The FAA and TSA Move to Make Public Charter Flights Subject to Airline-Style Regulation  

Recently many brokers of charter flights, regulated by the Department of Transportation’s economic authority under the relatively liberal standards of Part 295 of the Federal Aviation Regulations, have expanded, or considered expanding, their business to selling individual seats on charter flights, called public charters.  Public charters are regulated by the Department of Transportation’s under the more stringent Part 380.  The air carriers who operate charter flights arranged by public charterers generally do so under Part 135 of the safety regulations administered by the Federal Aviation Administration.  Concerned that public charters were starting to resemble scheduled airline operations, in 2023 the FAA announced that it was considering subjecting public charter flights to the more stringent safety standards of Part 121. 

Single-entity charters under FAR Part 295  

Federal Aviation Regulation Part 295 became effective February 14, 2019.   Part 295 recognizes a new class of indirect air carriers to be called “air charter brokers” and provides rules to regulate their activities as such.  Part 295 allows brokers, to hold out, sell and arrange charter air transportation (which would otherwise be prohibited under 49 USC Sections 41101 et seq.), but it must be single entity charter air transportation.  Single entity charter is defined as a charter for the entire capacity of the aircraft, the cost of which is borne by the charterer and not directly or indirectly by individual passengers, except when individual passengers self-aggregate to form a single entity for flights to be operated using small aircraft.   

Typically a broker does not engage with an air carrier until the broker is contacted by a passenger or customer who is seeking an on-demand charter flight.  The charter broker then goes and searches the market for a carrier who has an aircraft available for the proposed flight at an agreeable price. 

Selling Seats: public charters under FAR Part 380 

 Section 380 of the Federal Aviation Regulations allows public charter operators to furnish public charters using aircraft chartered from direct air carriers.  (It also allows direct air carriers to provide public charters.)  

 A public charter operator has an aircraft and flight arranged and is seeking passengers. In contrast, typical air charter brokers have passengers and are seeking a carrier to conduct the flight. 

 A public charter is a one-way or round-trip charter flight performed by one or more direct air carriers that is arranged and sponsored by an entity called a public charter operator.  The public Charter operator organizes a charter flight with the direct air carrier and sells seats to the public.  The Public Charter operator and the direct air carrier negotiate the departure location, arrival location, and departure time.  The operator may be any appropriately certificated air carrier, including on-demand and commuter carriers under 14 CFR Part 135 and airlines under 14 CFR Part 121. 

  Part 380 focuses on consumer protection.  Before offering any charter, the public charter operator must submit a public charter prospectus to the DOT.  The prospectus is subject to DOT approval.  Among other requirements, the operator must show the DOT that the operator has entered into a charter contract with a direct air carrier that covers the charter operator’s proposed flight schedule set forth in the prospectus.   There are required disclosures to passengers, and passengers must be provided with a contract for transportation.  There are limits for any changes or cancellations of a planned trip.   

 The direct air carrier performing the air transportation must make a reasonable effort to verify that the operator is complying with the requirements of Part 380.   

 Part 380 has various security provisions including that payments by the charter participants be made to and held by a designated bank and that the operator post a bond or other financial security. 

The DOT’s Office of Aviation Consumer Protection addresses issues related to transparency and fairness to consumers among public charters through the statutory authority to take enforcement action against unfair and deceptive practices.  The DOT can assess civil penalties by flight and by passenger, and ban individual violators from the aviation industry, among other actions. 

Proposed Amendments related to Operations Under Part 380 

 In August 2023, the FAA announced that it intended to issue a rulemaking to address its concerns that over the prior ten years public charters were being offered to the public in such volumes, scope, frequency and complexity that they were indistinguishable from air carrier operations under Part 121.  In the view of the FAA, to ensure the level of safety of these flights, the safety regulations that would govern the flights but for the Part 380 carveout should apply, up to Part 121.  

FAR Part 121 includes comprehensive safety and operational standards that are designed to ensure the highest level of safety for passengers and crew. These standards cover areas such as pilot training, aircraft maintenance, and operational procedures. By moving public charters under Part 121, the FAA aims to address concerns about the safety and oversight of these flights, which have grown in frequency and complexity. 

FAA Actions in June 2024 

In June 2024, the FAA took additional steps to address the growing complexity and frequency of public charter flights. On June 17, 2024, the FAA announced plans to initiate a rulemaking process aimed at amending the definitions of “scheduled,” “on demand,” and “supplemental” operations under Part 110. This proposed rule change is intended to ensure that public charters are subject to the same safety parameters as scheduled operations. 

FAA Administrator Mike Whitaker emphasized the importance of identifying risks early on, stating, “If a company is effectively operating as a scheduled airline, the FAA needs to determine whether those operations should follow the same stringent rules as scheduled airlines”. The FAA plans to issue a notice of proposed rulemaking expeditiously and will seek public comments on an effective date that allows the industry to adapt to the new regulatory environment. 

Additionally, the FAA announced the formation of a Safety Risk Management Panel (SRMP) to assess the feasibility of a new operating authority for scheduled Part 135 operations in 10-30 seat aircraft. This initiative aims to align aircraft size and certification standards with the operational needs of small community and rural air service, ensuring that safe air travel options are available to everyone, not just those living near major airports. 

