager of the Alabama, North Florida Flight Standards District Office (the ‘Birmingham FSDO’) and Darby Aviation’s present FAA Principal Operations Inspector (‘POI’) each approved this manual before wrongfully revoking the same document.”

Darby won an appeal to an ALJ but the FAA immediately appealed to the full Board of the NTSB. The Board upheld the FAA’s emergency order of suspension. Of particular interest to this discussion is the following:

“The Birmingham FSDO’s knowledge and approval of the charter management agreement does not preclude the Administrator from taking a different position. In a large organization such as the FAA there will inevitably be differing views. We disagree with Darby’s assertion that the Birmingham FSDO’s view should prevail in this case. The Administrator can, and indeed should, overrule a FSDO’s position if she believes it is incorrect or may be inconsistent with safety.”
Unfortunately for Darby, the Department of Transportation also issued violations against the air carrier, finding Darby in violation of a prohibition from engaging in unfair and deceptive practices. An excerpt from the DOT Consent Order makes that agency’s position very clear:

“In mitigation, Darby has assured the Enforcement Office that it has always enjoyed an excellent reputation for regulatory compliance, particularly in reference to the Birmingham FAA Flight Standards District Office (FSDO), which monitored Darby’s day-to-day activities. Darby asserts that it did not enter into its initial arrangement with Platinum with the intent of facilitating unlawful conduct on the part of Platinum and it states that the addition of the Platinum aircraft to its operations specifications was approved by its FSDO. Furthermore, Darby states that, based on contacts with its FSDO, it believed that it had taken the necessary and reasonable steps to ensure that Platinum would not be considered to be engaged in unauthorized operations.”
The DOT was not persuaded by this argument and found Darby had engaged in unfair and deceptive practices and an unfair method of competition. The company was ordered to cease and desist from further similar violations and to pay a compromise civil penalty of $60,000.

Unrelated to Darby Aviation’s many legal concerns, the NTSB found four contributing factors to the accident. Two of the four involved the FAA, including: “the failure of the Birmingham, Alabama, FAA Flight Standards District Office to provide adequate surveillance and oversight of operations conducted under Darby’s Part 135 certificate; and … the FAA’s tacit approval of arrangements such as that between Darby and PJM [Platinum Jet Management].”

The NTSB’s findings regarding the accident had no mitigation value for Darby Aviation in its interactions with the FAA or the DOT. In fact, two Board Members who reversed the ALJ’s decision and affirmed the FAA Administrator’s emergency order of suspension, then Acting Chairman Rosenker and Member Hersman, were still on the Board when these contributing factors were adopted as part of the accident final report. In other words, two of the same individuals who agreed the FAA had reason to issue an emergency order of suspension later found the FAA’s activities to be a factor to the Teterboro accident. However, the concept of “estoppel” and the government’s consistent view that safety cannot be compromised because of an inspector or office’s misunderstanding or inconsistency with Federal Aviation Requirements, FAA guidance, and so on, mean the FAA can be a contributing factor to an accident but not accountable for the operator’s regulatory noncompliance.

The “my inspector approved it” argument does not seem to hold water with the FAA, DOT, NTSB ALJs, or the NTSB. It’s a conundrum for operators and inspectors alike. An inspector’s judgment can be questioned by the agency at any time and operators have no real reason to be 100% confident in their inspectors’ decisions. So as a Part 135 operator, what do you do?

First, make sure someone in your company who understands Federal Aviation Regulations is responsible for keeping up with possible regulatory changes. The FAA posts new guidance documents and regulations on its website. Check at them at least weekly. Watch other sources for DOT changes, like hazmat requirements or limitations.

Second, get or stay involved with a trade association like NATA or NBAA. Then your dues are paying those folks to watch for regulatory changes that could affect your company. (Keep in mind, you might be subject to a relatively obscure or uncommon requirement that the majority of a trade association’s membership are not subject to, so don’t simply rely on the trade association. It’s YOUR business. Be proactive.)

Third, if you have an auditor, consultant, or other objective third party point out a possible inconsistency with requirements, LISTEN UP! Don’t dismiss the concern with a quick, “My inspector said I could” and move on. Ask the individual for references that back up his/her position and give the references serious consideration. There’s no doubt some regulatory issues exist in a grey area. Maybe the FAA hasn’t issued clear guidance or there hasn’t been an interpretation on the issue yet. But if there is inspector guidance, a policy notice, a regulation, a legal interpretation, heck, even a quote from FAA senior management that indicates the activity in question is fishy, don’t hang your hat on your inspector’s (or FSDO’s) opinion. Do your own research.

The bottom line: The FAA can and has violated air carriers for activities approved by FAA inspectors. Trust but verify.

