Given the rise of Uber and Lyft in the ground-based transportation market, it is no surprise that eager software developers and marketing folks with deep pockets filled with venture capital would set their sights on the air transportation market.
Based on the false premise of “inefficiency in the marketplace,” these digital-age air charter brokers, some with little understanding of the intricacies of Commercial Aviation Operations and Federal Aviation Regulations, promise to decrease these inefficiencies while lowering the cost of “private” air charter. A few of these organizations have already butted heads (and lost) with FAA while some are battling their own disenchanted Clients as they re-organize their business model to remain afloat.
What is Air Charter?
The offering of an entire airplane with a crew for transportation from one place to another at a date and time of your choosing is, by definition, “Air Charter.” In the industry, we call this arrangement, “on-demand air charter” and it is often also called private air charter.
You, as the Client, determine where you want to go and when. The Air Charter Operator lets you know the cost, and the two of you work out the financial terms. When you have reached an agreement, you have chartered the airplane. The charter operator will not offer any seats on your private charter flight to anyone else because the flight is “private” for you and your group.
There are several key distinctions between flying private charter, flying on the airlines and flying around on a friend’s airplane.
- You are not buying a seat. On the airlines, you buy a seat. When you charter a plane, you purchase the entire airplane for the date, time and route you determined. No one else other than you and your party will occupy that flight. Because there is no advertising to the public of seats available, this is a private charter flight. Without a Public Charter Certificate (see below), “holding out” to the public of the availability of these seats would not be legal.
- You aren’t flying around with a Private Pilot. The Pilot responsible for your flight has, at a minimum, a Commercial Pilot Certificate. Private Pilots are not allowed to engage in transportation for compensation or hire.
- You aren’t flying around with just a Commercial Pilot either. On both the airlines and in legal air charter, the Pilot responsible for your flight has subjected themselves to additional training and oversight. They have taken additional, required exams both oral and practical for each airplane they will fly for you. The exams, we call them “checkrides,” occur, at a minimum, every twelve months. And, each checkride is specific to each Air Carrier. If a Pilot wants to work for two Air Charter Operators, they must qualify separately with each On-Demand Charter Operator, by taking two different checkrides.
- Pilots in private airplanes are not tested for drugs or alcohol. On-demand charter pilots and airline pilots are routinely and randomly tested for drugs and alcohol. At any time, while just before, just after and on duty, they can be randomly tested. Not so with any other pilot.
But I Bought a Seat on a Private Plane and I Didn’t Have to Charter the Whole Plane!
The Department of Transportation protects the flying public with regulations that Air Carriers – Airlines and Private Charter Operators – are required to follow.
Under a specific set of circumstances, an on-demand air charter operator can advertise a schedule and sell by-the seat on a limited basis with the following restrictions:
- Less than 5 round trips per week on at least one route between two or more points according to published flight schedules,
- No turbo-jet airplanes can be used, and
- Airplanes are limited to a maximum passenger seating configuration of 9 seats or less.
This is one legal way you can purchase a seat on a charter airplane. There is, however, another way to buy a seat on a chartered flight and herein lies the confusion: Public Charter.
What is Public Charter?
First and foremost, the phrase “Public Charter” should never be interpreted to mean “Direct Air Carrier” – or even “air charter operator.”
A Public Charter is an authorization from the Department of Transportation to sell air transportation. It is not an authorization to conduct or operate that air transportation. Holding a Public Charter allows the ability to advertise and sell transportation on a per-seat basis; holding an air carrier certificate enables the charter company to both sell transportation and conduct or operate those flights.
A Public Charter Operator has a right to sell seats on an airplane that they chartered because they applied for and received authority to do so. They had to specify, in advance – before they received their Public Charter – the route and the Air Carrier they intended to work with as well as the number of flights they intended to make.
There are no “pop-up” or empty leg flights on a Public Charter because all of the flights are known in advance.
A applicant for a Public Charter must also put money in escrow or hold a security agreement to protect both you, the flying public and the air carrier. Should either the Public Charter operator or the Air Carrier not perform according to its obligations, you are protected from losing your money. That’s the deal they made with the DOT.
It should be clear, then, that a company cannot, on an ad hoc basis, use its Public Charter to minimize any inefficiencies it perceives in air charter by selling seats on empty legs.
What it can do is advertise and sell a seat on a flight it had already contracted for. So, if it had pre-arranged a flight to Whiteplains, New York from Opa Locka, Florida, it could advertise and sell seats on that “charter” flight. Thus if you purchased a seat on “a private jet” and you did not have to charter the entire airplane, you may have purchased from a company holding a Public Charter.
This is the only legal way a company can sell “by-the-seat” without operating as a Scheduled Airline.
Again, this type of airplane seat Seller is not a Direct Air Carrier – they are not an Airline and they are not an On-Demand Private Air Charter Operator. They are a Seller.
So, a Public Charter Operator:
- Sells one-way and/or roundtrip charter flights by-the-seat and anyone can get on these flight when they purchase a seat,
- Is not the operator of those flights because they do not have an Air Carrier Certificate and,
- Cannot advertise seats on flights on any charters outside of the scope of their Public Charter application that was approved by DOT.
Point 3 is where many Air Charter Brokers with Apps that run on mobile phones get into trouble – and where Air Carriers without DOT approval cross the line.
To sell by the seat you either need Air Carrier Operating Specifications or authority from DOT under Part 380.
But I Heard That a Lot of Planes Fly Empty and that This is Inefficient
That seems to be the battle-cry of many air charter brokers and operators… If only we could sell the empty legs…
And, logistically, who wouldn’t want the nirvana of moving metal that does work? It somehow feels efficient if there are passengers or some cargo on board.
The on-demand charter industry exists because someone wants to go somewhere on their own time, not the airline’s time and not the airlines’ route. When Time is Money, on-demand air charter is there to fill that void. And there are no inefficiencies when the Buyer agrees to Buy and the Seller agrees to Sell.
The idea of inefficiencies stems from a perspective of scarcity, not utility. Utility is met when the passenger arrives at their chosen destination. There is no inefficiency here.
But the airplane flies empty back to its home base, isn’t that inefficient? No. For the person who chartered the airplane, their need was met when they arrived at their destination. For the charter operator, their need was met when the Client utilized their business and paid the operator to meet their needs.
When concerned with inefficiencies, one should fly the airlines: They sell specific routes at specific times, by the seat, and they advertise heavily to fill each seat. They are Masters of limiting inefficiencies because inefficiency costs money.
BUT THE FLIES EMPTY AND THAT SEEMS INEFFICIENT!
So you want additional utility beyond what the original charter agreement specified? We’re back to the utopian desire to fill the empty leg seats. This leads us circularly back to either, operating on a schedule so that folks know when the plane leaves one destination to go to another after dropping off a private charter Client -or- holding a Public Charter certificate from DOT and selling by the seat (again, though, this will involve a schedule). By definition, on-demand air charter does not operate on a schedule more than four times a week between two cities. Doing so would require additional operating authority.
And therein lies the problem with Mobile Apps that allow you to purchase by-the-seat or “share” a charter. Not every company behind those apps holds the authority required to sell by the seat as a Public Charter or to operate an airplane on-demand or on a schedule as an Air Carrier.
In legal Air Charter, there are no inefficiencies.
Resources and References
Trying To Make Sense Of The Troubles At JetSmarter by Doug Gollan
FAA Part 135 Air Charter Certification General Information
Notice to Colleges and Universities OrganizingFlights to College Bowl Games and other Special Events
The Role Of Air Charters Brokers In Arranging Air Transportation
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