 Reasons for the Regulatory Change 

The FAA’s move to bring public charters under Part 121 is driven by several factors: 

1. Safety Concerns: As public charter flights have become more popular, there have been concerns that some operators are effectively running scheduled services without adhering to the same safety standards as traditional airlines. This has raised questions about the adequacy of the current regulatory framework. 

1. Consistency: By applying Part 121 standards to public charters, the FAA aims to create a consistent regulatory environment for all passenger air travel. This would ensure that all operators meet the same high standards of safety and reliability. 
2. Public Transparency: The move is also intended to enhance transparency for passengers, who may not always be aware of the differences between public charters and scheduled flights. By aligning the regulations, the FAA hopes to provide clearer information to the traveling public. 

Industry Response 

The proposed regulatory changes have thus far elicited mixed reactions from the aviation industry, reflecting the diverse interests and concerns of various stakeholders. 

Support from Major Airlines and Pilot Associations 

Major airlines and pilot associations have been vocal supporters of the FAA’s proposed changes. They argue that the current regulatory framework under FAR Section 380 allows some public charter operators to bypass stringent safety and operational standards, creating an uneven playing field. The Air Line Pilots Association (ALPA), for instance, has emphasized the need to close what they describe as a “loophole” that enables certain operators to cut costs by skirting lifesaving safety rules. 

ALPA President Jason Ambrosi stated, “Some airlines use the public charter loophole to cut costs by skirting lifesaving safety rules, but if they run similar operations as commercial scheduled airlines, then they are not operating as charter, and that’s an issue”. This sentiment is echoed by major airlines like American and Southwest, which have pushed for regulatory changes to ensure that all operators offering similar services adhere to the same rigorous standards. 

Concerns from Public Charter Operators 

On the other side of the debate, public charter operators, particularly those operating under Part 135 regulations, have expressed significant concerns about the proposed changes. JSX, a prominent public charter operator, has been particularly vocal in its opposition. JSX argues that the move to Part 121 would impose unnecessary burdens and stifle innovation, potentially limiting service options, especially in smaller communities. 

JSX has highlighted its strong safety record, claiming that some of its safety protocols even exceed current FAA standards. The company views the proposed changes as a “lobbying-inspired, targeted regulatory barrier to entry, erected to protect influential parties that are prepared to fabricate safety concerns”. JSX CEO Alex Wilcox has also emphasized the potential negative impact on small community air service, noting that the regulatory changes could jeopardize their plans to deploy hybrid-electric aircraft in smaller markets. 

Impact on Small Community Air Service 

The potential impact on small community air service is a significant concern for many public charter operators. These operators often provide essential air service to smaller and rural communities that are not served by major airlines. JSX, for example, has committed to ordering over 300 hybrid-electric aircraft designed for 9, 19, and 30 seats, with the goal of deploying them in small communities. The company argues that the proposed regulatory changes could undermine these efforts, reducing access to air travel for residents of these areas. 

The FAA has acknowledged these concerns and has indicated that it will explore opportunities to align aircraft size and certification standards with the operational needs of small community and rural air service. The agency plans to convene a Safety Risk Management Panel to assess the feasibility of a new operating authority for scheduled Part 135 operations in 10-30 seat aircraft. This initiative aims to balance the need for stringent safety standards with the goal of maintaining and expanding air service to underserved communities. 

Security Concerns 

Security is another critical aspect of the debate. Public charter operators like JSX are not required to screen passengers through traditional Transportation Security Administration (TSA) checkpoints, which has raised concerns among some industry stakeholders. Former American Airlines CEO Doug Parker described these security protocols as a “disaster waiting to happen”. The TSA is currently reviewing security requirements for public charter operators, including a proposal for the screening of passengers and their accessible property. 

The FAA and TSA are working together to ensure that any changes to the regulatory framework address both safety and security concerns. The TSA has provided a comment period for impacted operators to provide feedback on the proposed security requirements, which will be considered before finalizing any changes. 

In August 2024 Congressman Nick Langworthy introduced the bipartisan “Safer Skies Act.” This law, if enacted, would bring passenger screening requirements for public charter flights up to the standards for scheduled airlines.   

Conclusion 

The debate over the proposed regulatory changes highlights the broader challenge of balancing innovation with regulation in the aviation industry. Public charter operators argue that their ability to offer flexible and cost-effective services is crucial for meeting the diverse needs of travelers. They contend that overly stringent regulations could stifle innovation and limit their ability to serve niche markets. 

At the same time, proponents of the changes argue that consistent safety and operational standards are essential for protecting passengers and ensuring a level playing field. They believe that all operators offering similar services should be subject to the same rigorous standards, regardless of the specific regulatory framework under which they operate. 

In conclusion, the move to bring public charter flights under FAR Part 121 represents a significant shift in the regulatory landscape. While it may pose challenges for some operators, it reflects the FAA’s commitment to maintaining the highest standards of safety and transparency in the aviation industry. As the rulemaking process continues, stakeholders will have the opportunity to provide input and shape the future of public charter flights in the United States. 

Public charters offer a valuable service, providing flexibility and convenience for a wide range of travelers. By aligning the regulatory framework with the standards of scheduled air carriers, the FAA aims to ensure that all passengers can enjoy safe and reliable air travel, regardless of the type of flight they choose. The ongoing dialogue between regulators, operators, and the public will be crucial in achieving this goal and fostering a robust and resilient aviation industry.