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Basic Training for 135 Employees

How much training do you provide for your employees? Every Part 135 charter operator, depending on its operations, is required by regulation to provide pilots with company- and aircraft-specific ground training, simulator or aircraft flight training, emergency training, hazmat training, international training, security training… The list of training requirements for pilots is seemingly endless but training needs for non-pilots aren’t specifically addressed in the regulations.

Industry best practices now encourage Part 135 operators to provide all employees with training related to the operator’s safety program, emergency response procedures, and job-specific training. I think that’s a great start – but it’s not enough.

What industry did your accounting employees come from? Do you think they have any idea what “Part 135” means? Let’s look at a few different positions that could benefit from a general understanding of Part 135 regulations, the company’s responsibilities to the FAA, and the potential ramifications of inadvertent or intentional violations. When the FAA was at the height of the operational control and A008 hysteria, it wasn’t uncommon for inspectors to interview non-flight related staff, like sales personnel or accounting staff, and in some cases, these helpful but untrained individuals created problems for the air carrier.

Flight Coordinator/Controller/Scheduler: A charter operator hires a flight coordinator from the local flight school, where the individual was scheduling instructors, students, and aircraft. The flight coordinator, being the new kid, draws the short straw for night and weekend on-call duties and receives a late Saturday night phone call from an FBO where a company airplane is overnighting. The FBO – which is also a repair station – happened to notice the airplane has a flat tire and wants to know if they should fix it so the airplane is ready for the next day. Newbie flight coordinator, thinking he/she is being proactive and helpful, tells the FBO to go ahead and fix the tire. Why? Because the flight coordinator has never received training on the importance of ALL maintenance on a Part 135 aircraft being conducted under the air carrier’s maintenance program. He/she didn’t know how critical it is to coordinate maintenance functions with the Director of Maintenance or a designee, regardless of the seemingly minor nature of the repair or time of day.

Sales Staff: How many times has your sales staff sold a trip into an airport with a runway too short for the intended airplane? This is particularly confusing to untrained staff if that airplane goes into that airport frequently under Part 91. Has your sales staff failed to advise a client of restrictions on firearms? Or sold a trip that will exceed a crew’s duty period? A clear introduction to Part 135 requirements and comparison with Part 91 rules can help sales staff understand the limitations of Part 135 – and help you to avoid frustrating or losing a client!

Accounting Staff: Some people question the need for an individual responsible for accounts receivable to know what “Part 135” or “operational control” means. While it’s not necessary for the individual to have a PhD in all Part 135 issues, it sure helps to have a general understanding of why Aircraft Owner A flies everything Part 135 and must be billed federal excise taxes but Aircraft Owner B flies all fights under Part 91 and doesn’t pay FET.

Reception and Line Staff: Certainly these individuals don’t need lengthy and detailed training in Part 135 requirements, but some basic training can be helpful to understanding their responsibilities within the company. Most importantly, a general understanding of Part 135 requirements and the FAA’s authority over the company can help a receptionist or line personnel to properly answer, “Hi! I’m Inspector Gadget from the FAA and I’m here to help!” (Of course the correct answer is a very courteous, “Hello! Let me introduce you to our [Director of Operations / Chief Pilot / Director of Maintenance / Agent for Service].”) But first your receptionist or line personnel must know WHO those individuals are (does your line staff know who your company’s Agent for Service is?) and must know that seemingly friendly chats with federal inspectors can lead to trouble for the company if the company representative “guesses” or misspeaks.

Director of Operations / Chief Pilot / Director of Maintenance: Part 119 lays out the requirements and qualifications for these management personnel, but the regulations allow for experience in Part 121 or 135. If you hire a furloughed airline pilot to serve as your chief pilot, are you sure he/she understands the intricacies of Part 135? Your new chief pilot might be very experienced and highly intelligent, but think about it – most 121 pilots forget how to get weather reports or NOTAMs because “dispatch does that”. Don’t you want these folks – ESPECIALLY these folks – to understand how Part 135 differs from other regulatory structures?

I recently developed a training module for a client who realized a basic introduction to Part 135 regulations is a helpful addition to their existing training. This training is required of ALL employees, not just pilots or flight controllers or maintenance personnel.  The training is customized it to include their company-specific policies and procedures and I have delivered the training in person to a number of their employees. The client will soon have a trained individual to conduct future sessions in-house. Do you provide your employees with enough basic training to fully understand their roles and responsibilities within the company? Consider adding a “Basic 135” training module to your curriculum. Training doesn’t have to be complicated, lengthy, or expensive, and a properly trained staff can save you considerably – in time, money, and headaches!

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